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You’re quite wrong about that. In the US - sure. Apple will just move to the next half empty shopping mall. Finding adequate space for an Apple Store in Europe is not very easy, especially not in historic city centers. Apple sometimes has to wait years for a place to become available.

And? So then the landlords in Europe have the upper hand and will tell Apple they are being silly for asking. I doubt Apple would ask if they had zero chance, however.

the reductions aren’t long-term. They’re short-term corona relief.

You seem really knowledgeable on the intimate details of this. I guess they didn't make you sign an NDA? /s
 
And? So then the landlords in Europe have the upper hand and will tell Apple they are being silly for asking. I doubt Apple would ask if they had zero chance, however.



You seem really knowledgeable on the intimate details of this. I guess they didn't make you sign an NDA? /s

the request came after Boris Johnson asked landlords to cut the rent for companies who were in danger of not surviving the Corona-related economic downturn. It’s a short-term relief effort - and perhaps if you’d informed yourself before writing you’d have known that? /s
 
I have seen many businesses not being able to afford the rental increases. Eventually owners have to move, or shut down their business because there's nothing else available. Retail spaces rental rates are going through the roof. So we have a lot of unoccupied shop spaces that stay vacated for years and years. 10 plus years is no exception. And all because the landlords want to keep their high rental rates, because that looks great for the value of the properties on their books. They could have had rental income on those vacated properties for years, but they won't accept lowering the rent.
Also don't understand this. Same thing is around us with standalone places abandoned for decades. You're making ZERO or losing money by not lowering the rent and actually having cashflow.
 
the request came after Boris Johnson asked landlords to cut the rent for companies who were in danger of not surviving the Corona-related economic downturn. It’s a short-term relief effort - and perhaps if you’d informed yourself before writing you’d have known that? /s

Cool. Chronologically, Apple's request also probably came after I bought a sandwich.

This is an Apple-related story, the original Sun Times story was about Apple, and the post you quoted was about Apple. If there was any direct connection between Apple's negotiations and what you're talking about, I've found nothing factual pointing to that, and you don't have a citation, so it's speculation so far.
 
Negotiating lease agreements that you’ve already signed is a thing?

Yep. Renegotiation due to changed circumstances is not some outlandish thing. Two examples.

1. GF bought a house. The house closing date was nowhere near the apartment rental lease end date. She negotiated early termination of the lease that was MUCH better than walking away and paying the penalty outlined in the lease.

2. Friend rents a house. Lease does not allow pets. After 2 years of proving to be a great renter and very clean and tidy, he negotiated a change in middle of the lease period so he could have pets.
 
Its not, but its their contract.. Most ppl loses in this current situation, may takes a hit. .. But the riches company in the world.. Not paying taxes, record bringing sales etc etc. I cannot feel kinda disgusted with them, taking advantage of the situation

Apple didn’t become the most valuable company in the world by accident.

They execute strong business practices which, gasp, includes negotiating contract structures.

Besides that, nobody knows of there are clauses in their rental contracts that give them room to negotiate in extenuating circumstances such as economic downturns.

Everyone jumps the gun on a headline without finding out a little more info.
 
the reductions aren’t long-term. They’re short-term corona relief.

You know this based on what? Currently, the new reports say only that Apple has asked for new terms to bring rates closer to market levels, and has asked for some amount of free rent as well. Some have said the requested cuts were as much as 50%. Their offer of reductions now in exchange for multi-year lease extensions is not corona relief, but timed because they expect that many of these property owners will be eager to have a longer lease with a solid tenant.

This adds a great deal to the value of the property, and given the situation would be good timing to help these property owners in their own financing efforts.
 
If you want to play semantics, by asking to change an agreement, by implication you have to break the current one to make the change!
But Apple isn’t making that change unilaterally. They still honour the original agreement (ie, deliver what they promised) unless the other party is happy with a different agreement.
 
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You’re quite wrong about that. In the US - sure. Apple will just move to the next half empty shopping mall. Finding adequate space for an Apple Store in Europe is not very easy, especially not in historic city centers. Apple sometimes has to wait years for a place to become available.

