Yellowstone Seeks $400 Million in Private Placement Ahead of IPO

Yellowstone, a real estate investment firm founded by Yakir Gabay, is currently raising approximately $400 million in a private stock placement. This pre-initial public offering (IPO) round is intended to fund real estate opportunities in the United States.

Gabay, also the founder and largest shareholder of German company Aroundtown, established Yellowstone in 2019. The firm partnered with major Israeli institutional investors, including Clal Insurance (28.4%), The Phoenix (27.8%), and More (16.2%), to operate in the U.S. real estate market. Yellowstone itself holds a 27.6% stake in this partnership and manages its operations, effectively controlling it. The existing partners, along with Yellowstone, are expected to contribute to the new funding round to maintain their ownership percentages. Additional Israeli insurance companies, such as Harel, may also join the investment.

The partnership currently possesses $853.7 million in equity and manages approximately $1 billion in real estate assets. In June, the partnership raised 600 million shekels in Tel Aviv through bond offerings, with a 7.5% annual interest rate. Yellowstone, established in 2016, focuses on acquiring undervalued and distressed properties in North America, specializing in converting office and retail buildings into residential units, as well as acquiring hotels and leisure complexes.

The company's subsidiary, which raised bonds in Israel, holds four properties under development in New York City, including stakes in the Candler Building near Times Square and a property at 1740 Broadway, both slated for conversion into rental apartments. New York City's policies encouraging the conversion of commercial properties to residential use are beneficial to these projects. Bank Hapoalim is a primary Israeli lender for Yellowstone, which has also provided loans for projects in San Francisco and Ontario, Canada.

Yellowstone's valuation in this funding round is projected to exceed $1 billion, with proceeds earmarked for opportunities in New York's hotel sector and the U.S. residential market. The company recently exercised an option to sell its stake in the River District project to Adam Neumann and Canada Global for its investment plus a 20% return, a transaction expected to conclude by November. This move resulted in an $18 million loss for Yellowstone, recorded in its January-June 2026 financial reports, which also showed an operating loss of $25 million and a net loss of $29.2 million for the period. The company's net operating income from Manhattan properties has also declined significantly.