Nashville Business Journal Reports on Lawsuit Against AJ Capital Affiliate Following Closure of Roosevelt Island Hotel
May 13, 2026 – The Nashville Business Journal reports that Cornell University and ACRES Capital have filed separate lawsuits against an affiliate of AJ Capital Partners following the November 2025 closure of the Graduate by Hilton Roosevelt Island.
Graduate Roosevelt Island Owner LLC entered a 65-year ground lease with Cornell in 2018 to develop and operate the 224-room hotel on Cornell Tech’s campus. The property opened in 2021 and later secured a $76.5 million loan from ACRES in 2022.
According to court filings, ACRES declared a default under the loan agreement in September 2025, alleging the borrower failed to maintain required balances in its debt service reserve account. The hotel ceased operations on November 25, 2025.
ACRES then sued the AJ Capital affiliate that guaranteed the loan pursuant to a Recourse Guaranty, Graduate Hotels Real Estate Fund III, LP Roosevelt Island Owner LLC in New York County Supreme Court, seeking approximately $79.27 million in outstanding principal, accrued and unpaid interest, late charges, and attorneys’ fees.
On April 29, Cornell separately sued the borrower – Cornell’s former tenant – for eviction and for more than $1 million in unpaid rent and lost event revenue. The university’s lawsuit alleges that the hotel closure violated the ground lease agreement and caused substantial harm to the university, its campus operations, and related event activity.
Brewer, Attorneys & Counselors partners – William A. Brewer III and Jason Snyder – represent ACRES in the litigation, the Nashville Business Journal writes.