A protracted battle over control of one of New York City’s most iconic buildings will finally be settled at auction later this month. A group of developers will hash out their ownership of the Flatiron Building after a State Supreme Court judge ruled a sale could move forward on March 22 at Mannion Auctions.
Four real estate firms collectively own 75% stake in the 22-story steel-frame skyscraper, while a fifth partner, Nathan Silverstein, owns a 25% stake. GFP Real Estate, Newmark, ABS Real Estate Partners, and the Sorgente Group are angling to dissolve the partnership with Silverstein and force him out of the deal after years of clashes over renovations at the landmarked property.
The four owners sued Silverstein in 2021 to force a partition sale of their stakes, arguing that his business decisions kept the building empty. Silverstein in turn sued Newmark for attempting to lease the building to Knotel, a Newmark-owned flexible office company, for a below-market price. The building remains empty after its last tenant, Macmillan Publishers, moved out in 2019.
The proceeds of the sale of the property at 175 Fifth Avenue will be split among the partners. An opening bid has not yet been set. The auctioneer, Matthew D. Mannion of Mannion Auctions, LLC, confirmed that the sale is public — meaning anyone can bid, and the Flatiron Building is therefore anyone’s to win.
But the majority owners are angling to hold on to the historic structure.
“We’re not going to sell the building, we’re just looking to dissolve the partnership,” GFP Real Estate Chairman Jeffrey Gural told Hyperallergic. “Our plan is hopefully to maintain ownership. We’re going to bid for the 25 percent.”
Silverstein said it was “unfortunate” the parties couldn’t agree on the future of the Flatiron.
“It’s a shame, there’s no reason for it,” he said. “Jeff Gural didn’t want to give up his control over the financial aspect. He wanted to spend what he saw as a substantial amount of money. It’s different viewpoints with people who evidently get upset too quickly.”
Designed by Daniel Burnham and Frederick Dinkelberg and completed in 1902, the Flatiron building was originally home to the Fuller Company, the construction firm that invented modern skyscrapers.
The triangular tower had been owned by The Equitable Life Assurance Society and then a number of different partnership groups including Harry Helmsley’s Helmsley-Spear and Newmark, before the Italian developer, the Sorgente Group, purchased a majority share in 2009.
The Flatiron’s tenants have been far more stable. In 1969, St. Martin’s Press moved into the Fifth Avenue office building and its parent company, Macmillan Publishers, soon moved into other floors as they became available. For half a century, the quirky tower became the place where editors feted some of the world’s most influential writers and thousands of authors inked their first book deals.
Publishing industry workers loved the Gramercy Park location and the building’s quirky charms, even if its notoriously rickety elevator and its single interior staircase were fire hazards.
“Both the building with its warren-like floor plan and the neighborhood felt cozy,” said Gabrielle Gantz, St. Martin’s Press associate director of publicity. “One of the best neighborhoods I’ve ever worked in and having an iconic address didn’t hurt either.”
If Gural’s GFP Real Estate is able to hold onto the site, he expects to rent it floor-by-floor instead of leasing the entire building to a single tenant. Gural hasn’t been to a property auction before, but he’s not too worried.
“It’s just an auction. We’ll play it by ear,” he said.
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Great article! It’s interesting how the four real estate firms are trying to dissolve their partnership with Silverstein in order to gain full ownership of the Flatiron Building. Given the landmarked property’s history and unique design, do you think it’s better for it to be owned by one entity or for it to be shared among multiple partners?
Thank you for allowing me to share my thoughts
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