The lease runs through 2029. The area in recent years has attracted other retailers including H&M, Old Navy, Uniqlo and Target is planning a smaller urban store in neighborhood.

“As part of a continuing effort to optimize our retail operations, J.C. Penney is exploring a potential sublease agreement for its space located within Manhattan Mall,” Penney said in a statement. The decision was first reported by Women’s Wear Daily, which quoted sources saying Penney’s rent, taxes and other fees are $16 million a year.

Penney is in the process of closing 138 stores across the U.S. and CEO Marvin Ellison has said the retailer is looking at…