Jacob Garlick wants a shot at redemption.
After coming out of nowhere to win a dramatic live auction for the iconic Flatiron Building, then failing to produce a deposit to secure his $190 million bid, Garlick has been scrambling to show that he has the money. The 31-year-old with zero track record in big-ticket real estate maintains he’s still in the running to buy the property.
Nobody seems to believe him.
“Why would you take anything he is saying seriously?”
Jeffrey Gural, GFP Real Estate
GFP Real Estate’s Jeffrey Gural, who has long held a stake in the office building and was the runner-up in last month’s auction, said there’s only one scenario in which Garlick’s bid should even be considered: If he wires the entire $190 million into an escrow account.
“Why would you take anything he is saying seriously?” Gural said.
According to Gural, immediately after Garlick won the auction on the steps of the New York County Courthouse — which, unusually, did not require participants to post an upfront deposit or proof of funds — Garlick turned to him and asked if Gural wanted to partner in the deal. Later, Gural said, Garlick even asked if he would put up the $19 million deposit in exchange for a 10 percent stake in the vacant building.
“It was such a ridiculous proposal,” said Gural. “It concerned me. It was a red flag that he didn’t have the money.”
By Gural’s telling, Garlick’s group kept promising the money was coming. It was to be wired from one bank, then from another. The deadline arrived, but the money never did.
Garlick, through a spokesperson, declined to comment for this story.
Industry insiders speculated that Garlick was connected in some way to the building’s dissident owner, Nathan Silverstein, whose disagreements with Gural and the other partners over renovations to the 120-year-old building led to the auction.
Garlick, the theory went, was there to drive up Gural’s bid, giving Silverstein a bigger payday as a minority owner.
Silverstein confirmed to The Real Deal that he is a “distant relative” of Garlick, but said he’s only ever met him once. TRD has found no evidence to suggest collusion between the two.
Others involved in the auction said that Garlick’s most recent push was news to them. Matthew Mannion, the auctioneer, and Peter Axelrod, the court-appointed referee, both said they are not aware that he is a realistic contender to acquire the building.
Gural added that Garlick could be liable for the deposit regardless. “I hope he has $19 million,” he said.
The Flatiron saga has quickly become one of the strangest New York real estate tales in recent memory. What was supposed to be a straightforward auction has turned into a soap opera.
Those present at the auction said Garlick stood just a few feet from the auctioneer, like a prizefighter steeling himself for a title bout. He rarely broke eye contact, calmly raising his paddle to outbid Gural until the price hit $190 million.
Garlick told NY1 on the scene that owning the historic building had been his “lifelong dream since I’m 14 years old.”
“I’ve worked every day of my life to be in this position,” he said.
Later that night, he had a celebratory party at the Ritz Carlton in NoMad with the same entourage that had accompanied him to the auction, according to witnesses.
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Reality came knocking two days later, when Garlick failed to cough up the $19 million deposit. As runner-up, Gural had the option to buy the building at his final bid of $189.5 million, but declined, perhaps sensing that he could soon buy it for less.
The building, which Gural estimates needs a $100 million renovation, appears to be headed back to auction unless a deal can be made with Silverstein to buy out his stake.
“I’m not Nathan’s favorite person,” said Gural. But “the reality is, we have an empty building.”