CTO Realty Growth Acquires Palms Crossing Shopping Center From WPG

Why It Matters

The acquisition gives CTO exposure to cross‑border retail demand and unlocks development upside, strengthening its cash‑flow and growth prospects in a high‑traffic market.

Key Takeaways

• CTO acquires 400k‑sq ft Palms Crossing mall
• Center 98% leased, 7.2M annual visits
• Located near Mexico, 18M border crossings yearly
• Over 5 acres undeveloped land available
• Below‑market rents cover 32.3% of leases

Pulse Analysis

CTO Realty Growth, Inc. closed on the Palms Crossing shopping center in McAllen, Texas, adding roughly 400,000 square feet of retail space to its portfolio. The transaction, brokered by JLL Capital Markets, marks a strategic entry into the Rio Grande Valley, a region where consumer traffic is amplified by proximity to the U.S.–Mexico border. Palms Crossing sits on 46.6 acres and hosts anchor tenants such as Hobby Lobby, Best Buy, and Burlington, positioning the asset among the top‑tier retail properties in the state. The deal, valued at an undisclosed sum, reflects CTO's aggressive expansion strategy in high‑growth secondary markets.

JLL reports that Palms Crossing ranks in the top three percent of Texas shopping centers, drawing 7.2 million visits annually. The venue’s 98 percent occupancy reflects strong tenant demand, while the surrounding market benefits from an estimated 18 million annual border crossings, fueling cross‑border shopping activity. This blend of high foot traffic and robust lease rates makes the center a reliable cash‑flow generator, especially as retailers seek locations that capture both domestic and Mexican consumer bases. Such traffic resilience has become a key metric for investors evaluating post‑pandemic retail recovery.

Beyond its current performance, Palms Crossing offers more than five acres of developable land and leases that sit 32.3 percent below market, providing CTO with clear value‑add opportunities. Potential initiatives include expanding the mixed‑use footprint, introducing experiential tenants, or renegotiating leases to align with prevailing rates. If CTO can lift rents to market levels, the asset's net operating income could increase by double digits, enhancing overall portfolio yield. For investors, the acquisition underscores a broader trend of capital flowing into border‑adjacent retail assets, where demographic growth and tourism combine to create resilient, upside‑rich portfolios.

Deal Summary

CTO Realty Growth, Inc. purchased the 400,000‑square‑foot Palms Crossing shopping center in McAllen, Texas from WPG. The open‑air retail complex, anchored by national retailers such as Hobby Lobby and Best Buy, was represented by JLL in the transaction.