They Bet 2 Malls to Build a $5,000,000,000 One: The Ghermezian Family Story

Steven Weinstock (00:00) To finish one mall, a family once put up nearly half their ownership stake in two other malls as collateral. Not a small mall either. The largest shopping center in Canada and the largest shopping center in the United States, both pledged to a group of banks, including Goldman Sachs and JPMorgan Chase, just to complete a single project in the New Jersey swamps outside Manhattan. That project cost five billion dollars. It's called American Dream. And it's still, today, one of the most financially chaotic real estate stories in America, even as millions of people walk through its doors every single month. The family behind it built their fortune from a Persian rug trading business, fled Iran generations ago, and remain, by choice, almost invisible to the public. This is another one of our Deep Dive episodes here on The Wealth Clock. Their name is Ghermezian. Here's their story. The story starts with a man named Jacob Ghermezian, who built a rug and antiques business in Iran before political and economic uncertainty pushed the family out. Jacob, his wife Miriam, and their four sons, Nader, Raphael, Bahman, and Eskandar, left for Montreal in the late 50s, and by 1964 had settled in an unlikely destination for a family about to build one of the largest real estate empires in North America, Edmonton, Alberta, a city better known at the time for oil and cold winters than shopping centers. The family is Orthodox Jewish, and that identity shows up throughout their story, not as a footnote, but as something genuinely woven into how they've built and operated their properties. Jacob used the proceeds from the rug business to start buying real estate in the mid-1960s, bringing his sons directly into the business with him. They worked in adjoining offices, lived in adjacent homes connected by covered walkways, and shared phone lines. This wasn't a company with a boardroom full of strangers, it was, and largely still is, one very large, very close family, a structure that historians of the family have described as almost clan-like in how tightly the generations worked and lived together. In 1972, the family formally named their company Triple Five. The name itself tells you something about how they think. Triple, for three generations of Ghermezians. Five, for Jacob and his four sons. And according to one account of the company's early history, the very first version of the business was financed with backing from 551 silent partners, Iranian investors who needed a discreet way to move wealth out of a country with an unpredictable, retroactive tax system. Triple Five's first great achievement was the West Edmonton Mall, which became, at the time, the largest shopping and entertainment complex in the world, a title it held for years. It draws more than 60 million visitors a year, and even today includes its own indoor amusement park, water park, and ice rink, decades before that kind of retail and entertainment combination became common anywhere else. The family followed that with the Mall of America in Bloomington, Minnesota, still today the largest mall in the United States. Between those two properties alone, the Ghermezians had already built something most developers spend an entire career chasing and never reach, two of the most visited privately owned buildings on the continent. And then they decided to build a third one. In 2011, Triple Five took over a stalled, troubled project in the New Jersey Meadowlands, originally called Xanadu, and renamed it American Dream. The site had already sat half built for years, visible from the New Jersey Turnpike as an unfinished, rusting shell that commuters drove past every single day, and one New Jersey governor famously called it "the ugliest damn building in New Jersey, maybe America." The Ghermezians didn't just want to finish it. They wanted to make it the most ambitious retail and entertainment complex ever built in the country. The final price tag came to roughly five billion dollars, making American Dream the single most expensive mall ever constructed. New Jersey backed the project with over a billion dollars in tax-exempt municipal bonds. And to close the gap on construction financing, Triple Five pledged 49% of their interest in West Edmonton Mall, and 49% of their interest in the Mall of America, as collateral to Goldman Sachs and JPMorgan Chase. One industry advisor summed it up simply: "They bet the farm, and then they threw the kitchen sink at the mall itself." The finished complex covers roughly three and a half million square feet. It includes the largest indoor theme park in the Western Hemisphere, the largest indoor water park in North America, and the only indoor real snow ski slope on the continent. It is, by almost any measure, an extraordinary physical achievement. It opened its doors on October 25, 2019. Five months later, COVID shut the world down. American