He couldn’t get through.
After Jacob Garlick, who became this week’s most talked-about man in New York real estate, made a surprisingly successful bid to acquire the Flatiron Building on Wednesday, he failed to raise the down payment needed to close the property.
The terms of the sale required Garlick to deposit $19 million, or 10 percent of his $190 million bid, by close of business Friday. But according to multiple sources familiar with the deal, Garlick has yet to deliver the funds, putting his future ownership of the fabled estate in question.
When reached by phone Friday night, Garlick said he couldn’t talk about the down payment or the deal, but could talk next week. It is possible that a court-appointed arbitrator could offer him more time. But if an extension isn’t granted, the second-highest bidder in the auction, a group led by GFP Real Estate’s Jeffrey Gural, has the option to buy the property at its last bid of $189.5 million, according to a court filing.
However, on Friday, Gural reached out to The Real Deal 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 returns to the auction block and bidding begins again.
Garlick, a 30-something investor unknown to the New York 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 stewards of this historic building,” Garlick said after his victory, “and it will be our life’s work to forever preserve its integrity.”
“I was totally shocked that someone would bid so much money for the building,” Gural told the Commercial Observer after the auction. “It’s a nice building, but not really worth much.”
Garlick’s firm, Abraham Trust, is headquartered in Northern Virginia and invests in private equity buyouts, mergers and acquisitions, and venture capital. His journey to purchasing the Flatiron Building began as a result of a partnership between his former ownership group. Sorgente Group, Gural and ABS Real Estate Partners, who together held a 75 percent stake, have been unable to agree on the future of the listed property with remaining 25 percent owner Nathan Silverstein.