Well, if that is the case and the retail property market in the UK is so strong that Apple will have to fight to keep their prime locations, despite many storied and giant retailers going under, then no owners of their current leases with accept their offer and they will all raise Apple's rent substantially when their leases come due.

Seems pretty unlikely, but you might know much better. All my friends in commercial real estate in the UK think that Apple will get a great many companies to gladly trade longer term leases for current rent reductions.
 
Well, if that is the case and the retail property market in the UK is so strong that Apple will have to fight to keep their prime locations, despite many storied and giant retailers going under, then no owners of their current leases with accept their offer and they will all raise Apple's rent substantially when their leases come due.

Seems pretty unlikely, but you might know much better. All my friends in commercial real estate in the UK think that Apple will get a great many companies to gladly trade longer term leases for current rent reductions.
Especially with all the space opening up as companies flee to Europe because of Brexit.
 
Still no idea why people are bringing up Apple's financial reports or throwing around terms like "deserve" to make it some sort of moral argument. It's not a handout - it's a lease negotiation, plain and simple. As has been said multiple times, if the Landlords think Apple's request of 50% is egregious (or "greedy," or "tacky"), they are free to reject it or make a counter-offer. If nothing comes of the deal, then Apple is still paying full rent until the current lease is up.

Where is the moral outrage when tenants renew leases in a booming real estate market and the Landlords use their leverage to raise the rent?
I see it as equivalent of a billionaire asking for a discount off of a house or car. There’s nothing moral or immoral, just plain ass tacky. Apple asking for a financial break on leased properties after posting such massive profits to the tune of $60B is tacky. Plain and simple. They are clearly not even in the realm of not being able to ride this economic hardship out, like many of their property owners probably are unable to do.
 
I see it as equivalent of a billionaire asking for a discount off of a house or car.

Except that’s not what it was. What is being offered is a two-way transaction. More akin to “give me a discount on this car and I’ll buy Another one next year at today’s price, even if the cost goes down next year.”
 
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Apple asking for a financial break on leased properties after posting such massive profits to the tune of $60B is tacky.

They are not asking for a break, they are offering to renegotiate their current lease on terms that will be advantageous to both parties. Apple thinks that in two to three years when these leases come up for renewal, comparable rents for their locations that are already substantially above market at many of their locations will be even lower. They are offering a deal to their property owners - adjust our rates to somewhere between what we are currently paying and what the market rate was before just before this, and we will extend our leases for several years at whatever price we both think is advantageous. If the property owners do not think it is worth it, they will not do it. If, on the other hand, they look at these lease extensions and realize that they benefit from these deals, they will agree to them and everyone one wins.

Not sure how negotiating lease terms can be tacky.

Plain and simple. They are clearly not even in the realm of not being able to ride this economic hardship out, like many of their property owners probably are unable to do.

This has nothing to do with them riding out any economic hardship. This is offering the property owners something of tangible value (a long term lease extension at a solid rate) in exchange for some concessions today. These contracts make these properties more valuable and will help their owners secure necessary financing.
 
And never did anyone claim otherwise; but thanks for the straw man argument. Obviously the point is that it makes ZERO business sense to just "do nothing" when you have a part of your business losing money.

If any business can re-negotiate more favourable conditions to minimise losses, they obviously should. That Apple has the largest market cap in the world makes zero difference. Nor does it matter that they just posted record profits in their non-retail business.

Good business practices are not reserved for small 1-person outfits or companies that are in the red.

it's almost as if the world is in a the middle of a global pandemic.
 
You’re quite wrong about that. In the US - sure. Apple will just move to the next half empty shopping mall. Finding adequate space for an Apple Store in Europe is not very easy, especially not in historic city centers. Apple sometimes has to wait years for a place to become available.
But I thought the article said these are shopping centers in UK. Does the UK have long waitlists of merchants with deep pockets, ready to outbid Apple?
 
