Other high-profile losses include Whole Foods, Amazon Go, and Office Depot. The shrinking retail scene has contributed to a general real estate slump as large tech companies have also downsized, with the city estimated to have 18 million square feet of empty office space as of June.

However, despite the talk of San Francisco’s “doom loop,” many businesses have chosen to stay — and some are even moving into the Golden City’s vacant downtown storefronts.

The brands expanding and moving in

“As a new neighbor in the community, we are working to contribute and create a comfortable and welcoming environment,” a spokesperson for Ikea US told Insider, adding that Ikea has had stores in the Bay Area since 2000.

They continued, “We are excited to strengthen our presence in San Francisco and intend to test and try different formats to meet the needs of our San Francisco consumers for many years.”

Chanel is also making moves in downtown San Francisco. The luxury fashion brand moved from a smaller location in the city after purchasing a three-story building at 340 Post Street, across from Union Square, for $63 million, the Real Deal reported. Chanel did not respond to Insider’s request for comment.

Its parent company, Gap Inc, has been closing other locations in San Francisco. These include its downtown Old Navy site in July and its Athleta store on Sutter Street. But this isn’t unique to the city. The clothing giant has been shutting stores across the country in a bid to cut costs as it grapples with declining sales.

A spokesperson for Gap told Insider that the company was committed to San Francisco and had deep roots there.

“It’s where we were founded and the region where thousands of our team members still live and work today,” they said.

“We recently invested in renovating our Downtown San Francisco hub where our teams come together to develop new consumer experiences and product innovations. As part of that remodel, we opened four new stores at our headquarters,” they added.

AI boom boosts city

Fintech startup Brex decided to close its San Francisco office and switch to remote working during the pandemic but reopened a San Francisco location earlier this year to cash in on the opportunities offered by the AI boom.

“Our cofounder and co-CEO, Henrique Dubugras, was really excited by what he saw as going on in the Bay Area with regards to AI and how big of an opportunity it was going to be,” Michael Tannenbaum, Brex’s COO, told Insider. “So we wanted to get closer to that.”

He said that the sheer density of talent and innovation in San Francisco meant the city remained an ideal place for startups to develop.

“It’s a forward-thinking town,” Tannenbaum said. “It’s always been somewhere where a lot of trends have started – it’s just a place where ideas can get off the ground.”

Angela Hoover, the CEO and cofounder of Andi, an AI search-engine startup, moved the company to San Francisco earlier this year.

“Andi was initially based in Miami, which has a growing, vibrant startup scene. But increasingly, the heart of AI seemed to be beating in the Bay Area,” she told Insider.

The move has been enormously beneficial for the company, Hoover said, as it allowed Andi to accelerate its product development and has made hiring easier.

“It was a great decision,” Hoover said. “For an AI startup, there’s no better place to be right now than in San Francisco.”

The post These retailers are bucking the pattern and opening shops in San Francisco regardless of the town’s ‘doom loop’ appeared first on DAILY SAN FRANCISCO BAY NEWS.

• Some retailers are fleeing San Francisco as fears grow over rising crime and a worsening economic environment.
• Nordstrom, Whole Foods, and Anthropologie have all closed locations in the city in the past year.
• Many retailers are staying put and are even expanding their presence.

San Francisco is in the middle of a retail exodus.

The city has seen a number of high-profile businesses close locations in recent months, as fears over crime, soaring rents, and a worsening economic environment have grown.

The most recent exit was Nordstrom, which closed the doors of its five-story department store in Westfield San Francisco Centre in August, citing falling foot traffic and the “changing dynamics” of downtown San Francisco.

Other high-profile losses include Whole Foods, Amazon Go, and Office Depot. The shrinking retail scene has contributed to a general real estate slump as large tech companies have also downsized, with the city estimated to have 18 million square feet of empty office space as of June.

However, despite the talk of San Francisco’s “doom loop,” many businesses have chosen to stay — and some are even moving into the Golden City’s vacant downtown storefronts.

The brands expanding and moving in

Swedish furniture chain Ikea opened a new branch in San Francisco’s Mid-market area in August, occupying a 52,000-square-foot location as part of its strategy to open smaller stores in city centers.

“As a new neighbor in the community, we are working to contribute and create a comfortable and welcoming environment,” a spokesperson for Ikea US told Insider, adding that Ikea has had stores in the Bay Area since 2000.

They continued, “We are excited to strengthen our presence in San Francisco and intend to test and try different formats to meet the needs of our San Francisco consumers for many years.”

The entrance of Ikea’s new San Francisco store. Tayfun Coskun/Anadolu Agency via Getty Images

Chanel is also making moves in downtown San Francisco. The luxury fashion brand moved from a smaller location in the city after purchasing a three-story building at 340 Post Street, across from Union Square, for $63 million, the Real Deal reported. Chanel did not respond to Insider’s request for comment.

Another French luxury brand, Yves Saint Laurent, doubled its space in Union Square last year by leasing three floors of the I. Magnin & Co. building. The move came despite luxury stores in downtown San Francisco being targeted by a series of high-profile robberies.

