Manhattan’s biggest distressed hotel deal of the pandemic just closed for $175 million.
Isaac Hera’s Yellowstone Real Estate Investments bought the 600-room Watson Hotel at 440 West 57th Street, Bloomberg News reported.
Yellowstone bought the leasehold on the property as well as the mortgage held by HSBC, which shopped the loan around after Richard Born and Ira Drukier’s BD Hotels defaulted last year.
“The Watson represents for us a unique and rare opportunity to acquire substantial scale on West 57 Street,” Hera wrote in an email to the publication. “We are big believers in the strength of the U.S. market as a whole and the New York market specifically.”
The loan financing the ground lease for the hotel had an unpaid principal balance of $33.9 million. Eastdil Secured advised the sellers the loan and the leasehold.
Investors have been waiting for a large number of distressed hotels to trade since the start of the pandemic, but so far the wave of defaults hasn’t materialized. Yellowstone’s deal is the largest in New York City since the billionaire Reuben brothers paid $150 million for the Surrey Hotel late last year.
[Bloomberg News] — Rich Bockmann