California AB 380 Could Freeze Your Retail Rents—See the Loopholes Before It’s Too Late

Marc Perlof • July 25, 2025

Hey Retail Real Estate Rockstars!

Let’s talk about something important that’s happening in California: AB 380. This new law was created because, after wildfires and disasters earlier this year, some landlords raised rents on small business tenants by up to 300%. Places like cafés, stores, and barbershops were hit hard. People got angry. The government stepped in.¹

AB 380 is a new rule that may stop landlords from raising rent too much during emergencies. It’s not a normal rent control law, but it does limit how much rent can go up when something like a wildfire or pandemic happens.

What’s Happening Now?
AB 380 already passed the California Assembly. Now it’s going through the State Senate.

  • On July 8, 2025, the bill passed the Senate Public Safety Committee
  • It’s now being reviewed by the Senate Appropriations Committee²
  • After that, it will need to pass a full Senate floor vote
  • The final vote may happen later this summer


What Does AB 380 Do?
If it becomes law, here’s what it would do:

  • Stop rent increases over 10% during emergencies, like wildfires or floods¹
  • Apply to small businesses like cafés, hair salons, stores, and laundromats²
  • Block landlords from raising rent to cover repairs during emergencies²
  • Fine landlords up to $25,000 if they break the rule³


Which Tenants Are Protected?
AB 380 helps small business tenants during hard times. It applies to:

  • Local cafés, bakeries, and restaurants
  • Retail shops, like phone stores or clothing boutiques
  • Barbershops, dry cleaners, and gyms
  • Doctors and other offices in retail spaces
  • If they’re in a declared emergency zone, and you're negotiating new leases or renewals, the law caps rent increases at 10%—even if the old lease has expired.²


Do Big Chains Get Protection Too?
Yes, they do. Even if your tenant is a big-name business, like a fast food restaurant, pharmacy, grocery store, or national gym, the rule still applies. That’s because AB 380 covers all commercial tenants, not just small local shops. So if a franchise or national chain signs a lease or gets a rent increase during an emergency, that increase can’t go over 10%. This means landlords have to follow the same rule, whether the tenant is a local business or a major brand.¹

What AB 380 Does Not Do
Here’s what the law doesn’t do:

  • It does not create permanent rent control
  • It only limits rent during emergencies
  • After the emergency ends, landlords can raise rent as usual⁴


Already Have a Long Lease?
If your lease already includes annual rent increases or CPI adjustments, AB 380 won’t affect it. The rule only applies to new leases or changes made during emergencies. So if your tenant signed a 5-year lease with 3% increases, those terms still count. Just make sure any new deals include rent bumps you can depend on.

Wait—Does This Mean Year-Round Rent Control?
No. That’s a common misunderstanding. AB 380 is not permanent rent control. It only kicks in during emergencies declared by the state or city. Once the emergency is over, you can go back to market rent, as long as your lease allows it.¹ ²

What the Numbers Say

  • Over 5,000 complaints were filed after the 2024 wildfires²
  • Rent overcharges were over $21 million per month in some places⁴
  • Price gouging complaints rose 52% across California since 2021⁵


A Message for Retail Property Owners
AB 380 could change how you do business when disaster strikes. But you still have options. The key is knowing the rules, planning ahead, and protecting your income.
If you’re a retail property owner in California, AB 380 could block you from raising rent above 10% — even if your lease expires — during any declared emergency. That means you might miss out on thousands in rent increases unless your leases are written the right way. The smart move? Make sure your leases are crisis-proof  so you can stay compliant and still protect your income.

Call or DM me for more information.

Think About This…
If a disaster lasts for months and you can’t raise rent past 10%, how will you protect your cash flow and still stay within the law?

#CaliforniaAB380 #PriceGouging #CommercialRentControl #RetailRealEstate #SmallBusinessRights




Footnotes

  1. AB 380 Bill Text – California Legislature
  2. California Penal Code § 396
  3. AB 380 Assembly Bill Analysis
  4. Los Angeles Times – Wildfire Rent Gouging Cases Surge
  5. California Attorney General Consumer Complaint Data 2024


This content is provided for general informational purposes only and does not constitute legal, tax, or financial advice. Landlords, tenants, and property owners should consult with qualified legal counsel or tax professionals to understand how California AB 380 and related regulations apply to their specific situation. No attorney-client or fiduciary relationship is created by this communication.




© 2025 Marc Perlof Group. All rights reserved.

