Manhattan's Iconic Flatiron Building Heading to Auction
Triangular landmark goes under gavel March 22 to settle dispute among owners.
The date has been set for an auction of Manhattan’s iconic Flatiron Building. The Fifth Avenue landmark will go under the gavel on March 22, based on an order from a New York state judge to settle a long-simmering dispute between the owners.
Sorgente Group, GFP Real Estate and ABS Real Estate Partners—who together own 75% of the famous, 22-story triangular building that occupies the spot where Fifth Avenue and Broadway intersect on 23rd Street—sued in 2021 seeking a partition sale.
The majority partners are seeking the real estate equivalent of a divorce from the owner of the remaining 25% of the Flatiron Building, Nathan Silverstein.
When multiple owners on a property can’t resolve their difference, a court orders a partition sale, an auction that divides the proceeds of the sale based on the ownership stakes. The individual owners also can bid on the property, with their ownership stakes forming what is known as a credit bid, which credits them for the portion they own.
The March 22 auction will be conducted by Matthew Mannion of Mannion Auctions. In court filings, Sorgente, GFP and ABS have indicated that they expect to bid on the Flatiron Building.
According to statements filed in court by the owners, the falling-out began in 2017 after MacMillan Publishers, which occupied the entire building, said they would move out in 2019.
The partners developed a business plan for the vacated building, but Silverstein—who, like each of the other owners, had a veto over the plans—refused to sign off.
According to the other partners, Silverstein wanted to replace McMillan without upgrading the 120-year-old structure, which because it only has one exit no longer meets NYC fire safety codes.
The partners also said in court filings that Silverstein wanted to divide the property in five separate parcels, which can’t be done because the building is landmarked.
Silverstein alleged in his court filings that the partners were negotiating separately from him with prospective tenants on a lease with what he called “an extraordinarily low cost per square foot” and a term of nearly 50 years.
The partners undertook an $80M renovation of the Flatiron Building, but immediately began squabbling about the construction costs, eventually decided it was time to separate.
The Flatiron Building—the first skyscraper built north of 14th Street in Manhattan—was originally developed as the headquarters for the Fuller Co., a construction company that acquired the site from the Newhouse family in 1901. The Equitable Life Assurance Society took over the building in a Depression-era foreclosure auction in 1933.
The building was designated a National Historic Landmark in 1989.