US real estate

Destiny USA owner strikes another deal in New York to refinance debt

Syracuse, NY – Pyramid Management Group has secured new financing for a shopping mall in Albany, but the company remains silent on efforts to secure debt relief of more than $700 million on Destiny USA in Syracuse, the most major mall in the state.

Syracuse-based Pyramid said Monday it had refinanced debt at Crossgates Commons, a 700,000-square-foot mall adjacent to the company’s Crossgates Mall off Interstate 87.

The announcement is another indication that the mall developer is making progress in its efforts to rework hundreds of millions of dollars in debt across its retail portfolio.

Pyramid is struggling with its heavy debt load as the value of its New York malls, including Destiny USA, declines.

Refinancing its properties has proven difficult as lenders are reluctant to lend to depreciating malls. But Pyramid, which is controlled by the family of Robert Congel, the company’s late founder, has signaled it is not ready to let go of the business empire he built.

The developer’s successful negotiations with lenders in Albany this week and Buffalo last week could also show what’s in store for Destiny: a loan extension or refinancing of Syracuse’s huge mall debt.

Pyramid said it secured the new loan on Crossgates Commons from Argentic, a New York-based private real estate lender. He said the 10-year loan will allow the company to reinvest in the place.

“Reaching an agreement certainly speaks volumes about Pyramid’s persistence, determination and resilience as a developer, and our commitment to reinvest in our centers to ensure their long-term growth and continued success,” said Pyramid CEO Stephen J. Congel said in a statement. .

Crossgates Commons counts Walmart and Home Depot among its tenants. Pyramid did not disclose further details of the funding, including the loan amount.

Last week, Pyramid announced it had received a three-year loan extension for its Walden Galleria mall in the Buffalo suburb of Cheektowaga. About $236 million in loans on the mall were due to mature a month earlier.

Two loans totaling $430 million on Pyramid’s largest property, Destiny USA, were due to mature on June 6. The loans were transferred to Special Agent Wells Fargo on April 1 after Pyramid requested “forbearance.”

In addition to the $430 million in private mortgages on the mall, Pyramid owes about $278.5 million in bonds issued by the Syracuse Industrial Development Agency under a payment in lieu agreement. tax to finance an expansion opened in 2012.

Destiny USA in Syracuse is New York’s largest mall. (Rick Moriarty | [email protected])

Securing new financing on Destiny has proven to be one of the mall developer’s biggest challenges, as the total debt on the property is approximately five times its current value. Ratings agency Kroll Bond estimated in a March 25 report that the mall was worth just $139.2 million.

Destiny has been hurt by the shift of consumers from closed malls to online retailers and malls. It was further affected by the coronavirus pandemic, which temporarily closed most of the mall for four months in 2020 and cut off supplies to shoppers from Canada.

Many major tenants have left the mall, including JC Penney and Lord & Taylor in 2020 and Best Buy in 2021. Remaining anchor tenants include Macy’s and Dick’s Sporting Goods.

See also:

Destiny USA, the gigantic mall in Syracuse, faces a crisis of debt and uncertainty (Part 1)

How It Could End For Destiny USA: A Few Nasty Exits For The Struggling Mall (Part 2)

Rick Moriarty covers economic news and consumer issues. Have a tip, comment or story idea? Contact him at any time: E-mail | Twitter | Facebook | 315-470-3148