Revenue Per Square Foot

Revenue Per Square Foot

Reference in apple,dedicated server by Isabel Wang

A long time ago, I used to work in the investment banking division of LaSalle Partners now Jones Lang LaSalle, a real estate firm. One summer, in the process of underwriting a REIT, a coworker and I spent weeks taking inventory of Midwestern shopping mall retail stores: good store, bad store, must terminate that store lease our main metric for sustainability was sales per square foot.

Too bad none of our malls had Apple stores. According to , Apple retail operation rings up $4,032 per square foot per year compared to Best Buy $930, Neiman Marcus $611, and Tiffany $2,666. I used to think $500 was outstanding.

If any of those malls were owned by MGM Grand Gamal Aziz, he might have gutted the whole building and gone after Apple to build a megastore. I was fascinated when I read this Business 2.0 article back in July about his track record of out hundreds of millions of dollars worth of mostly profitable assets, including restaurants, bars, shops as well as entire hotel wings In their place, he built more popular replacements and managed to increase revenue by 25% and profits by 45%

Business 2.0 says Aziz strategy is to work backwards: calculates the max revenue that each business could generate if every customer spent the max amount the market could bear, and if traffic reached its physical limits. He then subtracts actual sales from the hypothetical number and calls the difference a loss. His formula for closing the gap usually starts with a jackhammer. would Aziz do if he ran your data center? I guessing he virtualize all of your discount dedicated servers before the end of the day. I was touched when I came across Greg Reinacker blog post about his attachment to his very first dedicated server it lost one of its disks and one of our operations guys asked if we could retire that box, I think the words out of my mouth were something like over my dead body! and I sure many of your customers feel that way about their machines. But are they going to pay $4,032 per square foot for the space that those servers take up??