One good thing about owning real estate is that even if your business begins to fail, you have an investment that could support you. This is best presented in the case of Macy's. Recognized for the Macy's Thanksgiving Day Parade and its local stores around the country, Macy's is a household name. Despite that, its sales have fallen for 11 quarters in a row, and, in 2017, its stock plummeted. Now, it's around 41 percent lower than a year ago.
Many brick-and-mortar shops are seeing the same issues as Macy's, but there is a difference in this company's case. Macy's still has real estate in its favor. It owns a network of over 600 stores all across the United States, and those stores are worth an estimated $16 billion. The company itself has a market value of around $6.4 billion, making its real-estate holdings worth more than the business.
Some of the extreme value of these buildings come from their history. They are older, exposing ornate details and harking back to eras past. A single store, the flagship store in New York City, is worth approximately $3.3 billion on its own. The company hasn't made any suggestions that it plans to sell, and it has renovated the store to the tune of $400 million between 2012 and 2016.
In the case of Macy's, a large store isn't necessarily profitable. That's why some now offer creative spaces or rent out portions of the stores to other businesses. Even if the retail industry is harsh, having that commercial real estate is saving the company's value.
Source: The New York Times, "Grand Buildings Help Keep Macy's Afloat," Micahel Corkery, Nov. 22, 2017