Following years of distress, the Palisades Center, a 2.3M SF mall in West Nyack, New York, has sold for less than half of the value of its troubled mortgage.
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Black Diamond Capital Management paid $175M for the mall, the 12th-largest in the U.S — a far cry from its listed price of $463.4M.
The sale puts an end to a foreclosure process that began in February 2023 after its prior owner, Pyramid Management Group, defaulted on $418.5M in debt. Palisades Center was put into receivership a year later.
In October, Black Diamond purchased the debt for $170M. The firm, with approximately $11B in assets under management, was the sole bidder at the auction, the Rockland County Business Journal reported.
Spinoso Real Estate Group, the receiver tapped to manage the property in 2024, will continue to oversee operations and leasing, according to an announcement by Black Diamond. The new ownership plans to invest in the property, maintaining it as a retail, dining and entertainment destination.
"Palisades Center is an irreplaceable asset serving one of the most affluent and densely populated trade areas in the Tri-State region," Black Diamond founder and Managing Partner Stephen Deckoff said in a statement. "We see significant value in this property and intend to reinvest in the center, enhance the tenant mix, and position Palisades for long term success."
The mall attracts approximately 12 million visitors annually. Approximately 2.2 million people live within a quick drive of the mall, with an average household income of more than $150K, according to Black Diamond. Targeting the highest earners may be key for retailers as the country undergoes a K-shaped economic recovery, with wealthy Americans propping up economic growth and lower-wage earners falling deeper into debt.
Like many malls around the country — particularly those that have been allowed to age in the decades since they were built — the Palisades Center has plummeted in value as big-box stores have shuttered and foot traffic has dwindled. It was last appraised at $209M in 2023, down from $881M in 2016, according to CoStar.
Among major tenant losses for the mall, which opened in 1998, were anchor stores JCPenney and Lord & Taylor.
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