PE Firm Set To Pay Nearly $1B For 119 JCPenney Stores

A Boston-based private equity firm entered into a binding agreement to purchase a portfolio of 119 JCPenney stores for $947M in an all-cash transaction. 

An affliliate of Onyx Partners of Boston purchased the retail portfolio roughly five years after the national retailer filed for bankruptcy. A holding company for the portfolio, Copper Property CTL Pass Through Trust, was created in 2020 as a separate entity owned by JCPenney lenders and tasked with selling properties to reimburse investors. 

The average store size in the portfolio is about 133K SF in locations across 35 states, according to a marketing brochure by Newmark. The properties are triple-net master leased to Penney Intermediate Holdings and its affiliates.

The portfolio Newmark marketed included 121 properties totaling over 16M SF, whereas the sale announcement involved 119 assets. Copper Property did not provide the details of the final agreement. 

The transaction is scheduled to close on or before Sept. 8. 

"The Buyer has now completed its due diligence, and its deposit under the Agreement is non-refundable," Copper Property said in a release. 

Copper considered a "tapestry of factors" when determining which company it would sell the properties to, Neil Aaronson, principal executive officer of the trust, said on a call Monday discussing the sale. That included execution capability, rationale for acquisition, capability to line up financing and overall purchase price. 

The trust, in coordination with Newmark, parsed through multiple bids before settling on Onyx Partners. 

"There was not one specific factor that led us to our conclusion, but we were absolutely led to the conclusion that the group that we went with was the best bid for our circumstances," Aaronson said.