99 YEARS IN FLUSHING: In the largest real estate transaction in the history of Flushing, N.Y., Colliers International arranged a $1 billion, 99-year ground lease on behalf of the Benider Company at 136-62 Roosevelt Avenue, a site fully occupied by Macy’s.
Crown Acquisitions signed the long-term lease beneath the 250,000-square-foot property. The ground lease is subject to Macy’s existing lease, which has 10 years remaining, according to a spokesman for the retailer. “We plan to operate for the full term,” he said. “We have no plans to close the store. It’s business as usual in Flushing.”
Macy’s has been battling weak sales trends throughout 2015 and the forecast for 2016 is for reduced earnings. The retailer last week revealed it’s eliminating 2,100 jobs. Macy’s has said it will close 40 stores in the spring.
“It’s possible for Macy’s to vacate a part of the property,” said Robert L. Freedman, co-chairman, Tri-State of Colliers International, who with Steve Chasanoff, executive managing director at Colliers, arranged the ground lease. “Macy’s could reduce its footprint or effectuate a lesser lease term for a sum of money. Any time you have a below market lease there’s always potential….Macy’s has value in their lease, which they have yet to monetize.”
The Flushing Macy’s is said to be a relatively robust performer for the last five or six years.
Freedman said the size of the transaction points to Flushing’s growing importance. “There are a number of mixed-use developments with retail and office components and luxury condominiums” on the horizon, he said. “The 7 train is the key to connecting Flushing with Manhattan’s upcoming Hudson Yards. The 7 train is embedded in the bowels of the Macy’s building.”