The San Francisco Centre, a 1.5-million-square-foot mall, has become a major void in San Francisco's downtown revival. Once a bustling retail hub featuring a luxury spa, a nine-screen movie theater, and anchor stores like Nordstrom and Bloomingdale's, the mall experienced a sharp decline during the pandemic. This downturn was exacerbated by an increase in crime and homelessness in the area, leading to significant drops in foot traffic and eventual store closures.
The mall's former owners, Unibail-Rodamco-Westfield and Brookfield Properties, stopped making payments on its $558 million loan in June 2023, citing the property's financial inviability post-pandemic. The lenders, including Goldman Sachs and JPMorgan Chase, subsequently took ownership through a $134 million credit bid. The property, which was valued at $1.2 billion a decade ago, is now expected to sell for no more than $130 million, a drastic reduction from its former worth.
A recent deal for the mall, involving San Francisco-based developers Prado Group and Presidio Bay Ventures, collapsed in July after months of due diligence. The developers stated they were not moving forward with the transaction, with sources suggesting issues arose from renegotiating a long-term ground lease with the San Francisco Unified School District (SFUSD) for a portion of the property. The SFUSD lease generates $3.2 million annually, a crucial income for the district. The complexities of dealing with various bondholders, each with different interests, also contributed to the deal's failure.
The San Francisco Centre permanently closed in February after years of declining occupancy and the loss of major tenants. Its redevelopment is considered crucial for connecting the Union Square shopping district with the Mid-Market and SoMa neighborhoods and bringing sustained foot traffic back downtown. Various redevelopment ideas have been floated, including a mixed-use space with housing, offices, entertainment, and even a soccer stadium, though no official plans have been submitted as the property is back on the market.
