“Apple wants to take a larger bite out of the GM Building. The tech giant pioneered its iconic glass cube on the Fifth Avenue plaza of the full block tower, but business in its now-cramped underground location is so good, it also wants to take over the former FAO Schwarz space,” Lois Weiss reports for The New York Post. “It is likely to open in some or all of the 61,000 square-foot space on a ‘temp’ basis while it refreshes its underground fortress.”
“But there’s a problem when it comes to a permanent expansion: Apple doesn’t want to pay the asking freight and feels it’s ‘entitled’ to the prime retail spot as it ‘made’ the location a global tourist draw,” Weiss reports. “Of course, owner Boston Properties has both investors and stockholders. The executives can’t simply roll over to the demands of its special-needs tenant, but must bring in the going return.”
“In that area of Fifth Avenue, asking rents for ground floor space — this has 13,000 square feet on the ground — range from $2,700 to $4,450 per square foot, while its Madison area garners $1,250 to $2,058 per square foot, according to a new Real Estate Board of New York report,” Weiss reports. “That’s what set up the opportunity for Nike to start negotiating with Boston Properties to take the now vacant toy store spot for its next flagship.”
MacDailyNews Take: How much are those rents without the iconic Apple Store Fifth Avenue, one of the most visited, most profitable, and most photographed placed on the planet? Boston Properties would do well to quickly wake up from whatever delusions they are suffering.
Full article here.
MacDailyNews Take: Before Steve Jobs, that basement was an un-rentable site of a string of retail failures. Of course, Apple not only made the area a prime retail spot, they made the location a global tourist draw. No air quotes required.
Apple is correct to remind the Boston Properties of the value of Apple to that particular area of Manhattan and, in fact, to BXP properties everywhere, and, importantly, to BXP itself.
Apple Store Fifth Avenue, the mother of all flagships, primed for massive makeover – June 26, 2015
Apple to totally renovate iconic Fifth Avenue Store, temporarily relocate to FAO Schwarz building – June 11, 2015
Apple Store Fifth Avenue is New York City’s most-photographed attraction – June 2, 2011