By reading the comments, I am suprised to see people saying this is disgusting and I started to wonder why. I think a lot of people believe that Apple is renting the space for shops from elderly pensioners, who worked hard after the 2nd world war to build a better future and now Apple the ruthless global company wants to pay less for them by 50%, just because it can.
Apple rents these space from companies who manage properties, not single people. Most of the UK shops are in shopping malls as well! I do hope they can pay less rent, because it means less of an impact on actual humans working in the stores
 
apple will survive paying rent on empty buildings.

They absolutely will. However, the owners of the properties they are leasing may very well want the substantial value of a long term signed lease with a solid tenant and so may be happy to lock in rents at rates that Apple is suggesting. These leases can be very valuable in negotiating financing. This is an exchange between two sophisticated parties, not between a big company and someone's naive grandmother.
 
By reading the comments, I am suprised to see people saying this is disgusting and I started to wonder why. I think a lot of people believe that Apple is renting the space for shops from elderly pensioners, who worked hard after the 2nd world war to build a better future and now Apple the ruthless global company wants to pay less for them by 50%, just because it can.
Apple rents these space from companies who manage properties, not single people. Most of the UK shops are in shopping malls as well! I do hope they can pay less rent, because it means less of an impact on actual humans working in the stores

Apple ist the or one of the richest companies in the world. Compared to that, any and all UK real estate companies are mere mosquito poop. Apple is only asking for reductions because BJ asked landlords to reduce rents as a corona relief measure. I doubt he had trillion $ companies in mind. Apple is the last company on this planet needing Corona relief, especially since they just released their numbers for the last quarter and their profits are actually up rather than down.
 
They absolutely will. However, the owners of the properties they are leasing may very well want the substantial value of a long term signed lease with a solid tenant and so may be happy to lock in rents at rates that Apple is suggesting. These leases can be very valuable in negotiating financing. This is an exchange between two sophisticated parties, not between a big company and someone's naive grandmother.

Don't forget that property value is important for owners of these malls, also.

Merely having an Apple Store as a tenant raises the value of your parcel.

Most owners will probably give some concessions just for the value of having Apple Store as a tenant for long term value.
 
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I like apple products, but this comes across as really tone deaf, especially considering what their stock price is doing.

Their stock price doesn't move on its own.

It is dictated by the decisions Apple makes, and the profits that result.

This decision by Apple to renegotiate rent terms is positive for investors because it will cut operating costs overall and result in higher profits. It's just one piece but it's a piece investors love to see.
 
Don't forget that property value is important for owners of these malls, also.

Merely having an Apple Store as a tenant raises the value of your parcel.

Most owners will probably give some concessions just for the value of having Apple Store as a tenant for long term value.

That‘s pure speculation. While Apple Stores are undoubtedly popular, other stores are too. Plus statements such as „most owners“ are generalized. I‘d say a lot of malls and other retail locations are already suffering from Corona, with companies going broke left and right, so the last thing they need right now is stinkingly rich tenants asking for 50% off. Right now it‘s about surviving the next 6 months - long term goals can be focused on once the crisis is over.
 
Their stock price doesn't move on its own.

It is dictated by the decisions Apple makes, and the profits that result.

This decision by Apple to renegotiate rent terms is positive for investors because it will cut operating costs overall and result in higher profits. It's just one piece but it's a piece investors love to see.

Absolutely, it‘s positive for investors. It‘s still a d*** move and doesn‘t necessarily improve the brand‘s image. Of course, with competitors like Google they really don‘t have to care about their image (and I don‘t mean that sarcastically, unfortunately)
 
That‘s pure speculation. While Apple Stores are undoubtedly popular, other stores are too. Plus statements such as „most owners“ are generalized. I‘d say a lot of malls and other retail locations are already suffering from Corona, with companies going broke left and right, so the last thing they need right now is stinkingly rich tenants asking for 50% off. Right now it‘s about surviving the next 6 months - long term goals can be focused on once the crisis is over.

Remember, it's a negotiation. Apple asking for 50% doesn't mean they fully expect it, but need a starting point. They aren't going to be a high school kid asking his employer, "Hey, can I get a raise?" without some idea of a range or %.

Pure speculation? Hahaha. Ya. Any site with "Rumors" in its title is usually rampant with speculation, which opens the avenues of possibilities and realities.
 
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