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Brits hand over Candler Tower to Isaac Hera’s Yellowstone

Midtown office transferred through deed-in-lieu

Yellowstone CEO Isaac Hera in front of 220 West 42nd Street (Getty Images, Google Maps)
Yellowstone CEO Isaac Hera in front of 220 West 42nd Street (Getty Images, Google Maps)

A troubled Times Square office property has dodged foreclosure with a change in ownership.

UK-based investment firm EPIC signed over the deed for the property at 220 West 42nd Street to Yellowstone Real Estate Investments last week, PincusCo reported. The transaction, which was in lieu of foreclosure, came with a $161.1 million valuation of the property.

The transaction ends a decade of ownership after the firm purchased the Candler Tower from Paramount Group in 2012 for $261 million, according to PincusCo. The mortgage on the building at the time was for $150 million and came from German lender Landesbank Baden-Württemberg.

In 2017, M&T Bank provided a $150 million loan to refinance the historic building. Yellowstone purchased the note in November 2021, leading to last week’s deed-in-lieu of foreclosure.

The 24-story, 235,000-square-foot office property was built in the early 20th century for Coca-Cola founder Asa Candler. At one point, it was the tallest building in Midtown.

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According to PincusCo, the city-designated market value for the property this year is $196.7 million.

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Last April, Isaac Hera’s Yellowstone made the biggest distressed hotel deal in Manhattan of the pandemic at the time when the company bought the 600-room Watson Hotel at 440 West 57th Street. It bought the leasehold on the property, as well as the mortgage held by HSBC. The loan financing the ground lease had an unpaid principal balance of $33.9 million.

This is the second major case of an owner losing control of its Midtown office property this week. Blackstone decided to hand over the keys to its building at 1740 Broadway after a $308 million loan on the 26-story property was transferred to special servicing. Blackstone is reportedly looking at loan resolution options for the building.

[PincusCo] — Holden Walter-Warner

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Commercial Real EstateMidtownMidtown Office MarketOffice MarketSteven Elghanayan