Real Estate

General Growth to buy JCP offices from Kushner group for $150M

Mall owner General Growth Properties is buying JCPenney’s office building at 200 Lafayette St. from a Jared Kushner-led group for just over $150 million.

Sources said the all-cash offer, set to close by the end of the month, was signed in the last few days by GGP to pre-empt the sales process just getting underway by Douglas Harmon and Adam Spies of Eastdil Secured.

GGP CEO Sandeep Mathrani is the former retail head for Vornado Realty Trust and — as one of Penney’s largest mall landlords — is familiar with Penney’s credit and the Soho/Noho area’s attraction for both retail and office tenants.

The 200 Lafayette purchase marks a sharp turn for the company as Mathrani brings the focus back to Main Street as the central business district instead of the shopping mall, with younger consumers preferring urban over suburban living.

The vacant, red brick building on the corner of Broome Street was purchased by Kushner and CIM Group for $50 million from the Zaccaro family and then updated and modernized it with a $30 million investment.

Penney signed a triple-net 15-year lease for the entire 127,559 square-foot seven-story building that has options through January 2029.

According to CoStar, the 16,130 square-foot 6th floor is available for sublease and, except for a Capital One branch, the majority of the retail is also still empty.

Penney is paying expenses and property taxes plus roughly $60 a foot for the offices and $90 per foot for the retail with 2 percent yearly increases.

“Market conditions have improved significantly since that deal was done,” said Patrick Heeg of Jones Lang LaSalle, who is offering the floor on behalf of Penney. The other parties declined to comment or could not be reached.