LANESBOROUGH -- A commercial mortgage firm has taken possession of the Berkshire Mall after its previous owner, Syracuse, N.Y.,-based mall developer Pyramid Companies, failed to keep up with its payments on the $36.9 million mortgage.
According to the deed filed with Northern Berkshire Registry of Deeds, the mall was sold to COMM 2005-FL10 Berkshire Mall LLC for $10 -- a nominal amount because the purchaser holds the mortgage -- on June 10. The sale has no effect on the operation of the mall, and business continues there uninterrupted.
The commercial lender hired Strategic Asset Services, the name listed on the deed, to hold the property and CBL & Associates Properties to manage the operation.
As part of the process, the Baker Hill Road District, a taxing entity formed to build and maintain the Route 7/8 Connector Road when the mall was built in 1988, received the final payment of $1.3 million on July 1, retiring the $10 million bond package.
According to Mark W. Siegars, the Lanesborough-based attorney who represents the road district, Pyramid missed a balloon payment in 2012, and negotiated a forebearance agreement to give them more time to catch up. But the company recently fell into a default on the forebearance agreement.
Siegars said it is likely that Strategic Assets will devise a new business plan.
"There has been talk about putting some money into the mall and making some improvements," he said.
Two attorneys representing Strategic Asset Services declined to comment.
The mall includes 715,146 square feet, including 396,353 square feet of anchor tenant space, which houses Macy's, Sears, and JCPenney. Target, which has nearly completed a renovation project, and Best Buy also occupy large retail spaces. There are currently 22 unoccupied store fronts in the mall, and 60 occupied stores, including the anchors.
Berkshire Mall general manager Joe Scelsi remains the on-site manager of the property.
"Over the upcoming months and years, the Berkshire Mall will be redeveloped and repositioned to include a shopping, dining and entertainment mix that reflects the wants and needs of today's consumer," Scelsi said in a prepared statement. "As has been the tradition since 1988, the Berkshire Mall will continue to promote a very family-friendly environment."
CBL, based in Chatanooga, Tenn., owns in whole or in part -- or manages -- 150 properties, including 90 regional malls or open air shopping centers in 30 states. They total 86.9 million square feet. Of that, 6.3 million square feet are in centers not owned, but managed by CBL.
According to Jesse Tron, a spokesman for the International Council of Shopping Centers based in New York City, the period between the Great Recession in 2008 to 2012 was especially hard on sales for malls in tertiary markets.
"Mall business lagged behind in the recession's recovery -- the aftermath was still being felt in 2011 and 2012," he said. "It was very difficult primarily for those in more challenging areas. In fact, some of them are still feeling the effect."
Tron noted that nationally, sales at shopping malls have rebounded.
"Mall sales per square foot are at the highest we've ever tracked since we started recording that information in 1996," he said. "But there are pockets where things are still a bit harder and there's more work to be done."
Tron said the national sales average for malls is at $475 per square foot, and that the average occupancy rate by square foot is about 93 percent.
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