A small portion of New York City will soon be available for sale.
As a result of an ongoing disagreement between the current owners of an iconic Manhattan building, the property will soon be available to the highest bidder.
The 121-year-old Flatiron Building, which is currently vacant, went to the auction block March 22 in what is known as a partition sale — stemming from a decision in a contentious legal battle among its many landlords.
In January, a New York state judge issued an order allowing the auction to proceed following a 2021 suit by Sorgente Group, Jeffrey Gural’s GFP Real Estate and ABS Real Estate Partners, who together own 75% of the building , The Real Deal first reported,
The co-owners filed suit after reaching an impasse with Nathan Silverstein, who owns 25% of the steel-framed 175 Fifth Avenue building, which was completed in 1902 and is the namesake for the surrounding neighborhood.
Due to the shared ownership of the building, which gives each owner veto power over every major decision in the building, the parties were not only unable to agree but were also unable to move forward – a very costly decision on the future of an extremely valuable piece of real estate. The fiefdom is stuck in a deadlock.
The situation became untenable after Macmillan Publishers – which occupied all 21 floors of the triangular structure at the time – announced in 2017 that it would move out within two years.
Silverstein later proposed a slew of “absurd” ideas to Gural, including no upgrades being done in the period between McMillan leaving and a new tenant moving in—despite the fact that the structure was being re-rented. The upgrade was legally required to take care of and fire safety, Gural said in an affidavit.
Despite the building being a landmark, Silverstein also had the idea of dividing the property into separate lots — an impossibility due to its historic status, Gural wrote, The Real Deal reported.
“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 a plan but will agree on how that work will be financed,” Gural wrote in the affidavit. “We have attempted over the years to resolve these differences with Mr. Silverstein, but Defendant delayed, resisted and ultimately refused to agree to Plaintiff’s proposed business plan.”
Meanwhile, Silverstein claims that Newmark failed to market the property when McMillan announced he was leaving, and then Gural tried to rent the space for an “extraordinarily low cost per square foot”. Tried and a very long contract for Notell, which was held by Barry Gossin of Newmark. significant share 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.
According to The Real Deal, the Sorgente-GFP-ABS group will bid at the auction later this month.