Receiver Named to Take Over San Francisco's Westfield Centre

A San Francisco Superior Court judge has appointed a receiver to “take possession, custody and control” of Westfield Centre, the largest downtown mall in the city, which was handed back to lenders by its owners in June.

Lenders of a $558M CMBS loan backed by the Union Square mall sued affiliates of the mall’s operator and majority owner Westfield on September 29, asking for the mall to be placed in receivership rather than foreclosed so that the property could be potentially sold and rectify debts owed by Westfield affiliates, according to a report in the San Francisco Business Times.

The receiver named by the court, Gregg Williams of Trident Pacific, wrote in a declaration filing that security is the “most significant issue” at Westfield Centre.

Williams is planning to retain a third-party security consultant and fully-insured third-party security personnel, and he may add off-duty and retired San Francisco police officers, the report said. The filing also suggested stationing guards with “security canines”-also known as large police dogs-at each entrance and exit at the Westfield Centre.

Security has been an issue at the half-empty Westfield Centre since the beginning of the year as crime surged in the hollowed-out downtown.

Last month, one of the remaining tenants at Westfield Centre sued the mall’s owners, claiming they failed to address more than 100 “significant security incidents” at its store in the mall between May 2022 and May 2023.

According to AE Retail West, parent company of fashion brand American Eagle, the incidents included threats of violence against store employees-including situations involving customers threatening employees with firearms and, in one case, a machete.

The lawsuit alleges that the mall’s operator considered options to address the unsafe conditions, but “ultimately decided not to make that investment.”

The 1.2M SF Westfield Centre is jointly owned by Paris-based Unibail-Rodamco-Westfield and Brookfield Properties. In June, URW disclosed that the mall, located at 856 Market Street, was going back to its lenders after the owner stopped making payments on the $558M loan.

A month earlier, when Nordstrom announced its plans to vacate a 300K SF store that anchored the Westfield Centre, URW issued a statement citing unsafe conditions in the downtown area.

“The closure of Nordstrom underscores the deteriorating situation in downtown San Francisco. A growing number of retailers and businesses are leaving the are due to the unsafe conditions for customers, retailers, and employees, coupled with the fact that these significant issues are preventing an economic recovery of the area,” URW’s statement said.

Sales at the Westfield dropped to $298M last year from a pre-pandemic level of $455M in 2019, while foot traffic has declined by 43% in the same period.

Mayor London Breed has proposed replacing the Westfield Centre with a soccer stadium.