Troubled Midtown rental saga headed for a foreclosure finale
After struggling to rebound from the pandemic, the Palisades Center megamall in West Nyack could be headed for a sale to satisfy its owner’s debts.
Wilmington Trust, acting as a trustee for CMBS bondholders, filed to foreclose on the 2.2 million-square-foot shopping and entertainment complex, claiming Syracuse-based owner Pyramid Management Group defaulted on a $418.5 million loan tied to the Rockland County property.
JPMorgan Chase and Barclays provided Pyramid with the loan in 2016 and assigned the debt to the CMBS trust and Wilmington as the trustee that same year. Palisades Center suffered from the loss of anchor tenants including JCPenney in the years that followed, and Covid-related business closures only made matters worse.
The loan was set to mature in April 2021, but Pyramid asked for a temporary moratorium on payments early in the pandemic, when a default appeared imminent. The two sides reached a standstill agreement in June 2020, extending the loan’s maturity date.
But Pyramid failed to make good on its payments this past fall, according to the foreclosure suit, and the loan went into default. Pyramid was notified of the default in November of last year.
Wilmington Trust is now seeking to take possession of the mall. The trustee has also asked the court to appoint a receiver and to award the trust all payments it claims it is owed, including the remaining loan balance, interest, late payment charges and other fees. Wells Fargo is the special servicer on the loan.
Neither Pyramid nor attorneys for the plaintiff immediately responded to requests for comment.
Located about 20 miles north of New York City, Palisades Center is the nation’s 12th-largest mall by rentable space. It was developed in 1998 and includes a ferris wheel, ice rink and 21-screen AMC movie theater. Appraisers pegged the property’s value at $425 million in 2020, according to Trepp, less than half of the $881 million it was valued at in 2016.
Pyramid’s portfolio includes 15 malls across upstate New York and New England, which combine for nearly 18 million square feet, according to its website.
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