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Mistes t1_jdcsg4b wrote

For some reason this is less than I expected for the building - it's a historical and super iconic piece of history.

Sounds like a deal hahaha

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BillionTonsHyperbole t1_jdctnxz wrote

I'm sure it probably warrants at least that much in repairs and upgrades to update and to comply with LPC and other City bodies. Those costs are priced in.

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Mistes t1_jdcxr8b wrote

Honestly I wouldn't be surprised if it has $190 million in repairs given the cost of construction and restoration in NYC. Good luck to the winner haha

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JeffeBezos t1_jdczpby wrote

The article said it needs $100MM in repairs.

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thetzar t1_jddawj2 wrote

Which is nuts, didn’t they just do a decade of work on it?

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Yolo_420_69 t1_jddti1z wrote

Im guessing the cost isnt to fix but to re-imagine the interior and space use. IE, it can be a perfectly good office floor but if you want to convert it to condos its going to cost a shit ton of money. Shop front additions, modern office spaces, etc

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GVas22 t1_jddwj53 wrote

Historic landmark status makes repairs more expensive since they need to preserve a lot of the old building design and materials and you're restricted on the types of renovations that are allowed.

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solo-ran t1_jddp6x9 wrote

I worked in offices in there from time to time and it seemed fine to me… but I maybe am used to old buildings.

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UnidentifiedTomato t1_jdg0xz1 wrote

That's definitely bare minimum. I imagine a good investment would be $150mil ballpark

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BillionTonsHyperbole t1_jdcz5p7 wrote

Also important to remember that owning the building is not the same as owning the land on which it sits.

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JeffeBezos t1_jdczn11 wrote

Where did you find that this building has a land lease? I haven't seen anything to that nature.

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BillionTonsHyperbole t1_jdd0p1p wrote

I may have been thinking about the ESB.

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colampho t1_jdd5lan wrote

Chrysler Building is a famous example of a land-leased iconic building

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BillionTonsHyperbole t1_jdd5yuv wrote

Cooper Union owns that land, right? I seem to remember something about that being a major source of revenue for them.

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colampho t1_jddbo8d wrote

Yup! Cooper Union, and it’s quite lucrative (if I’m remembering correctly)

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STcoleridgeXIX t1_jddkuco wrote

Not lucrative enough. The school was always intended to be 100% free, and it was until 2012. They hope to get back to that by 2030.

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magnus91 t1_jdf2nih wrote

It is lucrative enough. It was just financial tomfoolery by the board that caused them to have revenue issues.

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TizonaBlu t1_jddtkya wrote

The thing is, it’s landmarked, thus it’s impossible to do significant development.

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BillionTonsHyperbole t1_jde1dix wrote

There aren't many interior landmarks registered with the LPC, and this building is not one of them. Exterior landmarks are required to preserve the facade and appearance; you can still do significant upgrades and modifications to the interior.

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TizonaBlu t1_jde1ll9 wrote

I literally said none of what you said.

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BillionTonsHyperbole t1_jde1zps wrote

> it’s impossible to do significant development.

Changing the building's interior layout, utilities, demising walls, or changing the use represents significant development. You can do these things with LPC designation. You'd apply for a Certificate of No Effect, if I recall from the few times I did this as a project manager in the city.

Edit: The original poster changed their tune and claimed it couldn't be developed into a tower. They'd still be wrong though; see Hearst Tower as an example.

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TizonaBlu t1_jde29un wrote

Again, I said nothing of what you said. Im aware of what LPC does I’m currently dealing with them for my building. I’m talking about “significant development” meaning turning it into a tower. Not sure why you’re still confused.

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LoneStarTallBoi t1_jddzg2o wrote

Even still. If you need 60 mil in repairs you're still at the same price as one of the billionaire's row penthouses. Given the choice, I know what I'm spending my tax return on.

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msa1124 t1_jdd8ds1 wrote

$850/sf for a fully vacant office building is an obscene overpayment. Likely that the only economically viable business plan is to convert to condos.

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d4ng3rz0n3 t1_jddhe14 wrote

Condos in flatiron would sell for a huge premium. I cant imagine a bigger flex for NYC than saying “I live in the Flatiron”

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thegreatsadclown t1_jddjahx wrote

I used to work there and everyone would lose their minds when I told them

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z3rohabits t1_jde6mxo wrote

the biggest flex would be I live in a pizza shaped studio

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TizonaBlu t1_jddufnf wrote

Are you serious? It’s like saying, “I work in ESB”, like ok?

