Apple draws so many shoppers that its stores single-handedly lift
sales by 10% at the malls in which they operate, according to
Green Street Advisors, a real-estate research firm. That gives
Apple the clout to negotiate extremely low rents for itself
relative to its sales, while creating upward pressure on prices
paid by mall neighbors who might not benefit from the traffic.
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.