CNN —
Shopping mall operator Westfield said it plans to relinquish control of San Francisco Center Mall after more than 20 years of operation, in another sign of San Francisco’s economic struggles.
The company attributed its decision to “challenging operating conditions in downtown San Francisco, which have led to declines in sales, occupancy and foot traffic.”
The mall operator’s decision to surrender its San Francisco location came after several flagship stores in the mall, including Nordstrom and Banana Republic, were announced to close.
Last month, a spokesperson for Westfield blamed the Nordstrom’s closure on “unsafe conditions for customers, retailers and employees.”
Once a bustling retail hub in the heart of San Francisco, San Francisco Center has taken a significant hit over the past few years. According to Westfield, total sales are expected to drop from $455 million in 2019 to $298 million in 2022, and foot traffic is expected to drop from 9.7 million in 2019 to 5.6 million in 2022.
Westfield’s exit is another significant blow to San Francisco, which saw its economy hit hard by the pandemic as many Silicon Valley companies allowed flexible work-from-home policies, resulting in many white-collar workers leaving the city. Got out Three years later, the same numbers still haven’t returned to corporate America: Office vacancies in San Francisco have hit a 30-year high.
Westfield is the latest high-profile business to leave town. Twenty retailers near San Francisco’s Union Square have closed their doors since 2020, according to a tally by the San Francisco Standard.
Earlier this month, investment firm Park Hotels & Resorts, owner of the Hilton San Francisco Union Square and Parc 55 hotels, also stopped payments to its lender.
In a statement announcing the decision, Park Hotels & Resorts CEO Thomas Baltimore, Jr. “The road to recovery remains unclear and beset by great challenges,” San Francisco said. Some of those challenges include high office vacancies, a weaker-than-expected convention calendar and “concerns over road conditions,” according to Baltimore.
Westfield said it has already begun transferring management of the San Francisco center back to its lender, which will appoint a receiver to operate the property going forward.
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