And luxury jewelry brand Van Cleef & Arpels opened its first standalone location in Union Square in 2022.

A Banana Republic store at Gap’s San Francisco headquarters. Jay Watson

Other chains, such as Banana Republic, are downsizing but staying in the area.

Its parent company, Gap Inc, has been closing other locations in San Francisco. These include its downtown Old Navy site in July and its Athleta store on Sutter Street. But this isn’t unique to the city. The clothing giant has been shutting stores across the country in a bid to cut costs as it grapples with declining sales.

A spokesperson for Gap told Insider that the company was committed to San Francisco and had deep roots there.

“It’s where we were founded and the region where thousands of our team members still live and work today,” they said.

“We recently invested in renovating our Downtown San Francisco hub where our teams come together to develop new consumer experiences and product innovations. As part of that remodel, we opened four new stores at our headquarters,” they added.

AI boom boosts city

AI startups are giving San Francisco a much-needed boost. The city is home to 11 of the top 20 AI companies in the US, data from VC firm NFX, which was shared with Insider, showed. Many of these companies are hunting for office space.

Fintech startup Brex decided to close its San Francisco office and switch to remote working during the pandemic but reopened a San Francisco location earlier this year to cash in on the opportunities offered by the AI boom.

San Francisco skyline. Alexander Spatari/Getty Images

“Our cofounder and co-CEO, Henrique Dubugras, was really excited by what he saw as going on in the Bay Area with regards to AI and how big of an opportunity it was going to be,” Michael Tannenbaum, Brex’s COO, told Insider. “So we wanted to get closer to that.”

He said that the sheer density of talent and innovation in San Francisco meant the city remained an ideal place for startups to develop.

“It’s a forward-thinking town,” Tannenbaum said. “It’s always been somewhere where a lot of trends have started – it’s just a place where ideas can get off the ground.”

Angela Hoover, the CEO and cofounder of Andi, an AI search-engine startup, moved the company to San Francisco earlier this year.

“Andi was initially based in Miami, which has a growing, vibrant startup scene. But increasingly, the heart of AI seemed to be beating in the Bay Area,” she told Insider.

The move has been enormously beneficial for the company, Hoover said, as it allowed Andi to accelerate its product development and has made hiring easier.

“It was a great decision,” Hoover said. “For an AI startup, there’s no better place to be right now than in San Francisco.”

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‘Rampant crime has become a regular part of life’: CNN reporter witnesses 3 thefts in 30 minutes at a San Francisco Walgreens — here’s why retailers say they’re fleeing the Bay Area

America’s most-robbed Walgreens was the victim of at least three thefts within 30 minutes in July, according to CNN Senior National Correspondent Kyung Lah — one of the latest examples of brazen crime at the location.

The thefts were witnessed during the filming of a televised report at the Walgreens in San Francisco’s Richmond neighborhood. According to Lah, Walgreens has identified this location as having the “highest theft rate” — hit more than a dozen times a day — of the pharmacy chain’s nearly 9,000 U.S. stores.

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Shoplifting had become so bad in the Bay Area store that staff resorted to securing certain items with padlocks and chains. But they were ordered by corporate to remove them “because of the negative messaging,” Lah said.

Still, many other products at this location, including ketchup and mustard, remain locked behind plastic casings.

Other stories across the city have also resorted to locking up more products like cosmetics, frozen food and even coffee.

San Francisco resident Richie Greenberg, who toured the Richmond Walgreens with Lah, described what he felt after previously seeing the chained-up items.

“This was bizarre, something I’d never seen before,” he said. “This is just more icing on the cake. Telling us that rampant crime has become a regular part of life.”

A retail exodus

Several retail giants — including Nordstrom, H&M, Marshall’s, Gap, Banana Republic, Anthropologie and Office Depot — have announced they’re pulling the plug on some San Francisco locations.

When Whole Foods announced in mid-April that it was temporarily closing its store at Trinity Place in the city’s Tenderloin District, a spokesperson for the grocer expressed concerns about “the safety of our team members” due to criminal activity near the store.

Story continues

Read more: It’s going to be ugly’: This CEO issued a dire warning about U.S. real estate, saying areas will be ‘destroyed’ — but he still likes 1 niche

These issues, while significant in San Francisco, are not isolated to the Bay Area.

According to a study by the National Retail Federation, organized retail crime and theft are growing in both scope and complexity across the U.S.

To combat this, Home Depot CEO Ted Decker announced in June that the home improvement company would be “investing in more security guards” to protect the safety of its employees and customers. This sadly follows the deaths of two Home Depot employees during theft incidents.

Concern for commercial real estate

Many cities have seen retail store closures in recent months. Insider recently reported that as many as 2,373 major retail stores are set to close this year across the U.S — not all down to crime, but some due to dwindling foot traffic in the age of online shopping and economic factors like rising interest rates.

These trends are causing headaches for commercial real estate investors, since they present more challenges for the already shaky and debt-ridden sector.

