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JC Penney Closures Put More Than $7B CMBS Loans On The Line

JC Penney Closures Put More Than $7B CMBS Loans On The Line

Nearly $7B in CMBS loans issued since 2010 could be impaired because of another round of JC Penney store closures.

Morningstar Credit Ratings found 39 JC Penney stores with below-average tenant sales, which are at most risk of closure. Some of these locations are involved in multiple CMBS transactions. Morningstar calculated CMBS exposure for actual collateral at nearly $30B, which includes collateral tenant totals of $16.4B and another $13.4B in exposure to stores as a shadow anchor.

JC Penney said in late February it would close 130 to 140 stores and two distribution facilities because of slow traffic and muted sales with most closures expected during Q2 2017. The chain is one of several retailers this year that have announced closures following disappointing same-store sales. 

Find out more about the state of retail at Bisnow's upcoming event in Los Angeles March 28.