San Francisco's biggest mall has lost its largest remaining retailer as the troubled downtown shopping center's future remains in yearslong foreclosure.
Spanish retailer Zara closed its nearly 28,000-square-foot store on the third floor of the San Francisco Centre last week, with the store's former space locked and its windows were blacked out when CoStar News visited. "Unfortunately, Zara closed," a security guard told CoStar News; a spokesperson for Inditex, Zara’s corporate owner, didn't respond to an email requesting a comment.
The once-celebrated nine-story mall has faced a uniquely dismal set of circumstances since anchor tenant Nordstrom closed in 2023. The property's previous owners, Unibail-Rodamco-Westfield and Brookfield Properties, walked away from the iconic mall soon after. The property is slated to be sold at a public foreclosure auction, but lenders recently postponed the date — for the fifth time — to July 24.
In the meantime, the mall has seen a chain of departures. In addition to Zara, retailers Oak and Fort clothing and AG Jeans are expected to close soon. Chalo, a gift shop, has been stripped of its inventory, and so was Nectar, a seller of sneakers and streetwear, where a broom could be seen propped against one wall. H&M is now the largest remaining store there, with 25,289 square feet.
When the shopping center opened in 1988, it was heralded for its groundbreaking "vertical" design — it featured a retractable skylight over a domed atrium — and direct connections to public transit and the then-bustling Powell Street cable car turnaround.
While some have expressed hope that the property, previously regarded as a prime piece of urban real estate, might be reimagined and redeveloped, it is stuck in limbo.
Bleeding retailers
The stretch of San Francisco's Market Street that houses the mall seen an exodus of office workers. That turned the city's commercial real estate market upside down after the pandemic left the Mid-Market area with a 30% office vacancy rate, well above the city's overall rate of about 23%.
Meanwhile, the mall has continued to bleed retailers. This month, Milk Tee, a fast-fashion boutique that sells sparkly halter tops and furry animal print purses, among other items, said it was shutting its doors due to “the lack of improvement for businesses in the city’s environment, high theft, and low sales overall at San Francisco Centre.”
Other departures in recent months have included three luxury watch companies — Rolex, Bucherer and Panerai — as well as the Kate Spade and Coach stores and the Razer electronics store.
The Burke Williams Day Spa said in February that it was leaving after two decades because its clients no longer felt safe in the neighborhood, or walking through an empty mall.
Zara recently trumpeted plans to open a store at 400 Post St., a historic building in San Francisco's premier Union Square retail district, a neighborhood that has also struggled to rebound after hemorrhaging tenants in recent years.