How Much Is Macy’s Real Estate Worth?
Estimates range from $5 billion to $14 billion, depending on what would be done with the real estate holdings.
Investors and analysts are skipping over Macy’s promotional sales fliers and instead focusing on what the department store’s real estate holdings would sell for in today’s market.
A new report from CoStar says the retailer’s commercial real estate assets range in worth from $5 billion to $14 billion, “reflecting the difficulty of valuing such a large, niche real estate portfolio.”
As of February 2024, Macy’s operated 718 stores encompassing more than 110 million square feet of retail space. This includes department stores, furniture stores, small-format market stores, Bloomingdale’s locations, and Bluemercury stores.
Of its 718 total stores in the portfolio, Macy’s owns 286, with 90 of the company-owned locations under ground leases, and the remaining 342 leased directly from property owners, which include all small-format and Bluemercury stores.
Most of Macy’s owned real estate consists of large department stores anchoring enclosed malls.
“Given recent shifts in tenant space usage, these properties would be challenging to backfill with new tenants given their size and format, and as such, the value would be limited to the site value if Macy’s were to vacate,” CoStar wrote.
Its real estate assets are generally in valuable locations and include large swaths of parking. Therefore, analysts are estimating values using redevelopment and sale-leaseback scenarios.
CoStar analyst Brandon Svec writes that as a redevelopment opportunity, its estimated value of $7.9 billion reflects the valuable location of most Macy’s stores.
The second scenario values Macy’s real estate holdings based on what they would be worth in today’s market, which derived an estimated value of $10.5 billion — or approximately $146 per square foot, according to Svec.