Gray Street Sells Gateway Plaza for $16.7 Million

The Palomar Group has announced the $16.7 million sale of Gateway Plaza, a 179,327-square-foot San Antonio retail center, with Gray Street Partners as the seller, according to Connect CRE, and the price works out to roughly $93 a square foot. At that basis, the trade is a bid on the income the property already produces.

Gateway Plaza was 90% occupied at closing, anchored by a discount-retail roster—Ollie's, dd's DISCOUNTS, Dollar Tree, and DG Market—with no single tenant occupying more than 19% of gross leasable area, according to the announcement. The anchors hold ample remaining term with options in place, and the property, built in 1988, was renovated in 2024.

The buyer is identified only as a regional real estate investment firm. Palomar, headquartered in Augusta, Georgia, describes itself as a full-service commercial investment sales firm specializing in single-tenant, multi-tenant, and multifamily properties; its completed transactions exceed $2.5 billion across 23 states and more than 14 million square feet.

No cap rate or financing terms are covered in the announcement, leaving the price as the only public handle for underwriters tracking San Antonio retail, and the occupancy split matters more than the headline. With no tenant above 19% of gross leasable area, the rent roll is spread across a list of names, and the 2024 renovation likely means the buyer inherits a property whose deferred capital has already been spent in large measure.

The sub-$100-per-foot basis separates this trade from a value-add play. A 1988 shell with a 2024 renovation, at 90% occupied with credit tenants and long options, is a current-cash-flow trade; the seller priced an occupied center, the buyer paid for that occupancy, and the remaining 10% vacancy is the main near-term upside the numbers suggest.

The price is a bid for the rent roll rather than for redevelopment upside. The new owner collects contract rent while waiting out the next lease roll, and the deal's structure shows where necessity-retail pricing sits: on the stability of income.