We reported last week that the opening of Apple’s Grand Central retail store was rumored to be delayed to Friday, December 9. Today a report from New York Post is confirming a grand opening for next weekend while giving us an inside look into the one-of-a-kind lease that the publication has obtained a copy of. Unfortunately, as we learned from our video walkthrough of the space (video below), much of the retail space doesn’t take advantage of the terminal’s architecture and will actually be located underground, in the basement.
In comparison to the other tenants and retailers in the space who pay approximately $200 per square foot, Apple is reportedly paying just $60 per square foot. The lease will also include a no-percentage deal with the Metropolitan Transportation Authority who justified the rare decision based on the new Apple Store’s ability to “generate significant new traffic” for other retailers in the space. In contrast, all of the other retailers and restaurants pay the MTA a percentage of sales beyond a certain threshold. With real estate experts estimating the store will take in around $100 million per year in sales, the MTA is being criticized for this no-percentage deal with Apple.
Executive vice president at real estate firm Lansco, Robin Abrams, told the New York Post the no-percentage deal is surprising:
“I am surprised they didn’t get some kind of percentage. You’d think if they were going to do, say, $50 million in sales, the MTA would at least get some percentage of anything over that.”
The report notes that Apple’s flagship Fifth Avenue store, which the company pays approximately $5 million a year for, sees the landlord of the GM building raking in around $15 million per year off the over $400 million in sales per year the store generates.
MTA spokesman Aaron Donovan had this to say:
“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.”
Unfortunately, the Grand Central store won’t be ready in time for the company’s participation in World AIDS Day tomorrow, which will see Apple retail stores highlighting their (RED) product lines of iPod nanos and accessories with a portion of profits going to the Global Fund to fight AIDS in Africa. Full World AIDS Day story at ifoAppleStore.