Macy's just kicked off the holiday season with a fire sale, but this time, the only discount was on some real estate in downtown Brooklyn, the Post reported.
As the Post reported, the retail giant sold its department store at 422 Fulton Street last week to a syndicate of New York real estate investors, who publicly acknowledged the deal but declined to discuss the price. . Macy's also declined to comment last week.
But investors paid Macy's just $23 million for the 440,000-square-foot site, according to a source familiar with the situation. An investor told the Post that the site could be converted into a “family attraction” with potential tenants such as Netflix. Universal and Lego.
That equates to just over $50 a square foot, a fraction of the $250 a square foot level retail space in downtown Brooklyn is trading at these days, said Ian Lerner of Cushman & Wakefield. It's just a department.
“Macy's is not a real estate investor, so they would do something like that,” a person briefed on the situation told the Post. “In my opinion, this is the story of a retailer who knows nothing about his most valuable asset.”
In fact, last week's trading price is not even close to the price at which Macy's, which was founded in 1995 to replace the former Abraham & Strauss department store on Fulton Street, closed its doors. In 2015, the top four floors of the eight-story property were sold to Tishman Speyer. For $270 million.
Tishman Speyer converted the upper floors into office space. Macy's, on the other hand, maintains lower floors, which are usually more valuable; Since then, $100 million has been spent on renovations..
United American Land founder Albert Labos confirmed to the Post last week that he worked with Isaac Chela of Crown Acquisitions and the Chehevar family of The Jackson Group to purchase the Macy's property. He declined to comment on prices.
In an additional plot twist that insiders said proved Macy's failure, they purchased the property directly from Macy's for $23 million, immediately transferred it to the Laboz and Chehevar families for $36 million, and immediately Insiders say it was Chela who pocketed $13 million in profits. .
The syndicate then brought in another unidentified investor who valued the assets at $80 million, sources said. It is unclear whether Mr. Chera holds any stake in the property, the people said.
Macy's, led by CEO Tony Spring, has hired Rader Hill Advisors, a real estate firm that typically focuses on properties outside New York City, to market the Brooklyn store, one person said. That's what it means.
A Macy's spokesperson declined to comment. Labos declined further comment. Crown Acquisitions also did not return calls seeking comment. Rader Hill did not respond to a request for comment.
On Monday, Jackson Group's Isaac Chehevar also declined to comment specifically on the purchase price. But Chehevar told the Post: “This is a very good deal and we are very happy with the acquisition.”
“The Macy's building is one of the oldest retail stores in all of Brooklyn, and we're going to revitalize it and revitalize it to get the most out of the retail store,” Chehevar said. Ta.
The deal closed on Wednesday, Labos said, but The Real Deal did not report on the price, which was reported earlier.
The deal comes as Macy's business has been weak (preliminary financial results released last month showed sales were down 2.4%) and the company is trying to free up surplus cash. It is said that
Activist investor Barrington Capital and real estate investor So Equities acquired an undisclosed position in Macy's on Monday, according to a press release. The company was requested to establish a subsidiary. Activists believe Macy's real estate is worth between $5 billion and $9 billion, more than the company's $4.6 billion market capitalization.
Earlier this year, activist investors Arkhouse Management and Brigade Capital bought Macy's for $6.9 billion and sought to take the company private. Macy's rejected the offer and ended negotiations with the activist investor in July.
Macy's announced earlier this year that it would close 150 stores, about 30% of its portfolio, amid a challenging environment for department stores.
The sector has been shrinking for more than two decades as shopping habits change, with consumers buying directly from some brands carried in stores and increasingly buying online.
One industry expert points out that it makes sense for safes to be full, especially at this time of year when warehouses and stores are filled with holiday merchandise.
“Inventories have reached peak levels and are likely currently causing a cash shortage,” the official said.
Macy's sold 25 stores this year, according to people familiar with the matter. However, the company has remained largely silent about these deals.
In response to questions from the Post last week about the Fulton Street deal, a spokesperson said: “We intend to close approximately 150 Macy's stores over the next three years while further investing in 350 future stores. Final decisions regarding specific locations have not yet been made.”
Steve Cuozzo contributed reporting.
