inside the iconic building, things are a lot worse than you think

Events surrounding the fate of the Flatiron Building in Manhattan attracted worldwide attention ahead of the second public auction on May 23 to sell the iconic triangular landmark. And while buying a historic building seems like a good deal, it also comes with challenges. What is it like to be inside the building told the publication Costar.

Behind the romantic representation of the famous postcard building in movies like Spider-Man and Godzilla and a must-see for many tourists, the building, opened in 1902, also carries a burden: the new owner may have to spend about $100 million for modernization.

Recently, construction and demolition work could be seen and heard in different parts of the building, covered with mesh and scaffolding outside and inside. False ceilings were removed from some floors above. Drywall was removed from some of the columns to reveal the original steel frame skeleton of one of New York City’s first skyscrapers and one of the first steel-framed skyscrapers.

Dust covered the stairs and other parts of the building at 175 Fifth Avenue, at the intersection of Fifth Avenue and Broadway.

“There is a lot of core interior work that needs to be done before we can start designing what the space will look like,” said Jane Gural-Senders, CEO and Head of GFP Real Estate, co-owner and manager of the building. – What is shown on paper does not necessarily correspond to what is in reality. In other words, how much is this building worth? .The reality is that it costs less, maybe because it’s a shell. There are $100 million worth of unfinished major work here.”

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GFP, along with its partners, owns a 75% stake in the building, which has been acquired since 1997, according to court documents. According to Gural-Senders, Nathan Silverstein owns the remaining 25% after he inherited the stake from his father.

Second auction

Second public auction of the 255,000-square-foot building scheduled for Tuesday, May 23rd. Jacob Garlick, managing partner of the Abraham Trust in Reston, Va., unexpectedly won the first auction, offering $190 million. But Garlick failed to make the 10% down payment within 48 hours of the sale, and the majority owners auction by GFP Chairman Jeff Gural refused to exercise an option to buy the property at the price offered by the second-largest bid of $189.5 million.

“If this wasn’t an iconic building, I would have stopped a long time ago,” Jeff Gural told CoStar at the first auction. – It’s a beautiful building. But it needs a $100 million upgrade. That’s a lot.”

Most of the owners, citing “fraud”, sued Garlick and the Abraham Trust, seeking the down payment, as well as attorneys’ fees, punitive damages and expenses associated with both the first and the upcoming second auction.

These auctions were planned following lawsuits that arose from various disputes between the majority owners and Silverstein over renovations, lease plans, and even the physical division of the building. Earlier this year, a New York State Supreme Court judge approved a public auction.

The building was designated a landmark by the New York City Landmarks Preservation Commission in 1966, stating that the building evokes “special character and poetry”. The building has been vacant since Macmillan Publishers, which occupied the entire tower, moved downtown in 2019.

This opened the door to bringing the over 100 year old building up to modern fire safety standards.

New systems

“This 100-year-old building has received a lot of attention,” Grual-Senders said. “And now, since there is no one here, we must be ready for the arrival of new residents.”

The work in progress includes the installation of a heating and air conditioning system, as well as the removal of the existing single historic staircase to build two new ones, she said.

“There is no building this size in New York that can only have one staircase,” she said.

The building’s six elevator cars, which were built using a water-based hydraulic system, were also recently refurbished, decades after renovations in the late 1980s, to become “fully electric,” said Sunny Atis, building manager.

“It’s time for this building,” Atis said. – It is a landmark of the city and a national landmark. We should just do it justice.”

Due to the government’s delay and forced closure of construction work at the start of the pandemic, major renovations only began in earnest last year, with the exception of some emergency facade repairs, Gural-Senders said. The building’s limestone and terracotta façade work is expected to be completed this year, with the exterior black mesh and scaffolding removed, she said. This will be good news for tourists who regularly take pictures of the building.

Works are carried out not only by building owners. On the ground floor, T-Mobile, the only remaining retail tenant, is also closed for renovations.

Although the interior of the building looks far from attractive at the moment, it is not without its potential for developers who were interested in the second auction and came to inspect the structure.

Not only the look at the elegant building, but also the view from the famous structure of the city that developed around it, attracted potential buyers.

“They love the views from here,” Gural-Senders said.