Wanted: a buyer for a half-empty, 1.45 million-square-foot indoor mall in Downtown San Francisco.
The lenders for the Westfield San Francisco Centre at 865 Market Street have scheduled the nine-story indoor mall for a foreclosure sale next month, the San Francisco Business Times reported. The auction is set for Nov. 14.
Deutsche Bank AG and JPMorgan Chase are owed $625.6 million by Brookfield Properties, based in New York, and Westfield, a unit of Paris-based Unibail-Rodamco-Westfield, who walked away from the city’s largest mall.
This week, bank representatives issued Brookfield and Westfield with a notice of the trustee sale to the highest bidder.
The notice comes a year after the lenders sued Brookfield and Westfield after they stopped making payments on a $558 million loan backed by the retail center. A San Francisco Superior Court judge in October appointed Newport Beach-based Trident Pacific Real Estate Group as the property’s receiver.
Early this year, Trident Pacific and its property manager and leasing agent, JLL, renamed it Emporium Centre San Francisco.
The appraised value for the mall has fallen from $1.22 billion in 2016 to $290 million as a result of the store closures and a pending change in ownership. A rebound of the mall is only possible under a new owner, retail experts say.
The pending auction could open the door for a third party to make a qualified bid — above the minimum level set by lenders — to acquire the mall, according to the Business Times.
If no such bid emerges, the mall’s lenders could mount a placeholder bid to foreclose on the property, formally seizing control from Brookfield and Westfield.
It’s unclear at this time if there are any third parties planning to submit qualified bids, though a person familiar with the matter said no buyers have emerged for the mall.
The 312,000-square-foot Metreon shopping center at 135 Fourth Street has been listed for sale via assumption of a long-term lease with the City of San Francisco. The mall, anchored by Target and an AMC Imax theater, is 92 percent leased and sits across the street from the Centre.
— Dana Bartholomew
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