San Francisco Retail Market Report

Rising foot traffic draws retailers Downtown. San Francisco was one of only eight major metros where vacancy stayed flat or declined over the past year, as stronger in-store traffic bolstered retailer confidence. Despite concerns over weaker tourism, pent-up demand and business travelers helped lift Bay Area Rapid Transit ridership 12 percent — 15 percent on weekends — year over year in July, supporting expectations the metro will lead the nation in hotel occupancy growth in 2025. Stronger visitor flows have attracted more retailers to Downtown’s western and northern corridors, highlighted by Zara’s new Union Square store. In contrast, office nodes like the Financial District and Mid-Market have been slower to recover, though office attendance was up 21 percent year over year in July — the fastest among major markets. New in-office mandates from Uber, Gap and Paramount should also help daytime retail spending.