Empty Times Square Building Generates $23 Million a Year From Digital Ads 227
dryriver writes "Advertising things at the right place is proving to be a cash cow, as electronic ads earn about $23mn each year for an empty building at One Times Square – the iconic tourist destination in the New York City. A 25-story Manhattan office building that has long been empty keeps on bringing in millions to its owner as a billboard. Michael Phillips, CEO of Atlanta-based Jamestown Properties, bought One Times Square through a fund in 1997 for $117 million, as the Wall Street Journal reports. More than 100mn pedestrians pass through the square each year, which is 90% more than 16 years ago, says the Times Square Alliance, a non-profit business improvement organization. And this is what makes a price tag for having a company's name placed on the building the highest in the world, even above such crowded tourist destinations as Piccadilly Circus in London. Dunkin' Brands Group Inc. pays $3.6mn a year for a Dunkin' Donuts digital sign on the One Times Square building, with Anheuser-Busch InBev paying another $3.4mn a year for its advertisement. Sony and News America pay $4mn a year for a shared sign."
Re:Profit (Score:5, Interesting)
What exceptions are you referring to? I can see why a landlord might not want to rent if the marginal operating costs (janitors, maintenance, tenant improvements, security, etc.) exceed the rents. But I'm not sure what tax benefits are realized by letting the building sit vacant if there are tenants who will pay rents that exceed marginal operating expenses. I can't imagine that there are any property tax benefits, and income tax is applied only on actual income. The landlord can claim depreciation on its returns regardless of occupancy. I'm genuinely curious. Does NY have some sort tax on gross revenues (like Washington's business and occupation tax)?
hilarious (Score:5, Interesting)
Re:Profit (Score:5, Interesting)
I don't know why you were modded "funny". You're spot on. Times Square and Vegas were fantastic before they were nerfed and Disneyfied for boomers and their stupid kids.
Re:Profit (Score:4, Interesting)
When I'm at work, I look out the window at that building. I'm familiar with it's dimensions and location.
You'd rent it as an office space, not a residential space. No one cares that it doesn't have parking. The decision makers will take the corner slots with a view and not give a damn that everyone else doesn't have a view (or, given that those lights are irritatingly distracting, maybe the reverse)
You might not get as much as a larger building, but I have no doubt you could make enough to be worth doing.
Re:Profit (Score:4, Interesting)
Don't know why you've been modded a troll, but I think that your comment cuts to the quick of the aforementioned hollow argument.
In real estate, there is a concept known as highest and best use of property. That concept works exactly the way that it sounds and is one of the tools that an appraiser uses when trying to determine the value of a property. In this case, the building may serve its highest and best use as a billboard and not as office space/hotel/whatever. Who cares that the building sits empty? It most likely is not heated, not plumbed, and may not even have any interior walls/flooring/etc.
Further, I don't think that asking someone to justify their ridiculous statements (without even using the term "ridiculous statements") qualifies as trolling. If it did, then count Socrates as one of the first trolls.
Re:Profit (Score:4, Interesting)
How much is a "decent wage?" I hear people all the time talk about a "living wage" on here, but nobody puts a dollar figure on it. Give me something concrete. What should the high-school drop-out ditch digger (or whatever) who has learned no marketable skills make? What kinds of things should someone making a "living" wage be able to buy? What things are over the line? For example, how new a car, what kinds of food, cell phones, cable TV, how big of house or apartment? Should this "living wage" increase because people live in a certain area, or should we pay them more because they have a bunch of kids? I want to know what a "living wage" really means.
Also, how much more should a person with a degree make than this base "living wage." I mean a real degree which enables someone to produce something of value. I'm talking about engineering, or science, or something medical (and there are plenty of others), not philosophy or communications or something that qualifies you to be a barista.
Here's how I've always attempted to communicate this idea that you're sharing.
When you impose a minimum wage there are, almost by definition, jobs that are no longer worth hiring someone to do.
Is it worth $8/hr for a gym to hire a kid to wipe sweat off the equipment in the afternoons? Probably not. Wipe your own sweat.
Is it worth $8/hr for the mechanic to figure out why your BMW's heated cupholder isn't working? Probably so. The shop is going to bill $150/hr for the repair, so the mechanic has plenty of room between $8/hr and $150/hr to carve out a reasonable salary, while the owner still gets paid too.
Now, to run the "decent wage" and minimum wage ideas to their absurd extreme. If a $0 minimum wage is bad, and a $10 minimum wage is little better, why not make the minimum wage $10,000/hr! We'll All Be Rich! I'll have two new cars by lunchtime! Obviously, "We'll all be rich!" is the wrong answer. We'll all be criminals and working for whatever we're worth is the correct answer. If you insist on being law abiding, you'll be unemployed. No one on /. is worth $10K/hr (I'm sorry if this is a shock to some). Obviously, $10K/hr minimum is extreme, but the effects of raising the minimum wage to a "living wage" of $20/hr would be similar. Now everyone is getting paid at least $40K/year for their full time jobs. Great! But your Papa John's pizza is going to go up by a bit more than $0.15 to make it worth selling crappy pizzas.
You've just cut the bottom four rungs off of the economic ladder. It is no longer possible to go from sweeping the floors at the auto shop, to doing oil changes, to changing brakes, to being a highly skilled mechanic working on high end cars. The only job in that chain that is worth hiring an employee for is the last one. Everyone below that point gets the shaft and becomes a criminal.
