Opportunistic investor Isaac Hera has netted a huge construction loan from Barings to convert a Hell’s Kitchen hotel into apartments.
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Barings provided a $326M mortgage to Yellowstone Real Estate Investments, Hera's private equity firm, to turn 440 W. 57th St. into 312 apartments, PincusCo reported.
Yellowstone acquired the roughly 600-room property, formerly known as the Watson Hotel, in 2021 from its former lender for around $175M — at the time the highest pandemic-era price paid for any Manhattan hotel, Bloomberg previously reported.
Yellowstone didn’t disclose its vision for the Watson at the time of purchase but submitted plans in 2023 for a residential conversion, which were approved last month.
As it was waiting for approval and financing, Yellowstone offered the Watson as a shelter during the city’s migrant crisis under a contract that ran until June before it was nixed by then-Mayor Eric Adams. It provided some of the 16,000 hotel rooms estimated to have been used to house migrants who crossed the southern U.S. border and were bused to the city from states like Texas.
Yellowstone didn’t immediately respond to a request for comment. Barings declined to comment.
The Watson Hotel acquisition wasn’t Yellowstone’s only headline-making acquisition during what turned out to be the market's bottom. Hera scooped up a note valued at $106M on the New Yorker hotel, famous for its iconic signage, in 2023.
The following year, it paid less than $200M to acquire the CMBS loan for 1740 Broadway. Blackstone acquired the 621K SF, 26-story Midtown office tower for $605M in 2014 but handed the keys over to Hera after the building's loan was placed with a special servicer.
Also in 2024, Yellowstone purchased the 697-room hotel at 541 Lexington Ave., the Maxwell, bidding $140.5M at a foreclosure auction two years after acquiring the debt tied to the shuttered hotel.
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