A&G Real Estate Partners, in its capacity as real estate advisor to Party City Holdco (PCHI), plans to auction 12 Party City leases in six states – the first tranche to become available as part of PCHI’s expedited financial restructuring.
“Given the high cost of new construction in today’s marketplace, the lack of new development and the strong attributes of many of these Party City locations, we expect good interest from local and regional tenants who see this as an opportunity to open in a fully built-out retail box and begin doing business within three months,” Andy Graiser, co-president of A&G, said.
The New York-based real estate advisory and services firm will be auctioning additional leases in the weeks ahead, with the total number depending on the outcome of ongoing negotiations between A&G and Party City landlords. A&G’s role also includes advising on lease portfolio strategy as Party City looks to strengthen its financial position by reducing its debt and optimizing its capital structure and liquidity. The restructuring is expected to be completed in the second quarter of 2023.
“Our work on our lease portfolio is moving very quickly, with a plan for us to exit locations that do not meet the key financial metrics required for our go-forward fleet,” Marc Ehle, EVP of enterprise operations at Party City, said.
The initial leases being offered are located in:
- New York (Manhattan, The Bronx, Buffalo, Irondequoit)
- Missouri (St. Joseph, Belton)
- Michigan (Ft. Gratiot, Benton Harbor, Jackson)
- Oklahoma (Lawton)
- Oregon (Corvallis)
- West Virginia (Martinsburg)
The 12 stores range in size from 9,000 to 28,000 square feet. Some are freestanding, while others are in power centers, strips or city street locations.
“This size range remains hot, which is part of why this is such a great opportunity for retailers to take a Party City lease and expand into hard-to-penetrate markets, centers and regions,” Mike Matlat, senior managing director at A&G, said.
“We have a wide variety of users who have begun showing interest, including gyms, dollar stores, local retail operators, furniture users, local specialty retailers and non-retail users such as medical,” Alexandra Graiser, managing director at A&G, said.