Yellowstone Real Estate Investments has acquired the defunct Midtown East Maxwell hotel, adding another distressed property to its real estate portfolio.
The firm picked up an outstanding debt of $233.6 million on the hotel, a 697-room property at 541 Lexington Avenue in Manhattan. Yellowstone snagged the property at auction for $140 million, PincusCo first reported.
The hotel has been closed since April 2022, but a few holdouts, like women’s clothing retailer Galerie Saint Gil, remain on the property.
The $233.6 million loan was first provided by LoanCore Capital. While Joshua Roshanzamir’s Capstone Equities and Highgate Hotels bought the building in 2018 for $183 million, Dune Real Estate Partners and Aynsley Capital covered the acquisition portion of the loan. The firms were listed as the defendants in Yellowstone’s suit to claim the property.
Dune could not be reached for comment, while Aynsley and Yellowstone did not immediately respond to Commercial Observer’s requests for comment.
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Hera founded Yellowstone in 2020, and has since established a reputation for high-profile, complex turnaround deals. The acquisition continues the firm’s strategy of snapping up distressed properties.
The firm bought the loan on the New Yorker Hotel in September 2023 for $106 million. In April, it picked up a defaulted commercial mortgage-backed securities loan on 1740 Broadway from Blackstone, which defaulted on the $308 million loan in March 2022. Blackstone originally purchased the property from Vornado Realty Trust in 2014.
— Caroline Handel