July 5, 2018
Deal Watch Today

J.C. Penney's Manchester facility sold at $70M

PHOTO | Flickr Creative Commons - Mike Kalasnik
PHOTO | Flickr Creative Commons - Mike Kalasnik
J.C. Penney has sold its Manchester distribution center for $70 million.
PHOTO | Flickr Creative Commons - Mike Mozart

Department-store retailer J.C. Penney has completed a sale-leaseback of its sprawling Manchester distribution center for $70 million to one of New England's most active landlords who plans to convert the property into a state-of-the-art manufacturing-distribution campus, authorities say.

A Penney affiliate, J.C. Penney Properties Inc. of Texas, sold the 1.9 million-square-foot building on 163 acres at 1339 Tolland Turnpike to buyer PFFWE1339 Tolland Turnpike LLC, an affiliate of Concord, Mass., developer Winstanley Enterprises, according to Winstanley and Manchester town clerk files.

According to principal Adam Winstanley, he will invest another $40 million over the next year or so, to reconfigure the building to suit individual industrial tenants.

Meantime, Penney becomes a distribution tenant and will continue shrinking its operations footprint inside until it levels off at about 600,000 square feet, Winstanley said. The rest will be leased to other tenants.

Penney spokesman Joseph Thomas confirmed the sale that Thomas says was intitiated when Winstanley approached Penney about selling.

"... Since the building is oversized for the company's current business needs, this was an opportunity to sell the facility and leaseback an appropriate amount of space,'' Thomas said vial email. He said none of Penney's approximately 400 distribution-center workers are impacted.

The Penney property is adjacent to I-84 and I-291, and about 5 miles west of Pratt & Whitney Co.'s East Hartford jet-engine engineering, design and research and development campus.

Winstanley Enterprises, a closely held, family run real estate investor-developer, has been one of Connecticut's busiest and most aggressive realty investors in recent year. It has been particularly active in Greater Hartford, with developments and realty holdings in Hartford, West Hartford, Enfield and South Windsor, among other communities.

With the J.C. Penney transaction, Winstanley now owns or controls some 10 million square feet of commercial space in Connecticut, the developer says.

As for J.C. Penney, it also department stores in Manchester's The Shoppes at Pavilion Hills mall and at Westfarms mall in West Hartford/Farmington, but neither was part of the sale.

Reached at its Plano, Texas, headquarters Thursday, the retail giant did not immediately respond with a comment.

According to Manchester's Journal Inquirer, Penney opened its Manchester distribution center in 1982, with about 400 employees.

However, as its sales and profit fortunes slumped in recent years, it has periodically trimmed its Manchester distribution staffing as it reined back its online sales operation.

In Feb., JI said, citing a published report, Penney announced the closing of eight stores and a major distribution center outside of Connecticut, resulting in 480 layoffs.

It additionally plans to close a 2 million-square-foot Wauwatosa, Wis., distribution center this summer, eliminating 670 jobs, the report added.

Penney closed 138 stores in 2017, including one in Milford's Connecticut Post mall. It also closed distribution centers in Florida and California.

This post has been updated.

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