Bon-Ton in $84M deal with a REIT in which it will sell 6 properties and lease them back

Industries Associated Press

Bon-Ton, like a number of other retailers, is turning some of its real estate in to cash.

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The department store on Monday announced an $84 million deal with a real estate investment trust in which it will sell six properties and lease them back.

Last week Darden Restaurants Inc. said that it would create a real estate investment trust and transfer about 430 owned restaurant properties to the new entity, with essentially all of them being leased back to Darden. Sears Holdings Corp. Sears is planning to sell more than 250 properties to a REIT it created.

And McDonald's told the Wall Street Journal last week that it was trying to sell its stores in Taiwan to a franchise operator.

Proceeds from Bon-Ton's agreement with CPA:17-Global, along with borrowings under a revolving credit facility, will be used to pay one of its mortgage loan facilities due in April.

Bon-Ton will lease the six properties for an initial term of 20 years, with an option to extend it for three more periods of 10 years. Three of the properties are in Milwaukee. The others are in Green Bay, Wisconsin, Fargo, North Dakota and Joliet, Illinois.

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The Bon-Ton Stores Inc., with headquarters in Milwaukee and York, Pennsylvania, runs 270 stores in 26 states.