Flatiron - Through Networked Eyes
May 31, 2021
Each year I fly to New York, San Francisco, Omaha and a new USA city so that I can see first hand what is happening in the world of business and real estate in the largest economy. In 2020, like everyone I was grounded by the pandemic and I am not sure when I will be free to go again. The good news is that I’ve got the right people in key places and I can continue my learnings of some of the most significant global cities. I’m keen to compare this knowledge to our cities in Australia so that I can identify common trends and convey these to our clients.
In this series of stories I look at locations which I am familiar with and update myself on their current state through the eyes of my network. I thought I’d start with a small skyscraper in New York where I have been exchanging communications with my friends, Sunny Atis and Courtney Adham of GFP Real Estate. GFP RE was Newmark Holdings which formed part of the Newmark group. BGC acquired Newmark in 2011 when it was known as Newmark Knight Frank and then Newmark Holdings changed its name to GFP RE. Flatiron was part of that portfolio.
In this story you will understand the thinking of a wealthy owner, when to undertake a complete building regeneration, the impact of environmental & social governance on office buildings, how New York has been affected by the 2020 political campaign, the Black Lives Matters campaign and the lack of international visitors.
Sunny is the Building Superintendent who is in charge of the famous Flatiron building. He has managed Flatiron for over 30 years. Courtney is Head of Marketing, Design and Strategy for the business. Both are consummate professionals. Spiderman has been filmed there and that’s where Sunny and I first chatted, on the rooftop where all of Manhattan is on display. Our photo is from 2018.
Flatiron is an icon of New York because it is a wedge shaped property on the corner of Fifth Avenue and Broadway. It was built in 1902 as a 22 storey building known as the Fuller building. Like the monikers - Shard, Gherkin and Walkie Talkie, all iconic buildings in London, Flatiron took it’s nickname from its shape and the similarity to the original iron heated on a stove (for pressing clothes). The Flatiron is one of the most photographed properties in the world and is always included in Skyscraper photography books despite it being small by today’s standards. In most cities with an unusual triangular shaped parcel of land, someone has decided to mimic the design and take advantage of the unusual shape to distinguish an architectural advantage. That said, Sunny sees these copies as imposters but he also recognises that copying is the highest form of compliment.
Sunny’s employers, GFP Real Estate (Gural Family) and major investor, Sorgente Group, owners of Flatiron, have embarked on a complete renovation project which will cost in excess of US$50m. Given the market is down, this might be an odd time to be spending, but GFP have a history of buying at low points in the market and improving in those same market troughs. It’s quite a clever counter cyclical strategy. However for a group who are happy to consider themselves contrarian investors, its simply in their DNA. In the 1950’s, 60’s and 70’s they set their sights on buying out-of-fashion, but well-located warehouse properties and converting them to B class offices. Most were close to or on top of subway stations, which has held them in good stead over time, particularly as New York’s subway connects the city and its people so well.
At Flatiron, International publishers, Macmillan first moved into the building in 1959 and by 2014 occupied all of it. It has been their decision to relocate to Broadway, which has created the opportunity to re-invigorate the building. What a landmark building and how fortunate that this New York icon is in the ownership of such professional & financially capable long term business owners. We often take this aspect of ownership for granted but GFP and Sorgente have really stepped up.
In 2020 New York succumbed to the ugliness of the Federal election campaigning, the full fury of Black Lives Matters campaign and the spread of COVID-19. The city was under siege; riots and looting were common place. The police were outnumbered and could do very little to stop the angry crowds. Many stores were boarded up and left, retail workers, many of which had 2 & 3 jobs, saw the end of reliable work. Faced with steep apartment rentals, most elected to walk away and return to their home states. The wonderful retail experiences those travelers recall have been in hibernation and are awaiting reinvigoration just as soon as we can safely travel again.
In my view it is important to relish history and equally important to ensure that history remains relevant. The responsibility which these owners feel and the pride in ownership which Sunny espouses is critical to ensuring that this icon passes from it’s last user, Macmillan Publishing, to another worthy commercial occupant. That will be Courtney’s challenge and I look forward to updating you on it.
