Hilco Real Estate, enlisted to sell 121 JCPenney properties, reported the stores will continue operating under the JCPenney retail banner after they are sold.
The stores set to be sold have been operating under 20-year leases, with about 16-and-a-half years remaining. The stores and ground underneath them would have new owners, Larry Finger, executive vice president of Hilco Real Estate, told HomePage News.
Hilco JCP, an affiliate of Hilco Real Estate and manager of Copper Property CTL Pass Through Trust, is overseeing the property sales. As JCPenney emerged from bankruptcy in 2020, part of the process separated 160 locations from its store base for sale. Copper Property CTL Pass Through Trust is an entity created to sell the stores and operate them through a sale. Thirty-nine stores were sold prior to the announcement of the initiative covering the remaining 121 stores. The 39 stores operated as JCPenney stores through the sales, although how the properties are treated in the future will depend on the actions of the owners, according to Hilco.
Finger said expectations are for the sale of the 121 stores to occur by mid-year, at which time Copper Property CTL Pass Through Trust will dissolve.
“Copper is a liquidating trust,” Finger said. “Our goal is to liquidate the assets and to liquidate ourselves.”
According to Hilco, the trust distributes net rent and net sales proceeds to its certificateholders. The certificate holder effectively are shareholders of the trust as an outcome of the bankruptcy and former debtors of JCPenney, although the certificates can be and may already have been traded.
JCPenney, as it has operated, emerged from bankruptcy as a joint venture established by Simon Property Group and Brookfield Asset Management. The company recently combined with SPARC Group to form Catalyst Brands. JCPenney continues to operate some 650 stores in the United States and Puerto Rico.
The majority of the 121 properties up for sale operate in major metropolitan areas, including Austin, TX, Houston, Miami, Los Angeles and New York. Half of the stores operate in the Sunbelt region of the United States. The properties include 21 in Texas and 19 in California, in a concentration along the I-95 corridor in the northeastern United States and in the approximate vicinity of I-80 from western Pennsylvania to Chicagoland. The recent announcement of eight store closures made by JCPenney is separate from the activities of the trust.
