New York’s landmarked Flatiron Building is heading to a second public auction after a surprise outside bidder from the first bidding process failed to cough up a 10% deposit.
The new auction will take place at 2:30 p.m. May 23 on the portico at the front entrance of the New York County Courthouse in lower Manhattan, the same spot as the first auction, auctioneer Matthew Mannion of Mannion Auctions told CoStar News.
Different from the previous auction, the winning bidder this time around will have to submit to the referee a certified check in the amount of $100,000, Mannion said, adding he expects the second auction will “definitely” attract “a lot more people” following the drama surrounding the property.
The second auction is scheduled after Jacob Garlick, managing partner of Reston, Virginia-based Abraham Trust, surprised New York’s real estate industry last month after he emerged as the winner in an intense last-round, back-and-forth public auction with his $190 million bid.
The plot twist deepened after Garlick failed to pay the 10% down payment by a deadline. The first sale, in atypical auction fashion, didn’t require a down payment on the spot.
Jeffrey Gural, chairman of GFP Real Estate, which already owns 75% of the building with its partners, was the second-highest bidder representing the majority owners with $189.5 million from the first public auction. GFP and its partners had declined to exercise the second-highest bidder option to buy the building at that price.
Building Needs Repairs
Gural had told CoStar News the building isn’t worth that much as it still needs $100 million of upgrades. He said measures would be taken in the event of a second auction to make sure potential bidders “have skin in the game” and put down a $1 million deposit so that there won’t be a repeat of what he described as a “stunt” after Garlick failed to come through with the down payment.
“I will be there” for the second auction, Gural said in an email Friday, adding the new $100,000 certified deposit check now required “was the best we could do without going through the courts.”
Gural also said the building’s majority owners plan to hold Garlick “accountable,” without specifying.
According to the original terms of the sale, Garlick is liable for the $19 million down payment plus any expenses and fees associated with the second public auction.
Garlick didn’t immediately respond to a CoStar News request seeking comment.
The 255,000-square-foot, 22-story building has sat vacant since Macmillan Publishers, which had occupied the entire tower, moved out and relocated downtown in 2019. On the ground floor, T-Mobile remains a retail tenant, with more than 2,900 square feet occupied, CoStar data shows.
Opened in 1902 and designed by Chicago architect Daniel Burnham as one of New York’s first skyscrapers, the building, located at 175 Fifth Ave. at the intersection of Fifth Avenue and Broadway south of 23rd Street, was designated a landmark by the NYC Landmarks Preservation Commission in 1966.
At the time of the decision, the commission said the triangular site gave the French Renaissance tower “a special character and a poetic quality.”
The commission added that “to the New York of 1902 this building represented the very essence of modernity.”