For 601W Cos., the $40 million purchase of the Macy’s store in downtown Minneapolis is a relatively modest deal.
The New York real estate investment firm has a history of flipping skyscrapers, making old buildings new again and working with retailers.
“They have deep roots in the retail world and they’ve done extraordinary developments,” said Andrea Christenson, a senior director with Cushman & Wakefield NorthMarq’s Minneapolis retail team.
The group plans to redevelop the block-sized Macy’s property in Minneapolis, which is actually three buildings dating back to 1902, into a mix of office and retail space, Macy’s said in announcing the building’s sale.
Calls to 601W executives were not returned. The company is led by managing members Mark Karasick and Victor Gerstein.
The Macy’s deal looks to be the firm’s first venture into Minnesota and a smaller financial investment compared with its other purchases in recent years, which have included the Aon Center in Chicago that was bought for $713 million in 2015, and the U.S. Steel Tower, Pittsburgh’s tallest, for $253 million.
Through the years, the firm has acquired properties totaling about 24 million square feet, with a collective value in excess of $5 billion. 601W says it has raised more than $1 billion in equity from investors and has completed transactions involving more than 30 major office buildings, about half of which are in New York City.
601W has sold 44 percent of the properties it acquired within four years of purchase, the company says on its website.
In one of its most lucrative deals, 601W sold the building where its is housed, the Starrett-Lehigh Building in Manhattan, for around $950 million in 2011. The group, which had originally purchased the 2.3 million-square foot building in 1998 for $151.5 million, reaped a profit of $650 million after investments. The complex now has offices for retail and media brands such as Tommy Hilfiger, Hugo Boss and Martha Stewart Living Omnimedia.
Until recently, the company’s Midwest interest has been limited to Chicago properties. It made headlines last May when it bought the old main Post Office building in downtown Chicago and said the complex would get a $500 million overhaul, complete with a rooftop park and other amenities.
601W’s New York properties are managed from its main office. It hires local real estate firms to run the day to day operations of properties outside New York.
There has been no word of a partner in the Twin Cities.
Staff writer Kavita Kumar contributed to this report.