Shopping Mall operating company Westfield announced on Monday that they would be handing back the ownership of the San Francisco Centre mall back to the bank due to a massive decline in sales, occupancy, and foot traffic.
In a statement, Westfield noted that, along with Brookfield Properties, that they would no longer be making payments on a $558 million loan for the mall property, and that transferring the property to the lender is the best option for them due to the massive decline in visitors and sales. They also noted that, when Nordstrom leaves in the fall, the mall will only be 55% occupied.
“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,” said Westfield on Monday. “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.”
Westfield’s departure marks the latest in retail companies abandoning the city. In the last few years, for example, Walgreens has closed more and more stores in the city due to the massive amount of crime within its stores. Higher-end stores have also cited break-ins and crime as major reasons for leaving. And just within the last three months, all Amazon Go stores, Anthropologie, several high-end Union square stores, and the flagship Whole Foods store have all announced that their doors will be closing, along with multiple non-chain stores throughout the city. Last month, both Nordstrom and Saks Off 5th announced the closure of 3 main locations in the city, along with T-Mobile, Old Navy, and Williams-Sonoma also announcing closures. Many of those, including Nordstrom, had locations within the San Francisco Centre mall as well.
While Westfield didn’t specify any problems contributing to the lowered foot traffic, experts said that the failing of the mall was partly due to problems plaguing the city, such as rampant crime, drug use, not enough law enforcement, and laws making it difficult to prosecute criminals, as well as partly on outside factors, such as differing shopping habits, less people wanting to shop at malls regardless of crime, and less people living in San Francisco.
Big Changes For San Francisco Mall
“What happened with San Francisco Centre isn’t completely the fault of the city,” explained shopping mall planner and consultant Lydia Price-Davis to the Globe on Monday. “More people are shopping online, and everyone going downtown to shop in department stores and malls is something, to many, straight out of the mid 20th Century and doesn’t reflect current shopping trends. And also, there is a growing number of shopping options outside the city, so many are going there. Malls are also dying in general, so you can put all the blame on other factors you want, but the clear overall trend in the US and Canada is that less and less people like going to malls. People don’t like shopping like that anymore.
“But, at the same time, numbers don’t usually drop this fast to the point that a parent company just plains opts to leave a property like this. Crime, and more importantly, the fear of crime is keeping people away. Less people live downtown now too. And, as stores leave the city, people who like those stores just go to the nearest place with them. In San Francisco’s case, it’s just a perfect storm of everything happening it to once. More than one anchor store leaving is a serious red flag.
“In any case, this really isn’t boding well for the city. When a major shopping center like this in a downtown starts to flounder like this, it is a serious indication that something has gone wrong in the city. In San Francisco’s case, it’s a lot of things. And what’s sad is that the more stores leave, the worse it gets economically there.”
More announcements on the details of Westfield’s handing back of ownership are likely to come out soon.
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