The Related Companies has signed on the discount retailer JCPenney for a 20-year lease at its massive Gateway II development in Brooklyn’s East New York, city records show.
The lease, which was signed on Feb. 13, gives JCPenney about 124,000 square feet of space at the future shopping complex, with 11 options to renew the lease term for five-year periods, records show. The price per square foot was not immediately available.
JCPenney’s retail business has been suffering in recent years, with the company posting a fourth-quarter loss yesterday as sales and margins continued to plummet. In 2011, the company announced that it would close several stores across the country.
Two major real estate investment companies, Steven Roth’s Vornado Realty Trust and Bill Ackman’s Pershing Square Capital Management, own significant stakes in JCPenney, and both Roth and Ackman sit on JCPenney’s board. On Wednesday, Vornado announced a $224.9 million loss on its 10.7 percent stake. Pershing owns a 17.8 percent stake in the retailer.
In September, Shop-Rite Supermarkets struck a deal to anchor the Gateway site, after Related’s talks with WalMart to take the space died out amidst uproar from labor activists that the retail behemoth would undermine local businesses.
A spokeswoman for Related declined to comment on the JCPenney deal, but said that the 600,000-square-foot Gateway II is over 75% leased and is set to open in the fall of 2014.
JCPenney did not immediately respond to requests for comment.