Finance  ·  Distress

Cannae Advisors, Morgan Stanley Buy $174M Debt Attached to Albany Mall

The 1.7 million-square-foot Crossgates Mall has fallen on hard times, dropping from a $470 million value 10 years ago


The buyer of an enormous sale of the debt attached to Albany’s largest mall has now been identified. 

Cannae Advisors, a Greenwich, Conn.-based investment firm, has partnered with Morgan Stanley (MS) on a joint venture to purchase $173.9 million worth of loans served by the Crossgates Mall, Commercial Observer has learned. Pyramid Management Group, the largest privately held shopping center developer in the Northeast, remains the owner of the property. 

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Newmark (NMRK)’s capital markets professionals Thomas Dobrowski, Katharine French, Brock Cannon and Stephen Schwalb arranged the loan sales.

The Albany Business Journal first reported the loan sale Aug. 21 without the names of those who purchased the debt. 

“This was the largest in terms of dollar-size nonperforming loan sale of a regional mall loan known,” said a source close to the transaction, who requested anonymity. 

Pyramid had owed about $242 million from three CMBS loans that matured in May for the 1.7 million-square-foot mall, and had defaulted on the debt after a one-year repayment extension lapsed, according to the Albany Business Journal

The $173.9 million loan is significantly below the $470 million that Crossgates Mall was appraised at in 2012, and serves to reflect the challenging economic climate malls and other retail outlets find themselves in following COVID-19, where e-commerce now thrives and a decline in foot traffic has led to a wholesale restructuring of the economics behind regional mall investments. 

The occupancy at Crossgates was 78 percent in December 2022, compared to 90 percent upon the 2012 appraisal, while the retail sector in Albany is down 25 percent on the year, according to CREDiQ. Moreover, the appraised value of the mall cratered to $212 million in July 2020, while net operating income fell from $28.9 million in 2012 to $16.4 million in 2020, before ticking up to $25.4 million in 2022, according to the Albany Business Journal

Tenants at Crossgates have included Macy’s, Dick’s Sporting Goods, H&M, JCPenney, Burlington and Forever 21. 

This is not the first time the Pyramid Group has experienced a swift decline in value for one of its regional malls. 

CO recently reported that the 1.2 million-square-foot Poughkeepsie Galleria was valued at $68 million on March 17, 2023, after being valued at $237 million at the time $131.5 million in CMBS debt was issued on the property just over a decade ago. 

Pyramid’s fiscal woes have also extended to its 1.2 million-square-foot Destiny USA super regional mall in Syracuse. Here a pair of CMBS loans backing an 872,000-square-foot expansion incurred combined appraisal reductions of more than $242 million as of November 2020, according to Trepp. 

Pyramid Management Group CEO Steven J. Congel said in a statement that the deal is “business as usual for us,” and said his firm is “actively engaged in a constructive dialogue” with the new lender group. 

“We look forward to continuing to own and operate the shopping center and further its reputation as a hot spot for shopping, dining, and entertainment with newly added brands like Primark, which recently opened its first store in the Capital Region at Crossgates, along with several others slated for the future,” said Congel. 

Morgan Stanley declined to comment. 

Brian Pascus can be reached at 

Andrew Coen contributed reporting to this report