J.C. Penney Co. Inc. said it is pursuing the “potential sale and partial leaseback” of its headquarters building in Plano, Texas, “as part of an ongoing effort to reduce outstanding debt and effectively manage expenses.”
The company has operated out of the building since it was built in 1992. The three-story building serves as the retailer’s global headquarters. “A combination of favorable market conditions and a surplus of available square footage within the building make this an attractive real estate opportunity for the company,” the retailer said, adding that CBRE Capital Markets has been retained to market the site.
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Marvin Ellison, chief executive officer, said with “the tremendous growth and development currently taking place within Plano and North Texas, there’s no better time to take advantage of this lucrative market by pursuing a sale of our Home Office real estate.”
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Plano serves as a business hub for the region, and companies with regional or corporate headquarters in the city of 270,000 include Frito-Lay, Alliance Data, Pizza Hut and Toyota Motors USA.
“Even as we continue to deliver positive financial results across all aspects of our business, including delivering a year-over-year gross margin increase in the fourth quarter, this presents an ideal opportunity to reduce outstanding debt and create long-term savings for the company,” the ceo added.
The company said it “expects that the cost of leasing space within the building would be offset by a reduction in maintenance costs, property taxes and interest expense as a result of paying down debt with proceeds from the transaction.”
The building is described as a 1.8 million-square-foot, “Class A office campus.” It is located in the Legacy Business Park in Plano. “The new owner will have the opportunity to market over 650,000 square feet of contiguous space within the coveted Legacy West submarket,” the company said. “These actions follow a decision in 2014 to contribute a significant portion of fringe land around the Home Office to a joint venture with a team of developers.”