— Macy’s to Close Nearly 150 Stores; Manhattan Office Project Sold for $1; Apollo Founder Sells Shares for First Time; U.S. Home Prices Accelerate; Sixth Street Plans Real Estate Bargain-Hunting; U.S. Consumer Confidence Falls for First Time; Blackstone Buys Barclays Credit Card Debt.
1. Macy’s to Close Nearly 150 Stores
According to regulatory filings, Macy’s plans to close nearly 150 stores in the U.S., while adding 15 high-end Bloomingdale’s stores and 30 Bluemercury locations by 2026.
Macy’s did not disclose the number of employees potentially affected by these closures, though severance costs could reach up to $50 million. Some affected employees may transfer to other nearby Macy’s locations.
Macy’s warned in its latest earnings report that first-quarter EPS could range from 10 to 16 cents, significantly lower than the analyst consensus of 45 cents. Macy’s stock is down 4% year-to-date.
New CEO Tony Spring announced the closures less than one month after taking office, expecting to achieve savings of $600 to $750 million.
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2. Manhattan Office Project Sold for $1
The Canada Pension Plan Investment Board (CPPIB) has long been one of the most active investors in real estate, with its investment strategy widely emulated by many pension funds.
However, CPPIB has now become one of the most aggressive sellers in the office property sector.
Currently, CPPIB has sold two Vancouver office buildings, one office park in Southern California, and one office redevelopment project in Manhattan at a significant discount. Notably, the equity portion of the Manhattan project was sold for just $1, underscoring CPPIB’s eagerness to offload problematic properties.
CPPIB manages $436.9 billion in assets and invests across nearly all property types.
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3. Apollo Founder Sells Shares for First Time
According to a filing released on Monday, retired Apollo Global CEO Leon Black has sold company shares for the first time since leaving nearly three years ago.
Reportedly, Black sold a 2% stake worth $172 million. Since Apollo’s IPO 13 years ago, its stock has surged 480%.
In recent years, Black has reinvested dividends from Apollo into real estate and other private equity through his family office, Elysium Management.
According to Bloomberg Billionaires Index, Black’s net worth totals $13.8 billion.
Source：Bloomberg – Leon Black Sells Apollo Global Stock for the First Time Ever
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4. U.S. Home Prices Accelerate
In December last year, the S&P CoreLogic Case-Shiller home price index rose 5.5% year-over-year, accelerating from November’s 5% increase.
December’s data captured the home price movement in the final quarter of 2023 when mortgage rates reached a 20-year high of 7.79%, before quickly declining to 6.61% by year-end.
The index tracking the 20 largest U.S. cities showed a 6.1% year-over-year increase in December, up from 5.4% the previous month. San Diego led with an 8.8% increase, followed by Los Angeles and Detroit at 8.3%.
After seasonal adjustments, home prices hit new highs in 10 of the 20 cities.
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5. Sixth Street Plans Real Estate Bargain-Hunting
Alan Waxman, CEO of Sixth Street Partners, said in an interview with Bloomberg TV that his firm sees no systemic risk in the real estate market for now. However, he noted that many properties might fall into distress if interest rates remain elevated, presenting significant bargain-hunting opportunities.
San Francisco-based Sixth Street manages $75 billion in assets and is among the most active investors in private credit, providing financing for many prominent corporate and sports-team acquisitions.
Recently, Sixth Street hired former Goldman Sachs partner Julian Salisbury and Safehold’s Marcos Alvarado, both experienced in real estate investment.
49-year-old CEO Alan Waxman plans to invest heavily in discounted commercial real estate, including office properties.
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6. U.S. Consumer Confidence Falls for First Time
In February, the Conference Board’s consumer confidence index dropped to 106.7 from 110.9, marking its first decline in four months and coming in below economists’ expectations.
Moreover, consumer expectations for the economy fell to a three-month low. However, expectations for inflation to continue improving over the next 12 months remained at their lowest levels since 2020.
Conference Board Chief Economist Dana Peterson noted in a statement that while consumers were less concerned about inflation in food and fuel prices, they became increasingly worried about the political environment and employment market.
The proportion of consumers expecting higher future incomes fell to its lowest level since October.
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7. Blackstone Buys Barclays Credit Card Debt
U.K.-based investment bank Barclays agreed to sell $1.1 billion in credit card loans to Blackstone, aiming to clear assets and comply with regulatory requirements.
Compared to traditional banks, private equity firms like Blackstone face fewer regulatory constraints and have started entering mainstream debt markets to help banks relieve capital pressures.
Blackstone’s credit and insurance divisions will acquire Barclays’ receivables, though Barclays will continue managing the loans.
Barclays aims to expand its U.S. credit card lending by $8 billion over the next three years.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.