The owner of Pittsburgh Mills mall has built a real estate empire by buying dying malls and letting them deteriorate before selling off property and walking away, leaving helpless communities in its wake, according to officials where Namdar Realty Group owns assets.
New York-based Namdar boasts a portfolio of nearly 400 properties, which includes more than 170 retail properties in 37 states. The commercial real estate investment and management firm owns seven traditional malls in Pennsylvania, including the Pittsburgh Mills, Uniontown and Beaver Valley malls in Western Pennsylvania.
Last year, Namdar reported a gross profit of $86.7 million, up nearly 10% over the previous year, according to the Wall Street Journal. Yet the company fails to invest in its properties, appeals property tax assessments — and often wins relief to the tune of tens of millions of dollars — and then sells the assets to developers at a sizeable profit.
“They have been buying malls for pennies on the dollar,” said Manus Clancy, head of data strategy at LightBox, a commercial real estate information and technology platform.
Spending $20 million on a mall once worth $200 million doesn’t leave Namdar saddled in debt.
“With the tenants they have, there’s money to cover a loan payment,” Clancy said. “If you buy it cheap enough, you can run it without putting any money into it.”
Steve Jellinek, retired head of CMBS research at DBRS Morningstar, told TribLive last year that the shifting landscape for commercial real estate helps Namdar’s approach.
“From Namdar’s perspective, they think the property is (worth) more than whatever they paid for it and back taxes,” Jellinek said.