While we're living in the days of the very loud, hard-to-counter narrative of San Francisco's "doom loop" and general perceived death, at least some experts are trying to make it known that San Francisco's downtown problems are hardly unique.
Yes, we are losing a Nordstrom, and we lost a still-new Whole Foods, and a dozen other retailers around Union Square including H&M and Uniqlo. And it's been well documented and written about that San Francisco's downtown office comeback is kaput — dead in the water for now and holding at 31% vacancy, or 18.4 million square feet sitting empty.
By contrast, the office vacancy rate in Manhattan is 16.1% overall, but as an apples-to-apples comparison, Lower Manhattan and the Financial District is currently 25.6% vacant — a similar if slightly better number that San Francisco's Financial District.
As CNN reminds us today, the retail vacancy problems we're seeing in SF far predate the pandemic, and multiple major cities are seeing similar exoduses of big retail stores. Those cities, however, aren't currently the country's poster child for the failures of liberals like San Francisco is, so we're not hearing as much about it.
"Several forces are pushing chains out of some city centers: a glut of stores, people working from home, online shopping, exorbitant rents, crime and public safety concerns, and difficulty hiring workers," CNN writes. "To reinvent downtown retail, drastic changes may be required."
Between 2017 and 2021, multiple cities lost more retail stores than they gained. Those cities experiencing similar retail apocalypses to San Francisco's are Los Angeles, San Diego, New York City, Seattle, Miami, and Chicago, according to new research from the JP Morgan Chase Institute.
Closures became more pronounced in these cities in 2020 and 2021, but the researchers found that this reflected overall population trends during the pandemic — people moving out of high-cost, coastal cities (and Chicago) and toward suburbs and cheaper "Sun Belt" cities like Atlanta, Houston, and Phoenix.
Expanded work-from-home policies and extended closures of downtown retail and restaurants out of pandemic concerns both helped to kill what was left, in many cases, of downtown vibrancy in these previously bustling cities.
The fix is one that is going to take many years, and will be reflected as cities across the country struggle to catch up with larger trends — much the way cities in the last two decades tried to revive ghost-town downtowns that were decimated by the suburban mall culture of the 1970s and 80s. It will mean doing many of the things San Francisco leaders are already talking about — converting land and building uses to include more residential, activating streets with events, and adding more "experiential" retail.
"Once [these cities' downtowns] become true urban neighborhoods, then you will find retailing start to come back in different ways and forms," said consultant Terry Shook, a founding partner Shook Kelly, speaking with CNN.
One example of these forward-looking efforts around retail comes from IKEA's mall-building subsidiary Ingka Centres. These new-style malls, often anchored by pared-down IKEA stores, feature a mix of restaurants, entertainment venues, and flexible community spaces for pop-ups, public lectures, and things like cooking classes. Mid-Market will be getting one of these this year, with the IKEA opening first, and other retail to follow — and the only prospective tenant we've heard about so far is golfer Rory McIlroy's upscale mini-golf chain The Puttery.
Examples of the broad retail contraction abound, and it's not just in urban centers. One is the once-untouchable Walmart, which closed 40 stores in the last two years and plans to close 20 more, per CNN.
"The logic of big box retail, period, is much weaker than it was 20 years ago or even 10 years ago," said urban design expert David Dixon, speaking to CNN. And the reasons include the explosion of online shopping, and just changing tastes overall.
In the coming years, maybe, we'll see more housing become a reality in the downtown core. Eventually, a critical mass will need goods and services close to where they live, and the market will respond. But in the meantime, we are going to hear from a lot of people talking about SF being dead.
In related news, CNN has a whole hour-long special airing this weekend, hosted by Anderson Cooper, titled "What Happened to San Francisco?"
Photo: Tim Mossholder
