A loan associated with the Palisades Center mall in West Nyack, New York, has been settled with significant losses for investors. According to Morningstar Credit, lower-tier bondholders lost their entire investments, while first-priority investors also faced losses. The mall has struggled with declining occupancy and revenue since the loan was underwritten in 2016.
Developed by Pyramid Management Group in the late 1990s, the Palisades Center was refinanced in 2016 with a $388.5 million loan. At that time, the mall was valued at $881 million. The loan was then securitized and sold to investors. However, the mall’s financial performance weakened in subsequent years. Anchor tenants JCPenney and Lord & Taylor closed their stores in 2017 and 2019, respectively, and those spaces remain vacant.
The COVID-19 pandemic further reduced revenue. In 2016, the mall generated over $80.4 million in revenue; by 2022, that figure had dropped to $61.8 million. Occupancy rates also fell from full capacity to 78 percent as of 2022. Expenses increased from representing 40 percent of revenue to 60 percent by 2023.
Recent data from 2024 shows that annual revenue declined further to less than $56 million—a drop of more than 30 percent compared to earlier years—leaving the mall unable to cover its debt service obligations. Current tenants include Home Depot, Target, BJ’s Wholesale Club, AMC Theatres, and Dick’s Sporting Goods.
The property’s most recent appraisal values it at $191 million, representing a loss of approximately 78 percent of its previous value. After the servicer filed for foreclosure and received a receiver and summary judgment, the loan was resolved this month with a $231.4 million loss. Class B, C, and D bondholders were completely wiped out, while Class A bondholders lost about 32 percent of their investment—roughly $72 million.
Pyramid Management Group has experienced similar difficulties at other properties. Over the past year, the company lost two additional malls—Aviation Mall in Queensbury, New York, and Hampshire Mall in Hadley, Massachusetts—to foreclosure.
Pyramid Management Group did not immediately respond to a request for comment.
