Flatiron Building to Convert to Luxury Apartments

The Flatiron Building, which was the tallest office building in New York City when it opened 120 years ago, is going to be reborn as a luxury apartment tower.

The partnership that owns the iconic tower at the intersection of Fifth Avenue and Broadway, including GFP Real Estate, the Sorgente Group and ABS Partners, disclosed this week that the Brodsky Organization has acquired a stake in the building and will oversee its conversion.

Terms of the deal were not disclosed.

According to a report in the New York Times, the landmark 22-story tower will be converted into about 40 total residences, with ground-floor retail space. The owners didn’t specify whether the units would be rentals or condos, but condos are much more likely for the historic venue.

The owners said the conversion of the Flatiron Building will take about three years. The project plans will require approval of the Department of City Planning and the Landmarks Preservation Commission.

Dean Amro, a principal at the Brodsky Organization, told the NY Times that the project reflects “our confidence in New York coming back even stronger than before.”

Although the triangular wedge shape of the Flatiron will make conversion a challenge, Arno said the building’s numerous windows will make the conversion to residential easier than most office buildings, the newspaper reported.

The Flatiron Building was the focus of not one but two court-ordered partition sales earlier this year to settle a dispute between GFP’s Jeff Gural and Nathan Silverstein, who had a 25% stake in the triangular building.

The epic fight between Gural and Silverstein began during the pandemic over the cost of a renovation that had as its top priority eliminating a glaring safety hazard at the century-old icon: a single staircase that was the only way out in the event of a fire.

“It was legal but it was very unsafe and it worried us. It had a sprinkler system, but only one stair and we needed to put in two means of egress. Converting elevators-and making sure construction workers aren’t trapped in there-was a project with a long lead time,” Gural said.

The cost of renovating the landmark-which required the restoration of a Beaux Arts-style façade that had to match the original in every detail-ballooned to more than $100M as costs rose amid surging inflation.

“[Silverstein] didn’t understand why it cost so much to renovate the building. He thought if it’s going to cost $100M, Jeff must be crazy,” Gural told us.

The kerfuffle between Gural and Silverstein became the stuff of NYC folklore in March, when a court-ordered auction was held on the steps of the old County Courthouse in Lower Manhattan to determine the winner of a partition sale.

A DC-based investor named Jacob Garlick showed up at the auction and outbid Gural and his partners, seemingly grabbing the building for $190M-until Garlick took a powder and failed to make a required $19M deposit.

At the second auction, in May, Gural outlasted four other bidders and took the prize at $161M. Registered bidders (Garlick did not join the party this time) were required to show up at the historic court building at 60 Centre Street with certified checks for $100K made out to the auction’s referee, attorney Peter Axelrod.

Since the 75% share of the Flatiron Building that was held by GFP Real Estate and its partners, could be used as a stake in the partition sale, the partners ended up paying Silverstein $40M for his 25% share and assume full ownership of the tower.