Shopping mall landlords are now planning to buy J.C. Penney

The purchase will be an attempt to help keep the chain of department stores, which has declared bankruptcy, afloat and prevent downtime of commercial real estate.

In mid-May, the U.S. chain of J.C. Penney, facing financial difficulties amidst the Coronavirus pandemic, filed for bankruptcy. This step prevented the immediate liquidation of the company but put it before the need to restore its financial solvency and to continue its existence.

Discussions that the network may be sold in the near future to one of the major players in the market are proceeding quite actively. A possible buyer could even be called Amazon.

However, one of the likely candidates for the purchase of a chain of department stores would be the current landlord J.C. Penney. Owners of premises rented by the American network of department stores, Brookfield Property Partners, and Simon Property Group together with the company Authentic Brands Group, will likely become owners of the bankrupt network. As of publishing house, The Motley Fool reports, with reference to informed sources, negotiations on a deal are already being conducted.

For owners of commercial real estate who are among the largest operators of shopping centers in the U.S., such acquisitions are a step towards maintaining their numerous shopping properties. In case of a liquidation of J.C. Penney, huge areas will be idle, as it will be quite difficult to find such a large tenant in an unstable market. 

Three companies have already participated in such a buyout of bankrupt retailers. In 2016, they bought the clothing manufacturer Aeropostale for $243 million after bankruptcy. And in February 2020, the three companies were acquired retailer FOREVER 21, the amount of the deal was 81 million dollars.

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