Palisades Center’s $390M loan on verge of default

Special servicing for massive mall, which lost anchor tenant JCPenney in 2017

New York /
Apr.April 17, 2020 02:39 PM
The Palisades Center and Pyramid Management Group CEO Steve Congel (Credit: Facebook; Pyramid Management Group)

The Palisades Center and Pyramid Management Group CEO Steve Congel (Credit: Facebook; Pyramid Management Group)

UPDATED, April 17, 5:09 p.m.: One of the nation’s largest malls has been swept into the tidal wave of CMBS loans that have gone into special servicing.

A $388.5 million loan on the 2.2 million-square-foot Palisades Center in West Nyack, N.Y., has been transferred to special servicing because of imminent monetary default, Trepp reported.

The debt was originated by JPMorgan Chase and Barclays in 2016 and was included in a single-asset CMBS transaction, with Wells Fargo as both master and special servicer.

Robert Congel’s Pyramid Companies developed the mall, which opened in 1998 about 30 miles north of Midtown Manhattan and is the 11th largest in the country.

The loan covers 1.8 million square feet of retail space at the property, and excludes space occupied by Macy’s and Lord & Taylor. The mall’s capital stack includes an additional $141.5 million in mezzanine debt, according to rating documents.

Pyramid did not respond to a request for comment. No servicer commentary was provided in connection with the transfer. A spokesperson for Wells Fargo said that the servicer is “working with various borrowers, including this one, that are seeking relief at this time.”

Fully leased in 2016, the property saw occupancy fall to 82 percent by 2019 with the departure of tenants including JCPenney, Lord & Taylor and Bed, Bath & Beyond. JCPenney’s exit in 2017 led Moody’s to downgrade some classes of the CMBS trust.

The mall is also home to the 21-screen AMC Palisades Theater, which has been idled by the coronavirus. AMC’s struggles have spurred speculation that it will soon declare bankruptcy — although its owner, China’s Dalian Wanda Group, has denied this.

Last May a judge ruled that Pyramid could not expand the mall without voter approval.


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