Plunging Values
U.S. mall values have plunged 46% from their 2017 peak, including an 18% drop since the Covid-19 pandemic started, according to real estate information service Green Street. Declines have been fastest among B and C-rated malls like Namdar’s, where sales per square foot average a few hundred dollars.

Namdar’s bet is that he can pay a small enough price to outrun the decline. He said he sees value in the properties as malls, where other investors in the market are more interested in redeveloping them for other uses.

“It’s all about the cost basis,” said Cedrik Lachance, director of research at Green Street. “If you’re buying to harvest cash and not reinvest, it will work.”

Some of the biggest landlords, including Simon Property Group Inc. and Brookfield Asset Management Inc., have walked away from centers where values slumped below the property’s debt. Other companies—Washington Prime Group Inc., CBL & Associates Properties Inc. and Pennsylvania Real Estate Investment Trust—filed for bankruptcy, raising the potential for massive portfolios to come up for sale.

Namdar and Mason have averaged 20 acquisitions annually over the past decade, but could swallow 100 at a time if the right deal came along, Namdar said, declining to provide details on how much money they plan to spend.

Mason President Elliot Nassim, 40, whose cousin married Namdar, focuses on leasing and redevelopment while Namdar oversees property management.

Namdar and Nassim make no pretense of catering to luxury consumers. They say they charge affordable rents so stores such as Claire’s, Lids and Piercing Pagoda can fill vacancies.

One center, the Eastdale Mall in Montgomery, Alabama, is now 100% leased, up from 70% when it was purchased in January 2020 for $24 million.

“Is it where my wife would shop?” Nassim said about their properties. “It’s a different market.”

Buyer Lawsuit
Their first purchase, in 2012, was the DeSoto Square Mall in Bradenton, Florida, after Simon defaulted on the debt. They sold it in 2016 for $25.5 million to ML Estate Holdings LLC, which sued two years later, contending the property had lower revenue and higher costs than represented.

“Namdar’s approach to its real estate business generally is to purchase marginally performing properties, drain them of cash and operating funds, and then sell them,” the lawsuit in New York Supreme Court in Brooklyn alleged.