Smaller Businesses Continue To Struggle With Rent Payments

WRE News August 9, 2023


Smaller Businesses Continue To Struggle With Rent Payments

More than half of small and midsized businesses (SMBs) are dealing with rent increases, according to the latest Small Business Rent report published by Alignable.

In a survey of 4,601 randomly selected SMB owners polled from July 2-27, 55% of respondents said coping with rent spikes, with 15% reporting they are paying over 20% more in rent costs compared to what was required six months ago.

For the fifth consecutive month, nearly 40% of SMBs said they cannot afford to pay this month’s rent, due to ongoing spikes and trouble ramping up revenue. During July 40% of small business owners said they were only earning half or less of the monthly revenue they generated prior to Covid.

Texas had the highest percentage (73%) of small business owners facing rent spikes, aligning with its position as the second-highest state for rent delinquency at 47%. Maryland had the highest SMB rent delinquency rate at 55%.

As for the landlords, 13% of the SMBs’ landlords who haven’t raised rents yet said they’ll need to do it soon to combat the effects of cumulative inflation. But as of July, 52% of independent landlords said they experienced a financial post-pandemic rebound, despite three years of putting some tenant payments on hold and/or discounting their rents to help renters cope with Covid and inflation.

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