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Appraisers Said Palisades Center Mall’s Value Is $425 Million, 50 Percent Less In Four Years
The Palisades Mall in West Nyack is worth half of what it once was.
Appraisers said the Palisades Center Mall’s value is $425 million, according to data firm Trepp, 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.
Malls and retail centers nationally have been struggling since the coronavirus pandemic forced shutdowns and changes the ways consumers shop. However, The Palisades Center had been struggling prior to the state mandated shutdown – losing both J.C. Penny and Lord & Taylor, as well as several other retailers including Bed, Bath & Beyond. However, tenants across the board ceased paying rent during the lockdown. Occupancy rate before the pandemic was 82 percent.
After temporarily closing, Palisades Center Mall owner Pyramid Companies risked defaulting on its $388.5 million CMBS loan. The loan fell into special servicing in April.
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.
The appraisal will likely have an impact on the mall’s efforts to reduce its taxes.
In May, the mall filed a grievance with the Town of Clarkstown to slash its tax bills by 50 percent, citing economic difficulties. Pyramid was seeking a reduction of full market value of nearly $466 million to about $230 million. The Clarkstown Board of Assessment Review denied the grievance. The mall owner had a July 31 deadline to file Tax Certiorari petition with the New York State Supreme Court.
Last November, the citizens of Clarkstown voted to lift the 20-year restriction that prohibited the Palisades Center from developing additional gross leasable space in the mall. The mall is now free to use 250,000 square feet of existing empty space on the fourth floor and build another 250,000 square feet outside the four walls, though its plans are subject to town approval.
Whether new tenants, or some kind of redevelopment plan would set off the impacts of the tax challenge remains to be seen. The mall has been saying that it wanted the covenant lifted to diversify its offerings, including entertainment. Malls around the nation being reinvented through a mix of housing, hotel, convention centers, and other non-retail uses.
The mall did not return calls seeking comment.