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The Future Of The Palisades Center Remains Uncertain Despite New Ownership
The buyer of the Palisades Center’s underlying debt is now the owner of the shopping mall. Black Diamond Management, via an affiliate BD Palisades Holdings LLC, was the only bidder in the auction this afternoon in lower Manhattan.
No surprises here.
The official price that BD paid itself was $175 million, according to a Foreclosure Action Surplus Monies Form.
There was little expectation that bids would reach anywhere close to the outstanding $463 million judgment, which Black Diamond effectively purchased for about $170 million in October 2025.
The public auction was the natural culmination of years of litigation between Wilmington Trust and Eklecco, the former owner of the mall. The foreclosure action was filed by Wilmington in 2023 when after years of working with Eklecco to postpone and restructure $418 million in debt. The mall was placed in receivership, a judgment was entered against Eklecco, and a sale was sought to satisfy the debt. But while the litigation was pending, Black Diamond Capital Management, an “alternative asset management firm” purchased the mall’s underlying debt at a substantial discount and stepped into Wilmington’s shoes as the plaintiff.
While the sale closes out the foreclosure proceedings, little is known about future plans for the Palisades Center.
Black Diamond is an “alternative asset management firm” — one that specializes in high yield credit, stressed and distressed credit, restructurings and business turnarounds. It is not in the business of owning or running shopping malls – it earns profits on the acquisition and subsequent sale of distressed debt.
One local real estate professional says that Black Diamond will most likely secure new management for the mall, and/or retain a national commercial broker to market it for sale. A likely buyer would look at the mall as a potential redevelopment project.
The mall has two aging vacant anchor stores (Lord & Taylor and JCPenney) and has largely shifted toward down-market tenants in recent years. An investor could see value in the mall by repurposing the anchors, adding a hotel/convention center, or seek to have the property rezoned for multi-family residential use. The Town of Clarkstown, which controls the zoning at the mall site, has been cold to Eklecco’s earlier efforts to rezone the property to allow residential development, though circumstances are different now.
There have been discussions of rezoning regional shopping mall properties in the Town of Clarkstown (and elsewhere) to include multi-family housing units. Both The Shops at Nanuet and The Palisades Center would need zoning changes to build housing. The buyer of the Shops at Nanuet, renamed Nanuet Town Center, has drawn plans for multi-family housing where the Sears Auto Center building is situated. Clarkstown officials have rebuffed developers’ efforts when they’ve floated the idea in the past, but the town may have to choose between reinvention of financially strapped malls or risk converting them to “ghost” malls with declining valuations.
The mall is one of Clarkstown’s largest taxpayers and a declining market value doesn’t serve the town’s finances.
During a recent tax certiorari challenge, Eklecco argued that the Palisades Center had a market value in 2023 of around $155 million while the town countered that the value for the mall was $578 million. The parties settled the case, and under the terms of the settlement, the tax assessment is based on a market value of $300 million.
The Palisades Center mall is approximately 2.2 million on four floors. It sits on 172 acres of land. The mall itself was built in 1998 on a 130-acre site which previously housed two landfills.
Eklecco is no stranger to foreclosure, having lost the Aviation Mall in Queensbury, NY and the Hampshire Mall in Hadley, Massachusetts to excessive debt and the inability to refinance. The Palisades Center marks the third mall Eklecco has lost to excessive debt.
Ecklecco also faces challenges refinancing and holding onto its Walden Galleria property in Buffalo. Walden Galleria is the largest shopping mall in Western New York, with more than 200 retailers, 10 sit-down restaurants, an international food court and Regal Cinemas Stadium 16 with RPX theaters.
Pyramid is also struggling with debt at Destiny-USA in Syracuse. Destiny USA is a 2.4 million square foot shopping, dining, and entertainment complex located in Syracuse, New York. Ikea recently leased 90,000 square feet for a showroom, giving the mall’s finances a boost. It is New York’s largest shopping mall and the 10th largest in the United States.
