San Francisco retail market reports

Retail hubs across the Bay Area, bar Union Square, continue to enjoy relatively healthy availability rates in Q3 2024. The announcement of the auction/note sale of the former 1.4MM sq ft Westfield  (with current debt of $625.6MM) on November 19th as well as the announcement that the 312,592 sf Metreon complex being listed for sale has created some ripples in the market but show promise for a new vision for downtown.

Construction costs have remained largely unchanged over the previous year but are still up 40.4% compared to pre-COVID. Leasing activity rose 18.5% quarter-over-quarter but continues to be well below pre-COVID levels and will likely remain to be the case until construction costs and inflation. However, while many retailers have continued to bide their time waiting for costs to decrease, others have started to lease space that was otherwise not available to them prior to the pandemic, suggesting that there are strong opportunities at the right price.

Overall retail employment experienced a 0.9% upturn from the previous quarter and is expected to continue to grow with an increase in total job postings. The accommodations and food services sector experienced the largest uptick with a 1.5% increase, followed by retail trade at 0.8%.