Rye retail complex sees valuation fall 55 percent

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A Westchester County retail space is hitting financial trouble.

The Waterfront at Port Chester has seen its valuation slashed by 55 percent — from $178 million to $80 million in the last decade, according to Morningstar Credit.

Two loans tied to the property have missed their April maturity dates and entered special servicing.

G&S Investors developed the 350,000-square foot open air retail space in the town of Rye, with the first business opening in 2002. The biggest tenants now include a Stop & Shop supermarket, AMC Theaters, Marshall’s and Michael’s, according to Morningstar.

G&S took out two refinancing loans on the property in 2015: one for $80 million and another for $53.5 million. Owner Gregg Wasser sponsored the loans.

But the retail space faltered during the pandemic. Income cratered and the value of the property fell by 40 percent to $106 million, according to Morningstar. With time, G&S was able to work out a forbearance plan with lenders and get the loans out of special servicing. Revenue went up.

However, occupancy continued to slip. Bed, Bath & Beyond let its lease expire in 2022. The complex fell from 98 percent leased in 2021 to just 81 percent leased this year.

Last year, the complex’s net operating income was $5 million. Full balances remain on both loans, making the property worth less than its debt.

Morgan Stanley, which originated the loans, said it’s pursuing foreclosure along with a potential modification.

Neither G&S Investors or owner Gregg Wasser immediately responded to requests for comment.

Westchester County has seen a multifamily development boom in recent years. The region, a short trip on the Metro-North from Manhattan, has seen a ceaseless demand for apartments. About 12,500 units in the county have been delivered since 2021, with 15,000 in the pipeline, according to reports from RM Friedland.

But whether that boom will trickle down to retail environments still remains to be seen.