Namdar Realty and the Future of Severance Town Center

By Dennis Keating, Emeritus Professor, Urban Studies, Cleveland State University, for the Severance Action Group

I am a longtime Cleveland Heights resident and volunteer with Future Heights and the Severance Action Group, which has been working for the comprehensive redevelopment of Severance Town Center (STC). I offer this profile of its owner and its impact on the STC’s future.

   Much of the property we know as Severance Town Center is owned by Namdar Realty and is managed by its partner Mason Asset Management. Namdar bought the STC at auction for $10.4 million in 2016. Namdar Realty is based in Great Neck, New York (Long Island), and is family-owned. Founded in 1999, it now owns several hundred shopping malls across the United States. Igal Namdar heads Namdar Realty and Elliot Nassim, the cousin of Igal Namdar’s wife, heads Mason Asset Management.

    Namdar Realty is known for buying B and C-level malls that are “distressed” and “struggling.” Many had previously lost their anchor stores as national chains  (e.g., Sears, J.C. Penney, Macy’s) have reduced the number of their locations or gone out of business. Its business model is to buy malls at bargain prices, often as a result of court-ordered auctions following foreclosure, and then to spend as little as possible on maintenance of these malls. In a June 26, 2018, Reuters profile of Namdar Realty and Mason Asset (“Who is Making Money from struggling U.S. Malls?”), their strategy was described as to “invest as little as possible on many of their properties, adding the aim is to hold the assets, not redevelop them.”

   What has then often followed is a further decline in the number and quality of their 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 (e.g., in the STC, the Home Depot was sold for $13.7 million in 2019 to a California investor, which then sold it to a Maryland buyer in 2022). Namdar Realty both buys malls with cash offers but also 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 in 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 malls/buildings as “public nuisances” and demanded that Namdar either repair their properties 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 regional 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 prepared by the Severance Action Group (SAG) affiliated with Future Heights, these and other examples have been described in detail based upon articles in local news outlets and national media. For example, a January 22, 2021, New York Times article (“Inside mall owner Namdar’s rapid growth story”) discusses problems in six Namdar-owned malls, including its mall in Mansfield. That city has recently ordered the demolition of some of the buildings in that mall that are considered a public nuisance.

   In the case of the STC, the poor condition of much of the parking lots with hundreds of potholes has been noticeable. In the case of Dave’s Market, in the absence of adequate maintenance by Mason Asset, it paved that part of the parking lot in front of its store at its own expense. Finally, in 2022, after being cited by the city, the potholes have been filled by Mason Asset (as opposed to the parking lots being repaved). This is a recurrent pattern for Namdar Realty-owned troubled malls – when cited for code violations, respond with minimal maintenance wherever possible.

   Because of situations like the STC with many vacancies (e.g., most noticeable the Wal-Mart and Regal Cinema buildings), local governments in states, in  addition to Ohio, such as Connecticut, Florida, Illinois, Michigan, Nebraska, New Hampshire, New Jersey, New York, and Pennsylvania have tried to interest Namdar Realty in redeveloping significantly empty malls that have lost their anchor tenants. These local governments have variously 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 these cities.

     Thus, the city of Cleveland Heights must face these realities regarding Namdar Realty in any effort to redevelop the STC into a vibrant, mixed use site which will again be a major asset to our community. City Council Vice President Craig Cobb in his 2021 campaign profile in the Heights Observer 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 City on redevelopment.”