When JCPenney emerged from bankruptcy, the real estate portfolio was separated from the operating business and traded at an implied 14% cap rate, while the 20-year absolute triple net ground lease provided investors with a 12-13% unlevered yield on rental income, creating a favorable investment opportunity.
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JCPenney bankruptcy turned into a major real estate play!Added:
J.C. Penney out of bankruptcy. And what they did was they they separated J.C.
Penney's operating business from their underlying real estate. Based on the price it was trading at, it was unlevered trading at an implied 14% cap rate. Meanwhile, it was a portfolio of properties that were renting space to the new well-capitalized J.C. Penney operating business. And it was a 20-year absolute triple net ground lease. We invested and we were getting, you know, 12 12 to 13% yield unlevered just on the rental income.
>> Wow.
>> we we we did really well on that one.
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