A buyer has reportedly been selected for most of the former SF Centre mall property — the portions facing Market Street, but not the former Bloomingdale's store, which is on a separate parcel of land.
For the second time this year, the banks that bought the former Westfield SF Centre mall out of foreclosure have entered into negotiations with a buyer for the majority of property. As the Chronicle reports, there were three finalists as of Monday, and the sellers, a partnership of Goldman Sachs and JPMorgan Chase, have reportedly selected a winning bid: New York-based investor Seven Equity Group.
The deal would be to buy what was the former Emporium property in the middle of the block, as well as the connected Nordstrom portion of the mall at the corner of Market and Fifth streets. As reported earlier, these represent the properties that are part of a land lease from the SF Unified School District, which wants to continue collecting lease payments on the land under an agreement signed over 40 years ago.
The former Bloomingdale's property at the rear of the mall, facing Mission Street, is separately owned by Macy's and will apparently be sold separately. Per the Chronicle, while there was a buyer interested in taking both properties back in June — the same buyer who looked into getting the Bloomingdale's portion permitted to become an AI data center — that buyer appears not to have been among this week's finalists.
Developers Urban Land Development (ULD) and TMG Partners, who had been preparing a bid to transform the mall property into a sports entertainment complex that would include a "Top Golf for basketball," backed out of the bid process earlier this week, according to the Chronicle's sources.
We have no details yet about what Seven Equity Group plans to do with the property.
This potential deal arrives three months after a previous negotiation fell apart with prospective buyers Presidio Bay Ventures and Prado Group. The implication, which was unconfirmed, was that the school district's land lease was likely the sticking point there.
Late last year, Goldman Sachs and JPMorgan Chase foreclosed on a $560 million outstanding loan that had been tied to the mall property, purchasing the multi-building complex for a reported $134 million.
The five-story mall has been a sad blight on Market Street this year, and its wholesale vacancy has contributed to the downtrodden mood around Union Square and Powell Street in particular — which has been dotted with vacancies since the pandemic began. Across the Street, the prominent former Gap flagship store in the Flood Building has also been vacant since the Gap's departure in August 2020.
There are signs of life, however, in the area. Uniqlo just returned, opening two weeks ago in the former Old Navy space at 801 Market Street, five years after it closed its former SF flagship store a few hundred yards away on Powell Street. And Zara is still opening a new multistory flagship store at Powell and Post streets, presumably next year.
Last fall, there was a rumor that Gap had plans to return to Union Square as part of its broader retail revamp strategy, a rumor that CEO Mark Breitbard did not deny.
We await further details about the latest deal to transform the former mall property into, hopefully, something more lively than it is now.
Previously: Uh Oh: SF's Shuttered Downtown Mall Back on Market After Buyers Back Out
