Small Town Battles Zombie Mall Giant Namdar Over Fate Of Huge Shopping Center
Namdar Realty Group, a company that’s made a name for itself by buying dying malls, is facing legal battles and hundreds of citations for allegedly failing to maintain a nearly empty Pennsylvania mall.
The mall giant was sued last fall by Pennsylvania’s Frazer Township, the town in which the 1M SF Galleria at Pittsburgh Mills sits, and again in June by neighbor retailer Walmart and Sam’s Club, The Wall Street Journal reported.
Both alleged that Namdar failed to maintain the roads around the mall. The township’s lawsuit said repairs would cost $4.5M.
“As with any large, long-standing commercial property, ongoing maintenance is a regular part of operations at Pittsburgh Mills,” a Namdar spokesperson told Bisnow in an statement. “Extensive pothole repairs began last week, and Management looks forward to continuing to provide updates as progress is made.”
One of the town's inspectors has issued 436 citations at the property, claiming evidence of disrepair and neglect, including peeling paint, old rat traps, a crumbling wall at a shuttered restaurant and doors rusted shut.
Namdar was ordered in July to pay $2M in fines for the maintenance violations, WTAE reported. After an appeal, Namdar was fined $12M, the Journal reported.
“Management is also actively exploring all future options for Pittsburgh Mills, including new retail leasing enhancements, as well as potential repositioning and redevelopment,” Namdar's spokesperson said. “We welcome inquiries from interested parties in purchasing Pittsburgh Mills and any of our properties. While those conversations are ongoing, the potential scope of redevelopment may shape new strategic directions for the property and influence which projects are prioritized.”
There are barely any tenants left at Pittsburgh Mills. About a dozen of the more than 150 retail storefronts are occupied. Meanwhile, the mall’s valuation has plummeted. It was assessed this year for $6M, down from its $138M valuation a decade ago, the WSJ reported.
Namdar purchased the property for $11M in 2018 after Wells Fargo foreclosed on it in 2015.
Frazer Township’s campaign against Namdar could be used as a playbook by other municipalities where Namdar owns malls, many of which have complained that the Long Island-based investor lets its properties languish.
It was sued by the city of Citrus Heights, California, in July for public health and nuisance violations at the Sunrise Mall, which Namdar bought in 2018, the Citrus Heights Sentinel reported. The lawsuit cited mold, pest infestation and unhoused people living in an abandoned movie theater.
City officials in Bangor, Maine, filed civil and criminal complaints last year against Namdar over its ownership of the Bangor Mall, the Bangor Daily News reported.
And in November 2023, Namdar faced criticism at its 800K SF Berkshire Mall in Wyomissing, Pennsylvania, from local officials who found five sinkholes, a condemned department store and sewer backups that were spilling raw sewage out onto the front sidewalk.
Namdar manages over 70M SF of real estate, according to its website. Many of those are budget malls the investor acquired during the “retail apocalypse” in the middle of the last decade.
Since the pandemic and retail's subsequent rebound in value, it has pivoted to chasing another distressed asset class: outdated office properties.
