The retail rental collections continue to grow. In September, national retail rental collections rose to 80% for the first time since the pandemic broke out, according to data Datex Real estate solutions Tenant Track Report. Total retail rental collections lagged behind domestic tenants at 77%, while overseas retail collections were at 73.6%.
"The high point suggests we are working our way out of the deep hole in pension collections created by the pandemic from month to month." Mark Sigal from Datex, tells GlobeSt.com. "Additionally, this recovery is aided by the fact that cities can better support retailers by making it easier to secure outdoor seating and operating permits and developing retail opening standards that assess the COVID-19 health of a given city or town." better reflect. ”
However, rising rental income is not a sign that the market has recovered. The retail market still has a rocky road to go, especially early next year when the rent deferral negotiations expire. "We are by no means clear for the following reasons," says Sigal. “First, many of the rent relief agreements negotiated between landlords and tenants in the second quarter, which are mainly rent deferrals rather than rent reductions, will become due in the fourth quarter of 2020 and the first quarter of 2021. This represents an overhang that could put pressure on rental income at the end of the year. Second, the government has so far failed to halt the economy by agreeing to a new stimulus package that was a godsend in the second and early third quarters. Three retail categories remain extremely weak, due to declining retail sales per square foot and rising occupancy costs. "
The risk of a rebound in the fall or winter could hurt rental income growth, but it's not the only challenge retailers face. “Two big variables create risk here. One is the absolute risk of a new surge that can reinstate stoppages and tighten restrictions, ”says Sigal. Second is the fact that as winter comes, many of the outdoor options will become more problematic in cold, wet, or snowy weather. Add to this the normal flu season, which means more people are working from home and going to school, and we could easily see the fighting resurface when the cold weather sets in. "
Because of this, retailers remain at high risk in the coming months. “We continue to believe that while retailers, developers and municipalities work intelligently and collectively to protect and sustain retailers, the risk is high and the lack of government support through additional incentives is short-lived "Says Sigal." Never bet against American ingenuity and entrepreneurship, but acknowledge the conditions on the ground as it feels like at least 120 days before we get a vaccine that can be given on a large scale Solve the health crisis, in our opinion the economic recovery remains very fragile. "