After a few rocky months, rent collections at national chains are leveling out.
Major chains paid 89 percent of October rent, the highest amount since the start of the pandemic, and a slight increase from 87 percent collected in September, according to a report by Datex Property Solutions. October’s figure was just 7 percentage points below the same time last year.
The increase in payments is a continuation of the progress that landlords have been seeing over the past few months. While declines in rent payments were expected after various forms of rent relief expired for retailers, no such trends have occurred yet.
“Each end of month, I always hold my breath a little and see what the numbers are going to look like,” said Datex CEO Mark Sigal.
Some retail sectors excelled beyond their counterparts, even in just a month’s span. Among those are fitness, where rent collections hit 76 percent, an increase from last month’s 66 percent. Salons also had a good month, with 85 percent paying rent, an increase from 72 percent in September.
Movie theaters were the most troubled category, paying just 38 percent of rent. Big cinema chains have been struggling as moviegoers are forced to stay away because of social distancing protocols. Regal Cinemas announced last month that it would temporarily suspend operations, and AMC has serious doubts about its cash flow through the end of the year.
“As existential crises go, movie theaters are facing challenges on multiple fronts,” Sigal said.
Some individual retailers did better than the month before: Orangetheory Fitness paid 73 percent of its rent, a big jump from September’s 39 percent.
Others beat even last year’s numbers. Lowe’s, for example, paid 99 percent of rent, surpassing 71 percent in the same period last year. The home improvement chain saw a substantial increase in its revenue as homebound Americans tackled DIY projects.
While the vast majority of chains did better this month than the one prior, a few saw collections fall. Mattress Firm paid 89 percent of its rent in October after all of its rent in September. Urban Outfitters alo had a big hit, dropping to 59 percent from 87 percent a month prior.
The chains included in Datex’s survey all have a minimum gross monthly rent of $250,000, or lease 10 or more locations. The report does not account for any rent relief provided to the retailers by their landlords.