[HN Gopher] A VC bought the Flatiron Building and didn't pay for it
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A VC bought the Flatiron Building and didn't pay for it
Author : laurex
Score : 103 points
Date : 2023-03-29 18:41 UTC (4 hours ago)
(HTM) web link (hellgatenyc.com)
(TXT) w3m dump (hellgatenyc.com)
| rchaud wrote:
| The absurdity of this is off the charts. Someone can just raise
| one of those ping-pong paddle things, name a price, and win?
| Don't you at least have to put down a deposit of some kind to
| participate?
| mistrial9 wrote:
| "motivated sellers"
| jeron wrote:
| Just visited Flatiron building a few days ago. There's
| scaffolding covering the front and sides, are those renovations
| being done by the existing owner?
| advisedwang wrote:
| Do you recall whether the scaffolding went all the way up? My
| understanding is lots of NYC buildings have 1 level of
| scaffolding about the sidewalk as there is a law requiring
| regular checks against bits of the facade falling off and the
| scaffolding is a "temporary" alternative that allows them to
| avoid that expense.
| pastor_bob wrote:
| It was supposed to be renovated and converted to a hotel, but
| there was some sort of squabble between the co-owners and it
| was left half gutted. It was auctioned off then as a dispute
| resolution.
| crazygringo wrote:
| Hotel definitely sounds like the ideal use for it.
|
| Getting to stay in an iconic building? And getting to brag
| about snagging a skinny triangle room? And the location on
| Madison Square Park is ideal.
|
| Definitely hope it winds up that way. I could totally imagine
| Ace Hotel buying and running it if they didn't already have a
| location just a few blocks north. There's got to be another
| boutique urban hotel brand though?
| bri3d wrote:
| When it comes to this kind of property, hotel brands like
| Ace are usually operators, not owners. VC is a thing in
| hospitality real estate too, and this is what a lot of real
| estate VC funds do. They'll buy a distressed property or
| location with potential and flip it into a hotel, and then
| pick an operator. If the property is successful, they'll
| eventually get an exit when they sell it to a larger,
| lower-risk cash-flow oriented real estate fund and pocket a
| profit.
|
| As for "boutique" urban hotel brands, I think it's a fad
| lately, even within the major hospitality groups - the
| Hilton Curio and Marriott Autograph sub-brands specialize
| in these kinds of things, and Westin / W used to operate a
| lot of these kinds of properties too.
| tptacek wrote:
| The title here is editorialized (maybe by the moderators, because
| the original, "Some guy" bought the building, is baity). But it's
| probably worth saying that he doesn't seem like a VC in the sense
| we think about; he manages a multi-family office that does PE and
| venture and isn't tech-focused. "An investor" would be maybe a
| better description.
| dheera wrote:
| Sounds like what VCs do most of the time. I've seen countless
| term sheets signed and never paid.
| latchkey wrote:
| https://therealdeal.com/new-york/2023/03/24/meet-the-mysteri...
| ChrisMarshallNY wrote:
| They could have John Wick stay there...
| Arrath wrote:
| Once he's done with it it will require even more extensive
| renovation, though.
| dylan604 wrote:
| Why? no business is to be conducted there, so it should be
| okay
| ng12 wrote:
| Or just rent it to The Boys.
| kritiko wrote:
| The Continental, the fictional hotel where John Wick stays, is
| Delmonico's downtown.
|
| https://en.wikipedia.org/wiki/56_Beaver_Street
|
| Edit - it's actually another building used for exterior shots,
| although Delmonico's was used for some interior shots.
| integrale wrote:
| It's the very similar-looking Beaver Building/Cocoa exchange:
| https://en.m.wikipedia.org/wiki/1_Wall_Street_Court
| ChrisMarshallNY wrote:
| Ah. I always thought it was the Flatiron.
| kristjansson wrote:
| A landmark skyscraper held as a tenancy-in-common, a forced
| partition sale, a rouge bidder, ... some lawyers are having a
| field day with this.
| jmacd wrote:
| I was curious about the tenancy-in-common issue. This article
| [1] provides a nice overview.
|
| 1: https://therealdeal.com/new-york/2023/03/28/the-trouble-
| with...
| readthenotes1 wrote:
| it's always the rouge bidders that do it dirty!
|
| always favor the cerulean bidders!!
| dllthomas wrote:
| bring me the BLUE pages!
| sacnoradhq wrote:
| If you like triangular buildings, the original Apple HQ was:
|
| 5300 Stevens Creek Blvd
|
| San Jose, CA 95129
|
| Until around the early 1990's, it had the multicolored Apple II
| logo on the side facing I-280.
|
| Accolade with Peter Harris was a tenant at one point.
| goldfeld wrote:
| But Multi-Millionaires need to actually pay for things like real
| estate and taxes? Is it not enough an honor for something to be
| owned by the princely class?
| VWWHFSfQ wrote:
| I didn't realize the Flatiron Building was vacant and apparently
| in shambles. This guy bought it for 190 mil but from the article
| it requires another 100 mil to be renovated.
| tandle wrote:
| I worked in that building about 10 years ago and old copper
| pipes running water were directly above server racks. The
| corner offices facing the park were nice, but everything else
| was significantly worse than any other building I've worked in
| because of age, low ceilings, etc. I would guess 100 mil is a
| low estimate.
| crazygringo wrote:
| > _...venture fund managing partner Jacob Garlick... placed a
| $190 million bid on the historic Flatiron Building..._
|
| > _...you 'd think the building would go to the second-highest
| bidder--but, dear reader, think again, because that guy doesn't
| even want the building. "I was kind of shocked, to tell you the
| truth," that bidder, former Flatiron co-owner Jeff Gural, told
| NY1 after Garlick outbid him. "I never thought someone would bid
| so much for the building. It's a beautiful building, but it needs
| $100 million of upgrades, it's basically empty."_
|
| Never thought someone would bid $190 mil? OK, so how much did
| this second-highest bidder bid then? Well:
|
| > _But if an extension is not granted, the second-highest bidder
| in the auction, a group led by GFP Real Estate's Jeffrey Gural,
| will have the option to purchase the property at their last bid
| of $189.5 million, according to a court filing._ [1]
|
| About 0.3% less? ...Why is he shocked somebody else would pay
| basically the same amount he himself bid? I am so confused.
|
| But it seems they've both changed their minds so no harm no
| foul...?
|
| Is there any kind of penalty though for bidding at an auction and
| not following through on the deposit?
|
| [1] https://therealdeal.com/new-york/2023/03/24/garlick-fails-
| to...
| toast0 wrote:
| > About 0.3% less? ...Why is he shocked somebody else would pay
| basically the same amount he himself bid? I am so confused.
|
| Mr. Gural's bid is complicated, because he's already 75% owner
| of the building; he's really bidding that he'd rather spend
| $47.5M for the other 25% of the building, than accept $142.5M
| for his part.
|
| But if Mr. Garlick isn't following through on the bid, it's not
| surprising that Mr. Gural would rather reauction. He doesn't
| expect anyone to bid much for the property, and he'd rather
| spend less to get the other 25%.
| crazygringo wrote:
| Thank you for clarifying - that was definitely the context I
| was missing. Makes much more sense now.
| brunooo wrote:
| Plus, given that the auction was about getting rid of the
| increasingly weird 25% equity holder, it's not a far stretch
| to assume that the minority guy just rigged the auction with
| ,,who do I know who I could talk into starting a fake bidding
| war", and thus even less appetite among the majority to just
| pick up the tab for that stunt.
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(page generated 2023-03-29 23:01 UTC)