Roosevelt Island Hotel Lender Looks to Claw Back $77M

Roosevelt Island’s lone hotel is getting kicked out of class.

A lender is looking to claw back $76.5 million after Hilton’s Graduate Hotel ceased operations and had its ground lease terminated by Cornell University.

An entity of commercial mortgage lender ACRES Capital is suing a real estate fund tied to the Graduate chain and AJ Capital Partners, saying it owes the full value of the loan after a recourse guaranty was triggered, according to a request for summary judgment filed in New York state supreme court on Wednesday.

The action could spell a financial challenge for AJ Capital, which launched the Graduate hotel chain in 2014.

“AJ Capital shut down the only hotel on Roosevelt Island, turned Union employees out of work, walked away from its obligations to Cornell University, and attempted to leave its lender holding the bag on almost $80 million,” said William Brewer III, a partner at Brewer, Attorneys & Counselors and lead counsel for the ACRES entity, in a statement.

Neither AJ Capital, Hilton, or Cornell Tech immediately responded to requests for comment.

The Graduate is a chain of hotels located in college towns and themed around the local university. Nashville-based real estate investor Benjamin Weprin and his AJ Capital Partners launched the concept in 2014 with the first location in Athens, Georgia.

An entity of the hotel in 2018 signed a 65-year ground lease at the Roosevelt Island site on Cornell Tech’s campus at 22 North Loop Road. The base rent would grow from 1 to 4 percent of the hotel’s gross operating income, depending on the year. The lease stipulated that the site had to be operated as a three-star hotel, serving at least two table-service meals per day.

The hotel also took out a $60 million five-year construction loan from Emigrant Bank.

The Roosevelt Island Graduate location, on Cornell Tech’s campus, opened in 2021. The 224-key hotel is 18 stories.

The hotel entity took out a $76.5 million loan from ACRES in 2022. A Graduate real estate fund agreed to a full recourse guaranty, with documents signed by Weprin.

Hilton acquired the Graduate brand in 2024 for $210 million, entering long-term franchise agreements with the hotels. AJ Capital retained ownership of the real estate and management of existing locations.

But soon after opening, the Roosevelt Island location started defaulting on both its agreements to ACRES and to Cornell, according to court documents. The borrower failed to keep the debt service reserve account flush and failed to pay the lenders’ legal fees associated with requests to work out the loan, according to ACRES. Separately, the hotel failed to make utility payments to Cornell.

The Graduate hotel on Roosevelt Island closed in November 2025. Cornell terminated the ground lease on April 9, according to court documents. That, attorneys for ACRES say, converts the entire loan to full recourse and allows it to seek payment from the loan guarantor: an AJ Capital entity.

The plaintiffs say the AJ Capital affiliate now owes more than $79 million.
Graduate is offloading other locations, both domestic and abroad. The firm is seeking £60 million ($81 million) for its Cambridge location in the United Kingdom. The brand’s Storrs, Connecticut location, on the University of Connecticut’s campus, was acquired by West Anderson Partners last month.