Westfield Exits Ownership of San Francisco Mall

Downtown San Francisco has been experiencing a mass exodus of retailers in recent months, and this week the owner of a high-profile mall there has decided to a walk away from the property. The story was first reported by the San Francisco Chronicle, and has since been covered by a variety of publications, including The New York Times, on which much of the account below is based.

On Monday, mall owner Westfield said it was handing Westfield San Francisco Centre back to its lender, who will decide who will operate the property going forward.

That decision to walk away from the location it has owned since 2002 raised a new round of questions about how long it will take city centers throughout the U.S. to recover, and the ability retailers and mall owners have to keep operating in the meantime, the Times reports.

Downtown malls have always been relatively rare, given the limited space available in city centers for sprawling shopping areas. But those that have been built have long relied on a steady flow of foot traffic from local residents, office workers, convention-goers and tourists. That calculus no longer worked during the pandemic.

In many cases, retailers in urban centers are voluntarily choosing to exit. In San Francisco, the biggest recent blow along those lines was Nordstrom’s decision to close its longtime store at San Francisco Centre in August (along with a Rack outlet across the street), which will leave the mall 45 percent empty. More recently, Cinemark announced that it was closing its theaters at the mall at the end of this week.

The six-level indoor complex has about 180 retail tenants and just under 1.2 million square feet of leasable space.