JC Penney skips $2.45 million rent payment on its Plano headquarters - The Dallas Morning News

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J.C. Penney’s landlord has asked the bankruptcy court to force the retailer to pay the $2.45 million monthly rent on its Plano headquarters.

Penney filed for Chapter 11 in May. The rent, which was due June 1, is a bankruptcy domino falling on local developer Sam Ware and his partners, who bought the headquarters in late 2016.

The rent payment includes almost $1 million that is used to pay operating expenses such as utilities, security and common area maintenance. “There is no extra money available to pay these expenses,” Ware’s group said in a filing Tuesday.

Penney is the largest tenant, with 1.13 million square feet of the 1.8 million-square-foot campus.

Ware’s partnership is “burdened with its own liquidity problems,” the filing said. Its lender has posted the property for foreclosure and there is pending litigation.

“There have been hard negotiations to keep the loan in place,” the landlord’s filing said.

Penney sold its large campus for $353 million in December 2016 to a partnership headed by Ware’s Dreien Opportunity Partners. That group took out a $388.7 million mortgage from Beal Bank, owned by Dallas billionaire Andy Beal. The sale included 45 acres around the building that was developed in the $5 billion Legacy West mixed-use project.

The term of the headquarters lease is 15 years, and Ware’s filing said the company was already negotiating for a break before Penney filed for bankruptcy.

Last month, Penney asked landlords to defer store rents for June and July and asked for rent abatements for June, July and August. Ware’s group said that when Penney’s lawyers were asked if that included rent on the headquarters, they said it did.

Ware said he’s still working to refinance the property, even with the question about Penney’s continued rent payments.

“We are moving ahead,” he said. “The pandemic has turned the world upside down and slowed things. But I hope to have it done pretty soon.”

While bankruptcy allows for a 60-day extension on rents, there must be cause, and Ware’s motion suggests that Penney has no cause for rent relief. The motion noted that Penney secured $900 million in financing last week to use during the bankruptcy reorganization.

Under the terms of that financing, Penney has access to $225 million so far.

Penney is permanently closing 150 stores, including stores in Dallas and Lewisville. The retailer plans to announce more permanent store closings soon, but it has reopened about 500 stores that were closed during the coronavirus.

Real Estate Editor Steve Brown contributed to this report.

Twitter: @MariaHalkias

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