Dwindling hopes that the San Francisco Centre can stage a comeback were dealt a severe setback this week with the impending loss of the downtown mall’s anchor tenant.
Bloomingdale’s is shutting its 339K square foot store at the San Francisco Centre at the end of March, the San Francisco Chronicle reported.
The Macy’s-owned chain has a lease for the space that was not scheduled to expire until 2046, according to bondholder reports on the debt tied to the mall. Details on a negotiated exit from the lease were not provided.
The 1.2M square foot San Francisco Centre is down the street from the historic Macy’s flagship store in Union Square which also is slated to close. The retailer has said it will keep the location open until a buyer can be found for the massive property.
The mall has been under receivership since former owners Unibail-Rodamco-Westfield and Brookfield handed back the keys in 2023 after stopping payment on a $558M CMBS loan backed by the property.
A foreclosure auction originally scheduled to take place in December has been pushed back until Feb. 20.
According to special servicer commentary cited by Morningstar early last year, San Francisco Centre has been appraised at $290M, a drop of nearly $1B from its 2016 valuation of $1.2B.
Safety concerns in the Union Square neighborhood spurred an exodus of retailers in 2023. San Francisco Centre’s other anchor, Nordstrom, shut its 312K square foot store at the mall in 2023 after 35 years at the location, and Cinemark vacated its 52K square foot theater at the mall.
When Bloomingdale’s shutters its store, the largest tenant at the mall will be Zara, which is leasing about 28K square foot until March 2027.
Mayor Daniel Lurie called the Bloomingdale’s closure “disappointing” in a statement that also expressed confidence that downtown San Francisco eventually will get back on its feet.
“There are massive changes happening across the country in retail, and we know there’s a lot of work to do in our city,” Lurie said. “Although this closure is disappointing, I’m energized every day by businesses of all sizes opening and growing in our city. San Francisco has green shoots everywhere, and we continue to work towards the revitalization of the city.”
In October, JLL was tapped by Starwood Capital Group to market the leasehold interest of the 313K square foot Metreon, a downtown mall located on Fourth Street across the street from the Moscone Center.
The Metreon, which sits on 2.7 acres of leasehold land owned by San Francisco, was 92% leased at the time of the listing, with anchor tenants Target and an AMC multiplex accounting for 61% of the property’s total income.
JLL’s marketing materials tout the mall’s “incomparable” opportunity to generate advertising revenue when conferences are taking place at the Moscone Center. Metreon’s wall signage along Fourth Street facing Moscone West offers space for five 40-foot billboards.