Crossgates Commons refinances loans

ALBANY — With millions in Crossgates Commons loans payments set to come due in May, the shopping center’s owner, Pyramid Management Group, in a Monday press release celebrated a 10-year reprieve from a $30 million balloon payment. 

Pyramid, the release began, “one of the largest, most innovative, privately-held shopping center developers in North America, has secured a commercial mortgage-backed securities (CMBS) debt package from Argentic, a private real estate lender based in New York City, for the refinance of its Crossgates Commons ….”

In 1999, when Pyramid finally abandoned its plan, unpopular in town, to more than double the size of Crossgates Mall in Guilderland, it added to Crossgates Commons, begun in 1994, in the panhandle of Albany that stretches into Guilderland. Guilderland’s supervisor at the time, Jerry Yerbury, said that, while expansion at the commons would not add to Guilderland’s tax base, it would add to the traffic congestion residents had considered such a problem with the proposed mall expansion — and should have undergone regional review.

The town then, as now, was in a years-long court battle with Pyramid, fighting challenges to its tax assessment. “Crossgates will never stop,” Yerbury said in 1999. “They’ve just shifted gears and jumped across the road.”

The now 437,286-square-foot outdoor shopping center is home to big-box retailers like Home Depot and At Home. The retail center had $29.8 million in debt spread across two loans whose original value was $32.5 million due May 1

The release from Pyramid went on to say, “The 10-year CMBS loan allows Pyramid to reinvest in Crossgates Commons, ensuring its health, vibrancy and continued success in the Capital District.”

In the CMBS industry, loans are typically short-term in that the borrower has only a 10-year loan term — or, in the case of the Pyramid loan due May 1,  a five-year term. However, the monthly payments made by the borrower are set up as if he or she is paying off a standard 30-year loan. 

With a 10-year CMBS loan, like Pyramid’s new one, for example, the loan is amortized, spread out equally, over 30 years, but the borrower is doing little more than covering the interest on the loan and not putting a dent in the principal, leaving the borrower with a large balloon payment on the principal that comes due at the end of 10 years. 


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