A commercial mortgage lender tied to ACRES Capital is asking a New York court to make the owners and guarantors of the Graduate by Hilton on Roosevelt Island cough up roughly $76.5 million after Cornell Tech pulled the plug on the hotel's ground lease. The move comes on the heels of the abrupt shutdown of the 18-story, 224-key property on the Cornell Tech campus in November 2025 and leans on a signed guaranty that, the lender says, now puts AJ Capital-linked entities directly on the hook for the debt. At the heart of the fight is a technical but costly question: did the lease termination flip what had been a limited-recourse loan into a full-recourse obligation a judge can now enforce?
ACRES Files for Summary Judgment
An ACRES Capital entity has filed for summary judgment in New York State Supreme Court, arguing that the guaranty was triggered and that the lender is entitled to collect the full loan balance, according to The Real Deal. In a statement to The Real Deal, William Brewer III, lead counsel for the ACRES entity, said AJ Capital "attempted to leave its lender holding the bag," casting the dispute as a straightforward case of a borrower walking away from its obligations.
Loan Records and Financing
Public filings show the hotel entity took out a $76.5 million loan with ACRES in 2022, a refinance that closed in late September and was recorded in October, according to property records compiled by PincusCo. Those records list Graduate Roosevelt Island Lessee LLC as the borrower, a detail ACRES is now spotlighting in court papers as it works to collect under the guaranty tied to the loan.
Hotel Closure and Local Fallout
The Graduate by Hilton on Roosevelt Island went dark in November 2025, with local coverage describing employees being told the hotel would close and that future reservations were canceled, according to Roosevelt Islander. The shutdown left the lone campus hotel sitting empty and immediately raised questions in the neighborhood about what it meant for operations on the Cornell Tech campus and the owner's obligations to the university.
Legal Implications
According to The Real Deal, Cornell Tech terminated the hotel's 65-year ground lease on April 9, and ACRES argues that this move converted the loan into a full-recourse obligation, giving the lender the right to chase the guarantor for the entire balance. Court documents cited by The Real Deal say the AJ Capital affiliate now owes more than $79 million, a figure the borrower has not publicly accepted in the filings that have surfaced so far.
Brand Sale and What Comes Next
Hilton bought the Graduate brand in 2024 for $210 million and now franchises the properties, while AJ Capital kept ownership of many of the underlying buildings, according to a Hilton press release. The outcome of the current courtroom fight - whether through a judgment, a negotiated workout, or a foreclosure - will decide who ultimately controls the Roosevelt Island hotel and how the financial pain gets divided among the owner, franchisor, and lender.
The case remains pending in New York State Supreme Court, and the lender's summary-judgment push is an early bid to speed up collection. Upcoming court dates and filings should reveal whether ACRES can turn the lease termination into a fast recovery from AJ Capital affiliates or whether this turns into a longer legal slog over remedies and who ends up with title to the property.
