Photo courtesy of d26b73 on Flickr
After being put up for auction for the second time since March after the previous buyer failed to make the down payment, the Flatiron Building has sold for $161 million. During the auction hosted on the front steps of a Lower Manhattan courthouse Tuesday, a group led by Jeff Gural of GFP Real Estate, one of the landmarked building’s previous owners, placed the winning bid over four other contenders. After winning, Gural said he plans to convert the upper part of the building into residential units, while keeping office space below, according to Crain’s New York.
The auction started at $50 million and lasted roughly 15 minutes, according to Crain’s New York. Eli Lever of development firm 21B bid as high as $120 million, while Lajos Horvath, an investor from Florida, and his son Leon Horvath, a real estate broker, bid over $150 million.
In the end, Gural placed the highest bid. In order to prevent the outcome of the previous auction, bidders were required to bring a $100,000 check to “weed out” unserious buyers. Gural must pay $16 million, 10 percent of his total bid price, by Thursday. Gural’s group, which consists of Sorgente Group and ABS Real Estate Partners, now owns the 25 percent stake held by previous owner Nathan Silverstein.
In order to convert part of the building into residences, Gural would first need to acquire a special permit from the city.
“I know that there are enough residential tenants that would want an apartment in the Flatiron,” Gural told NY1. “There’s probably enough commercial tenants that would want an office there, but residential is easier.”
Tuesday’s auction finally ends a long-running disagreement between the previous owners of the Flatiron Building, which included GFP Real Estate, Newmark, Sorgente Group, ABS Real Estate Partners, and Nathan Silverstein.
In 2021, the four partners sued Silverstein, who owned 25 percent of the building, in search of a partition sale, claiming that Silverstein made poor business decisions after the building’s only tenant, Macmillan Publishers, moved out in 2019, as Crain’s reported.
Silverstein went on to sue his partners for damages, claiming they didn’t try to get the building leased and accusing Newmark of making a separate deal with the other partners to lease it to Knotel at below-market-rate rents and failing to properly market the building. After all of the partners agreed to pay $80 million to renovate the property, Silverstein alleged that GFP inflated the construction costs, and so unable to reach a deal, the partners acquired a partition sale through a judge to extract their investments from the property.
The sale marks the final chapter in the drama-filled story that has been the Flatiron Building’s auctioning. In March, the property sold for $190 million to Jacob Garlick of Abraham Trust, who failed to pay the required 10 percent down payment of $19 million by the set deadline.
Gural, who was the second highest bidder, could have purchased the building for $190 million after Garlick backed out but was uninterested in buying it for the winning bidder’s price.
Gural and his partners are currently suing Garlick for the $19 million down payment as damages for his failure to pay.
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Tags : Flatiron Building
Neighborhoods : Flatiron