It’s taken CBRE very little time to begin marketing some of the stores that Macy’s on Wednesday said it will be closing.
Macy’s hired CBRE to help with the disposition of a portion of its stores. The real estate company’s brochure on Thursday said, “Former/Soon-to-Be-Former” next to Macy’s logo and lists 33 locations in 20 states, including four units each in Texas and Pennsylvania and three each in Ohio, Michigan and Massachusetts. Store sizes range from 40,944 square feet to 432,988 square feet. “Locations available for sale, sublease or assignment,” according to CBRE.
The majority of stores, 24, are owned, seven are leased, and Macy’s holds ground leases for two locations.
Many of the stores Macy’s is exiting are in attractive locations, such as the 370,171-square-foot Spokane, Wash., unit in the heart of the central business district’s retail core. Neighboring retailers include Nordstrom, Chico’s, White House|Black Market, J.Jill, Loft, Williams Sonoma, Pottery Barn, Jos. A. Bank and Lululemon.
Most of the stores Macy’s plans to close are either underperforming or their real estate is more valuable than the retail business, Macy’s chief financial officer Karen Hoguet said in November.
Last year, Macy’s enlisted Tishman Speyer to help it redevelop its flagship in San Francisco’s Union Square as well as flagships in Manhattan, Chicago and Minneapolis. Macy’s chose Tishman Speyer after the real estate company successfully worked with the retailer to redevelop its Brooklyn store. Macy’s continues to operate the four lower levels of the downtown Brooklyn unit while Tishman Speyer purchased the remainder of the building and will convert it to office space.
Macy’s partnered with real estate investor Brookfield Asset Management to potentially develop 50 stores, some of which have adjacent surplus land. Brookfield reportedly has two years to come up with plans for the stores, which could be closed, or Macy’s and Brookfield could also jointly develop the land by adding restaurants or other retailers, possibly Bloomingdale’s.
General Growth Properties in October paid $46 million for five Macy’s units, and subsequently, the retailer sold its downtown Portland store to GGP for $54 million.
This time, Macy’s hired CBRE Group, the world’s largest commercial real estate services and investment firm. CBRE recently enhanced its retail advisory and transaction services business to include practices in several specialized sectors, including shopping centers, urban retail and dispositions.
Brandon Famous, CBRE senior managing director and retail leader for the Americas, said the company’s decision to expand dispositions services comes at a time “when many retailers are optimizing their store portfolios to focus on their best-positioned, most profitable operations.” He added that CBRE will use a combination of industry knowledge, location analytics capabilities, capital markets resources and relationships with investors and retailers to produce the best outcomes.