Retail landlords can celebrate as rent collections are slowly but surely returning to normal levels after months of lackluster payments.
Major chains paid 83 percent of August rent, a new record, and only 14 percent below the nearly 97 percent that they paid during the same time last year, according to the most recent report by Datex Property Solutions. That’s a slight increase from last month’s 80 percent.
Mom and pop shops are similarly increasing, hitting 76 percent last month.
“Some categories were doing fine and some are still struggling very hard, but more and more of the categories are figuring it out,” Datex Property Solutions CEO Mark Sigal said, pointing to social-distancing solutions retailers are experimenting with, like outdoor dining and curbside pick up.
The major chains included in the survey all have a minimum gross monthly rent of $250,000, or lease 10 or more locations.
Banks have already hit last year’s collection rates, paying 98 percent in August. The same trend holds true with office supplies, which paid a stunning 99 percent.
Some stores are even surpassing last year’s rent levels, either because of pressure from landlords or because the pandemic is driving demand.
Home improvement stores, for example, have surpassed last year’s rate of 87 percent, with a payment rate of 95 percent.
The Home Depot paid 96 percent of rents, up from 75 percent last year.
The retailer with the highest jump in payments was the United States Postal Service, which paid close to all of its rent. That was up from 60 percent last month and up 70 percent last year. Sigal attributes the increase in payments to the attention the USPS has received over funding issues.
While many chains made strides in payments this month, some fell.
Francesca’s, a women’s clothing chain, stopped paying rent completely last month. The hair care franchise Fantastic Sams also dropped 16 percent from July, paying about half of all collections.
Justice and Lane Bryant, both owned by bankrupt Ascena Retail Group, continued paying no rent, as they have for most of the pandemic.
That’s not surprising, however. Apparel and hair care categories performed poorly overall, with retailers only paying 63 percent of rent. Others doing poorly include fitness, with 61 percent, and movie theaters, with 37 percent.
Sigal said that movie theaters’ woes are understandable.
“All of the other categories, when I look at them, they all sort of have variations of strategies that are viable or viable-ish,” Sigal said. “That’s probably the one category I look at and just kind of, go, ‘it’s gonna be interesting.’”
The Datex Property Solutions report does not include rent relief negotiated between landlords and tenants.