The closure of Nordstrom at Westfield San Francisco Centre in Downtown, a major department store that anchors the city’s shopping district, has real estate insiders and locals wondering what the future holds for the beleaguered mall.
The Nordstrom at Westfield will close at the end of August, the company confirmed on Tuesday. The retailer’s exit will leave a gaping vacancy that could be very difficult to fill: the store sprawls across 312,000 square feet and five floors. A Nordstrom Rack across the street is also slated to close in July.
Opened in 1988, the Westfield mall—noted for its unique architectural features, spiraling escalator bank, central Downtown location and collection of high-end retailers—was considered avant-garde at the time and heralded as a new attraction for the neighborhood. But that was then.
Mark Ritchie, a longtime Bay Area commercial real estate broker, said the Westfield and Nordstrom are some of the last in a dying breed after years of disruption by e-commerce.
“In some ways, the department store model is becoming a thing of the past. It’s going the way of the covered wagon,” Ritchie said. “That amount of space, that amount of overhead and labor to merchandise just doesn’t make sense anymore.
“That’s just a lethal combination,” Ritchie added.
Malls in Decline
Prior to Nordstrom’s planned closure, Westfield mall had already been facing headwinds.
Even before the pandemic, there were signs of waning demand for retail space in San Francisco as customers increasingly turned to online shopping. In 2018, Westfield mall submitted plans to convert about 50,000 square feet at the Nordstrom into offices. Those plans were approved by the Planning Commission in 2019 but appear to have been tabled after the pandemic hit.
Kate Sofis, executive director of the Office of Economic and Workforce Development, told the San Francisco Business Times that an alternative redevelopment plan weighed by the Westfield owners would have created housing and office space while downsizing retail.
Sofis referred to the redevelopment plan for Stonestown Galleria, spearheaded by Brookfield Properties, as a potential model. That proposal would retain the existing mall in southwest San Francisco but add 2,930 homes, 150,000 square feet of retail space, 6 acres of park and open space and a 200-room hotel.
The Downtown Westfield mall itself is co-owned by Brookfield and French real estate company Unibail-Rodamco-Westfield. In recognition of the changing market environment for malls, Unibail told investors last year that it was moving forward with selling off its entire U.S. portfolio, including its stake in the San Francisco property.
The pandemic, and the indelible rise of remote work, decimated foot traffic in San Francisco’s downtown core. But even as concerns about Covid waned, foot traffic at Westfield remained anemic as Stonestown—San Francisco’s other large mall—bounced back, according to the San Francisco Business Times.
A spokesperson for Westfield didn’t immediately respond to questions about potential changes to the mall after the Nordstrom closure.
In addition to a Bloomingdale’s store at the other end of the complex, the Westfield mall still contains a mix of 78 smaller retail shops, several eateries and a movie theater. But when asked about the Nordstrom closure, one longtime commercial real estate broker put it bluntly.
“It sucks,” he said. “That mall is in bad shape.”
Downtown Problems
Westfield mall is also at the nexus of problems that, if not unique, are particularly pronounced in stretches of Downtown San Francisco.
Echoing statements from other businesses in the area, the Westfield mall and its owner, Unibail-Rodamco-Westfield, said that the closure “underscores the deteriorating situation in Downtown San Francisco.”
Less than a month ago, a nearby Whole Foods abruptly shuttered, citing employee safety concerns. The Whole Foods had made regular emergency calls since it opened in March 2022 for a mix of medical crises, assaults and other incidents; in September of last year, a man fatally overdosed in a bathroom at the grocery store.
Last week, a Walgreens store next to Westfield mall was the scene of a fatal shooting after a private security guard allegedly shot a shoplifter.
The bustling intersections near the mall’s entrances are hotspots for police activity, according to dispatch data. There were 586 calls for law enforcement service to Stevenson and Fifth streets in 2023 through May 1, data shows. That made it the 21st-most-dispatched-to intersection out of the over 6,150 intersections in San Francisco; the neighboring Market and Powell streets intersection ranked 38th, with 362 calls during that period.
So far this year, police have responded to 74 reports of petty thefts, 54 fights and 30 grand thefts in the area. In a statement, the Mayor’s Office said that the city has stationed two police officers within the mall and assigned a sergeant to be a point person for security at the mall, in addition to deploying retired police officers and safety ambassadors in the area.
The manager of a restaurant in the mall, who didn’t want to be named because she wasn’t authorized to speak to press, was dismayed about the Nordstrom closure and said many of her customers come to get a bite to eat after shopping there.
“This is a big loss to our business also,” she said. “This is big news.”
The restaurant has had its mall location open for only about five months, but the manager said the business had already experienced alarming incidents along with concerns about high rent. She described one incident where a homeless man grabbed one of her serving utensils and flung hot curry at the business owner.
“If I [hadn’t] run, he [would have burned] my body,” the manager said. The man went on to burn another person with hot soup, she said, but the security guard was reluctant to apprehend the man.
“‘If I touch the guy, maybe my company will fire me,” the business owner recalled the man saying.
Rising Vacancies
A local who gave the name Carl J. said he has been shopping at the store since he was a child. He was shopping for his own family on Tuesday when the news broke of Nordstrom’s closure.
“Now that they’re closing Nordstrom, I mean, what are we gonna do?” Carl said. “Just online shop?”
The Standard has tracked at least 20 other retailers in the broader Union Square shopping district that have shuttered since 2020 or announced plans to close. And for locals and visitors to the area, the closure of Nordstrom adds another unusually large vacancy to the struggling neighborhood.
A Los Angeles Times story written to mark the Westfield mall’s opening in 1988 called the neighborhood “a seedy torn-up corner three rugged blocks from San Francisco’s acknowledged retail center, tony Union Square.”
But locals welcomed Nordstrom as a savior, a magnet that could lure visitors to Downtown San Francisco.
“If anybody can turn Market Street around, I think it would be a combination of Nordstrom and this property,” broker Ward P. Lindenmayer told the paper. The $67 million investment was—as Nordstrom Co-Chairman Jim Nordstrom said at the time—the department store chain’s “biggest gamble.”
After 35 years in the city, it appears as if the company has decided to take its chips off the table.