Originally posted by Andria Cheng, CoStar News
The surprise outside bidder who won the $190 million public auction of the iconic Flatiron Building in New York has failed to make a scheduled 10% down payment, the sale organizer said, potentially setting the stage for the property to be peddled again.
Managing Partner Jacob Garlick of Abraham Trust, billed on its website as a multifamily office and growth equity venture fund, didn’t make the $19 million deposit required by Friday, auctioneer Matthew Mannion of Mannion Auctions said in an interview with CoStar News. He added it’s not clear if an extension was officially granted.
According to the terms of sale, in the event the winning bidder doesn’t make the good faith down payment, the second-highest bidder is given the option to acquire the triangular-shaped building, Mannion told CoStar.
That would be Jeffrey Gural, chairman of GFP Real Estate, who bid $189.5 million as he stood next to Garlick on Wednesday in an intense last-round back-and-forth at the New York County Courthouse in lower Manhattan.
Gural and his partners currently own a 75% stake in the Flatiron Building. While there were 11 registered bidders, the third-highest bidder stopped at $118 million, Mannion said.
Gural told CoStar News he is not interested in exercising his option.
“Another auction is likely,” Mannion said, adding it’s “very rare” that a deposit isn’t made.
Garlick didn’t immediately respond to CoStar News requests seeking comment.
‘Very High Price’
Gural told CoStar News in an interview last week that the winning bid was what he considered “a very high price,” adding the building still needs $100 million in upgrades.
“If it wasn’t an iconic building, I would have stopped long ago,” Gural told CoStar last week. “It’s such an iconic building and we own 75%. I really thought that it wasn’t worth anywhere near that but since we are only bidding on 25%, I felt I could overpay for 25%.”
He said last week “it’s a little disappointing” that he lost the bid and described the iconic landmark as “a beautiful building.”
Garlick, who was visibly excited and emotional when he won the auction, told CoStar News at the time “we are going to make sure it stays one of New York’s most iconic buildings” without giving more details.
The public auction came after lawsuits arising from various disputes between Gural’s GFP and the Flatiron’s minority owner, Nathan Silverstein, over renovations, leasing plans, and possibly dividing up the building. A New York state Supreme Court judge earlier this year approved the public auction sale.
The 255,000-square-foot, 22-story building has sat vacant since Macmillan Publishers, which was said to have occupied the entire tower, moved out and relocated downtown in 2019.
Opened in 1902 and designed by Chicago architect Daniel Burnham as one of New York’s first skyscrapers, the building, located at 175 Fifth Ave. at the intersection of Fifth Avenue and Broadway south of 23rd Street, was designated a landmark by the NYC Landmarks Preservation Commission in 1966.