Key Takeaways
- • Onyx Partners acquires 119 J.C. Penney stores for $947 million all-cash from the Copper Property CTL Pass Through Trust, averaging $8 million per store across 15.8 million square feet spanning 34 states.
- • Competitive bidding process attracted 700+ interested parties with multiple bid types evaluated, with Onyx selected based on closing certainty, strategic alignment, and execution capability rather than price alone.
- • Expected creditor distribution of $928–$932 million after closing costs, with the trust meeting its January 2026 divestment deadline through portfolio-level sale rather than prolonged asset-by-asset disposition.
- • Triple-net lease structure with J.C. Penney operator provides stable cash flow at a 10.37% cap rate; Simon Property Group and Brookfield exercised first refusal rights on only 3 of 54 eligible stores, signaling limited appetite for the portfolio.
- • Transaction expected to close September 8, 2025 pending Onyx's due diligence completion and deposit submission, with the deal originating from J.C. Penney's 2020 bankruptcy restructuring.
Summary
The Copper Property CTL Pass Through Trust, established following J.C. Penney's 2020 bankruptcy, has agreed to sell a portfolio of 119 retail stores to Boston-based private equity firm Onyx Partners for $947 million in an all-cash transaction. The 119-store portfolio comprises 15.8 million square feet distributed across 34 states, with significant concentrations in Texas (21 stores) and California (19 stores). The transaction values each store at approximately $8 million on average, a metric that prompted some investor scrutiny during discussions with analysts, though trust executives defended the portfolio approach as the most efficient path to satisfy their obligation to divest all properties by January 2026.
The sale process, led by real estate advisor Newmark with assistance from Hilco, generated robust competitive interest with more than 700 interested parties submitting bids across multiple structures including single-asset and sub-portfolio offerings. Onyx Partners emerged as the selected buyer based on demonstrable closing certainty, strategic fit, and overall transaction terms rather than price maximization alone. The trust's focus on execution probability reflects the time-sensitive divestment mandate and the operational complexity of managing a large dispersed portfolio.
The 119 properties operate under long-term triple-net lease agreements with J.C. Penney, which continues operating approximately 650 stores owned by Simon Property Group and Brookfield. Simon and Brookfield held first refusal rights on 54 stores but exercised that option for only three properties, indicating limited strategic interest in these specific assets at current valuation levels. Following transaction closing, the trust expects to distribute between $928 million and $932 million to creditors after accounting for closing costs, with remaining reserves distributed in phases post-closing. The transaction carries a 10.37% cap rate and is anticipated to close on September 8, 2025, upon completion of Onyx's due diligence and deposit submission.
The sale process, led by real estate advisor Newmark with assistance from Hilco, generated robust competitive interest with more than 700 interested parties submitting bids across multiple structures including single-asset and sub-portfolio offerings. Onyx Partners emerged as the selected buyer based on demonstrable closing certainty, strategic fit, and overall transaction terms rather than price maximization alone. The trust's focus on execution probability reflects the time-sensitive divestment mandate and the operational complexity of managing a large dispersed portfolio.
The 119 properties operate under long-term triple-net lease agreements with J.C. Penney, which continues operating approximately 650 stores owned by Simon Property Group and Brookfield. Simon and Brookfield held first refusal rights on 54 stores but exercised that option for only three properties, indicating limited strategic interest in these specific assets at current valuation levels. Following transaction closing, the trust expects to distribute between $928 million and $932 million to creditors after accounting for closing costs, with remaining reserves distributed in phases post-closing. The transaction carries a 10.37% cap rate and is anticipated to close on September 8, 2025, upon completion of Onyx's due diligence and deposit submission.
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