As the number of tourists trekking to the lights of Times Square swells, advertising, not office or residential tenants, has become the neighborhood’s primary money-maker, according to the Wall Street Journal. Companies like Dunkin’ Donuts, Anheuser-Busch and Sony pay $3.6 million, $3.4 million and $4 million per year to use the 25-story tower at 1 Times Square as a billboard. In fact the trapezoidal building generates approximately $23 million annually in advertising dollars, according to refinancing documents recently filed.
In addition to rents from the Walgreens, which occupies the first three floors, the building’s signage brings its appraised value to nearly $495 million, according to the loan documents cited by the Journal. That is twice the price paid for 222 Broadway, a 31-story Lower Manhattan office building that has nearly six times more space than 1 Times Square.
“We’ve been very happy with it,” Michael Phillips, COO at Jamestown Properties, owner of 1 Times Square through a fund purchased in 1997 for $117 million.
Advertising prices have nearly doubled in Times Square over the last decade as New York City tourism has reached a record 50.9 million annual visitors. Moreover, buildings with digital billboards are now renting for as much as five or six times more than their static counterparts. Some advertising-industry executives now estimate that Times Square has the highest-priced outdoor signage in the world and landlords are taking note — racing to install even larger signs onto their buildings. For instance, Vornado Realty Trust recently announced that it will add a new digital sign along the 300-foot base of the Marriott Marquis hotel on 46th Street and Broadway. [WSJ] —Christopher Cameron