Soaring Rents Are Impacting Texas Small Businesses
The rent has come due for America’s small businesses and at a very inopportune time. Landlords were lenient about rent payments during the first two years of the pandemic. Now, many are asking for back rent, and some are raising the current rent as well. Meanwhile, most of the government aid programs that helped small businesses get through the pandemic have ended while inflation has sharply pushed up the cost of supplies, shipping, and labor.
Thirty-three percent of all U.S. small businesses could not pay their May rent in full and on time, up from 28% in April, according to a survey from Alignable, a small business referral network. And 52% said rent has increased over the last six months.
Data from the commercial real estate financing and advisory firm Marcus & Millichap shows rent rose 4.6% in the first quarter of 2022 compared to the same period of 2021 as the vacancy rate dropped to 6.5%, the lowest since before 2015. But Daniel Taub, national director of retail sales at Marcus & Millichap, said inflation will make it harder for landlords to impose rent increases as the consumer begins to feel squeezed.
“Consumers can only spend so much when the dollar goes not as far, and retailers can only pay so much to carry space and have enough inventory to pay employees,” he said. “It’s a tough retail market, and something’s going to have to give.”
Source: Dallas Morning News