Destiny USA Foreclosing? Massive Mall Defaults on Its Mortgage

Destiny USA continues to limp along, but is this latest financial development the final nail in its coffin?

New York's biggest mall has been seemingly struggling with deep monetary issues over the past few years, sparking rumors that its time is limited.

Read More: Destiny USA Could Face Foreclosure in New York

The troubled mall, which boasts over 250 storefronts, has been shedding tenants.  Among the many recent closures within its grounds include Hugo Boss, Nordstrom Rack, World of Beer, Margaritaville, and TGI Fridays.

It's been reported malls across the country are under increased stress due to the rise of online shopping and shifting consumer spending. These pressures increased following the COVID-19 pandemic, which shifted consumers further into using online shops like Amazon, Temu, and Etsy.

CapitalOne Shopping says that there are currently 1,150 malls across America, but that number could shrink to 150 by 2032.  This is a far cry from when malls were the dominant shopping force in the nation, when there were over 25,000 nationwide back in 1986.

Destiny USA Entering New Fiscal Battle

While it is unknown if Destiny USA can survive this fluctuating market, its parent company is not doing it any favors. Pyramid Management Group has defaulted on the mall's $300 million mortgage.

According to the mall's financial statements, this has opened a can of worms. Documents show Pyramid failed to secure an extension for the loan's maturity date when it came due in June.

Because of that, the lender of the loan canceled the forbearance agreement. The mall and parent company now must pay the entire outstanding principal and unpaid interest immediately. 

If these financial demands aren't met, the lender could foreclose on Destiny USA. 

Unfortunately, it is unknown if the mall can come out of this since Pyramid had two properties foreclosed upon last year. The lender could foreclose on the mall much like what happened to two other Pyramid properties last year. 

The malls that went under in 2024 include Hampshire Mall in Massachusetts and the Palisades Center in West Nyack.

It should be noted Pyramid also owns the Crossgates Mall in Albany, and they were able to secure a five-year extension on their loans in December 2023, according to the Altamont Enterprise Guilderland.

According to Syracuse.com, DiMarco, Abiusi & Pascarella accounting firm says Pyramid is still negotiating with the lender on the Destiny USA loan. The parent company hopes to nab an extension until December 6 of this year in exchange for paying a "consent fee" of $1.1 million.

The auditor is unsure if this bid will succeed. Stay tuned.

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