Real estate comes down to how much buyers are willing to pay and how much sellers are willing to accept.
But last week showed that the market is not just confused about selling prices, but also about how players behave.
Nowhere is this more evident than in New York City, where the Flatiron Building saga appears to be over, as the building’s majority owners, led by Jeffrey Gural, beat out at least one Four other bidders were awarded the landmark building.
At the first auction in March, Gural’s bid was beaten by unknown Jacob Garlick, who won with a $190 million bid. However, two days later, Garlick failed to pay the deposit, triggering a retrial and lawsuit by the Gural Group against Garlick and its investment company, Abraham Trust.
Fast forward to last week, and not everyone was thinking about shutting down. In fact, as Gural was speaking to reporters — presumably to calm the matter down — a man started yelling at Gural’s attorney, Richard Dolan.
“Get ready for a fucking lawsuit,” the man yelled. “We’ll see you in the Court of Appeals or the fucking Supreme Court.”
Aside from the fact that New York State’s Supreme Court is an audacious court known as the Court of Appeals, the threat of a lawsuit doesn’t appear to be bogging down Gural.
“Lovely,” Dolan responded. “The courts are open every day.”
“You better fucking believe it,” the man growled.
Another thing that had to be seen to be believed was the price Safe Harbor paid — a staggering $149 million — to buy the Montauk Yacht Club from Gurney’s, setting numerous records in the process. The deal was finalized last year, but the price was not announced until recently.
Even that figure doesn’t come close to the California record of $200 million that music royal couple Jay-Z and Beyoncé paid for the Malibu estate designed by Japanese architect Tadao Ando.
Not all is so rosy on the business front, however, as Vornado sold its Rego Park development site at 93-30 93rd Street to Queens developer Chris Jiashu Zu for about $70 million, more than the REIT initially sought. Its $85 million is 16 percent lower than two years ago.
It’s been a tough time for business buyers and sellers, but that hasn’t stopped Vornado from looking to sell assets to raise cash.
The bad news isn’t limited to New York, with Melohn Group expected to default on a $105 million debt plan for a Chicago building after losing some key tenants.
According to credit-rating agency DBRS Morningstar, the investor took out a loan in 2017 “on the brink of default due to cash flow issues” for the 24-story, 575,000-square-foot building at 111 West Jackson Avenue.