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The Colonie Center, the second-largest mall in the Albany region, is facing foreclosure after defaulting on a $110 million loan received in 2014. The loan, initially provided by Cantor Commercial Real Estate Lending LP, was bundled into a commercial mortgage-backed security. The default occurred when KRE Colonie Owner LLC, affiliated with Pacific Retail Capital Partners, failed to pay the principal and interest by the maturity date in December 2023.
According to the Times Union, Deutsche Bank Trust Co., as trustee for Citigroup commercial mortgage-backed securities, filed a foreclosure complaint in Albany County's state Supreme Court. The foreclosure affects about 754,000 square feet of the 1.3 million-square-foot mall, excluding spaces owned by Macy's and the former Sears.
The mall, which houses stores like L.L. Bean, Regal Cinemas, and Barnes & Noble, remains open during the proceedings. The foreclosure comes amid a challenging period for malls, exacerbated by the COVID-19 pandemic and the rise of online shopping. The mall's appraised value has dropped significantly from $145 million in 2014 to $67.5 million in January 2024, as reported by Morningstar Credit.
Business Journals notes that the lender seeks a court judgment to sell the property and recoup the debt. The mall's owners have not commented on the foreclosure. The situation mirrors financial struggles faced by other malls, such as Crossgates Mall, which defaulted on a $300 million loan in 2012.