Analysts say Macy's is worth billions more than the $5.8B bid an investor group brought forward this week for outstanding stock it doesn’t own — and the retailer's real estate is the reason.

Evercore ISI and TD Cowen estimate Macy’s real estate portfolio to be worth at least $7B, with TD Cowen's estimate reaching as high as $11B, according to Reuters. JPMorgan equity researchers value the portfolio at $8.5B, estimating its flagship location alone is worth no less than $3B, according to MarketWatch via Morningstar.

The 2K SF flagship in question, the Herald Square Building in New York City, is one of the 320 stores Macy's owns. About 400 Macy's-branded stores are owned by others, and its large number of locations is viewed as a major draw to investors.

"The cake is the real estate," Neil Saunders, GlobalData’s managing director of retail, told Yahoo Finance. "That's the core of this deal."

Arkhouse Management and Brigade Capital's bid, which breaks down to about $21 a share, represented a 32% premium at the time it was proposed Dec. 1, The Wall Street Journal reported. Macy's shares closed Friday at $17.39, down 17% since the beginning of the year. But after news of the bid spread, shares soared nearly 20% by the time markets closed on Monday, according to CNN.

Macy's stock traded in 2015 for as much as $70 a share, the WSJ reported. That year, when Starboard Value LP took a stake in the retailer, its CEO valued the company’s real estate at $21B. E-commerce competition and dwindling demand have taken a toll on Macy's since then.

Macy's seeking bidders for its portfolio could signal a brewing sale-leaseback plan, in which the retailer would rent previously owned locations from its buyers, saving money, according to Bloomberg. This concept was also brought up in 2015, when Macy's sold some of its real estate.

But buyers are harder to come by these days, with a surge in interest rates and a decline in demand for big-box stores.

Transactions have declined because buyers and sellers are unwilling to complete them, Rich Traub, a partner at a law firm that specializes in retail transactions, told MarketWatch. All of the uncertainty explains why the Arkhouse-Brigade Capital group is starting off with a conservative estimate, he told the outlet.

Arkhouse and Brigade Capital aim to take the retailer private, claiming that Macy's is undervalued in public markets. The group is willing to up its offer, per WSJ, and has approval from a bank for more funding.