Apr 1, 2023
After Loss in ‘Crazy’ Auction, Bidder for NYC Icon Wants a Redo
(Bloomberg) -- Jeffrey Gural spent years battling over the future of Manhattan’s Flatiron Building, only for his bid of almost $190 million at an auction to be topped by a relatively unknown figure.
Then, the winning bidder, Jacob Garlick, failed to pay his deposit. That’s left Gural, who runs GFP Real Estate, and the other investors in his group scrambling to figure out next steps in an unexpected twist after years of legal fights over the wedge-shaped tower.
While his group still has until Monday to officially decide, he said he’s likely to decline at the price they bid, $189.5 million, and wants to ensure next steps are smoother. Gural suggested potential bidders would have to deposit $1 million to even participate in an auction for the property.
“We’re in the process of regrouping,” Gural said in an interview. “Most likely there’ll be another auction, but we want to make sure if there is, that anyone who bids has to have skin in the game.”
The Flatiron Building at 175 Fifth Ave. has been tied up in a dispute between its owners in recent years. The tower, empty after its main tenant Macmillan Publishers moved out in 2019, was being renovated to try to attract other companies.
But the owners disagreed over the best course of action, leading to a dispute between Nathan Silverstein and the other investors including Gural’s GFP that resulted in an auction this month.
Then came a plot twist neither side saw coming.
Jacob Garlick, a managing partner at Abraham Trust who wasn’t well known in the New York real estate market, outbid the group to win the auction.
But Garlick failed to pay the deposit in time, according to reports, throwing the building’s future into flux. Gural said he spoke with Garlick about a potential partnership after the bid, but was shocked when the money didn’t show up.
He called the whole auction process “crazy.”
Garlick didn’t respond to an emailed request for comment.
Gural’s group bid $189.5 million for the property, though the group would only have to fork over a slice of that price for Silverstein’s stake.
While he acknowledged respect for Silverstein, he said the pair disagrees on how to reinvent the iconic NYC building. Silverstein declined to comment.
Ultimately, Gural said it’d be hard for him to step away after being involved with the Flatiron Building for nearly three decades.
“It’s a trophy property in my mind,” Gural said. “I’ve put in a lot of my time and energy and we’ve been renovating the building for the last two years.”
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