San Francisco’s shuttered downtown mall could be torn down under new

San Francisco’s shuttered downtown mall could be headed for a dramatic reset.

New York investment firm Seven Equity Group, which has been selected to buy most of the San Francisco Centre, is considering a ground-up redevelopment of the roughly six-acre property as one of several potential business plans, real estate insiders confirmed to the Chronicle.

Seven Equity has not yet closed on the transaction. The firm still needs to raise the funds to complete the acquisition, while also securing financing for its potential redevelopment.

Tearing down the massive mall and redeveloping it into something new – a pitch first reported by the San Francisco Standard – is the most aggressive of a number of proposals the group is said to be evaluating. Other options include reimaging the existing structure for offices and retail, sources said.

Appraised at over $1 billion a decade ago, Seven Equity could acquire the shuttered mall for $132.5 million, according to the Standard. The Chronicle previously reported that Seven Equity had been selected as the buyer but that the price had not been disclosed and the purchase remained dependent on financing. The deal is expected to close in the first quarter of 2027, according to a Fitch Ratings report.

The firm is the second prospective buyer to emerge after a deal with two veteran San Francisco developers unravelled earlier this year.

Seven Equity’s pitch to demolish the existing mall would involve replacing it with a mixed-use development that could include as much as 2.4 million square feet of office, residential and hospitality space. The firm is seeking financing for both the acquisition and the entitlement process.

A range of ideas have been floated for repurposing the property, including a sports and entertainment complex that would have retained much of its existing structure. But securing financing has remained a challenge, according to market participants. Any ground-up development would face a difficult market, where high construction and borrowing costs have made it hard for developers to make projects financially feasible. Buying the mall at a steep discount to its former value, however, could improve the economics of redevelopment.

Seven Equity has not publicly confirmed the redevelopment plan, and declined to comment when contacted by the Chronicle Thursday. CBRE, which is marketing the property and seeking financing on the firm’s behalf, also declined to comment.