Macy’s has sold the top four floors (levels five through eight) of underutilized space in its downtown Seattle store, located at 300 Pine Street, to a controlled affiliate of Starwood Capital Group to be converted to office use.
The Macy's store will remain open and operating, with space reconfigured by fall 2016 to accommodate all existing merchandise categories in a more efficient manner. Selling space will be reduced from 363,000 square feet on seven floors (the lower level plus floors one through six) to 283,000 square feet on five floors (the lower level plus floors one through four).
"Macy's on Pine Street is a very successful business serving a thriving community of downtown residents and workers," said Terry J. Lundgren, Macy's, Inc. chairman and chief executive officer. "Our vision is to make the store easier and quicker to navigate while also attracting new jobs and economic activity to space that has not been fully utilized in recent years. While there will be some construction activity inside the store over the next year, we expect to continue to serve customers without interruption.
"This transaction is an example of the company's ongoing efforts to enhance shareholder value by identifying and pursuing strategic real estate dispositions while maintaining the flexibility we require to run a successful business," he added.
Macy's 265 current downtown store associates will remain in place, although some may be reassigned as departments are respaced.
Macy's downtown Seattle building, with a total of 864,000 square feet, was opened in 1929 as The Bon Marche. The nameplate converted to Macy's in September 2006.
The purchase price for the four floors, totaling more than 300,000 square feet, was $65 million in cash. Macy's, Inc. will record a gain of approximately $60 million in the third quarter of 2015. The gain was originally anticipated and included in 2015 earnings guidance previously provided by the company although it is being booked a quarter earlier than expected.
