JCPenney sells Acadiana Mall space but expected to remain a tenant

Photo by LeeAnn Stephan

The gist: The Acadiana Advocate reported this week that troubled retailer JCPenney has sold its building at the Acadiana Mall but is expected to stay in the mall.

A subsidiary of a Miami-based real estate investment firm purchased the space for $705,000. The two companies signed a lease last month that will expire June 30, 2024, with JCPenney having two options to extend the lease an additional five years, according to the story.

JCPenney’s financial problems are continuing, reporting in late May a first quarter 2019 net loss of $154 million or 48 cents per share, with comparable sales falling 5.5% for the first quarter. Two months earlier, the company announced plans to close 27 stores in 2019 and has analysts questioning whether it can survive. In 2017 it shuttered stores in Baton Rouge, Slidell and DeRidder, according to The Acadiana Advocate. 

“Selling back is a cry for help — we need cash to keep this thing afloat,” Jake Dollarhide, a Tulsa, Okla.-based retail analyst with Longbow Asset Management Co., told the local paper. “That’s all this is. Selling the property is a trend among retailers trying to survive.”

JCPenney is far from alone in its financial struggles, as national retailers continue to announce store closures, putting immense pressure on the traditional malls that typically house them. 

Why this matters: It’s critical to the long-term viability of the mall that JCPenney stay put, as anchors are often the draw smaller retailers count on for foot traffic. Additionally, the leases governing inline spaces typically include co-tenancy agreements that allow tenants to reduce the rent they pay or rework terms of their leases if anchors or a certain number of tenants leave. Sears left the mall in 2017 (earlier this year it opened a Home & Life store), and another anchor, Macy’s, has also been shedding stores since 2016. Should JCPenney opt to make an exit (or go out of business), that could spell new trouble for Acadiana Mall, which is now owned by New York-based Namdar Realty Group, a company known for buying declining malls and investing little in them

The mall’s previous owner, CBL & Associates Properties of Tennessee, did have co-tenancy agreements. A Namdar rep did not immediately respond to a request for comment on whether the departure of a key anchor could potentially affect other leases at the property.   

Like JCPenney before this sale, Dillard’s owns its space in the mall. The Macy’s building is owned by Namdar.

Locally-Sourced-Badge

Give today and quadruple your donation

Help us keep the lights on, Lafayette.

Donate Now
About the Author

A founding editor of both The Independent and ABiz and senior editor at The Times of Acadiana in the 1990s, Leslie Turk has worked in the newspaper business in Lafayette for almost three decades. Her work has also appeared in The New York Times and The Acadiana Advocate. Email her at leslie@thecurrentla.com.

Leave a Comment