Nearly a third of U.S. apartment renters didn’t pay any of their April rent during the first week of the month, according to new data to be released Wednesday by the National Multifamily Housing Council and a consortium of real-estate data providers.
The numbers are the first hard look at how many Americans are struggling to make rent during the coronavirus pandemic. The data come in the first of weekly reports on unpaid rent from NMHC, a landlord trade group.
Only 69% of tenants paid any of their rent between April 1 and 5, compared with 81% in the first week of March and 82% in April 2019, the data show.
Apartment tenants are not the only ones skipping rent. It applies to commercial real estate too:
Retailers are worried about paying rent because of the damage from the coronavirus pandemic. And that has mall owners increasingly worried about meeting their own obligations.
Mall of America- and American Dream-owner Triple Five Group has said it is concerned about some of its tenants not paying rent, which is going to hinder its ability to make mortgage payments.
With thousands of retail and restaurant doors shut, not bringing in sales, many business owners are not in the position to pay rent. The Cheescake Factory, for example, has said publicly it will not be paying rent in April. Lululemon, on the other hand, said it paid April rent.
Some retailers are asking to cut rents to a smaller percentage, or delay payment to a later date.
In turn, landlords are arguing they still have their own bills to pay, too. U.S. mall owner Taubman, for example, sent a letter to its tenants on March 25 saying it has obligations to meet — such as paying lenders on mortgages and paying for utilities. “The rental income that we receive from tenants is essential in order to meet these obligations,” Taubman said.
Triple Five Group is running into a similar situation, American Dream co-CEO Don Ghermezian told CNBC in an interview. “The difficulty we are going though now … if tenants don’t want to pay rent, my response is: I have got to pay a mortgage. I borrowed money. I have got to pay back my lenders.”
If there is not more assistance to come from the federal government on this front, “many malls will be headed into default because they won’t be able to make mortgage payments going forward,” he said.
Residential mortgage lending is also starting to be affected: