An iconic mall foreclosed for a fraction of the billion-dollar valuation it once commanded as Covid shutdowns and out-of-control crime left the seven-story behemoth a shell of its former self.
Valued at $1.2 billion nearly a decade ago, the San Francisco Centre Mall, previously known as the Westfield Emporium, was sold at an auction on Wednesday to lenders Deutsche Bank and JPMorgan Chase.
Before the Covid-19 pandemic, the mall served as a shopping hub in San Francisco, with residents and tourists flocking to its vibrant energy and big-name brands.
As consumers turned away from the city’s sketchy downtown and toward online shopping, however, the mall’s value declined drastically.
An appraisal at the end of 2022 valued the property at only $290 million, a 76 percent drop from its height before the pandemic.
But lenders purchased the property for even less than appraisals, with the final sticker price for the sprawling 1.5 million square-foot mall only $133 million – or just 11 percent of its top valuation.
The banks have reportedly hired real estate brokerage CBRE to find a new buyer for the mall – and their executive VP of CBRE Kyle Kovac told CBS News that the sale signals a new era for the property.
After Westfield and Brookfield walked away in 2023, the mall’s flagship stores Bloomingdales and Nordstrom closed (Pictured: Westfield Centre shopping center in 2009)
The San Francisco Centre Mall foreclosed for a fraction of its evaluation nearly a decade ago
The mall’s previous owners defaulted on loan payments in 2023, and a court-appointed receiver took control
It’s unclear what the next buyer’s plans will entail for the mall, but the property has sat mostly empty since its previous owners, Unibail-Rodamco-Westfield and Brookfield Properties, defaulted on loan payments in 2023.
Westfield and Brookfield were forced to relinquish ownership of the property, and a court-appointed receiver took control.
At the time, Westfield blamed ‘unsafe conditions’ and ‘lack of enforcement against rampant criminal activity’ for the mall’s decline.
‘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,’ the company previously said in a statement.
Since then, the number of retail stores has declined rapidly. The mall’s flagship store, Nordstrom, shuttered its doors the same year. Bloomingdale’s soon followed suit, and the mall’s movie theater later shut down.
The mall currently has only leased 9 percent of its storefronts, according to the San Francisco Chronicle.
One visitor from Los Angeles described the mall as ‘eerie’ during a recent interview with CBS News.
‘Coming in, you’re expecting so many stores, you know, like a typical mall but it’s not that at all,’ Romel Pacheco told the publication.
Westfield blamed ‘unsafe conditions’ for the mall’s decline in 2023 (Pictured: Black Friday shoppers in 2011 at the San Francisco mall)
‘It’s such a beautiful building and it’s in a prime location, but it’s just really empty. So, it’s kind of odd,’ Erick Linares added.
One San Francisco native, Paula Reinda, told CBS that every time she steps in the mall, it gets ’emptier and emptier’.
She shared that she managed a store in the mall in the 90s, adding: ‘It was bustling. It was so busy you couldn’t even walk. So, seeing it like this is just unbelievable.’
San Francisco Mayor Daniel Lurie told the San Francisco Chronicle that the foreclosure ‘marks a critical step towards an exciting new chapter for this site and for Market Street’.
A real estate brokerage has been hired to sell the property, marking a new era for the sprawling space
‘With safe, clean streets and an activated Market Street, we can re-energize downtown and move our recovery forward,’ he added.
San Francisco isn’t the only city facing a drastically changing retail climate. According to data compiled by Capital One, an average of 1,170 shopping malls closed every year between 2017 and 2022.
Projections indicate that the trend is expected to continue, with estimates revealing that up to 87 percent of large shopping malls may close over the next decade.
Westfield, an Australian-founded shopping centre company established in 1959 in Sydney, acquired the complex in 2002, before its branding was removed in 2023 when the owners announced they would stop making loan payments and cede the property to their lenders.
The Daily Mail has reached out to Deutsche Bank, JPMorgan Chase, CBRE, and the mayor’s office for additional comment.
