Last week, I visited Bloomingdale’s at the San Francisco Centre after seeing word of its pending closure. I wouldn’t have known that the five-story behemoth was shutting down based on how it looked: Chock-full of top-tier inventory, with floor staff available in each department to lend a hand.
But walking out of Bloomingdale’s into the rest of the mall shocked me back to reality. The cavernous interior looked bombed-out, with only a handful of visitors on a weekday afternoon (mostly elders gossiping over coffee and a variety of people napping in quiet corners).
This is, of course, part of the “doom loop” everyone keeps talking about. Nordstrom departed the San Francisco Centre in 2023; the Macy’s at Union Square last year announced it will close soon, mirroring similar closures of smaller street-level retailers around Downtown.
But the struggles at big indoor malls like the San Francisco Centre didn’t merely unfold during the pandemic, or because of a few smash-and-grab robberies. It seems more likely that traditional malls, with their adoration of department stores and outdated architecture, just don’t work for shoppers anymore. When shopping online is the easiest option, it takes more than a maze of escalators to lure people off the couch.
Retail recovery after COVID has been sluggish, save for famous centers of high-end shopping like New York City and Miami, but the projection for malls is especially bleak. There are currently 1,150 malls in the U.S., according to CapitalOne Research. By 2032, that number is expected to drop to 150.
“When you look at successful malls around the country, the ones that have really survived, you don’t see them being more than two levels, and the best ones are open-air lifestyle centers,” Ali McEvoy, partner at real estate agency Maven Commercial, told me. “So a closed, four-story building is as far away from the ideal as you can get.”
Blaming mall failures on street conditions and theft is rife with myths, and it ignores long-gestating trends in the industry, McEvoy told me.
“Operators don’t really see the mall as a viable option anymore — they’re looking at the street. We feel strongly in the next year or two that Union Square will come back to its former glory in terms of rents and lack of vacancy,” McEvoy said. “But does that translate to the mall? Probably not, given the factors in the past decade.”
Industry insiders had already been fearing a “retail apocalypse” after brands overextended themselves with too many stores and large spaces during boom times, and McEvoy believes a market correction would have unfolded even without the pandemic. It also may be time to say goodbye to conventional anchor tenants. Macy’s has shuttered a third of its stores in the last 10 years; 150 more closures are slated to begin this year.
But what will become of San Francisco Centre remains unclear. There are a lot of options: In 2023, Mayor London Breed suggested the city might turn the place into a soccer stadium. But the future likely depends on who ends up buying it. Operators Westfield and Brookfield stopped making payments on the property in 2023, landing the property in court-ordered receivership. A bankruptcy auction, originally scheduled for November last year, was postponed.
McEvoy believes that a transformation of the San Francisco Centre is possible — as long as the new operator dreams big, and throws in the much-needed capital that the facility has been deprived of for years.
“It needs to be completely mixed-use. We need high end condos, we need a sports facility, some offices, bring in biotech and schools, and then the ground floor can be retail,” she said. “People don’t want to be going up and down four escalators looking for a niche boutique. People want to be outside, walking down the street, peek into a cool store, see a bar, see another cool store — an organic mix.”
