The war with landlords is still going on, but many retailers are already ready to pay rent.
More and more retailers are returning to their usual mode of operation: starting to pay rent. However, negotiations, sometimes very hot, between tenants and landlords continue.
According to a study by the US National Retail Federation and investment bank PJ Solomon, only about a third of retailers paid at least 75% of their rents in June. By July, the number of borrowers had nearly doubled to 65 percent.
The survey also showed that 73 percent of retailers who missed payments plan to pay at least half of the rents due since the start of the nationwide closing in March. More than half of respondents said they received discounts or concessions from their landlords. In this case, the most common compromise was to defer payments until the end of 2020 or even 2021.
Real estate experts say that retailers are increasingly seeking to pay rent as a percentage of sales. However, lessors resisted this type of settlement, as this approach would make it difficult for them to predict future revenue streams.
Often it comes to litigation. During the pandemic, one of the most high-profile lawsuits was Bal Harbour Shops' lawsuit against the Saks Fifth Avenue chain of department stores, which claimed that the retailer had not paid more than $1.8 million in rent. In response, the chain filed a countersuit accusing the landlord of defamation and contract violations. Subsequently, there were other, less high-profile cases. And we can assume that the number of such lawsuits will only increase over time.
Many analysts assume that there will be a decline in rent levels everywhere soon, as it has become too high for many companies to justify its payment. With the rapid growth of online sales and many people's unwillingness to visit public places in the market, global changes may begin.