Amazon could be the next owner of embattled J.C. Penney, and experts say the transaction would be less focused on the bankrupt department store’s business and more on its real estate.

Article originally posted here.

The e-commerce giant in recent weeks is said to be considering a purchase of the department store, which filed for chapter 11 protection last month. According to an S&P Global Market Intelligence report, a potential deal would focus on acquiring some of J.C. Penney’s physical locations, rather than trying to save the brand.

“I personally think [a prospective deal] is for the real estate, not because they are interested in resurrecting a brand that’s been struggling for a number of years,” Dick Seesel, manager and owner of the consultancy Retailing In Focus, told S&P Global.

The potential deal would come as Amazon is sniffing out additional brick-and-mortar retail opportunities, which experts say could help the company expand its reach to rural areas and compete with big-box retailers. The company already owns more than 500 Whole Foods and has recently looked into purchasing department store Kohl’s and movie-theater chain AMC, S&P reported.

Currently, Amazon is ceding ground to stores like Walmart and Target, which have a physical presence and a particular stronghold in rural areas. Currently, only a small percentage of Amazon’s sales come from physical stores. But by investing in a struggling mall mainstay, the company could gain enough real estate to create a hybrid model of warehouse distribution, grocery story and physical retailer.

“[Amazon has] a chance to reinvent the real estate and perhaps provide a new kind of draw to a mall,” Seesel told S&P.

Tom Forte, a retail analyst with D.A. Davidson, added that J.C. Penney was an especially good investment opportunity for Amazon because the department store has 846 stores across the country, 242 of which are slated to close during the bankruptcy.

“Within the portfolio of J.C. Penney, there are some high-quality locations that could give Amazon what I think Amazon needs right now, which is a larger physical footprint,” he said.