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Market Report

San Francisco Retail Investment Forecast

2022 Outlook

Retail to Make a Slow but Clear Comeback this Year;
Buyers Target Storefronts in Residential Areas

San Francisco retail market begins to turn corner. After the metro was hard hit by the health crisis, a broader reopening and the return of the retail spending base will support a modest improvement in operations this year. A rapid bounce back is not anticipated, as the pace of businesses returning to offices is relatively pedestrian in the face of the ongoing pandemic. Furthermore, local retailers are highly dependent on tourism, which has not returned in a significant way due to restrictions both in the United States and abroad. Last year, the number of tourists that visited the city was down 39 percent from pre-pandemic levels, and a full recovery in the number of visitors is not expected until 2025. Furthermore, only two-thirds of Californians meet the minimum requirement to visit most retailers in the metro, which is hamstringing local tourism. In the long run, the outlook is much brighter. The density of the metro limits overbuilding at a time when more residential units are added vertically, supporting more shoppers per square foot.

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