News and Events
The Apple of Landlords’ Eyes
RCS Senior Vice President Mitchel S. Friedman talks to Chain Store Age about Apple's real estate position in malls.
Jun 20, 2011 Chain Store Age Katherine Field Boccaccio
Mall owners are rapidly realizing that Apple is pulling in as much traffic, or more, than department store anchors. In fact, a recent article in Wall Street Journal went as far as to say that Apple is “challenging the dominance of
department stores,” expanding its presence in malls around the country and, say some, likely to start asking landlords to strike the kinds of rent deals currently reserved for anchor status.
“From day one, Apple has been incredibly savvy with their lease terms,” Mitchel S. Friedman, senior VP of NYC-based RCS Real Estate Advisors, told me. “They’re actually getting a better deal than the department stores in some cases. With most leases, the retailer pays a base rent plus a percentage of sales above an agreed-upon amount. Apple doesn’t give landlords a percentage of their sales. For example, if Apple is paying $100 per square foot for a 5,000-sq.-ft. store, their rent is $500,000. If their average sales are $34 million per store, that $500,000 is only 1.5% of their sales. Most department stores are paying, on average, 3%-4% of their sales.