Retail rent payments improved, albeit nominally, in May.According to data from Datex Property Solutions, acompany that tracks retail rent activity, there was a slight uptickin rent payments during the first two weeks of May compared to thesame period in April. Still, the numbers are not promising. ThroughMay 15, only 51.35% of retail rent was collected, compared to 48.9%in April. National retail collections are stronger with 53.2% ofrents collected in the subcategory in May, compared to 50.65% inApril.

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"As a frame of reference, since late fees kick in after thetenth in most leases, this is a pretty good indicator of overallmonthly trends, which also explains why March 15th data showed87.4% total rents collected, and 91.6% collected for nationaltenants," Mark Sigal, CEO of Datex PropertySolutions, tells GlobeSt.com. "By the time the stay at home orderskicked in in most of the country in mid-March, most retail rentshad been paid."

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The increase in May payments could be due to a combination ofdeferral plans forged between landlords and tenants as well as thearrival of PPP funding to relieve retailers. "I would note thatwith May being the first month that rent relief agreements arestarting to factor in, that the collections picture is likelysomewhat weaker than the May numbers show, owing to the level ofrent deferrals we are seeing," says Sigal.

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Unsurprisingly, grocery stores have led in rent collections. Thegrocery retail category has brought in 97% to 99% of gross rentsduring the pandemic. Likewise, drug stores have outperformed otherretailers in terms of rent collections. "With virtually everyoneworking from home, kids being home from school, sit down restaurantdining out of the picture, and the occasional toilet paperhoarders, grocery stores are paying their rents just fine," saysSigal, adding that drug stores are also in the same collectionrange. Financial services, including banks, are also making rentpayments, although slightly less than grocery and drug stores, inthe 90% to 95% range.

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Other retail segments are bifurcated and largely dependent onthe size and credit of the retailer. "Quick service restaurants,which are already configured well for take-out and delivery, fallinto two buckets: the strong—like Chick Fil-A and Chipotle, are inthe 90% to 97% range—and the not so strong, like Subway, Panera andJamba Juice—which range from 30% to 60% collected range," saysSigal. "At the other extreme are the lifestyle retailers, such asMovie Theaters and Gyms, which are paying very little of theirrents. There are lots of interesting narratives in the data."

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.