The San Francisco Center has suffered a staggering $1 billion in value loss since 2016 as the crime-plagued mall now lies moribund amid rampant homelessness and escalating criminal activity.
The city's largest mall, owned by Westfield and Brookfield, which stopped making mortgage payments last year, is now worth just $290 million, down 75 percent from seven years ago, according to Real Deal.
The Alto shoe store will leave the mall next week and numerous tenants, including Nordstrom, Adidas, Abercrombie & Fitch and Lego, have left the mall since 2020.
When former mall operator Westfield handed over the property to its lender last year, it blamed Nordstrom's departure in large part on “unsafe conditions” and a “lack of enforcement to address rampant criminal activity.”
The mall is located in the troubled Union Square area of downtown, where businesses and tourists have fled since the pandemic, with groups blaming crime, homelessness and work-from-home policies.
The San Francisco Center has lost a staggering billion dollars in value since 2016, as the crime-plagued mall is now dying amid rampant homelessness and escalating criminal activity
The city's largest mall, owned by Westfield and Brookfield, which stopped making mortgage payments last year, is now worth just $290 million, down 75 percent from seven years ago
The mall is located in the troubled Union Square area of downtown, where businesses and residents have fled since the pandemic, with groups blaming crime, homelessness and work-from-home policies as reasons
The valuation, published by market research firm Morningstar, found that the 1.45 million square foot property lost $910 million between 2016 and 2023 and more than half of the rental space is now vacant.
The San Francisco Center generated $455 million in revenue in 2019, before the pandemic. In 2022, sales fell by about a third to $298 million.
Occupancy has now fallen to about 25 percent since its largest tenant, Nordstrom, left its 312,000-square-foot store last year.
Its owners Westfield and partner Brookfield Properties lost control of the 5 million-square-foot retail and office complex to lenders last June and defaulted on a $558 million loan.
“For more than 20 years, Westfield has proudly and successfully operated the San Francisco Center, during which time it has invested significantly in the vitality of the property,” the company said at the time.
“Given the difficult operating conditions in downtown San Francisco, which have resulted in declines in sales, occupancy and foot traffic, we have made the difficult decision to begin the process of transferring management of the mall to our lender for appointment. “The insolvency administrator will take over the future management of the property.'
Gregg Williams of Trident Pacific, an Orange County real estate firm, was appointed receiver with the authority to collect rent and sell or liquidate the property.
According to Real Deal, the property's lenders have since advised the bankruptcy trustee to sell the mall to pay off the debt.
When former mall operator Westfield handed over the property to its lender last year, it blamed Nordstrom's departure in large part on “unsafe conditions” and a “lack of enforcement to address rampant criminal activity.”
Among the high-profile closures is accounting firm KPMG, which will move out of its namesake $400 million building
According to a recent report, nearly 100 retailers in downtown San Francisco have closed since the start of the COVID pandemic, a decline of more than 50 percent
The mall collapse is part of a larger disaster affecting retailers across the city.
Nearly 100 retailers in downtown San Francisco have closed since the start of the pandemic, a decline of more than 50 percent.
Among the high-profile closures is accounting firm KPMG, which will move out of its namesake $400 million building.
The consulting and accounting giant first leased space in the 25-story office tower when the building opened in 2002. His name hangs above the entrance to the skyscraper where the company currently occupies more than 100,000 square meters.
KPMG originally acquired 90,000 square feet at 55 Second St. in a 10-year deal, marking the second-largest office deal of 2003.
Since then, its footprint has expanded to nearly a third of the 35,000 square foot building, which is why it is commonly known as “The KPMG Building.”
According to the San Francisco Chronicle, the company is now considering ending its two-decade relationship with the building. It is the latest tenant to move out of the city center.
The city center has suffered from the proliferation of homeless camps, open-air drug markets and rampant theft
The city's downtown has suffered from the proliferation of homeless encampments, open-air drug markets and rampant theft, while tourists stroll along devastated Powell Street – a street that was once bustling with shops
Instead of being confronted with an array of shops, cafes, bars and restaurants, the party is met with countless closed storefronts
The closures and exits suggest that San Francisco's “bad luck cycle” is far from over. In a vicious cycle, a city loses its tax base and cannot afford the necessary improvements to improve the situation and bring new businesses and residents back to an area.
Earlier this week, San Francisco journalist Erica Sandberg shared alarming images of a once-famous San Francisco street rocked by store closures.
A snapshot taken in the heart of the city's famous shopping district shows tourists strolling along a gutted Powell Street.
But instead of being confronted with an array of shops, cafes, bars and restaurants, the party encounters countless closed storefronts.
Additional shots from Sandberg show more of this and how the thoroughfare that borders the city's downtown and stretches from Market to Fisherman's Wharf has become a shell of its former self.
The city center has suffered from the proliferation of homeless camps, open-air drug markets and rampant theft.
Countless brand names, including Whole Food and Nordstrom, have recently migrated, resulting in a loss of customers that in turn pushes out other companies.
The city has also struggled with rampant fentanyl use and fatal overdoses for years and is facing its deadliest year yet.
In the first five months of 2023, preliminary reports show there were 346 overdose deaths in the city – an increase of more than 40 percent compared to the same period in 2022.
Economists have warned that the city is entering an “urban doom loop” – a vicious cycle of interconnected trends and forces that is driving cities toward economic and social ruin.
High theft has proven to be a problem in the area lately, and a downtown Walgreens decided to chain its freezers to stop shoplifters.
Retail stalwart Old Navy announced the closure of its flagship store in the area last month.
Anthropologie and Office Depot also made the same decisions.
These stores joined the growing list of stores that have left the coastal city, including H&M, Marshall's, Gap and Banana Republic.
A disturbing recent report showed that 95 retailers in downtown San Francisco have closed since the start of the COVID pandemic, a decline of more than 50 percent.
Of the 203 retailers that opened in the city's Union Square area in 2019, only 107 are still in operation, a 47 percent decline in just a few years hit by the pandemic.