The $21-a-share bid by Brigade Capital Management and Arkhouse Management for the shares of Macy’s Inc. they don’t already own is surely aimed at the department store giant’s real estate assets, as analysts have said since the offer came to light last week.
The hedge funds would pay $5.8 billion to acquire Macy’s — much less than the $7 billion to $8 billion its real estate is estimated to be worth.
Macy’s owns nearly half of its 500 US stores.
The company also controls retailer Bloomingdale’s and cosmetics chain Bluemercury, which have about 300 locations.
But despite speculation that the new owners might seek to demolish or build on top of the company’s crown-jewel locations — the Macy’s Herald Square flagship and Bloomingdale’s on Lexington Avenue at East 59th Street — neither property figures to be a redevelopment target.
Long before the takeover bid, Macy’s itself announced a plan to build a 900-foot-tall office skyscraper on top of the 11-story flagship in February 2020.
Macy’s announced a plan to build a 900-foot-tall office skyscraper on top of the 11-story flagship in February 2020. andykazie
The pandemic stalled the idea. Then, in May 2021, CEO Jeff Gennette doubled-down on the vision, saying Macy’s would spend $235 million to upgrade Herald Square’s transit and pedestrian features — a step toward getting a zoning change needed for a new tower.
But the initiative hasn’t gone anywhere. Department of City Planning spokesman Joe Marvilli told Realty Check that Macy’s has filed no application for them. Macy’s spokeswoman Stephanie Jimenez said the store “is declining to comment at this time.”
A prominent commercial dealmaker sneered to Realty Check, “Are you kidding? Offices over Herald Square? In the worst market in fifty years? At the same time when four or five other supertall plans aren’t going anywhere, either?
Public records show that Bloomingdale’s at 1000 Third Avenue is a long-term leasehold tenant. Rossella De Berti
“Yes, everything could change in a few years,” the insider conceded. “But takeovers aren’t usually based on the long-term. Hedge funds want returns right away.”
The Bloomingdale’s site at 1000 Third Avenue between East 59th and East 60th would lend itself more to a luxury condo tower than to offices — that is, if Macy’s actually owned it.
In fact, public records show, the luxury department store is a long-term leasehold tenant.
The ground is owned by a Bloomingdale family trust, which leased it to the retailer through 2058.
In other words, the fashionable emporium isn’t going anywhere.
Bloomie’s customers shouldn’t worry about losing their favorite spot for men’s and women’s clothes in their lifetimes.
Source link: https://nypost.com/2023/12/17/business/macys-herald-square-flagship-bloomingdales-unlikely-to-undergo-redevelopment/