Rising rent impacting local small businesses

PALM SPRINGS, Calif. (KESQ) - It's becoming more expensive to own a business.

According to the latest retail submarket report from Riverside County, rents for retail space in the Coachella Valley are rising.

However, rent growth is decelerating. In 2022, market asking rent growth was at 5.6 percent. The second quarter of 2024 saw growth of 3.4 percent.

But for some business owners, it's not enough to remain business as usual.

“The increase in the rents is challenging. We, after 4 years, have decided to close this location... It’s going to be an adjustment. We look forward to many more years of successful business but it’s going to be sad, we put a lot of work and effort into this location and while it looks great we have to make the decision and move forward.”

Tony Torres, Bike Palm Springs Rentals co-owner

Palm Springs council member Jeffrey Bernstein, and PSP Destinations owner, says the reason for the increase is high demand, and despite seeing revenue go up, his profits are actually going down.

“We have a challenge because the great benefit of having the Palm Springs brand is that people want to be here. The challenge is that can help drive up rents... The costs are skyrocketing, and we see it as a consumer but for a business, you not only have cost of goods and rent but you also have utilities, pay role, which has gone up significantly in the past few year.”

Jeffrey Bernstein, Palm Springs council member and PSP Destinations owner

Stay with News Channel 3 for more.