Retail Rent Collections Surge To Near Pre-Pandemic Levels
One of the embattled retail sector's fundamentals has returned to near pre-pandemic levels, but data shows the resurgence is split along subsector lines.
Retail rent collections reached 89.42% in April, a spike compared with 59.73% in April 2020 and a full percentage point increase from March, according to real estate data specialist Datex Property Solutions, Wealth Management reports.
That volume of retail rent collections is close to pre-pandemic levels. During January and February 2020, and even last March, collections hovered a bit above 90%. National chains paid 93.44% of their rent due in April 2021, while local and regional chains paid 85.07%, according to Datex.
"Nationals, by and large, are doing well," Datex Property Solutions CEO Mark Sigal told The Real Deal. "They obviously did better throughout the pandemic, for the most part, because they have more locations and certain markets were more open than others."
The surge in rent payments is especially pronounced among beauty and hair salons and fitness studios as these kinds of businesses enjoy post-vaccination booms. Home goods stores and drug stores are also doing well in terms of rent payments. Movie theaters and gyms, by contrast, still aren't paying a large proportion of their rents.
Movie theater chain Cinépolis paid 11.7% of its rent in April, down from 14.08% in March but up from zero in February, according to Datex. Regal Cinemas paid 16.96% of its rent in April, up from 13.14% in March.
Gym chain 24 Hour Fitness paid 64.99% of its rent in April, down slightly from 64.86% in March but up from 50.19% in February. Orangetheory Fitness paid 71.52% of its April rent, up from 63.25% in March.
Prospects for future rent payments depend on post-pandemic retail sales growth. Retail sales this summer are expected to be greater than in 2020, but by exactly how much isn't clear yet. The U.S. Census Bureau reports that in April, consumer spending, not including car sales, was down 0.8% compared with March, though up 40.6% compared with the pandemic-beset March 2020.