pyramid management

Palisades Mall Owner Says It’s Adding Residential Projects Across Its Portfolio

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Clarkstown’s Soon-To-Be Released Comprehensive Plan Is Looking At How To Accommodate Multifamily Housing

By Tina Traster

It is probably safe to say The Palisades Center will not replace Lord & Taylor or JC Penney with a new generation of department stores. Nor will management fill all the empty spaces with retail.

The American mall is in transition – one that started long before the pandemic but has been crystalized by the crisis. The American mall is being reinvented, and for the Palisades Center, it appears to be only a matter of time before the retail/entertainment monolith morphs into something with more dimensions.

Last month, Trammel Crow Residential broke ground on a 282-unit residential development adjacent to the Kingston Collection mixed-use complex in Kingston, Massachusetts. Pyramid Management Group, which manages the Palisades Center, owns and manages the Kingston Collection.

The company says it plans to “replicate this formula throughout its portfolio as the popularity of live/work/play continues to increase among the U.S. population, especially within the millennial and empty nester demographics.”

When asked specifically if residential housing is slated for the mall site, Pyramid said it had no comment. However, its CEO has signaled diversification is the way of the future.

“We are pleased to be moving forward with other residential projects across our portfolio,” said Stephen J. Congel, CEO of Pyramid Management Group. “Staying ahead of the curve is the key to our success and resilience as a company.”

“The development of a residential complex at our Kingston Collection is really just the beginning of a much broader, portfolio-wide diversification strategy to bring popular, exciting new uses, such as residential, into the mix with our existing assets,” Congel added.

The pandemic’s shift to online shopping is forcing nearly every owner-operator of enclosed and outdoor malls to rethink how to shape it. Even before the pandemic, Pyramid incorporated a residential component at its Destiny USA mall in Syracuse.

Of the approximately 1,500 malls built in America since the mid-1950s, about 500 have either closed or converted into something other than retail; hundreds more are projected to close in the next decade. Already, nearly 60 of these former malls have been reconstructed as new types of communities, featuring multifamily housing and other uses—typically some retail and office space. Another 75 projects of this type are in the planning stages.

More than half of all U.S. department stores in malls will be gone by 2021, one real estate research firm predicts.

Converting commercial real estate to housing may be the best use of land in a retailed-saturated country. Malls and shopping hubs tend to be centrally located and connected to transit.

Mall owners nationwide are repositioning properties to incorporate other uses including outpatient centers, medical offices, flex office space to accommodate workers who are coming back from working at home, and the much-needed warehousing in the e-commerce era. Scottsdale Fashion Square in Scottsdale, Ariz. has added an 80,000-sq.-ft. expansion that includes co-working space.

More recently, Centennial Real Estate Co. has proposed adding a luxury multifamily component with 300 apartments to Connecticut Post Mall in Milford, N.J.

Another example of revitalizing an aging retail property with multifamily that’s in the works is at Alderwood, a 1.3 million-square-foot retail center in Lynnwood, Wash. Brookfield Properties is collaborating with AvalonBay Communities to revitalize the 41-year-old regional mall in the Seattle suburb. Rising on the former site of a Sears store, Avalon Alderwood Place will encompass 328 units and 64,000 square feet of first-floor commercial space.

When The Arcade Providence in Rhode Island, the nation’s oldest indoor shopping mall, closed in 2008, a developer turned it into a complex of micro-apartments so popular that 4000 people were on the waiting list.

The sprawling Palisades Center, located in West Nyack, is zoned “Major Regional Shopping (MRS). For Pyramid to contemplate housing, the company would need to secure either a zoning amendment or a variance for the site. Clarkstown, which plans to release an updated comprehensive plan in April, is focused on bringing needed multifamily housing to the town. Town planner Joe Simoes says once the Comprehensive Plan is adopted, the town will look at underutilized retail areas for residential use.

“We need more housing for millennials, the workforce, and seniors,” Simoes added.