(Reuters) - Department store operator J.C. Penney Co Inc (JCP.N) said it is pursuing a potential sale and partial leaseback of its headquarters in Texas to reduce debt and costs.
J.C. Penney employs more than 3,000 workers at its Plano, Texas headquarters, which it has occupied since 1992.
The retail chain’s decision comes at a time when several U.S. department store operators are looking to create value from their vast real-estate holdings as their core business of selling clothes and home goods come under pressure.
Hedge fund Starboard Value LP urged Macy’s Inc (M.N) last month to enter into joint ventures for its stores, including its flagship Herald Square store in New York, to realize greater value from its real estate assets.
Struggling retailer Sears Holdings Corp SHLD.O laid out plans in April last year to raise more than $2.5 billion by creating a real estate investment trust, Seritage Growth Properties (SRG.N), that would hold about 254 Sears and Kmart stores. The company also entered into three joint ventures with mall operators, including Simon Property Group Inc (SPG.N) and Macerich Co (MAC.N), to sell some of its stores.
J.C. Penney said on Friday the cost of leasing space would be offset by reducing maintenance costs, property taxes and lower interest expenses through paying down debt with proceeds from the sale.
CBRE Group Inc’s CBG.N Capital Markets unit has been selected to find buyers for the 1.8 million-square-foot office campus located in Legacy Business Park in Plano.
J.C. Penney had in 2014 decided to contribute a significant portion of the land surrounding its headquarters to a joint venture with a team of developers.
Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila