Buyer Fails To Close After Winning Flatiron Building At Auction For $190M
The fate of the iconic Flatiron Building is once again uncertain after the winning bidder in last week’s auction failed to put down a deposit.
Jacob Garlick shocked the New York commercial real estate market when his Virginia-based investment firm, Abraham Trust, offered $190M for the property, outbidding the building's long-term ownership group of GFP Real Estate, ABS Real Estate Partners and Sorgente Group.
But in yet another twist in the saga over the landmarked building’s fate, Garlick didn’t meet the Friday close-of-business deadline to put down a 10% deposit of $19M to secure the property, The Real Deal reported.
Garlick could be offered more time, if a court-appointed referee agrees. Otherwise, the second-highest bidder — which was the GFP-led group, offering $189.5M — could be given the option to purchase the building. Bidding opened at $50M and “dragged” as the auctioneer increased bids at $500K increments, GFP chairman Jeffrey Gural told Bisnow Wednesday.
“We would have liked to purchase it for a lower price,” Gural said. "It's a trophy property ... but we need another $100M to renovate the building."
Gural declined to comment to Bisnow Monday, but told TRD on Friday that he doesn't plan to purchase at the $189.5M price he offered during last week’s live auction.
If neither Garlick nor Gural’s group agree to purchase the 22-story property, it will likely head back to live auction and a fresh round of bidding.
GFP, ABS and Sorgente collectively own 75% of the property, but have been tangled in a years-long dispute with the fourth partial owner, attorney Nathan Silverstein.
The three owners sued Silverstein in 2019 after being unable to reach an agreement over how to renovate the property and fill 21 vacant floors after anchor tenant MacMillan vacated in 2017, per previous reporting from TRD.
GFP was favored to win the property at auction, but was taken by surprise when Garlick and Abraham Trust outbid them. Gural’s family has had an ownership stake in the building at 175 Fifth Ave. since the 1970s, and has said that the building isn't worth $190M considering how much work it needs to be brought up to modern standards.
