5Qs for Stephen Congel on Pyramid’s recapitalization and future
Stephen Congel grew up in the mall business. In the early Seventies, his father, Robert Congel, founded Pyramid Management and built it into the largest privately held mall development company in the Northeast. Its Destiny USA mall in Syracuse is the 10th largest shopping and entertainment center in the nation. The company recently made news for renegotiating some of its bank deals, and we got on the phone with Stephen to learn more about it.
Stephen, Pyramid recently reported that it had secured extensions on $400 million worth of loans for four of its malls. What’s the near future look like for you?
Securing these extensions shines a light on Pyramid's determination and unwavering commitment to reinvesting in our centers. We have a robust pipeline of deals coming in 2025 featuring innovative and exciting uses. I'm incredibly proud of our team for working with our lenders in the midst of challenging market dynamics to produce this great outcome. We’re working on new financings for $300 million that should close this quarter.
Your malls are super-regionals that are primary shopping destinations, like the Crossgates Mall in Albany and Walden Galleria in Buffalo. Are you still trying to fill empty anchor boxes at your properties?
All of our owned Sears spaces have been absorbed and almost all additional anchor boxes have been filled or are in advanced stages of negotiations to be filled. What we are replacing these boxes with are far superior uses than what was there previously. We’ve backfilled with uses that were needed at the center and those uses depended on the market. We’ve filled with entertainment, fitness, grocery, a new department store, and we’ve also cut-up boxes for other big box stores. We are very pleased with what these new uses bring to the centers.
Have you been doing any redevelopment on the properties?
Much of our redevelopment is focused on bringing exciting new tenants to the shopping centers, using the anchor spaces we discussed. However, we’ve done a good amount of densifying sites around our shopping centers. We have developed two hotels, several new residential sites, and have a Costco and a state-of-the-art cancer research and treatment center in Albany that will begin construction this year. We are actively pursuing approvals for two more residential projects and another hotel. We have a lot of exciting projects in the pipeline.
What kinds of new uses have you been introducing across the portfolio?
We’ve always been on the leading edge of incorporating unique uses into an enclosed mall environment. Since the early 2000’s we have had a focus on adding entertainment, dining, fitness and new retail to our markets. We continued that approach in 2024 and into 2025. In addition, retailers have had to become more efficient in their use of omnichannel, so we’ve been making a lot of deals with direct-to-consumer brands that realize brick-and-mortar locations are critical to their distribution. Shipping costs have gone through the roof.
Available, Class A retail space was hard to come by in 2024. How’d that impact Pyramid’s performance?
2024 was one of our strongest years for leasing production over the past decade, and we’re poised to announce over 400,000 sq. ft. of new deals in Q1 2025. Portfolio-wide traffic increased by nearly 4% compared to 2023, and we had an impressive 12% surge during the holiday season.
