- Historic Albany mall grapples with $110M loan default amid changing retail landscape
- Pacific Retail Capital Partners remains optimistic about restructuring despite legal challenges
- Colonie Center’s future in focus as tenant closures and redevelopment plans shape its path forward
COLONIE — Colonie Center’s lenders have initiated foreclosure proceedings on a $110 million loan that the mall obtained in 2014, signaling continued financial strain on traditional shopping centers in the region.
The foreclosure, filed in state Supreme Court in Albany County last week, seeks to recover the debt owed by Colonie Center’s owners, Pacific Retail Capital Partners, a Los Angeles-based real estate investment firm. The lawsuit was
brought by Deutsche Bank, acting as the trustee for the loan held by Citigroup Commercial Mortgage Securities. According to court filings, the original loan default occurred in 2023.
Colonie Center’s financial troubles reflect broader challenges faced by malls and retail properties in the aftermath of the COVID-19 pandemic. Temporary closures of indoor malls during the initial 2020 surge of the virus forced a shift in consumer shopping habits, with more people turning to online retailers like Amazon, Walmart, and Target. Since then, many malls have struggled to regain pre-pandemic foot traffic, prompting them to adapt by incorporating lifestyle and entertainment tenants that offer unique experiences.
Despite the legal proceedings, shoppers at Colonie Center should not notice any immediate changes, as the mall remains operational while the case plays out in court.
Colonie Center, established in 1966, spans 1.3 million square feet. Pacific Retail Capital Partners owns half of the mall, while Macy’s owns its space on the northern end. The southern portion was previously owned by Sears, which closed its store in 2017. That section of the mall was sold by Sears’ real estate holding company for $28 million last year. Other portions of the mall have been repurposed, with retailers like Sierra and Floor & Decor taking over former Sears spaces.
The mall has also seen significant tenant changes in recent years. The Christmas Tree Shops closed in 2023 following the retailer’s bankruptcy. Additionally, Nordstrom Rack announced it will close its Colonie Center location on February 1, 2025, affecting 19 employees.
“Nordstrom Rack has been an asset to Colonie Center for 10 years, and we are saddened to see this retailer leave,” the mall’s management said in a statement last October. “We’ll use this transition to thoughtfully assess and adapt the property to meet both current and future community needs.”
According to a recent report from the Times Union, PRCP remains optimistic about resolving the foreclosure, with company founder and CEO Steve Plenge stating, “We are confident that we will be able to negotiate a new mortgage that will allow us to continue to serve the community and ensure the long-term success of Colonie Center.”
Over the past 18 months, Pacific Retail Capital Partners has been involved in several significant developments across its property portfolio. In January 2025, PRCP faced foreclosure proceedings on a $110 million loan for Colonie Center in Albany, New York, due to a default that began in 2023. Despite this, the company expressed confidence in negotiating a new mortgage to resolve the issue, according to a report from the Times Union.
In October 2024, PRCP, alongside joint venture partners Starwood Property Trust and Taconic Capital Advisors, acquired Kings’ Shops in Waikoloa, Hawaii. This nearly 70,000-square-foot luxury resort retail destination marked PRCP’s second asset in Hawaii, reflecting its commitment to the region, as reported by Yahoo Finance.
Earlier in May 2023, PRCP entered the New Jersey market by acquiring Bridgewater Commons, a 1.2 million-square-foot mall in Bridgewater, with plans to transform the property into a vibrant mixed-use destination, according to Business Wire. In November 2023, PRCP expanded its Southern California presence by acquiring The Shops at Palm Desert, a nearly one-million-square-foot enclosed shopping mall in Palm Desert. Plans include developing a transformative master plan for the asset, Business Wire reported.
In September 2023, PRCP, in partnership with The Cappelli Organization and SL Green Realty Corporation, filed a rezoning request for the multi-billion-dollar redevelopment of The Galleria at White Plains in New York. The project aims to convert the enclosed mall into a mixed-use development featuring residential towers and open spaces, as noted in PRCP’s official announcements.
Additionally, in October 2023, PRCP assumed management and leasing responsibilities for Park Place Mall in Tucson, Arizona, marking its first property under management in the state. The 1.1-million-square-foot fashion and entertainment destination is a key retail center in the region, according to Real Estate Daily News.
Leasing and operational highlights from PRCP include signing over 1.4 million square feet of new leases in the first half of 2023, demonstrating strong operational performance and retailer confidence in its properties, as reported by Business Wire.
In January 2025, PRCP provided a recap of its 2024 business activities, highlighting strategic transactions, mixed-use transformations, and a total of $341 million in capital markets transactions. The company emphasized its commitment to evolving real estate for the next generation through various initiatives, as noted in Yahoo Finance.
