BHI Provides $113M Refi for Yellowstone’s Purchase of Former Midtown East Hotel – Commercial Observer
Yellowstone Real Estate Investments has landed a $113 million loan to refinance the former Maxwell hotel in Midtown East, Commercial Observer has learned.
Yellowstone has not announced specific plans for the building yet.
BHI, the U.S branch of Bank Hapoalim (BKHYY), supplied the loan for the 541 Lexington Avenue property that Yellowstone acquired for $140 million last October through a foreclosure auction. In addition to the refi, loan proceeds will be used to fund tax reserves and closing costs for the 344,284 square-foot property as Yellowstone finalizes plans for reimagining the former 697-room hotel.
“We’re excited to provide this financing to Yellowstone as they continue to explore the optimal reimagination and reintroduction of this property,” Ilana Druyan, senior vice president and head of international origination at BHI, said in a statement.
Yellowstone, which is led by CEO Issac Hera, was note holder on $233.6 million in debt from a loan provided by LoanCore Capital tied to the building prior to its acquisition of 541 Lexington last fall, as CO previously reported. The property was acquired by Capstone Equities and Highgate Hotels for $183 million in 2018. The hotel closed in April 2020 at the height of the COVID-19 pandemic.
Hera said in a statement that BHI was a valuable “financial partner” in the deal who aligned with its “strategic vision” for the property and provided “growth capital” needed to “to immediately act” on implementing its plans.
Manhattan-based Yellowstone, a joint venture backed by international institutional investors, has developed or acquired a number of hotel properties since its founding in 2020, including the CitizenM Bowery, CitizenM Times Square and Hotel Indigo Lower East Side.
Andrew Coen can be reached at acoen@commercialobserver.com
