“We’re moving into this new normal”: Retail landlords are finally getting paid

As of mid-July, 72% of national chains paid their rent, the best rate since the pandemic started

National /
Jul.July 22, 2020 08:30 AM
(iStock)

(iStock)

After months of skipping out on rental obligations due to the coronavirus pandemic, retailers are getting closer to making their landlords whole.

Over 72 percent of national chain retailers paid their July rent as of mid-July, according to the latest report by Datex Property Solutions. That’s up from 62 percent just a month ago.

“We’re moving into this new normal,” Datex Property Solutions CEO Mark Sigal said. “It’s going to be mushy and uneven. I think landlords and tenants have gotten to the meeting of the mind.”

While most grocery stores and take out establishments have been fulfilling most of their obligations throughout the pandemic, sit-down restaurants and apparel stores have only recently started paying their bills as they were allowed to reopen across the country.

However, in July, the only two chains that paid 100 percent of rent seemingly came out of left field. After not paying any rent for months, Century 21 and Dave & Buster’s made their comeback.

Along with Century 21, other department stores made leaps in payments. J.C. Penney paid nearly 86 percent after making no payments last month and closing several of their stores this month. Stein Mart also paid nearly all of its rent after paying just 10 percent last month.

Claire’s Boutiques paid less than 3 percent of rents in June, but paid almost 85 percent in July, according to Datex. DSW Shoe Warehouse’s landlords saw rent collection increase from 16 percent to 96 percent.

While the majority of the 144 retailers included in the report paid more or the same amount of rent compared to last month, 36 chains saw a five percent or more decrease in rent payments.

Chuck E. Cheese stopped paying rent completely, likely due to its parent company, GNC, filing for bankruptcy last month. Victoria’s Secret similarly dropped from paying approximately 12 percent last month to just 2 percent this month, and Barnes & Noble went from paying 18 percent of rents to paying about 14 percent.

Still, fewer retailers are skipping payments completely. Last month 10 retailers failed to hand over even a dime of rent. This month, only three — Justice, Lane Bryant and Chuck E. Cheese — didn’t do so.

Sigal expects this report to be indicative of the next few months leading up to Q4, when many rent negotiations are set to expire.

“You could see a wave of renegotiations, depending on what the economy is looking like, and I suspect, in getting to that place, you’re going to see tenants work pretty darn hard to maintain the faith with the landlords,” Sigal said.

The report counts major chains as those that have a minimum gross monthly rent of $250,000 or lease 10 or more locations. It is based on verified collections from Datex Property Solutions’ portfolio of clients that report payment information from thousands of U.S. properties.

The report does not include rent relief negotiated between landlords and tenants. However, according to Sigal, this month’s report saw higher charges, meaning the numbers were not artificially inflated by negotiations made between landlords and their tenants.

Contact Sasha Jones at [email protected]


Related Articles

arrow_forward_ios
The Domain in Austin with Simon Property Group CEO David Simon (Simon Property)
Here’s what tenants pay (and pull in) at the Domain in Austin
Here’s what tenants pay (and pull in) at the Domain in Austin
Durst Organization CEO Douglas Durst (Getty)
Durst to fire unvaccinated corporate employees Sept. 6
Durst to fire unvaccinated corporate employees Sept. 6
132 West 14th Street and KPG’s co-founders Rod Kritsberg and Gregory Kraut (Avison Young, KPG)
KPG signs long-term ground lease for 57K sf at 132 West 14th Street
KPG signs long-term ground lease for 57K sf at 132 West 14th Street
Unibail-Rodamco CEO Jean-Marie Tritant with Westfield Broward in Florida and Westfield Culver City in California (right) (Photos via Unibail-Rodamco-Westfield)
Unibail-Rodamco plans “radical reduction” of regional malls
Unibail-Rodamco plans “radical reduction” of regional malls
Pandemic lockdowns for all three cities started in the last full week of March 2020, but office use had already plunged the week before as companies proactively sent workers home (iStock)
Manhattan lags Chicago, LA in returning to the office
Manhattan lags Chicago, LA in returning to the office
Kite Realty CEO John Kite and RPAI CEO Steven Grimes (Getty, Kite, RPAI)
Kite Realty to acquire Retail Properties of America for nearly $3B
Kite Realty to acquire Retail Properties of America for nearly $3B
The latest measure comes a month after the state lifted most restrictions. (Getty)
Los Angeles County re-imposes indoor mask mandate
Los Angeles County re-imposes indoor mask mandate
The Westchester at 125 Westchester Avenue in White Plains and Simon Property Group CEO David Simon
Here’s what tenants pay (and make) at the Westchester mall in White Plains
Here’s what tenants pay (and make) at the Westchester mall in White Plains
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...