Flatiron Building Sold At Auction To Surprise Bidder For $190M
The Flatiron Building sold for $190M at an auction in front of a Manhattan courthouse on Wednesday, bringing to a close a years-long dispute and putting the iconic building under new ownership.
A judge approved a partition sale earlier this year of the storied property — the first skyscraper built north of 14th Street — after GFP Real Estate, ABS Real Estate Partners and Sorgente Group, which collectively own 75% of the property, took legal action against the other partial owner, attorney Nathan Silverstein, in 2019.
At the sale, Abraham Trust, a firm led by Washington, D.C.-based investor Jacob Garlick, secured the property for $190M, The Real Deal first reported.
GFP Chairman Jeff Gural was the favorite to win the auction because owners can put up their stakes as a “credit bid” when a partial auction is taking place. But ultimately the bidding got beyond what the Manhattan property tycoon was willing to pay.
“We would have liked to purchase it for a lower price,” Gural told Bisnow Wednesday. "It's a trophy property ... but we need another $100M to renovate the building."
He said the bidding opened at $50M, and the auction “dragged” toward the end as the auctioneer increased the bids by $500K increments, putting Gural’s final bid at $189.5M.
His family has had an ownership stake in the 22-story building at 175 Fifth Ave. since the 1970s. Gural said because of the need to renovate, the new owner is committing to spend nearly $300M — or about $1,500 per SF for the 204K SF landmark.
Garlick could not be reached by press time, nor could Mannion Auctions, the auctioneer.
Friction between the now-former owners reportedly began six years ago, when anchor tenant MacMillan Publishers said it was planning to vacate its lease of the entire 21 floors of the property. Under the ownership terms, each owner had a say over what could happen next, and no agreement could be reached.
Silverstein had proposed dividing the building up, an idea which Gural said in a court filing “boggles the mind." He also claimed Silverstein wanted to put in a new tenant without doing legally required upgrades.
Silverstein, on the other hand, had accused Gural of offering a lease to flexible office provider Knotel for less than $44 per SF.
Gural’s plan was to win the property back and get rid of Silverstein, who inherited the stake in the property from his father, TRD reported.
Abraham Trust describes itself as a "multi-family office and growth equity venture fund" on its website. It was founded by Garlick in 2014 and has advised, worked on or syndicated $30B in deals since its founding. It is unclear what other real estate holdings it has.