Want an apartment in the Flatiron building? New owners pay $161 million at auction, announce residential conversion
The iconic Flatiron Building was bought for $161 million at auction Tuesday afternoon by its majority owners, who immediately floated plans to convert part of the office building for residential use.
Jeffrey Gural, Chairman of GFP Real Estate, made the winning bid to keep the Flatiron at a packed outdoor auction held on the steps of the Supreme Court. GFP, Sorgente Group and ABS Partners already owned 75% and beat out six other bidders for full ownership of the property. Their previous $189.5 million bid narrowly lost two months ago.
“I saved $30 million, I feel okay,” Gural joked to reporters afterwards. “We overpaid, but not by much. I had no idea what to expect.”
Gural said the next step would be to convert the Flatiron into apartments, either putting them in the top half of the building and leaving offices on the bottom, or making it entirely residential.
“You know, everybody talks about the city accelerating, converting office buildings to apartments, and here we are ready to go,” he said.
Gural added that the conversion would require a special permit from the Department of City Planning, saying, “It’s just one more problem to deal with.”
It’s perhaps the most famous building in the city so far to announce such plans, which can entail a complex and time-consuming process.
Mayor Adams and Gov. Hochul previously touted workplace conversions as part of their “Making New York Work for Everyone” plan. In January, Adams issued recommendations to help facilitate such conversions, which could potentially lead to housing for 40,000 New Yorkers in the next decade if enacted, he said. A proposed tax break for office-to-residential conversions did not make it into Hochul’s final budget late last month.
Bidding on Tuesday started at $50 million and the proceedings were over in less than half an hour.
It was a much less hectic affair than the first auction, when relative unknown Jacob Garlick of Virginia stunned the city real estate scene with a winning $190 million bid — then failed to pay the necessary $19 million deposit, torpedoing the deal.
Garlick was not present at the new auction, but the events of March 22 hung over the proceedings all the same. One key difference this time was that participants had to submit a certified check of at least $100,000 in order to participate.
The Flatiron, empty since 2019, initially went up for sale because of disagreements between the majority owners and Nathan Silverstein, who owned the remaining 25% of the building. GFP, ABS and Sorgente sued Silverstein in 2021 to seek a partition sale, leading to the court-ordered first auction in March.
“This is a big relief to finally own the whole building and buy out Nathan’s share,” Gural said.
The coalition of majority owners, led by Gural, were runners-up after being narrowly outbid by Garlick just over two months ago. When he failed to make the deposit, Gural’s coalition had the option to purchase the Flatiron for the price of the second-place bid. They declined, and the property returned to auction.
Gural’s group sued Garlick earlier this month, describing his bid as “fraudulent.” Garlick and his firm Abraham Trust have until July 18 to respond to the complaint, according to a Monday court filing.
For Gural, the victory was about legacy.
“I’ve gotten a lot of publicity from this,” he said. “When I die, people will know who I was.”