The Palms Shopping Center 3941 S Interstate 35 17,672 SF 100% Leased Retail Building San Marcos, TX 78666 For Sale 7% Cap Rate

TC Austin Realty Advisors is pleased to exclusively offer The Palms Shopping Center ("Palms"), a premier retail investment opportunity located in the heart of the San Marcos Premium Outlet trade area in San Marcos, Texas. Positioned along the Interstate 35 corridor between Austin and San Antonio, the Property benefits from outstanding frontage, accessibility, and regional exposure within one of the most heavily trafficked retail destinations in Central Texas.
The Palms Shopping Center consists of approximately 17,672 square feet of retail space situated on 1.29 acres and is currently 100% leased to a well-balanced mix of national, regional, and service-oriented tenants, including Destination XL (DXL Men’s Apparel), James Avery, Christian Gifts Outlet, Perfume Kings, Alpha Nails & Spa, and Kings Jeweler. The Property benefits from a stable and diversified tenancy, supported by staggered lease expirations, a weighted-average lease term of approximately 4.5 years, and built-in contractual rent escalations, which provide long-term income stability and growth potential.
The Palms is strategically located within the San Marcos Premium Outlets and Tanger Outlets trade area, one of the most successful outlet retail destinations in the United States and the economic anchor of the San Marcos retail corridor. Originally developed in 1977, the outlet centers began as a regional shopping destination positioned along Interstate 35 between Austin and San Antonio. Over the past four decades, the development has expanded into a nationally recognized retail and tourism destination encompassing more than 1.2 million square feet of outlet retail space and over 240 stores.
Today, the outlet complex is anchored by two of the most prominent names in outlet retail development: Simon Property Group, owner and operator of the San Marcos Premium Outlets, and Tanger Inc., developer and operator of Tanger Outlets. Simon Property Group is the largest publicly traded retail real estate company in the United States and one of the world’s leading owners of premium outlet centers, malls, and mixed-use retail destinations. Tanger is widely recognized as a pioneer in the outlet industry and was the first outlet-focused REIT listed on the New York Stock Exchange.
Together, the San Marcos Premium Outlets and Tanger Outlets have become one of the premier retail and tourism destinations in Texas, attracting more than 14 to 15 million visitors annually from across Texas, Mexico, Latin America, and international markets. The combined outlet centers generate an estimated $2.3 billion in annual retail sales and have transformed the surrounding area into a dominant retail, hospitality, and commercial hub for Central Texas.
The continued success of the outlet centers has driven substantial growth throughout the IH-35 corridor, fueling new hotel, restaurant, entertainment, residential, and retail development in the immediate area. Ongoing expansion, strong institutional ownership, and sustained tenant demand continue to reinforce the long-term strength and stability of the San Marcos retail market.
San Marcos remains one of the fastest-growing communities within the Austin–San Antonio Innovation Corridor, benefiting from significant population growth, corporate expansion, and continued residential development throughout Hays County. The trade area is supported by strong household incomes, expanding consumer demand, and traffic counts exceeding 160,000 vehicles per day along Interstate 35, where The Palms Shopping Center benefits from exceptional frontage, visibility, and accessibility.
With its irreplaceable outlet-adjacent location, strong occupancy history, stable tenancy, and long-term growth potential, The Palms Shopping Center represents a rare opportunity to acquire a high-performing retail asset in one of the fastest-growing regions in Texas. Combining durable tenancy, excellent interstate visibility, and direct access to one of the nation’s most visited outlet shopping destinations, the Property is uniquely positioned to benefit from continued population growth, rising consumer demand, and long-term retail expansion throughout the Austin–San Antonio corridor.
Investors seeking a strategically located, fully leased retail asset with strong market fundamentals and future upside are encouraged to explore this exceptional acquisition opportunity. The Palms Shopping Center offers the rare combination of stable in-place tenancy, proven consumer traffic, and a location positioned for sustained long-term appreciation in one of Texas’ most dynamic growth markets.