One of the nation’s largest malls has had its value chopped in half.
Appraisers pegged the Palisades Center Mall’s value at $425 million, according to data firm Trepp. That’s less than half of the $881 million that the mall was valued at in 2016, when owner Pyramid Companies received a $388.5 million mortgage on the 1.8 million-square-foot property.
Pyramid did not respond to a request for comment prior to publication.
Like retail centers across the country, the pandemic wreaked havoc on the Palisades Center. In April, after New York state mandated the closure of shopping centers, Pyramid requested relief and the loan behind the West Nyack mall was transferred to the special servicer. (Malls in New York state were able to reopen in July if they met certain requirements, namely installing enhanced air-filtration systems.)
Pyramid originally sought relief through 2022, but in June it reached a standstill agreement with servicer Wells Fargo, which provided the borrower with a moratorium on debt service payments until Sept. 9. The deal also came with a six-month deferral and an extension of the loan. Instead of maturing April 2021, the loan is now set to expire to either October 2021 or whenever the borrower pays off the last of the 12 monthly installments, whichever comes first.
The debt behind the Palisades Center carried a loan-to-value ratio of 48 percent when it was originated four years ago. The mall was fully leased at the time, but has since seen its occupancy rate drop to 83 percent, with large-footprint tenants JCPenney, Lord & Taylor and Bed, Bath & Beyond closing their locations.
Other malls have similarly seen their values plummet. The 5.6 million-square-foot Mall of America was reappraised in August, resulting in the value dropping to $1.94 billion, down from $2.31 billion, according to Bloomberg.