Macy’s, the only remaining stop in the “four-block walk” of department stores in downtown Minneapolis, may close or be significantly downsized, two people familiar with the company’s plans said Friday.

The national retailer is deep in negotiations with at least one potential buyer interested in converting the building, one of the largest properties downtown, chiefly into office space.

The makeover may include some retail space, though Macy’s future at the site on Nicollet Mall is in limbo, the two people said.

The company is assessing whether to lease back space following a sale. If it does, the two people said, it would likely be significantly smaller than its current store and may be under a short-term lease.

A representative for Macy’s Inc., based in Cincinnati, declined to comment Friday.

The fate of the building, known best as the flagship of the Dayton’s department store chain that for decades was the jewel of the Minnesota retail scene, has been the source of speculation for several years.

“It’s a lot of square footage, a lot of history and it would be a sad day for the city if they are in fact closing, though it doesn’t surprise me,” said Larry Millett, a Minnesota architecture historian. “I did the four-block walk with my mother many times back in the 1950s. We would go downtown to shop, and I would get dragged along. If you wanted to get something sort of fancy, you would go to Dayton’s.”

The other stores, each a block apart, were Donaldson’s, J.C. Penney and Powers Dry Goods.

“It was those big department stores that they really anchored the mall,” Millett said, adding that Macy’s is not only the last remaining traditional department store, it also is the last remaining of those four buildings.

Macy’s executives a year ago quelled concern over the landmark property when they listed it as one of four “flagship real estate assets” along with stores in Manhattan at Herald Square, San Francisco at Union Square and Chicago on State Street. The company at that time said it was looking to form joint ventures with real estate partners to redevelop the locations “in a manner that maintains a robust Macy’s retail store presence while also bringing alternative use into those buildings.”

But in a series of steps since then, the fate of the Minneapolis store appeared to become less certain.

In January, Macy’s hired Eastdil Secured, a prominent New York real estate banking firm, to shop dozens of its properties. In April, it appointed a new executive vice president of real estate to find ways of monetizing the flagship properties. But it was in August, when Macy’s announced plans to close about 100 stores nationwide by early 2017, that the tone and language regarding its flagship properties became more cryptic, saying it continues to “analyze possibilities” for their use.

The downtown Minneapolis Macy’s site is mammoth. It totals about 1 million square feet or about two-thirds of the 57-story IDS Center, Minnesota’s tallest office building.

The property is composed of three buildings in the 700 block of Nicollet Mall. Macy’s fills about half the space. The oldest portion — which is beloved for its ornate exteriors — was built in 1902, while the two adjoining structures were built in 1913 and 1929.

The site is sentimental for Minnesotans who remember the flagship Dayton’s department store, which was rebranded Marshall Field’s in 2001 and then Macy’s in 2006.

“It’s an essential downtown Minneapolis institution and building,” Millett said.

Wendy Jacobson of Minneapolis remembers going downtown as a child to shop at Dayton’s.

“We would do the eighth-floor Christmas store display, go to Oak Grill for lunch,” she said. Her mother, Jan Zimmerman, worked at the store through its transition from Dayton’s to Marshall Fields and eventually to Macy’s. In recent years, they would meet at the Skyroom, Macy’s 12th floor lunch spot, before shopping.

Now, Jacobson said, “We just don’t go downtown that often. It’s not that far, there’s just nothing unique downtown that you can’t get in the suburbs or elsewhere. It’s not a destination anymore.”

Macy’s has department stores in the Twin Cities at the Mall of America, Rosedale Center, Ridgedale Center, Southdale Center, Maplewood Mall and Burnsville Center. It also has two furniture galleries in the metro area.

Macy’s rebounded solidly after the 2007-09 economic downturn. But over the past two years, its revenue and profits declined as consumer spending patterns changed.

People are spending more on home improvement and experiences, like travel or spas. When it comes to clothing, more shoppers are turning to T.J. Maxx or ­fast-fashion chains like H&M. They’re also turning to the internet. By some forecasts, Amazon.com Inc. is expected to surpass Macy’s as the largest online seller of clothing next year.

Staff reporter Kavita Kumar contributed to this report.