JCPenney applied for bankruptcy protection around five years ago and has been selling its stores and assets to potential buyers. Moreover, it has sold many of its location stores to major dealers, but this deal will blow your mind. A private equity firm based in Boston has extended its hand to purchase 119 JCPenney stores at a value of $947 million. According to the Copper Property CTL Pass Through Trust, Onyx Partners from Boston has extended a deal to purchase the retail stores of JCPenney. Moreover, the Copper Property CTL Pass Through Trust was given the property responsibility after JCPenney filed for bankruptcy protection.
This entity was given the responsibility to sell 160 retail stores of JCPenney and 6 industrial properties five years ago. Moreover, the main reason for selling the company’s assets was to reimburse the investors, who couldn’t be paid back due to bankruptcy. In the last five years, approximately 36 stores and various warehouses have been sold by the Trust. However, the deals were not very beneficial, as the amount was not enough to pay off the bill.
A new deal for JCPenney by Onyx Partners
While the stores were sold for petty deals, Onyx Partners has extended a deal to buy 119 stores of JCPenney. The $947 million transaction has been completed in cash, according to the deal closing adjustments. Moreover, the agreement will be fully implemented by September 8, after which the properties will be named under the firm. According to Copper Property, the all-cash transaction has been accumulated through a long marketing procedure, along with Newmark. These properties are in a lease agreement with Penney Intermediate Holdings LLC, which is now applicable to the equity firm. Furthermore, it has been declared that the depositions and transactions under this contract are non-refundable and finalised.
As these properties are lease-agreement properties, the responsibility for spending costs for their maintenance is with JCPenney. Many companies faced bankruptcy after the COVID-19 pandemic, which destroyed their businesses. Moreover, they couldn’t survive the continuous fall of the economy like some top companies, such as Tesla. Every business faced a difficult time where they had to make some decisions to survive or face doom.
Value of the 119 retail stores of JCPenney
In December, the Copper Property gave the responsibility to draft the portfolio for 120 JCPenney retail stores to Newmark. Moreover, these stores acquired 15.86 million square feet of space in a total of 34 states. According to Newmark’s calculations, the lease properties under JCPenney were earning a net revenue of $100 million in just a year of filing. If we calculate the size of a single retail store, it accounts for 134,000 square feet of space, which is approximately 8.36 acres of land.
The Copper Property has scheduled a press conference on Monday to inform investors about the JCPenney retail stores. By then, investors can check the website of Onyx Partners Ltd., where they have mentioned their corporate strategy. Moreover, the company has mentioned its reach in 47 states of the US, where they invested approximately $2 billion in private transactions. Furthermore, the company is focused on offering its investors a risk-adjusted return while providing its best services.
The Copper Property CLT Pass Through Trust has clarified its priorities with the completion of the deal with Onyx Partners. Moreover, they have prioritised crediting the returns to the retailer’s investors after the sale, before any other tasks.
Which JCPenney stores are included in the sale deal?
According to USA Today, the JCPenney Portfolio included 121 retail stores, which had to be sold this month. These stores were spread across 35 states in the US, including 21 stores in Texas and 19 in California. Among the 160 properties, which were the responsibility of the Copper Property, two properties were sold earlier this year. One property was based in Florida, and the other was in Pennsylvania, and was purchased by Simon and Brookfield Group for $21 million. Furthermore, the major locations where the stores were sold are: New York, California, Texas, Pennsylvania, Oklahoma, Florida, and many more.
Conclusion
On July 23, the contract was brought for negotiation to the Copper Property, and is now finalised by both parties. Moreover, they decided on this pact for 119 retail stores at $947 million, in cash transactions. Additionally, Onyx has mentioned that the operational cost, maintenance expenses, and taxes will be handled through JCPenney. This is because the properties are available on a lease agreement, which will apply to the retailer itself.
