Activist hedge fund Starboard Value stepped up pressure on Macy’s Inc. to squeeze money out of the department-store chain’s real estate, which the firm values at $21 billion.

Separating the properties into two or more entities would create $10 billion in shareholder value, the investment firm said in a presentation that was sent to Macy’s. The idea would be to put the chain’s iconic properties, such as its flagship location in Manhattan, into one joint venture, while placing its mall-based real estate into another. An operating company would then continue to run the stores.

“Macy’s real estate portfolio is extremely valuable,” Starboard Chief Executive Officer Jeffrey C. Smith said in the letter, which was dated Monday. “A JV, or series of JVs, can crystallize the value of Macy’s real estate while bringing in a partner with substantial capital and real estate expertise.”

Starboard announced its stake in Macy’s in July, when the firm began touting a real estate separation. Though Macy’s rejected the idea of forming a real estate investment trust in November, the chain said last week that it was considering a range of options for its properties. The company is grappling with a slowdown in department-store traffic, weighing on its stock. The shares lost 47 percent of their value last year.

Selling Stakes

Macy’s said last week that it’s seeking to sell portions of its signature Manhattan, San Francisco, Chicago and Minneapolis stores, as well as mall-based properties. Tishman Speyer, the commercial real estate firm, is interested in taking stakes in the flagship locations, Macy’s said. The company is searching for a real estate executive who could oversee the effort, including any partnerships or joint ventures.

Macy’s also is slashing jobs and closing about 40 locations in an cost-cutting push, a move Starboard’s Smith applauded in the letter.

“We appreciate that you have begun to take actions to re-size the cost structure and reduce Macy’s store base,” Smith said. “We believe that as you continue to review the company’s operations, you should find additional opportunities to improve efficiencies.”

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