I own a townhouse in Manhattan is a significantly bigger flex. Not to mention Flatiron district is actually not great to live in, and the price reflects it.

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vanalla t1_jdek5ea wrote

"I work in ESB" is a dunk on everyone who doesn't live here.

"I own a townhome in UWS/WV/Chelsea is a dunk on everyone who lives here.

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40characters t1_jddpfe1 wrote

I … kinda … like? … the condos idea?

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damnatio_memoriae t1_jddx2i2 wrote

the only thing i dont like about it is i wouldnt be able to afford the penthouse.

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SSG_SSG_BloodMoon t1_jdepjpk wrote

You'll be able to afford one of the units that opens up when the city's wealthier residents do their hermit crab dance up to the flatiron building.

Guy moves into the Flatiron, guy 2 moves into that guy's old place, yaffa yadda yadda, you move into guy 10,000's old place

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damnatio_memoriae t1_jdevepw wrote

trickle down housing

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maydaydemise t1_jdfp4y8 wrote

You joke but it's a real thing

Now obviously boutique condo conversions like this have less impact than larger housing developments, but new supply is still a good thing

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JetmoYo t1_jdggrzo wrote

This presumes the higher end housing is actually going to NYC residents. And maybe Flatiron would. But some of the luxury market is functionally geared to foreign wealth sheltering and money laundering. I think that needs to be factored into NYC's luxury housing model as well.

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z3rohabits t1_jdgymkt wrote

truth be told I can’t even afford a pent house in Jersey city

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dbenc t1_jddkkwj wrote

That's 220k sq ft, if converted into 115 condos of approximately 2000 sqft, taking into account 100m of renovations needed (mentioned by another comment) they would have to sell for 2.6m each to break even, probably more like 3-4m each. or more condos of smaller size... might work 🤷

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_ACompulsiveLiar_ t1_jddl9el wrote

Brand new 2k sq ft in the flatiron building would go for well above 3m. Probably closer to 6m, with ~$3k/sqft. With the risk of construction/condo dev it seems like a reasonable buy.

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TizonaBlu t1_jddummu wrote

You significantly overestimate the amount of wealthy people who want to live on 23rd, and in a building where tourists are constantly outside taking pictures.

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_ACompulsiveLiar_ t1_jdduw1s wrote

No, I don't. Flatiron new developments are going for $2k-$4k/sqft right now and they are having no trouble clearing inventory (flatiron house for ex). Also owning a 5m property is not that selectively "wealthy" for a location as central as 23rd. It's a lot, sure, but there's also a lot of wealthy people in this city

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theageofnow t1_jdestah wrote

Normally developers like to have sell out be 2x hard and soft costs when underwriting a deal. The numbers don’t always work out that way (overruns, market conditions etc) but that’s the pro forma

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nonlawyer t1_jddai3c wrote

Could be. Maybe in a few years it will be seen as cheap. Who knows.

Or maybe the buyer is just a big fan of The Boys and wants to pretend to hunt supes

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TizonaBlu t1_jddu5cz wrote

It’s not gonna be good as a condo. The weird shape of the building significantly limits the shape of the building. Not to mention it’s landmarked. It’s also iconic, meaning there’ll be people taking pictures outside constantly. Lastly, it’s on 23rd, and not exactly luxury real estate.

The actual luxury buildings in the area sit on 22nd and are nice and quiet while still having park view.

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JonB_ t1_jddy2zx wrote

Converting the floor plans for use as condos could be a little awkward, but I have to think it would be easier than converting the postwar super wide office towers to condos, no?

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AlienTD5 t1_jded5sr wrote

Yeah for sure. A huge problem with converting most office buildings to residential is that NYC requires a window for every bedroom; shouldn't be an issue for the Flatiron bldg.

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msa1124 t1_jdey8l2 wrote

Think you’re wrong on most accounts but I guess we’ll see

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[deleted] t1_jdet1ps wrote

[deleted]

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TizonaBlu t1_jdettj4 wrote

Uh, you’re literally proving my point? I was referring to both One Madison and MSP Tower, both of which have their entrance on 22nd, a much quieter street, not that you’d know. I’ve literally been on top of both.

Also, please stop spamming me with the same stuff thanks.

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jles t1_jdfz6zn wrote

Another viable business plan is laundering Russian money.

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Ok-Strain-9847 t1_jddtok3 wrote

The Flatiron building is one of the most photographed, non-high-rise buildings in NYC.

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johnla t1_jdd9jgc wrote

First thought was it's a steal when you consider that the high level apartments on billionaire's row went for hundred million range.

