Pyramid Management Group, already beset with troubles across the Northeast, defaulted on a loan backing the biggest mall in all of New York.
The Pyramid affiliate that owns Destiny USA in Syracuse defaulted on a $300 million mortgage, Syracuse.com reported. It failed to secure a loan extension when the maturity date of the mortgage came around in June, according to Pyramid’s most recent financial statements.
JPMorgan Chase originated the loan in 2014. Wilmington Trust obtained the debt five years later. The loan’s original maturity date was in June 2019, but Pyramid landed several one-year extensions as part of a forbearance agreement.
The lender terminated a forbearance agreement with Pyramid after the mall failed to meet net operating income targets, making the outstanding principal and unpaid interest due immediately, according to a report from an independent auditor. The lender could foreclose at any time.
Pyramid may have an escape hatch: the auditor said the company was negotiating to extend the maturity date to Dec. 6 in exchange for a $1.1 million consent fee. Even so, the auditor said the “conditions raise substantial doubt about the company’s ability to continue as a going concern.”
With unpaid interest, the loan’s balance has ballooned above $325 million, according to the auditor. Pyramid did not return the publication’s request for comment.
Syracuse-based Pyramid has faced financial difficulties across its mall portfolio.
In June, the Hampshire Mall in Hadley, Massachusetts was sold to its lender at a foreclosure auction for a fraction of the property’s assessed value, according to the Daily Hampshire Gazette.
Last summer, a lender purchased the $243 million mortgage debt backing Pyramid’s flagship Crossgates Mall outside of Albany. The debt was sold at a significant discount; bondholders lost $100 million on the sale, according to Trepp.
Prior to the debt auction, Fitch downgraded the mall’s debt due to declining performance and concerns about refinancing. Weeks later, Pyramid defaulted on the mall’s three mortgages.
And since 2011, the value of the Poughkeepsie Galleria in New York’s Hudson Valley has declined 71 percent, cratering from $237 million to $68 million, according to CRED iQ appraisal data.
— Holden Walter-Warner
Read more
Pyramid’s mall problems spread to New England
Buyer snaps up $243M Crossgates Mall debt
Pyramid’s Poughkeepsie Galleria valued at 70% off
