Retailer Macy's said it's seeing strong interest in the real estate it put on the market, an emerging positive sign of demand for department store properties as some chains look to cut their space.

The New York-based company — parent of not only its namesake department store chain but also Bloomingdale's and Bluemercury — on Wednesday said that it has found that the deal pipeline is so solid that it will now shutter and sell five more stores than originally planned, up to 55 from 50, this fiscal year.

"While non-go-forward locations are underperformers relative to the total Macy's fleet, they are valuable real estate assets," Tony Spring, chairman and CEO of the retailer, said during a fiscal second-quarter earnings call. "Demand for these properties has been strong."

Iconic department-store brands like Macy's have traditionally had large spaces in malls but now a number of retailers, apart from big-box discounters, are reducing their individual store footprints. So, while department-store retailing is challenged and perhaps even out of style, Macy's executives are finding that their locations still hold allure for buyers in a year when the U.S. retail vacancy rate is only about 4%, making available space scarce.

The company also said it sold a property for $36 million in the second quarter as it looks to weed underperforming locations out of its portfolio and ensure its long-term survival. Macy's declined to identify the property it sold, but according to CoStar data it was a store at 13251 S. Dixie Highway in Miami. The University of Miami bought the property for $40 million on June 27, CoStar News reported.

After just notching up asset-sale gains of $36 million in the period ended Aug. 3, Macy's is forecasting $30 million in such gains in the third quarter and $67 million in the fourth quarter, according to Chief Financial Officer Adrian Mitchell.

Macy's isn't in a rush or looking to hold a fire sale on its stores, according to Spring. It's finding that it may not need to: It now anticipates $115 million in asset-sale gains this fiscal year.

"We are pleased with the pace and the quality of dealmaking. ... We will continue to thoughtfully evaluate all opportunities presented to us," he said. "But given our strong balance sheet and that we have no material debt maturities until 2027, we will not execute a deal unless it is accretive."

Past buyers of Macy's big-box stores have sometimes divided them into smaller spaces, redeveloped some for other uses or simply demolished them.

Even so, the demand for its property could bode well for other similar chains, their landlords and lenders looking to dispose of property. Macy's is part of a retail sector — department stores — that's been struggling for years now, resulting in casualties such as now-defunct Lord & Taylor. Chains like Macy's, Kohl's, Nordstrom and Saks Fifth Avenue face heightened competition from discounters, off-price retailers, online sellers and luxury-goods makers who are rolling out their own stores.

And landlords are increasingly turning to different kinds of tenants, ones that generate lots of repeat foot traffic, as their retail anchors. On top of those woes, department stores have to endure macroeconomic pressures on consumer spending that have even impacted giants such as Walmart.

Macy's, facing flagging revenue, is in the process of executing its "Bold New Chapter" turnaround plan, a strategy it unveiled in February entailing focusing on its 350 top-performing "go-forward" locations and monetizing its other real estate holdings, CoStar reported. The retailer plans to close 150 stores through fiscal 2026 and obtain an estimated $750 million from sales of some of its properties as it tries to optimize its fleet. Macy's wants to rid itself of poorly performing stores and improve customer service, staffing and the merchandise array at its other locations.

"We retain our view that this is a year of transformation and change for Macy’s," Neil Saunders, a retail analyst and managing director of analytics firm GlobalData, said in a note to clients. "The business has a clearer plan and better leadership than it has had in a long time. Profitability is also improving. However, we are in a phase where investors are holding their breath to see what Macy’s can deliver. As is the case in real life, people can only hold their breath for so long."

Macy's declined to comment on Saunders' remarks.

Activist investors Arkhouse Management and Brigade Capital Management made several offers to acquire Macy's since December. During that period, the retailer announced its turnaround plan. Then about a month ago, Macy's said it had ended seven months of buyout talks with the dissidents.

Macy's hasn't publicly identified the stores it plans to sell and shut. But it told city officials in San Francisco that it plans to sell its Union Square flagship there. Macy's also retained a Dallas firm, SRS Real Estate Partners, to sell some of its stores in Texas, Alabama and Georgia.

"Regarding real estate monetization, we are pleased with the traction we've experienced to date with landlords and developers," Mitchell told Wall Street analysts. "We're committed to monetizing these assets and certain distribution centers, but only at the right value. We are encouraged by the progress that our seasoned real estate team is making. As noted earlier, we have increased our expected number of store closures this year to approximately 55 locations from roughly 50."

In another update, Mitchell said, "The deal pipeline is healthy even in this environment. Coming into the quarter, we had a range of $90 million to $115 million in asset-sale gains. Now we're seeing approximately $115 million. We were pleased with $36 million of gains in (the second quarter)."

Macy's also said it plans to expand making improvements beyond its so-called First 50 stores, the first batch out of the 350 go-forward stores it's investing in.

"We remain encouraged by our First 50 performance," Mitchell said. "We're also excited for the rollout of additional staffing in handbags and shoes to another 100 locations this fall."

Spring said that, just like in the first quarter, the First 50 stores are performing better than the chain overall, with positive comparable sales.

Overall, including its three chains, Macy's net sales in the second quarter dropped 3.8%, to $4.9 billion, with comparable sales down 4%. At the namesake Macy's locations overall, net sales were down 4.4% and comparable sales down 4.5%. By contrast, First 50 Macy's comparable sales were up around 1%.

"The fact (is) that in the First 50, all categories outperformed the rest of the nameplate," Spring said. "The fact (is) that we're seeing it on the top line. We're seeing it on the customer service scores. We're seeing it in better traffic conversion. So we think we have a model that we just need a little longer to learn from, but we're prepared to use that as the go-forward strategy for the Macy's brand."

Overall, the problem with Macy's financial results "is that they paint a headline of decline at a time when Macy’s is trying to convince investors that the company is on a new trajectory," according to Saunders.

"However, as critical as we often are of Macy’s, we think it is important to look at the nuance behind the headlines and cut the company a little slack," he said.

Saunders added that beyond any real estate matters, "the first point to be made is that Macy’s is trying to reinvent itself in a market that is soft and changeable and where consumers, generally, are cutting back on discretionary volumes and migrating more to value players. This is a bit like running up a down escalator. The second point is that Macy’s has deep-rooted problems which are not going to be immediately resolved. Essentially, this is a long-term game that will be won over the years, and not the quarters, ahead."