How To Make Money At The Mall

Woodbridge905 [OP]: Deal Addict; Sep 5, 2010; 2338 posts; 368 upvotes; Toronto

Oct 24th, 2014 9:06 am

How do malls make money?

How do malls make money?

By malls, I don't mean the stores inside the mall. I mean the actual companies that own the malls (i.e cadillac fairview owning Eaton Center)

-Do they only make money from the rent they charge to the mall occupants?

Or do they also take a percentage from every sale made?

My Signature is empty. My signature space is not for sale. You may not contact me to advertise your RFD-related activities here. I repeat, this signature-space is not for sale, unless it is a ......day

Oct 24th, 2014 9:11 am

Winkle: Deal Fanatic; May 25, 2009; 8782 posts; 2013 upvotes

Oct 24th, 2014 9:11 am

Rent.

"God's in His heaven. All's right with the world." - Robert Browning (1812-1889)

Oct 24th, 2014 9:12 am

CenturyBreak: Deal Addict; May 31, 2006; 1097 posts; 111 upvotes; Burlington

Oct 24th, 2014 9:12 am

Woodbridge905 wrote: ↑ I mean the actual companies that own the malls (i.e cadillac fairview owning Eaton Center)

You meant the Eaton Centre, right?

No such place as Eaton "Center"!

Oct 24th, 2014 9:17 am

Supercooled: Deal Expert; Dec 4, 2010; 19500 posts; 2201 upvotes; Quarantine Bubble

Oct 24th, 2014 9:17 am

There is if he's American. Don't be such a pedant!

Exactly as Harry Winkle said; rent.

Oct 24th, 2014 9:21 am

CenturyBreak: Deal Addict; May 31, 2006; 1097 posts; 111 upvotes; Burlington

Oct 24th, 2014 9:21 am

Supercooled wrote: ↑There is if he's American. Don't be such a pedant!

Um... nope. It's a distinct business/place name which uses international English spelling.

Besides, his (her) user name is Woodbridge905... pretty much guarantees it's this side o' the border.

Besides yet again, the purpose of the forum is to communicate. Doing so clearly makes it easier for both the writer and reader.

Oct 24th, 2014 9:23 am

ZeroToHero: Sr. Member; Dec 31, 2010; 899 posts; 354 upvotes; Richmond Hill

Oct 24th, 2014 9:23 am

In addition to rent, they sell gift cards you know those Cadillac Fairview GCs accepted across like 5 malls?
So those as well, I would imagine they charge a store something to accept those.

Oct 24th, 2014 10:38 am

Cas77: Banned; May 12, 2004; 9758 posts; 4120 upvotes; Ottawa

Oct 24th, 2014 10:38 am

In some locations they also charge rent to trade shows/promotions like Coca-Cola last summer (could be considered very temporary retail space rental I guess), car dealerships (to display cars inside the malls), to advertisers on their store map billboards, parking rental to Shriners circus etc..not the Eaton Centre due to location but ones in the 'burbs.

Some locations in the US are purposely built near sporting facilities and stadiums and charge teams a flat fee for parking use since usually these games are not held during prime shopping hours.

Censorship is telling a man he can't have a steak just because a baby can't chew it.
- Mark Twain

Oct 24th, 2014 10:44 am

marc_t: Deal Addict; Feb 28, 2005; 3167 posts; 1189 upvotes; Montreal

Oct 24th, 2014 10:44 am

Commercial rents are sometimes based on sales. Rents can be very high; a small Second Cup coffee stand in Eaton Centre can pay upwards of 2000 per month for the space.
The shopping mall's strategy is to maximise overall traffic in the mall, so they run all sorts of promotions, such in-mall entertainment.

Oct 24th, 2014 10:51 am

Woodbridge905 [OP]: Deal Addict; Sep 5, 2010; 2338 posts; 368 upvotes; Toronto

Oct 24th, 2014 10:51 am

Thanks guys!

I see malls use a lot of advertising for their stores, so I thought maybe they make a percentage of sales.

Oct 24th, 2014 10:57 am

Beachdown: Deal Fanatic; Apr 23, 2009; 5159 posts; 691 upvotes; South of Ottawa

Oct 24th, 2014 10:57 am

Woodbridge905 wrote: ↑Thanks guys!

I see malls use a lot of advertising for their stores, so I thought maybe they make a percentage of sales.

They can. Some malls charge a percentage based on sales.

Oct 24th, 2014 11:26 am

Neovingian: Deal Fanatic; Feb 6, 2004; 6770 posts; 497 upvotes; GT'eh

Oct 24th, 2014 11:26 am

I know a guys whos family co-owned one of the largest malls in the GTA, malls make a killing, this mall raked in over 5 mill a month in rent. I guarantee Eaton Centre probably does more.
Some anchor stores were paying almost 30K a month in rent + more during holidays. My guess is they make next to nothing off giftcards since most stores now sell their own with no additional fees, malls also lease space for trade events and public events, sell ad space so they also make a bunch from advertising, they have to keep people coming.

I wouldn't be surprised if malls are involved in data mining, ever wonder why they always ask for postal codes and ph#. I also know of 1 retail store that tracked customers info at the register by age, gender, and other factors, they did all this without the customer knowing.

