With the exit of Bloomingdale’s, which is owned by Macy’s, the largest retailer remaining at the mall is Zara, which occupies more than 27,000 square feet, according to loan reports.
“It’s going to take a long time to turn around a large ship like this,” said Alex Sagues of CBRE, a retail broker with listings in Union Square and Mission Bay.
“There are very few tenants right now that can take space of that size,” he added. “There are even fewer who are interested in an urban location.”
Similar to the city’s slow-recovering office sector, the demand for smaller floor plans in retail is robust, while the largest tenants are in the process of downsizing their real estate.
Real estate sources suggest that merging Bloomingdale’s with the Macy’s flagship in Union Square would make sense, as the latter owns the building it occupies at 170 O’Farrell St. and has said it wants to shrink its footprint.
What will become of the massive empty spaces at the San Francisco Centre? The next owner will face Herculean obstacles in redeveloping the mall, in part because preservation of historic components such as the rotunda will drag out any planning and approval process. Developers say it’s unlikely that investors would be patient enough to demolish structures around those historic parts without interrupting the property’s existing revenue streams. To complicate matters further, the San Francisco Unified School District owns a 75,675-square-foot lot beneath the mall — yet another stakeholder that would have to be at the table.