To Post ID @1hhr+15CIvmoK and others,
I copied and pasted the article from Business Insider regarding Macy's slashing the Jacx lease by 40%.
Title: Macy's is slashing the size of its brand-new global headquarters by nearly 40% in another drastic step to cut costs.
By Daniel Geiger May 11, 2020, 6:33 PM
Macy's is seeking a taker for 330,000 square feet it leased in Long Island City last year, according to a marketing document seen by Business Insider.
The space is part of a block of about 867,000 square feet that Macy's had taken in The Jacx, a twin-spired office tower where Macy's said it would relocate its corporate headquarters earlier this year.
The sublease offering comes after the department store operator has been battered by the coronavirus crisis and announced layoffs and store closures.
Dumping the office space is part of an effort by the company to cut costs as its retail peers teeter on collapse.
Macy's is seeking to dramatically slash the size of its new corporate headquarters in Long Island City, Queens, as it grapples with the coronavirus and the devastating impacts the pandemic has had on the nation's retail business.
According to a marketing document seen by Business Insider, the department store operator has hired the real-estate services firm and brokerage CBRE to market just over 330,000 square feet for sublease at The Jacx, a 1.2-million-square-foot recently finished office building along Jackson Avenue near Court Square.
The space amounts to nearly 40% of the 867,000 square feet Macy's previously signed on for in the twin-spired property — a dramatic downsizing of the company's corporate footprint and a sign of the urgent steps it is taking to try to cut costs as its business has slumped.
Even before the coronavirus crisis was felt on US shores, Macy's had been grappling with a years-long decline in sales from increased competition in the retail sector and a continued migration by consumers to online shopping.
Read More: A quarter of NYC office leases went to tech firms in 2019. Now, the fate of a blockbuster Facebook deal is make-or-break for the city — and a case study for the future of commercial real estate.
In early February, it announced it would lay off 2,000 office workers, close 125 underperforming stores nationally, and pour money into boosting its e-commerce.
Earlier this month, Macy's said it was delaying the reporting of its first-quarter results due to disruption from the coronavirus.
Macy's did not respond to a request for comment on Monday.
The coronavirus has accelerated the pains felt by many big chains, especially department stores, which had already been struggling to deal with a fast-changing retail sector. Neiman Marcus filed for bankruptcy last week and upcoming reorganizations or liquidations are expected for both Lord & Taylor and JC Penney, according to media reports.
"The demise of department stores… is going to accelerate following years of kicking the can down the road," the real estate analytics firm Green Street Advisors stated in a recent market report. "Covid is pulling forward several years of retailer fallout."
Read More: Neiman Marcus just filed for bankruptcy, and it could mark a major blow to NYC's glitzy Hudson Yards — one of the most expensive mega-malls in US history. Here's why.
During the depths of the coronavirus crisis in recent weeks, Macy's closed all of its 775 stores nationally and furloughed virtually all of its retail workforce. It has since begun to reopen stores as the pandemic crisis has eased and attempted to reboot its business.
Reuters reported in April that Macy's had tapped Lazard to explore options to help bolster its finances, and also hired debt restructuring lawyers at Kirkland & Ellis.
The company has sought to raise money from its real-estate portfolio. According to a report in Real Estate Alert, for instance, it has hired Cushman & Wakefield to market a portfolio of warehouse properties it owns around the country in a bid to raise tens of millions of dollars for its balance sheet.
Shedding the space at The Jacx, where Macy's houses corporate offices for both itself and its sister brand, Bloomingdale's, won't be easy. Tenants across the city's office market have pulled back on taking office space as the pandemic has thrown the economy into a steep downturn and raised questions how - and even if - companies will continue to occupy offices in a post-Covid world where working in close proximity to colleagues may be viewed as unsafe.
In addition to the huge block of space it is now seeking to shed in Long Island City, Macy's has another large office it has been trying to part ways with for months at 11 Penn Plaza in Manhattan. Earlier this year, it was able to reach a deal with Apple to sublease about 220,000 square feet of the space.
Macy's, whose flagship department store on West 34th Street is nearby, has another 360,000 square feet at 11 Penn Plaza that continues to remain vacant, costing it millions of dollars annually in rent. So far it has found no takers.
Have a tip? Contact Daniel Geiger at dgeiger@businessinsider.com or via encrypted messaging app Signal at +1 (646) 352-2884, or Twitter DM at @dangeiger79. You can also contact Business Insider securely via SecureDrop.