Category: Commercial Real Estate

On Wednesday, the Flatiron Building brought in $190 million at a live auction.

In Lower Manhattan, the public auction took place in front of the state supreme court. A group of real estate firms controlled the Flatiron Building prior to the auction, but they couldn’t agree on refurbishment plans or potential tenants. They were compelled by a judge to put the building up for sale.

Tom Brady, a real estate broker with Douglas Elliman Real Estate, stated, “I didn’t want to miss this iconic event. The final offer, according to Brady, was reasonable but higher than he had anticipated. You’re talking about one of the most iconic and well-known structures in the world, he remarked. One of the most photographed man-made structures in the world, and I think the new owner deserves praise for it.

A group of real estate firms controlled the Flatiron Building prior to the auction, but they couldn’t agree on refurbishment plans or potential tenants. They were compelled by a judge to put the structure up for sale. The final company to occupy all 21 office floors of the building, MacMillian Publishers, left in 2019. In order to modernize the outdated building and lower its carbon footprint, the owners removed the ground-floor stores and spent $100 million on the renovation. Garlick’s toughest rival was Jeffrey Gural of GFP Real Estate, one of the building’s previous owners. He said, “I wish you hadn’t shown up,” in response when asked if he had any words for the winner.

However, the bids became excessive. Gural called for a break and, after speaking with a person, declared: “It’s not worth it.” If I’m being completely honest, I was somewhat astonished. I never imagined that the building would receive such a high bid. Although it’s a gorgeous structure, it requires $100 million in improvements. It’s essentially empty, he declared. The winning bid of $190 million was almost four times greater than the initial $50 million offer.

From NY1.

From CBS News:

New initiatives are being made to shut down the illicit marijuana businesses that have proliferated like weeds across the state, particularly in the five boroughs. Gov. Kathy Hochul is putting out a new enforcement strategy that would give state agencies increased enforcement authority as well as hefty fines. She wants tough new sanctions to crack down on illegal shops where lengthy rows of various marijuana strains are arranged in clear Plexigas boxes so connoisseurs can smell them before choosing. The governor issued a statement saying that it was intolerable that illicit dispensaries continued to operate.

Having illegal cannabis plants or goods could result in fines of $200,000, and selling without a license might result in daily fines of up to $10,000. In his Manhattan district, Senate Judiciary Chairman Brad Hoylman-Sigal has a large number of unlawful businesses.

“I’m supportive of any efforts to shut these illegal cannabis shops down. They are a nuisance, an eyesore,” according to Hoylman-Sigal. In order to pursue illicit dispensaries that are dodging state cannabis sales taxes, the measure would grant investigators with the state Department of Taxation and Finance the status of peace officers. “These cannabis shops don’t pay taxes. They’re operating way outside the law, but, most importantly, they are dangerous, dangerous to young people, to tourists, and to others who may think that just because a cannabis shop is open on a block — many in my district — that they’re selling a product that has been sanctioned,”, according to Hoylman-Sigal.

The latest suggestion excited Mayor Eric Adams, who has complained that city sanctions are too modest to be a deterrent.”Gov. Hochul clearly recognizes the need for action to strengthen the city’s ability to hold these illicit businesses accountable,” Press Secretary Fabien Levy said. “This enforcement is critical for the health and safety of our families and young people.” The budget is due at the end of the month, so officials hope it will be included.

A landmark Manhattan building’s current owners are at odds, and the property will shortly be put up for auction to the highest bidder.

On March 22, the 121-year-old Flatiron Building, which is now vacant, will be put up for auction in a partition sale as a result of a decision in the ongoing legal dispute between its many landowners.  Following a 2021 lawsuit by Sorgente Group, Jeffrey Gural’s GFP Real Estate, and ABS Real Estate Partners, who collectively own 75% of the property, a New York state judge in January issued an order permitting the auction to proceed, the Real Deal was the first to announce. 

The steel-framed 175 Fifth Avenue skyscraper, which was finished in 1902 and serves as the namesake for the area, was the subject of a lawsuit by the co-owners following a deadlock with Nathan Silverstein, who owns 25% of the structure. 

The parties were stuck in a very expensive standoff over the future of a very expensive piece of real estate because of the shared ownership of the building, which gives every owner veto power on every significant building decision. 

