Commercial rent delays could turn into abatements if crisis drags on, industry watchers say

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One quarter of small businesses can’t make April lease or mortgage payments — and it won’t get much better any time soon

Owners of commercial real estate in Canada are delaying rent collection and may be forced to consider rent cuts as tenants ranging from restaurants to retail stores deal with prolonged business shutdowns aimed at slowing the spread of the coronavirus pandemic.

But some analysts believe landlords in some cases may have to go even further, if the current crisis drags on. DBRS, which tracks larger players including real estate investment trusts, or REITs, published a report last week identifying “hotels, recreational properties, and certain retail properties” as the sectors that will “experience significant stress,” at least in the near term.

But, so far at least, Canadian tenants appear to have stopped short of the bold stance taken by the Cheesecake Factory in the United States. The company’s chief executive has reportedly advised landlords that the chain of 300 eateries — many in or near malls — cannot and will not pay rent while they are closed.

 

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On the other hand, three quarters of small businesses can make April lease or mortgage payments. CoronaVirus

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