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Empty offices, abandoned malls, concerns over crime: Why San Francisco, the Golden City, is losing its luster

Al Yoon Jun 17, 2023, 7:00 AM EDT

• Commercial real-estate landlords are giving up on once trophy San Francisco properties.
• A lack of hope among real-estate owners stems from office vacancies, but crime is also a factor.
• Expect the downtown's downturn to worsen before it gets better, said Manus Clancy of Trepp.

Landlords large and small are waving the white flag over the increasing pressures facing the city, stemming in part from the downsizing of some of the largest employers and the inertia of remote work.

In May, foot traffic to San Francisco offices was down nearly 60% compared to 2019 — the largest deficit of the major US urban centers tracked by Placer.ai, and it shows. The city's 18 million square feet of empty office space is so vast that it could house 92,000 people, according to the San Francisco Chronicle.

Since April, the office tower at 350 California Street sold for an alarming 75% less than its estimated value before the pandemic. The owner of the flagship Hilton San Francisco Union Square and the nearby Parc 55 handed the keys to its creditors rather than try to make payments on a $725 million loan. Days later, Unibail-Rodamco-Westfield and coowner Brookfield gave the San Francisco City Centre back to their lenders after the exit of retailers left the mall just over half occupied.

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