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Seems like journalistic malpractice that all these recent pieces trumpeting the SF downtown location closing don't also mention that Westfield announced a year and 2 months ago they're selling their entire US mall portfolio by 2024 to focus on Europe.
https://smmirror.com/2022/04/french-based-owners-of-westfiel...
It says "Westfield’s parent company said last year that it planned to sell all of its U.S. malls by 2024 to focus on its operations in Europe." It also links to a prior San Francisco Chronicle article about this.
There is a huge difference between the two.
Why is the difference meaningful to anyone who isn't the corporation already planning on exiting the market? Would be a helpful exposition to better understand what you're both trying to indicate with pointing out that 2 different things are different.
edit: I'm asking bc the article doesn't really explain that either and I'm not sure why this means anything beyond Westfield couldn't find a buyer at the price they wanted, or thought this was the simplest/fastest way to divest
> Why is the difference meaningful to anyone who isn't the corporation already planning on exiting the market?
> have replied this as if it has self-evident corollaries
They are sort of self evident for locals and folks who have dealt with any form of real estate in CA. But happy to explain.
It matters to cities. Foreclosed assets go for lower price than before and thus reduce property tax revenue (which is based on the value the property was purchased for).
It matters to consumers. As a consumer in the bay area, I know WestField SF will be neglected. Meanwhile WestField in San Jose, even after it changes hands, will continue to thrive.
I guess this one was too self-evident, as that feels like it was a truism even before the foreclosure considering the overall direction the entire area has already been headed for over a decade and the stores within the mall that have already closed. Do you see the foreclosure itself having had a unique impact on these feelings? To me, public sentiment has already been very negative.
> Foreclosed assets go for lower price than before
Makes total sense! Wasn't thinking what happens after the next sale re: property taxes, good point.
Thanks for explaining!
Unfortunately, these things are self-perpetuating.
> Thanks for explaining!
Mp!
foreclosure: "the current owner, the world's expert on making this location profitable, concluded it can't be done"
You can argue that it's reductive, obviously that's true but this is the "self-evident" optics people are responding to. (Not the GP but HTH.)
I guess this seemed like the obvious next step for them, to me. Considering recent store closures, operational costs have to be close to outpacing revenue at this point so waiting for a potential buyer wouldn't make sense while losing money daily. Especially not when you already planned to divest of the asset - you'd save yourself trouble and time and write off the loss.
So I got curious about what other ramifications I was missing - like maybe those replies were insinuating the foreclosure was an first trickle of a broader collapse in commercial real estate, or something else that wasn't just "SF downtown bad" again.
Thanks for clarifying!
It's a functional foreclosure, which divests them of their interest much like selling an asset would - do you just mean it's "much different" because of the amount of money they make/lose?
Trying to understand the distinction you're making as it relates to this article and their preexisting plans to exit the market.
The general area has also seen a huge wave of closures including pretty much every anchor tennant with IKEA being the only major business to buck the trend so far.
This isn't a just a "business is going okay but we over leveraged" situation.
The fact that their lender probably wants to squeeze any return they can out of it and they stand to lose far more money leaving it with lights off than at least letting it limp along until they can get someone else on the hook for it, to start.
It could be that the lender also writes off the loss and just shutters the mall, but usually properties in foreclosure stay open because they want to claw back as much make-up ROI as possible on an already down position.
A lot of these buisnesses were largely supported by tourism traffic from asia & white collar work travel buisness and conventions all of which are no longer happening because of public safetey concerns.
It's going to take years before the city does anything.