The headquarters of the Federal Reserve Bank of Boston. Photo Courtesy of Fox-orian / CC BY-SA 3.0

Commercial tenants in New England are seeking lease renewals with shorter terms, the Federal Reserve’s eight-times-a-year survey of the nation’s regional economy, colloquially called “the Beige Book” after the cover of its print edition, has found.

The compendium of anecdotes about the nation’s economy is gathered from regular conversations researchers and directors in the Fed’s 12 regional branches have with key business figures, economists, market experts and others.

Leasing volume remains low, the Fed reported, save “a few time-sensitive transactions or lease renewals” in Boston, Providence and Hartford. Many tenants are also looking to renew leases with shorter terms and, in Greater Boston, tenants were likely to have their rents lowered.

Business sentiment remains “cautious and observant,” the Fed said, although rent collection continues to be a challenge.

“Most office and industrial tenants were able to pay April rents, but retail tenants struggled. May rent collection was expected to be challenging, and lenders and landlords have been considering payment relief measures,” the report states.

The Beige Book also noted potential pending trouble in the retail and restaurant sectors: “A contact for one coastal area reported a stark increase in inquiries about bankruptcy procedures from small retailers,” while many of the restaurants across New England which attempted takeout-only business found it neither sustainable nor profitable.

Fed Survey Shows Tenants Seeking Shorter Lease Renewals

by Banker & Tradesman time to read: 1 min