Macy’s, Inc. and Tishman Speyer on Wednesday announced they have signed a real estate purchase and sale agreement that will enable a re-creation of Macy’s Downtown Brooklyn store and further enliven one of New York City’s most dynamic, transit-rich neighborhoods.
Macy’s will continue to own and operate the first four floors and lower level of its existing nine-story Fulton Mall store, which will be reconfigured and remodeled. Tishman Speyer will buy part of the site, which it will develop into approximately ten floors of architecturally-distinct, headquarters-quality office space with appeal to a wide range of diverse companies. The developer also agreed to buy Macy’s Hoyt Street parking facility, which could be used for a future mixed-use development.
Macy’s will receive $170 million in cash from Tishman Speyer for its Brooklyn real estate assets and an additional $100 million over the next three years as a contribution toward renovation of the Brooklyn Macy’s store.
“In recent years, it has become clear that our Fulton Street store requires major improvements in order to serve the Brooklyn of today, as well as future generations of customers,” Terry J. Lundgren, Macy’s Inc. chairman and CEO, said in a statement.
“We invested the time and resources necessary to fully study and understand the opportunity for making a major positive impact on Brooklyn and selecting the most capable partner in the project,” said Lundgren, who noted that Macy’s has had a store on Fulton Street since 1865, which originally was Abraham and Straus. He called the planned project with Tishman Speyer “bold and exciting.”
Lundgren first revealed his plan to remodel the Fulton Mall Macy’s early last year.
This will be the first-ever Brooklyn project for Tishman Speyer, which owns New York City icons including Rockefeller Center and the Chrysler Building.
“We believe this partnership will produce a transformative mixed-use development in one of the nation’s foremost destinations for today’s creative workers and new economy companies,” Tishman Speyer Co-CEOs Jerry Speyer and Rob Speyer said in a statement.
Macy’s store, with 378,000 square feet of selling space on eight floors, will occupy 310,000 square feet on floors one through four and the basement after the remodeling. Interior reconstruction will level the floor elevations. New elevators and escalators will be installed. Key architectural elements of the building’s façade will be preserved. The store will remain open during the remodeling.
The aim is to create a fashion hub serving neighborhoods from DUMBO to Manhattan Beach. — a store that fuses Macy’s traditions with Brooklyn’s local flavor to create a modern environment of cutting-edge style and hip, urban attitude.
In tandem with the redevelopment of Macy’s store, Tishman Speyer will build offices with 16-foot ceilings, ample outdoor spaces and easy access to 10 subway lines, which will appeal to a wide range of traditional companies and new economy firms. Work is expected to begin on both the retail and office portions of the Fulton Street property in spring 2016 and be completed by fall 2018.