Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
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.

I don‘t think the „rumors“ part here extends to users making wilde speculations, but I guess that‘s up to personal interpretation :)
 
I don‘t think the „rumors“ part here extends to users making wilde speculations, but I guess that‘s up to personal interpretation :)
The speculation side is from me actually doing research in Ohio for a friend and his commercial real estate business.

When strip mall owners offer their properties for sale, they use a pretty deep demographic brochure which details each store, and the “anchor store”, while listing amount of foot traffic, sales per store and total sales per square foot of space.

So, my speculation, or interpretation, is a little more insightful than most(another generalization). 😉
 
I don‘t think the „rumors“ part here extends to users making wilde speculations, but I guess that‘s up to personal interpretation :)

Here. Just an example.

3BC9433C-4462-429B-8115-E9FF9984F134.png
 
  • Love
Reactions: Alan Wynn
That‘s pure speculation.

No, it is not. Apple stores have consistently been the highest revenue per square foot and bring in a great deal of foot traffic. There is no other retailer that is close.

While Apple Stores are undoubtedly popular, other stores are too.

What other retailer draws any where near as much traffic as an Apple Store? How stable are that retailer‘s finances?

Plus statements such as „most owners“ are generalized.

Yes, that is true, these are generalizations. There may be some location where the Mall has so many other stable retailers that they owner would like to see the Apple store leave. I do not know of any such location, but if you do, please tell us about it.

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.

You continually focus on only the part of the offer that you do not like and refuse to acknowledge the part of the offer that adds value to the property owner. Retail locations are valued based on their ability to generate revenue. Loan underwriters look at several factors in evaluating their leases:
  1. How much revenue the lease will generate, not just monthly, but over the length of the lease.
  2. How much time is left on the leases at a location. In a location where demand is increasing, having a good mix of shorter and longer terms means that rents can be raised, in a location where demand is stagnant or decreasing, the more long term leases the better.
  3. The financial stability of the tenants. Having a long term lease with Sears in the U.S. used to be a great thing for a mall. Now it is at best neutral and most likely a negative. What other retailers in the UK are close to as stable financially as Apple? A long term lease with them adds a great deal of value to a retail locations value.
  4. How much foot traffic does a tenant generate? This matters for the halo effects of people visiting the mall for one store and stopping at others. A large draw increases the value of the mall for every other tenant. Again, Apple stores generate more visitors per square foot than any other retailer. That means there are more people to visit the little carts on the way, to stop at the food court and to wander into other stores when they are waiting for their appointments.
By offering long term leases, Apple is increasing the valuation of these locations. Every property owner will need to evaluate the individual deal being offered and either accept it, reject it or counter it based on its own financial analysis. Apple clearly feels the deals it is offering are a good trade off for both parties. If they are right, they will get many of the property owners to accept them. If they are wrong, they will not.

Right now it‘s about surviving the next 6 months - long term goals can be focused on once the crisis is over.

Sorry, signing long term leases helps with their short term situation. It will make it easier for these property owners to re-finance or restructure their loans, ensuring they have the needed capital. A major tenant lease that is only one to three years is scary for lenders, as it means uncertainty - something they hate. A long term lease gives them confidence that their cash flow numbers are correct (not greatly inflated).
 
Apple is managing costs as a business. I don’t see a story here or a reason for anyone to get upset. Apple requesting relief for renting a store front when no business can commence/continue is no different than the landlord charging it’s tenets full rate well knowing no business can commence/continue.

Everyone goes belly up over "rent free" periods thinking the popular ones will somehow escape.. elsewhere


No need to fret... why would Apple do a runner?
 
Because most retailers are asking for discounts because they are losing money due to recent events. It's kind of like Bill Gates haggling with a mom and pop shop about a $20 item.

There's nothing technically wrong with it. But it feels icky.

How do you know that those shop owners were not earning ton of money at the same time on other fronts? It’s the exact story with Apple — it is losing money on THESE STORES due to recent events. Why it is relevant it earned money on other fronts different from other shop owners? Just because YOU, personally YOU, know one side and not the others, so the WORLD should revolve totally around YOUR personal cognitives?!
 
