National chains paid 93% of rent in April

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May 12, 2021
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As reported in The Real Deal.

In April 2020, one month after pandemic-related lockdowns started in much of the U.S., national chains such as Ann Taylor, Bob’s Discount Furniture, Men’s Wearhouse and Tilly’s did not pay any of their rent.

One year and the lifting of many restrictions later, those retailers have all returned to paying 90 percent or more.

Rent collections for national chains hit 93 percent in April, the highest they’ve been since the pandemic began, according to the latest report by Datex Property Solutions. That’s just below the 96 percent of rent that national tenants paid during the same month in 2019, the benchmark for a typical year.

Last April, collections for national tenants were at 63 percent, with 21 percent of 135 major chains tracked in the report paying no rent or a small fraction of what was owed.

The chains included in Datex’s survey have a minimum gross monthly rent of $250,000, or lease 10 or more locations. The report does not account for rent relief provided to retailers by their landlords.

“Nationals, by and large, are doing well. They obviously did better throughout the pandemic, for the most part, because they have more locations and certain markets were more open than others,” said Datex Property Solutions CEO Mark Sigal. “So for them, it’s been a continuous path back to normalcy.”

But, Sigal noted, “it’s the non-nationals that are continuing to slowly but surely dig their way out.”

Mom-and-pop stores paid 85 percent of rent last month, compared to 92 percent paid during April 2019.

In part, that’s because smaller businesses are faced with paying back rent, having diminished staff, and reallocating resources to account for shifting consumer trends during the pandemic, such as curbside pick-up in addition to traditional services, according to Sigal.

However, both national chains and mom-and-pop stores are seeing increasing sales per square foot and shrinking occupancy costs, indicating a healthy rebound.

Still, one retail category is lagging behind: movie theaters. Theater chains paid just 54 percent of rent last month, with Cinepolis paying 12 percent and Regal Cinemas paying 17 percent.