SYRACUSE, N.Y. (WSYR-TV) — Destiny USA, one of the largest malls in the United States, may default their mortgage when it is due in June, according to a report in the Wall Street Journal.
Pyramid Management’s mortgage was taken over by a special servicer that deals with defaults or renegotiations of loan terms, according to WSJ.
Pyramid Management Group owns Destiny USA.
According to the article, the servicer expects Pyramid Management Group to default the mortgage.
Pyramid Management Group issued the following statement in response:
“The debt on the Destiny USA property matures in June. We have been engaged in negotiations with the debt administrator to extend the loan. In order to further the loan extension process, Pyramid and the debt administrator initiated the common next step for the loan to be transferred into special servicing.
Destiny USA is the dominant shopping, dining and entertainment destination in the region, and we are moving forward to solidify and build on its standing as Central New York’s premier international travel and tourism destination.
The property is an important employment driver in the Syracuse area and an economic catalyst for the region. We look forward to continuing that success over the coming years and remain committed to ensuring the health, vibrancy and longevity of the center for decades to come.
Customer traffic at Destiny USA remains very strong and Pyramid is well positioned to move the property forward.”
Pyramid has two securitized mortgages on the 2.4 million-square-feet mall, totaling $430 million, according to real-estate data provider Trepp Inc.
Wall Street Journal reports that Pyramid said it is now in discussions for an extension on its mortgage.
U.S. retailers have already closed 5,994 stores so far this year, compared to 5,864 closures for all of last year, according to Coresight Research.
Destiny USA has struggled in the last few years, with tenants breaking their lease and chain stores going out of business nationwide.
Recently, tenants like Charlotte Russe, Melting Pot, Dressbarn, Sears and others have left the mall. Other stores like Forever 21 have reduced the size of their stores.
While big-name brick-and-mortar retailers have closed across the country, Destiny’s anchors like Macy’s, JCPenny and Lord and Taylor have remained open.