Dream's retail stores didn't fully reopen until October of 2020, a full year after the complex first opened. The financial damage was severe. The company lost about $60 million in 2021 alone, on revenue of roughly $173 million against expenses of over $230 million. Bond payments were missed, more than once. At one point, a reserve account meant to cover an $8 million debt payment held a balance of exactly $862. To keep the lender relationship alive, Triple Five put up equity in Mall of America and other holdings as additional collateral, on top of what they'd already pledged. As one restructuring advisor put it, bluntly, "for better or for worse, the lenders are partners with Triple Five" now. A three-alarm fire even forced the Big Snow ski slope to close for months, right as the mall was finally starting to recover from the worst of the pandemic shutdowns. And here's the part that makes this genuinely a current story, not a settled one. As recently as May of 2025, the property's assessed value dropped by $800 million in a single quarter, a nearly 25% drop, a real blow to the municipal bondholders whose payments are tied to that value. Nuveen alone holds close to $700 million of American Dream's debt. At the same time, the underlying business has genuinely been recovering. Sales hit roughly $650 million in 2024, an 18% jump from the year before. Foot traffic and leasing have both been climbing. In 2025, American Dream was ranked the second best retail center experience in the entire country by Chain Store Age. So you have two true stories running at the same time: a mall that's becoming a genuine cultural destination, and a debt structure that's still, right now, under real financial strain. That tension, the operational success sitting right next to the financial distress, is exactly why this story isn't finished. Nobody, including the bondholders, knows exactly how it ends. Walk through the place today and you'd never guess any of this from the outside. DreamWorks Water Park is the largest indoor water park in North America, home to the tallest indoor body slide in the world. Nickelodeon Universe is the largest indoor theme park in the Western Hemisphere. There's a SEA LIFE Aquarium, a LEGOLAND Discovery Center, more than 70 places to eat, and millions of visitors a year who have no idea their ticket is, in a very real sense, helping repay a $5 billion bet. Despite controlling three of the largest shopping centers in North America, the Ghermezians remain famously publicity shy. Many family members simply don't do public interviews. Unlike other prominent Persian Jewish real estate families who settled in places like Great Neck or Beverly Hills, many Ghermezians live quietly in Riverdale, in the North Bronx. Their Jewish observance shows up in small, practical ways inside the business itself. American Dream's water park includes a modesty wall specifically so observant Jewish guests can enjoy it comfortably. During Sukkot, the mall has closed the water park to the general public during specific daytime hours to offer gender-separated swimming for Orthodox families. These aren't symbolic gestures for a press release. They're quiet accommodations built into the actual operation of a five billion dollar complex, for a community the family has never stopped being part of. Today, roughly 120 family members are involved across the company, now led by Don Ghermezian as CEO of American Dream, with his uncle Nader still serving as chairman. A third generation, raised inside the business the same way their fathers and grandfather were, is now running it. So what do you take from a story still actively unfolding like this one? First, sometimes the biggest risk in your portfolio isn't the new deal you're chasing. It's using your existing, proven assets as collateral to fund it. The Ghermezians didn't just risk American Dream. They put nearly half their stake in two of the most successful malls in North America on the line to build it. Second, timing is not something you fully control, no matter how good the underlying asset is. American Dream opened five months before a global pandemic shut down public life. Third, and this is the one worth sitting with, operational success and financial distress can be true at the exact same time. That's the Ghermezian family. Persian Jewish immigrants who built a rug business into three of the largest shopping centers on the continent, bet two of them to build a third, and are still, today, working through the consequences of that bet, one municipal bond payment at a time. Next time you're at American Dream, riding a roller coaster under a glass ceiling in the middle of the New Jersey swamps, remember, you're standing inside one of the biggest wagers in modern real estate, and nobody's entirely sure how the story ends. If you enjoyed this one, comment the word awesome so I know that you made it to the end. This has been The Wealth Clock Podcast. I'm Steven Weinstock. I'll see you next time.