J C Penney Company Inc (NYSE:JCP) is in the process of looking for buyers of its headquarters building. The retailer is working with a unit of CBRE Group to find buyers for the property. J C Penney will lease back space in the same building after selling it.

The proceeds from the sale of the headquarters are expected to help J C Penney Company Inc (NYSE:JCP) repay part of its outstanding debt. Paying down of debt should help the retailer reduce its interest expenses burden. J C Penney’s books reflect $5.12 billion in long-term debt.

Lower maintenance costs

Besides unlocking funds to pay down a portion of its debt, J C Penney also hopes for several other benefits from the sale of the headquarters building. For example, the retailer believes that it will eliminate maintenance costs of the vast headquarters office once the property is sold. Additionally, the company will sidestep property taxes associated with the ownership of the headquarters building.

As such, the management believes that the cost of leasing back space from the headquarters building will be offset with lower maintenance costs as well as reduced tax and interest burden.

Developing idle land

J C Penney Company Inc (NYSE:JCP)’s Plano, Texas home office is a 1.8 million square-foot office space. In addition to selling the headquarters building, the retailer also hinted at plans to transfer a portion of the undeveloped land around its headquarters to a joint venture with developers.

Struggling to trace its footing, J C Penney hopes that the asset sales will go a long way to strengthening its balance sheet and unlock funds that it can reinvest in building robust digital presence.

Retailers selling real estate assets

However, J C Penney Company Inc (NYSE:JCP) is not the only major retailer offloading real estate assets to raise funds to pay down debt or fund operations. Macy’s, Inc. (NYSE:M) also recently created a joint venture through which it hopes to extract maximum value from its real estate assets. Sears Holdings Corp (NASDAQ:SHLD) is also in the process of getting the most out of its real estate properties.