Macy’s said Wednesday that it would close its Nicollet Mall store and has signed an agreement to sell the building to 601W Companies, a New York-based commercial real estate firm.
City officials, who wished to remain anonymous, said Macy’s told the city the store would close in March. 601W intends to redevelop the upper floors of the Macy’s space into “creative office space” according to a release, with retail on the street and skyway levels.
The deal is expected to close by the end of the month, which is when Macy’s wraps up its fiscal year. The Nicollet Mall store is just one of 68 that Macy’s said it will close as the struggling Cincinnati-based retailer attempts to shed poorly performing stores.
“We are closing locations that are unproductive or are no longer robust shopping destinations due to changes in the local retail shopping landscape, as well as monetizing locations with highly valued real estate,” Macy’s CEO Terry Lundgren said in a statement.
The announcement is hardly a surprise—Twin Cities Business broke the news of the closing in early December
—but the buyer has changed. Early reports indicated that San Francisco-based City Center Realty Partners was in talks to acquire the property for redevelopment. But contingencies in sale terms regarding asbestos in the century-old building ultimately derailed that deal, according to city officials. The 601W sale contains fewer contingencies, city sources said.
Mayor Betsy Hodges expressed excitement about the project and called it a "huge opportunity for downtown Minneapolis."
"I have been working closely with Macy's over several months and will meet with the new owners very soon," she said in a statement following the announcement. "Retail is changing dramatically in downtowns across America, and my expectation is that the new owners will bring in the kind of targeted, specialty retail that will be successful in our vibrant, safe, 24-hour downtown."
While the Macy’s site has a prime location, redevelopment efforts could be tricky given large floor plates that provide little natural light. But 601W is not without experience: It’s currently working on the old Main Post Office in Chicago
, a similarly massive building. It’s slated to open in 2018.
601W’s portfolio has at times included several high-profile buildings, including the US Steel Building in Pittsburgh, the Aon Center in Chicago (the city’s third-tallest building) and the Bank of America Center in San Francisco.