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Empty Times Square Building Generates $23 Million a Year From Digital Ads
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."
If he's making a profit anyway, why not rent or give the space to local community groups / organisations?
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Is it just me or when did "mn" surpass "m" for million? "100mn pedestrians" looks like it should be a measurement in milli-newtons per pedestrians - I'm sure the imperial equivalent is slugs per servants.
...for an evil genius to set up his lair. Who would ever suspect an empty building at the busiest intersection in the world?
How many spare rooms in your own house do you really need? One room, one person's life changed. Hop to.
He's not making money off the advertising, he's making money off the stupid companies not realizing that there's no way in hell it has an ROI above 1. 3.4 million at Dunkin Donuts' profit margin? That billboard would have to convince something like 1 in 10 people that sees it to go buy a coffee from them to make up its cost. This is right up there with GE realizing after many years that its Facebook ad campaign to the tune of $43 mil didn't have an ROI above 1.
The Curse of the Network Effect is obvious enough in real estate that there is an entire school of political economy geared toward a single tax on land value -- a school most identified with the 19th century political economics author, Henry George.
Again, the real solution is to stop taxing economic activity (capital gains, income, sales, value added, etc) and instead tax market-assessed liquid value of assets.
And, again, of course, not many people are going to really understand this idea so it must be demonstrated by those who do get it.
That's why we need Sortocracy.
The proposal you link to essentially removes all control anyone has over their own property. Everyone is, in effect, required to sell any property at any time to the highest bidder. That may be economically efficient, but it sucks on a day-to-day basis for real people. It's the "infinite frictionless plane" type of economist thought problem, not an actual solution to anything. The law would last about as long as it would take for grandma to be kicked out of her house.
E pluribus unum
Does the prestige translate into actual business?
a manoneter
The One Times Square building is decades obsolete for an office building. However, as a mounting point for the multimedia signs, it is very functional. The empty floors provide power and space for the equipment required to run the signs and the massive equipment required to cool the equipment that runs the signs.
Plus, it's at the crossroads of the world.
Kriston
Lets set something straight here, the building used to be empty but about a year ago a Walgreens (with its own crap load of digital signs) opened taking up the first 3 floors. I have been working across the street from this building for the past 5 years and indeed the rest of the building is empty. It is also quite narrow and I just don't see how it would make for comfortable offices. While some taxes might be getting paid the owner does not need to pay for heating or cooling or most types of maintenance. Security, cleaning, water, etc ... This really was a smart move by the guy.
So a building, which is nominally meant to house people and objects, is being used to hang billboards. Space being at a premium in New York City, I find it rather amusing that you can make more money off of advertising using the side of your building than in leasing the floor space.
The wikipedia page for this building suggests one significant difficulty in leasing the space:
Because of the extensive cost of renovating the building with central air conditioning, the building currently has no tenants above the retail floors
That, and the building where it sits can hold more advertising than what you could accommodate if you tore it down and just put up traditional billboards.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
With NASDAQ next door, there has to be gobs of fiber running along Times Square.
NASDAQ isn't there at all. The NASDAQ put that sign in years ago to give them a visible presence in New York. NASDAQ corporate HQ is downtown at 165 Broadway. The signage is strictly for PR purposes.
Operationally, NASDAQ is distributed. The data centers aren't in New York. Neither are those of the NYSE; the main one is in New Jersey, but there's a backup elsewhere.
After Hurricane Sandy, the NYSE and the NASDAQ closed for two days. But not because they couldn't operate. The NYSE operations people wanted to transfer operational control to the NYSE Arca offices in Chicago and come back up the next day for online trading. The floor traders and the Wall Street financial community screamed. They were terrified of the financial system running without them. Especially if it worked just fine.
Think of all the good this person could do if he opened the building to the homeless or community organizations.
Think of all the permits that would be required before the building could be used for this. Think of all the inspectors that would need to be paid off.
Your "fair share" is NOT in my wallet.
Someone more business savvy than me told me that while "self storage" facilities weren't a bad business considering how much junk people have, they are often setup primarily for "parking" real estate until something more valuable can be constructed on the site.
Storage brings in some revenue to pay property taxes and basic maintenance and the facilities themselves have very low overhead costs as most are just a vast network of non-climate controlled one-story garage-type structures with a fence around them. Plus it keeps local officials from bitching about undeveloped or poorly maintained property.
Now, there are more elaborate storage centers run as legitimate businesses in their own right and some of these may have more elaborate facilities (climate control, electricity, etc), but a lot of the plain/simple ones are just holding places for real estate investors.