Iconic San Francisco Mall Set for Closure as Westfield Stops Paying Mortgage

San Francisco's namesake mall is set for closure as Westfield stops making mortgage payments on its $558 million loan
The decision was sparked by Nordstrom, the mall's anchor tenant, who has chosen to close in August
Westfield cited several reasons, such as unsafe conditions and lack of enforcement against crime, as the reasons for its decision

An iconic San Francisco mall is set for closure as Westfield has stopped making mortgage payments on its $558 million loan, citing crime and reduced sales, dealing another blow to the area's struggling downtown.

While the mall will remain open for now, Westfield is giving the rights back to the lender, who will be responsible for appointing a receiver. The mall's anchor tenant, Nordstrom, sparked the decision to close in August.

San Francisco Mall Set To Close

Westfield last month cited unsafe conditions and officials' lack of enforcement against rampant criminal activity that led to Nordstrom's decision. It said that the poor performance in San Francisco was the opposite situation to the rest of its properties, as per the Daily Mail.

In 2019, before the coronavirus pandemic, San Francisco Center generated $455 million in sales, which went down to $298 million last year. Nordstrom occupied 312,000 square feet in the mall, meaning Westfield San Francisco will only be 55% leased when it closes.

The mall is a smart and upmarket building, and its other retailers include Bloomingdales, Aesop, Rolex, and Sephora. Westfield's woes will continue to pressure city leaders following the decision of multiple retailers and hotels to shut down in the area amid soaring crime, open drug use, and homelessness.

For some time, the famously progressive city has faced condemnation over its "harm reduction" policies, which critics argue have only effectively legalized drug taking. On the other hand, the police department in the area is still short-staffed after supposed woke lawmakers called for defunding the force after George Floyd's murder at the hands of a police officer.

Harsh Conditions After the Pandemic

In a statement, the company said that for more than 20 years, Westfield has proudly and successfully operated San Francisco Center. It noted that it invested significant amounts during that period to support the property, according to the San Francisco Chronicle.

Westfield added that downtown San Francisco's challenges have resulted in a decline in sales, occupancy, and foot traffic. This forced the company to make the difficult decision to start the process of transferring management of the shopping center back to its lender and allow them to appoint a receiver.

San Francisco has been one of the areas in the United States that struggled to recover following the health crisis. This kept workers away from its officers; some have expressed concern that the city is stuck in a "doom loop."

This is where office space will remain empty, and tourism will continue to lag, negatively affecting retailers and restaurants while draining the lifeblood of the once-thriving urban ecosystem. In recent months, several landlords who own several office buildings in downtown San Francisco have defaulted on their property debt or given the keys back to lenders, said Market Watch.