Jacob Garlick Fails to Deposit Funds to Buy Flatiron Building – The Real Deal
He did not come.
Jacob Garlick, who this week became the most talked about figure in New York real estate after making a surprise winning bid to acquire the Flatiron Building Wednesday, failed to come up with the required deposit to close on the property.
The terms of the sale stipulated that Garlick put down $19 million, or 10 percent of his $190 million bid, by the end of trading on Friday. But Garlick has yet to disburse the funds, according to multiple sources familiar with the deal, putting his future ownership of the storied property in question.
When reached by phone Friday evening, Garlick said he could not talk about deposits or deals, but could talk next week. It is possible that a court-appointed referee may give him more time. But if an extension is not granted, the group led by Jeffrey Gural of GFP Real Estate, the second-highest bidder at the auction, will have the option to purchase the property at its final bid of $189.5 million, according to a court filing. .
However, reached on Friday, Gurl told the real deal that it would not exercise its option to purchase the building for $189.5 million. This means that the likely scenario is that the property is returned to the auction block and bidding resumes.
Garlick, a 30-something unknown investor in the New York City real estate industry, came out of nowhere to outbid Gurl in a live auction in front of the New York County Courthouse.
“We are honored to be the stewards of this historic building,” Garlick said after his 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 a building,” Gural told the Commercial Observer after the auction. “It’s a beautiful building, but it’s not really worth that much.”
Garlick’s firm, Abraham Trust, is headquartered in Northern Virginia and invests in private equity buyouts, mergers and acquisitions, and venture capital. Their journey to buy the Flatiron Building began because of a partnership dispute between its former ownership group. Sorgente Group, Gural and ABS Real Estate Partners, which together controlled a 75-percent stake, couldn’t see the future of the land-marked property with Nathan Silverstein, the owner of the remaining 25 percent.