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.
Toght now that is the case. But what happens when people start loosing their jobs a d cant buy products? Apple will be in trouble As well
 
Toght now that is the case. But what happens when people start loosing their jobs a d cant buy products? Apple will be in trouble As well
If enough people lose their jobs that Apple is in trouble the economic issues will be so great that none of this will matter.
 
I know a lot of retailers are doing this but it is effectively passing on the loss to the landlord. There are in many cases still mortgage payments landlords need to meet and the rent covers this. Apple are one of the richest companies in the world and if anybody can absorb the loss from Covid-19 it is them. I would think a small amount of their overall sales come directly from Apple Stores too as online shopping has been king for nearly 2 decades now.

Apple are doing what a lot of retailers are doing but are far from bankruptcy like many and it doesn't sit right for me. It doesn't matter how much we like their products and services, some things just feel off.
 
  • Like
Reactions: PrincePoppycock
I know a lot of retailers are doing this but it is effectively passing on the loss to the landlord.

That is not what they are doing at all. They are offering property owners a trade of cash now for a longer lease. It may or may not be worth it to the property owner, but it is a valuable offer to some.

There are in many cases still mortgage payments landlords need to meet and the rent covers this.

If the property owners do not feel it is worth it, they just say no. Then they take a risk that in two years when their lease comes up for renewal, rents have dropped so much and there is so much more open real estate, that Apple either gets a much lower rent than they are willing to renew today, or Apple moves altogether and they get nothing. It is a risk reward calculation that they can easily make on their own.

Apple are one of the richest companies in the world and if anybody can absorb the loss from Covid-19 it is them. I would think a small amount of their overall sales come directly from Apple Stores too as online shopping has been king for nearly 2 decades now.

This has nothing to do with losses from Covid-19. It is simply a financial transaction less money now for a guaranteed income for a longer period. Its value to the property owner is directly related to how stable a company Apple is. That lease is much more financeable.

Apple are doing what a lot of retailers are doing but are far from bankruptcy like many and it doesn't sit right for me. It doesn't matter how much we like their products and services, some things just feel off.

No, Apple are not doing what a lot of retailers are doing. They are not laying off their employees, they are not failing to make rent payments. They are simply offering a choice that property owners can take or leave as suits them. If the property owners want the money now they get it. If they want to mitigate their longer term risk they can do that too. Their choice. Apple is not asking for a handout, they are offering different options, just like car companies that say: You can have a rebate or a low interest rate. You decide. No property owner is forced to accept these terms and if they do not, Apple just keeps paying as they have, and negotiates its lease renewal based on whatever market conditions prevail at that point.
 
I know a lot of retailers are doing this but it is effectively passing on the loss to the landlord. There are in many cases still mortgage payments landlords need to meet and the rent covers this. Apple are one of the richest companies in the world and if anybody can absorb the loss from Covid-19 it is them. I would think a small amount of their overall sales come directly from Apple Stores too as online shopping has been king for nearly 2 decades now.

Apple are doing what a lot of retailers are doing but are far from bankruptcy like many and it doesn't sit right for me. It doesn't matter how much we like their products and services, some things just feel off.

Because landlords have NEVER raised rent prices on tenants in a new lease, right? 🙄
 
Because landlords have NEVER raised rent prices on tenants in a new lease, right?

Sorry your other post is too long to go through in order to respond so i’ll reply to this one. Landlords do put prices up sure, but 50% lease now for a longer lease term doesn’t make up the loss in the short term that the property owner has to find. Apple aren’t laying off their staff because they have huge cash reserves and aren’t in a situation like Marks and Spencer for instance. Furlough schemes are now down to 60% and Apple are now be if the few who can make up the difference to the employee and it not make a dent in their financial situation. We’ve already lost retailers and ones that have been around for nearly 100 years in some cases.
 
