Small Businesses in Texas Struggling to Make Rent
Recent data from Alignable, the largest online referral network for small businesses, shows that Texas is second in the country when it comes to rent delinquency. 45% of businesses surveyed said they were delinquent on rent in December, up two percent from November and up 22% from last December. New York has the highest rate at 55%.
Alignable attributes the rent delinquency to economic pressures such as higher-than-usual inflation and lower consumer spending. Restaurants are leading the pack with 52% of owners saying they were unable to make the December rent in full and on time, a record for 2022. This is 10 percentage points higher than November.
Kelsey Erickson Streufert, spokesperson for the Texas Restaurant Association, attributes the high rent delinquency rate in Austin to the city’s retail rent per square foot, which is up 8.41% year-over-year. This is the highest increase among the four major metros in the state.
In response, Austin restaurants are pivoting, streamlining their menus, reducing their hours, and relying more on delivery and catering concepts. They are also turning to shared kitchen spaces.
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Source: https://www.kxan.com/news/texas/austins-retail-rent-increases-more-than-8-texas-restaurants-struggle-to-pay-rent-survey-says/