Full Breakdown
BHI Finances Major Manhattan Residential Conversion Project
4/13/2026, 9:32:26 PM
Overview of the Project
BHI, the U.S. branch of Bank Hapoalim, has provided a $167 million construction loan to Yellowstone Real Estate Investments for the conversion of the Candler Building, located at 221 West 41st Street in Midtown Manhattan, into a residential tower. This redevelopment project will feature 176 residential units along with 18,174 square feet of retail space. The total financing for the project amounts to $203 million, which includes an additional $36 million in mezzanine financing from Naftali Credit Partners.
Project Details and Objectives
The Candler Building, a 25-story structure, is part of a broader initiative to convert office buildings into housing in response to changing urban needs. As part of this initiative, 44 of the residential units are expected to be designated as affordable housing under New York's 467-m incentive program for commercial-to-residential conversions. Gil Karni, CEO of BHI, emphasized the bank's longstanding involvement in Manhattan's development and its commitment to supporting such conversions.
Isaac Hera, CEO of Yellowstone Real Estate Investments, highlighted the importance of BHI's expertise in navigating the complexities of Manhattan transactions, stating that the financing provides the necessary certainty to pursue repositioning opportunities effectively.
Broader Implications
This project reflects a growing trend in New York City, where developers are increasingly focused on transforming underutilized office spaces into residential units. The conversion of the Candler Building is part of Yellowstone's expanding portfolio, which includes other projects in Manhattan, particularly on Broadway and Lexington Avenue. This shift not only addresses housing shortages but also revitalizes urban areas, contributing to the city's economic recovery.
Criticism & Opposition
While the project aims to enhance housing availability, it may face scrutiny from community groups concerned about the impact of gentrification and the adequacy of affordable housing provisions. Critics often argue that such developments can lead to increased living costs in surrounding neighborhoods, potentially displacing long-term residents.
Official Statements & Responses
Gil Karni stated, "We are pleased to support Yellowstone’s effort to reposition the property and return it to the market with a new purpose." Meanwhile, Isaac Hera remarked on BHI's role, noting that their familiarity with the speed and complexity of Manhattan transactions made them a valuable partner.
What's Next
As the project progresses, stakeholders will be closely monitoring its development and the integration of affordable housing units. Future announcements regarding additional projects by Yellowstone Real Estate Investments are anticipated, as the company continues to explore further opportunities in New York City's evolving real estate landscape.
