Abandoning San Francisco mall

Westfield abandoning San Francisco mall due to 'challenging operating conditions'

Tessa McLean

Westfield is officially giving up on its downtown San Francisco Centre, as first reported by the San Francisco Chronicle.

The mall operator and its partner Brookfield Properties have turned over the property to its lender, blaming diminishing sales and low foot traffic at its stores.

“For more than 20 years, Westfield has proudly and successfully operated San Francisco Centre, investing significantly over that time in the vitality of the property,” the company said in a statement provided to SFGATE. “Given the challenging operating conditions in downtown San Francisco, which have led to declines in sales, occupancy and foot traffic, we have made the difficult decision to begin the process to transfer management of the shopping center to our lender to allow them to appoint a receiver to operate the property going forward. San Francisco Centre’s debt is non-recourse and this action has no impact on the rest of [Unibail-Rodamco-Westfield's] debt.”

Westfield and Brookfield Properties ceased payments on the retail complex’s $558 million loan, leaving the undisclosed lender to find a new owner. 

The impending foreclosure shouldn’t come as a surprise for San Francisco: Westfield owners, Paris-based Unibail-Rodamco-Westfield, revealed in April 2022 it would seek the “radical reduction of financial exposure” in the United States. That includes selling off most of its American malls to refocus on its European properties, a plan that’s reportedly been in motion since 2021.

When Nordstrom announced its departure last month, the future of the 1.5 million square foot center looked grim, leaving it only 55% occupied once the department store vacates. Banana Republic also exited its space in the building recently. 

A spokesperson for Westfield told SFGATE last month that the closure of Nordstrom "underscores the deteriorating situation in downtown San Francisco."

"A growing number of retailers and businesses are leaving the area due to the unsafe conditions for customers, retailers, and employees, coupled with the fact that these significant issues are preventing an economic recovery of the area," Westfield and Unibail-Rodamco-Westfield wrote in a statement at the time. "URW has actively engaged with City leaders for many years to express our serious concerns, which are shared by our customers and retailers.  We have urged the City to find solutions to the key issues and lack of enforcement against rampant criminal activity. The current environment is not sustainable for the community, or businesses, and we are hopeful the City will implement the changes that are so urgently needed."