The San Francisco Centre, a vast shopping mall in Union Square, is now face with a significant decline in its estimated value, losing nearly $1 billion. Originally appraised at $1.2 billion in 2016, the property’s worth now stands at $290 million, as reported by Morningstar Credit Analytics. The owners, Brookfield and Unibail-Rodamco-Westfield, ceased mortgage payments totaling $558 million on commercial mortgage-backed securities loans last year.
This default led to legal action by CMBS lenders, who sought to place the property under receivership. A court-appointed receiver now holds the authority to manage the property, oversee leasing efforts, and collect rents. In response to the financial challenges, lenders have requested the receiver to sell the property to address the outstanding debt.
As of March the previous year, the property was only 47 percent occupied. The situation worsened when Nordstrom, one of the major tenants, vacated its 312,000-square-feet flagship store in August, causing the occupancy rate to plummet to around 25 percent.
The city of San Francisco has taken proactive steps to address the challenges facing the San Francisco Centre. Mayor London Breed has introduced a bold plan to revitalize the mall by proposing its redevelopment into a soccer stadium. To assess the feasibility of this ambitious undertaking, the city enlisted the services of Gensler, a renowned architecture and design firm, which initiated a feasibility study last summer.
The proposed transformation aims to breathe new life into the struggling property, offering a unique and vibrant alternative to its current commercial use. Converting the San Francisco Centre into a soccer stadium not only aligns with the city’s vision for urban development but also presents an opportunity to repurpose the space for a community-oriented and recreational purpose.
The feasibility study conducted by Gensler will likely assess various aspects, including the structural adaptability of the existing infrastructure, the economic viability of a soccer stadium in that location, and the potential positive impact on the surrounding community. If the study yields positive results, it could pave the way for a comprehensive redevelopment plan that not only addresses the financial challenges but also contributes to the city’s sporting and community engagement goals.