The iconic Flatiron Building, located at 49 Wellington St., was sold this week for $15.4 million — and some might say it was a bargain.

Last sold in 2011 for $15.2 million, it’s hard to believe this culturally significant building only appreciated by $200,000. Especially given the ballooning real estate prices across the city. 

But the small price gain is likely due to a lack of interest in office space. Toronto in particular has been suffering when it comes to office vacancies — the city’s downtown office vacancies rose to 17.4 per cent in the fourth quarter of 2023, up from 15.8 per cent a quarter earlier, according to a report from commercial real estate services company CBRE. It was Toronto’s soft demand that dragged down the national average; Vancouver, Calgary, Edmonton, Ottawa and Halifax all saw office vacancy improvements.

But we’re not alone. Cities across the globe are experiencing a lackluster desire for traditional offices. 

In New York City, for example, another famous Flatiron building, the Fuller Building, has sat in question since its long-time tenant, Macmillan Publishers, went out of business. Recently purchased in 2023, there are now plans to transform the triangular building at the corner of Fifth Ave from an office space into luxury housing.  

But what of our beloved Flatiron building in the heart of Toronto? 

The new owners, Lee Chow Group, a Toronto-based boutique real estate investment firm, have high hopes for this historic property.

Liam Sauro, a partner at the Lee Chow Group, believes that with the right attention, the mixed-use building at 49 Wellington St. has a bright future.

“The office sector is certainly experiencing some turbulence. But we believe that unique character office spaces within a five-minute walk of Union Station are very rare,” Sauro said. “Buildings like this traditionally have experienced very high occupancy rates, and the Flatiron is no exception.”

Often the subject of postcards, photographs and local art, the Flatiron Building has long been a focal point of fascination in Toronto’s bustling St. Lawrence neighbourhood. 

But, with this recent sale and growing indifference towards older structures, some people are concerned about the building’s fate. Quips about the property turning into another tower have dominated some conversations.

But Sauro assured, “That is not going to happen.”

Built in 1892, the Flatiron Building was originally the head office for Gooderham and Worts Distillery — once the largest liquor producer in the British Empire. It is also a protected heritage building under the City of Toronto and the Ontario Heritage Trust. 

One of the oldest Flatiron buildings in the world, the five-storey Romanesque Revival landmark is a municipal gem and is an undeniably unique purchase.

“To us, it felt like a once-in-a-generation possibility to acquire one of Toronto’s most recognizable and unique heritage properties,” Sauro said.

Asked about how the Flatiron Building will be treated compared to other high-profile historic property purchases, such as the Broadview Hotel, Sauro noted that plenty of dedication and attention will be needed to maintain the landmark.

“The Flatiron Building is over 130 years old and will require a lot of love and care, but our goal is to maintain it to a first-class standard,” Sauro said. “The Broadview Hotel is certainly a very high standard — that ownership group did an incredible job. It’s difficult to compare the two (or any two heritage properties) as that one specifically was a full-scale interior and exterior renovation.”