Westfield Gives Up San Francisco Mall Following Nordstrom Closure: SF Chronicle

In the aftermath of Nordstrom’s planned closure and a significant drop in sales and foot traffic, Westfield is relinquishing control of its namesake San Francisco mall, The San Francisco Chronicle reports.

Westfield’s Decision: Westfield and its partner, Brookfield Properties, have ceased payments on a $558 million loan and initiated the process of transferring control of the 865 Market St. mall to their lender. The decision comes as the mall’s sales and foot traffic have significantly declined due to challenging operating conditions in downtown San Francisco.

Impact of Nordstrom’s Closure: Nordstrom, which occupies 312,000 square feet in the mall, is set to close in August after 35 years. The mall will be only 55% leased after Nordstrom’s departure, a stark contrast to other U.S. Westfield malls that are, on average, 93% leased.

Future of the Mall: The mall’s commercial mortgage-backed securities loan has multiple lenders, who will determine the future operations of the mall. Despite the foreclosure, retail properties typically continue to stay open. The mall also faces more lease expirations soon, including Century Theaters and H&M.

Westfield’s U.S. Exit: Last year, Westfield’s parent company, Unibail-Rodamco-Westfield, announced plans to sell all of its U.S. malls to focus on Europe. The company currently owns 18 malls after completing some sales. The decision to relinquish the San Francisco Mall is part of this broader strategy.

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