Retail rent collection strongest since start of Covid-19 pandemic

Rent collection performance continued to improve in July, with retail recording its strongest performance since the start of the Covid-19 outbreak in the U.S., according to the latest NAREIM member rent collection survey.


Initial collections for July were 91.2%, 40 basis points higher than June and more than 700 basis points higher than initial April and May collections.



Industrial was the best performing property type for collections in July with an average of 93.1% of rents collected. For the first time, office outperformed multifamily, with collections averaging 92.9% compared to multifamily’s 92.8%.


Retail, however, recorded the strongest performance in terms of month-over-month improvement in collections. Between April and June, retail assets were collecting on average 50% of rents due. According to NAREIM members, retail properties in July reported collections of 74.5%.


The improving landscape for rent collections was also mirrored in expectations for August cashflows – with seven out of 10 NAREIM members anticipating collections next month to remain the same as or be up to 5% better than July.


But members were cautious as they looked towards the third quarter – and the potential risk of a second lockdown in the U.S. Members said many conversations with tenants were centered around the uncertainty over the fallout of the pandemic, with concerns over another lockdown, schools not reopening fully in September and reopening strategies.


As one member commented on office tenants: “People will come back to the office once we have a vaccine, but until then [occupancy will] not likely be above 50% capacity. New leases are hard to come by.”


The NAREIM survey was conducted between July 16 and July 23 and comprised 15 organizations with an average AUM of $4.8bn.


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