JCPenney has faced turbulent years marked by bankruptcy and mass store closures. Now, the retailer has revealed another significant shift in its business.
Five years after emerging from bankruptcy, JCPenney has sealed a $947 million all-cash deal with the private equity firm Onyx Partners Ltd., agreeing to transfer the ownership of 119 store locations.
The seller, Copper Property CTL Pass Through Trust, announced that the amendment began on July 23 and it’s non-refundable, which guarantees the transaction.
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The properties are under a triple-net master lease, under which JCPenney remains responsible for all operating costs, including property taxes, insurance, and maintenance.
The real estate firm Newmark handled the sale, which is expected to close on September 8. Once the deal is finalized, Copper Property plans to distribute the proceeds to investors.
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The agreement includes limited termination rights for individual sites, applicable in the event of specific circumstances such as property damage or condemnation proceedings.
However, due to the conditions required to finalize the transaction, the trust cannot assure that the disposition of the properties is certain.
All 119 JCPenney stores will continue operations as of now.
JCPenney strikes $947 million deal to sell 119 store properties.
Image source: Justin Sullivan/Getty Images
JCPenney files for Chapter 11 bankruptcy
JCPenney (JCP) filed for Chapter 11 bankruptcy in May 2020, attributing its downfall to the Covid pandemic, although the company hadn’t been profitable for the last 10 years.
To navigate bankruptcy, the retailer developed a restructuring plan that included securing $450 million in financing from its lenders to continue operations while it reorganized its business.
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JCPenney was eventually acquired by Simon Property Group (SPG) and Brookfield Asset Management (BAM) for $1.75 billion, making them the new owners of the company’s retail and operating assets.
Copper Property CTL Pass Through Trust was created to assume ownership of 160 retail properties and six warehouses as part of JCPenney’s reorganization plan during bankruptcy. This trust is managed by an affiliate of Hilco Real Estate LLC. and is responsible for owning, leasing, and selling properties.
JCPenney sells 119 store properties
At the time of its bankruptcy filing, JCPenney closed over 200 stores nationwide. Earlier this year, the retailer announced the closing of seven more locations.
Related: Why your favorite retail store is going out of business
Newmark owned 121 properties with JCPenney stores across 35 states. However, earlier this year, it sold two of those properties, one in Florida and one in Pennsylvania, to the Simon Property Group and Brookfield Asset Management.
JCPenney store properties sold
21 in Texas19 in California6 in Florida6 in Michigan5 in Illinois4 in Ohio4 in Arizona4 in New Jersey3 in Connecticut 3 in Nevada3 in New York3 in Oklahoma3 in Pennsylvania 3 in Washington2 in Arkansas2 in Colorado2 in Kentucky2 in Maryland2 in Missouri2 in New Mexico2 in Puerto Rico2 in Tennessee 2 in Virginia1 in Georgia 1 in Iowa1 in Idaho1 in Indiana1 in Kansas1 in Louisiana1 in Massachusetts1 in Minnesota1 in Mississippi1 in North Carolina1 in New Hampshire1 in Oregon1 in Wyoming
