Owners of Flatiron Building Start Push for Office-to-Residential Conversion

The owners of the Flatiron Building–GFP Real Estate, the Brodsky Organization, and Sorgento Group–have filed a zoning application, with the Department of City Planning, to largely transform it from a commercial building into a residential one.

“The Proposed Project would include approximately 199,786-gsf [gross square feet] of residential space, comprising up to 60 dwelling units (“DUs”), as well as approximately 4,807-gsf” of ground-floor commercial retail space,” the application reads. “The proposed residential space would occupy floors 2-21 of the Flatiron Building. No accessory parking and no accessory loading berth(s) would be required or provided.”

The application notes that separate entrances would be provided for the building’s residential and commercial spaces. It also stresses that no external renovations would be necessary, and that there would be “no significant change to the size, massing, or exterior features of the existing building.” In other words, some small changes to the facade may be made.

At one point, the developers argue that that a conversion to residential units is desirable due to the persistence of high office vacancy rates in Manhattan, and Midtown South in particular. As of Q3 2023, the application says, these rates were respectively sitting at “19.6 percent and 21.1 percent.”

This means, according to the developers, that “it is unlikely the Flatiron Building’s vacant commercial office space totaling approximately 198,093-gsf would be fully leased and occupied by 2026.” The triangle-shaped building (which locals have said resembles a flatiron since the 1800s, hence its name) has indeed been sitting empty since 2019, when MacMillan Publishing left.

If the residential conversion is approved, meanwhile, the developers claim that it would begin by early 2025. It would reportedly be completed in a “single phase” of an unspecified time length.

Jeffrey Gural, the CEO of GFP, won his share of the building’s ownership in a contentious bidding process last spring. He was joined by Sorgento. During an initial March auction, a man named Jacob Garlick put up a winning bid of $191 million, only to not even provide a $19 million security deposit after announcing he didn’t have the adequate funds. He went on to claim that he was oblivious as to how the auction worked, saying that he believed he could raise the funds after a successful bid was made. This didn’t prevent investors in his win, including Gural himself, from filing a lawsuit against him.

The auction was ran again in May, with GFP and Sorgento acquiring their now-stake in the building for a slightly more modest $160 million. At the time, Gural suggested that they were planning on the same residential conversion that they are actively attempting now. The Brodsky Organization bought their stake in the building last October, signing onto its residential bid.

The Fifth Ave. site that houses the Flatiron Building was originally owned by Amos Eno and his descendants, who sold the plot to Harry S. Black of the Fuller Company in May 1901. It used to house the Cumberland Hotel, which Black razed the month after the purchase. Black, who was regarded as a patron of the modern skyscraper movement, hired famed Beaux-Art architect Daniel Burnham to build the distinctive-shaped building that persists today. It opened by 1902.

The road to approval for the developers is long. Outside of review by the City Planning Commission, it involves: community board review, borough president review, city council review, and mayoral review. An environmental assessment is already underway.