Rendering of Grand Central Apple Store The cash-strapped Metropolitan Transportation Authority presented Apple with an unusually favorable deal to take 23,000 square feet of space in the Grand Central Terminal, according to the New York Post.
Not only is Apple paying just $60-per-square-foot, while other tenants, such as Shake Shack, pay upwards of $200 per square foot, but Apple is also under no obligation to kickback a percentage of its sales to the MTA, as all other Grand Central tenants do. The Post said retail analysts believe the store should generate at least $100 million in sales per year. Real estate executives interviewed by the Post expressed some measure of surprise that the agency wasn’t able to recoup some percentage.
But the MTA justified the lease terms by explaining that an Apple store would drive traffic to other retailers in the terminal, increasing their sales and the amount the MTA takes from them in sales percentages. Moreover, no other companies responded to the agency’s request for proposals, and the rent is still a four-fold increase over what the previous tenant, Charlie Palmer’s Metrazur restaurant, had paid.
The store, which is set to open next week, has an even better deal than the one negotiated for the 59th Street location, where the tech retailer pays less than $5 million per year in rent, but pays $15 million of its $400 million in annual sales back to the landlord in a deal negotiated by Harry Macklowe. [Post]