A new report paints a fairly dire picture of the current commercial real estate market, saying that 40% of U.S. small business owners couldn’t pay their rent for September in full and on time.

The statistic from small business networking site Alignable’s September Rent Report released Friday is a high for 2023. The rate of rent delinquency has shifted from 37-39 percent since March. It was 30 percent in January as well as September 2022.

Some 4,523 small business owners were surveyed last month to produce the report. There were four primary factors making it harder for renters:

Revenue loss – 53 percent are making no more than half of the income they generated monthly prior to Covid. For businesses one to three years old, the figure is 60 percent.

Interest rates – Half of those polled said 18 months of climbing interest rates have eaten into their margins.

Increased rents – 52 percent say they’re being charged more for rent than they were six months ago

Gas prices – 46 percent say higher gas prices the past few months have slowed growth.

Business Journal real estate reporter Estela Anahi Jaramillo’s most recent story about the local commercial real estate found that the most dire industry predictions don’t track with reality in the Central Valley. But anecdotal evidence shows that local small businesses are indeed facing higher rents. 

With $1.5 trillion in balloon commercial mortgage payments coming due in the next three years in the U.S., according to the Wall Street Journal, both landlords and tenants are headed toward a reckoning.