The sale of the 2.2 million-square-foot Palisades Center in West Nyack earlier this year, as part of a foreclosure auction, handed control of one of the largest malls in the country to its creditor, Black Diamond Capital Management, at a deep discount. Although the new owners have expressed a desire to keep the mall open and expand it, the move has the potential to affect thousands of New Jersey shoppers, who have long evaded Bergen County’s blue laws by heading to Rockland County on weekends and have contributed to the Rockland County economy since the mall opened in the late 1990s.
According to a New York Post report, Black Diamond held $463 million in mall debt and was the only bidder at the auction on February 4. The final sale price for the property reached $175 million. However, the asset manager has stated that the move is part of a long-term play to bolster the retail center’s evolution to a destination for retail, dining, and entertainment.
“Palisades Center is an irreplaceable asset serving one of the most affluent and densely populated trade areas in the Tri-State region,” Stephen H. Deckoff, founder and managing partner of Black Diamond Capital Management said in a statement that mirrored comments made by previous ownership. “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.”
Although the firm did not release additional information about what it intends to do with the mall, it said that Spinoso Real Estate Group, the firm that was appointed the property manager and leasing agent in 2024, will continue to oversee operations at the property.
For North Jersey residents, particularly those who shop in Bergen County, the Palisades Mall became a destination because of the county’s restrictions around Sunday shopping. The mall is roughly 15 miles from the George Washington Bridge and is proximal to the Garden State Parkway, the New York Thruway, the Palisades Interstate Parkway, and U.S. routes 303 and 9W.
At its peak, the mall drew in more than 20 million annual visitors, which is especially remarkable given that the U.S. Route 17 corridor in Bergen County is one of the most successful retail corridors in the country. That annual figure has since declined to 16 million, according to Black Diamond, reflecting the financial distress the property and its owners have faced for more than a decade.
According to a report from lohud.com in January, the mall has been targeted for foreclosure since 2023 when the owners, Pyramid Management Group, failed to make whole a $418.5 million loan it took out in 2016. The loan matured in October 2022, one month after the retail center entered special servicing, but the creditors and mall owners agreed to a forbearance agreement extending the maturity to November 2022.
The Real Deal reported in October that the mall had lost 78% of its value from 2016, 10 years before it was ultimately sold at auction.
But while the Palisades Mall was estimated to be worth $881 million in 2016, the retail center’s estimated value has been in a steady decline for many years.
Whether Black Diamond can succeed where Pyramid failed remains an open question. The firm may sell off pieces of the property or redevelop parts of the structure to cater to experiential shoppers. For New Jersey shoppers, the mall’s fate will determine just how far they have to drive on Sundays.
