- The Westfield mall used to be the beating retail heart of downtown San Francisco.
- Westfield stopped paying the mortgage on the shopping mall, the San Francisco Chronicle reported.
When a city becomes too expensive for people to live in, other things begin to fall apart. It can take years, but it happens. Just look at San Francisco.
The city is regularly at or near the top of the rankings for the priciest places to live in the US. The median rent was $4,500 in 2019, almost three times the national average. The list price of homes for sale averaged $1.3 million, 4.4 times the US median list price.
When housing costs this much, and more housing isn't being built fast enough, life becomes untenable for some residents. They leave, as some did in the pandemic; they live in RVs; or they live on the street.
Great things are still happening in San Francisco, however. Generative AI startups are sprouting up. The hottest startup in the world, OpenAI, is headquartered there. There's a new post-COVID energy in some parts of the city. But that's at the high-end. For an urban area to truly thrive, it needs people from all walks of life to embrace the location — which has become hard for teachers, nurses, and other workers in San Francisco in recent years.
Now, the cracks are beginning to show. One of the biggest fissures so far was reported by the San Francisco Chronicle on Monday. The Chronicle broke the news that Westfield had stopped paying its $558 million mortgage and was surrendering its namesake shopping mall to lenders.
The Westfield mall is the biggest mall in San Francisco. Tourists who come to experience the famous city often hang around nearby. It's the beating retail heart of the area. Or, at least, it was.
So, what happened? In a nutshell, there are just not enough people living and working in downtown San Francisco anymore. Office vacancies remain high. Nordstrom, an anchor tenant of the Westfield mall, is leaving. The Chronicle reporter Roland Li wrote on Twitter that foot traffic in the city had dropped around 42% since 2019.
There are more problems nearby the mall. Here's a list of retailers pulling out of the city's downtown area.