Lenders Buy San Francisco Centre Mall at Auction

After losing more than 90 percent of tenants from its once-hallowed halls, the San Francisco Centre mall has been auctioned off to its lenders.

The troubled Market Street shopping center has been taken over by Deutsche Bank, JPMorgan Chase and other stakeholders of the mall’s commercial mortgage-backed securities loan for about $133 million, the San Francisco Business Times reported. The stakeholders were the only bidders in the public auction on Wednesday for the city’s largest shopping center.

The $133 million minimum bid is below the property’s latest assessed value of about $145 million — quite a stumble from its 2016 valuation of $1.2 billion. The lenders will tap CBRE to market the property for sale, hoping to start fielding offers early next year.

CBRE said a new investor could come in and breathe new life into the retail center or redevelop it at a maximum of the existing 400-foot height limit. It won’t, however, be turned into housing, as the floor plans of the mall present legal hurdles too high to overcome to build residences.

Previous owners Westfield Corporation, Unibail-Rodamco-Westfield and Brookfield Properties gave up their ownership in 2023 while owing lenders $625.6 million at the time. The lenders fought back with a lawsuit against Brookfield and Westfield after they ceased making payments on a $558 million loan backed by the 1.2 million-square-foot mall. Trident Pacific Real Estate Group was later appointed as the property’s receiver.

In the two years since then, restaurants and retailers fled the mall in droves. Nordstrom announced in 2023 it would close its 312,000-square-foot store at the mall, and earlier this year, Bloomingdale’s closed its 339,000-square-foot flagship at the property, more than two decades ahead of its 2046 lease expiration. Clothing retailers like Zara, Madewell, J. Crew, Lucky Brand and Aldo and eateries like Jamba Juice and Blondie’s Pizza have closed their doors, leaving just Panda Express and Shake Shack in the food court.

Foot traffic at the mall has also dipped significantly, falling 63.3 percent from 2019 to 2024. The mall is now 95 percent vacant with several floors looking like retail ghost towns.

— Chris Malone Méndez