San Francisco Retail Market Report

Recovering household count, incomes bolster retail landscape. While certain property types in San Francisco continue to lag the nation in post-pandemic recovery, the metro’s retail sector is gathering momentum. A key to this shift is population growth, which resumed in fall 2021, following a year of net out-migration. Many areas of the market are benefiting from this trend, including Downtown, where apartment vacancy in certain neighborhoods has returned to pre-2020 lows. San Francisco also led the country in median household income growth last year, nearing 10 percent. A rising number of households, paired with climbing incomes, bode well for the market’s retail outlook. Vacancy in the city, excluding Downtown, continues to hold under 5 percent, with even tighter conditions in South San Mateo County. While high-profile retailer exits in Downtown San Francisco last year pushed vacancy above 10 percent, the greater resident count should encourage improving foot traffic. A rising number of international arrivals at SFO also supports tourism spending both in and outside the metro’s core.