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TizonaBlu t1_jdduw43 wrote

Because it’s literally in the flatiron district. Which is not a highly desired residential neighborhood.

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pixel_of_moral_decay t1_jdeaod9 wrote

Old building with a pretty small floor plate and limited space for modern amenities/utilities that tenants demand.

Any renovations or uses need to preserve it historically.

I think that price is kinda high. Going to be hard to recoup that money unless people pay to look at it from the street.

Even in a hot market it would be tough to find commercial tenants who want to be there. Today? Nobody would pay what would be needed just to cover day to day operations.

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TizonaBlu t1_jddtgj1 wrote

Yes it’s iconic, it also means it’s landmarked and there’s no way in hell to build anything on the land or modify it much at all. The fact that it’s oddly shaped means it’s difficult to use. I don’t think it’s gonna be much of a revenue generator.

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TeamMisha t1_jdeetl0 wrote

Given the crash in office retail leasing, personally if I was a business owner I'd look for quality Class A office space in a newer building than stuff in an ancient one with weird angles, $190m could take a long ass time to recoup lol

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Mistes t1_jdegkco wrote

Hahaha good point - I remember I visited another building shaped like the flatiron in the past and that weird corner fit like maybe a single (expensive) chair.

That being said, I feel like there's some sticking power to the building, whether it becomes a museum of some sort of niche event space.

Here's to hoping this buyer is a super fan of the flat iron and regards like like one might a Van Gogh painting...but which continues to cost additional money each year

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monkbus t1_jdf98nj wrote

It’s not that cheap. Only about 200k rentable square feet so over $900/rsf.

Wonder if they will try to make it something other than office space. Floors are odd but could lend well to resi

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Casamance t1_jdgad2e wrote

Yeah I read the title and I was like "That's it?"

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Geronimobius t1_jdikeu7 wrote

Most in the industry think its a crazy high number for the building. Likely a condo conversion play.

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Alternative_Arm1926 t1_jdct74z wrote

Would love to see it rejuvenated and scaffolding free before I leave NYC.

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CactusBoyScout t1_jddibuv wrote

Apparently it needs $100M in renovations... the scaffolding isn't going anywhere.

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Alternative_Arm1926 t1_jddl9dm wrote

Yea I plan on being here 18ish more months so I know the odds are not at all in my favor.

A guy can dream tho…. 😂😂😂

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_TheCommish_ t1_jdeapy7 wrote

You'd be lucky if they started the renovations within 18 months.

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Jr-12 t1_jdeflqr wrote

Closer to 18 years than 18 months

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More_Garlic_ t1_jddp50p wrote

Seriously, when was that scaffolding put up?

I feel like building a new flatiron would have been faster.

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Shaolin718 t1_jdebp09 wrote

I remember the scaffolding going up right before Covid so over 3 years now…fucking gross

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midtownguy70 t1_jdd0y3k wrote

So, 60 million less than the cost of one penthouse on Billionaires Row. Crazy.

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_ACompulsiveLiar_ t1_jddln7v wrote

That thing is not selling for 250m lmao. They're just putting it at that price for the marketing

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midtownguy70 t1_jdduu5e wrote

Sure but single units HAVE sold for north of 190 million so the interesting comparison remains...interesting. in 2019 a penthouse over there sold for 238 million. Ka-ching.

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_ACompulsiveLiar_ t1_jddvkij wrote

Yeah I know but that thing is literally just not worth 250m. Like 220cps sold the top 4 floors for less than that for more square footage, not to mention 220cps is way most costly per sqft

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Patruck9 t1_jdefy9j wrote

These billionaires aren't buying for square footage, they're buying for bragging rights.

It's also why 432 Park was all the rage at first until it was revealed how badly built everything is.

Edit: All that said, put me in an apartment about 100 feet over the city and I'm content. I can do observation decks, but living at that height? I don't think Michael Jacksons doctor could calm me.

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Laxziy t1_jdfd9cj wrote

The view is definitely awesome but honestly if I had effectively infinite money give me a townhouse to myself any day of the week.

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_ACompulsiveLiar_ t1_jdfhyno wrote

They aren't buying for any of those, it's just an investment. You're overthinking this. Ken griffin doesn't give two shits what other billionaires think about his property, he just believes that 220cps is a good investment, and whether or not he lives there, it has been a good investment. Property is a great place to park money, all things considered.

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TennSeven t1_jdelyx2 wrote

>in 2019 a penthouse over there sold for 238 million

Do you have any credible sources for this? This site states that the most expensive home sale in 2019 was a $98 million, 5 story penthouse.

