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Landlords Eye Taking Cut Of Retailers’ Online Sales As Rent

Landlords are familiar with percentage rent — taking a portion of retail tenants’ in-store sales — but now, some are thinking of bringing online sales into the mix.

As shopping habits shift towards the digital, some property owners think demanding a portion of online sales is not only fair but might be necessary. However, with little precedent set, it may be difficult, according to the Wall Street Journal.

The increased interest comes as Covid causes retailers to fall behind on rent, even as their online sales remain steady or increase. Many of their landlords have taken a beating.

Unibail-Rodamco-Westfield and Hammerson, for example, have seen their stock values fall around 80 percent since the start of the year. They now trade at a fraction of net asset value.

“How do you value your assets if they are based on turnover that is constantly going up and down?” Tom Whittington of global real-estate agent Savills told the Journal.

Hammerson will now let U.K. tenants switch to turnover-based leases if they pay an “omnichannel top up.” The company will factor in sales from practices such as click-and-collect — in which shoppers buy goods online, then pick them up in stores — to calculate the amount of rent due.


Source: The Real Deal 

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August Brings No Sign Of Rent Apocalypse

Tenants across the country are largely still paying rent despite high unemployment and waning government aid, a new report found.

About 87 percent of apartment households made a full or partial rent payment by Aug. 13, according to the National Multifamily Housing Council’s Rent Payment Tracker. That was only a 2-point drop from the same period a year ago, when the economy was humming.

NMHC surveys 11.4 million units of professionally managed apartment units across the country.

Doug Bibby, the organization’s president, said the rent collections could decline, however, as relief through the CARES Act dries up. The federal unemployment benefit of $600 a week expired in the last week of July, and job growth is not likely to make up the difference.

“With that support now having expired more than two weeks ago, households across the country are grappling with even greater financial distress,” Bibby said in a statement.

Unemployment is steadily declining across the U.S. In July, the U.S. unemployment rate was 10.2 percent, down from its peak of 14.7 percent in April. Still, the U.S. has lost about 13 million jobs since the coronavirus gained a foothold in February, according to the Department of Labor.

For the unemployed, the next few weeks, or months, could be tough. Democrats and Republicans have failed to compromise on a new stimulus package, which was expected to extend the unemployment bonus, albeit at a diminished level, and perhaps include another round of $1,200 stimulus checks.

In addition, eviction moratoriums are also set to expire in many states, and some landlords are eager to move out tenants who have not paid rent for months.



Source:  The Real Deal

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