What Is Macy's Real Estate Worth?
The Impact of Real Space on Macy's Retail Strategy
Macy's flagship stores, such as those located in New York, Union Square in San Francisco, and the State Street store in Chicago, are likely worth billions of dollars themselves. The Manhattan store was pegged at $3.3 billion by the analysts. It means that there could be excess real space hitting the market that will drive prices lower, leaving Macy's unable to realize the premium prices they could otherwise have received.
It also reduces the value of the remaining portfolio even though the department store space has little chance of improving. Macy's won't get top dollar if it even is now because department store sales have fallen 32% over the last two decades. It's not clear if Macy's can hit that $16 billion figure.
Macy's stock price
Macy's stock fell below $21 last Friday, hitting a new 52 week low. The stock was trading for less than seven times forward earnings. Many investors think that Macy's earnings will only head lower from here, and that they are not just skeptical that Macy's can return to growth.
Macy's stock is still above the multiyear nadir of $17.41 that it reached in late 2017, another low point for investor sentiment. Macy's has reduced its net debt from $5.8 billion to $4 billion. Macy's enterprise value is around $10.5 billion, which is lower than it was a year and a half ago.
Macy's real estate partnership with Brookfield Asset Management is going well. Macy's and Brookfield are looking for tenants for new retail space that they will build on excess parking lot land next to dozens of Macy's stores. The partners are planning a mixed-use development at a Macy's store in Manhasset, New York.
They envision 355 apartments, a hotel, offices, and additional retail space at that location. Selling more real estate is an option that could be revived if necessary. If the Macy's plan to increase sales fails, it would make sense to downsize the chain, including some of the more valuable stores.
Macy's Real Estate Ill be Worth $10 Billion
Cramer created an equation that said that Macy's real estate is only worth $10 billion. You have left with $3.7 billion if you take away its $6.3 billion in debt.
The Herald Square ad hoc bond issue
The report said that the department store chain is looking to issue new bonds backed by some of its real estate, but not its flagship Herald Square location.
Macy's Window Display at Herald Square
Macy's is known for its elaborate holiday and Christmas window displays in many locations across the U.S., but most notably at the Herald Square location. There are six windows on the Broadway side of the building that show different themes. Thousands of people are attracted to view the displays in each window. The windows have been designed, fabricated and animated by Standard Transmission.
Shorts of Lambda_0(1232)
There are 43,114,362 shares that have been shorted. It would take at least 2.028 days for all of the short holders to cover their shorts, with 311,484,831 shares available for purchase and an average trading volume over the past 10 days of 21,263,837.
Property Management
Property management is the daily oversight of real estate by a third-party contractor. Property managers take responsibility for day-to-day repairs and upkeep of properties. They work for the owners of investment properties, which include apartment and condominium complexes, private home communities, shopping centers, and industrial parks.
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