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.

Weekly Perl: A Commercial Real Estate News Recap

By Marc Perlof • March 20, 2026
Santa Monica Airport Conversion Project Unveiled By City SANTA MONICA, CA — Following a nearly two-year public engagement process, the city has released a draft Framework Diagram for the Santa Monica Airport Conversion Project. "The Framework Diagram brings many ideas together to find common ground about what should go where and what types of uses belong in different areas of the site," the City of Santa Monica explained in a March 11 news release....

How Rising Oil Prices and Job Losses Could Affect Retail Property Values in 2026

By Marc Perlof • March 16, 2026
By Marc Perlof | MarcRetailGuy CA #01489206 March 16, 2026 If you own retail real estate, here’s what just changed for you. Retail property owners are asking a simple question today. Is the market about to change? Several economic signals moved quickly over the past two weeks. Oil prices surged as conflict disrupted major energy supply routes. The U.S. job market also weakened unexpectedly during the same period. Financial markets have become more volatile as investors reassess economic risks. When oil prices rise and hiring slows, real estate investors begin adjusting risk assumptions. These adjustments often appear first in lender loan standards and buyer pricing. For retail property owners, these shifts can influence demand and property values. Owners of strip centers, shopping centers, store front retail, and NNN retail properties (multi-tenant and single tenant) should watch closely. Understanding these signals early can help protect property value and guide decisions. Market Analysis and Trends Energy markets reacted first. Brent crude oil recently surged above $100 per barrel. The increase followed conflict disrupting shipping routes and global oil supply.¹ Much of the concern involves the Strait of Hormuz shipping corridor. Roughly 20 percent of global oil supply normally passes through this route. Even small disruptions there can quickly affect shipping costs and supply chains.¹ Consumers often feel the impact through gasoline prices. Since late February, U.S. gasoline prices increased more than 15 percent. Prices reached roughly $3.47 per gallon in early March.¹ In Southern California, fuel prices are usually among the highest nationally. Drivers in the region are already paying significantly more at the pump. Higher fuel costs can quickly strain household budgets. This often reduces spending at restaurants and other nonessential retail businesses. The labor market also signaled caution. The U.S. economy lost about 92,000 jobs in February 2026. Unemployment rose to approximately 4.4 percent during the same period.² Slower hiring typically leads to reduced consumer spending several months later. When advising retail property owners, I track three important property risks. These include tenant margin pressure, lender loan standard changes, and buyer cap rate expectations. Key signals retail property owners should monitor include: Brent crude oil moving above $100 per barrel during Middle East supply disruptions.¹ U.S. gasoline prices rising more than 15% since late February.¹ The U.S. economy losing roughly 92,000 jobs in February while unemployment increased.² Essential Retail vs Nonessential Retail Retail categories respond differently during periods of economic stress. Essential retail includes grocery anchored centers, pharmacies, and daily service tenants. These businesses usually remain stable during economic disruptions. Consumers still need basic goods even when household budgets tighten.³ Nonessential retail categories are more sensitive to economic pressure. Restaurants, entertainment venues, and similar tenants often experience softer sales first. This usually happens when consumers reduce spending. For property owners, tenant mix becomes especially important during economic uncertainty. Centers anchored by essential tenants often remain more stable. Properties dominated by nonessential retail may experience greater sales volatility. Strategic Advice for Retail Property Owners Economic uncertainty is a good time to review several property fundamentals. 1. Review tenant stability Evaluate tenant sales performance, credit strength, and upcoming lease expirations. 2. Monitor capital markets Lenders and investors may begin tightening loan standards as risks increase. 3. Evaluate sale timing carefully Markets sometimes offer short windows before buyer pricing adjusts to new conditions. Even a 1/4% to 1/2% increase in cap rates can affect property values. For example, a $6 million retail property valued at a 6% cap rate generates about $360,000 in annual income. If buyer expectations move to a 6.5% cap rate, value could fall near $5.5 million. If you own retail property and are wondering how these economic signals could affect buyer pricing or cap rates for your asset, this is exactly the type of analysis I help owners evaluate before making a sale or hold decision. If investor cap rates in your market moved just 1/2% higher, how much would the value of your retail property change? Investor Behavior During Uncertain Markets Market volatility often changes how investors evaluate retail properties. Research shows that investors prefer assets with stable income during uncertain periods. Properties with strong tenants and longer lease terms usually attract the most buyer interest.³ Assets with predictable cash flow often perform better during market uncertainty. Properties with weaker tenants or short lease terms may face greater scrutiny. For retail property owners, tenant quality and lease structure matter even more in volatile markets. What This Means for Retail Property Owners Retail property values depend on more than location. Energy prices, employment trends, and capital markets also influence buyer demand. If oil prices stay elevated and hiring slows, investors may become more selective. Properties with weaker tenants or short lease terms may see pricing pressure first. Well located shopping centers with strong tenants and long leases usually remain more resilient. Owners who monitor these signals early often have more strategic options. If economic uncertainty continues over the next twelve months, how strong are the tenants in your retail property? #RetailRealEstate #CommercialRealEstate #NNNProperties #ShoppingCenters #RetailPropertyOwners #CREInvesting #RealEstateInvestors #CREMarketInsights #RealEstateTrends #CaliforniaRealEstate #LosAngelesRealEstate #CapRates

Weekly Perl: A Commercial Real Estate News Recap

By Marc Perlof • March 13, 2026
US consumer inflation steady before Iran conflict drives up oil prices WASHINGTON, March 11 (Reuters) - U.S. consumer prices rose moderately in February as rents maintained a steady pace of increases, though households paid more for gasoline and at the supermarket and higher costs are in store because of the escalating war in the Middle East .  The Consumer Price Index report from the Labor Department on Wednesday, which also showed underlying inflation muted ​last month, covered the period before the U.S. and Israel launched strikes against Iran. The attacks at the end of February were met with retaliation by Tehran and have boosted oil prices...
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