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TizonaBlu t1_jddv1ye wrote

I really think they made a huge mistake making that a triplex instead of one full floor and a duplex.

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_ACompulsiveLiar_ t1_jddvwc7 wrote

The building already has 2 duplexes and like 15 full floor units lol. I think 107 & 127 are duplexes and then everything in between those are full floors. They might split, anyway. A lot of high end buildings will split their units up if they don't sell fast enough and they lose patience

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TizonaBlu t1_jde0o7k wrote

Not sure what your first sentence has to do with anything I said. I didn’t say it didn’t have any of those things.

My point is they should have gone with one full floor and a duplex, thus lowering the price point so they’ll be easier to sell, people willing to drop 100m for an apartment is already slim pickings and 250m is even smaller even for NY.

What could happen is these two are on the market, and if someone actually does want a triplex, they buy both and combine them. Doing a triplex makes their options much more limited.

Also, in terms of them splitting, it’s certainly a possibility. However, they built themselves into a corner as they’re not designed to be two apartments. The first floor doesn’t have a BR worthy of being a primary. Second floor doesn’t have a kitchen nor living room. This will require significant work to convert not to mention moving of plumbing.

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_ACompulsiveLiar_ t1_jde6gjg wrote

Yeah but these buildings are not priced to sell. They're priced to price. If they wanted to price to sell there woudl be no full floor units they would just cram 7 2 bedrooms on every floor. They price to price on purpose, because it's an investment building not a residential building. Literally nothing about standard residential development or real estate dynamics applies here. You talking about "2nd floor doesn't have a kitchen and that's weird" like whoever buys the top 3 floors of this building give a shit about the cost of building a kitchen. Who is buying the top two floors and being like "damn it I have to spend $2M and wait 9 months for my kitchen, to move in!"

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Towel4 t1_jdd7zwg wrote

Honestly 190 million for the fucking Flatiron building seems cheap? I’m not in the business of buying building but, damn

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TennSeven t1_jdem6vy wrote

I thought the same thing. I've never been inside though and I imagine it's pretty outdated.

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T1mac t1_jdg84cy wrote

> Honestly 190 million for the fucking Flatiron building seems cheap?

The building has 255,000 sq ft and it comes to $745 per sq ft. Actually cheap for Manhattan where median price for a building is $1,450/sq ft. Add on the $100 million restoration costs and you're still in the ballpark of Manhattan real estate at $1,135.

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msa1124 t1_jdx3whn wrote

It’s actually an overpay by more than 2x if the intention was to redevelop it as a class A office building.

Assuming its fully redeveloped and gets top of the market rents (which it won’t since the floor plates are inefficient and the ceilings are too low) of ~$100/RSF, it should have ~$70/RSF in net operating income which at a 5% cap rate is $1,400/sf exit value. Going in at $750/sf with $400/sf in redevelopment costs plus $100/sf in financing and operating shortfalls leaves you at a ~$1,250/sf total cost basis, 40% of which is equity for a total of $500/sf, which means your $150/sf entrepreneurial profit is a 0.3x multiple on invested equity. A deal of this level of risk would typically command a minimum of a 2.0x multiple, and that’s not even factoring the amount of time it would take to go through the redevelopment process and try to lease the full building up when the office market is in the shitter. It’s actually hilarious that so many people on here seem to think that this was a “good deal” when the buildings current owner and profiling Nyc landlord Jeff gural himself said that it was probably not worth more than $80 million. Jacob Garlick probably realized this sometime after having his day in the paper as he forgot to send in the court mandated 10% deposit by the deadline last Friday.

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StoryAndAHalf t1_jdd3nzo wrote

Ah shoot, how did I miss the auction? Dammit. I was so close too, I’m short $189,999,900 and change from what was in my wallet.

E: from the article…

"I didn't want to miss this iconic moment," said Tom Brady, a real estate broker from Douglas Elliman Real Estate.

I see Tom is staying busy in retirement.

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ffffffn t1_jddkqgh wrote

Damn look at Richie Rich over here with $100 in his wallet

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imlavanow t1_jdd3klz wrote

why does that seem like...so much lower than i would expect a famous NYC building to go for? Shit has me thinking I was only a few bucks away

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leg_day t1_jdda483 wrote

It needs a shitload of work. Even in 2019 when it was still occupied it was pretty horrible inside -- and that was after a bunch of retrofits.

It's also landmarked, so everything costs more.

Trying to renovate and retrofit a landmarked building and bring it up to modern standards is hard. And risky. And time consuming. And expensive as shit.

