By  on April 6, 2007

The Pyramid Cos., which owns 20 malls in the Northeast generating about $5 billion in annual sales, is evaluating strategic alternatives for 16 properties in its portfolio.

The privately held company has retained Goldman Sachs to study the possibilities for its malls in New York and Massachusetts, said Tim Ahern, an independent trustee for the Congel family trust, which controls the properties. A sale is also an option.

"We have no formal time line as to a decision," Ahern said. "We're exploring all options and are in a position to evaluate them and make a sound, prudent choice."

The firm said it is exploring options for some of its top properties, including Palisades Center in West Nyack, N.Y.; Crossgates Mall in Albany, N.Y.; Walden Galleria in Buffalo, N.Y., and Holyoke Mall, in Holyoke, Mass. Some of their major tenants include J.C. Penney, Macy's, H&M, Target, Steve & Barry's and Old Navy.

Though Ahern declined to put a value on the mall properties, Rich Moore with RBC Capital Markets expects the malls to sell for as much as $6.3 billion, based on a $300 to $400 per square foot sale price.

"We expect all of the major mall REITs to take a detailed interest," Moore wrote in a research note. "Pyramid is the largest privately held mall company to come up for sale since Rodamco in 2002."

Ross Nussbaum, with Bank of America, said that the company will likely be acquired by a mid-sized mall real estate investment trust such as CBL & Assoc. Properties or Pennsylvania REIT, "given the nature of the assets," he wrote. "But the portfolio could go to a private buyer as well."

Pyramid is also developing the huge Destiny USA project in Syracuse, N.Y., which includes more than 4 million square feet of retail and entertainment space and hotels.

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