A very troubled and expensive tristate area mall’s journey through distress is coming to a close.
The Palisades Center mall in West Nyack, New York, was auctioned off after a foreclosure. An affiliate of Stephen Deckoff’s Black Diamond Capital Management won the property on Wednesday with a $175 million credit bid, meaning no new funds were expended.
The Black Diamond affiliate had purchased the debt on the property on Oct. 6.
The auction is a new low point in the decline of the regional mall, once valued at $881 million. Its most recent appraisal gave it a 78 percent haircut, pulling the value down to $191 million.
The October sale of the debt to Black Diamond also resolved the mall’s loan, which had been securitized and sold to investors.
The original investment took a $231.4 million loss. Class B, C and D bondholders were entirely wiped out. Class A lost about 32 percent of its value, to the tune of $72 million.
Pyramid Management Group developed the mall in the late 1990s. In 2016, it took out a $418.5 million refinancing loan against the property.
But performance began to falter shortly after. JCPenney left its space in 2017, followed by Lord & Taylor in 2019. Those anchor spaces have not been re-occupied.
The pandemic added new pains. Revenue dipped nearly $20 million — from $80.4 million in 2016 to $61.8 million in 2022, according to Morningstar Credit. That same year, occupancy fell to 78 percent and the loan was transferred to special servicing for maturity and monetary default. By 2023, expenses were 60 percent of revenue.
Current tenants in the four-story, 1.9 million-square-foot property include Home Depot, Target, BJ’s Wholesale, AMC and Dick’s Sporting Goods, according to Morningstar. The most recent data, from 2024, shows revenue has fallen even further, to $55.2 million.
Pyramid Management Group has lost two other malls to foreclosure recently: the Aviation Mall in Queensbury, New York, and the Hampshire Mall in Hadley, Massachusetts, according to reporting from Syracuse.com.
Neither attorneys for Black Diamond nor for the borrower immediately responded to a request for comment.