What: Private equity firm Onyx Partners acquires 119 J.C. Penney stores for $947 million, marking a significant real estate transaction in the department store sector.

Why it is important: This sale represents a critical milestone in J.C. Penney's post-bankruptcy evolution, as the company balances property monetization with operational improvements under Simon Property Group and Brookfield's ownership.

The Copper Property CTL Pass Through Trust has announced the sale of 119 J.C. Penney stores to private equity firm Onyx Partners for $947 million in cash. The trust, established during J.C. Penney's 2020 bankruptcy proceedings, was tasked with managing and eventually selling 160 stores and six distribution centres. The average price per property in this transaction is $8 million, approximately $2 million lower than previous individual sales. The properties are under triple-net leases with J.C. Penney as the sole tenant, with potential extensions up to 45 years. While the trust's executives faced questions about the selling price and alternative options such as REIT formation, they defended the decision citing the January deadline and the risks associated with single-tenant exposure, particularly given J.C. Penney's recent financial performance, including an 8.6% decline in total net sales to $6.3 billion and a $177 million loss in the latest fiscal year.

IADS Notes: The sale comes at a pivotal time in J.C. Penney's transformation journey. In January 2025, the retailer merged with SPARC Group to form Catalyst Brands, creating a $9 billion retail powerhouse . This followed December 2024's achievement of operational profitability, despite ongoing sales challenges . The transaction's timing and structure reflect broader industry trends, where retailers must balance real estate monetization with operational improvements, contrasting with cautionary tales like Hudson's Bay's April 2025 collapse, which demonstrated the risks of prioritizing property assets over retail operations.

Nearly 120 J.C. Penney stores sold to private equity for under $950M