Brodsky, Sorgente, GFP, record $47M buyout of former Flatiron Building partners

UPDATED: The Brodsky Organization, GFP Real Estate, and Sorgente Group recorded two purchase transactions that totaling just under $47 million that bought out former partners at the Flatiron Building at 175 Fifth Avenue in Flatiron District, Manhattan. The two former partners were Nathan Silverstein and Gregg Schenker. The sale was precipitated by a partnership dispute between GFP and Sorgente, on one side, and Silverstein on another, that was ultimately resolved by a partition auction in which the GFP-led group bought out Silverstein. At the same time, Brodsky Organization joined the joint venture that now owns the building which they expect to convert to residential condominiums.

In the larger transaction, Brodsky Organization, GFP Real Estate, and Sorgente Group through the entity Flatiron Owner LLC paid $40.2 million to Nathan Silverstein, for his 25 percent stake in the office building (O4) at 175 Fifth Avenue in Flatiron District, Manhattan.
The deal closed on October 25, 2023 and was recorded on November 9, 2023. The property has 183,449 square feet of built space according to a PincusCo analysis of city data.
The signatory for Nathan Silverstein was the court referee Peter A. Axelrod. The signatory for the Brodsky Organization, GFP Real Estate, and Sorgente Group was Brodsky Organization’s Dean Amro. The contract date was October 25, 2023.
In the second transaction, Brodsky Organization, GFP Real Estate, and Sorgente Group through the entity Flatiron Owner LLC paid $6.7 million to Gregg Schenker through the entity Flat Iron Acquisition LLC for his smaller stake in the office building (O4) at 175 Fifth Avenue in Flatiron District, Manhattan.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Brodsky Organization purchased three properties in two transactions for a total of $80.3 million and sold one property in one transactions for a total of $101.2 million over the past 24 months.
The seller GFP Real Estate purchased one property in one transaction for a total of $250.8 million and sold two properties in two transactions for a total of $15.4 million over the same time period.

The property

The office building in Flatiron District has 183,449 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 197 feet and is 85 feet deep with a total lot size of 8,650 square feet. The lot is irregular. The property is in the Ladies’ Mile Historic District. The city-designated market value for the property in 2022 is $62.3 million. The most recent loan totaled $30 million and was provided by Apple Bank for Savings on January 30, 2020.

Violations and lawsuits

The property was involved in two lawsuits and zero bankruptcies over the past two years. The highest value suit was a $200 million money judgment concerning a management filed on December 22, 2021, by Nathan R. Silverstein against Newmark & Company and GFP Real Estate. In addition, according to city public data, the property has received one DOB violation, $3,125 in ECB penalties, and $14,865 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Flatiron District, The majority, or 71 percent of the 23.2 million square feet of commercial built space are office buildings, with elevator buildings next occupying 15 percent of the space. In sales, Flatiron District has the 10th highest sale turnover among other neighborhoods in the city with $1.5 billion in sales volume in the last two years. For development, Flatiron District has 2.4 times the average amount of major developments relative to other neighborhoods and is the 11th highest in Manhattan. It had 2.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of 10 of the 16 commercial properties representing 628,892 square feet of the 711,717 square feet. The largest owner is Sorgente Group, followed by Solil Management.
The majority, or 95 percent of the 711,717 square feet of built space are office buildings, with retail buildings next occupying 3 percent of the space.

The seller

The PincusCo database currently indicates that GFP Real Estate owned at least 16 commercial properties in New York City with 4,372,497 square feet and a city-determined market value of $892.9 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 98 percent of the 4,372,497 square feet of built space are office properties, with industrial properties next occupying 2 percent of the space. The bulk, or 98 percent of the built space, is in Manhattan, with Brooklyn next at 2 percent of the space.

The PincusCo database currently indicates that Sorgente Group owned at least one commercial property in New York City with 183,449 square feet and a city-determined market value of $62.3 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single office property. It is located in Manhattan.

The buyer

The PincusCo database currently indicates that Brodsky Organization owned at least 42 commercial properties with 5,920 residential units in New York City with 5,641,016 square feet and a city-determined market value of $1.2 billion. (Market value is typically about 50% of actual value.) The portfolio has $746.1 million in debt, with top three lenders as M&T Bank, AXA Equitable, and Bank of New York Mellon respectively. Within the portfolio, the bulk, or 96 percent of the 5,641,016 square feet of built space are elevator properties, with walkup properties next occupying 3 percent of the space. The bulk, or 79 percent of the built space, is in Manhattan, with Brooklyn next at 21 percent of the space.

Correction: A prior version of this post indicated the sale price was $219 per square foot, but that was incorrect.

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