One month after filing for Chapter 11 bankruptcy protection, Party City begins parting with some of its locations.
The Woodcliff Lake, N.J.-based operator of some 800 stores has engaged A&G Real Estate Partners to put leases for 12 locations up for auction. On the block are three stores in both New York State and Michigan. The remaining six are in Oklahoma, Missouri, Oregon, and West Virginia.
They range in size from 9,000 to 28,000 sq. ft. and are located in power centers, strip centers, and on city streets. Some are freestanding.
"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," said A&G Senior Managing Director Mike Matlat.
A&G reported that it 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. The real estate advisory and services firm will also help Party City evaluate its lease portfolio in order to reduce its debt and optimize its capital structure and liquidity.
Upon filing Chapter 11, Party City Holdco received access to $75 million of a $150 million debtor in possession loan and reached a pre-negotiated agreement with a bondholder group to support an "expedited restructuring" that would substantially reduce its debt and “optimize its capital structure and liquidity.”
The company stated that it expected its financial restructuring to be completed in the second quarter.
Soft sales and rising prices plagued the party supply retailer since the pandemic took hold, and decreased availability of helium hampered its Anagram balloon manufacturing business, which was not included in the Chapter 11 filing.
"Given the high cost of new construction in today's marketplace and the lack of new development, 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," said A&G co-president Andy Graiser.
Uses that have begun to show interest in the locations up for auction, according to A&G, include gyms, dollar stores, local retail operators, furniture users, local specialty retailers, and medical.