By Sarah Trefethen
Microsoft has leased the southwest corner of Vornado Reality Trust’s 1540 Broadway for the holidays, the Seattle-based technology company confirmed Tuesday.
But a week before the official announcement, technology enthusiasts and real estate watchers alike have noticed a large wrap-around billboard advertising Microsoft’s new table computer, the Surface, looking out from the prominent corner in the heart of Times Square.
The cozy retail space below the sign was shrouded in grey curtains Tuesday morning. Inside, a bustle of renovations were underway. The store is scheduled to open on Oct. 26, and will carry a “curated selection of the coolest Microsoft products,” according to the company’s website.
The Surface — microsoft’s highly-anticiapted answer to Apple’s iPad – will go on sale online and in stores in conjunction with the pop-up’s Oct. 26 opening, but a limited number of the tablets were scheduled to be available for online pre-order starting at 9 a.m. Pacific time today (Wednesday.)
Judging from the way Microsoft Stores operate in other locations, the corner space may serve more as a place for customers to test out the company’s products than as a major point of sale. “It would seem more likely to me that this is something to raise awareness of Microsoft — a marketing effort of sorts,” Steven Rappaport, senior managing director at Sinvin Real Estate, said in an interview last week.
Microsoft’s decision to hang its shingle — at least temporarily — in Times Square is just the latest confirmation that the intersection is one of the world’s most prominent billboards.
Last week, the Durst Organization announced it had leased the first three floors of the Conde Nast Building at 4 Times Square to retailer H&M. As part of the deal, the fast-fashion giant will hoist four 70×70 ft. signs to the top of the 48-story tower.
The asking rent for each of those signs was $1 million a year per sign, according to a Durst representative.
Times Square “has become a true shopping destination, but also it’s the most visible place in the world,” said Joshua Strauss, a vice president at RKF who has worked in the neighborhood for a number of years.
While the foot traffic makes for strong sales, raising brand awareness can be at least as much of a draw for tenants, he said, and retailers are expressing more and more interest in the advertising opportunities attached to a retail space. When the Hard Rock Café leased its Times Square location a few years ago, the two rotating signs and wrap-around marquee added between 25 and 30 percent to the value of the deal, Strauss said.
The corner that will house Microsoft’s temporary store was formerly part of Planet Hollywood’s Times Square restaurant. The restaurant was scheduled to close for renovations in June and appears to be shifting its frontage east along 45th Street.
It is scheduled to re-open by the end of the year and share its space with Bucca di Beppo, a chain of Italian restaurants.
Other tenants in the building along Broadway include Forever 21’s flagship store, a Disney Store and Mac Cosmetics.
Average ground-floor asking rents in Times Square were $2,013 psf at the end of the third quarter this year, according to Cushman and Wakefield. That’s up seven percent from the previous year, and puts the neighborhood just slightly behind Manhattan’s most expensive retail neighborhood, the Fifth Avenue corridor between 49th and 60th Streets, where average asks are at $2,067 psf.