- The portfolio, totaling 16 MSF, includes 120 JCPenney stores in 34 states, 21 of which are in Texas and 19 in California.
- The portfolio generates $100M in annual rent, with lease terms offering annual increases of up to 2%.
- Previous sales of JCPenney properties in the same trust averaged $62 PSF, indicating strong investor interest in retail assets.
- Newmark and Hilco Real Estate are marketing the portfolio, with bids due by February 2024.
A portfolio of 120 JCPenney stores across 34 states, averaging 130 KSF each, will go on sale in 2024, and potential sales could exceed $1.3B.
The portfolio, being sold by Copper Property CTL Pass Through Trust, also includes most of JCPenney’s best-performing locations. These stores are considered stable assets, unlikely to face closure even as JCPenney continues restructuring.
Inside The Portfolio
The portfolio spans 16 million square feet and includes notable locations like the 124 KSF Gateway Center store in Brooklyn, NY, and the 185 KSF store at Newport Centre in Jersey City, NJ.
Notably, the sale marks the final phase of Copper Property CTL Pass Through Trust’s divestiture of JCPenney real estate holdings.
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Projected Portfolio Value
While no official pricing guidance has been provided, the trust has already sold 37 JCPenney stores for $497M, averaging $62 PSF.
The remaining portfolio, generating $100M in annual rent, is expected to attract significant interest from institutional investors, particularly given the low retail vacancy rates and limited new development in the US.
Strong Retail Demand
According to Newmark Managing Director Paul Penman, the current retail market is experiencing unprecedented institutional interest. “I’ve never seen, certainly in the last decade, this amount of institutional interest in retail,” Penman said.
Based on historical performance, the portfolio’s leases range from $2–$9 PSF with annual CPI-based increases, making the properties attractive for investors seeking stable returns.
Timeline, Next Steps
Newmark (NMRK) and Hilco Real Estate will begin marketing the portfolio, with bids expected by February.
As retail vacancies remain low and demand for stable assets grows, the sale of this JCPenney portfolio could set a benchmark for future retail property transactions.
