Two stores that were among dozens of retailers that shut in downtown San Francisco after the pandemic plan to reopen in the same spots they previously occupied.
It's a show of how life — and tenant demand — is finally returning to San Francisco's premier shopping district nearly seven years after COVID-19 sent companies, office workers and shoppers packing.
A year ago, things still seemed touch-and-go for Union Square. Despite foot traffic trickling back to the district, the area of the city that has traditionally bustled with tourists and downtown workers was still dotted with “for lease” signs. The retail vacancy rate was at a high of 22%, more than five times the nationwide rate, making it one of the nation's hardest-hit neighborhoods following the pandemic.
But in recent months, stores and shoppers have returned to the city’s most prominent downtown retail zone, with a slew of notable new leases inked by businesses from a Japanese clothing brand to a national telecom as life returns to downtown San Francisco, thanks in part to the artificial intelligence boom.
Luxury consignment chain The RealReal reopened its flagship store at 253 Post St. on Thursday “in the heart of Union Square — reaffirming the company’s deep roots in the city where it was founded and its commitment to San Francisco’s downtown revival,” the store said in a statement.
Another store returning to its previous San Francisco flagship is AT&T, which closed its shop in August 2023 at One Powell Street — on one of the city’s most famous and hardest-hit retail stretches adjacent to the cable car turnaround near Market Street.
Longtime Union Square retail broker Kazuko Morgan of Cushman & Wakefield said in an interview that the new leases show that the city’s downtown retail district is “over the hump.”
He added that “this is proof. It’s been a long time coming; this is what everyone has been waiting for. It’s more leases signed, and more stores opening. It’s happening.”
Open for business
Another business that signed a lease in Union Square recently is A Bathing Ape — better known as BAPE — a Japanese streetwear brand favored by rapper Kanye West in the early 2000s. The company inked a deal to open its first San Francisco store at 216 Stockton St., the location of a former Dior men’s store.
The streetwear brand’s arrival will fill another dormant Union Square storefront, adding to the proliferation of major new leases signed last year, including from trendy Asian companies like Nintendo Co. Ltd. and Labubu-maker Pop Mart, in San Francisco’s central downtown shopping district.
A Bathing Ape takes over a three-story building advertised as a rare single-tenant opportunity with 4,800 square feet fronting Union Square. Once known as “the Dior building,” the property has been vacant ever since eyewear giant Warby Parker departed in 2020.
Several new shops have also filled previously dark spaces on Maiden Lane, an upscale, boutique-lined, pedestrian-only street that runs off Union Square. They include Camera West and furniture store Steelcase. Toy store Just for Fun opened in place of another toy store, Jeffrey’s Toys, which closed in early 2024, citing declining street conditions and sparse foot traffic.
Danish high-end audio brand Bang & Olufsen opened its largest store worldwide in a two-story, 5,100-square-foot property formerly known as the Britex Fabrics building at 146 Geary St., as part of what a spokesperson proclaimed as an “ambitious” West Coast expansion plan.
Return to form
The RealReal, the San Francisco-based fashion resale brand, said its “reimagined space” will feature women’s and men’s luxury fashion, fine jewelry and watches, along with “significantly expanded areas for consignor appointments and private, high-value showings” that reflect “the city’s creative spirit — blending heritage, sustainability, and modern luxury.”
The store’s reopening comes just over three years after it shuttered the two-story store it had opened back in March 2020, just days before the pandemic shutdown, in a space formerly occupied by Hermès. In early 2023, The RealReal announced in a regulatory filing that it was closing the Union Square store and several others across the country as part of cost-cutting measures.
The chain said the newly reopened two-story flagship store, spanning more than 8,100 square feet, would be its 17th nationwide, adding to locations in Chicago, Dallas, Houston, Los Angeles, Miami, New York and elsewhere.
“The expanded store brings expert-authenticated luxury resale, personalized service, and elevated design back to one of San Francisco’s most iconic retail corridors,” it said in the statement.
AT&T, meanwhile, has applied for signage permits and new tenant improvements at 1 Powell St.
At a gathering this month sponsored by the San Francisco Chamber of Commerce, AT&T Director of External Affairs and outgoing board chairman Cammy Blackstone told business leaders that the company is part of a wave of companies returning to the city.
“It hasn’t been easy, but by staying focused on the fundamentals and working together, we’ve helped move the city in a more positive direction,” Blackstone said in a statement.
AT&T did not respond to a request for comment by CoStar News.
Future potential
The San Francisco Chamber of Commerce last month released a poll that found "a decisive shift in how San Franciscans view the city’s trajectory, with optimism, confidence and perceptions of quality of life reaching their highest levels in years," according to the 38th Annual CityBeat Poll.
In a statement about the poll, Mayor Daniel Lurie pointed to the Super Bowl that took place this month in the Bay Area, putting "the eyes of the world" on the city.
"We got to show off who we really are. The streets were alive. Restaurants were packed. Events ran smoothly. We showed that the San Francisco comeback is real,” Lurie said. “We’ve finally got our city moving in the right direction again and now it’s time to step on the accelerator."
Other indicators confirm the vibe shift in the neighborhood in the past few months. The Union Square retail submarket started 2026 with a vacancy rate of just over 15%, down from 16.5% a year ago. The figure reflects 31,000 square feet of positive net absorption — or tenant move-ins minus move-outs — over the past 12 months.
“Looking ahead, Union Square's vacancy rate is expected to remain flat through 2026, with modest negative absorption and no major deliveries anticipated,” according to a CoStar analysis. Still, "rent growth is expected to soften, while a continued emphasis on experiential retail, tourism recovery, and redevelopment of legacy spaces will shape demand.”
Some observers have speculated that San Francisco’s downtown retail picture has gotten a boost from the long-awaited closing of a troubled mall, which saw a gradual exodus of tenants following the closings of its anchor tenant, Nordstrom, in 2023. In its last weeks, San Francisco Centre was a mostly empty 1.2 million-square-foot retail space in the heart of the city’s commercial center.
Macy’s said in 2024 that it planned to close its Union Square store. However, the department store remains open and is expected to remain so as the New York-based retail chain partners with San Francisco real estate firm TMG Partners to “explore the future potential” of redeveloping the downtown property at 170 O’Farrell St., which has been operating since World War II.