A little bit of New York City will soon be up for sale.
As the result of an ongoing disagreement among 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 empty, will hit the auction block in what is known as a partition sale on March 22 — stemming from a ruling in the contentious legal fight between its multiple landlords.
In January, a New York state judge issued an order allowing the auction to move forward 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 sued after reaching a stalemate with Nathan Silverstein, who owns 25% of the steel-framed 175 Fifth Ave. building, which was completed in 1902 and is the namesake for the surrounding neighborhood.
Due to the building’s shared ownership, which gives every owner veto power on every major building decision, the parties were not only unable to agree but also unable to move forward — trapped in a very expensive standoff over the future of an extremely pricey piece of real estate.
The situation became untenable after MacMillan Publishers — which at the time occupied all 21 floors of the triangular structure — announced in 2017 that it would be moving out within two years.
Silverstein subsequently proposed a slew of what Gural deems “preposterous” ideas, including that no upgrading be done in the time period between MacMillan leaving and a new tenant moving in — despite that fact that upgrades were legally required to re-rent the structure and for fire safety, Gural said, according to an affidavit.
Despite the building being landmarked, Silverstein also had the idea to divide the property into separate ones — an impossibility due to its historic status, wrote Gural, 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 agree on a plan as to how that work would be financed,” Gural wrote in the affidavit. “We have tried for years to work out these differences with Mr. Silverstein, but the defendant has delayed, resisted and ultimately refused to agree with plaintiffs’ proposed business plan.”
Silverstein, meanwhile, claims Newmark failed to market the property when MacMillan announced it was leaving, and then Gural tried to rent the space for an “exceptionally low cost per square foot” and an extremely long contract to Knotel, which Newmark’s Barry Gossin had a significant stake 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.
The Sorgente-GFP-ABS group will likely bid at the auction later this month, Gural said in a previous filing, according to the Real Deal.
By: Ny Post
