In a move aimed at acquiring the valuable real estate assets of Macy's Inc., hedge funds Brigade Capital Management and Arkhouse Management have made a reported bid of $21 per share for the shares of Macy's that they don't already own. Analysts have speculated that the bid is primarily focused on the department store giant's real estate holdings.

The proposed deal would see the hedge funds paying $5.8 billion to acquire the remaining shares of Macy's, significantly lower than the estimated worth of Macy's real estate portfolio, which is valued between $7 billion to $8 billion. Macy's currently owns close to half of its 500 stores across the United States.

Macy's, which also oversees the operations of Bloomingdale's and Bluemercury, controlling around 300 locations combined, has two iconic properties that attract attention - the Macy's Herald Square flagship and Bloomingdale's on Lexington Avenue at East 59th Street. Despite speculation that the potential new owners would consider demolishing or redeveloping these prime locations, it appears that neither property is on the redevelopment target list.

Interestingly, even before the takeover bid emerged, Macy's had announced plans in February 2020 to construct a massive 900-foot-tall office skyscraper on top of its 11-story flagship store. However, these plans were put on hold due to the onset of the pandemic. In May 2021, CEO Jeff Gennette reaffirmed the company's commitment to the vision, stating that Macy's would invest $235 million in upgrades to transit and pedestrian features at Herald Square, a crucial step towards obtaining the necessary zoning change for the new tower.

However, it seems that little progress has been made on this initiative. The Department of City Planning has stated that Macy's has not filed any applications for the proposed project, and the company's spokesperson declined to comment on the matter. Some industry experts remain skeptical about the feasibility of the office tower project, especially given the current challenging market conditions and the stalled progress of several other supertall developments.

As for the Bloomingdale's site located at 1000 Third Avenue between East 59th and East 60th, it holds potential for a luxury condo tower rather than office spaces, if Macy's were to have ownership. However, it is important to note that the ground is owned by a Bloomingdale family trust, which leased it to the retailer until 2058.

The bid from Brigade Capital Management and Arkhouse Management underscores the appeal of Macy's valuable real estate assets. While the potential new owners may have envisioned alternative plans for redevelopment, the existing plans for an office tower above Macy's Herald Square flagship, coupled with the uncertain status of the proposal, suggest that the future of Macy's properties may still hold some surprises.

Only time will tell whether Macy's real estate assets will be sold off or undergo significant changes in the hands of these hedge funds.