Clothing stores, restaurants, gyms, and other businesses have missed $52 billion in retail rent payments since April. The amount of rent collected, however, has climbed from 54% at the height of the pandemic to 86% this month, according to CoStar. Malls have fared worse, with only 79% of rent due this month received.
- Why it matters: Traditional retailers continue to face headwinds as consumers remain reluctant to return to stores, and the long-running migration of shoppers from brick-and-mortar locations to e-commerce has accelerated, Bloomberg noted.
- Rent reductions aren’t free: Retailers are giving up rights to landlords in exchange for rent reductions, such as granting landlords the ability to terminate their leases with 90 days’ notice.
- Be Smart: A number of stores like Macy’s, Whole Foods, and Kroger are going dark. These so-called “dark stores” are attempting to stay open by closing their doors to shoppers and transforming their spaces to order fulfillment centers. Macy’s is turning stories into Omni Service Centers where it will offer a virtual shopping experience, where customers can communicate with sales associates on social media. These locations will be staffed to ship orders, fulfill pickup orders, and accept payments. [Bloomberg+CoStar+USAToday]