Macy’s longtime Brooklyn home could soon become a showplace for “experiential entertainment retail” for companies like Netflix, Universal and Lego, according to the leader of a partnership that just purchased the four-story, 440,000 square-foot property at 422 Fulton Street.
Albert Laboz, founder and chief executive of United American Land, said, “Everything is on the table” for the site’s future. UAL and partners Isaac Chera of Crown Acquisitions and the Jackson Group’s Chehebar family, purchased the Macy’s property for an undisclosed price. The deal closed on Wednesday, Laboz said.
Macy’s has been at the three-building location since 1995 when it replaced the flagship store of defunct Abraham & Straus.
It’s expected that the store will close next year. Parent Macy’s Inc. has been under pressure from investors over under-performing stores which they say are much more valuable as real estate assets. Early this year, it said it would close 150 of 520 Macy’s locations in the US. Macy’s Inc. also owns Bloomingdales and the Blue Mercury cosmetics chain.
Laboz said he’s taking a two-pronged approach to the Macy’s space — “traditional retailing and/or family-friendly entertainment such as Netflix, Universal, Lego … when you have 23,000 new apartments with lots of children within an eight-block radius, there’s a need for family-friendly uses.”
Laboz said he was open to having “two different operators per floor to create synergies among tenants.”
The Macy’s floors sit below four higher floors that it sold to Tishman Speyer in 2015. The developer constructed a new office building next door called the Wheeler which includes part of the former Macy’s floors, and pumped in $100 million to help modernize the old store. Laboz called the result, which included facade restoration and mechanical systems, “magnificent.”
The city turned a half-mile stretch of Fulton Street — once home to several other major department stores — into a mall decades ago to try to arrest the neighborhood’s decline.
But the mall, although lively, was dominated by cheaper merchandise, fast food — and crime.
The nearby MetroTech office complex was designed in the 1980s and ‘90s as an inward-facing enclave to separate it from the mall’s low-rent environment. It was recently rebranded as the classier-sounding Brooklyn Commons.
In recent years, national chains on the mall such as American Eagle Outfitters and Aeropostale and the reopened Gage & Tollner a few blocks away gave the area a new image.
Cushman & Wakefield’s Ian Lerner, who worked on a large retail food deal on Fulton Street last year, said the area’s rising fortunes were reflected in ground-floor store rents of $250 per square foot — “at least doubled over the past 20 years,” he said.
Lerner noted the influx of national chains such as Burlington Coat Factory and Five Below and of food purveyors like Trader Joe’s and Lidl. Like Laboz, he cited “a lot of residential development nearby.” He called the Fulton area “one of the bright turnaround spots of New York.”
He said, “Laboz and Chera know what they’re doing. They’re smart people.”
Laboz said, “We have an incredibly blank canvas to create something new and exciting.”
Asked about the Brooklyn store’s future, a Macy’s spokesperson said, “Our new strategy is designed to create a more modern Macy’s, Inc. and enhance the customer experience. 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.”
