SAN FRANCISCO (KRON) — In another big blow to San Francisco’s downtown, Westfield will be pulling out from operating the city’s largest mall. The company had owned and operated San Francisco Centre on Market Street for more than two decades. But a steep decline in shoppers and other “challenging operating conditions” heavily impacted sales numbers, according to Westfield.

The mall’s occupancy rate has dramatically dropped with major retailors closing down stores. One of the mall’s signature stores, Nordstrom, announced last month that it would not renew its lease. Nordstrom cited “unsafe conditions for customers, retailers and employees” for the closure,” according to Supervisor Matt Dorsey.

A spokesperson for Westfield wrote Monday, “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.”

Shoppers walk by a Nordstrom sign at Westfield San Francisco Centre on May 11, 2023. (Photo by Justin Sullivan / Getty Images)

Westfield listed troubling performance numbers as reasons for its decision to leave San Francisco. Westfield’s spokesperson wrote:

  • “We have seen a significant decrease in total sales at San Francisco Centre from $455 million in 2019 to $298 million in Dec 2022 YTD, a period where Westfield Valley Fair in neighboring San Jose experienced a +66% increase in sales, URW’s California Flagships center’s sales increased by +26% and our overall US Flagship sales have increased by +23%.”
  • “Since 2019 foot traffic has decreased to 5.6 million visits (Dec 2022 YTD) from 9.7 million, a 43% drop at a time when our US Flagship portfolio has seen a 98% recovery.”
  • “The center’s occupancy level has decreased dramatically to approximately 55% including already announced closures of tenants such as Nordstrom, Banana Republic and others.  Our US Flagship portfolio occupancy averages around 93%.”

The Westfield spokesperson noted that the company had invested “significantly” in the vitality of the property for more than 20 years. But as tech workers continue working remotely, San Francisco’s downtown is struggling to rebound post-pandemic.

Stores at the mall will remain open and operate under new management, Mayor London Breed told KRON4 on Monday.

Westfield’s decision was not unexpected, Mayor Breed said.

“This has been something that has been coming for some time. We’ve had numerous conversations with Westfield about the future of this site, and it’s been clear that they did not have a long-term commitment to San Francisco. With new management, we will have an opportunity to pursue a new vision for this space that focuses on what the future of downtown San Francisco can be,” Breed wrote.

(Photo by Justin Sullivan /Getty Images /File)

Breed continued, “Whether that’s attracting new types of business, or educational institutions, or creating a totally different experience, we need to be open to what’s possible. Retail is changing, and we will adapt to diversify and better use spaces in our downtown area.”

San Francisco Supervisor Dorsey described Westfield’s departure as “disappointing.” He wrote, “While a changing retail landscape and remote work are contributing factors, we can’t ignore that safety and street conditions are, too — and those are factors within our control.”

Breed said the city’s ramped-up public safety measures will also continue along Market Street.

Community ambassadors are posted between 4th and 5th streets, in Hallidie Plaza, and by the Powell Street BART station to help shoppers feel more welcome. “The public safety resources we’ve dedicated to the area, including ambassadors and police officers, remain in place. The stores are still a part of our downtown experience and we will continue to support this area to make it clean, safe, and inviting for everyone,” Breed wrote.