An aerial view of the 2.4M SF Destiny USA mall in Syracuse, New York
The owner of the 2.4M SF Destiny USA, New York’s largest mall, has defaulted on a $300M mortgage on the property.
An independent auditor’s report, presented with the most recent financial statements of parent company Pyramid Management Group, says, “These conditions raise substantial doubt about the company’s ability to continue as a going concern,” Syracuse.com reported.
The default happened when Carousel Center Co., the Pyramid Management Group entity that owns the original part of the mall, didn’t lock in an extension on the loan’s maturity date last June.
Its failure to do so rendered null a forbearance agreement on the loan, the balance of which, including unpaid interest, came due immediately, according to Syracuse.com. The property could be foreclosed on at any time.
Pyramid is in negotiations with its lender to extend the maturity date of the loan to December of this year.
The loan dates to 2014, when JPMorgan Chase provided the funding to help Pyramid expand the mall to its current state. The debt transferred to Wilmington Trust in 2019, the year of the loan’s original maturity date. Pyramid has been using one-year extensions to push the maturity out, but those extensions have run their course, Syracuse.com reported.
The loan offered interest-only payments with repayment or refinance at maturity. Its outstanding balance is now $325.2M, including $25.2M of deferred interest, according to the auditor’s report.
Like many other malls, Destiny USA has suffered a wave of closures of larger stores that haven’t been replaced by similarly sized tenants.
