Most Retailers Have Now Struck Agreements with Landlords on Back Rent
In July, two-thirds of retailers paid only 65% of rent, but most tenants have worked out repayment plans.
September 25, 2020 | Kelsi Maree Borland | GlobeSt.com
Retailers have struggled to pay rent through the pandemic, and as a result, the retail market has been among the sectors with the lowest rent collections in the commercial real estate. In June, one-third of retail tenants had paid 75% of rent, but in July, that number doubled, with two-thirds of retailers paying only 65% of rent, according to a retail survey conducted by NRF and PJ Solomon.
The low rent collections aren’t surprising, considering that so many retailers were forced to shutter during the pandemic. At the peak of the pandemic, 73% of retailers had to close their doors during the pandemic, including locations in malls and shopping centers.
While back rent is accumulating, most retail tenants have already come to an agreement with landlords to repay any accumulated rent debt. In fact, only 10% of respondents to the NRF and PJ Solomon had not yet reached an agreement with landlords to repay rent. On the other hand, 73% of retailers said that they plan to repay at least half of back rent, and 50% of retailers responded that they had received some form of rent relief from landlords.
