Yellowstone has snagged a $203 million in financing, which will be used to transform what was once an office building in Times Square into 176 apartments.
Naftali Credit Partners is providing a mezzanine loan ($36 million), with the main debt coming from the U.S. lending arm of Bank Hapoalim, as reported by The Real Deal, citing a report from the Commercial Observer. IPA's Capital Markets team arranged the financing package.
Yellowstone first acquired the 221,000-square-foot office in 2022 through a deed-in-lieu of foreclosure, according to The Real Deal. At the time, the asset was worth $161.1 million, much less than the $261 million that EPIC paid to acquire the property in 2012.
After serving as a migrant shelter that held almost 1,100 individuals, Yellowstone had plans to turn the 25-story building into a mixed-use property with a 265-room hotel. However, now the plans have shifted and Yellowstone will seek residential use with at least 44 affordable units and 18,000 square feet of retail space for the site at 220 West 42nd Street.
Overall, Manhattan has become a hot spot for office-to-residential conversions, as the city needs as much housing as it can get to tackle the affordability crisis. In fact, a Cushman & Wakefield recent report revealed that these transformations are slated to double this year, with 9.8 million square feet of office space now in the planning stages, almost double from the amount of starts seen from 2025.
Another big project in Times Square is coming from RXR, which is working on transforming a 1.1 million square foot office building into as many as 1,250 residential units.
Also, Broad Street Development recently announced a $175 million recapitalization, as it moves forward with an office-to-residential conversion in Downtown Manhattan, at 80 Broad Street.
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