Center City Macy’s To Shutter In March, Leaving Market East Without Key Retail Anchor

Department stores were once the beating heart of Center City’s retail scene, but that’s no longer the case. A key reminder of that commercial heritage will soon disappear into the annals of history as well.

Macy’s is shutting down its Center City location in the Wanamaker Building, the chain announced Thursday. It comes as the vintage skyscraper is going through foreclosure proceedings, and it is slated for a partial residential conversion once those are concluded.

The department store will close for good in March, city officials said during a press conference Thursday afternoon.

“We are saddened that Macy’s has decided to move on,” said Council Member Mark Squilla, who represents the district where the store is located. “We have a lot of challenging times ahead of us, and that means we have to get to work.”

Officials were eager to frame the closure as an opportunity for the city to create a new vision for Market East, which has struggled with high vacancy rates for years.

“It reaffirms that we are in the midst of that revival opportunity,” Philadelphia Planning and Development Director Jesse Lawrence said. “We’re optimistic that the future of Philadelphia along Market East is very much bright.”

Much of that hope is pinned on the new Philadelphia 76ers arena, which the city council recently approved. The venue is slated to open in time for the 2031 NBA season.

“We've framed the arena as that catalyst, as that attractive anchor that’s really needed to jump-start development,” Lawrence said.

New York-based development company TF Cornerstone, which owns the retail space occupied by Macy's and acquired the majority of the building’s office debt in July, is planning a partial office-to-residential conversion for the 1.4M SF property.

“The city definitely appreciates the attention that TF Cornerstone is paying to the building with its current proposal,” Lawrence said. “Where better a place to put that housing than right here in the middle of Center City?”

Rubenstein Partners paid $200M for a majority stake in the building in 2017. The tower was 96% occupied at the time, but that rate sat at just 36% late last year.

The Wanamaker went into receivership in September 2023. TF Cornerstone was pushing to advance the foreclosure case late last year.

Real estate professionals across the city are curious to see what will happen to the historic skyscraper, which once housed the flagship location for the John Wanamaker Department Store.

“Everyone’s talking about the Wanamaker,” JLL Philadelphia Research Manager Emily Friedman told Bisnow earlier this month. “It is a very hot topic of conversation right now.”

Friedman said that while the building has a well-respected historic lineage, the fact that its elevator bay is on the second floor above an escalator is a bit of a drawback.

The building also has a roughly 100K SF floor plate, larger than what is considered ideal for an office-to-residential conversion.

One potential solution could entail hollowing out the historically protected skyscraper for an interior courtyard, which would allow for more windows, but that would be an expensive project.

The only other Macy’s location in the city is at the Roosevelt Mall in Northeast Philadelphia.

“Closing any store is never easy, but as part of our Bold New Chapter strategy, we are closing underproductive Macy’s stores to allow us to focus our resources and prioritize investments in our go-forward stores, where customers are already responding positively to better product offerings and elevated service,” Macy's CEO Tony Spring said in a statement.

Macy’s announced plans to close 65 underperforming stores late last year. The closures are expected to bring the company $135M. Macy’s made $66M in profit off real estate sales in the third quarter.

The downsizing initiative isn't new for the chain. It surfaced plans to shutter 150 stores by the end of next year in its February 2024 earnings report.

Macy’s employees at the Center City location were notified about the closure during a meeting Thursday morning, The Philadelphia Inquirer reported. The chain opened the store in the Wanamaker Building in 2006.

TF Cornerstone didn’t immediately respond to Bisnow’s request for comment.