As Nordstrom prepares to set sail from San Francisco’s largest mall, other stores may follow.
The Seattle-based retailer’s move from the Westfield San Francisco Center this fall at 865 Market Street in South of Market has opened the door for a movie theater and a clothing store nearing the end of their leases. reported the San Francisco Business Times.
The Century Theaters, which occupy 52,000 square feet on the top floor, are leased out in September.
H&M’s lease, which occupies 25,300 square meters, expires in January, according to a CMBS financial report on a commercial mortgage-backed securities loan related to the property.
Co-working company Bespoke’s lease for 40,000 square meters of flexible office and event space ended earlier this year, according to the report. It is not clear whether the lease has been extended or whether the tenant has moved out. Bespoke did not respond to requests for comment from The Business Times.
CMBS industry reports suggest that Century Theatres, Bespoke and H&M have all made short-term lease extensions after Century and Bespoke leases expired in December 2021 and H&M in January.
The Nordstrom lease expires in October, and the Business Times reported that that would be the case Moving out of his 312,000-square-foot store. A 45,000-square-foot Nordstrom rack will also close across the street this year.
CMBS loans tied to the retail and office center have been on industry watch lists since 2021, though mall owners have kept up with payments.
Leases for the Westfield San Francisco Center have fallen since the loan was signed in 2016, when mall occupancy was at 95.6 percent.
The mall ended last year with an occupancy rate of 52.8 percent, compared to 73.9 percent at the end of 2021, when Crunchyroll vacated 71,600 square feet and TrustArc vacated 28,200 square feet.
San Francisco State University terminated its lease on 125,000 square feet of office space on the lot in late 2021 and moved its downtown campus to 160 Spear Street.
“The borrower currently has no potential new tenants to fill the space. The borrower also has other large vacancies,” read an analyst comment in the CMBS report, cited by the Business Times.
“As you probably know, the San Francisco mid-market area is extremely difficult for office leasing due to an oversupply of vacancies and low demand,” it said. “There were very few tours and few activities.”
Westfield’s parent company, Paris-based Unibail-Rodamco-Westfield, said it plans to shift its focus to European real estate and hopes to sell most of its US holdings this year.
— Dana Bartholomew
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