GUILDERLAND — The owners of Crossgates loan debt are set to take a bath after the mall’s mortgages were sold at auction for far less than their original value. 

Control of Crossgates, however, remains in the hands of Pyramid Management Group, which confirmed in a statement that it continues to own the 1.7 million-square-foot shopping center. 

Trepp, a real-estate data firm, in a Friday trading alert wrote, “The resolution appears to come via note sale,” a real estate practice where some or all of a property’s debt is acquired, “as opposed to the asset itself,” according to commercial property site loopnet. 

Trepp reported that the once-$242 million in loans were sold for nearly $174 million, which, after subtracting $29.6 million in liquidation expenses, leaves $144 million in net proceeds — an approximately $98 million loss for bondholders. 

“The loss comes a little out of the blue,” Trepp wrote. “The loan was originally slated to mature in May 2022, but a modification pushed the maturity to this month. The loan was current following the modification and ahead of the resolution.”

Trepp did not indicate the buyer of the bonds. 

The sale was first reported locally by the Business Review.

In July 2020, the mall’s appraised value was lowered from $470 million to $281 million, which placed its mortgage underwater, meaning Crossgates Mall’s current value was less than what it owed in loan payments on the property. 

In May, as the extension expired, Pyramid failed to refinance the mortgages. According to Securities and Exchange Commission filings associated with the three commercial mortgage-backed securities holding Crossgates Mall’s debt, the company filed a notice of default with creditors and that a new appraisal of the mall had been received, which has yet to be disclosed publicly. 

Pyramid is currently suing the town of Guilderland in an attempt to lower Crossgates Mall’s assessed value from $234.2 million to $102 million. In tax year 2023, the seven parcels that make up the mall’s footprint paid a collective $6.1 million in taxes to the town of Guilderland, its special districts, school system, and Albany County. A win would mean millions in annual property-tax savings for the company.