New York’s famed Flatiron Building has been bought by a surprise contender.
The now-former owners of the Fifth Avenue landmark lost their deed to a deep-pocketed challenger in a Wednesday auction.
That afternoon, at what’s known as a partition sale (referring to the fact that the auction was a court-ordered sale of a jointly owned property), the Flatiron Building changed hands: Growth equity venture fund Abraham Trust is the new keeper of the 121-year-old building, its managing partner Jacob Garlick having placed the winning $190 million bid, according to the Real Deal.
As part of a partition sale feature, which honors existing stakes in a property, the previous Flatiron proprietors were all allowed to make credit bids on the property.
Despite the heads up of sorts, Jeffrey Gural of GFP Real Estate — who, alongside Sorgente Group and ABS Real Estate Partners owned 75% of the building before Wednesday — was outbid by Garlick on the Manhattan County Courthouse’s steps.
The auction was born out of a disagreement between the aforementioned stakeholders and one Nathan Silverstein, who owned the remaining 25% of the historic, triangular tourist attraction.
Sharing the building proved impossible for the wealthy crew of co-owners, and the fact that each owner got veto power on every major building decision meant that not only were the parties unable to agree, but they also eventually reached a very expensive stalemate over the pricey piece of real estate’s future.
The situation became untenable after MacMillan Publishers — which at the time occupied all 21 floors of the triangular structure — announced in 2017 that it would be moving out within two years.
Silverstein subsequently proposed a slew of what Gural deems “preposterous” ideas, including that no upgrading be done in the time period between MacMillan leaving and a new tenant moving in — despite that fact that upgrades were legally required to re-rent the structure and for fire safety, Gural said, according to an affidavit.
Despite the building being landmarked, Silverstein also had the idea to divide the property into separate ones — an impossibility due to its historic status, wrote Gural.
“It boggles the mind to suggest that we could nevertheless agree on a plan to physically divide this building into five smaller, independent properties, none of which would be marketable — and then agree on a plan as to how that work would be financed,” Gural wrote in the affidavit. “We have tried for years to work out these differences with Mr. Silverstein, but the defendant has delayed, resisted and ultimately refused to agree with plaintiffs’ proposed business plan.”
Silverstein, meanwhile, claims Newmark failed to market the property when MacMillan announced it was leaving, and then Gural tried to rent the space for an “exceptionally low cost per square foot” and an extremely long contract to Knotel, which Newmark’s Barry Gossin had a significant stake in.
“The proposed rental agreement would have locked the property into an unprofitable lease for a long period of time,” Silverstein wrote in an affidavit, The Post previously reported.