JCPenney’s latest real estate drama has left 117 mall stores — and their surrounding retail ecosystems — in limbo, as a high-profile sale to private equity firm Onyx Partners stalls under legal and financial issues. The uncertainty highlights how much of JCPenney’s future still hinges on complex property deals engineered after its 2020 bankruptcy, even as shoppers continue visiting these locations across 35 U.S. states and Puerto Rico.
How the Onyx deal unraveled
Earlier in 2025, Onyx Partners agreed to buy 117 JCPenney stores from Copper Property CTL Pass Through Trust, the entity created to dispose of real estate following JCPenney’s Chapter 11 restructuring. The portfolio, valued between approximately $935 million and $947 million in various reports, was originally scheduled to close by early September 2025 but experienced multiple extensions due to unmet closing conditions.
By December 22, 2025, the Trust filed with the U.S. Securities and Exchange Commission, saying the agreement would terminate if the buyer failed to close by December 26, triggering what has now become a legal and strategic standoff over who is at fault for the missed deadline. Anton Melchionda, founder and principal/partner at Onyx Partners Ltd., said, “Onyx Partners Ltd. continues to work toward closing the previously announced transaction in accordance with the purchase agreement,” pointing to “customary seller deliverables” such as tenant documentation that it claims remain outstanding.
What happens to the 117 stores
The 117 affected JCPenney locations span 35 states, including Puerto Rico, with heavy concentrations in Texas and California, where there are 19 stores in each state tied to the portfolio. Properties in this group include anchor spaces at malls such as Westfield Palm Desert and Mall at Bay Plaza, making the outcome material not just for JCPenney, but also for landlords, adjacent tenants, and local employment.
For now, the stores remain open and continue to trade under long-term triple-net leases. JCPenney has previously stated that locations included in the sale would continue operating even if the property owner changed. The limbo mainly affects who collects the rent and controls the underlying real estate — the Trust or Onyx Partners — but any prolonged dispute could complicate future remodels, relocations, or redevelopment plans for these sites.
A legacy of the 2020 bankruptcy
The store package at the center of this deal sits inside Copper Property CTL Pass Through Trust, created when JCPenney exited Chapter 11 in 2020 and sold its operating business to mall giants Simon Property Group and Brookfield Asset Management. At that time, approximately 160 stores and six distribution centers were carved into the Trust so proceeds from eventual property sales could be distributed to creditors.
Over the past four years, the Trust has sold off dozens of JCPenney locations piecemeal, but the Onyx Partners transaction was meant to be a clean exit from a large chunk of the remaining portfolio in one transaction worth roughly $947 million. With that deal now in question, the Trust’s timetable to fully wind down — and creditors’ path to recovering value — becomes less predictable.
Legal fight and financial stakes
Reports indicate that the Trust has moved to terminate the sale after Onyx Partners missed the agreed closing date, while Onyx maintains that it remains committed and that the seller has not delivered all required documents. The disputed portfolio size — variously described as 115, 117, 119, or “nearly 120” stores due to properties being added or removed over time — has only added confusion to an already complex, multi-party negotiation.
For JCPenney, which no longer owns most of its store real estate, the immediate risk is less about operating control and more about the stability of its landlord structure and the potential knock-on effects if properties are eventually redeveloped or re-tenanted. For mall owners and surrounding tenants, the fate of 117 anchor boxes tied up in a collapsed or contested sale could influence traffic patterns, leasing strategies, and capital investment decisions well into 2026.
