J.C. Penney Co. is exploring ways to borrow against its real estate holdings to help raise cash, two people with knowledge of the situation said.

The retailer and its financial advisers are considering options including spinning off real estate into a new subsidiary that could issue debt, said one of the people, who asked not to be named because the matter is private. Certain property-backed transactions may avoid triggering problems under existing bond rules, the person said.

J.C. Penney is also exploring whether it could sell real estate and lease the property back as another way to free up cash, another person said, adding that other assets, such as inventory, could also be collateralized. It has not decided yet which alternatives to pursue, the person said.