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By: Meyer Wolfsheim
Macy’s has ushered in the holiday season with an unexpected move: the sale of its iconic downtown Brooklyn department store at 422 Fulton Street. In a surprising turn reported by the New York Post, the 440,000-square-foot property was sold for just $23 million—an amount that has left real estate experts and industry insiders scratching their heads.
The sale price, amounting to just over $50 per square foot, stands in stark contrast to the $250 per square foot that comparable retail spaces in downtown Brooklyn have commanded in recent years. Macy’s decision to part with the property at such a steep discount has raised questions about the company’s ability to capitalize on its real estate assets.
“Macy’s isn’t a real estate investor; they’re a retailer, and this shows they didn’t realize the value of their most significant asset,” a source told the New York Post. This miscalculation becomes even more glaring when examining what happened next.
Isaac Chera of Crown Acquisitions, one of the initial buyers, reportedly flipped the property almost immediately. He sold it to his associates — United American Land’s Albert Laboz and the Chehebar family of the Jackson Group—for $36 million, pocketing a swift $13 million profit. Following this transaction, another unnamed investor joined the syndicate, pushing the property’s valuation to a staggering $80 million.
This series of flips highlights Macy’s apparent oversight in recognizing the true value of the property. What could have been a significant windfall for the struggling retailer turned into a golden opportunity for savvy investors.
Macy’s history at the Fulton Street location stretches back to 1995, when it took over from the defunct Abraham & Straus department store. The Post reported that in 2015, Macy’s sold the top four floors of the building to Tishman Speyer for $270 million, retaining only the more lucrative lower floors, which it renovated at a cost of $100 million. The recent sale marks the end of Macy’s direct ownership of a site that has been a cornerstone of Brooklyn’s retail landscape for decades.
The sale comes as Macy’s faces mounting financial challenges. Preliminary third-quarter earnings revealed a 2.4% decline in sales, prompting the retailer to offload 25 properties in 2024, including the Fulton Street location, according to The Post report. Macy’s is also closing 150 stores—nearly 30% of its total portfolio—while investing in its remaining locations over the next three years.
With an inventory glut ahead of the holiday season, Macy’s has found itself under increasing pressure from activist investors to monetize its real estate portfolio. Estimates of the company’s real estate holdings range from $5 billion to $9 billion, making it a potential lifeline in a turbulent retail market. However, deals like the Fulton Street sale suggest the company may be leaving significant money on the table.
The new owners of the Brooklyn property, led by Laboz, Chehebar, and Chera, have ambitious plans for the historic site. Laboz told the New York Post that the group aims to transform the space into a hub for “family-friendly attractions.” Potential tenants include entertainment giants such as Netflix, Universal, and Lego.
“It’s one of Brooklyn’s most historic retail buildings, and we intend to activate its retail potential to the fullest,” Chehebar told The Post, signaling a shift toward experiential and entertainment-driven uses for the site.
