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This Four-Year-Old, $150M Mall in San Francisco Has Never Seen a Customer

Thursday, August 20, 2020   /   by The Villages Home Search

This Four-Year-Old, $150M Mall in San Francisco Has Never Seen a Customer

There it sits and pouts, a gleaming glass-and-steel behemoth, its double-helix escalator visible from the sidewalk. Squeezed between two smaller buildings, it’s an awkward building. And empty. Always empty. Chronically empty. It’s been that way since 2016, when construction of the 250,000-square-foot retail complex was completed.

The $150 million project was supposed to be the prized bookend of Mid-Market, a skinny slip of a neighborhood that stretches from Fifth Street to Van Ness between Mission and Market Streets, with the Twitter building — the much-publicized tech neighbor meant to kickstart a revitalization — as the centerpiece. Far from the tech-fueled money tree that developers hoped it would be, 6x6 has come to represent something of a canary in the coal mine for S.F real estate.

Although its centrally located and adorned with some of San Francisco’s most stunning architecture, Mid-Market has, for years, been the butt of jokes. Within greater S.F., it is thought of as a kind of skid row — a rock-bottom spot where people suffering from addiction or mental health problems crash-land. In 1985, San Francisco Chronicle columnist Herb Caen crudely christened Mid-Market “Le Grand Pissoir” due to the large quantities of urine and human feces found in the area. Three decades later, despite the presence of two tech giants (Uber’s headquarters is also in the neighborhood) and pricey pour-over coffee bars, not much has changed.

An exterior view of a glass building with small, newly planted trees in front.

The retail complex 6x6, a development that had been in the works for decades, reached completion at a moment when the city’s socioeconomic gap had widened to a chasm. Just before opening, the developers changed the name from Market Street Place to 6x6, — a slick reference to the building’s six floors and its proximity to Sixth Street, one the city’s most troubled strips. It also happens to be located next to Union Square, San Francisco’s plagued shopping district; the Westfield Centre, a sprawling mall with vacancies galore; and a Nordstrom Rack. The new mall would not escape its neighbors’ fates: The only business currently operating at 6x6 is the 167-space underground parking garage, the building’s sole source of revenue since it opened.

In 2018, in an effort to avoid hitting a financial iceberg, the mall’s original Dallas-based owners, Cypress Equities, won city approval to convert 47,522 square feet of retail space into offices. But, after failing to find a single tenant, they gave up and sold the sleeping giant to Alexandria Real Estate Equities and TMG Partners for $179 million, roughly $700 per square foot.

Chris Maguire of Cypress Equity told the San Francisco Chronicle in 2018 that “litter, panhandling, open drug use and a significant homeless population” in the neighborhood have nixed potential deals with clientele. This was true even prior to the pandemic, when newly-minted, 20-something millionaires littered the streets, and venture capitalist funding seemed to fall from the sky. Now, with the health crisis upending in-person retail shopping, 6x6 looks less like an anomaly and more like an indication of the dystopian future.

Just last year, the idea of converting a portion of the 6x6 building into office space seemed sound, but the COVID-19 crisis has effectively quashed the market for workspaces across the city — particularly in this neighborhood, which has seen its tech luster fade fast. Earlier this year, Twitter told its employees to go home forever. Same with Square. Uber laid off 3,700 workers, or about 14 percent of its workforce. And WeWork, now an industry punchline, who have a chunk of offices one block away, has all but unraveled.

“It galls me over and over again to see it standing empty mere blocks from rows of tents,” says Marcel Moran, a city planning PhD candidate at U.C. Berkeley, who calls 6x6 “an edifice to little demand for high-end retail in the face of a desperate need for housing.”

The current owners remain hopeful. Kazuko Mogan, a broker for Cushman & Wakefield who oversees the property, says plans for food and retail are in the pipeline at some point in the future — she would reveal neither the names of potential tenants nor the prices of leases — but notes that “there’s not much to report right now.”

“Sit tight,” she says. “It’s a puzzle and it takes time for it to all come together.”

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