Retail rent payments inch back toward normal in August

Major chains paid 83% of rent, mom and pops clocked in at 76%

TRD NATIONAL /
Sep.September 08, 2020 05:30 PM
A report shows major retailers paid 83 percent of August rent (iStock, Andy C via Wikipedia Commons)

A report shows major retailers paid 83 percent of August rent (iStock, Andy C via Wikipedia Commons)

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.






Related Articles

arrow_forward_ios
(iStock)

Movie theaters might not come back after all

Movie theaters might not come back after all
(iStock)

Landlords lost about $9B in rental payments last quarter: report

Landlords lost about $9B in rental payments last quarter: report
Jamie Dimon and 383 Madison Avenue (Getty, Google Maps)

JPMorgan suffers setback in return to office

JPMorgan suffers setback in return to office
Lennar's Stuart Miller, Rick Beckwitt and Jon Jaffe (Lennar; iStock)

Lennar reports untempered demand for new homes in Q3

Lennar reports untempered demand for new homes in Q3
A lawsuit seeks to dismantle Gov, Andrew Cuomo’s midnight food curfew by arguing coronavirus is not a vampire (Getty; iStock)

Nail in the coffin: Eatery says Cuomo’s biz-killing curfew treats virus like vampire

Nail in the coffin: Eatery says Cuomo’s biz-killing curfew treats virus like vampire
U.S. foreclosure filings in August jumped 11% as some states ended relief measures, though continued government intervention has prevented sharper increase (iStock)

US foreclosure filings jump as some states end relief measures

US foreclosure filings jump as some states end relief measures
Town Sports International CEO Patrick Walsh (Credit: JoJosh313; Getty)

Dead weight: New York Sports Clubs owner files for bankruptcy

Dead weight: New York Sports Clubs owner files for bankruptcy
From left: J.C. Penney CEO Jill Soltau, Authentic Brands Group CEO Jamie Salter, Simon Property Group CEO David Simon, and Brookfield Property Partners CEO Brian Kingston (Getty)

Authentic Brands in talks to join J.C. Penney takeover

Authentic Brands in talks to join J.C. Penney takeover
arrow_forward_ios

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

Loading...