Around 40 percent of major retailers avoided paying rent in full last month due to the coronavirus pandemic, according to a Monday report from The Real Deal, which cited data from the Los Angeles-based real estate business intelligence company Datex Property Solutions.
Brick-and-mortar stores such as Pier One, Bed Bath & Beyond, Famous Footwear and Gap have reportedly skipped paying rent in the month of May in addition to the gym 24 Hour Fitness and movie theaters AMC and Regal. FOX Business reached out to the aforementioned companies but did not immediately hear back at the time of publication.
Conversely, 60.1 percent of big-box retailers paid rent for the month, according to Datex, which is an increase from the firm’s April report that showed 56.7 percent of them had paid rent.
When factoring in small local retailers, May’s total rent payment goes down slightly to 58.6 percent, according to Datex’s records.
Other companies, such as Starbucks, have made rent payments but are actively requesting or negotiating rent relief terms with landlords. This factor may very well inflate the number of paying retailers in Datex’s current report, the firm’s CEO Mark Sigal noted.
The impact of the pandemic on rent payments has been significant. During the same period last year, 96 percent of major retail chains that had 10 or more locations and minimum gross rent of at least $250,000 per month were able to pay landlords at the end of May.
“A lot of the growth has been around more lifestyle oriented retail, the kind of retail where there’s a goodness to being present,” said Sigal, according to The Real Deal. “With social distancing, the retailers that most build around that, folks like gyms and yoga studios or movie theaters — the types of operators where people are in the same space and close quarters — are the ones that have been most existentially impacted.”
Grocery store chains such as Aldi and Giant have paid rent nearly in full, though this is likely due to the fact that most if not all locations were allowed to remain open nationwide as essential businesses.