Westfield Eyes Housing Redevelopment for Vacant SF Offices

San Francisco’s downtown continues to face uncertainty as the city’s largest mall remains half-vacant, with its sale delayed for the second time. Now, its former owner, Unibail-Rodamco-Westfield, is shifting focus to a potential housing redevelopment opportunity with two adjacent, empty office buildings.

Westfield originally acquired the 77,000-square-foot building at 814 Mission St. and the 28,000-square-foot building at 818 Mission St. nearly two decades ago with plans to expand the mall. However, that vision never materialized, and both properties sat vacant for much of the pandemic. Now, the buildings are being marketed for sale and are expected to trade at significantly lower prices than their original $42 million purchase.

A Long-Term Bet on Housing?

With San Francisco’s office market still struggling, the current owners enlisted architecture firm SOM to explore redevelopment options for housing. Under current zoning and density bonus laws, the site could accommodate a 365-foot residential tower with up to 400 units—a rare high-rise opportunity in this part of downtown.

“They have dreamt up a large tower that somebody could think about entitling and building in the future,” said Darren Kuiper, a broker with Colliers. However, the challenge lies in the timeline. “It may take five-plus years for the development world to come back, maybe longer,” he noted.

Despite downtown’s challenges, Bruce Carlson, managing director at Kennedy Wilson, highlighted the area’s strong infrastructure, including public transit, parking, and proximity to the Moscone Convention Center. “The bones are there,” he said, suggesting that a bold investor could transform the entire block.

Pairing With the Former Westfield Mall?

The two Mission Street properties could be sold separately or together and may even be packaged with the former Westfield San Francisco Centre, now rebranded as San Francisco Centre after Westfield and Brookfield Properties defaulted on their loan in 2023. The mall’s auction has been rescheduled for March 27, though its future remains uncertain, with developers eyeing potential retail, education, or mixed-use redevelopment.

Carlson noted that a college campus could be a viable reuse strategy, leveraging the mall’s existing office space, movie theater, and storefronts. Meanwhile, other nearby projects, like Hearst Corp.’s revived 400-unit condo tower at Fifth and Mission, signal renewed investor confidence in the area.

“There’s a quiet confidence this year from investors who are looking forward about jumping into the market,” Kuiper said.

With interest slowly returning to downtown San Francisco, the question remains: Will a forward-thinking investor seize the opportunity, or will these properties remain in limbo as the city waits for a full recovery?