San Francisco's largest mall saw its value drop about 75% in December, to $290 million, representing a loss of nearly $1 billion since the property was last financed by Wall Street lenders, according to Morningstar Credit.
Westfield URW Owners,
Brookfield Properties Pn,
In June, the company turned over the shopping center in the heart of downtown San Francisco to lenders, dealing another blow to the city's post-pandemic recovery plans.
The large upscale mall and office building, formerly known as Westfield San Francisco Center, was refinanced by a group of Wall Street banks in 2016 in a deal that split the 10-year mortgage debt into several bond deals.
In the wake of the pandemic, fortunes have turned downward not only for mall owners, but also for the urban cores of cities like San Francisco, where officials are projecting an $800 million budget shortfall over the next two years, due in part to a rise in office vacancies. .
be seen: San Francisco office buildings have 53% less traffic than they did four years ago
At the time the Westfield Mall was refinanced, it was 93.7 percent leased for $1.2 billion, according to financing documents. Those records showed Bloomingdale's M,
and Nordstrom JWN,
As anchor tenants, Century Theaters CNK,
As a major tenant.
Nordstrom said in August that it would close its flagship store at the mall, which last had an occupancy rate of 46%, according to Morningstar Credit. News reports since the last occupancy reading indicate that additional tenants have since left the property, Morningstar noted.
The Union Square Mall has since been renamed the San Francisco Center, with a receiver appointed in October to manage the property, according to the San Francisco Chronicle.
Hopes for a rate cut by the Federal Reserve sent the 10-year Treasury yield BX:TMUBMUSD10Y falling to about 4% from a high of 5% in October, sparking some optimism in the struggling commercial real estate sector.
Westfield and Brookfield did not immediately respond to requests for comment.
Westfield's parent company, Unibail-Rodamco Westfield, is slowing its plans to shrink its remaining US mall presence, having previously outlined plans to divest most of its US properties by the end of 2023 to focus on European malls.
