Severance's owner has history of violations
Much of Severance Town Center (STC) is owned by Namdar Realty (namdarrealtygroup.com) and is managed by its partner, Mason Asset Management. Namdar bought STC at auction for $10.4 million in 2016.
Namdar Realty, based in Great Neck, N.Y., is family-owned. Founded in 1999, it owns several hundred shopping malls across the United States. Igal Namdar heads Namdar Realty, and Elliot Nassim, the cousin of Namdar’s wife, heads Mason Asset Management.
Namdar Realty is known for buying "B" and "C" level malls that are “distressed” and “struggling.” Many lost their anchor stores as national chains (e.g., Sears, J.C. Penney, Macy’s) reduced their number of locations or went out of business.
Namdar's business model is to buy malls at bargain prices, often as a result of court-ordered auctions following foreclosure, and then spend as little as possible on their maintenance. A June 26, 2018, Reuters profile of Namdar Realty and Mason Asset (“Who is Making Money from struggling U.S. Malls?”) described their strategy as: “invest as little as possible on many of their properties . . . the aim is to hold the assets, not redevelop them.”
What often has followed is a further decline in the number and quality of tenants. Namdar profits from the rents it collects from the remaining tenants and, if possible, by subdividing the malls in order to sell off individual parcels. For example, in 2019 Namdar sold the STC Home Depot for $13.7 million to a California investor (who then sold it to a Maryland buyer in 2022).
Namdar Realty buys malls with cash offers and with loans. The Israeli Discount Bank of New York City is one of its lenders. Another source of capital is bonds, which it sells on Israel’s Tel Aviv stock market.
Due to the physical decline of many of its malls, Namdar Realty has been described in news articles as a “slumlord.” It has been sued by dissatisfied tenants, unpaid creditors, and local governments. In extreme cases, local governments have cited Namdar's malls/buildings as “public nuisances,” and demanded that Namdar either repair their properties [that are] in serious violation of local codes, or demolish them. Namdar has a well-documented history of failing to comply with many of these municipal orders.
Two Ohio examples are the Midway Plaza in Tallmadge (bordering Akron) and the West Park Shopping Center in Mansfield. In both cases, some of the buildings in these malls have been condemned and face possible demolition. Both malls have been put up for sale by Namdar Realty.
In a white paper [public report] prepared by the Severance Action Group (SAG) affiliated with FutureHeights, these and other examples have been described in detail, based on articles in local news outlets and national media. [To view SAG's work, visit www.futureheights.org/programs/sag.]
A Jan. 22, 2021, New York Times article (“Inside mall owner Namdar’s rapid growth story”) discussed problems in six Namdar-owned malls, including its mall in Mansfield. That city has recently ordered the demolition of some of the mall's buildings that are considered a public nuisance.
At STC, the poor condition of the parking lots, with hundreds of potholes, has been noticeable. Dave’s Market, in the absence of adequate maintenance by Mason Asset, paved the parking lot in front of its store at its own expense. In 2022, after being cited by the city, Mason Asset filled the potholes (as opposed to repaving the parking lots). This is a recurrent pattern for Namdar Realty-owned troubled malls—when cited for code violations, respond with minimal maintenance wherever possible.
In cases like STC, where properties have many vacancies, local governments in Connecticut, Florida, Illinois, Michigan, Nebraska, New Hampshire, New Jersey, New York, and Pennsylvania, as well as Ohio, have tried to interest Namdar Realty in redeveloping significantly empty malls that have lost their anchor tenants. They have offered Namdar incentives and sought to find prospective purchasers for mixed-use development. The results have been consistent: Namdar Realty has declined to participate in the redevelopment of these malls, leaving these properties as a “blight” in many cities.
Any effort to redevelop STC into a vibrant, mixed-use site, and an asset to the community, must face these realities regarding Namdar Realty.
In his 2021 League of Women Voters' campaign profile, CH City Council Vice President Craig Cobb warned, “Efforts at redevelopment are hampered by Namdar, a real estate investor that specializes in buying distressed shopping malls in foreclosure to hold them as assets in their real estate portfolio versus redevelopment. A strategy (strict code enforcement, no parcel subdivision) must be employed to pressure Namdar to work with the [c]ity on redevelopment.”
W. Dennis Keating
W. Dennis Keating, a longtime Cleveland Heights resident, is a volunteer with FutureHeights and SAG, which has been working for the comprehensive redevelopment of Severance Town Center He wrote this to explore the impact of the owner on Severance's future.