The Bon-Ton Stores is selling one of its Pennsylvania department stores and a distribution center as part of sale/lease back deal.
The York, Pa.-based retail chain, which operates nine stores in Western New York, has sold its flagship stores at the York Galleria and a nearby warehouse to W.P. Carey Group for $12 million. The company also signed a 20-year lease with the New York City-based commercial real estate firm, for continued use of both facilities.
The sale and lease back arrangement is similar to a deal struck with Carey for the company's Allentown, Pa., distribution center in the mid-1990s, according to Bon-Ton spokeswoman Mary Kerr.
"It was strictly a financial deal," Kerr said. "Our mortgages had matured and it was time to refinance. We saw this as the most effective way to get the maximum value out of our assets."
Proceeds of the sale will be used to pay down debts, with the possibility that some of the funds will be directed to store updates or expansions. At this time no renovation schedule has been established, and no particular sites have been targeted for capital improvement.