A $245 million loan backed by a Pyramid Management Group mall is headed toward a refinancing dead end when the debt comes due next month.
The CMBS loan collateralized by the majority of Crossgates Mall, one of New York state’s largest, went to special servicing in February for imminent maturity default, according to Trepp.
Fitch downgraded the debt in March citing declining performance and concerns that Pyramid would not be able to refinance the loan.
The fall of the regional mall began decades before Covid hit, but for many struggling assets, the pandemic was a fatal blow.
The Crossgates loan first went to special servicing for delinquency in 2013, less than a year after its origination, according to Morningstar. Then, in April 2020, the loan went back to special servicing for imminent monetary default, meaning Pyramid was in danger of falling behind again.
The group saw four other mall loans head to special servicing that same spring.
Pyramid requested Covid relief in April 2020. And by June, special servicer Midland Loan Services okayed a four-month deferral of debt service payments and a 60-day extension option.
The group also managed to bump its maturity date back one year to May 2023, acknowledging at the time “there would be an inability to refinance the loan,” Chief Financial Officer Robert Utter recalled in court testimony.
Pyramid’s net operating income dropped to $16 million in 2020 from $30 million in 2018, according to tax documents submitted in a dispute between Pyramid and Crossgates hometown of Guilderland, the Times Union reported.
Operations didn’t improve through 2022. Amazon in March shuttered a store it had opened just a year before, even after Crossgates sweetened the deal with $850,000 in incentives, according to the Times Union.
As of July, the occupancy rate of non-specialty tenants listed as collateral on the loan, fell to 83.9 percent from 85.4 percent in December 2021 and 86.3 percent in 2020.
Now, with Pyramid less than a week away from its maturity date, interest rates stand 4 percent higher than they would have when the loan first came due.
Pyramid did not respond to a request for comment.
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