Posted by Rich_WI on November 15, 2014 at 11:20:04 from (50.50.95.159):
In Reply to: OT--Today's World posted by John in La on November 15, 2014 at 10:55:38:
Quoting Removed, click Modern View to see
Anybody knows (or should know) that anything done to increase sales in a malls stores causes the malls rent per square foot to go up. When a mall advertises, when a mall brings in a santa, when a mall brings in a fashon show, when a mall does ANYTHING and it brings in business, it makes the rent per square foot of store worth more. Why do you think the malls do those things (and many more)? They do it to make the rents go up. So yes, in theory, having a giving tree in the mall makes the malls income go up because it draws in business to the stores, thus the mall can charge higher rents.
I thought everybody knew this stuff?
Quoting Removed, click Modern View to see
You are thinking short term and on a micro scale (both are KILLERS to business BTW). You could look at, for example, all the tags on the tree, add up thier cost and then factor in that each single tag was coupled with gift buying for family members of the person that took the tag of say, $125. Now add up that money and the tree likely only brings in business of, say, $50,000 to the mall. You could then divide that money to all the stores (50,000/150) and say that the couple hundred per store is nothing. Thats short sighted. Look at it on a larger scale, year after year, promotion after promotion. That adds up to big money. Big money that the stores want part of so they pay a competive rent for. Rent goes up for the mall/landlord and he gets even more money.
See, you are correct that the mall gets X dollars per square foot of space but you overlooked the money that promotions brings in and thus raises the rent per square foot.
BTW, I have heard of store sales being paid as a part of rent but that is not a common way for rent to be charged and thus outside this discussion so I wont get into it here, I will save that for another day! (you're welcome).
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