Bloomingdale’s to Close Flagship in San Francisco Centre Mall

Could an exit by Bloomingdale’s signal the death of San Francisco Centre mall?

The luxury department store, a unit of New York-based Macy’s, announced it would close its 339,000-square-foot flagship store at the half-empty San Francisco Centre at 865 Market Street, near Union Square, the San Francisco Chronicle and San Francisco Business Times reported.

Bloomingdale’s said it would clear out of the city’s largest mall by the end of March, citing a shift in retail practices and evolving strategies for future operations.

The lease for the anchor store doesn’t expire until September 2046, according to bondholder reports on the debt tied to the mall. It’s unclear how Bloomingdale’s negotiated an exit to the lease.

“While we are committed to this decision, Bloomingdale’s doors will remain open until late spring 2025,” the retailer told the Chronicle. “We are hopeful to be back to serve the San Francisco community in the future and look forward to introducing new ways to provide enhanced service to our loyal local shoppers.”

The exit, after a 20-year stint, may be a bullet to the beleaguered 1.5 million-square-foot mall once owned by Brookfield Properties, based in New York, and Westfield, a unit of Paris-based Unibail-Rodamco-Westfield. They walked away from the property last year after ceasing payments on a $558 million loan.

The mall has since been run by Trident Pacific, a court-appointed receiver charged with leasing it up for a future sale. The beleaguered mall has lost an estimated $1 billion in value.

Bloomingdale’s, which opened in 2006 in San Francisco Centre, is its second anchor tenant to leave. The Nordstrom flagship store closed its 312,000-square-foot store in 2023 after 35 years at the mall.

Other high-profile retailers such as Hollister, Adidas and J. Crew have exited the mall.

A theater operator is in negotiations to potentially fill the 52,000-square-foot theater space vacated by Cinemark in mid-2023, according to the Chronicle.

The departure is also a blow to Downtown San Francisco as city officials have lobbied Macy’s to stay in nearby Union Square, after the chain announced it would close its historic Macy’s flagship store. Macy’s stores are also closing soon in Corte Madera, Newark and San Mateo.

As the mall’s last large tenant, the exit of Bloomingdale’s could impact ongoing lease negotiations at the property and efforts to sell it, according to Kazuko Morgan, a veteran retail broker who has worked in Union Square and Downtown for two decades.

“They’re trying to find a new buyer and turn the ship around,” Morgan told the Chronicle. “It certainly doesn’t help, losing your two anchors.”

Mall tenant leases generally include “waterfall” provisions that allow them to pull out with minimal penalties if an anchor exits. If applicable to San Francisco Centre leases, the loss of Bloomingdale’s departure could lead to more early exits by other tenants.

The mall’s largest tenant will soon be Zara, which has leased 27,600 square feet until March 2027, according to the Business Times.

The Metreon, another major Downtown mall, is also for sale. The retail complex, which is less than a block from the San Francisco Centre mall, is 92 percent leased.

— Dana Bartholomew