SYRACUSE, N.Y. — The Destiny USA mall has an occupancy rate of 89 percent, as of July, down from the 93 percent occupancy recorded at year-end 2015, according to a recent report from bond-rating firm Fitch Ratings. The decline resulted primarily from the loss of Bon Ton, a former anchor tenant, in February of this […]
SYRACUSE, N.Y. — The Destiny USA mall has an occupancy rate of 89 percent, as of July, down from the 93 percent occupancy recorded at year-end 2015, according to a recent report from bond-rating firm Fitch Ratings.
The decline resulted primarily from the loss of Bon Ton, a former anchor tenant, in February of this year, as well as the loss of Sports Authority (which went bankrupt and closed all its stores nationally), according to a Sept. 8 Fitch news release.
Destiny’s sales per square foot as of July 31, totaled $599, unchanged from the 2015 level, also reflecting the loss of those tenants, as well as Gap and Gap Kids.
To be sure, Fitch said it “takes comfort” from Destiny’s “good history” of re-filling vacant space and noted that occupancy at the mall had been above 90 percent since 2011, until now. It noted that a new anchor tenant, At Home, is scheduled to open in December 2016 — going into the former Sports Authority space. At Home is a home décor superstore that will occupy nearly 90,000 square feet of space at Destiny.
The bond-rating firm said the nearly 2.4 million-square-foot Destiny USA faces limited competition in Central New York, and with approximately 26 million in annual customer visits, the mall is the “dominant shopping center in the area.”
The expansion project, completed in 2012, added about 850,000 square feet of gross leasable space and is fully integrated with the original 1.5 million-square-foot mall, which was called the Carousel Center.
A July 2016 appraisal valued the original mall at $500 million, up from $490 million in 2014, but down from the appraised value of $550 million in 2006, according to Fitch.
Fitch Ratings assigned an ‘A-’ rating to the following Syracuse Industrial Development Agency (SIDA) bonds: $198 million in tax-exempt refunding payment in lieu of taxes (PILOT) revenue bonds, series 2016A (Carousel Center Project); $12.3 million in taxable refunding PILOT revenue bonds, series 2016B (Carousel Center Project).
The bonds were scheduled to sell by negotiation the week of Sept. 26, Fitch said.
Fitch also affirmed an ‘A-’ rating to $322.3 million in PILOT revenue bonds, series 2007A and series 2007B (Carousel Center Project). Its rating outlook is stable.
Fitch noted that as a “single-site property with one owner” Destiny is subject to “concentration risk.” It added that “mall performance is also vulnerable to changes in the competitive landscape, including digital commerce.”
But the rating agency said that was “mitigated” by the large and diverse number of tenants the mall attracts.
Destiny USA also draws shoppers from a broad area, including generating about 10 percent to 20 percent of current sales from Canadian shoppers, Fitch said, citing Destiny management data.
Contact Rombel at arombel@cnybj.com
