In a move few in the market saw coming, Extell Development’s Gary Barnett has emerged as the potential new steward of Worldwide Plaza, one of Midtown Manhattan’s most prominent office towers. With the asset heading toward a UCC foreclosure auction on January 15, Barnett’s strategic acquisition of the building’s mezzanine debt has positioned Extell to take control of the beleaguered property — and possibly redefine its future.
A Power Shift at 825 Eighth Avenue
SL Green and RXR have long been associated with Worldwide Plaza, but the property has faced mounting financial pressure over the past several years. Now, with Extell quietly acquiring the mezzanine debt, the narrative is shifting quickly.
The building’s ownership entity received a default notice last year, and both the senior and mezzanine financing stacks are currently in default. With nearly $1.2 billion in combined CMBS and mezzanine debt and falling occupancy levels, the January auction has become a focal point for the investment community.
Extell’s move — while unpublicized — immediately places Barnett in the driver’s seat. Should the firm successfully credit bid at the foreclosure sale, Worldwide Plaza could soon become one of the most significant repositioning opportunities in Manhattan.
Vacancy Pressures Redefine Value
Like many Midtown assets, Worldwide Plaza has struggled to maintain tenancy in the wake of shifting workplace norms and corporate relocations. The departure of Cravath, Swaine & Moore in 2024 — vacating 617,000 square feet — left the building nearly 40% empty. As of March 2025, the tower stood at 63% occupancy, down significantly from 91% just two years earlier.
Further reductions loom: Nomura Holdings, the tower’s largest remaining tenant, is expected to shrink its footprint by 75,000 square feet by 2027.
These challenges have led to a dramatic valuation drop. In April, the property was appraised at $345 million, an 80% decline from its $1.7 billion valuation in 2017 — underscoring the significant headwinds facing legacy office stock across Manhattan.
A Potential Turning Point
Despite the difficulties, Extell’s involvement introduces a new level of intrigue — and potential optimism — to the asset’s future. Barnett is known for bold redevelopment strategies and a long-term approach to value creation. Should Extell secure the property, market watchers expect substantial reinvestment, meaningful repositioning, and a reimagined leasing strategy.
With DBRS Morningstar recently downgrading a CMBS trust tied to Worldwide Plaza to junk status, the building sits at a critical moment. A successful takeover by a major New York developer could stabilize the asset and shift its trajectory.
Why This Matters for the NYC Office Market
Worldwide Plaza has long been viewed as a bellwether property for Midtown West. Its dramatic valuation shift, tenant turnover, and now its possible change in ownership highlight several market-wide themes:
- Flight to quality continues to shape leasing behavior
- Aging office inventory requires major modernization
- Highly leveraged capital structures remain vulnerable
- Strategic buyers are increasingly stepping in to acquire distressed assets at significant discounts
For tenants, investors, and landlords, Worldwide Plaza’s next chapter will be closely watched — and may influence broader repositioning trends across the city.
Landair Property Advisors: Market Insights That Matter
As New York’s commercial landscape evolves, Landair Property Advisors continues to monitor key movements and provide strategic guidance. If you’re evaluating your portfolio, exploring acquisition opportunities, or considering repositioning or restructuring strategies, our team is here to assist.
For strategic advisory or leasing inquiries, contact Landair Property Advisors at info@landairnyc.com.
Article adapted from reporting by The Real Deal.
