UPDATE, April 17, 5:09 p.m .: One of the largest shopping malls in the country has been swept away by the tidal wave of CMBS loans which have been earmarked for special services.
A $ 388.5 million loan on the 2.2 million square foot Palisades Center in West Nyack, NY, has been transferred to a special department due to an impending monetary default, Trepp reported.
The debt was initiated by JPMorgan Chase and Barclays in 2016 and was included in a single asset CMBS transaction, with Wells Fargo as master and special service.
Robert Congel’s Pyramid Companies developed the mall, which opened in 1998 about 30 miles north of Midtown Manhattan and is the 11th largest in the country.
The loan covers 1.8 million square feet of retail space on the property and excludes space occupied by Macy’s and Lord & Taylor. The mall’s capital stack includes an additional $ 141.5 million mezzanine debt, according to the credit rating documents.
Pyramid did not respond to a request for comment. No service agent comments were provided in connection with the transfer. A Wells Fargo spokesperson said the service agent “is working with various borrowers, including this one, who are looking for relief at this time.”
Fully let in 2016, the property saw its occupancy rate drop to 82% in 2019 with the departure of tenants including JCPenney, Lord & Taylor and Bed, Bath & Beyond. The exit of JCPenney in 2017 led Moody’s to downgrade certain classes from the CMBS trust.
The mall is also home to the 21-screen AMC Palisades theater, which has been slowed down by the coronavirus. AMC’s struggles have sparked speculation it will soon file for bankruptcy – although its owner, Chinese group Dalian Wanda, has denied it.
Last May, a judge ruled that Pyramid couldn’t expand the mall without voter approval.