Remember what the new Times Square used to be like. The lights, the red neon of the Virgin Megastore. No more.
The new, new Times Square will feature a Forever 21 clothing store in place of the music staple, which is slated to close this April. After almost two years of speculations, the two real estate companies — the Related Cos. and Vornado — which acquired the Virgin Entertainment Group North America, have decided to lease the space for higher profits.
With the deal Virgin had, it is not surprising that the prime location can still earn more for the landlords even in a sluggish real estate market.
Billboard: [Vornado] executive was quoted as saying that Virgin pays only $54 per square-foot when the market rent in the area is about $700 a square foot.
So, while the store, which does an estimated $55 million in annual volume, is profitable to the tune of $6 million, according to sources, the space would be even more profitable for its owner with a higher rent tenant. Vornado bought the 180,000 square foot retail component of the Bertelsmann building, which houses the Times Square store, in 2006, and will lease the space to Forever 21, according to press reports.
Not to worry, there is still a Virgin Megastore in Union Square. Right?
But the status of that store is also at question as the Related Cos. and Vornado leased the ground floor of the store to Nordstrom Rack for the holiday season, only to have the deal fall through.
Apart from the vanishing New York aspect, we aren’t really that sad about the closing. Who buys CDs (in a store!) anyway?
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