BHI, the US branch of Bank Hapoalim, said it had provided a $167 million construction loan to Yellowstone Real Estate Investments for the conversion of the Candler Building in Midtown Manhattan into a 176-unit residential tower with retail space. The project, at 221 West 41st Street near Times Square, will also receive $36 million in mezzanine financing from Naftali Credit Partners, bringing total financing to $203 million. 

The 25-story building spans 221,357 square feet and is set to include 18,174 square feet of retail space as part of the redevelopment. Forty-four of the apartments 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, said the bank had long played an active role in Manhattan’s development and remained engaged in the city’s push to convert office buildings into housing. He said the bank was pleased to support Yellowstone’s effort to reposition the property and return it to the market with a new purpose. 

Isaac Hera, CEO of Yellowstone Real Estate Investments, said BHI’s familiarity with the speed and complexity of Manhattan transactions made it a valuable partner, adding that the financing gave the firm the certainty needed to move decisively on repositioning opportunities.

The deal adds to Yellowstone’s growing portfolio of New York redevelopment projects. Industry reports in recent weeks said the company was also advancing other conversion and repositioning efforts in Manhattan, including properties on Broadway and Lexington Avenue. 

BHI describes itself as a commercial bank serving middle-market clients in sectors including commercial real estate, general industry, private equity, renewable energy, healthcare, technology, and data centers. In addition to its New York headquarters, it operates representative offices in Woodcliff Lake, Miami, and Los Angeles.