The vast portfolio of real estate owned by department store chain Kohl's Corp. is at the center of a debate about the retailer's worth as investors push toward a sale.

UBS analysts wrote this week that they doubt Kohl's real estate would add any significant value to its share price, and expects the retailer should ultimately sell for $38 per share, MarketWatch reported — a far cry from the two offers for up to $65 per share reportedly made by two hedge funds in recent weeks. The retailer was trading at roughly $60 per share Thursday afternoon.

UBS valued Kohl's 409 owned stores at $6M to $8M each on average, with its distribution network and headquarters worth nearly $2B, according to MarketWatch.

“A hypothetical real estate developer buying a Kohl’s asset in order to repurpose it would likely value the property at a 20% to 25% discount because of the numerous costs and challenges of repurposing retail real estate,” UBS analysts wrote.

The report comes as Kohl's faces a renewed push among activist investors to sell the company to outside bidders, which could use Kohl's real estate assets as leverage in a deal. Already, the Wisconsin-based retailer has received unsolicited offers from the hedge fund Starboard Value LP, The Wall Street Journal first reported, and from Sycamore Partners, Reuters reported, each for about $9B, or up to $65 per share.

Over the past 10 years, Kohl's has grown its brick-and-mortar locations while many of its competitors shuttered stores. Kohl's has 1,162 locations across the U.S., up from 1,127 10 years ago, Forbes reported. Analysts say Kohl's could leverage its owned real estate stores as collateral by entering into sale-leaseback arrangements.

In a recent letter to shareholders, Macellum Capital Management — which owns around 5% of Kohl's stock — urged the company, in part, to sell its real estate up to 15 times its earnings before interest, taxes and amortization and buy back its own stock for just three times EBITA.

“Contrary to what the board and management claim, this is a far superior structure versus any potential debt financing they might pursue that would only serve to lever the balance sheet and decrease valuation,” Macellum Managing Partner Jonathan Duskin wrote in the letter.

This is the second year Macellum is agitating for change at Kohl's. The hedge fund reached a settlement with Kohl's last year to cease seeking change for a year.

“Our campaign last year highlighted the deficiencies in the company's operations and strategy that were causing it to lose market share as well as the opportunity cost of letting $7B to $8B of owned real estate sit idle on the balance sheet,” Duskin wrote.

But the costs to run those stores has risen since the pandemic, Forbes reported, when taking into account that the retailer's sales and stock price has remained flat. Kohl's has attempted to spur more foot traffic in its stores by partnering with Amazon for e-commerce returns and Sephora, which opened smaller stores within Kohl's locations.