Retail Real Estate 2026: Why Some Properties Stay Strong While Others Struggle

By Marc Perlof • February 2, 2026
Retail Real Estate 2026: Why Some Properties Stay Strong While Others Struggle By Marc Perlof | MarcRetailGuy February 2, 2026 If you own retail real estate, here is what just changed. Retail real estate in 2026 is no longer one market. It has split into clear winners and clear losers. Owners who understand this are protecting value. Owners who do not are feeling pressure. The biggest change is how people spend money when things feel uncertain. Interest rates are higher. Costs are up. Households are more careful. That shift shows up first at the property level. Some retail feels stress faster than others. Lifestyle centers, nightlife areas, entertainment districts, and tourist retail depend on optional spending. When people cut back, visits drop. Sales slow. Tenants push back on rent. Vacancies last longer. This is not a crash. It is a pressure issue tied to spending people can delay. Other retail performs differently. Grocery anchored centers, pharmacies, medical and dental, quick-service food, auto service, and personal care are built around daily habits. People cut wants before needs. That makes income steadier and easier to support in a cautious market. Recent retail market reports show this split clearly. National retail vacancy stayed fairly stable through late 2025, mostly in the mid-5 percent to high-6 percent range, with necessity-based centers performing better than discretionary locations¹. Leasing slowed in 2025, with longer decision times and more rent pushback, especially from non-essential tenants². Buyers are still active, but they are more careful. They now focus on tenant quality, lease length, and operating costs more than rent growth³. What retail owners should focus on right now • Daily-needs tenants reduce risk. Properties with grocery, medical, pharmacy, and quick-service food see more stable rent and fewer concession requests. That helps protect sale price and lender support in slower markets¹. • Grocery-anchored centers sell faster. Buyers still want these assets because traffic is predictable and costs are easier to pass through. These deals tend to fall apart less often³. • Discretionary retail carries pricing risk. Properties tied to optional spending face longer vacancies, rent resistance at renewal, and wider gaps between buyer and seller pricing. Waiting too long to adjust can hurt value, not just cash flow². One thing is becoming clear in early 2026. The market is not pricing retail as one category anymore. It is pricing risk. Two properties with the same income can be worth very different amounts based on tenant mix, lease terms, and rising expenses. Owners who understand this protect equity. Others only see the gap after a buyer or lender points it out. The takeaway is simple. Retail real estate in 2026 is about quality, not hype. Stable income matters. Lease terms matter. Tenant mix matters. Insurance and operating costs matter. Owners who match strategy to how their tenants actually perform stay in control. Owners who rely on old assumptions end up reacting. If you want a clear, property-specific review of how buyers and lenders would view your retail asset today, I can prepare a short market positioning summary. No templates. No guesses. Just how your property would really trade in this market. Ask yourself this. Is your property built around spending people can delay, or spending they rely on every week? #RetailRealEstate2026 #RetailMarketOutlook #EssentialServicesRetail #GroceryAnchoredRetailCenters #DiscretionaryRetailProperties

Weekly Perl: A Commercial Real Estate News Recap

By Marc Perlof • January 30, 2026
Smoothie King plots 90-plus new openings for 2026 The world’s largest smoothie franchise isn’t planning on slowing down its growth after a strong 2025.  Smoothie King says it plans to open more than 90 new store openings in 2026, in addition to launching a targeted franchisee incentive program spanning several key states, including Arizona, Illinois, Massachusetts, Michigan, Pennsylvania, Virginia and more. Through the program, Smoothie King says it is offering financial incentives to “growth-minded franchisees,” designed to accelerate brand awareness and density in these markets...

Retail Real Estate in 2026: What Commercial Owners Need to Know Right Now

By Marc Perlof • January 26, 2026
By Marc Perlof | MarcRetailGuy January 26, 2026 If you own retail real estate, here’s what just changed for you. 2026 is shaping up to be a year where retail property owners need to pay attention. Not to fear. Not to headlines. To real signals in the market. There is more global and domestic uncertainty right now. Conflicts overseas, trade tension, higher government debt, and political changes in the U.S. all affect interest rates, insurance markets, and investor behavior. This does not mean panic. It means owners need clear, reliable information. Here is where the retail market stands today. Local retail remained steady through late 2025. In Los Angeles County, vacancy ranged from about 5.6 to 6.9 percent in the second half of the year¹²³. That tells us demand is still healthy, even as some tenants adjust space needs or renew leases at new rent levels. Leasing activity slowed in some areas. Spaces are taking longer to fill, and asking rents softened slightly as owners and tenants reset pricing². This is a normal market adjustment, not a collapse. On the investment side, commercial real estate transactions increased nationally through mid 2025. Both the number of deals and total dollar volume rose, showing capital is still moving⁵. Buyers are active when pricing reflects today’s risks and returns. This is exactly what I am seeing in live pricing discussions and negotiations right now. Insurance remains one of the biggest issues for retail owners. Property insurance markets became more stable in 2025, and rate increases slowed in some areas. However, insurers are still selective. Coverage terms matter more than ever, especially for properties exposed to wildfire or coastal risk⁴. Insurance costs directly affect net income, lease negotiations, and buyer interest. Retail Outlook for Q1 and Q2 2026 In early 2026, the retail market is likely to stay steady but measured. Vacancy is expected to remain near current levels. Leasing will be deliberate, not rushed. Rents should hold close to where they ended in 2025 as owners and tenants continue to agree on realistic pricing. Capital will remain active for properties with solid income, strong tenant credit, and durable lease terms. Buyers are selective, but they are still moving forward when risk and return are properly aligned. Insurance markets will stay selective in the first half of 2026. Owners need to plan renewals carefully and understand how insurance affects operating costs, tenant negotiations, and future sale value. Here is a simple retail risk check for 2026: • Local vacancy around 6 percent, stable but uneven by location¹ • Leasing takes longer than peak years, making pricing discipline critical² • Capital remains active, but underwriting is conservative⁵ • Insurance coverage is improving in some areas, but terms still matter⁴ Not all retail performs the same. Discretionary-driven destinations like lifestyle centers, nightlife districts, and tourist-focused shopping streets feel more pressure when consumer spending slows. Retail that serves daily needs and essential services tends to perform better during uncertain cycles. The best strategy now is disciplined and data-driven. Focus on tenant credit strength. Protect lease term and income stability. Price based on real market data. Understand insurance risk clearly. This is how value is protected in changing markets. I help retail property owners position assets based on real tenant behavior and real buyer demand. Not headlines. Call or DM me if you want a clear view of how your retail property should be positioned for 2026. How will you adjust your leasing or investment strategy this year based on what the market is actually telling us? #RetailRealEstate #LosAngelesCRE #CommercialRealEstateOutlook #RetailInvestment #CRE2026 #MarcRetailGuy
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