Macy's (M) third-quarter bottom line may be hard to stomach but the company continues to show investors it can rack up big bucks by selling off prized properties that potentially could be used for stock buybacks.
The storied department store retailer said Thursday that it signed a contract to sell a 248,000-square-foot location in San Francisco for a cool $250 million. The transaction is scheduled to close in January, and Macy's will realize a gain of about $235 million in January 2018. Macy's will lease the site for two to three years while the building is being reconfigured. It also disclosed a deal to sell a store in downtown Portland, Ore., for $54 million, which will net it about $36 million when the transaction closes in the fourth quarter. Topping it off, the company said Thursday it would join forces with property developer Brookfield Asset Management to re-develop as many 50 sites that it currently owns or leases.
Macy's has certainly been active on the real estate front lately since bringing on William Lenehan, an expert in real estate trusts, to its board in March and Douglas Sesler as executive vice president for real estate in April.
The company earlier this month sold five stores -- which opened between 1980 and 1993 -- to mall developer General Growth Properties (GGP) for $46 million. Macy's expects to realize a gain of $32 million on the sales in the third quarter. Since the beginning of 2015, Macy's has announced or completed asset sales with projected proceeds exceeding $800 million. The company said Wednesday it continues to explore options for its iconic Herald Square location, which has reportedly been valued at about $1 billion.