Page 12 - aruba-today-20220705

A12 business
Tuesday 5 July 2022

Add rent to the rising costs bedeviling

small businesses

the money must be spent
by March of 2023.
"What I have to do to stay
alive after that, every single
penny that I can save has
to go into reserve," Lacoste
said. To cut corners she's re-
finishing tables to cut down
on linen costs, not printing
color copies of menus, and
working with 22 staffers in-
stead of the 50 she once
had.
Before the pandemic, the
7,000-square-foot restau-
Charleen Ferguson, left, poses for a photo with her husband Jay rant was often full, but it
Ferguson in front of the building they own in Wylie, Texas, Friday, isn't "back to full occupan-
July 1, 2022. cy at all," Ris said. At the
Associated Press same time, inflation is com-
pounding the cost of doing
NEW YORK (AP) — The rent helped him pay back his business.
has come due for Ameri- loans, but so far this year "Payroll is up labor is up, the
ca's small businesses and sales have slipped, and he cost of goods is up, utili-
at a very inopportune time. used credit card financing ties are going up," Lacoste
Landlords were lenient to pay his June rent. Gar- said. "I'm wearing 20 hats
about rent payments dur- cia thinks some of his cus- instead of 10, and working
ing the first two years of tomers are cutting back six days a week, 12 hours
the pandemic. Now, many on non-essentials to afford a day." But rent isn't some-
are asking for back rent, to pay the higher prices for thing she can control, and
and some are raising the gasoline and other must- that adds to the stress.
current rent as well. Mean- have items. "You're working for the
while, most of the govern- Thirty-three percent of all landlord, how long do you
ment aid programs that U.S. small businesses could want to do that, how long
helped small businesses not pay their May rent in full will you survive?" she said.
get through the pandemic and on time, up from 28% "It's not sustainable."
have ended while inflation in April, according to a sur- Data from the commercial
has sharply pushed up the vey from Alignable, a small real estate financing and
cost of supplies, shipping, business referral network. advisory firm Marcus & Mil-
and labor. And 52% said rent has in- lichap shows rent rose 4.6%
Martin Garcia, owner of gift creased over the past six in the first quarter of 2022
and décor store Gramercy months. compared with the year-
Gift Gallery in San Anto- "Many small businesses are ago quarter as the vacan-
nio, Texas, survived the first still frankly recovering from cy rate dropped to 6.5%,
part of the pandemic in whatever the last phase of the lowest since before
part by paying his landlord COVID was," said Chuck 2015. But Daniel Taub, na-
whatever rent he could Casto, head of corporate tional director of retail sales
each month. Then in Au- communications at Align- at Marcus & Millichap, said
gust 2021, after the federal able. "Plus, they're deal- inflation will make it harder
moratorium on evictions ing with a years' worth of for landlords to impose rent
ended, his landlord asked increasing inflation on top increases as the consumer
for the full amount of back of that. It's made it difficult begins to feel squeezed.
rent that he owed. for small businesses to really "Consumers can only
"I needed $10,000 in 15 make a go of it." spend so much when the
days," Garcia said. He took Ris Lacoste owns a name- dollar goes not as far, and
whatever loans he could sake restaurant, Ris, in retailers can only pay so
find – often at high interest Washington, D.C., and is much to carry space and
rates – and barely met the staying afloat using aid she have enough inventory to
deadline. got from the Restaurant Re- pay employees," he said.
A strong holiday season lief Fund to pay her rent. But "It's a tough retail market
and something's going to
have to give."
Charleen Ferguson owns
the building that houses
the tech business she owns
with her husband, Just Call
the I.T. Guy, in Wylie, Texas.
She also has 13 tenants, so
she sees the dilemma from
both the small business and
landlord points of view.q