Macy’s, Inc. (NYSE:M) and Tishman Speyer today announced they
have signed a real estate purchase and sale agreement that will
enable a re-creation of Macy’s Brooklyn store and further enliven
one of New York City’s most dynamic, transit-rich
neighborhoods.
(Editor’s Note: Macy’s, Inc. this morning also issued separate
news releases announcing second quarter 2015 sales and earnings,
and a joint venture in China.)
Under the agreement, Macy’s will continue to own and operate the
first four floors and lower level of its existing nine-story Fulton
Street retail store, which will be reconfigured and remodeled.
Tishman Speyer will purchase the portion of the site that Macy’s
will not retain, which it will develop into approximately ten
floors of distinct, first-class office space with appeal to a wide
range of diverse companies. In addition, Tishman Speyer has agreed
to purchase Macy’s Hoyt Street parking facility, which could be
used for a future mixed-use development.
Macy’s will receive $170 million in cash from Tishman Speyer for
its Brooklyn real estate assets and will receive an additional $100
million over the next three years that will be used as a
contribution toward renovation of the Brooklyn Macy’s store.
“Brooklyn has emerged as one of the most dynamic, diverse and
vibrant communities in America. This is a place we know well and
have served with a highly successful downtown store on Fulton
Street since 1865. In recent years, it has become clear that our
Fulton Street store requires major improvements in order to serve
the Brooklyn of today, as well as future generations of customers.
We invested the time and resources necessary to fully study and
understand the opportunity for making a major positive impact on
Brooklyn and selecting the most capable partner in the project. We
are now moving forward with a bold and exciting project with
Tishman Speyer, one of the world’s most experienced and visionary
developers,” said Terry J. Lundgren, Macy’s, Inc. chairman and
chief executive officer.
“As developer, owner and operator of such New York City
icons as Rockefeller Center and the Chrysler Building, we are
thrilled at the opportunity to partner with Macy’s for our
first-ever project in Brooklyn,” said Tishman Speyer Co-CEOs Jerry
Speyer and Rob Speyer. “We believe this partnership will produce a
transformative mixed-use development in one of the nation’s
foremost destinations for today’s creative workers and new economy
companies.”
Macy’s store, currently occupying 378,000 square feet of selling
space on eight floors will be re-created into a more efficient
store occupying 310,000 square feet on five floors (levels one
through four, as well as the basement). A portion of the interior
of the building will be re-constructed to level the floor
elevations. New elevators and escalators will be installed. From
top-to-bottom, the interior of the store will be entirely
remodeled. Key architectural elements of the exterior of the
building will be preserved. The Macy’s store will remain open and
operating through the remodeling process.
In tandem with the redevelopment of Macy’s store, Tishman Speyer
will create architecturally-distinct, headquarters-quality office
space featuring 16-foot ceilings, ample outdoor spaces and easy
access to 10 separate New York City subway lines, all of which will
appeal to a wide range of traditional companies and new economy
firms. Work is expected to begin on both the retail and office
portions of the Fulton Street property in the spring of 2016, with
all elements expected to be completed by the fall of 2018.
Macy’s downtown Brooklyn store, built in 1865 as Abraham and
Straus, has grown and developed with the community around it.
Over the next three years, Macy’s is reinventing the Brooklyn
store to create a fashion hub serving neighborhoods from Dumbo to
Manhattan Beach. The renewed store will fuse Macy’s traditions
with Brooklyn’s local flavor to create a modern environment of
cutting-edge style and hip, urban attitude. Highlights include:
- The main floor will feature high
ceilings and dramatic rooms to house Macy’s signature businesses in
cosmetics, fragrances, shoes, handbags and accessories.
- Each floor will be leveled to create
larger footprints and offer an expanded assortment of new fashion
brands, including Macy’s renowned private brands.
- Windows on the upper-levels will be
uncovered to allow for more natural light.
- Street-level entrances and display
windows will be refreshed.
- Restroom facilities will be
upgraded.
- A Starbucks with after-hours access
from Fulton Street.
The Macy’s store’s workforce of about 490 associates will remain
in place. The Macy’s photo studio that has operated on the upper
floors of the downtown building is being relocated to refurbished
space in a leased building in Long Island City.
The real estate transaction is expected to be completed in the
fourth quarter. As a result, Macy’s, Inc. is expected to record a
gain of approximately $250 million in its fiscal fourth quarter of
2015.
About Tishman Speyer
Founded in 1978, Tishman Speyer is one of the world’s leading
developers, owners, operators, and fund managers of first-class
real estate. Active across North America, Europe, South
America and Asia, Tishman Speyer is relied upon by many of the
world’s most prestigious corporations to meet their office space
needs. As of March 31, 2015, the firm had acquired, developed
and/or managed a portfolio of approximately 133.8 million sq. ft.
with a total value of approximately USD $73 billion. Signature
assets include New York's Rockefeller Center and Chrysler Center,
São Paulo’s Torre Norte, Ventura Corporate Towers in Rio de Janeiro
and OpernTurm in Frankfurt. Tishman Speyer also has projects
at different stages of development currently in Atlanta, Brasília,
Chengdu, Frankfurt, Gurgaon, Hyderabad, Paris, Rio de Janeiro, San
Francisco, São Paulo, Shanghai and Suzhou.
About Macy’s, Inc.
Macy’s, Inc., with corporate offices in Cincinnati and New York,
is one of the nation’s premier retailers, with fiscal 2014 sales of
$28.105 billion. The company operates about 885 stores in 45
states, the District of Columbia, Guam and Puerto Rico under the
names of Macy’s, Bloomingdale’s, Bloomingdale’s Outlet and
Bluemercury, as well as the macys.com, bloomingdales.com and
bluemercury.com websites. Bloomingdale’s in Dubai is operated by Al
Tayer Group LLC under a license agreement.
All statements in this press release that are not statements of
historical fact are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such
statements are based upon the current beliefs and expectations of
Macy’s management and are subject to significant risks and
uncertainties. Actual results could differ materially from those
expressed in or implied by the forward-looking statements contained
in this release because of a variety of factors, including
conditions to, or changes in the timing of, proposed transactions,
prevailing interest rates and non-recurring charges, competitive
pressures from specialty stores, general merchandise stores,
off-price and discount stores, manufacturers’ outlets, the
Internet, mail-order catalogs and television shopping and general
consumer spending levels, including the impact of the availability
and level of consumer debt, the effect of weather and other factors
identified in documents filed by the company with the Securities
and Exchange Commission.
(NOTE: Additional information on Macy’s, Inc., including past
news releases, is available at www.macysinc.com/pressroom).
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version on businesswire.com: http://www.businesswire.com/news/home/20150812005577/en/
MACY’SMediaJim
Sluzewski, 513-579-7764orElina Kazan,
646-429-7448orInvestorsMatt Stautberg,
513-579-7780orFOR TISHMAN
SPEYERMediaRubenstein CommunicationsBud
Perrone, 212-843-8068bperrone@rubenstein.com
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