February 27, 2017
In the midst of announcing national closures, department store operators Kohl’s Corp. and Macy’s Inc. are quietly monetizing the real estate they currently own and lease. The two companies are leasing prime space within their large stores, and leasing it to other retailers.
The companies are hoping that their stores, which are situated within prime shopping districts, will attract retailers with popular brands, thereby increasing rental income, while boosting foot traffic. The two retailers have approximately 225 million square feet of real estate space, total.
Kohl’s is planning to operate 500 of its total 1,150 stores with less square footage, and will lease out the remaining space to other retailers. Macy’s, in the meantime, is planning to set aside storefront space, and lease or sell the space to high-end retailers.
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