SF's former Westfield Mall, once a bustling hub in San Francisco, has seen a dramatic loss in value. Reports indicate that the mall's value has plummeted by nearly $1 billion.
According to Morningstar Credit Analytics, a leading financial analysis firm, the value of the once-thriving mall has decreased significantly, dropping by $910 million since 2016.
The Real Deal initially reported this shocking decline. The mall, which was once valued at a staggering $1.2 billion in 2016, has now been appraised at just $290 million.
This marks a significant downturn for what was once one of San Francisco's most prominent shopping destinations. The drastic reduction in the mall's worth highlights the challenges faced by retail spaces in the city.
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SF's Former Westfield Mall Struggles: Major Stores Shut Doors
The once-vibrant SF's former Westfield Mall faces a wave of high-profile store closures, affecting its 1.45 million-square-foot space. Last summer marked the end of an era as Nordstrom, the mall's anchor tenant for over 34 years, shut its doors.
Adding to the series of setbacks, June saw Westfield, the long-time operator of the San Francisco Centre on Market Street, withdraw its involvement. The company, which had been a part of the mall for over two decades, cited a significant drop in foot traffic and tough operating conditions as the primary reasons for its departure.
The mall's challenges don't end there. Several other retailers have ceased operations, leaving the mall at a mere 25% occupancy. This stark decline reflects the broader struggles faced by retail spaces in the area.
Last June, Westfield, and their partner Brookfield Properties faced a significant setback as they lost control of a vast 5-million-square-foot retail and office complex. The reason behind this loss of control was their inability to meet the obligations of a $558 million loan.
In a statement during that time, Westfield expressed pride in their more than two-decade-long successful operation of the San Francisco Centre. They acknowledged their substantial investments in the property's well-being.
However, they also cited the challenging conditions in downtown San Francisco, which had led to sales, occupancy, and foot traffic declines.
To address these challenges, Westfield made the tough decision to initiate the transfer of the shopping center management to their lender. This allowed the lender to appoint a receiver, Gregg Williams of Trident Pacific, a real estate company in Orange County.
Williams was granted the authority to collect rent and explore options to sell or liquidate the property.
In a subsequent development, the property's lenders have advised the receiver to sell the mall to settle the debt, as reported by the Real Deal.
Wider Crisis Hits SF Retailers as Mall Collapse Adds to Woes
The mall's recent troubles are emblematic of retailers' challenges in downtown San Francisco. The area has seen a significant downturn in its retail sector, with nearly 100 stores shuttering since the onset of the pandemic, marking a more than 50% decrease.
Notably, KPMG, the accounting firm, is preparing to vacate its $400 million namesake building, where it has been a tenant since the tower's opening in 2002. Over time, KPMG expanded its presence within the building, occupying over 100,000 square feet and earning it the nickname 'The KPMG Building.'
However, as the San Francisco Chronicle reported, KPMG is now contemplating ending its two-decade-long association with the building. This move aligns with a broader trend of tenants seeking to exit the downtown area, highlighting the ongoing challenges confronting businesses in this part of the city.
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