Isaac Hera is pushing ahead with his planned redevelopment of the former Watson Hotel.
Barings provided Hera’s Yellowstone Real Estate Investments with a $326 million construction loan for the hotel-to-residential conversion of 440 West 57th Street, according to property records. The financing will fund the redevelopment and expansion of the Hell’s Kitchen property, which is slated to deliver 316 apartments spread across two towers.
Yellowstone purchased the leasehold interest at the Watson along with the existing mortgage from HSBC in 2021 for $175 million, after Richard Born and Ira Drukier’s BD Hotels defaulted on the debt the year before.
But the project has been slow to move forward. During the pandemic, the 600-key Watson shuttered to traditional guests and was instead used by the city as a migrant shelter amid an influx of asylum seekers. Mayor Eric Adams said last year that the shelter would close by the start of the summer, clearing the way for redevelopment.
Yellowstone filed updated plans with the Department of Buildings this summer, calling for two residential towers and a parking garage in the cellar. Amenities will include an entertainment lounge, gaming room, pet playroom, fitness center and indoor swimming pool. The hotel’s existing rooftop outdoor pool will remain as part of the redevelopment, per the filing.
The Watson conversion is the latest in a growing list of Manhattan repositionings by Hera, whose firm has leaned into adaptive reuse as office and hotel distress has mounted. Yellowstone is also pursuing a 422-unit office-to-residential conversion at 1730 Broadway, a Midtown West building it bought from Blackstone last year for $185.9 million.
Hera declined to comment.
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