Macy's, Inc. Forms Strategic Alliance With Brookfield Asset Management To Expand Opportunities To Enhance Real Estate Portfolio Value

Consistent with its previously announced strategy, Macy's, Inc. (NYSE:M) today announced it is forming a strategic alliance with Brookfield Asset Management, a leading global alternative asset manager, to create increased value in its real estate portfolio.

Brookfield's investments in real estate span all major sectors - retail, office, multi-family, industrial and hospitality. Brookfield is one of the few firms with both the capital and the operating capability required for this type of partnership. Together, the companies believe they will be able to realize the development potential of Macy's portfolio.

(Editor's Note: Macy's, Inc. today also issued a separate news release announcing third quarter 2016 earnings, reaffirming full-year 2016 EPS guidance and raising full-year sales guidance.)

Under the alliance, Brookfield will have an exclusive right for up to 24 months to create a "pre-development plan" for each of approximately 50 Macy's real estate assets, with an option for Macy's to continue to identify and add assets into the alliance. These assets primarily include owned and ground- leased stores and associated land, most of which are located in malls not owned by major mall owners. The breadth of opportunity within the portfolio ranges from the additional development on a portion of an asset (such as a Macy's-controlled land parcel adjacent to a store) to the complete redevelopment of an existing store.

"We have real estate assets with significant value creation opportunities, and we believe that partnering with a leading global real estate investor like Brookfield is the best way to unlock the potential of those assets," said Terry J. Lundgren, Macy's, Inc. chairman and chief executive officer. "The Brookfield alliance strengthens our ability to improve the customer shopping experience by giving us greater flexibility to invest in our most productive and highest-potential locations, and to make the most of our real estate assets, or portions of them."

"We are pleased to partner with Macy's on this important initiative," said Brian Kingston, CEO, Brookfield Property Group. "The Macy's portfolio includes some of the highest quality real estate in the United States and we look forward to working closely with them to unlock value for their shareholders and enhance the shopping experience for their customers."

The Brookfield alliance is part of Macy's previously-announced strategy to generate value from its real estate portfolio consistent with the company's commitment to stores as a critical element of its long-term omnichannel strategy and its balance sheet objectives. The company is also exploring options for its flagship stores and closing approximately 100 full-line Macy's stores due to underperformance or because the value of the real estate exceeds the value to Macy's as a retail store location.

Eastdil Secured and Goldman, Sachs & Co. acted as financial advisors to Macy's.

Macy's, Inc., with corporate offices in Cincinnati and New York, is one of the nation's premier retailers, with fiscal 2015 sales of $27.079 billion. The company operates about 880 stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's, Bloomingdale's, Bloomingdale's Outlet, Macy's Backstage and Bluemercury, as well as the macys.com, bloomingdales.com and bluemercury.com websites. Bloomingdale's in Dubai is operated by Al Tayer Group LLC under a license agreement.

All statements in this press release that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Macy's management and are subject to significant risks and uncertainties. Actual results could differ materially from those expressed in or implied by the forward-looking statements contained in this release because of a variety of factors, including conditions to, or changes in the timing of, proposed real estate and other transactions, prevailing interest rates and non-recurring charges, store closings, competitive pressures from specialty stores, general merchandise stores, off-price and discount stores, manufacturers' outlets, the Internet, mail-order catalogs and television shopping and general consumer spending levels, including the impact of the availability and level of consumer debt, the effect of weather and other factors identified in documents filed by the company with the Securities and Exchange Commission.

(NOTE: Additional information on Macy's, Inc., including past news releases, is available at www.macysinc.com/pressroom)

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