A struggling office building in Times Square escaped foreclosure with a change in ownership.
British investment firm EPIC signed the deed to 220 West 42nd Street last week with Yellowstone Real Estate Investments, PincusCo reported. The transaction, which stood in lieu of foreclosure, came with a property valuation of $161.1 million.
The transaction ends a decade of ownership after the company purchased the Candler Tower from the Paramount Group in 2012 for $261 million, according to PincusCo. The mortgage on the building at the time was $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 bought the note in November 2021, which led to the deed in lieu of foreclosure last week.
The 24-story, 235,000-square-foot office building was built in the early 20th century for Coca-Cola founder Asa Candler. At one time it was the tallest building in Midtown.
According to PincusCo, the city’s designated market value for the property this year is $196.7 million.
Last April, Isaac Hera’s Yellowstone secured the biggest struggling hotel deal in Manhattan of the pandemic when the company purchased the 600-room Watson Hotel at 440 West 57th Street. He bought the lease on the property, as well as the mortgage held by HSBC. The loan funding the ground lease had an outstanding principal balance of $33.9 million.
This is the second major case of a landlord losing control of his office building in Midtown this week. Blackstone has decided to hand over the keys to its apartment building at 1740 Broadway after a $308 million loan on the 26-story property was transferred to special service. Blackstone is reportedly looking at building loan resolution options.
[PincusCo] —Holden Walter-Warner