Iconic Flatiron Building Finally Sold to Former Owners at $161 Million; Previous Bidder Sued for Fraud
Edited by: TJVNews.com
It seems like the iconic Flatiron Building in Manhattan has now found a new owner. The historic, triangle shaped edifice had been through two auctions, a lawsuit and other assorted problems before a new owner was found, as was reported by the New York Post.
In March, the 121-year-old building went up for court-ordered auction and was won by an enigmatic 31-year-old bidder who said he’d pay $190 million, the Post reported.
That mystery man, Jacob Garlick, then failed to pay any of the enormous sum he’d promised, though, and the skyscraper was sent back to the auction block Tuesday for the second time in two months, the Post report also stated.
According to allegations against Garlick, the Post reported that the former deed holders made the bid in order to bring “15 minutes of fame” to the small trust that he represents. He is also being sued by the previous deed holders for making a “fraudulent bid.”
This time around, Crain’s reported that the winning bid came from Jeff Gural of GFP Real Estate who is a majority building stakeholder of the group. It was also reported that he beat four other contenders with the $161 million winning bid from the group he represents.
Also included in the winning group were ABS Real Estate Partners and Sorgente Group. The Post reported that Gural and other co-owners were forced to auction off the address after reaching a stalemate with Nathan Silverstein, who owned 25% of the steel-framed structure until the first auction, and who could not come to an agreement on how to manage the pricey piece of property.
Crain’s also reported that subsequent to formalizing Gural’s repossession of the building on Wednesday afternoon, Gural said, “I feel good, truthfully. I really didn’t know how it would all turn out.”
And thus, a former part deed-sharer has become the full one, Gural and company having now functionally acquired the 25% stake previously held by Silverstein, the Post reported.
The Real Deal reported that Garlick was nowhere in sight at the second auction, which took place outside the New York County courthouse.
The Jewish Voice previously reported that Jeff Gural’s GFP Real Estate has sued Garlick’s Abraham Trust for allegedly failing to make the initial payment after winning the Flatiron Building at a March 22nd auction. Abraham Trust is a small Virginia company who did not previously own a stake in the building, had won the auction, bidding $190 million, beating out another close offer of $189.5 million from the GFP-aligned group.
The complaint says that winner, led by Garlick, never followed up with the necessary $19 million deposit within two days as per the agreement, thereby making the deal void. The plaintiffs in the case are seeking the promised $19 million down payment, plus damages and fees for the botched purchase. “Defendants’ failure to pay the down payment and move forward with the purchase of the Flatiron Building was contrary to the multiple representations they made by participating in the auction,” the suit says, adding that Garlick’s maneuvers were a “fraudulent bid.”
The plaintiffs allege in court documents that Abraham Trust and its managing partner had led them on for weeks after the auction, insisting that they were serious players and had access to major capital with which the payment would be made. The suit filed in Manhattan’s Supreme Court, alleges that Abraham Trust and its managing partner perpetuated a “fraud.”
As per Crain’s, the terracotta Flatiron building, completed in 1902 and located across from Madison Square Park, is collectively owned by five parties– four of them, including GFP, control a 75% stake, while the other 25% is owned by Silverstein, who inherited the stake which his family had acquired around World War II.
It was also previously reported that the lawsuit would not affect yesterday’s auction said the referee, attorney Peter Axelrod. At the Wednesday auction, bidders needed to bring in a check for $100,000 made out to the referee, and were required to provide documents showing they have the money to pay at closing.