The shopping center company Westfield is giving up ownership of its San Francisco shopping mall to its lender due to a significant decrease in sales and occupancy. Westfield has operated San Francisco Centre for over 20 years and has invested significantly in the property’s vitality during that time. This statement was released by the company and published by SFGate.com.
Due to the difficult conditions in downtown San Francisco, including declining sales, occupancy, and foot traffic, management of the San Francisco Centre shopping center will be transferred to our lender. This allows them to appoint a receiver to operate the property going forward. It’s important to note that the shopping center’s debt is non-recourse and this action will not affect any of Unibail-Rodamco-Westfield’s other debts.
Westfield and Brookfield Properties stopped making payments on the $558 million loan for the retail complex. The lender’s identity has not been made public. According to Reuters, foot traffic at the mall dropped significantly in 2020, with only 5.6 million visits compared to 9.7 million in 2019. This decrease in foot traffic was reflected in sales, which fell from $455 million in 2019 to $298 million in December 2020. The mall’s occupancy rate also declined to 55% after the closure of Nordstrom and Banana Republic stores.
The owners of major downtown San Francisco properties have abandoned ownership twice in one week. The mall operator is the latest to make this decision. Park Hotels & Resorts, a real estate investment trust, recently defaulted on a loan for two San Francisco hotels. The company removed the hotels from its portfolio due to concerns about the city’s “street conditions” and economy.