Bay Area landlords dealing with increasing costs, causing 'rent spikes'

SAFETY HARBOR, Fla. - As local small businesses report a struggle to pay rising rent, Bay Area landlords argue they are dealing with increasing costs, too.

"I think landlords are trying to catch up because their expenses have gone up," attorney Bill Foster said.

The former St. Petersburg mayor represents commercial landlords across Pinellas County. Many of them are having to charge their tenants more for rent, he told FOX 13.

"Varies on the condition of the building and the location of the building," Foster said. "In really good parts of Pinellas County, the rents can go up 20, 30, even 40% depending upon how long the lease has been. If it’s been a long lease without good escalators to where the landlord is catching up in an area that commands greater rent, it could go up 50%." 

Alignable, an online network of small business owners, surveys its members every month.

In January 2024, 53% of small Florida businesses surveyed said they are victims of ‘rent spikes,’ meaning they pay more for rent now compared to six months ago. 

READ: Family-owned cheesecake restaurant in Safety Harbor closing doors as costs rise

Last week, Tom and Cindy Bassano of Bassano Cheesecake Café told FOX 13 they won’t be signing a new lease next year because rent has doubled for their building on Main St. in Safety Harbor.

"It's not something that we can afford to do," Bassano said. "I mean, we're scraping by as it is now with the way the economy is."

Foster says his clients – the landlords – feel the same way.

"I think a lot of people sympathize with the small business owner. No one sympathizes with the landlord," Foster said. "Not every landlord is a rich, greedy landlord. They have families too, and they're just trying to make ends meet."

READ: U.S. seeing small business boom, benefiting buyers in Tampa Bay Area

"From the ownership and landlord side, it's been less profitable," Tampa financial advisor Lee Mezrah said.

Mezrah, president of Mezrah Financial, has clients that build, own, and invest in commercial properties.

"I'm seeing the margins are being squeezed quite a bit on the owner side. Why? Some of the reasons you already know: Lending costs are still high. Insurance costs are out of control right now to be honest," Mezrah said. "So those two items alone have substantially squeezed their margins to the point where it's not what it used to be."

"It's not just residential. Nobody wants to insure commercial either. So it's harder and harder to get insurance for commercial properties," Foster said.

While it depends on the type of lease, landlords are responsible for taxes and maintenance costs, which have also increased, Foster told FOX 13.

"Pinellas County, especially, we are landlocked, so we can’t make any more land. Small businesses have to have a place to go. I’m a huge supporter of small businesses. But landlords are a small business, too," Foster said.