It’s been well-chronicled in recent months how Macy’s Inc. is looking to monetize its sizable real estate holdings. The retail giant took a step in that direction this week in Chicago. The Chicago Tribune reports Macy’s agreed to sell the top seven floors of its flagship store on State Street for $30 million. The buyer, Brookfield Asset Management, plans to convert the space into offices.
The top seven floors account for one-half of the 14-story Macy’s building. A spokesperson for Macy’s said the sale would have a “small impact” on the amount of retail space, as some of the floors are empty and others contain executive offices. All executives will continue working at the building in the new offices created.
Of the $30 million sale price, $3 million is earmarked for capital improvements. Plans for the redevelopment are still being finalized, including whether the office and retail portions of the building will have separate entrances. Macy’s officials hope the changes will improve the overall activity at one of their flagship stores.
“We believe by creating a great office space above the store, combined with investments in the store, we can make this space a more vibrant shopping environment,” said Macy’s Chief Financial Officer Karen Hoguet.
Cincinnati-based Macy’s has real estate holdings worth an estimated $21 billion, according to the Cincinnati Business Journal. Officials have been exploring ways to develop underused space in Chicago and at three other flagship stores. In San Francisco, Macy’s plans to separate a historic building from its flagship and put it on the market.