Real estate boils down to how much a buyer is willing to pay and a seller is willing to accept.
Duh.
But last week showed the market is more than a little helter skelter, not only with sales prices, but also with the way in which players conduct themselves.
Nowhere was that more evident than in New York City, where the Flatiron Building saga appeared to come to a close when the building’s majority owners, led by Jeffrey Gural, beat out at least four other bidders to acquire the landmark at a second auction last week.
The first auction in March saw Gural outbid by unknown Jacob Garlick, who won with a $190 million bid. Two days later, however, Garlick failed to put down the deposit, triggering a do-over and a lawsuit by Gural’s group against Garlick and his investment firm Abraham Trust.
Fast forward to last week and closure wasn’t on everyone’s mind. Indeed, as Gural spoke to reporters — presumably ready to put the matter to bed — a man began to scream at Gural’s lawyer, Richard Dolan.
“Get ready for the fucking lawsuits,” the man shouted. “We’ll see you at either the Appellate Division or the fucking Supreme Court.”
Putting aside that the highest court in New York state is the milquetoast-named Court of Appeals, the threat of litigation didn’t seem to phase Gural.
“Lovely,” Dolan responded. “The court is open every day.”
“You better fucking believe it,” the man hollered back.
Another thing that had to be seen to be believed was the price Safe Harbor spent — an eye-watering $149 million — to buy the Montauk Yacht Club from Gurney’s, setting numerous records along the way. The sale was completed last year, but the price was only just recently revealed.
Even that number wasn’t close to the California record $200 million that music royalty couple Jay-Z and Beyonce paid for a Malibu estate designed by Japanese architect Tadao Ando.
Not everything was so rosy on the commercial side, however, as Vornado sold its Rego Park development site at 93-30 93rd Street to Queens developer Chris Jiashu Zu for about $70 million, which was 16 percent shy of the $85 million the REIT initially sought two years ago.
It’s a tough time for commercial buyers and sellers, but that isn’t stopping Vornado from looking to raise cash by selling assets.
The bad news isn’t limited to New York, with Melohn Group is projected to default on a Chicago building’s $105 million debt package after losing some crucial tenants.
The investor is on track for an “imminent default due to cash flow issues” on the loan it obtained in 2017 against the 24-story, 575,000-square-foot building at 111 West Jackson Boulevard, according to credit ratings agency DBRS Morningstar.