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Gural’s group wins auction for Flatiron Building

Majority owners acquire iconic office property for $161M after first auction blew up

A group led by Jeffrey Gural on Tuesday won the right to acquire the Flatiron Building in an auction that had much less drama than one just a few months ago.

Gural’s group, whose members have long been the building’s majority owners, bid $161 million on the steps of the New York County courthouse in Lower Manhattan. Bidding started at $50 million.

A previous attempt to auction off the historic but vacant office building at 175 Fifth Avenue devolved into chaos when Jacob Garlick made a winning bid of $190 million but then failed to put down a deposit.

The Gural group had the option to buy the building for their runner-up bid of $189.5 million after Garlick’s flameout, but declined — a bet that paid off Tuesday.

“It’s a big relief, to tell you the truth, because I really wanted to keep the building,” Gural said moments after the auction. “But on the other hand, I didn’t want to overpay like we did the last time. So this is kind of a good result for us.”

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Jeff Gural

He added, “I still think we overpaid, but we overpaid by a lot less.”

Five other bidders fell short. Garlick did not show up.

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A court-appointed referee rescheduled the auction after the previously unknown Garlick missed the deposit deadline. This time, rules were imposed to make sure bidders were serious. The winner was required to pay the court-appointed referee $100,000 at the end of the auction.

Jeff Gural

The building was put up for auction to resolve a lawsuit pitting the majority owners — including Gural’s GFP Real Estate, Sorgente Group, Newmark and ABS Partners — against Nathan Silverstein, who owns the remaining 25 percent.

Silverstein disagreed with the other owners’ plans for the famously triangular building at Fifth Avenue, Broadway and 22nd and 23rd streets, so the owners decided to pursue a partition auction, which allows them to bid using their ownership stakes in the property — making Gural’s group the clear frontrunner.

Although they can now proceed without Silverstein, the owners have not settled on a renovation.

“I’ve got to talk to my partners and come up with a plan,” Gural said outside the courthouse. “I would think either make half the building residential and half office or all residential.”

Tuesday’s bidding does not end the drama of the first auction. Gural’s attorneys are pursuing Garlick for the $19 million deposit and suing him over the botched sale, claiming that Garlick never had the funds that he claimed.

The new owners of the vacant landmark are expected to undertake an ambitious renovation, which Gural claims could cost around $100 million.

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Jacob GarlickJeffrey Gural
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