Palisades Center mall wipes out bondholders

"A loan tied to the Palisades Center mall in Rockland County, New York, has been settled, but with substantial losses to securities holders. Lower classes of the bonds were wiped out entirely, and first-priority investors also saw some of their investment vanish, according to Morningstar Credit. Occupancy and revenue at the mall had declined substantially since the loan's underwriting in 2016."

"Revenue dipped precipitously during the pandemic and then failed to fully recover. The mall pulled in more than $80.4 million in 2016, but that fell to $61.8 million in 2022, according to Morningstar. Occupancy fell from 100 percent to 78 percent that same year, as the loan was transferred to special servicing for maturity and monetary default. Expenses, once 40 percent of revenue, rose to 60 percent by 2023."

A securitized loan secured by the Palisades Center in West Nyack, New York, was settled with substantial investor losses and the wiping out of lower-tier bondholders. Pyramid Management Group developed the mall and obtained a $388.5 million refinancing in 2016 while the property was then valued much higher. Anchor closures, including JCPenney and Lord & Taylor, and pandemic-related declines drove revenue from $80.4 million in 2016 to under $56 million by 2024 and occupancy from 100 percent to 78 percent. Expenses rose from 40 to 60 percent of revenue, the property appraisal fell to $191 million, and foreclosure proceedings produced a receiver and summary judgment.

Read at therealdeal.com