Major shifts in the retail landscape are on the horizon as Newmark prepares to market a substantial portfolio of J.C. Penney stores, with three significant locations in the Phoenix area poised to change hands. As reported by Phoenix Business Journal, the offering includes stores in Mesa, Glendale, and Goodyear, which are part of a broader national portfolio encompassing 120 stores across 34 states.
The ownership of these stores could potentially reshape local mall structures and retail centers, a process that has seen both progress and setbacks in other Arizona shopping venues. The stakes are particularly high in the Valley, where the three J.C. Penney stores represent nearly half of the retailer's current operations in the region, according to Phoenix Business Journal. This, coupled with their placement within key shopping destinations, marks an opportunity for substantial influence over future retail developments.
In a broader context, CoStar reports that the sale of these J.C. Penney stores could exceed $1 billion. The entity behind the sale, Copper Property CTL Pass Through Trust, was established following J.C. Penney's 2020 bankruptcy to manage the disposition of the retailer's properties, thereby recouping investments. To date, the Trust has finalized sales of 37 stores and six warehouses.
Newmark, on behalf of the Trust, seeks to attract both domestic and international institutional investors. As explained by Newmark Managing Director Paul Penman in an interview obtained by CoStar, "This is basically a covered land play" where the buyer would take on properties with core acreage and no operating costs, all while J.C. Penney remains accountable for upkeep. This arrangement suggests a low-risk opportunity with the potential for significant redevelopment upside.
Given the attractive lease terms and J.C. Penney's stable financial outlook post-bankruptcy, the interest in the portfolio is expected to be high. Industry professionals like Venture Commercial's Mike Geisler project the portfolio's value at over a billion dollars, highlighting the desirability of such an investment given the lack of risk.