The simple fact is that minimum wage laws hurt the very ones they are supposed to be helping, either by eliminating their jobs or by forcing them into "under the table" working arrangements where they can be paid what they are worth.
Peter
Re:Profit (Score:5, Interesting)
Manhattan has actually been coming out of a weak real estate market. I live around the Times Square neighborhood. Several real estate construction projects were cancelled. There are empty stores. It's counter-intuitive, since the price of Manhattan real estate seemed infinite, but that's why we get real estate bubbles that finally burst.
For example, Mayor Bloomberg sold the Donnell library to a hotel company, but the market crashed so it is now a gutted building on 53rd St. between 5th and 6th Ave., one of the most expensive locations in the world.
There are stores in the neighborhood that have closed, and left vacant instead of being rented (even in the Christmas sales season).
Some buildings just stay vacant for reasons that I can't understand. For example, there is 400 W. 57th St., on the SW corner of 9th Ave., which is owned by a Korean investment syndicate, that has remained vacant for maybe 15 years. There was an article in the New York Times about how it was a prime location (3 blocks from Carnegie Hall, and 4 blocks from Lincoln Center) and how they were planning to do something with it, but last time I walked by it was still empty.
Sometimes a real estate company will have vacant property, so they'll throw up a cheap store just do something with it rather than let it sit vacant. I think a lot of the 99-cent stores are set up like that. Some of these stores, like the restaurants and tacky shops, have the landlord as a partner. They're waiting for the real estate market to come back, and then they'll tear down the block and build a new building.
It's strange to think that a building like the one on Times Square could have signs on the outside, but nobody exploiting the inside in eternally-hustling Manhattan. But it happens.
Here's another one: I was living in another building around that area. My super asked me to help him do something in the back yard. He took me through a non-public door, and into a big back yard, that nobody in the building was allowed to use. There was a line of buildings down the north and south street, with a string of back yards between them, and nobody was using the back yards. It was like a collection of secret gardens. There are lots of streets like that in Manhattan, with closed-off back yards, even though space is so precious.
Re:Profit (Score:5, Interesting)
Interesting take on a country that just re-elected the most income-distributing president of all time.
What, did they dig FDR and re-elect him?
Tax rates are a record low in the past two decades, and Obama has so far done little to change that.
We know he didn't win on his economic record. He won on the same kind of class warfare talk that you're giving right now.
No, he won on the "I'm not those guys" record. By which I mean that he's not a loony who spouts bullshit about how raped women don't conceive unless they "really wanted it" and so don't need abortions, or how gays are icky abominations that should be glad to not be in jail and just shut up about that whole marriage thing, or how Hispanics are a "culture of losers". This election wasn't really a victory for Obama - it was a loss for the bigots on extreme social conservative right. Good riddance, too. Next time try running some guy who actually focuses on the economy. Having a fiscal plan which does not involve money conjured from thin air to balance the budget helps there (or, at least, don't claim that it'll balance!).
How much is a "decent wage?" I hear people all the time talk about a "living wage" on here, but nobody puts a dollar figure on it. Give me something concrete. What should the high-school drop-out ditch digger (or whatever) who has learned no marketable skills make? What kinds of things should someone making a "living" wage be able to buy? What things are over the line? For example, how new a car, what kinds of food, cell phones, cable TV, how big of house or apartment? Should this "living wage" increase because people live in a certain area, or should we pay them more because they have a bunch of kids? I want to know what a "living wage" really means.
A "decent wage" should not be lower than some reasonable factor relative to the highest wage in the company (note, I'm talking wages here, not dividends). "Reasonable" in this case is debatable and varies depending on who you ask, but vast majority of us agree that the 200x-500x rates that we see today are unreasonable. Personally, I think anything beyond 20x is unhealthy.
Please describe your moral code with respect to who should be giving what to whom in what situations, and who should be allowed to be on the receiving end.
Muslims has this nice term, "fard al-kifaya". This is a duty which is imposed on community as a whole - in other words, it is fulfilled when there are enough people that make it happen by whatever means necessary (and moral), and there is no personal individual obligation for every member of said community to participate. But if it is not fulfilled, then everyone should do what they reasonably can to contribute.
Same reasoning would seem to apply here - Americans as a society are certainly wealthy enough to eradicate poverty and homelessness, and it is therefore morally binding on them to do so. If, as fiscal conservatives and libertarians keep telling us, this is something that can be achieved entirely through private charity, then that's absolutely fine and government needs not be involved, but so far it hasn't happened.
Re:Profit (Score:4, Interesting)
Is it worth $8/hr for a gym to hire a kid to wipe sweat off the equipment in the afternoons? Probably not. Wipe your own sweat.
This is why many minimum wage implementations have different minimum wage values depending upon the age of the worker - allowing a business to hire that "sweat wiper and general gym dogsbody".
For example, the UK (https://www.gov.uk/national-minimum-wage-rates):
Age 21+ : £6.19/hr ($9.96/hr)
18 - 20: £4.98/hr
http://www.livingwage.org.uk/about-living-wage
The London Living Wage is currently £8.55 per hour. The link above shows that it is good for the employees and the employers, that the minimum wage laws benefit those they are supposed to be helping because lots of jobs are necessary but underappreciated.
Before the minimum wage was introduced in the UK lots of people were saying the exact same things you are saying. You don't hear squat from them anymore, because they were wrong.