Mall owner Pyramid Management Group finally is getting some traction on long-touted plans to expand beyond retail to ensure its future.
The Syracuse-based company, with nearly 18 million square feet of gross leasable space at 14 properties in New York and Massachusetts, has been adding entertainment options to its malls as traditional retail anchors faltered. Now, bowling alleys, arcades, trampolines and bumper cars are as common as storefront mannequins.
And beginning this summer, you can live at a mall, too.
Commercial developer Trammel Crow Residential of Dallas opened the first phase of an apartment project dubbed Alexan Kingston in June on the site of a former Sears store at Pyramid’s Kingston Collection mall near Cape Cod Bay in Massachusetts.
Crow bought the site from Pyramid last year and plans 282 mostly market-rate units by next year.
Similarly, Long Island developer Eliviat Group announced the purchase in May of five acres across from Pyramid’s Galleria at Crystal Run mall in Middletown, where 224 market-rate apartments will be built as The Galleria Residences. Groundbreaking is scheduled in September, with completion in June 2024.
In Guilderland, multifamily and commercial developer United Group of Cos. of North Greenbush will construct 192 apartments and 30 town homes on land just purchased near the Macy’s end of Pyramid’s Crossgates Mall.
Called The Apex at Crossgates, the project mirrors earlier residential plans by Pyramid that were tied up in court for nearly two years by neighbors worried about density. (United told Guilderland officials in July it has no plans for a future 90-unit addition once envisioned on the site by Pyramid.)
Pyramid CEO Stephen Congel calls the apartments near its malls “just the beginning of a much broader, portfolio-wide diversification strategy to bring popular, exciting new uses … into the mix with our existing assets.”
In a news release last month noting the apartments planned in Middletown and Massachusetts, Congel promised “additional residential projects across our portfolio.”
A spokesman later declined to answer an emailed question about residential plans at Pyramid’s Aviation Mall in Queensbury, where zoning changes made in 2020 would allow apartments near the closed Sears store.
Commercial real estate observers say malls face “a lot of disruption” from retail oversupply after the department-store-as-anchor model faded and the pace of e-commerce accelerated.
“There is too much retail space, even in some performing malls,” said Mark Hunter, a managing director in Chicago for commercial real estate services firm CBRE, who heads a year-old effort to help mall owners reimagine their properties.
“You are not going to be able to rely on retailers to increase occupancy. You will need additional, complementary, non-retail uses,” he indicated in a CBRE interview. Among the possibilities cited were life sciences, industrial, residential and health care.
“Owners must have patience and capital to pull off some of these solutions,” he added.
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected].