Robert Khodadadian – Commercial Observer

A joint venture between The Meridian Group and Martin-Diamond Properties has acquired five J.C. Penny stores in the Mid-Atlantic region for $53 million, according to TMG. 

The five stores, spanning 900,000 square feet, are all in regional malls in Virginia, Maryland and Delaware. Copper Property CTL Pass Through Trust sold the portfolio. 

“This represents the second deal acquired jointly by TMG and Martin-Diamond Properties, and a continuation of the groups’ collaborative retail strategy,” Stephen Garibaldi, senior associate of acquisition for TMG, told Commercial Observer. “The portfolio was an attractive opportunity to acquire best-in-class locations that we expect to outperform as brick-and-mortar shopping continues to recover.”

Acore Capital provided the acquisition financing for the deal.

“We are excited to be a part of this transaction and saw it as a unique opportunity to finance well-located assets with tremendous upside potential,” Eric Ramirez, managing director at Acore Capital, told CO. “Retail is a challenging environment, but there are good financing opportunities out there. In this case, each location has excellent demographics and very strong in-line store sales, making this portfolio a fantastic candidate for an eventual repositioning.”

The J.C. Penney stores are at Fair Oaks Mall in Fairfax, Va.; Springfield Town Center in Springfield, Va.; The Mall in Columbia in Columbia, Md.; Westfield Annapolis Mall in Annapolis, Md.; and Christiana Mall in Newark, Del.

J.C. Penney Co. will continue to operate the stores, having emerged from bankruptcy through the pandemic. J.C. Penney filed for bankruptcy early in the pandemic, but problems for the almost 120-year-old retailer occurred almost a decade earlier.

In 2018, newly appointed CEO Jill Soltau assembled an executive team in an effort to turn around J.C. Penney and restructure its $4 billion debt load. Despite these efforts, the company’s stock dropped more than 70 percent in 2019, falling below $1 for the first time. 

Simon Property Group and Brookfield Asset Management acquired J.C. Penney in an $800 million deal rather than let its stores go dark. The sale released JCPenney from Chapter 11 bankruptcy supervision. 

“These locations are uniquely situated in high barrier markets with strong transit that lends itself well to longer-term, retail-led, mixed-use densification,” Garibaldi said. “We plan to monitor consumer trends and evaluate the best product offering of these properties individually and as part of the greater mall community.”

Newmark represented the seller in the deal. The buyer was not represented by a broker. JLL advised on the financing.

Keith Loria can be reached at Kloria@commercialobserver.com.

A joint venture between The Meridian Group and Martin-Diamond Properties has acquired five J.C. Penny stores in the Mid-Atlantic region for $53 million, according to TMG.  The five stores, spanning 900,000 square feet, are all in regional malls in Virginia, Maryland and Delaware. Copper Property CTL Pass Through Trust sold the portfolio.  “This represents theRead MoreAcquisition, Channel, Commercial, Finance, Sales, Acore Capital, Copper Property CTL Pass Through Trust, Eric Ramirez, JCPenney, Martin-Diamond Properties, Newmark, Stephen Garibaldi, The Meridian Group

Robert Khodadadian, skyline properties, ground leases

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