The Real Deal New York

Macy’s taps Eastdil to shop stake in Herald Square flagship

Retailer also seeking partners in Chicago, San Francisco, Minneapolis stores

January 07, 2016 10:05AM

Macy's Herald Square

The Macy’s store in Herald Square

Under pressure from an activist investor, Macy’s is looking to sell partnership stakes in some of its flagship locations, including its iconic Herald Square store.

The firm hired Eastdil Secured to “approach potential interested parties” about possible joint ventures. Eastil will also handle sales for Macy’s locations in cities such as San Francisco, Chicago and Minneapolis.

One of the parties is Tishman Speyer, which has expressed interested in buying into to at least four of the companies’ stories, Bloomberg reported.

Macy’s is struggling at the moment, hit by a weak holiday sales season. The company announced Wednesday it plans to close 40 stores and lay off about 4,350 employees.

An activist Macy’s investor – Starboard Value, a Midtown East-based financial adviser – has recently pressured the company to more effectively monetize its real estate holdings.

It pushed Macy’s to form a real estate investment trust, a suggestion the company rejected.

Tishman was working with the firm at the time to formulate a national real estate strategy, but that relationship has now concluded, according to Bloomberg.

In August, Macy’s sold 422 Fulton Street in Downtown Brooklyn to Tishman for $170 million. The company continues to operate its store at the location.

The company’s Herald Square store is “probably one of the most significant retail buildings in the world,” Newmark Grubb Knight Frank’s Jeffrey Roseman told Bloomberg. “It’s high profile, it’s high visibility. If you want to own a piece of real estate in New York and you have any sort of ego, it’s as good as it gets.” [Bloomberg]Ariel Stulberg

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