➡ Ne0's Bio:
➡Retired G@mer & t3<h [0nn0!ss3ur ??? Spitting t3<hy lingo since the early 90's ➡Member of Crazy Group Buys ??? ➡ Feedback: eBay|1000+ ??? rFD | 300+

Oct 24th, 2014 11:35 am

deadice: Deal Addict; Sep 24, 2007; 3938 posts; 1338 upvotes; Ontario

Oct 24th, 2014 11:35 am

Most malls charge rent in the form of a combination of floor space and percentage of store sales (with a monthly minimum rate in the store is not doing well).

Oct 24th, 2014 11:45 am

TrevorK: Deal Expert; Aug 2, 2001; 17176 posts; 7566 upvotes

Oct 24th, 2014 11:45 am

CenturyBreak wrote: ↑Um... nope. It's a distinct business/place name which uses international English spelling.

Besides, his (her) user name is Woodbridge905... pretty much guarantees it's this side o' the border.

Besides yet again, the purpose of the forum is to communicate. Doing so clearly makes it easier for both the writer and reader.

Try again. Center and Centre both have the same meaning. If he is American, "center" would be correct.

A more valid argument would be that the name is "Eaton Centre" not "Eaton Center", and that he is calling it by the incorrect name.

Oct 24th, 2014 11:52 am

jm1: Deal Addict; Jan 5, 2003; 4455 posts; 3963 upvotes; Toronto

Oct 24th, 2014 11:52 am

In terms of retail leases, basically:

1. Landlords charge plain old monthly rent.

2. In most cases, tenants also pay a proportionate share of the property's operating costs (property taxes, utilities, etc.). This is known as recoveries (ie. the landlord "recovers" their costs from the tenants).

3. In some cases, in addition to #1 and #2 above, some tenants have to pay a portion of sales (known as "percentage rent"), but this is usually a function of a "base year" or "base sales" (ie. pay 1% of sales over $1 mil or 1% of sales over the tenant's 2013's sales level). The intent is that, if the tenant is having a good year, the landlord gets a cut as well, especially if the landlord has been trying to drive additional sales to that mall.

There are relatively few leases with only percentage rent and no monthly rent or recoveries. The tenant will self-report their sales numbers and it wouldn't be unusual for landlords to wonder if they're not understating their sales. However, it would be costly to audit, therefore most leases are rent plus recoveries and pecentage rent would just be a bonus. Landlords also want to make sure their get their money, and not be completely dependent on a tenant's sales in case of a economic downturn, etc. A landlord might consider charging only recoveries and % rent in limited cases to fill up an empty unit they're having trouble renting, but they'll much rather have monthly rent.

In addition to the above, there's minor income from paid parking, kiosks (those small, mostly seasonal, booths), signage (some tenants pay to have their logo on the big outdoor mall signs).

Oct 24th, 2014 1:32 pm

CenturyBreak: Deal Addict; May 31, 2006; 1097 posts; 111 upvotes; Burlington

Oct 24th, 2014 1:32 pm

TrevorK wrote: ↑ A more valid argument would be that the name is "Eaton Centre" not "Eaton Center", and that he is calling it by the incorrect name.

That's essentially what I wrote... both times.

Oct 24th, 2014 1:56 pm

jzmtl: Deal Addict; Jun 14, 2008; 3530 posts; 2298 upvotes; Montreal

Oct 24th, 2014 1:56 pm

Neovingian wrote: ↑ I wouldn't be surprised if malls are involved in data mining, ever wonder why they always ask for postal codes and ph#. I also know of 1 retail store that tracked customers info at the register by age, gender, and other factors, they did all this without the customer knowing.

Think that's bad, now they use wifi routers and possibly BT to tract exact movement of your smartphone/you throughout the place, where you've been and how long you stay there.

Turn wifi/BT off when you are outside lol.

Oct 24th, 2014 2:15 pm

eonibm: Deal Expert; Aug 2, 2010; 15193 posts; 4955 upvotes; Here 'n There

Oct 24th, 2014 2:15 pm

Having negotiated with a few malls in the past, for any mall or location with decent traffic it is a % of sales or rent, whichever is the greater. Some charge rent + % of sales.

Oct 24th, 2014 2:22 pm

Cheap Cat: Deal Guru; Aug 20, 2005; 10462 posts; 2043 upvotes; Nowhere

Oct 24th, 2014 2:22 pm

CenturyBreak wrote: ↑You meant the Eaton Centre, right?

No such place as Eaton "Center"!

Well, at least he included the word centre even if he spelled it wrong. I've seen to many people posting that they recently bought something or saw something at Eaton's when referring to the Toronto Eaton Centre (its correct name).

Oct 25th, 2014 1:39 am

Swarez99: Deal Addict; Jan 28, 2008; 1387 posts; 56 upvotes

Oct 25th, 2014 1:39 am

Beachdown wrote: ↑They can. Some malls charge a percentage based on sales.

The food courts do - I kinda know someone who owns few subways, ones in mall and they take % once he passes certain $ in sales. They don't do any if the big promos in the mall location because costs are way higher apperently.

Oct 25th, 2014 2:13 am