Two Financial District chain retail businesses less than 500 feet from one another — both of which opened in 1994 — have announced their closures: a McDonald's and a 24-Hour Fitness, both shutting down due to the district’s offices being emptied out.
The San Francisco Business Times broke two stories this week illustrating how downtown San Francisco businesses continue to face bad times. On Monday, that publication was first to report that the Financial District 24-Hour Fitness will be closing permanently, though it will remain open through Friday, December 29. Then on Tuesday, the Business Times reported the McDonald’s at 235 Front Street has already closed permanently, as its last day in business was Friday, October 27.
The soon-to-close 24-Hour Fitness at 100 California Street, and the McDonald’s near Front and Sacramento streets, are less than 500 feet away from one another. And as the Chronicle notes, both locations opened in 1994. Presumably, both are victims of the currently moribund office leasing market that’s seeing far fewer workers downtown than pre-pandemic.
24 Hour Fitness had reportedly been considering exiting one of its downtown gym leases. Now it’s official: Its California Street location will close Dec. 29. https://t.co/S2Z96oaorF— San Francisco Business Times (@SFBusinessTimes) November 1, 2023
The California 24-Hour Fitness says in a statement on its website, “Members, this location will be closing on December 29, 2023. Join us down the road at our Sutter-Montgomery or Van Ness club.” Though 24-Hour Fitness will have four remaining SF locations, so its unclear whether those memberships would also transfer to the 1850 Ocean Avenue and Potrero Center plaza locations.
The San Ramon-based 24-Hour Fitness had already shut down 130 locations during their pandemic bankruptcy when gyms statewide were ordered closed, though the company did emerge from bankruptcy by the end of 2020.
The McDonald's franchise owner cited “high office building vacancy rates and visitor trends” since the pandemic as the reason for the closure https://t.co/k1XD56nSSn— Eater SF (@eatersf) November 1, 2023
Meanwhile, the franchise owner of the already-closed Front Street McDonald’s, Rodrick Management Group president Scott Rodrick, said in a statement to multiple media outlets that “a downtown that is impacted by high office building vacancy rates and visitor trends that have not recovered since the pandemic. My Front Street location, without the benefit of parking and a drive-thru, amplified the challenge.”
Both of these closures are in the Financial District, whose retailers are obviously reeling from a record office vacancy rate, currently at 33.9%. And certainty these closures will amplify more “doom loop” narrative about San Francisco.
That narrative will likely ignore that supposedly-booming Texas has near-similar office vacancy rates in Austin, Houston, and Dallas, per the Wall Street Journal. The Journal blames those Texas office vacancy rates on overdevelopment, and the McDonald’s and 24-Hour Fitness closures may be analogous. If a national chain has stores all over SF, this is probably an era where over-saturation is a liability. And SF Financial District franchise locations are logically the first on the chopping block.