GGP Buys Macy’s Store in Stonestown for $40.7MM

Macy's, San Francisco, Bay Area, Stonestown Property

Macy's, San Francisco, Bay Area, Stonestown Property

By Jon Peterson

Chicago-based GGP has paid $40.7 million or $148.9 per square foot to acquire the 280,000 Macy’s store in the 840,000 square foot Stonestown Galleria in San Francisco, as stated by the public real estate investment trust in its fourth quarter 2016 earnings report.

The Registry had reported the sale in early January of 2017 at $42.8 million. That figure was based on the transfer tax reverse calculation, which was done while reviewing the public documents.

GGP is very familiar with the Macy’s store as it has been the long-term owner of the Stonestown property. “We are planning to redevelop the Macy’s store going forward. We have not made any definite plans now as to what that will be in the future,” says Kevin Berry, senior vice president of investor and public relations for GGP. This store sits on 2.7 acres and has three levels.

The Stonestown Mall is a relatively closed-in location in San Francisco where entry hurdles are very high and no new retail development of scale is planned. There is also no physical room in the region for a competing property to be constructed in the future, either. According to the property’s Web site, in 2016 within a three-mile radius of the property there is a population base of 85,156 with an average household income at $113,441.

Over half of Stonestown is made up of its two anchor tenants. Macy’s and Nordstrom total 430,000 square feet or a little more than 51 percent of the property. The regional mall is currently 99 percent occupied.

There was a second Macy’s store in San Francisco that has also been sold. This is the 248,000 square foot men’s store at Union Square. New York City-based Morgan Stanley Real Estate has acquired the property for $250 million, according to sources familiar with the transaction. The real estate manager acquired the property along with its Los Angeles-based partner, Blatteis & Schnur.

This property is located at 120 Stockton Street. It covers almost a half a city block at the northwest corner of Stockton and O’Farrell Streets. The property will be redeveloped in a mixed-use retail driven destination. The existing building will be reimagined providing updated architectural style and increased visual transparency, positively enhancing the pedestrian and retail experience.

Blatteis & Schnur anticipates several potential uses for the property. These could be world-class flagship retail, art galleries, artisanal food, upscale restaurants and creative uses on the upper floors of the project. This asset is planned to be an 8-level property, with a new opening tentatively scheduled for 2021. Macy’s Men’s will remain as a tenant inside the property, while the design, renovation and leasing of the new development progresses.

“Our vision for the project is to breathe new life into its incomparable gateway. We will deliver a modern iconic destination that pays homage to the rich and unique history of Union Square that is compatible with the existing context,” said Dan Blatteis, co-chairman of Blatteis & Schnur, in a prepared statement.

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