Yellowstone Real Estate Investments is refinancing its recent Midtown East acquisition, but isn’t ready to tip its hand about the future of the property.
BHI, the U.S. arm of Bank Hapoalim, provided a $113 million loan to refinance 541 Lexington Avenue, the Commercial Observer reported. The property was once the home to the Maxwell Hotel, which Isaac Hera’s firm acquired through a foreclosure auction in October for $140 million.
Proceeds from the debt will fund tax reserves and closing costs for the 344,000-square-foot asset. Yellowstone was the noteholder on $233.6 million in debt linked to a LoanCore Capital loan tied to the building.
The 697-key hotel shuttered more than three years ago. Joshua Roshanzamir’s Capstone Equities and Highgate Hotels bought the building in 2018 for $183 million.
The firm doesn’t yet have a plan for the property. In statements to the Observer, BHI’s Ilana Druyan said the lender was “excited to provide this financing to Yellowstone as they continue to explore the optimal reimagination and reintroduction of this property,” while Hera mentioned a “strategic vision” for the asset.
Since founding Yellowstone in 2020, Hera has built a reputation on high-profile, complex turnaround deals, snapping up distressed properties.
Yellowstone recently filed plans for a 422-unit residential conversion of an office building at 1730 Broadway in Midtown West, which it had acquired from Blackstone last year for $185.9 million.
Last week, BHI and Israel Discount Bank provided a $105 million loan for two 99-unit buildings being developed by Jay Group in Downtown Brooklyn. Jay Group, led by Jacob Kohn, filed plans last year for 450 units spread among five buildings, nodding to the strange terms of the state’s 485x tax break, for which a $40 wage floor kicks in on developments with at least 100 units.
— Holden Walter-Warner
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