Morgan Stanley Buying Macy’s Union Square Store in San Francisco for $250MM

Morgan Stanley Macy’s Union Square San Francisco Brookfield Asset Management General Growth Properties retail Bay Area commercial


(EDITOR’S NOTE: According to two sources with knowledge of the transaction, the buyer of the retail asset in San Francisco’s Union Square is Morgan Stanley.)

Macy’s, Inc. continues to make progress toward its goal of creating value from its real estate assets. The company announced today that it has formed a strategic alliance with Brookfield Asset Management, to further explore value creation opportunities in its real estate portfolio.

[contextly_sidebar id=”ZxYLKcQJtSlraQwlRebBRAL4K5kNdM2Y”]Separately, Macy’s has signed a contract to sell its 248,000 square-foot Union Square Men’s building in San Francisco for $250 million, and will use part of the proceeds to consolidate the Men’s store into its main Union Square store. Macy’s will lease the Men’s store property for two to three years as it completes the reconfiguration of the main store. The company expects the transaction to close in January 2017 and expects to recognize a gain of approximately $235 million in January 2018. The company continues to explore options for its downtown Minneapolis, State Street (Chicago) and Herald Square (New York City) stores.

The company has also signed a contract to sell its downtown Portland, OR store for $54 million. The transaction is expected to close in the fourth quarter of 2016, at which time a gain of approximately $36 million will be recognized. The downtown Portland store will continue operations through the holiday season and will be closed in spring 2017.

The company announced last week the sale of five locations to General Growth Properties. In addition, as a result of lease terminations or expirations, the company will be closing Macy’s stores in Douglaston Mall, Douglaston, NY and Lancaster Mall, Salem, OR in early 2017.

Since the beginning of 2015, Macy’s has announced or completed asset sales with anticipated proceeds exceeding $800 million.

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