Riley McDermid/San Francisco Business Times – Macy’s will sell its Men’s Store in San Francisco’s Union Square for $250 million, the company said on an earnings call Thursday, as part of a broader effort to shutter 100 stores and reduce its brick-and-mortar presence.
“Macy’s will lease the Men’s store property for two to three years as it completes the reconfiguration of the main store,” the company said in its investor relations statement.
“The company expects the transaction to close in January 2017 and expects to recognize a gain of approximately $235 million in January 2018. The company continues to explore options for its downtown Minneapolis, State Street (Chicago) and Herald Square (New York City) stores.”
The retailer announced earlier this summer that it was in negotiations to sell the 263,640-square-foot San Francisco men’s store “for redevelopment.” The price of $950 a square foot is in line with Union Square prices.
Macy’s declined to name the buyer but two sources confirmed it is Morgan Stanley (NYSE: MS).
“The fact that more and more shopping is done online has affected the overall size required for Macy’s,” Green said. “Not only are there too many stores in the chain, the stores themselves are too oversized for this changing retail environment.”
The news of negotiations brought other warm reactions from other players in the Union Square real estate market and retail community in August, who were heartened that the area will soon have a new tenant.
“This a colossal building that’s been largely idle in the heart of Union Square,” Julie Taylor, a retail broker with Colliers International, told the Business Times in August. “This is a move by Macy’s to monetize one of their most valuable assets.”