C&W Inks Deal with Microsoft for Manhattan Flagship Store
- Oct 06, 2014
The Microsoft Corp. has agreed to sign a lease for a flagship store at 677 Fifth Ave. in Manhattan, occupying the entire ground through fourth floors and a portion of the lower level of the building.
Further details about the size or the company’s plans were not revealed, although Microsoft’s stores normally feature PCs running Windows 8, laptops, smartphones, Surface and Windows tablets, Xbox consoles and accessories bundled with personalized customer service.
“It’s always good to have visibility from Wall Street,” Jeff Green, president of Jeff Green Partners, told Commercial Property Executive. “Go back to the early days of Bed, Bath and Beyond, and analysts didn’t know who they were and when they put a store in SOHO, their stock went up really quickly.”
Various published reports suggest that Microsoft is planning to create an “experiential space” within the store to turn the shop into more than just the average Microsoft Store. Currently, there are more than 100 Microsoft retail stores in the U.S.
According to Green, while Microsoft may be attempting to emulate the nearby Apple Store, it’s akin to comparing apples to oranges.
“So much of what Microsoft sells is hidden—it’s the inside components, not the outside hardware,” he said. “Microsoft stores tend to be closer to what you might see at Best Buy—selling other people’s hardware. That makes it difficult to have a brand. From what I can gather, typically Microsoft will do ¼ of the volume that an Apple store would do at the same location and size.”
The Fifth Avenue store will be Microsoft’s first full-time retail store in Manhattan. The company has specialty stores, which are smaller than the full-line version, at The Shops at Columbus Circle and the Staten Island Mall.
Ironically, Microsoft CEO Satya Nadella told reporters during the company’s fourth quarter fiscal 2014 earnings call that he considered retail stores to be a supporting and not a core business for the company.
Cushman & Wakefield represented the landlord, 677 Fifth Avenue Corp., in the deal. Richard Hodos of CBRE represented Microsoft.
“This is the perfect pairing of an iconic global brand with one of the best locations on Fifth Avenue,” Andrew Kahn, Cushman & Wakefield’s executive director, said in a company statement. “We are fortunate to have been involved in such a unique transaction that establishes a long-term partnership while adding to the prestige of having a flagship store on Fifth Avenue.”
No date was given for the launch of the store.