A real estate scion and onetime Warren Buffett protege recently set about acquiring 3 million square feet of San Francisco real estate, following a strategy that can be summed up in two words: Buy low. In the wake of the pandemic, such discounts are plentiful in the three blocks of Powell Street where cable cars turn around, a once-bustling stretch now dotted with “For lease” signs.
A company connected with Ian Jacobs is buying up properties in that area's central shopping district in a bold bet that things will soon change for the better in struggling downtown San Francisco. The deals are drawing attention in a region that has seen the most dramatic pandemic-induced drop in office occupancy in the country, a plunge that added to a downturn for retail real estate demand in the city.
The acquisitions hark back to Jacobs' roots as part of the Toronto-based Reichmann real estate dynasty, which made a fortune buying properties in the troubled New York City of the 1970s. As part of an effort he’s dubbed Project Uris, Jacobs bought two retail buildings on Powell Street in recent months. Media reports say a third property, a vacant, turn-of-the-century office building on the corner of Ellis and Powell, is getting bought by a Jacobs affiliate at a significant discount from its pre-pandemic value.
The deals add to a growing sense of optimism that Union Square — and perhaps downtown San Francisco — is finally turning a corner. The city’s premier retail district was among the hardest-hit neighborhoods in the hardest-hit city in the country following the pandemic, with a vacancy rate that soared from 9% in 2019 to about 22% by early 2025, more than five times the nationwide rate of just over 4%.
Mayor Daniel Lurie and upbeat brokers point to a handful of openings that have pushed the neighborhood vacancy rate down to 14.7% in the past few months. This past week, Lurie — who was elected last year running on the slogan “San Francisco is open for business” — posted an Instagram video touting the news that the popular Chinese toy store Pop Mart is slated to open at 200 Powell St., one of the buildings Jacobs acquired in the spring. The brand has gained a cult following selling collectible plushies resembling grinning gremlins with bunny ears called Labubus, which have inspired a craze akin to the Beanie Baby obsession of the 1980s.
“Both retailer and investor interest in the neighborhood is very strong right now,” said veteran Union Square broker Julie Taylor of Colliers. “You can see it and feel it on the streets.”
'Times Square West'
Jacobs, a stock investor who mostly spent his career outside of the family real estate business, apparently found the pandemic-sparked collapse of commercial real estate in San Francisco too alluring an opportunity to pass up.
He spent much of 2023 raising money to buy property in downtown San Francisco as part of Project Uris, which takes its name from his family’s 1977 purchase of eight Manhattan office buildings from Uris Buildings Corp., properties that exploded in value as New York recovered from the crime and flight of businesses that characterized the decade.
Now Jacobs is apparently following the same road map half a century later in San Francisco. He once worked as an analyst for Berkshire Hathaway before leaving to start his own investment firm in 2009, according to The Wall Street Journal. Berkshire’s founder, Warren Buffet, famously made huge profits largely by investing in undervalued companies and holding on to them long term.
In April, Uris Acquisitions bought 200-216 Powell St., the distinctive green art deco 1930s building at Powell and O’Farrell streets, for $7.4 million from private equity fund ASB Real Estate Investments, down from the property’s $12.6 million purchase price of nearly two decades ago, in 2006. The following month, Uris acquired the two-story, 17,000-square-foot building at 35-41 Powell St. for $7.5 million from a real estate trust related to James and Dorothy Hatley.
The 111 Ellis St. property is currently in escrow, per the San Francisco Standard. Public records show that the property has been owned for decades by the family of San Francisco socialite and philanthropist Gladyne K. Mitchell, who died at age 84 in December. Until 2016, the ground floor was home to Blondie’s Pizza, a beloved establishment known for its tattooed workers and giant slices. In previous decades, the line outside the storefront often stretched down the block as shoppers and tourists jostled their way down the street known as Times Square West.
Uris Acquisitions declined to comment on the recent deals.
Uphill battle
San Francisco saw its office vacancy rate rise from the lowest among the nation's major markets in 2019 to the highest in 2024, as a perfect storm of pandemic lockdowns, remote work and layoffs among technology companies caused tenants to downsize at record levels. But after several bleak years in which downtown office workers disappeared and department stores and other retailers that once drew throngs of shoppers to San Francisco shut their doors one by one, Taylor and other brokers say Union Square is witnessing a comeback.
A gradual recovery of the city’s office market is taking hold, with high-profile local investors making discounted deals for offices in downtown San Francisco. Taylor and other neighborhood boosters say the same is happening on the retail front.
Key openings in recent months have included video game giant Nintendo, which opened a second U.S. store at 331 Powell St. in Union Square’s Westin St. Francis San Francisco in May. Global fashion giant Zara announced plans to move from its current Union Square spot to a four-story flagship store nearby at 400 Post St. Last month, the Spanish brand quietly closed its nearly 28,000-square-foot store on the third floor of the nearby San Francisco Centre, a large indoor mall that’s undergone an exodus of tenants in the last two years.
Luxury brands that cater to the super wealthy have simultaneously spread out in recent years even as traditional retailers have shuttered, with ritzy names like Chanel, Maison Goyard, Brunello Cucinelli and Bulgari expanding their footprints in the neighborhood or opening stores in Union Square.
Officials and real estate players hope that Jacobs' bet on San Francisco and its struggling downtown will bring back its retail center, though observers say it's an uphill climb.
“The Union Square retail market is arguably in a bigger slump than San Francisco's office market,” said CoStar Senior Director of Analytics Nigel Hughes. “Building values and prices are low right now, so buying into the market makes sense if you believe the current downturn is cyclical and that demand will return.” But he added: “The risk is that the downturn is more structural, and that recovery might take a long time or might not happen at all.”