After MacMillan Publishers, who at the time had all 21 floors of the triangular building, declared in 2017 that it would be leaving within two years, the situation became intolerable. 

After that, Silverstein made a number of “preposterous” suggestions, according to Gural, including not upgrading the property between the time MacMillan left and when a new tenant moved in. This was despite the fact that upgrades were legally required to re-rent the building and for fire safety, Gural claimed in an affidavit.

The Real Deal said that Gural wrote that Silverstein had the idea to divide the property into separate ones despite the building being a landmark. This was impossible because of the property’s historic status.

Gural stated in the statement that it “boggles the mind” to suggest that we could nonetheless agree on a plan to physically divide this structure 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. We have been attempting to resolve these issues with Mr. Silverstein for years, but he has put off, fought, and ultimately refused to accept the plaintiffs’ suggested business plan.

Meanwhile, Silverstein alleges that Gural attempted to rent the space to Knotel, which Newmark’s Barry Gossin had a large stake in, for a “exceptionally low cost per square foot” and an exceptionally long term after Newmark neglected to advertise the property when MacMillan announced it was departing. 

According to Silverstein’s affidavit, the “proposed rental agreement” would have committed the property to an unproductive lease for an extended length of time. 

According to a prior filing made by Gural, the Sorgente-GFP-ABS consortium would probably make a bid during the auction later this month, according to the Real Deal. 

From the NY Post.

According to Commercial Observer, Hilton Grand Vacations paid $136 million to buy a 161-key timeshare hotel in Midtown Manhattan from private equity firm 54 Madison Partners. The troubled property, located at 12 East 48th St., was first constructed by developer Hidrock Realty just before the pandemic. Hilton Grand Vacations is the most recent in a long line of different owners. Hidrock was unable to “substantially complete” the 31-story hotel before the end of 2019; 54 Madison Partners provided mezzanine debt; and Midland National Life Insurance served as the senior lender. 54 Madison Partners later used this information to claim that Hidrock had defaulted on the loan in January 2020. Later that year, it took control of the property. The Hilton-operated The Central at 5th hotel opened its doors in the summer of 2021 with rooms starting at $350 per night. With the acquisition of the hotel from 54 Madison Partners, Hilton Grand Vacations has acquired its fifth timeshare hotel, a deal that enables owners to stay for a specific amount of time each year by purchasing a share in the property.

As reported by the NY Post, according to police and sources on Saturday, two men were detained in connection with the vicious assault and attempted robbery of the elderly owner of Ray’s Candy Shop in the East Village. The sadistic assault on Ray Alvarez, 90, whose injuries were so severe he now needs to eat through a straw, he told The Post, led to the arrest of Luis Peroza, 39, and Gerald Barth, 55. According to the sources, Barth and Peroza, who are both from the East Village, are thought to have gone on a rampage through the area and damaged Alvarez’ Avenue A store as part of their crimes. According to sources, Barth, who is no stranger to law enforcement, was detained on Wednesday in connection with the attempted robbery of Alvarez as well as a separate robbery. The NYPD reported that Peroza was arrested and charged with assault on Friday, hours before he was led from the 9th Precinct stationhouse on East 5th Street. The tough store owner can only eat through a straw after the attack broke bones in his face and dislocated his jaw. If there had been more police officers in the area, he railed, the beating would never have taken place.

Trump’s coveted 40 Wall Street is under “lender watch” due to declining income, according to a report  Bloomberg reported on Friday that Donald Trump’s heavily mortgaged skyscraper at 40 Wall Street is under “lender watch” due to declining revenue and rising expenses.

According to a monthly filing on the building’s remaining $126.5 million mortgage, the vacancy rate at the 72-story building, which is Trump’s most valuable property, increased to nearly 18% in the third quarter of last year, Bloomberg reported. Meanwhile, costs are said to have increased 11% since the mortgage’s inception in 2015.  Trump has frequently boasted about the 1995-purchased structure, which was valued at $540 million in 2015.

Long-term declines in high-rise office leasing in Manhattan were made worse by the COVID-19 pandemic, when many businesses shut down and employees of those that survived were forced to work from home.

According to the filing, Wells Fargo, which is servicing the mortgage on 40 Wall Street, “has reached out to the borrower for a status of leasing developments” and the strategies for enhancing the performance of the asset according to Bloomberg.

40 Wall Street (Wikipedia)