The eviction ban will spur action from landlords: Colliers CEO
Sixteen per cent of commercial tenants didn’t pay their rent last month, according to Colliers Canada, as fallout from the COVID-19 pandemic continues to ravage businesses.
The real estate services company said it resurveyed 7,100 tenants across the country in May as a follow-up to an April survey that showed 21 per cent of commercial tenants requested rent relief.
Of the tenants that requested relief in April, only 42 per cent paid full rent last month, while 39 per cent didn’t pay at all and 19 per cent made partial payments.
A further decline in rent collections is expected this month before improving in July and August as long as reopenings continue, Colliers anticipates.
“There are several factors contributing to the decline in rent payments from April to May,” John Duda, president of real estate management services at Colliers Canada, said in a release.
“These include overall deterioration of conditions that many businesses are facing due to closures or decreasing demand, and the fact that some tenants and owners have been in a holding pattern regarding rent payments and deferral discussions while learning more about the Canada Emergency Commercial Rent Assistance (CECRA) program, which recently opened for applications.”
The federal government began accepting applications for CECRA on May 25, but Colliers said the impact from the program won’t be seen until July as it anticipates a six-week lag between reopening dates and a rise in rent collections.
In its survey, Colliers also found that of the tenants that requested rent relief in April, 23 per cent were able to negotiate direct relief agreements with their landlords outside of CECRA.
“Tenants and landlords are familiarizing themselves with the government’s rent relief supports, and many landlords are taking proactive action to find mutually beneficial solutions,” Duda said.