Sorry your other post is too long to go through in order to respond so i’ll reply to this one. Landlords do put prices up sure, but 50% lease now for a longer lease term doesn’t make up the loss in the short term that the property owner has to find. Apple aren’t laying off their staff because they have huge cash reserves and aren’t in a situation like Marks and Spencer for instance. Furlough schemes are now down to 60% and Apple are now be if the few who can make up the difference to the employee and it not make a dent in their financial situation. We’ve already lost retailers and ones that have been around for nearly 100 years in some cases.

Both parties in a commercial rental agreement almost always agree on a rental negotiation set of factors.

The landlords in these leases know full well what they offer and what they sign. This isn’t something Apple pulled out of thin air, but a pretty standard part of any commercial lease agreement.

Apple also may be only asking for a temporary reduction while Covid has its grips on the economies of the world.

In any regards, I support Apple running its business, like a business. In the end, I, as a consumer, don’t want to foot even higher product prices because Apple is losing money out the back door by not being diligent with their finances.
 
Both parties in a commercial rental agreement almost always agree on a rental negotiation set of factors.

The landlords in these leases know full well what they offer and what they sign. This isn’t something Apple pulled out of thin air, but a pretty standard part of any commercial lease agreement.

Apple also may be only asking for a temporary reduction while Covid has its grips on the economies of the world.

In any regards, I support Apple running its business, like a business. In the end, I, as a consumer, don’t want to foot even higher product prices because Apple is losing money out the back door by not being diligent with their finances.
Apple have only 38 major retail units in the UK and have already taken advantage of the government freezing business rates between March and July. If Apple are passing the small loss they may have made in the UK onto the global market, then that tells you all you need to know.

Did Apple also take advantage of the governments very very generous furlough scheme where for 3 months they didn’t have to pay a single employee wage? Of course they did. They had minimal collateral damage in the UK and passing an ultimatum onto landlords to pay only 50% rent plus a period rent free is rather underhand of a trillion dollar plus company IMO. You don’t have to agree with me and that makes no difference to me personally.
 
Apple have only 38 major retail units in the UK and have already taken advantage of the government freezing business rates between March and July. If Apple are passing the small loss they may have made in the UK onto the global market, then that tells you all you need to know.

Did Apple also take advantage of the governments very very generous furlough scheme where for 3 months they didn’t have to pay a single employee wage? Of course they did. They had minimal collateral damage in the UK and passing an ultimatum onto landlords to pay only 50% rent plus a period rent free is rather underhand of a trillion dollar plus company IMO. You don’t have to agree with me and that makes no difference to me personally.

Agree or disagree. That’s irrelevant.
Apple is well within their rights to negotiate on all levels regardless of how anyone FEELS about it.

Governments give big subsidies to attract big companies.
 
Agree or disagree. That’s irrelevant.
Apple is well within their rights to negotiate on all levels regardless of how anyone FEELS about it.

Governments give big subsidies to attract big companies.
I think you completely missed the fact I have never said they were not entitled to do it. My opinion on this isn’t irrelevant either thank you very much. This is a discussion forum where everybody’s opinion is as good as everybody else’s.
 
I think you completely missed the fact I have never said they were not entitled to do it. My opinion on this isn’t irrelevant either thank you very much. This is a discussion forum where everybody’s opinion is as good as everybody else’s.
Didn’t say your opinion was irrelevant.
Agreeing or disagreeing is what is irrelevant. My exact words.

Doesn’t matter. At all. Because it is Apple’s decision and anything said here on the forums about it....is irrelevant. Thus, maybe in the end your opinion is actually....irrelevant.
 
Didn’t say your opinion was irrelevant.
Agreeing or disagreeing is what is irrelevant. My exact words.

Doesn’t matter. At all. Because it is Apple’s decision and anything said here on the forums about it....is irrelevant. Thus, maybe in the end your opinion is actually....irrelevant.
Maybe it’s time to close Mac Rumours down then and not discuss anything amongst ourselves because the point can always be made for every argument that, ‘it’s irrelevant’.
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.