The San Francisco Centre shopping mall is 93% vacant, with more operators on the move. (Photo by Smith Collection/Gado/Getty Images)
Gado via Getty Images
After previously being cancelled seven times, no one was that surprised when the long-delayed auction of San Francisco Centre, once the city’s flagship downtown shopping mall, didn’t happen as slated on September 4.
In truth, few in San Francisco’s real estate community expected it to take place, meaning the transfer of ownership of the ailing property from its lenders to a new owner continues to orbit the same doom loop as the retailers who have all but departed.
With little cash to be recouped for stakeholders finding a solution, and fast, is now the priority to close a dark chapter in San Francisco’s recent history.
The property’s troubles came to a head in 2023, when real estate giants Unibail-Rodamco-Westfield and its partner Brookfield Properties stopped making payments on a $558 million mortgage tied to the mall.
That loan, part of a larger $625 million commercial mortgage-backed securities package, had financed earlier renovations and operations of the 1.5 million-square-foot complex at 865 Market Street.
But facing declining foot traffic and mounting losses amid the wider economic and crime issues dogging the city, Westfield and Brookfield effectively handed the keys back to their lenders, walking away from an asset whose value had plummeted from more than $1.2 billion in 2016 to less than $200 million today.
San Francisco Centre Auctions
Control of the property currently rests with the lenders, represented through a court-appointed receiver, Trident Pacific Real Estate Group, which is working with real estate broker JLL to oversee the building. For now, the lenders themselves have formal ownership, making the San Francisco Centre one of the most expensive distressed assets in California’s recent history.
But it was once so different. For much of the past two decades, the mall symbolized downtown San Francisco’s retail prowess. Reopened in 2006 after a $440 million redevelopment by Westfield, the complex combined the restored dome of the old Emporium department store with modern retail. Anchored by Nordstrom and Bloomingdale’s department stores, it boasted foot traffic that once topped 20 million visitors a year.
But by the early 2020s, that formula had broken down. The pandemic hollowed out the city’s office population, tourism collapsed, and fears about crime, cleanliness and widespread drug use in the city’s major shopping districts turned people off.
Nordstrom’s decision in 2023 to shutter its Downtown flagship marked a turning point. Bloomingdale’s followed in spring 2025, closing its five-level store and leaving the building minus an anchor tenant. Smaller brands — from Coach and Kate Spade to Zara and Michael Kors — soon followed.
The centre’s occupancy rate has since fallen to about 7%, being generous, leaving vast stretches of the mall empty.
San Francisco Centre Near Empty
Only a handful of food court operators, including Shake Shack and Panda Express, remain with more exits ongoing, and the mall continues to haemorrhage money.
The repeated delays in the auction reflect both logistical complications and market reluctance. The lenders must coordinate among multiple creditor tranches while grappling with a property whose income has evaporated.
Large-scale redevelopment as a mall is highly unlikely, but even a mixed-use project combining homes, offices and entertainment would require hundreds of millions of dollars in new investment and extensive city approvals.
That would require a brave investor with deep pockets.
Union Square, San Francisco, is showing signs of recovery. (Photo by Smith Collection/Gado/Getty Images)
Gado via Getty Images
The San Francisco Centre’s decline also mirrors the broader struggles of the city’s retail landscape. Today Downtown San Francisco, once one of the West Coast’s most vibrant shopping districts, still has half-empty office towers and weekday foot traffic around Market Street has dropped over 30% since 2019.
Nearby Union Square, the traditional shopping heart of the city, is showing flickers of recovery, though vacancies still sit around 20%. Luxury brands such as Louis Vuitton, Gucci and Chanel have recommitted to their flagships, while high-end audio specialist Bang & Olufsen is to open it’s biggest store globally.
Developers and investors have been quietly buying up empty buildings in the hope of a long-term rebound and City officials have introduced tax incentives to attract new tenants, with international tourism, particularly from Asia, slowly rising.
In the meantime, the city, for its part, has expressed willing to help any new owner repurpose the San Francisco Centre, with ideas ranging from converting upper levels into student housing or offices to using parts of the site for cultural or civic purposes.
But for the San Francisco Centre, ideas are cheap, redevelopment is not.
Source: https://www.forbes.com/sites/markfaithfull/2025/10/16/will-near-empty-san-francisco-centre-ever-find-a-buyer/
