Flatiron Building Being Converted to Residential
The Brodsky Organization bought a stake in the landmarked office tower with an eye toward residential conversion
By Nicholas Rizzi October 26, 2023 11:16 am
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One of New York City’s most iconic office buildings is being converted to residential.
The Brodsky Organization bought a stake in Manhattan’s landmarked Flatiron Building and formed a joint venture with existing owners GFP Real Estate and The Sorgente Group to turn the 22-story building into a residential property, The Real Deal first reported.
Details on the exact plans for the building aren’t clear yet, but Brodsky, which will manage the joint venture, bought a “substantial stake” of up to 50 percent, according to a source with knowledge of the deal. Brodsky said it hopes to get approvals from the city for the conversion early next year.
“The Flatiron is an iconic New York City building, and The Brodsky Organization is very proud to join our partners at The Sorgente Group and GFP Real Estate in preserving this landmark property,” The Brodsky Organization’s Daniel Brodsky said in a statement. “We believe that the Flatiron Building is well suited for residences, and we look forward to working with the city and the Landmarks Preservation Commission on this exciting opportunity.”
The deal was brokered by Newmark (NMRK)’s Adam Spies, Doug Harmon and Adam Doneger, who declined to comment.
The Flatiron’s conversion into residential ends a spate of recent troubles for the more than 120-year-old building, including infighting between its partners and a public auction that failed embarrassingly.
The 255,000-square-foot building at 175 Fifth Avenue has been completely empty since 2019 when publishing house Macmillan left its offices there for 261,000 square feet at 120 Broadway. GFP and its partners argued that the building needed up to $100 million in renovations to accelerate leasing, but alleged that partner Nathan Silverstein stonewalled those plans.
GFP, Sorgente, ABS Real Estate Partners and Newmark took Silverstein to court in 2021 to get a partition sale of the property, and a judge set an auction on the steps of the courthouse at 60 Centre Street for March 22.
Jeff Gural’s GFP and his partners were outbid by the enigmatic Jacob Garlick, a managing partner at Abraham Trust, who offered to pay $190 million for the Flatiron.
“I was totally shocked that somebody would bid so much money for the building,” Gural told Commercial Observer after the auction. “It’s a beautiful building, but not really worth that much.”
However, Garlick failed to pay the $19 million deposit due two days after bidding ended, and the property went back onto the auction block on May 23 with GFP securing a winning bid of $161.5 million. And Gural immediately floated the idea of turning the storied property residential.
“If we were to condo the building as residential, we’d make a lot of money,” Gural said after the auction.
Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.
