Apple Gets Sweet Deals From Mall Operators

Apple Gets Sweet Deals From Mall Operators
Apple Inc. ’s huge gravitational pull on mall traffic is distorting the market for mall rents, winning the iPhone maker sweetheart deals and putting upward pressure on other tenants’ leases.
In the past, malls typically operated according to a straightforward bargain. Department stores that anchored the ends of the malls either owned their own stores or paid almost nothing aside from fees to maintain common spaces in exchange for drawing much of the traffic, while specialty retailers in the smaller spaces between the anchors typically paid the bulk of a mall’s rent.
Apple has upended that model by using its bargaining power to pay no more than 2% of its sales a square foot in rent. That compares with a typical in-line tenant, which pays as much as 15%, according to industry executives.
 
 
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Source News: The Wall Street Journal