Stores are reopening and customers are streaming back in, which means retailers that withheld rent during Covid-19 shutdowns are now able to pay. But first they have to agree with their landlords on how to define a sale.
Landlords are increasingly offering deals in which retailers pay a percentage of their monthly sales in rent, rather than a fixed amount. Percentage-rent leases give retailers breathing room when sales decline and allow landlords to reap the upside when sales recover.
But there is a sticking point. With e-commerce soaring, some landlords want to include a portion of online sales in the new leases, arguing that physical stores play an important role in many of these transactions. Retailers are pushing back, according to landlords, real-estate brokers and retail executives.WSJ