Cavernous spaces tough to fill on Market Street

The economic downturn has left large retail spaces on Market Street vacant and tough to fill.

The Examiner conducted an independent survey of empty buildings that face the major shopping and retail corridor between The Embarcadero and Fifth Street. That count turned up 14 buildings, many of which contained multiple vacancies.

The empty stores include former national retailers such as Virgin Megastore and Shoe Pavilion. Until such companies recover from the recession, it will be difficult for real estate agents to refill the large vacant spaces, said Ross Portugeis, a broker for commercial real estate consultant Collier International.

“In terms of retail activity, I’ve been seeing more local businesses, but that section of Market Street is really geared more to the type of user that would be national,” Portugeis said. “We need a re-entry of the national retailers that have the resources and types of business models that can sustain those size spaces.”

National retailers are beginning to enquire about Market Street spaces, but the inquiries have been few and far between.

San Francisco’s downtown area is not subject to the same city laws that often bar chain stores from opening in neighborhood shopping districts.

The most popular areas for prospective retailers on Market Street are near the tourist destinations of Union Square and the waterfront, where occupancy rates are higher than elsewhere along the strip, according to Portugeis.

Clothing and department stores are the least active companies looking for Market Street space, while financial services companies and other stores that operate during regular business hours are the most active, he said.

A national cell phone company recently signed a deal brokered by Portugeis to move into part of the ground floor of the Pacific Gas and Electric Corp. building, which is near The Embarcadero. “That really typifies the type of tenant that’s in the market,” he said.

The recession only served to exacerbate a long-running problem on Market Street, said Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association.

“San Francisco is one of only a handful of American cities that kept a healthy downtown retail district serving the whole region [after World War II], whereas most cities lost their destination shopping to suburban malls,” Metcalf said. “However, Market Street has been struggling for half a century. We need to come together as a city with a comprehensive strategy for Market Street.”

Stretch of street stagnant after housing issue halted redevelopment

At ground level, Market Street between Fifth and Sixth streets contains little more than a wall of shuttered windows and vacant storefronts.

A redevelopment plan for the area was finalized in 2005, but it was never adopted by the Board of Supervisors.

The redevelopment plan died because its supporters wanted to mandate levels of affordable housing that Supervisor Chris Daly, whose district includes downtown, considered to be too low.

“We just never met in the middle,” Daly said.

Carolyn Diamond, executive director of the Market Street Association, said the strip would already have benefited from redevelopment efforts if the plan had been adopted.

“We’d have money set aside for arts programs and we’d have economic development incentives for property owners,” Diamond said.

jupton@sfexaminer.com

 

 

 

— John Upton

Bay Area NewsLocal

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