Sales  ·  Commercial

Flatiron Building Heads to Auction After Feud Between Owners

reprints


One of New York City’s most well-known buildings will be hocked to the highest bidder on the steps of the New York County Courthouse later this month.

A New York State Supreme Court judge ruled to allow an auction of the Flatiron Building, siding with partners GFP Real Estate, Newmark (NMRK), Sorgente Group and ABS Real Estate Partners in their yearslong strife with majority interest holder Nathan Silverstein.

SEE ALSO: Amazon Pays $218M for More Virginia Land for Data Center Development

Bids will be placed on the site designated by the Landmarks Preservation Commission on March 22 in the portico of 60 Centre Street, The Real Deal first reported

GFP’s Jeff Gural indicated that Sorgente, GFP, Newmark and ABS would likely bid together for the property at the auction.

“We are not interested in selling the building, and remain committed to finding a timely solution to resolve this stalemate,” Gural said in a statement.

The four firms have been at odds with Silverstein for some time, claiming he had been making poor business decisions. Their attempts to exit the joint venture landed them in court multiple times in recent years. 

In return, Silverstein has sued Newmark for allegedly attempting to lease the building to the Newmark-owned flexible office company Knotel for a price below market rate. He also claimed GFP goosed up the costs of construction to renovate the building, according to TRD.

The 22-story building sat devoid of activity — apart from the underlying turmoil and some construction work — after its sole tenant, publishing house Macmillan, headed south to 261,000 square feet at Silverstein Properties120 Broadway.

Upon Macmillan’s exit of the building, the partners began a gut renovation — which Silverstein allegedly tried not to do — that they hoped would accelerate leasing in the building which hadn’t seen many upgrades in its storied past.

Completed in 1902, the Flatiron Building was constructed on a triangle-shaped lot formed as Broadway slices diagonally through the intersection of Fifth Avenue and 23rd Street, leading to the structure’s signature three-sided profile. It is both a city and national historic landmark, and was one of New York’s first skyscrapers. 

“It only has one interior staircase, so we have to add a second staircase,” Gural previously told Commercial Observer. “We have to add sprinklers to the building. And we’ve got to put in a new mechanical system. You even have window a/c units in some of the offices, which is terrible.”

GFP, Newmark, Sorgente and ABS did not immediately respond to requests for comment. Silverstein could not be reached.

Mark Hallum can be reached at mhallum@commercialobserver.com.