Are Malls Making a Comeback?

The modern American mall more or less grew up alongside David Simon, and it now faces its next chapter without him.

Simon, who died this week at 64, industrialized Simon Property Group. Taking over as CEO at 33, he turned a family business into the largest mall owner in the country, assembling a portfolio of more than 250 properties and setting the standard for how institutional capital approached retail real estate. His son, Eli Simon, is now stepping in as CEO, continuing the family’s control of the business. His playbook was scale, quality and constant reinvention. That formula is still shaping how the sector is sorting itself out today.

At the top end, Class A malls have proved to be durable, experience-driven assets. Properties like Roosevelt Field on Long Island are pushing occupancy above 96 percent, with luxury tenants driving sales north of $1,200 per square foot. Roughly 100 top-tier malls now account for about half the sector’s total value, and revenues there are still growing around 5 percent annually. Financing has followed, with CMBS issuance tied to those assets doubling last year, a signal that lenders remain comfortable underwriting the best locations.

It’s a different story for other asset classes within the sector. Lower-tier malls continue to hollow out, with about 40 shutting down each year and delinquency rates climbing into the double digits. The foreclosure of the Palisades Center in West Nyack is a clear example of how quickly value can erode. Once appraised at $881 million, it traded via credit bid for $175 million, wiping out entire classes of bondholders and underscoring how unforgiving the middle and lower tiers have become.

With no quick-fixes for the mall business, some owners are taking reinvention literally.

That’s essentially the bet behind American Dream, the Triple Five Group’s sprawling, nearly 3 million-square-foot shopping center-theme park hybrid in the Meadowlands. Indoor ski slopes, water parks, luxury wings and a steady pipeline of attractions are all designed to give people a reason to show up.

For a while, things looked shaky. The project was plagued by delays, pandemic closures, lawsuits and a heavy debt load, including a $1.7 billion construction loan coming due, while bondholders tied to roughly $800 million in municipal debt are suing over a sharp drop in the property’s assessed value.

More recently, though, there have been signs of traction. Foot traffic is up, sales are improving and luxury tenants are filling in. There’s still a gap between reality and early projections, but the property is starting to look like a high-risk example of where retail could go. The Ghermezians’ American Dream project in Miami would push the concept even further, leaning heavily into entertainment and tourism. It’s also years behind schedule and tied up in infrastructure and land issues, a reminder that pulling this off requires lots of patience and deep pockets.

Then there’s the other path entirely. If a mall can’t be saved, redevelop it.

Lawmakers in New York are now pushing the REVIVE Act, which would fast-track the conversion of underused malls and commercial sites into housing. The proposal aims to strip away much of the entitlement friction that has historically made these projects difficult, with approval timelines as short as 60 to 90 days. It’s not a silver bullet. Lease structures, site layouts and financing realities still make conversions complex. But it reflects a broader shift in thinking about malls as land plays rather than commercial real estate plays.

There was plenty of other real estate news this week. Daryl Hagler sold a Boro Park nursing home to Chuny Herzka, Jared Solomon has an April court date for his embezzlement charges and highlights from the first Los Angeles mayoral debate. These stories and more below.

Daryl Hagler sells Centers portfolio in NYC to Chuny Herzka

Daryl Hagler is offloading a significant chunk of his New York nursing home portfolio as part of a sweeping $1.7 billion deal. Chuny Herzka’s Emerald Group paid $296 million for three nursing home facilities from Centers Healthcare, including the 504-bed Boro Park Center. The sale locks in substantial gains for Hagler, who acquired the Boro Park property for $19 million in 2011 and later expanded it with 150 additional beds.

Former Vornado exec to face embezzlement trial in April

Former Vornado Realty Trust executive Jared Solomon is set to stand trial April 14 on federal charges that he embezzled more than $9.5 million from the company over 15 years. Prosecutors allege Solomon created fake brokerage firms and submitted fraudulent invoices tied to real estate deals, funneling payments into accounts he controlled. Authorities say he used the funds to purchase luxury properties in Westchester and Manhattan, and now faces up to 20 years in prison if convicted.

LA mayoral debate offers patchy view of candidate field, clash on Measure ULA

Los Angeles’ first mayoral debate offered little clarity in a crowded race as leading candidates skipped the stage and those present clashed over housing policy. Incumbent Karen Bass and challenger Spencer Pratt did not attend, leaving other contenders to spar over Measure ULA, with sharp disagreements on whether the tax helps or hinders housing development.

Alex Sapir’s divorce heading to trial in October

Developer Alex Sapir and his estranged wife Yanina appear headed for a divorce trial this October after nearly four years of legal battles. The dispute recently centered on a proposed $2.2 million loan backed by their $37 million waterfront estate on the Venetian Islands, which is currently on the market.

FiDi condo building changes hands in secret $93M sale

A long troubled Financial District condo project has traded hands in a quiet $93 million deal and is now being repositioned as luxury rentals. Eenhoorn acquired the 62-unit building at 1 Park Row from an entity tied to Circle F Capital after stepping in while several units were already under contract. The sale follows a decade-long development process that included financing hurdles, a construction lawsuit over delays and a $50 million loan secured to complete the building.

Monroe Capital sues Ari Pearl, BH3 principals over Mondrian Hallandale Beach loan

Monroe Capital has sued the developers of the Mondrian Hallandale Beach Residences to recover a $70 million mezzanine loan tied to the nearly completed project. The lawsuit targets entities linked to Ari Pearl of PPG Development and principals of BH3, alleging a missed February payment triggered a default and pushed the total owed to about $72.7 million.

Core Club’s fraud claims against Michael Shvo dismissed

A New York judge dismissed key fraud claims brought by Core Club against developer Michael Shvo, handing Shvo a partial legal victory. The ruling found that Core’s allegations failed to meet the legal standard for fraud, which requires misrepresentation of present facts rather than unfulfilled promises about future plans. Some claims will proceed, including allegations that Shvo unjustly enriched himself by using the club’s facilities and breached agreements tied to a new New York location.

Basis Investment Group finds buyer for Fannie, Freddie license

Basis Investment Group has sold its Fannie Mae and Freddie Mac multifamily lending licenses to Zions Bancorporation as agency approvals become increasingly valuable assets. The deal gives Zions the ability to originate loans through Fannie’s DUS program and Freddie’s Optigo platform, along with acquiring Basis’ mortgage servicing rights. The transaction comes amid a broader wave of agency license sales, with firms like Fifth Third Bank, Lument and Ready Capital either acquiring or exploring exits from similar platforms.

Ken Griffin’s last Chicago property back on market at $12M, with previous deal scuttled

Ken Griffin is again trying to sell his final Chicago property after a previous deal for his Park Tower penthouse fell through. The 67th-floor, 9,250-square-foot unit is now listed at $12.3 million, after initially hitting the market in 2022 for $15.8 million and later going under contract at $12.5 million. Griffin has steadily liquidated his Chicago real estate holdings since relocating Citadel to Miami in 2022, often at a loss, and the Park Tower listing represents his last remaining asset in the city.