J.C. Penney is leasing a portion of its home office campus in Plano, Texas.
The U.S. apparel retailer sold its home office building and 45 acres of land to Dreien Opportunity Partners, LLC, the general partner of Silos Opportunity Partners, LP for, $353 million on Jan. 3. J.C. Penney has operated its global headquarters at the three-story, 1.8 million-square-foot building since 1992.
Once Dreien Opportunity Partners resumes ownership of the home office campus, Penney’s will lease back roughly 65 percent of the building, which will leave the remaining space available for new tenants. Building lease costs will be offset by minimized maintenance costs, interest expenses and property taxes. With the transaction, Penney’s aims to pay off existing debt and revamp its home office location.
“This transaction also represents a significant financial milestone for the Company, as proceeds from the sale give us the opportunity to reduce outstanding debt and make improvements to our workspace, creating a modern and efficient environment that fosters productivity and seamless collaboration,” J.C. Penney CEO and chairman Marvin R. Ellison, said.
Penney’s recent home office sale follows its dismal third quarter results. The company achieved a net loss of $67 million or 22 cents per diluted share, which was a 42 percent increase from last year. Adjusted earnings per share also improved 54 percent to a loss of 21 cents per diluted share, compared to a loss of 46 cents per diluted share in 2015. Operating income also improved at a 140 basis point rate compared to last year with a $39 million increase for third quarter 2016.