Flatiron Building buyer fails to provide $19 million deposit following last week’s auction

In Limbo

Flatiron Building buyer fails to provide $19 million deposit following last week’s auction

(Paul Griffin/Unsplash)

At an auction last week on the steps of a Manhattan courthouse Jacob Garlick, a managing partner of Abraham Trust, bid $190 million to purchase the Flatiron Building. Garlick’s bid was high enough to secure the historic, triangular-shaped office building. Yet two days later, the court-ordered deposit of ten percent of the sale price, $19 million, was not delivered.

Under the auction rules should a deposit not be made the purchase goes to the second-highest bidder, in this case GFP Real Estate Chairman Jeff Gural. According to reporting in The New York Times, Gural went into the auction anticipating he would win and theorizes that Garlick was there to simply up the bidding.

​​“I was annoyed. I never thought he’d keep going to such a high price,” Gural said. “All he was doing was driving up the price.”

In an interview immediately following the bidding, Garlick expressed excitement in his win, telling NY1, “It’s been a lifelong dream of mine, since I’m 14 years old. I’ve worked every day of my life to be in this position.”

Prior to the pandemic, the 22-story building designed by D. H. Burnham and Company of Chicago (with Daniel Burnham and Frederick Dinkelberg as the lead architects) was valued at $200 million with an estimated $100 million required for renovations to upgrade the mechanical system and restore the exterior. It has been vacant since 2019 when its last office tenant MacMillan Publishers and street-level shops moved out.

The building went to auction following an order from a Supreme Court judge, as its previous owners, a consortium of real estate companies, have been unable to agree on renovations and tenants for the building. The companies with stakes in the building were Newmark, Sorgente Group, ABS Partners Real Estate, Nathan Silverstein, and Gural’s company GFP Real Estate. The companies could not come to agreement on how to manage the landmark site, a proposal in 2021 from Nathan Silverstein looked to divide it into five separate properties; this did not go over well with the other stakeholders who sued him.

Gural further suspects that Garlick may have been bidding on behalf of Silverstein.

What happens next? Gural, as the second-highest bidder, can purchase the building at his final bid of $189.5 million.

If he declines, the building will go up for auction again.