A third of small retail businesses couldn’t make their rent payments in April, according to new survey data from Alignable.
Of the small businesses surveyed nationwide by Alignable, 34% responded they couldn’t make the rent, an increase of 6% from February’s survey, and 46% of respondents said their rent is now higher than it was six months ago.
The primary reasons cited for failure to make rent included inflation, supply chain issues, labor shortage, reduced revenue and rent increases, the report said.
Across all industries, New Jersey, Illinois and Maryland had the largest share of small businesses that couldn’t make rent, while states including New York and Texas recorded improvements, according to the Alignable survey.
Last week, Alignable unveiled a new Quarterly Road to Recovery Report for Q2 2022. The research firm said its recovery reports, which Alignment had been issuing monthly during the pandemic, would now be published on a quarterly basis at the beginning of each quarter.
The Q2 report, based on data collected from 2,279 small business owners between March 31 and April 26, said the 42% of respondent said their businesses are “no longer experiencing any impact” from COVID, but only 27% said they were fully recovered, a decline of 2% from the last survey.
A retail report issued this week by JLL Capital Markets doubled down on a bullish outlook for the retail sector, projecting a continuing strong recovery for the retail sector with several markets poised for “exceptional rent growth.”
“Increased occupancies, population growth and low delivery of new product mixed with high construction costs are all driving market rent growth for retail, making the sector even more attractive to investors,” the JLL report said.
After consecutive years of net closures, store openings have outpaced store closings since the beginning of 2022. Year to date, 11 retailers have announced about 720 store openings over the next two years, with only 47 store closures announced, JLL said.
“Total space demanded by the store openings is almost double the space that will be vacated,” said Barry Brown, JLL’s retail co-leader in capital markets.
A report issued this month by the Real Estate Board of New York said that a majority of retail corridors in Brooklyn now have average asking rents per SF higher than they did a year ago, but 16 of the 17 retail corridors reported that the average rent is still below pre-pandemic peaks.