PORTLAND, Ore. -- Talk among the local commercial real estate scene over the past six months has hinted that the downtown Macy's building was being sold and would likely be redeveloped into creative office space.

Earlier this month, Macy's announced it had sold its five floors of the historic Meier & Frank Building for $54 million and would close up shop in early 2017. The Business Journal later reported that the buyer was KBS.

Now, the Business Journal has learned that, indeed, KBS and its partner, Sterling Bay of Chicago, plan to redevelop the property into the latest creative office and retail space to come downtown.

“We believe that the Meier & Frank Building’s accessible, marquee location will attract first-class tenants seeking flexible and creative space in Portland,” said KBS Western Regional President Rodney Richerson, in a statement. “We’re excited to be working with Sterling Bay on an adaptive reuse project in such a thriving city.”

Macy's plans to keep its store open through the holidays before closing it down in early 2017. After that, KBS and Sterling will set about an extensive redevelopment.

The upper floors of the building are home to The Nines hotel, which is owned separately from the Macy's portion by Pebblebrook Hotel Trust. Pebblebrook paid nearly $81.2 million for the hotel portion of the building in 2004.

The purchase of the Macy's property is not the first in Portland or Oregon for KBS, one of the largest office owners in the world. The Newport Beach, Calif.-based company also owns the Commonwealth Building in downtown Portland, which it acquired for $69 million back in July. Other holdings in Oregon include ADP Plaza in Portland and the Triangle Corporate Park III in Tigard.

The Business Journal will share more details of what's to come for the Macy's floors in a forthcoming Q&A with a representative from KBS.

Jon covers real estate for the Portland Business Journal. Sign up for his daily newsletter to hear about new projects and get behind-the-scenes looks at Portland's rapidly changing built environment. The Portland Business Journal is a KGW News partner.