SL Green says TIAA misled it over 2 Herald Square negotiations: lawsuit

UPDATED 4:20 a.m., March 19, 2025: SL Green Realty accused TIAA of misleading it as the giant real estate investment trust was negotiating with a partner and lender as well as with TIAA, to restructure ownership, debt and the ground lease itself that controls 2 Herald Square, also known as 1328 Broadway, in the Garment District in Manhattan. TIAA owns the fee.

This action is a response to a lawsuit TIAA, also known as Nuveen Real Estate, filed March 5, 2025, which alleged SL Green Realty was in default under the ground lease, and so Nuveen was seeking a declaration that the ground lease with a value of $120 million was therefore assigned to TIAA.
The property was negatively impacted by the loss in August 2023 of a major retail and office tenant, which occurred amid a general decline in both retail and office rents. Since the property was in distress, SL Green offered to turn over the keys, but instead, the complaint says, they agreed SL Green would maintain control but the ground rent would be restructured, SL Green would pay off a loan and would buy out a partner.

SL Green alleges it performed as promised, paid off the loan and bought out the partner, but then TIAA declared the lease in default, instead of signing the lease amendment reducing the rent.

In this new action, SL Green seeks to block any such assignment of the ground lease, alleging Nuveen negotiated in bad faith over months.
SL Green says TIAA operated by “unclean hands” because the ultimate goal was TIAA taking over the ground lease free and clear of the loan and partner. SL Green is now seeking, among other requests, a judgment blocking a transfer of the ground lease and also enforcing a Third Agreement to the ground lease, which ratified the restructuring of the ground rent but was never perfected.

SL Green alleges in its complaint, “Ground Lessor has unclean hands and is executing its plan, by way of its aforementioned wrongful actions, in order to wrest the Demised Premises from Ground Lessee.”

In a statement to PincusCo, Robert J. Cyruli of Cyruli Shanks, a law firm representing SL Green, said, “The filing reveals the incredible measures that the Fee Owner has taken to undermine SL Green’s stewardship of this asset, reneging on a longstanding agreement after SL Green had fulfilled its commitments. Instead of meeting with SL Green to understand the terms of a pending lease that would undeniably be beneficial to the property, they outrageously asked the court to stop a deal they haven’t even seen. Everything they’ve done is part of an underhanded and wrongful attempt to interfere with SL Green’s ownership.”

In a statement to PincusCo, Nuveen said, “Nuveen disputes SL Green’s allegations as stated in papers filed yesterday.  Nuveen has made every effort to try to work with SL Green over the past year.  We are pursuing the best interests of our investors and confident the record will be set straight in due course.”

In the prior case, TIAA alleged, “[TIAA] has exercised all of its default remedies under the ground lease: it has served two notices of default and a notice to cure. And, because [SL Green] failed to cure its defaults, in January 2025, Plaintiff served an assignment notice, reassigning the ground lease to its affiliate and terminating any possessory and/or tenancy rights formerly held by [SL Green]. This means that [SL Green] was required to vacate, and relinquish control of, the Premises.”

Court filings represent the position of one party and are not necessarily accurate or complete.

New case LINK

Prior case LINK

According to the complaint, “At all relevant times, Ground Lessor was aware that Ground Lessee’ pay off of the Leasehold Mortgage was reliant upon a corresponding restructuring of the Ground Lease to reduce and defer ground rent and that, but for Ground Lessor’s agreement to restructure the Ground Lease, Ground Lessee would not have further invested millions of dollars in a distressed asset such as the Demised Premises in order to pay off the Leasehold Mortgage.”

UPDATED: The post was updated with a comment from the law firm representing SL Green, and later with a comment from Nuveen.

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