Macy’s Inc., moving forward on its strategy to monetize certain real estate assets and streamline its store fleet, has completed the sale of its downtown Minneapolis flagship store to the 601W Companies real estate firm.

Macy’s sold the property for $59 million in cash and will record a gain from the deal of approximately $47 million in the first quarter of 2017. The sale of the property was announced in January this year.

The 601 W Companies is planning a major mixed-use redevelopment for the site, at 700 Nicollet Mall, with offices on the upper floors and retail opportunities on the street and skywalk levels. The company has a portfolio of 45 million square feet valued at over $7.5 billion.

“As a part of our overall real estate strategy, Macy’s has been investigating the best possible use for this property, especially given the large amount of unproductive and unused space on the upper floors. We have talked with a wide variety of partners in pursuit of a plan that would create the most value for the company and the community, and are pleased that the new owner intends to invest substantial capital to repurpose the building,” said Jeff Kantor, Macy’s chief stores officer.

“While we will not operate a downtown store going forward, Macy’s remains committed to our customers and associates at eight other stores in the Twin Cities, including six department stores and two furniture galleries, as well as on macys.com,” Kantor said.

The Dayton-Hudson archive display and designer merchandise housed in the Oval Room department will be relocated to the Southdale store. The Oval Room sells St. John, Max Mara and Armani Collezioni, among other labels. Macy’s also has donated archival items to the Minnesota Historical Society, including past iconic events’ displays, props, floor plans, candy kitchen machinery and molds.

A final clearance sale in the store began Jan. 9 and is expected to run until late March. The company anticipates that the store will close in spring.

The store first opened as Dayton’s in 1902, was renamed Marshall Field’s in 2001, and became Macy’s in 2006 after Macy’s acquired The May Department Stores Co. which owned Marshall Field’s at the time.

The closing of the flagship affects 280 employees, including 90 associates working in district offices on the upper floors of the downtown Minneapolis building who will be relocated to space in other Macy’s stores in the Twin Cities area. Some other associates are expected to be offered positions in nearby stores; others will  be offered severance benefits if positions are not available in other locations.

Macy’s, as previously reported, will close 63 stores in early spring, and about three dozen others will close subsequently over the next few years, as part of the 100 store closings unveiled in August.

Last year, Macy’s gave Brookfield Asset Management the exclusive rights over a two-year period to create a “pre-development plan” for up to 50 Macy’s properties. Macy’s could add assets into the alliance. They primarily include owned and ground-leased stores and associated land, mostly in malls not owned by major mall owners. Macy’s and Brookfield will work together to redevelop the stores as well as properties on land adjacent to stores.

Separately, Macy’s is working on plans for redeveloping its giant flagships in Herald Square, N.Y.; State Street in Chicago, and Union Square in San Francisco. None are part of Brookfield arrangement. In other real estate maneuvers, Macy’s is downsizing and redeveloping its flagship on Fulton Street in downtown Brooklyn.

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