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azdak t1_jddadfj wrote

the thing with ALL these iconic landmarks is that the internal infrastructure is a fucking mess, so any bid is taking into account the 9 figures they're gonna have to spend un-fucking it

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STcoleridgeXIX t1_jddl4jc wrote

Also the reason it’s famous (it’s crazy shape on a triangular lot) makes the floor layouts awful.

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GreenGreenGreenDDD t1_jdd6gv5 wrote

They might have bought the building only, and not the land. That brings the value down if they have to make large rent payments to the landowner.

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TeamMisha t1_jdefbu8 wrote

The only people nowadays looking to fill weird office space is maybe WeWork, this is gonna be riskier than investing in a quality, newer building that is in a better state of repairs and can more reliably attract tenants. Idt potential tenants are gonna be super keen to be stuck in a building with scaffolding blocking windows and endless reno work on it lol

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elizabeth-cooper t1_jdddkpu wrote

Thankfully it was bought by an American, not a foreign company.

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im_coolest t1_jddpmw8 wrote

Yeah American oligarchs are the best

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ep1032 t1_jddvg2q wrote

Home grown oligarchs do tend to be better than foreign ones, yes.

Not that they're so much better as to have crossed the line into good, but still better

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Plaetean t1_jdesu8w wrote

I dunno who else you expect to buy a building for 200m and then spend another 150 on repairs for it..? Or should we just not have any expensive buildings?

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numberwunwun t1_jddreoa wrote

I used to work in the Flatiron, and the building was a mess on the interior and an absolute fire hazard (we had a firefighter do a drill, and he was like..."just pray to God there isn't a fire"). Everything was coated in dust constantly, no matter how much it was cleaned. No idea where it came from. And the plumbing/heating...

$190 million feels right for how much work is going to need to be done for it to be livable, let alone luxurious.

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Topher1999 t1_jddkqfu wrote

I’d buy the Flatiron just to turn it into the daily bugle

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jayesh_f33l t1_jdcqwly wrote

Kinda offtopic but why does it have those wooden bamboo structures around it? I remember seeing it in 2021 and it still was there the last time I saw it in January.

Is it for support? Or was it just coincidence that every time I go there they are getting some work done?

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Capsman13 t1_jdcr918 wrote

There has been scheduled on the building for 4+ years

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A-73a t1_jddkxq5 wrote

Thats cheap

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LCPhotowerx t1_jddtuw6 wrote

now J. Jonah Jameson can finally nab that menace spiderman!

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mozzarella__stick t1_jddn13p wrote

Hopefully this won't affect Butcher and the boys finally taking down Vought.

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trickedx5 t1_jdfazzq wrote

It probably has a lot of upkeep which scared people away

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bustawolfe t1_jdcuu68 wrote

Nice. The Continental can finally come to fruition.

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SolidSpark t1_jdcx72x wrote

Already exists - The Beaver Building at 1 Wall Street

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TheSchweekly t1_jddlqf5 wrote

Why don’t I get invited to these things?

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Calm-Door-302 t1_jdea9nf wrote

Damn, I didn’t even know it was up for bid!

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TeamMisha t1_jdeiq9x wrote

So the building is 121 years old and it makes me wonder if it'd be better/cheaper to just raze it and build a replica/similar style in its place using modern materials with perhaps apartments or event space (better for the odd floor plates maybe?). This is a good thought experiment moment on the nature of landmark preservation. If the interiors and facades are gut renovated anyways, is it still really the same building? If you completely rebuilt it you could make a new building that'll last another 100 years instead of constantly repairing the current one.

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jonnycash11 t1_jdex8dn wrote

Can they put up lights on it now to properly identify it as the headquarters of the Daily Bugle?

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Brooklyn-Epoxy t1_jdgi3iu wrote

The biggest flex would be to convert the building to a homeless shelter, low middle income and artist housing. I don’t need profit!

Also who is this Jacob Garlick guy?

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SufficientWish t1_jdel9rl wrote

hell yeah, let's knock this baby down and build some modern condos

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goldk1wi t1_jdda8he wrote

So… why was a building of this significance sold at an auction? Who was the previous owner

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lightinvestor t1_jddapws wrote

It was co-owned by a bunch of people and there was a dispute between them, so an auction was ordered by the courts.

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EveryNameIWantIsGone t1_jddctyt wrote

So… why don’t you read the article?

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goldk1wi t1_jddrdl7 wrote

Easier for me to ask the question and ppl like you can spend your time answering.

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