Retailer Macy's has decided to put two of its stores in the nation's fourth-largest metropolitan area on the market with the help of a national real estate services firm.
The decision by the retailer, with a headquarters in its Herald Square store in New York, to hire SRS Real Estate Partners of Dallas to help market some of its U.S. properties in the Dallas-Fort Worth region has been anticipated by those in the industry, with Macy's expecting to rack in $750 million from potential property sales as it shutters 150 under-performing stores within its real estate portfolio.
"Our new strategy is designed to create a more modern Macy’s and enhance the customer experience," a Macy's spokesperson told CoStar News. "We intend to close approximately 150 Macy’s stores while further investing in our 350 go-forward fleet over the next three years. A final decision on specific locations has yet to be made."
SRS Real Estate Partners started marketing the retailer's store at Town East Mall in Mesquite, Texas, just east of Dallas, and Fairview Town Center in a far north Dallas suburb. SRS declined to comment to CoStar News.
The two stores hitting the market come at a pivotal time for Macy's. The retailer has been seeking to upend its real estate by trading up its massive department stores for smaller-format stores in off-mall locations that appeal to treasure-seeking customers.
That has Macy's seeking to shrug off some of its massive department stores for more nimble real estate, but it's not yet clear if Macy's will shutter these two North Texas stores. At least one longtime Dallas broker who isn't working on the project, however, expects that may end up happening.
"I think they are planning to close both those stores," said Mike Geisler, the founding principal and managing partner of Venture Commercial based out of Dallas. "They want to go into smaller format stores in a power center with the new store size being about 25,000 square feet. They want to be a smaller version of Macy's and seem to do well around off-price retailers."
Geisler said he wasn't surprised to see the Fairview store hit the market, but the Town East Mall store was unexpected. That store sits in a strong-performing retail center, he added, but it could be just too big of a store.
The Fairview store totals more than 121,000 square feet at 201 Stacy Road in Fairview, Texas. The Town East Mall store totals more than 196,000 square feet of space at 4000 Town East Mall in Mesquite, Texas. Both stores are within a 20- to 30-minute drive of Dallas and are part of the Dallas-Fort Worth region.
"The Town East Mall store may not have been serving its core customer," he said, adding he believes the property could be potentially subdivided for other would-be tenants.
Macy's is currently evaluating its real estate portfolio comparing its real estate values with future profitability.