Apple stores are so popular that they can increase overall mall traffic and sales. But the success often means higher rents for smaller retailers.
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.
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.