SL Green Nears Resolution With TIAA, Norges in $50M Dispute
SL Green is close to ending one fight at 2 Herald Square, though a broader battle appears to remain.
Marc Holliday’s real estate investment trust reached a framework for a settlement agreement with TIAA and Norges Bank revolving around a financial dispute, Crain’s reported. Terms of that settlement agreement were not disclosed.
The issue started as a simple retail dispute. SL Green sued Victoria’s Secret after the latter closed its store at the building during the pandemic, alleging the lingerie retailer fell well behind on rent. A judge ultimately awarded SL Green $50 million, triple the amount of back rent.
Norges and TIAA, which own the land underneath 2 Herald Square, alleged in a lawsuit that they were owed money from SL Green’s court victory. They claim to have pressed SL Green about the judgment while pursuing $24 million in defaulted ground lease payments, only to be rebuffed.
“This framework would allow the parties to move forward to benefit this important asset,” SL Green said in a joint statement with TIAA subsidiary Nuveen.
The resolution of that dispute could cast light on the future of the property’s ownership.
TIAA purchased the fee interest in the property in 2014 from SL Green for $365 million, when Sitt Asset Management was the ground lease tenant. Four years later, SL Green acquired the ground lease following a foreclosure case.
In 2024, SL Green completed a deal to acquire a 95 percent stake in the leasehold, paying only $7 million to settle the property’s $182.5 million mortgage. The 370,000-square-foot asset was only 35 percent occupied at the time of the deal and Holliday was floating a potential conversion to residential use.
But last year, TIAA filed a complaint in New York State Supreme Court, alleging SL Green owed $16 million in back rent on its ground lease at the property, as well as $8 million in taxes and other fees adding up to $30 million owed in total over the course of a year.
TIAA declared SL Green to be in default in December 2024 after the tenant didn’t pay what was owed, according to the complaint. The following month, TIAA declared the lease terminated.
SL Green pushed back against the lease termination and said it had started seeking a reduction in ground rent due to the commercial real estate market’s downturn.
SL Green did not immediately respond to a request for comment from The Real Deal about where that dispute stands.
The property’s leaseholder has the right to purchase the building next year for an undisclosed, set price.
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TIAA declares SL Green’s 2 Herald Square lease terminated
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