Jacob Garlick Fails to Fund Deposit for Flatiron Building Buy
He didn’t get through.
After making a surprise winning bid to buy the Flatiron Building on Wednesday, Jacob Garlick, who this week became the most talked-about man in New York real estate, was unable to come up with the necessary deposit to close on the property.
The terms of sale require it Garlick put down $19 million, or 10 percent of his $190 million bid, by the close of business Friday. But according to several sources familiar with the deal, Garlick has yet to deliver the money, calling into question his future ownership of the large property.
When reached by phone Friday night, Garlick said he could not talk about the deposit or the deal, but could speak next week. It is possible that a court-appointed judge may offer him more time. But if an extension is not granted, the second-highest bidder in the auction, a group led by GFP Real Estate̵[ads1]7;s Jeffrey Gural, will have the option to buy the property at its final bid of $189.5 million, according to a court filing.
Reached Friday, however, Gural said Genuine item that he would not exercise his option to purchase the building for $189.5 million. This means that the likely scenario is that the property goes back on the auction block and bidding starts again.
Garlick, a 30-year-old investor and unknown in the New York City real estate industry, seemed to come out of nowhere to outbid Gural in a live auction in front of the New York County Courthouse.
“We are honored to be a steward of this historic building,” Garlick said after the win, “and it will be our life’s mission to preserve its integrity forever.”
“I was completely shocked that someone would bid that much money for the building,” Gural told the Commercial Observer after the auction. “It’s a beautiful building, but not really worth that much.”
Garlick’s firm, Abraham Trust, is headquartered in Northern Virginia and invests in private equity, mergers and acquisitions and venture capital. His journey to buy the Flatiron Building started because of one partnership spat between its former ownership group. Sorgente Group, Gural and ABS Real Estate Partners, which together controlled a 75 percent stake, could not see eye-to-eye with the remaining 25 percent owner, Nathan Silverstein, about the landmark property’s future.