Retailers exposed: Who’s paying rent and who’s not

The Gap, Barnes & Noble, Nordstrom, H&M and Foot Locker haven’t paid

(Credit: iStock)
(Credit: iStock)

As commercial landlords receive requests for rent relief, discerning whether the call for help is driven by hardship or strategy has been weighing on many.

A new report titled “Who’s paying rent and who’s not” provides some insight.

It documents which national retail and restaurant chains paid rent and costs related to triple-net leases to landlords so far this month. Out of the 118 chains included, 16 percent are not paying at all as of April 17.

The findings were produced by data firm Datex Property Solutions based on verified payment information entered into its system by its clients, which include retail, office and multifamily owners and portfolio managers that oversee thousands of properties around the country. The 118 chains pay a minimum gross rent of $250,000 for at least 10 stores.

Though Mark Sigal, CEO of Datex, declined to comment on the firm’s clients, the company website includes among them Vestar, Weitzman, investment firm Brixton Capital, Devonshire REIT and Lewis Retail Centers.

Datex noted that based on information received from all its clients, national tenants paid 53 percent of billed rent costs so far this month, compared to 87 percent paid by this time last month. Rent collections from retailers without a national footprint were lower. Those tenants paid 47 percent of rent, down from 81 percent in March.

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Of the 118 retailers broken out individually, 19 chains that have yet to pay any rent or other costs associated with triple-net leases in April, according to the report.

A substantial portion of the non-payers include clothing and apparel chains such as Foot Locker, H&M, Old Navy, Nordstrom, LOFT and The Gap. There’s also sports bar and restaurant Dave & Buster’s, Barnes & Noble, home decor chain Kirkland’s, LA Fitness and Party City.

Four of the companies are movie-theater chains: AMC Theaters, Cinepolis, Harkins Theaters and Regal Cinemas.

Other companies are paying a fraction of their monthly overhead. Dick’s Sporting Goods, Panera Bread, Supercuts and 24 Fitness fall into that category.

Chains still paying include banks, grocery stores, pharmacies and big-box and anchor tenants such as Home Goods, Marshalls, Lowes, JCPenney, Dollar Tree Stores, Walmart and Best Buy.

The report largely reflects what’s been reported to date about which retailers are maintaining strong sales compared to those businesses that have taken big hits, such as fitness centers, dine-in restaurants and clothing and apparel stores.

Sigal said the report also reveals which chains are bucking the trends within its sector of the market. He said that it could be a sign of a company that already had a distressed balance sheet heading into the pandemic, or it may indicate a strategic decision to not pay rent.

“If your peers are paying and you’re not,” he said, “it sort of begs the question of why.”

Such discrepancies within the report are readily apparent in a few cases.

For instance, Petco had only paid about 21 percent of its rent by April 17. By the same date in March, the pet-supplies chain had paid 89 percent of its rent. PetSmart, meanwhile, has paid its rent in full.

Home decor and renovation outfitters Hobby Lobby, Home Depot and Home Goods are still paying rent, while crafts supplier Michaels Stores has paid less than a third of its rent and home furnishing company Kirkland’s has not paid at all.

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Nordstrom Rack has paid its full standard rent, unlike its parent company, Nordstrom, which is taking the opposite approach.

General Nutrition Centers has paid about 4 percent of its rent this month, compared to the 88 percent owners collected from it by the same time in March. It’s a stark difference from the many food suppliers and grocery chains that continued to pay rent.

Rent collection ranged widely among fast-food chains.

Five Guys has only paid about 17 percent of its rent so far, after paying almost all of its rent in March. Similarly, Jamba Juice and IHOP have only paid just over 20 percent in rent, compared with paying 82 percent and 97 percent of overhead costs in March.

But Kentucky Fried Chicken paid 87 percent of its rent and Panda Express paid 63 percent after both paid 97 percent in March. Chili’s Bar & Grill handed over 57 percent, down from last month’s 90 percent.

Meanwhile, restaurants including Chipotle, Chick Fil-A, Domino’s Pizza and McDonald’s not only paid full rent in April, but actually paid more overhead costs than they did in March. Sigal saw that as tenants sending a message that “we’re open for business,” or trying to demonstrate they are “good citizens.”

Other companies taking that approach include Starbucks, Wells Fargo, Bank of America and Chase Bank; grocers Whole Foods, Target and Trader Joe’s; and others such as WeightWatchers and Goodwill.

Cell phone carriers across the board paid less rent in April than in March, though the degree of short payments varied.

Verizon paid about 4 percent less rent in April, while Sprint Mobile, AT&T Wireless and T-Mobile paid between 10 percent to 14 percent less. Meanwhile, Boost Mobile’s rent payments dropped by 41 percent and Metro PCS’ payment plummeted by 51 percent.

Sigal also noted that some chains began paying more as the month progressed, which may indicate a change in strategy.

By April 17, Staples had paid 27 percent of its rent, a big change from the less than 1 percent it had been paying up until April 10, though still significantly less than the 91 percent it paid by the same period in March. Landlords have also collected about 26 percent from Subway Restaurants, despite the chain informing many owners it couldn’t pay.

Allstate, the only insurer listed, paid 64 percent of April rent so far, after having paid 90 percent by the same time in March.

Datex’s weekly report on who’s paying rent and who’s not comes as some mall and shopping-center owners have created a blacklist of financially stable tenants holding out on rent payments.

When asked whether this report functions similarly, Sigal said, “I don’t look at this that way at all.”

He said the goal is to provide landlords with information to manage their assets at an “unparalleled time” and, in that spirit, that Datex is providing the report for free.

“Light is the best antiseptic,” he said. “The challenge is really not having access to this data.”

Write to Erin Hudson at