Commercial Real Estate Firm Expands Footprint as Shaky Retailers Give Way

A Dallas-based commercial real estate investment firm recently closed on a deal to acquire 137,287 square feet of retail space at McKinney’s 380 Towne Crossing.

The space comprises one-half of a portfolio acquisition by Younger Partners Investments (YPI) from developer Weber & Company. It has a diverse mix of tenants, ranging from Guitar Center to Cook Children’s Pediatrics, and is strategically situated with high visibility on the northwest corner of US 75 and Highway 380.

YPI is a relatively new player in the retail landlord game. Formed in 2020 as an affiliate of brokerage house and CRE property management firm Younger Partners, the company has been making moves to grow its footprint in North Texas. It now owns just over 1 million square feet of retail space across six cities.

“What we want to do is buy well-located, well-leased assets in the D-FW metroplex,” YPI managing director Micah Ashford told CandysDirt.com. “It’s about location and potential growth.”

380 Towne Crossing appears to check all the boxes. Anchored by Target and Lowe’s, it is 98.2% leased and sees plenty of traffic. For its part, McKinney is the fourth-fastest growing city in the U.S.

“We’re looking at areas that have strong demographics because you want your neighborhood to have dollars to spend, and then, in the case of McKinney, there’s two shadow anchors: the Super Target and the Lowe’s. They’re part of [380 Towne Crossing] but not part of what we now own,” Ashford explained. “We had to make sure that those locations were strong within their respective chains because that’s what’s going to draw shoppers to the center.”

YPI Saw an Opportunity

YPI saw an opportunity during the economic disruption caused by the COVID-19 pandemic as a number of brick-and-mortar retailers (already under stress from competition with e-commerce) found their business models increasingly unsustainable. YPI hopes to upgrade tenants, leasing to businesses with stronger fundamentals and a tolerance for higher rents.

Two cases drive home the premise. Last month, Party City closed all of its stores, one of which was located in a 12,000-square-foot space at 380 Towne Crossing.

“They’re going to try to auction all 695 of their leases, so we could end up with another tenant that meets the assignment criteria that a larger company puts in, but our hope is this one doesn’t get bought,” Ashford said. “We can take the space back and re-lease it to one of the soft goods [businesses] that we have interested at probably $12 more a foot than what Party City was paying.”

The shopping center also has a Joann Fabrics and Crafts store. Last week Joann announced it was filing bankruptcy for the second time in less than a year.

“There were a lot of tenants that we couldn’t figure out how they were still in business,” Ashford said, describing the CRE market YPI was looking to break into. “I feel like we’re starting to see the end of them … Nobody can build a shopping center and afford to lease a space at $8 a foot, and that’s where [Joann Fabrics and Crafts] can afford to pay. You’ll see more of that type of tenant go away, I think.”

As part of its portfolio acquisition from Weber & Company, YPI also bought 150,775 square feet at Longview Towne Crossing in East Texas. The shopping center is 95.6% occupied and positioned at the northeast corner of US Highway 259 and Hawkins Parkway.

“In Longview, we also have a shadow anchor Target, but instead of a Lowe’s, there’s a shadow anchor Kohl’s that does very well in the market,” Ashford said, noting that the shopping center draws higher-end tenants like James Avery, Ulta, and Crumbl Cookies. “You can tell by your tenant lineup how strong the demographics are around you.”

Despite YPI’s foray into East Texas, Ashford told CandysDirt.com that the CRE firm is looking to expand north from Dallas along the corridor into Oklahoma in 2025. The company has made six acquisitions since its founding roughly four and a half years ago.

“It hasn’t been the easiest environment to buy in with interest rates, so we’re very happy with what we’ve accomplished to date,” Ashford said.

YPI also owns retail space in Heath, Fort Worth, Prosper, and Midlothian.