San Francisco mall loses fifth store this month, occupancy drops to 25%

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by Shannon Thaler

The devastated San Francisco mall is losing another store, marking the fifth closure in the past month and sending the mall’s occupancy rate to just 25%.

Clothing brand Madewell is the latest to announce a closure inside the sprawling Union Square mall — the largest in San Francisco — with a notice on its website that it will close the outpost on Monday.

Madewell’s closure comes after its sister brand, J. Crew, issued a similar notice that it would close its San Francisco Center location, also on Monday, January 22.

According to signs posted at the mall seen by the San Francisco Chronicle, shoe store Aldo will close its store on January 21, and denim giant Lucky Brand will leave the mall on January 29.

The mall has seen an exodus of high-profile retailers since last year, after one of the mall’s largest tenants, Nordstrom, moved out of its 312,000-square-foot multi-level space in August.

Shortly thereafter, she bid farewell to Hollister, its Lego store and its Cinemark movie theater.

The departures reduced the mall’s value by a staggering $1 billion.

The 1.5 million-square-foot property was recently valued at $290 million, down from its $1.2 billion valuation in 2016, The Real Deal reported, citing investment valuation analysis firm Morningstar Credit Analytics.

Mall owners Westfield and Brookfield withheld mortgage payments of $558 last year, citing poor foot traffic and declining sales since the pandemic, according to the SF Chronicle.

“For more than 20 years, Westfield has proudly and successfully managed San Francisco Center, investing significantly during that time in the vitality of the property,” Westfield said in a statement after defaulting on its loan.

“Due to the difficult operating conditions in downtown San Francisco, which have resulted in a decline in sales, occupancy and traffic, we have made the difficult decision to begin the process of transferring management of the shopping center to our lender to allow them to appoint a receiver to operate the property in the future.

A judge has since appointed Greg Williams of Trident Pacific Real Estate Group to take over management of the beleaguered mall at 865 Market Street. He will reportedly be paid $30,000 a month to serve as San Francisco’s starting goalkeeper.

Although it is unclear what the future holds for the mall, San Francisco Mayor London Breed has proposed redeveloping it into a soccer stadium, even hiring local architecture firm Gensler to work on feasibility studies for the sports arena.

The Post requested comment from Madewell and mall owners Brookfield and Unibail-Rodamco-Westfield.

Central San Francisco’s struggles are part of a larger issue in the city, which has been plagued by rampant crime, embattled retailers, the flight of Silicon Valley tech enthusiasts, and homeless encampments over the past year.

Last week, JP Morgan CEO Jamie Dimon declared that “San Francisco is in much worse shape than New York,” citing its housing shortage, which has driven the price of a small 4-foot-tall, 3.5-foot-wide “pod” to skyrocket. $700. Per month.

The pods are less than half the size of an RV at Candlestick Point, which the city opened in January 2022 to homeless people. The “secure parking site” called Bayview Triage Center has 30 RVs, each costing $12,000 a month in San Francisco, though residents live there rent-free with 24/7 security.

“They (businesses) need housing,” Dimon told Fox, arguing that if employers can’t get permits to build affordable housing, they won’t be able to bring in high-wage employees.

Google, for example, is slated to build a 15,000-home residential campus surrounding its San Francisco headquarters, which is expected to include four Bay Area neighborhoods worth a combined $15 billion in Sunnyvale, San Jose, and Mountain View.

However, the tech giant hit a bump late last year when its developer, Ledlease, backed out of its contract, citing “current market conditions,” even though development wasn’t scheduled to begin until 2026.