Apple mulls permanent expansion of Fifth Avenue store, feels 'entitled' to cut-rate FAO Schwarz lease
Apple's plan to temporarily relocate its flagship Fifth Avenue store from the base of the GM building to the old FAO Schwartz location has apparently evolved into a desire to permanently occupy the space — and without paying the going rate for rent.
According to a report from The New York Post, Apple feels "entitled" to the prime real estate because its existing Apple Store, topped by an iconic Steve Jobs-designed glass cube, has transformed the area into a global tourist attraction. Apple initially planned to temporarily take over some or all of a 61,000-square-foot space previously occupied by FAO Schwarz.
The move puts Apple in conflict with Boston Properties, owner of the GM building that houses both spaces. Apple's demands were left unreported, but the report says ground floor rental rates in that region of Fifth Avenue range from $2,700 to $4,450 per square foot, more than double what its nearby Madison area garners. The data was culled from a recently released Real Estate Board of New York report. The former FAO Schwarz plot includes about 13,000 square feet of street level real estate.
More recently, Nike expressed interest in relocating its New York flagship from a Trump Enterprises building to the FAO Schwarz vacancy. Nike's just extended the least on its existing store out to 2022, so the company's plans are not in immediately conflict with Apple's designs for a temporary outlet. If Apple decides to build out a permanent expansion, however, the two retail giants might soon be at odds.
Since opening in 2006, Apple's 24-hour Fifth Avenue flagship has become a major tourist destination and is often seen representing the company in news reports.