The longtime home of Macy's in Brooklyn will soon be home to companies like Netflix, Universal and Lego, according to leaders of the partnership that just bought the four-story, 440,000-square-foot property at 422 Fulton Street. It has the potential to become a showplace for experiential entertainment retail.
United American Land founder and CEO Albert Labos said “everything is on the table” regarding the land's future. UAL and its partners Isaac Chera of Crown Acquisitions and the Chehebar family of Jackson Group purchased the Macy's property for an undisclosed price. The deal closed on Wednesday, Labos said.
Macy's has been located in the three building locations since 1995, when it replaced the defunct Abraham & Strauss flagship store.
The store is scheduled to close next year. Parent company Macy's is under pressure from investors over unprofitable stores, which they say are far more valuable as real estate assets. Earlier this year, the company announced it would close 150 of Macy's 520 stores in the United States. Macy's also owns Bloomingdale's and Bluemercury cosmetics chains.
Labos said he's taking a two-pronged approach to the Macy's space. “Traditional retail and/or family entertainment like Netflix, Universal, Lego… When you have 23,000 new apartment units in an eight-block radius with lots of kids, you need family-friendly uses. ”
Labos said it is open to having “two different operators on each floor to create synergies between tenants.”
The Macy's floor is four floors below the upper level that the company sold to Tishman Speyer in 2015. Developers spent $100 million to build a new office building next door called Wheeler, which includes some of the former Macy's floors, and to help modernize the old stores. Labos called the results, which include façade restoration and mechanical systems, “excellent.”
Decades ago, the city turned a half-mile stretch of Fulton Street, once home to several other major department stores, into a mall in an effort to stem the area's decline.
But while the mall was vibrant, it was rife with cheap goods, fast food, and crime.
The nearby Metrotech office complex was designed as an inward-looking enclave in the 1980s and '90s to isolate it from the mall's low-rent environment. It was recently rebranded as the more upscale-sounding Brooklyn Commons.
In recent years, national chains such as American Eagle Outfitters and Aeropostale have opened in the mall, and the reopening of Gage & Tollner a few blocks away has given the area a new look.
Ian Lerner of Cushman & Wakefield, who last year worked on a large food retail deal on Fulton Street, said the area's rising wealth is reflected in ground-floor retail rents of $250 per square foot. “It has at least doubled over the past 20 years,” he said. he said.
Lerner cited the influx of national chains like Burlington Coat Factory and Five Below, as well as food suppliers like Trader Joe's and Lidl. Like Labos, he cited “a lot of housing development nearby.” He called the Fulton District “one of New York's bright turning points.”
He said, “Labos and Chera know what they're doing. They're smart people.''
“We have an incredibly blank canvas to create something new and exciting,” Labos said.
When asked about the future of the Brooklyn store, a Macy's spokesperson said: The Company plans to close approximately 150 Macy's stores over the next three years while investing further in 350 future stores. A final decision on the exact location has not yet been made. ”
