Landlords See Opportunity From JCPenny Closings

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JCPenny recently announced plans to close down 40 stores by April and many landlords are preparing to profit off of the vacant space left by the big box retailer.  These closings represent 4 percent of the department store’s total U.S. footprint.  The announcement has presented many landlords with the opportunity to boost profits through redevelopment of the once occupied space.   

CBL & Associates Properties, who will see four JCPenny locations within its portfolio close down, fully anticipated the announcement and has already begun preparing plans for the redevelopment of the vacant space left by the retailer.  The company believes they can generate higher traffic and productivity by adding new stores and restaurants where the JCPenny stores once were.  This is familiar territory for CBL, as they added or redeveloped more than 25 anchor and junior anchors to its portfolio in 2014, two of which being former JCPenny locations.  "These closures will allow us to take space that is underperforming and convert it into fresh new retail, driving increased traffic, sales and growth to the entire property as well as generating strong returns,” said Stephen Lebovitz, President and CEO of CBL.  Similar projects taken on by CBL have required an investment of $3-$10 million, generating initial unleveraged returns of 7-10 percent and taking 1-2 years to complete.

However, don’t take the store closings as a sign of doom for JCPenny.  According to CEO Myron E. Ullman III, the department store saw a healthier-than-expected holiday sales season.  The retailer is hoping for continued healthy growth, expected to report fourth-quarter comparable-store sales of 2-4 percent.

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Virginia MacKoul

Virginia is a graduate from the University of Florida's College of Design Construction and Planning with a degree in Sustainability and the Built Environment, and a minor in Urban Regional Planning. Virginia joined the Front Street team in 2011, as an intern. Upon graduation, Virginia joined the Front Street team full-time as the Director of Client Services. Ms. MacKoul’s addition furthers Front Street’s continued growth and expansion within Gainesville and other North Central Florida markets. She was promoted to Director of Marketing in 2014 and now manages the firm’s team of interns and oversees all marketing and branding activity. Virginia was born in Boston and moved to Lee County, Florida in 1997. Virginia graduated her high school's International Baccalaureate program and started at the University of Florida with a focus on Architecture. Virginia shares Front Street's passion of giving back to the community and those in need. Virginia's hobbies include photography, cooking, football, movies, music, and spending time with her dog, Brinkley.

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