Commercial properties struggling to pay rent

CENTRAL COAST, Calif. (KION)

It's the start of July, and rents are due.

Property management companies say leases for commercial properties along the central coast are falling months behind and at some point the landlords and small business owners will have to come to some sort of agreement.

In the meantime, many small business owners are doing what they can to get by.

According to Mangold Property Management commercial has been hit the hardest during the closures.

It's not just in downtown Monterey, other management companies in the peninsula agree. They say tenants with commercial leases are desperate to come up with cash for the first of the month. People with leases for salons, restaurants, and shops. Mangold Property Management says they're behind a half a million dollars' in collections

“We have tenants who haven't been able to pay rent haven't been able to open so that's been pretty catastrophic,” said Craig Cummings with Mangold.

Doran Poma is trying to avoid the catastrophe. She’s an esthetician with toddler. Poma was in the process of signing over her lease to a new small business owner when the pandemic forced her shop and others to close along Alvarado Street.

"I'm struggling really hard to make rent every month,” said Poma.

Forced to keep her small shop open Poma decided to diversify during Monterey’s shelter-in-place order.

With her skin care and lash services restricted she reinvented her business model.

“At first I realized I was able to get things like hand-sanitizer because of my esthetician license through beauty supplies and so I started getting that for my clients, because most of my clients are elderly and they couldn't get it anywhere,” said Poma.

Up until now she's still can't make all of her rent. However, she is able to set aside a few hundred

dollars every week.

“I was just trying to figure out how I could keep paying my rents here and my mortgage at home and all my other bills," added Poma.

Management companies says there is going to have to be a negotiating point.  

“There's not a whole lot we can do if you can't open at this point they still owe the back rent but I know there's going to be a reconciliation, where owners are going to come to the table and meet people in the

middle,” said Cummings

Nationwide an estimated 520 billion dollars in loans was given to small businesses under the Paycheck Protection Program. Still, l many needy business, like Poma's, were left waiting. However just this week Congress voted to extend the program and small businesses have until early August to apply for assistance.

While beauty services are now able to reopen, the recent spike in cases keeps small business owners cautious. Poma won't perform facials because of the health risks. However, she's determined to stay afloat for her sake and her landlords.

“I don't want to see my landlord struggle. Because then if he loses the building then what does that mean for me."