Macy's has started to weigh its real estate value in New York City. It seems to be the better option that the company has to make after it has disclosed its big shake up. The talks about liquidating its flagship, Herald Square, has also been surfacing.
NY Racked reports that the department store is planning "spin off its real estate holdings into a separate company." The plan is to compress the sale space to five floors, since at present the downtown Brooklyn store occupies up to nine floors. The company would then sell the upper levels as office space. It is also speculated that the Herald Square flagship would follow suit.
According to Biz journals, the value of Macy's together with its Herald Square in Manhattan is more than the worth of the company as the stock price has dropped recently. This currently value is the reason why the investors of the Cincinnati-based retail giant have been pressuring the company to spin off its 556 stores in the country to a separate company. This information has come out as it has been reported by the Cincinnati Business Courier. It is in the report that the Hedge funds has been insisting to spin off its real estate holdings.
The Wall Street Journal says that the estimate value of Herald Square building is around $3 to $4 billion. The appraised value of the Macy's Manhattan building has something to do with being the key tourist attraction in the city of New York at the same time being the final destination for its annual Thanksgiving Day parade. One of these investors is the Starboard Value LP, which has recently invested last month and is dubbed as Macy's activist investor. It has been already drooling over the potential of the real estate of Macy's. Its estimated overall worth is around $21 billion. However, Macy's is still weighing its total value prior to making a final move.
Biz Journal reports that the retailer is not the only company that is evaluating its real estate assets. The Sears Holding Corp has also been struggling with its retail sales for several years already, and has created "a real estate investment trust to milk money from its 254 properties."