Former ARC Nontraded REIT’s Last Asset Heads Toward Foreclosure
By Staff
New York REIT Liquidating LLC , the liquidating vehicle for the former nontraded REIT that later listed on the New York Stock Exchange as New York REIT, Inc., said a court-appointed receiver has replaced SL Green Management Corp. with Cushman & Wakefield as property manager at One Worldwide Plaza. Three layers of debt on the Eighth Avenue office tower remain in default, and a foreclosure action is moving through New York courts.
NYRT holds a 49.9% indirect interest in the 49-story building through its subsidiary ARC NYWWPJV001, LLC, alongside joint venture partner WWP JV LLC, an entity tied to SL Green Realty Corp. and RXR Realty LLC. The property carries a $940 million first mortgage, in monetary default since December 2025; a $190 million senior mezzanine loan, in default since September 2024; and a $70 million junior mezzanine loan, also in default.
The senior mezzanine loan changed hands in October 2025, when WWP Mezz Investment Company LLC, an affiliate of Extell Development Company, acquired the debt and declared a default, accelerating the amount owed.
WWP Mezz, LLC, an affiliate of the borrower, sought a preliminary injunction in New York Supreme Court to block a Uniform Commercial Code foreclosure sale of the pledged collateral; the court denied the motion in January, finding the borrower had not shown the proposed sale was commercially unreasonable. The sale has since been postponed multiple times and has not closed.
Separately, first mortgage trustee Wilmington Trust, National Association has pursued a mortgage foreclosure action in New York Supreme Court, and the court appointed receiver Matthew D. Mason of Hilco Global in March. Effective July 1, the receiver replaced SL Green Management with Cushman & Wakefield as property manager, with the mortgage lender’s consent.
NYRT said it has no obligation to fund additional capital tied to the property and is not a party to the ongoing default negotiations, which are being handled by SL Green Realty Corp. and RXR Realty and their affiliates as WWP Holdings members.
From Nontraded REIT to Liquidating Vehicle
Worldwide Plaza is the last significant asset of a company that began life in the American Realty Capital stable. Incorporated in October 2009 as American Realty Capital New York Recovery REIT, Inc., it was sponsored by Nicholas Schorsch’s American Realty Capital, advised by an ARC affiliate, and sold through ARC’s captive broker-dealer, Realty Capital Securities LLC.
The nontraded REIT launched an initial public offering of up to 150 million shares at $10 per share in September 2010 and closed the offering in December 2013. It operated as a nontraded REIT through April 14, 2014, listing on the NYSE the following day under the ticker NYRT and taking the name New York REIT, Inc. The subsidiary that still holds the Worldwide Plaza stake, ARC NYWWPJV001, LLC, carries the sponsor’s initials.
Schorsch resigned from the New York REIT board and a dozen other affiliated companies in late 2014, weeks after American Realty Capital Properties Inc. – another Schorsch vehicle, later renamed Vereit Inc. – disclosed accounting irregularities. Former ARCP chief financial officer Brian Block was convicted of securities fraud in 2017 for his role in the episode.
Activist investors, among them Michael Ashner’s WW Investors, Steve Witkoff, and Land & Buildings Investment Management founder Jonathan Litt, pressed the REIT over its external-management structure and board composition. AR Global was replaced as adviser in 2016, and stockholders approved a plan of liquidation on Jan. 3, 2017.
NYRT sold down its Manhattan portfolio, raised its Worldwide Plaza position to 98.8% in 2017 before selling a 48.7% interest to the SL Green and RXR venture, and converted from a listed corporation into New York REIT Liquidating LLC on Nov. 7, 2018. The tower has been its only significant property asset since.
September 2025 Settlement
The current distress follows a September 2025 settlement that resolved a separate, internal dispute over the same joint venture. On Sept. 17, 2025, ARC and WWP JV entered into a fourth amended and restated LLC agreement for WWP Holdings, ending litigation in Delaware Chancery Court and the Supreme Court of New York’s Commercial Division over the prior version of the agreement. Under the settlement, ARC transferred a 0.2% interest to WWP JV, shifting the split from 50.1%/49.9% to 49.9%/50.1% in WWP JV’s favor and making WWP JV the managing member, though ARC retained consent rights over specified major decisions.
The settlement also freed NYRT from an obligation to maintain reserve funds tied to WWP JV’s initial investment, clearing the way for WWP Holdings to distribute roughly $6.75 million to the two members – with ARC receiving about $3.39 million, inclusive of payment for the transferred stake. Both parties agreed to dismiss the litigation with prejudice, and the settlement contains no admission of liability by NYRT or ARC.
Taken together, the two disputes mark a shift in what has threatened NYRT’s remaining asset: a governance dispute between joint venture partners gave way, within months, to external default and foreclosure risk on the underlying debt itself – a risk NYRT says it isn’t obligated to help resolve.
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