The complex owner has agreed to restructure its debt of about $350 million.
The Empire Outlets mall on Staten Island will be sold as part of a $350 million debt restructuring program. Donald Capoccia and Joseph Ferrara's BFC Partners, the mall's developer, have agreed to restructure with its primary lenders, Goldman Sachs and Sterling National Bank, which are in the running to take control of the mall.
It could take a year for the mall to be sold, reports The Real Deal, adding that the mall itself (which is heavily damaged due to the pandemic and restrictions) will operate normally, and no changes will be made to buyers in the short term.
Empire Outlets' problems are due to the pandemic, argues Goldman Sachs' Urban Investment Group. At one time, the nearly 31,500-square-foot mall had 73 percent of its tenants. As a result of severe restrictive measures and a mass exodus of tourists, the center closed 12 tenants and emptied more than 4,600 square meters of additional retail space.
At Empire Outlets, attendance dropped 65% by mid-2020 to 23,000 people per day, a record low. As a result of problems with tenants and customer traffic, the mall owners had difficulty servicing their loans.
Construction began on Empire Outlets in 2015, and the mall opened on May 15, 2019. After construction was completed, the number of tenants was reduced to 70 from the original plan of 100. It is positioned as the "premier shopping and dining destination" on Lower Manhattan. Among the center's tenants are well-known mass-market brands like H&M, Gap, Banana Republic, Levi's, Nike, Samsonite, etc.
Currently, BFC Partners is also working on a new mixed-use residential complex with 270 apartments on Bay Street. As part of the development, there will be retail space as well. The developer is also involved in the $1.5 billion Essex Crossing project on the Lower East Side, and the Bedford Union Armory in Crown Heights.