San Francisco's largest mall has been dying a long, slow death and it's rebirth as something new just got kicked down the road again. The mall's former owners walked away from the property back in 2023.

The owners of the Westfield San Francisco Centre mall are giving up the property to lenders, adding to deepening real estate pain in a city struggling to bring back workers and tourists after the pandemic...

The move comes a month after Nordstrom Inc. said it was closing its store at the site, citing a drop in customer traffic and the changing dynamics of the city. The mall is in the heart of San Francisco’s Union Square district, one of the downtown’s main shopping and tourist areas.

“Given the challenging operating conditions in downtown San Francisco, which have led to declines in sales, occupancy and foot traffic, we have made the difficult decision to begin the process to transfer management of the shopping center to our lender to allow them to appoint a receiver to operate the property going forward,” Molly Morse, a spokeswoman for Unibail-Rodamco-Westfield, said in the statement.

Part of the challenge was the emptying out of downtown after the pandemic and part of it was the declining safety in the area. Some tenants remained but by last year the mall was nearly empty.

On the edge of the food court at the bottom of San Francisco’s largely empty downtown mall at Market and Fifth streets, Sam Argueta is waiting for the inevitable. 

Argueta, 66, has owned a shoe repair shop at San Francisco Centre for about a decade. Before the mall’s customer base evaporated during the pandemic, Argueta usually had five other people working in his store, Shoe Wiz. Now, it’s just him most days.

As the mall endured a relentless wave of store closures in recent years, emptying out the vast majority of the building’s 1.5 million square feet of retail and office space, Argueta thought about joining the exodus.

In March of this year, a new buyer for the property was selected to take over the project of deciding what to do next with the property.

San Francisco’s vacant downtown mall has new stewards: A pair of experienced, San Francisco-based developers, who are teaming up to reimagine the languishing 1.5 million-square-foot complex.

The Chronicle has learned that Presidio Bay Ventures and Prado Group have been jointly awarded the exclusive right to purchase the now shuttered San Francisco Centre at Fifth and Mission Streets that once drew suburban families, office workers and international tourists into its glass-domed atrium and nine-screen movie theater, which officially closed in 2023.

Just four months later, those buyers are also walking away and the city is apparently back to square one.

The prospective buyers of the shuttered San Francisco Centre mall have walked away from the pending deal to buy the downtown shopping center after months of due diligence, according to sources familiar with the talks, scuttling what had been poised to be one of San Francisco’s highest-profile commercial real estate sales in recent years.

The buyers, San Francisco-based developers Prado Group and Presidio Bay Ventures, confirmed their exit in a joint statement to the Chronicle Wednesday: “After extensive diligence and thoughtful evaluation, we are not currently moving forward with the transaction,” the partners said, adding that they remain “strong believers in the long-term future of downtown San Francisco” and the long-struggling shopping center’s “pivotal importance to Market Street and the broader San Francisco downtown recovery that is underway.”

One source tracking the sale of the city’s fully vacant downtown mall reported the deal was killed, in part, after the developers failed to renegotiate an existing long-term lease held by the San Francisco Unified School District for a portion of the property...

Sources say that the plan moving forward is to re-list the landmark property. 

So downtown is not recovering the way people hoped it would. However, there is plenty of real estate in San Francisco that is booming right now.

On a tree-lined street in the affluent Duboce Triangle residential neighbourhood of San Francisco, the top half of a white, Edwardian-era, detached house was drawing visitors from prospective buyers.

The opulently renovated three-bedroom apartment was on the market for almost $3m (£2.3m). And it had been attracting increased attention due to an unusual payment possibility - the seller would consider shares in artificial intelligence companies OpenAI or Anthropic instead of cash.

"The value [of the property] is questionable, but I would like to buy," says a young OpenAI employee who has just viewed the flat with his partner...

Welcome to San Francisco 2026, also home to fellow AI giant Anthropic. The city is ground zero for the AI revolution, and its property prices have risen dramatically this year.

"They are just astronomical," says Daryl Fairweather, chief economist at Redfin, a real estate company that tracks US home prices. "People are flush with cash and ready to buy."

Sounds like SF should tear down the mall and turn it into condos. Maybe that was the plan all along. I'm not really sure. 

Editor's Note: Do you enjoy HotAir's conservative reporting that takes on the radical Left and woke media? Support our work so that we can continue to bring you the truth.

Join HotAir VIP and use promo code FIGHT to receive 60% off your membership.

Trending on HotAir Videos