- The Macy’s-owned retailer will exit its long-term lease at San Francisco Centre nearly 20 years early, leaving Zara as the largest tenant.
- San Francisco Centre, once valued at $1.2B, is now appraised at $290M, with its foreclosure auction scheduled for February 20.
- Safety concerns and declining foot traffic have driven out major anchors like Nordstrom and Cinemark, with Union Square continuing to lose retailers.
Bloomingdale’s (M) is set to shutter its 339 KSF store at the San Francisco Centre in March, dealing another blow to the embattled downtown mall, which is facing a foreclosure auction, per GlobeSt.
Downtown Mall in Decline
San Francisco’s retail woes deepened this week as Bloomingdale’s announced the closure of its 339 KSF anchor store at the San Francisco Centre. The closure, scheduled for the end of March, removes one of the mall’s last major tenants, further jeopardizing its future.
Bloomingdale’s lease was originally set to run through 2046. But Macy’s, the chain’s parent company, has opted for an early exit. Details about the negotiated departure have not been disclosed, but the decision is another high-profile retail retreat from the struggling Union Square area.
Buying High, Selling Low
The San Francisco Centre, which spans 1.2 MSF, has been under receivership since 2023, when former owners Unibail-Rodamco-Westfield (UNBLF) and Brookfield (BN) abandoned the property and stopped paying on a $558M CMBS loan.
The mall was appraised at $1.2B in 2016, but flagging retail activity and broader economic pressures slashed its value to just $290M, according to Morningstar.
Originally set for December, the mall’s foreclosure auction has been postponed to February 20, further clouding its future.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
The Bigger Picture
The challenges facing the San Francisco Centre reflect a larger retail exodus from Union Square, driven by declining foot traffic, safety concerns, and shifting consumer habits.
- Nordstrom exit: Nordstrom (JWN) closed its 312 KSF store at the mall in 2023, ending a 35-year tenure.
- Cinemark departure: The mall’s 52 KSF movie theater (CNK) also closed last year, due to a lack of business.
- Remaining tenants: With Bloomingdale’s exit, Zara became the largest remaining tenant, leasing just 28 KSF until 2027.
Mayor Daniel Lurie called the closure “disappointing” but was optimistic about the city’s potential for recovery. “San Francisco has green shoots everywhere, and we continue to work towards revitalization.”
Fighting For Downtown
Union Square’s struggles have extended beyond the San Francisco Centre. Across the street from the Moscone Center, Starwood Capital Group (STWD) listed the Metreon Mall for leasehold sale.
The 313 KSF property, anchored by Target (TGT) and an AMC multiplex (AMC), was 92% leased in October and offers advertising opportunities during Moscone Center conferences.
Despite these challenges, San Francisco leaders and developers remain hopeful that downtown can recover. But with major tenants like Bloomingdale’s, Nordstrom, and Macy’s Union Square flagship shutting their doors, the road ahead remains uncertain.
Zooming Out
The decline of the San Francisco Centre underscores the struggles of urban retail in post-pandemic cities, where remote work and safety concerns have disrupted downtown economies.
With anchor tenants departing and property values plummeting, the fate of San Francisco’s downtown retail hinges on successful redevelopment and renewed consumer confidence.
All eyes are on the February foreclosure auction and how the property’s next owner will navigate redevelopment. For San Francisco, the stakes are very high.
