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MTA loses out in deal to get Grand Central Apple Store

updated 12:00 pm EST, Wed November 30, 2011

Apple thought be paying substandard rent

Apple has managed to secure an unusually beneficially real estate deal for its upcoming Grand Central Terminal store, according to the New York Post. The paper says it has obtained copies of leases showing that Apple will be paying just $60 per square foot, "well below" what many other GCT tenants are paying. A future Shake Shack, for instance, is expected to pay over $200 per square foot.

The Apple Store is moreover said to be skipping revenue sharing with Grand Central's operator, the Metropolitan Transportation Authority. The Post suggests that Apple may have driven a tough bargain for its space, depriving the MTA of revenue at a time when budget problems have caused fares to go up. Of the businesses in the GTC, only Apple and a Chase ATM branch are not paying a percentage of sales over a given threshhold.

People described as "real estate insiders" reportedly estimate that Apple could pull in $100 million per year from the new outlet. The MTA, though, is defending its agreement. "We set out to maximize the rent we receive for this space, and we're thrilled that we were able to more than quadruple what we had been receiving previously," says spokesman Aaron Donovan. He adds that no other companies responded to a request for proposals. A July summary, prepared after Apple signed its lease, reveals that the MTA is hoping "significant new traffic" from Apple customers will offset money lost by sacrificing usual financial arrangements.




by MacNN Staff

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Comments

  1. Sandman619

    Joined: Dec 1969

    +1

    font-size:13px

    The other option would be to wait it out for a few months, thus losing revenue on that location. Citing lack of interest, any other applicant would similarly negotiate a good deal too. Go figure Cheers !

  1. aristotles

    Joined: Dec 1969

    +3

    Not quite

    Apple might be paying less per sq foot than other retailers but they are paying around 800,000 USD for the space which is a few times more than what the restaurant was paying.

    They are getting away with not paying a percentage of their revenues but the higher rent and increased traffic to other shops should make up for it.

  1. Flying Meat

    Joined: Dec 1969

    +1

    Doesn't sound so much like

    Apple's getting a great deal so much as it sounds like Shake Shack is getting a bad deal. Those better be some darned good shakes.

  1. cmoney

    Joined: Dec 1969

    +1

    shake shack

    darn good burgers actually. and lines that rival apple stores, on a nearly daily basis too.

  1. macjockey

    Joined: Dec 1969

    0

    like apple couldn't afford it

    like apple couldn't afford it

  1. charlituna

    Joined: Dec 1969

    0

    don't listen to the NY Post

    it's a gossip rag posing as a newspaper. there's a very solid chance they have no clue what they are talking about in terms of the rates. and even if that part is true they could be incorrect about who did what. For all we know MTA offered the terms to get Apple into the soon to be empty space that apparently no one wanted and to get Apple to pay for several key repairs that should probably have been paid for by MTA

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