Meridian JV Acquires Five JC Penny Stores for $53M

A partnership between the Meridian Group and Martin-Diamond Associates has acquired five Mid-Atlantic JC Penney stores for $53M.

Copper Property CTL Pass Through Trust, the Jersey City-based entity created last year to sell off the department store chain’s real estate assets, sold the portfolio. Acore Capital financed the deal, Newmark represented the seller.

The five stores, encompassing 900K SDF, all are in regional shopping malls in Virginia, Maryland and Delaware.

The stores are located at Fair Oaks Mall in Fairfax, VA; Springfield Town Center in Springfield, VA; The Mall in Columbia in Columbia, MD; Westfield Annapolis Mall in Annapolis, MD; and Christiana Mall in Newark, DE.

In a separate transaction involving an undisclosed buyer, Copper Property also sold JC Penney stores at Pheasant Lane Mall in Nashua, NH and Dulles Town Center in Sterling, VA.

“We believe these sales reflect current market conditions and the market’s recognition of the solid performance of J.C. Penney post-reorganization,” said Neil Aaronson, principal executive officer of Cooper Property.

JC Penney, which emerged from bankruptcy protection last year, will continue to operate the seven stores.

JC Penney filed for Chapter 11 in May 2020, citing hardships from the pandemic lockdowns. Later that year, Simon Property Group and Brookfield Asset Management acquired JC Penney for $800M in an auction.

In 2021, JC Penney’s retail and operating assets exited Chapter 11 bankruptcy protection through the creation of Cooper Trust, which was created to sell 160 retail assets and six distribution centers to third-party investors.

To date, Cooper has sold 23 store properties and six distribution centers, generating $868M in sale proceeds. The distribution centers portfolio, encompassing more than 10M SF, was sold in December in a $557M deal with National Industrial Portfolio Property Owner LLC.

J.C. Penney holds long-term triple net leases on all of the assets being sold by Cooper.

The partnership between Simon, the leading mall REIT, and Brookfield Asset Management also teamed up to buy two other retailers that went into bankruptcy: fast-fashion retailer Forever 21 in 2020—a deal that Brookfield divested in 2021—and teen retailer Aeropostale, which went under in 2016.

According to a report in the NY Post, Simon and Brookfield jointly bid $68 per share in April in an unsuccessful effort to acquire the retail chain Kohl’s in an $8.6B transaction.

Earlier this month, Oak Street Real Estate Capital offered to acquire a portion of Kohl’s portfolio in a $2B sale-leaseback deal, GlobeSt. reported.