J.C. Penney Is Selling Its Headquarters for $353 Million by Phil Wahba @FortuneMagazine January 3, 2017, 5:33 PM EST E-mail Tweet Facebook Linkedin Share icons J.C. Penney has found a new way to chip away at its enormous debt load: selling its sprawling Plano, Texas campus for $353 million. The retailer said on Tuesday it had sold its headquarters near Dallas along with 45 acres around it to Dreien Opportunity Partners but would lease back 65% of that space for its home office. The move is the latest by Penney to clean up its balance sheet and lower a debt load that is out of proportion to the profits its main retail business generates. As of Oct. 29, 2016, the end of its most recently completed fiscal quarter, Penney had long term debt of $4.5 billion, a big improvement over the $5.15 billion a year earlier, but certainly enormous for a retailer expected to report annual sales of only $13 billion for the fiscal year ending at the end of this month. “This transaction also represents a significant financial milestone for the Company, as proceeds from the sale give us the opportunity to reduce outstanding debt and make improvements to our workspace,” Penney CEO Marvin Ellison said in a statement. CBRE Capital Markets represented Penney in the deal. The mid-tier department store chain announced the plan last February, betting that the booming commercial real estate market in Plano, about 20 miles north of downtown Dallas, would help it find eager buyers. What’s more, with a number of rounds of layoffs in recent years, Penney simply needed less space. Penney suffered disastrous sales declines in 2012 and 2013 when it attempted to become trendier, prompting it to borrow heavily at high interest rates (more than 8% for one tranche) to stay afloat. In recent years, the retailer has sold off some assets, including part of its Plano campus to maintain cash reserves, and refinanced some of its debt at better rates. In the first three quarters of the fiscal year, Penney spent $184 million on interest, down more than 50% from the same period a year earlier. That means Penney will likely spend less on interest than on improvements to its stores and e-commerce this year for the first time in several years. At a time Penney is fighting tooth and nail with the likes of Macy’s, m ,Kohl’s kss and Target tgt , a lower debt load will give it more leeway to invest in e-commerce and stores, the actual things that will help it compete and where it has long lagged its rivals. Penney moved to Plano from New York in 1992, attracted by a massive new development in which land was sold at extremely low prices. Penney’s current neighbors include Dr. Pepper Snapple, Frito Lay and Ericsson. Penney, which had been on the comeback trail this year but reported two quarters of slight declines in comparable sales out of three so far this year, is expected to report holiday season sales later this week.