Issac Hera, who helms the real estate private equity firm, confirmed that Yellowstone had acquired the property. He declined to comment on the price.
“The Watson represents for us a unique and rare opportunity to acquire substantial scale on West 57 Street,” Hera said in an email. “We are big believers in the strength of the U.S. market as a whole and the New York market specifically.”
The Watson, which was previously operated as a Holiday Inn, was a textbook casualty of the pandemic. A previous owner defaulted on its loan, leading lender HSBC to find a buyer for the mortgage.
That wound up being Yellowstone, which also acquired the ground lease in a simultaneous transaction. Eastdil Secured advised both HSBC and the ground owner.
HSBC declined to comment.
The Watson sale comes as accelerating vaccination campaigns kindle hopes for a lodging rebound in the second half of 2021. Leisure travelers are expected to spend on vacations, while corporate travel departments could get more comfortable putting employees back on the road.
Experts say resort markets will bounce back before big-box hotels in places like New York, which typically depend on business travel and meetings to fill rooms and increase rates.
Yellowstone was part of a joint-venture that recently sold a U.S. apartment portfolio for $1.75 billion, and the firm is actively looking for opportunities, Hera said.
Hera also said that his firm is still evaluating potential plans for the Watson, which has been viewed in the past as a potential redevelopment site for offices or apartments.