A huge hotel chain is closing the iconic property as major sports teams exit

The effect of the Covid-19 pandemic on San Francisco’s office market has been tragic, as workers abandoned workspaces around the city to work remotely and then never returned after the pandemic subsided.

The vacancy rate in San Francisco reached a record high of 36.8% in the second quarter of 2024, after setting a record in the previous quarter of 36.7%, according to CBRE statistics.

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High vacancy rates since the pandemic wiped out office buildings in 2020 have helped destroy San Francisco’s downtown retail market. The San Francisco Center City mall, formerly a Westfield mall, has lost several major retailers, including Nordstrom, Hollister, Adidas and J. Crew, and American Eagle has revealed it is leaving.

And the downtown shopping district of Union Square has lost major retail chains since the pandemic, including H&M, The Gap, Uniqlo and Crate & Barrel. Several major retailers have revealed they will also be closing stores, including Macy’s, The North Face and Zara.

The economic decline in downtown San Francisco and its Union Square shopping district has also driven hotel operator Park Hotels & Resorts (PK) in June 2023 to abandon two major hotels in the city, the 1,921-room Hilton San Francisco and the 1,024-room Parc 55 San Francisco.

Park Hotels & Resorts has stopped making payments on a $725 million loan for the two hotels, and the two properties are now in litigation.

Problems in another metropolitan city have prompted Park Hotels & Resorts to close another San Francisco Bay Area hotel in Oakland.

After 56 years in business, Park Hotels & Resorts (PK) It reportedly closed its Hilton Oakland Airport location on Aug. 25 because the neighborhood surrounding the property near the Oakland Airport has deteriorated in recent years.

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Park Hotels & Resorts revealed in June that it planned to close the hotel on Aug. 28, but the property closed operations three days earlier than expected, San Francisco’s KPIX-TV reported. The company did not give a reason for closing the property.

Former employees of the hotel believe that the effects of the Covid-19 pandemic and the high crime rate in the area led to the hotel’s closure. Workers said plenty of customer vehicles were broken into, catalytic converters were stolen from cars and even hotel buses were stolen, KPIX reported.

More closures:

• Essential retailer closes more stores in Chapter 11 bankruptcy
• Historic furniture chain closes after Chapter 11 bankruptcy
• The bankrupt essential retail chain is closing dozens of stores

At one time, the hotel hosted many sports fans attending Oakland Raiders, Golden State Warriors and Oakland Athletics games played a short distance over a nearby overpass on Hegenberger Road at the Oakland Coliseum complex. Attendees of many concerts and other events at the Coliseum arena and stadium have also stayed at the hotel over the years since it opened in 1968.

However, the hotel lost a lot of business with the Warriors moving to the Chase Center in San Francisco in 2019, the Raiders moving to Las Vegas in 2020, and many concerts and other events moving from the Coliseum arena to the Chase Center. The hotel was slated to lose even more future business as the Oakland A’s are slated to relocate, first to Sacramento in 2025, then to Las Vegas when its new ballpark is completed.

Not only have Oakland sports teams abandoned the neighborhood surrounding the Hilton, but many businesses have closed nearby over the past decade due to crime.

A neighborhood Walmart closed in 2016 due to frequent car break-ins, and a popular nearby In-N-Out restaurant closed in March due to car break-ins, property damage, theft and armed robberies, SiliconValley.com reported.

A nearby Raising Cane’s also closed its dining room in 2023 due to car break-ins and numerous robberies in the neighborhood, San Francisco’s KGO-TV reported.

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