Retail continues to flee the liberal utopia of San Francisco:
Downtown San Francisco has been dealt another blow after Westfield and its partner Brookfield Properties made the “difficult decision” to stop payment on a $558 million loan for the metro area’s largest shopping mall after “challenging operating conditions,” the San Francisco Chronicle reported.
“For more than 20 years, Westfield has proudly and successfully operated San Francisco Centre, investing significantly over that time in the vitality of the property. Given the challenging operating conditions in downtown San Francisco, which have led to declines in sales, occupancy and foot traffic, we have made the difficult decision to begin the process to transfer management of the shopping center to our lender to allow them to appoint a receiver to operate the property going forward,” Westfield said.
This comes after Nordstrom, which occupies 312,000 square feet in the mall, isn’t renewing its lease in August after nearly four decades of operations. When Nordstrom closes, the mall will only be 55% leased, well below the average 93% of other Westfield malls across the US.
Bloomberg obtained a letter to employees from Jamie Nordstrom, the retailer’s chief stores officer, who said the closing of Nordstrom is due to a slump in sales because of lower foot traffic, adding “dynamics of the downtown San Francisco market have changed dramatically over the past several years.” We suspect Nordstrom is referring to the out-of-control crime…
Westfield recently blamed “unsafe conditions” and “lack of enforcement against rampant criminal activity” in the downtown area for Nordstrom’s departure. It also said the mall’s poor performance and crime-ridden surrounding area is an anomaly versus its other properties nationwide.
Westfield and Nordstrom’s exodus comes one week after Park Hotels & Resorts Inc. ceased making payments on a $725 million CMBS loan secured by two of its San Francisco hotels.
That which can’t continue, won’t continue. A city can only survive so much ideological nonsense and demographic diversity before it collapses. The same is true of a country.