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Macy’s Listed Downtown Store For Sale Leaseback

Macy’s Listed Downtown Store For Sale Leaseback

Macy’s is putting its historic, 13-story Downtown store on the selling block, with plans to lease back part of the space.

The department store chain didn’t name an asking price for the landmark that fills a block on Smithfield Street, between Forbes and Fifth avenues. Macy’s retail operations fill 10 floors, and offices are on part of a separate floor.

“Pittsburgh is fortunate to have one, and it’s good to maintain downtown stores — they have a history and a sense of integrity.” In putting the building on the market, Mr. Sluzewski said, Macy’s is seeking to capitalize on the redevelopment and stable real estate market Downtown. “Department stores used to be major property owners in many cities. Now they’re mainly tenants in malls and shopping centers,” said Beemer of America’s Research Group in Charleston, S.C Cincinnati-based Macy’s owns 469 of its 850 Macy’s and Bloomingdale’s stores. Spokesman Sluzewski said Macy’s always is looking to maximize its use of space in stores. The company maintains many downtown stores, he said, citing 15 other examples.

Patricia Edwards of Storehouse Partners LLC in Seattle said department store chains, especially in the rough economy of recent years, “are really trying to make sure each individual store is profitable, as opposed to just the chain itself.”

In September 2006, Macy’s kicked off its new presence Downtown and elsewhere in the region with a block party on Smithfield Street. It promised to keep the landmark corner clock at Smithfield and Fifth, the Tic Toc restaurant on the first floor, holiday events and other favorite Kaufmann’s features.

Still, Duquesne University marketing professor Audrey Guskey said shoppers in the region gave Macy’s a lukewarm reception.

“A lot of people were disappointed in the quality of merchandise,the service and the hours,” she said. “Also, Macy’s goal was to become a national department store, and they were very cookie-cutter — the Pittsburgh stores were like Cleveland, L.A. and Chicago.” Macy’s since then has been tailoring merchandise to various regions’ tastes, Guskey added.

In the past three decades, Downtown has lost four department stores, including a Lord and Taylor department store next to the Macy’s building.

Macy’s sales nationwide last year totaled $23.5 billion, down 5.6 percent from 2008. The company’s profit was$350 million, after a $4.8 billion loss in 2008.                                                                                                                                                                                     Mike Hanrahan, a broker for commercial Realtor Cassidy Turley, confirmed that the building at the corner of Fifth Avenue and Smithfield Street is on the market but referred all questions to Macy’s.

Macy’s paid $2,847,600 million for the real estate in 1986, according to the Allegheny County assessment website. The property assessment Value is $14,085,300 million.

Calkain can facilitate business owners in the sale of their real estate, while simultaneously structuring a long-term net lease with the purchaser, allowing the business to retain control of their asset.

Advantages

• Monetize your real estate
• Obtain 100% fair assessed value of your asset
• Improve working capital
• Convert illiquid assets into cash
• Consummate transactions quickly
• Improvement on company balance sheet
• Avoid risk of real estate ownership
• Increase borrowing capacity
• Attain tax advantages
• Lease terms and conditions can be tailored to meet the needs of the seller
• Enhance financial liquidity

What can a sale-leaseback be used for?

Sale-leaseback’s have a broad area of disbursing cash proceeds for a company. Some of the more common reasons of why clients have participated in sale-leasebacks are:

Our capital sources include:

• Pay down debt
• Finance Operational Growth and Investment
  • Construct new facilities
  • Purchase new equipment
  • Invest in new technology
• Reallocate capital into core business activities
• Mergers and Acquisitions
• Executive and/or Management Restructuring
• Buy back company stock

Cash proceeds in result of a sale-leaseback have no limit on the expenditure. A sale-leaseback transaction is a great alternative form of financing which allows business owners to fully maximize the value and position of their real estate assets. www.calkain.com

About the Author

www.calkain.com

Fox Chapel, Pittsburgh, PA, Home For Sale, Ron Lovelace, RE/MAX Professionals