Yellowstone Acquires Former Midtown East Maxwell Hotel Through Foreclosure

Yellowstone Real Estate Investments continues to take over more turf through distress as it takes back the shuttered Midtown East Maxwell hotel.

As the note holder on $233.6 million in debt on the building, Issac Hera’s Yellowstone is now the proud owner of the 697-key lodging at 541 Lexington Avenue, which it bought at auction for $140 million, PincusCo first reported.

The hotel was purchased by Joshua Roshanzamir’s Capstone Equities and Highgate Hotels for $183 million in 2018, but Dune Real Estate Partners and Aynsley Capital guaranteed the acquisition portion of the loan and was named as the defendant in Yellowstone’s litigation to claim the shuttered hotel.

The $233.6 million loan in question was originally provided by LoanCore Capital.

Yellowstone and Aynsley did not immediately respond to a request for comment while Dune could not be reached for comment.

The hotel has been closed since April 2020 but some retail tenants are holding out in the building, such as women’s clothing store Galerie Saint Gil.

Hera started private equity firm Yellowstone in 2020 and has quietly racked up a number of high-profile and complex turnaround deals in the city.

That includes last September when Yellowstone bought the New Yorker Hotel’s $106 million loan.

In April, Yellowstone also acquired the defaulted commercial mortgage-backed securities loan on 1740 Broadway. The property was previously owned by Blackstone until it defaulted on the $308 million debt in March 2022, after buying the building in late 2014 for $605 million from Vornado Realty Trust.

Mark Halum can be reached at mhallum@commercialobserver.com.