Simon Property Group, parent of Kennewick’s Columbia Center mall, is partnering with a real estate firm that specializes in redeveloping tired shopping centers to buy the retail and other assets of J.C. Penney Co. out of bankruptcy.
Simon and Brookfield Property Partners announced their intent to purchase the retailer’s assets in a $1.75 billion cash-and-debt deal, CNN reported Sept. 9.
Plano, Texas-based J.C. Penney filed for protection under Chapter 11 on May 15. The company said it would close 137 stores, though the Kennewick location wasn’t on the list.
The Simon deal will give Columbia Center and its parent ownership of a greater share of its property because J.C. Penney owns its building and much of the parking lot around it.
In 2019 the retailer sold a pad fronting Columbia Center Boulevard, which is being developed as a strip mall with Starbucks, MOD Pizza and a burger chain as tenants.
Analysts hailed the deal as a way for Simon to keep a major anchor store open in its malls.
But the involvement of Brookfield Property Partners, among the largest owners of real estate properties in the nation, could signal redevelopment of the massive property in the future.
In 2018, Brian Kingston, Brookfield’s senior managing partner and chief executive officer, outlined the steps the company has taken to revive flagging malls by adding multifamily development in a presentation to investors.
At the time, Brookfield had just closed a deal to buy GGP Inc., a Chicago-based mall operator, for $15 billion. The deal, the company noted in its investor presentation, gave it 125 “development sites” across the country.
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