Investment firm Starboard Value LP commended U.S. department store chain Macy’s on its recently announced efficiency drive, but urged the company to fully realize the value of its vast real estate holdings, the Wall Street Journal reported Monday. The activist investor, in a letter and presentation to Macy's management Sunday, said although it supports the retail chain's cost cuts, it wants the company to follow-through with real-estate deals to bolster cash reserves, the Journal reported.

New York-based Starboard, known for its aggressive shareholder activism, recently made news for asking Silicon Valley giant Yahoo to change its management and business strategy, raising the possibility of a proxy battle with the Yahoo board. Starboard launched a similar campaign against Darden Restaurants Inc., Olive Garden’s parent company, which replaced its entire board after a proxy fight in July last year.

Spinning off Macy's real-estate assets could "create meaningful and lasting value for shareholders," the newspaper reported, citing Starboard’s letter to Macy’s. The letter reportedly suggested two separate joint ventures, one for Macy's landmark properties like Herald Square in New York and a second for hundreds of its mall locations.

In an email reply to the Journal, Macy's said it was reviewing Starboard's recommendations and that the views expressed by the firm were along the same lines as actions already being implemented by the company. According to Reuters, Starboard owns 1.04 percent stake in Macy's.

Last week, Macy’s reported disappointing sales for the months of November and December, and said it will eliminate more than 2,000 jobs which will help it save $400 million annually.

In July last year, at a CNBC investor conference in New York, Starboard CEO Jeff Smith reportedly said that Macy’s could separate its properties from operations, unlocking value for investors. Its real estate is worth $21 billion of the company’s $29 billion enterprise value, according to Starboard’s analysis.