- Party City will auction 695 store leases in 44 states, with locations ranging from 7 KSF to 46 KSF.
- The auction follows the retailer’s second Chapter 11 filing in two years, driven by inflation, lower consumer spending, and high interest rates.
- Franchise-owned locations, including stores in Austin and San Antonio, will remain open.
- A&G Real Estate Partners will manage the auction. Discount retailers, gyms, and medical offices are expected to show strong interest.
After filing for Chapter 11 bankruptcy protection for the second time in under two years, Party City is winding down its operations and preparing to auction nearly 700 store leases across the US.
The retailer cited inflationary pressures, weakened consumer spending, and lingering pandemic effects as key drivers behind its financial challenges, according to CoStar.
Auction Details
The auction, managed by A&G Real Estate Partners, comes after Party City emerged from its first bankruptcy in September 2023 with a reduced debt load and a smaller store footprint. However, economic pressures have made it difficult for the company to sustain operations.
A&G Real Estate Partners plans to auction 695 Party City store leases, pending court approval, with most bid deadlines and auction dates scheduled for early February 2025. One location in Anchorage, AK, will close earlier, with a bid deadline set for January.
The available leases cover a diverse mix of freestanding stores, power centers, strip malls, and city street locations. Store sizes range from 7 KSF to 46 KSF, making them suitable for a wide range of tenants.
New Tenants Coming
A&G senior managing director Mike Matlat noted that the properties are well-positioned for a variety of retail and service operators, including:
- Gyms and fitness centers
- Dollar stores and discount retailers
- Entertainment venues
- Medical office clinics
- Furniture and specialty retailers
State by State
The states with the highest number of available Party City leases include:
- California: 82 stores
- Texas: 72 stores
- Florida: 59 stores
- New York: 46 stores
- Illinois: 37 stores
New Jersey, the company’s home state, has 26 available leases, including a location in East Hanover.
Zooming Out
While the corporate-owned stores are closing, at least 29 Party City locations owned by franchisees will remain open. These include stores in Austin and San Antonio, indicating some parts of the brand will continue operating independently.
The Party City wind-down reflects a broader trend of retail bankruptcies and store closures driven by inflation, reduced consumer spending, and high interest rates. Other retailers facing similar struggles in 2024 included 99 Cents Only, Sam Ash Music, and Conn’s HomePlus (CONNQ).
What’s Next
Given the prime retail locations and favorable lease terms, significant investor interest is anticipated, particularly from discount retailers and service-based businesses seeking immediate occupancy.
Party City’s lease auction will take place at their legal counsel’s Manhattan office of Paul, Weiss, Rifkind, Wharton & Garrison. rgy-efficient properties is shaping long-term development trends.
The continued expansion of port infrastructure, population growth, and balanced supply-demand dynamics across several regions suggest that industrial markets will remain a top target for CRE investors in 2025.
