San Francisco retail market reports
Q4 2024
Q4 2024: There is a new sense of optimism with pro business politicians like San Francisco Mayor Daniel Lurie and other business friendly supervisors now in office. On top of this the fourth quarter of 2024 saw renewed leasing activity and the first full quarter of new retail absorption since 2023. The San Francisco Emporium is still the largest uncertainty in the SF market with the recent announcement of Bloomingdale’s closure of their 339,000 sq ft store bringing the mall’s vacancy to over 50% in 2025. The mall is currently scheduled for a foreclosure auction on February 20, 2025.
Total San Francisco retail availability including Union Square and surrounding areas
Retail hubs across the Bay Area experienced positive net absorption in Q4 2024 except for Union Square, San Mateo, and downtown Oakland. Retailers have continued to show a clear preference towards San Francisco’s residential neighborhoods as well as the Bay Area’s suburban markets. However, only Burlingame, downtown Palo Alto and downtown San Jose experienced positive net absorption over the entirety of 2024.
Leasing remains largely flat due to mounting construction costs and inflation
Construction costs have increased 2.3% year-over-year and continue to be an inhibitor for new tenants hoping to enter the market. Leasing activity remained steady quarter-over-quarter but is down 9.3% compared to the post-COVID leasing average. Overall leasing will likely face challenges for the foreseeable future until inflationary pressure and rising construction costs ease.
Total retail employment rises slightly in 2024 compared to 2023
Overall retail employment in 2024 was up 1.2% compared to the overall totals of 2023, but down 0.2% quarter-over-quarter. Employment is expected to continue to grow if the economic pressures on inflation ease in 2025 but largely depends on new business formation.
Your source for the latest San Francisco retail market reports
Get in-depth retail market reports and insights from commercial real estate experts in the Greater San Francisco Bay area. Avison Young advisors look at San Francisco commercial real estate activities and the latest San Francisco statistics to provide you expert market research on San Francisco's retail properties.
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