NEW YORK | Macys Tower | FLOORS | 800 FT

Macy’s in Early Talks to Put an Office Tower Atop Its NYC Flagship

The company has floated plans for a 1.2 million-square-foot (111,500-square-meter) office tower that would be used by other tenants, according to a person with knowledge of the matter. Macy’s probably would push for zoning changes around its property to allow for the 800-foot (244-meter) building, which would bring an estimated 6,000 additional people to the area, said the person, who asked not to be identified because the talks are private. The plans are exploratory and may change.

Macy’s shares jumped as much as 4.5 percent to $25.76. They were trading at $25.28 at 1:36 p.m. New York time.

A representative for Macy’s had no immediate comment. A spokesman for Manhattan Borough President Gale Brewer confirmed that she met with the retailer about its plans late last month.

“Such a major addition of square footage to the area will require major public improvements to the streets and sidewalks that surround the Herald Square neighborhood, and I look forward to Macy’s contributions to ensure that this part of Midtown and the Garment Center sees relief,” Brewer said in a statement.

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https://www.bloomberg.com/amp/news/articles/2019-04-24/macy-s-is-in-early-talks-to-build-office-tower-atop-nyc-flagship

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Gale Brewer is disgusting.

Macy’s shouldn’t have to pay a single penny for infrastructure improvements. That’s why we pay income taxes.

The absurd welfare mentality is going to kill this city.

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Agreed. This isn’t a zoning change. This isn’t even a new Hearst Tower on steroids. (Macy’s existing building(s) aren’t landmarked are they?)

I’m no fan of Macy’s as a corporate entity, but if they’re talking about an upgrade of their existing building to make use of unsold air rights I don’t see why they would need to pay a kickback to make it happen.

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Are there zoning changes requested? The article posted by chris08876 says there are anticipated zoning changes, but SideStreet says there won’t be any.

Does anyone have any color to clear up the confusion?

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I may have been a bit hasty. There might be a height restriction on their site they want lifted, but they’re not bargaining with the city for extra air rights. They seem to be looking to monetize their air rights in the most cost effective way which might mean a height boost over what’s allowed in the area currently. Its all speculation on my part.

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Its landmarked.

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I did a zoning check, and it came up as R10A.

It could possibly require a zoning amedment or upzone as its mapped for R10 density. FAR being 10.

But its odd as thats for residential usage, and the whole block which Macys sits on is zoned as that except the corner slot on 7th/34th Street. Maybe that section is where the tower will rise?

Although I feel like something is off. Possibly could be the GIS set.

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Its actually built to more than 50% larger than current zoning allows. The Sunglass Hut building and the one at the far northwest of the site have some development rights but nothing like 1M sf.

I wonder if they have the ability to poach the massive available air rights from multiple sites across the street to the South (in red).

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Which mapping service are you using. I too had one block of C6-4 but the rest stated R10A? But that very grey alloted area was all R10A? I knew it looked fishy at first.

The FAR was on point though but was listed as R10a for most of it.

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MAS that’s it

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or maybe people can pay less in income taxes and not subsidize corporations that require that infrastructure

bit of an alarmist article.

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Garbage journalism

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What an idiotic take in that article.

Are there a ton of subway lines serving that specific spot? Yes. Are they at capacity? No. Then obviously that area should be denser. Otherwise we’re wasting critical infrastructure.

If the sidewalks are too crowded (and they are) then the street space simply needs to be rebalanced to favor pedestrians over cars. Obviously.

This stuff isn’t hard, we just have a mayor who cares more about his giant SUV than how to house and move people in a growing city, not to mention the environment.

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I love how they to decline to mention all the under-developed garbage retail on the South side of 34th street. Absurd in the extreme.

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paywall :frowning:

For those who can’t get past the paywall

Macy’s Inc. offered new details about plans to build an office tower atop its flagship Manhattan store, which will likely include public improvements to the Herald Square neighborhood and more office space than previously reported.

Chief Executive Jeff Gennette said in an interview that the retailer aims to build 1.5 million square feet in office space above the block-long building that houses one of the largest department stores in the world. Previous press reports said that Macy’s was pursuing a tower with 1.2 million square feet of space.

The tower would include a sky lobby, with sweeping views of the city. Macy’s has also indicated it would help with upgrades to the surrounding area, such as improving nearby subway stations.

Macy’s has been in discussions with city and state officials to get clearance for the project since at least last year, according to the company’s public filings. Mr. Gennette said that details are still being worked out and that he planned to discuss them on Wednesday at an event with analysts and investors mapping out the next leg of Macy’s strategy, which includes shuttering 125 department stores over the next three years.

The company’s development plans reflect both how big-box retailers and department stores are eager to find new revenue streams and how the Manhattan office market is heating up.

While the rise of e-commerce has hurt retail rents, growing demand from tech and other creative industries for New York City office space has helped power that market. In 2019, office Manhattan leasing rose almost 16% from the previous year to 48.9 million square feet, according to Newmark Group Inc.

“The highest and best use in the current market is often tech office,” said Alexander Goldfarb, senior REIT analyst for Sandler O’Neill + Partners LP. “Before it was street retail, and before that it was condos.”

Macy’s, like other large, older retailers, has had to trim its number of physical stores and consider ways to tap the value of its properties across the country. These companies have been under pressure from shareholders to cash in on their real estate, especially those in major urban areas where property has become quite valuable.

The Herald Square location sits near Penn Station in a neighborhood where firms from the tech, advertising, media and design sectors have been expanding into buildings once dominated by apparel production. New mixed-use developments in the Hudson Yards district rising next door to Herald Square have attracted an array of major firms including social media giant Facebook Inc. and money manager BlackRock Inc., raising the potential for office demand spilling over into neighboring areas.

Manhattan’s average asking rent average rose to $78.78 a square foot in the fourth quarter of last year, up 3.8% from the prior year, according to real-estate services firm Colliers International.In 2019, the average weighted starting rent in tech office leases was $90.41 a square foot, a price that was 14.8% above the 2019 average for all industries and driven by tech firms taking newly constructed office space.

Macy’s isn’t alone in taking advantage of its real estate. Mall companies across the country have turned department stores into restaurant wings, apartments and hotels, Mr. Goldfarb said.

Macy’s already has used the model of selling developers air rights and floors above its retail operations to build commercial space.

In 2016, Macy’s sold the remaining upper floors of its downtown Brooklyn store and air rights for the site and a nearby parking garage to real-estate company Tishman Speyer for $270 million. New for-profit school Whittle School & Studios will make the 10 floors above the Macy’s store its home.

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Weird…let me see the entire article and I’m not a subscriber