One–or both!–of the Virgin Megastores in New York City could be on the chopping block, thanks to the chain of super-sized music outlets being sold to a pair of NYC real estate companies. Related Companies and Vornado Realty Trust will finalize their purchase of the 11 stores–totaling some 400,000 square feet of retail space–in September, and the New York Post is speculating that the buy is in part a ploy to squeeze more cash out of the two New York City locations, both of which are paying low rent on long-term leases. The landlords who are getting those discounted rental payments? Take a guess:
Industry watchers say the sale would allow Related and Vornado – which are already Virgin’s landlords at their Union Square and Times Square stores, respectively – to close the two stores where Virgin has long-term leases well below market rates.
“There’s rental gold in the Times Square Virgin Store,” said one broker. Virgin is probably paying $100 a foot, compared to the $800 a foot Vornado could be getting today.”
While I’m not 100% sure that the $800-a-foot figure is a slam-dunk–ahem, if it was, would the Barcode space still be empty after all these years?–the idea of one of New York’s Virgin outlets closing isn’t a surprise at all, given the fact that a lot of their space seems to be taken up by, well, empty space. It’s really going to be a sad day in the city when the only place where you can pick up an $18.98 copy of Daughtry is the FYE off Rockefeller Center.