In particular, office real estate is under immense strain due to the rise in remote and hybrid work during and after the COVID-19 pandemic. Rising borrowing costs are also squeezing property owners and complicating real estate financing.

In recent months, high-profile investors — including Elon Musk — have sounded the alarm about a potential market crash.

Real estate investing expert Patrick Carroll said the commercial real estate market is tumbling toward a crash that could be as devastating as the 2008 crisis.

“The party’s over, unfortunately,” he said. “The office market’s going to be destroyed, hotels are going to be destroyed — it’s going to be ugly.”

What to read next

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

The post CNN reporter witnesses 3 thefts in half-hour at a San Francisco Walgreens — this is why retailers say they’re fleeing the Bay Space appeared first on DAILY SAN FRANCISCO BAY NEWS.

News

From Joshua Rhett Miller

June 21, 2023 | 6:20 p.m

With crime rising and fewer shoppers on the city’s once bustling streets, major retailers are leaving their broken hearts in downtown San Francisco.

At least 22 big-name businesses have closed or announced plans to flee the Union Square area of ​​San Francisco since January 2022, including trendy retailers like Anthropologie, Banana Republic and Crate & Barrel, as well as the investment firm that owns two of the city’s largest hotels.

According to the San Francisco Standard, 47% of businesses in the area have closed since 2019.

Before Covid, around 203 retailers operated in and around Union Square; By May only 107 were left.

The commercial chaos is set to continue in the coming weeks, with brands including AT&T, Nordstrom, Coco Republic and Old Navy set to close more stores as early as July 1st.

The biggest casualty — the Westfield San Francisco Center — came last week when the mall’s operator cited “challenging” downtown conditions, including falling sales and occupancy rates, as the reason for the threatened churn.

In the past 18 months, 22 major retailers and hoteliers have fled downtown San Francisco. San Francisco commercial real estate woes are worsening as Westfield pulls out of its iconic Union Square mall, where sales have plummeted 35% since 2019.Getty Images

Westfield suspended payments on its $558 million loan for the 1.2 million-square-foot Market Street retail center and began transferring control this month, first reported in the San Francisco Chronicle.

The mall exit is the latest in a series of setbacks in the shopping district, where Nordstrom will close two stores this summer — an anchor in the mall and a Nordstrom Rack across the street — cutting nearly 400 jobs.

San Francisco’s only Crate & Barrel at 55 Stockton Street in Union Square closed in March 2022. It was subsequently replaced by a Coco Republic store, which is closing next month.David G McIntyre

Nordstrom officials made the announcements last month, blaming the “deteriorating situation” in San Francisco.

Westfield’s parent company, Paris-based Unibail-Rodamco-Westfield, said the closures demonstrated the “unsafe conditions for customers, retailers and employees” in the city center.

According to a May poll sponsored by the San Francisco Chamber of Commerce, about 77% of San Francisco residents believe the city is on the wrong track, and only 30% said they felt safe downtown at night.

Both Nordstrom and Nordstrom Rack are packing up their deals.David G McIntyre

Elsewhere in the area, the owner of two of the city’s largest hotels — the 1,921-room Hilton San Francisco Union Square and the 1,024-unit Parc 55 — announced plans last week to stop making mortgage payments.

Park Hotels & Resorts CEO Thomas Baltimore predicted a “dull and protracted” recovery in San Francisco and revealed plans to remove the hotels from its portfolio amid record office vacancies – 44.7% of pre-pandemic levels The Wall Street Journal reported Wednesday — and public safety concerns.

The Cinemark Century San Francisco, the Westfield Mall theater, closed after the final showing of “Transformers: Rise of the Beast” on June 15. According to an email from the company, the closure came as part of a “wide review of local business conditions,” SFGATE reported.

Some seasoned analysts believe the city’s ongoing commercial chaos may be just beginning.

Ken Woods, founder and chairman of Asset Preservation Advisors, said his team of municipal bond managers is backing out of San Francisco.

“We see, to some degree, an emperor without clothes,” Woods told the Wall Street Journal on Tuesday.

A Whole Foods location closed in April after just 14 months of operations.Getty Images

The grocery store was closed after syringes and hoses were found in the bathroom, the San Francisco Standard reported.David G McIntyre

And the city struggles with several downtown “open-air” drug markets, including in the Tenderloin neighborhood.

The group Mothers Against Drug Addiction & Deaths put up a giant billboard in Union Square last year that read, “Famous around the world for our brains, our beauty and now dirt cheap fentanyl.”

The rise in fatal drug overdoses in the city is now reaching a record 800 deaths, the San Francisco Standard reported Tuesday.

Westfield has suspended loan payments for its San Francisco Center mall.David G McIntyre

Police data shows that overall crime near the San Francisco Center mall increased slightly in 2023 compared to the previous year. Reported serious crime in the tenderloin increased by 1.4%, while theft increased by 5.6%.

Downtown Saks Off 5th has implemented a one-in-one-out system to better patrol for thieves, according to the Daily Mail, while a Folsom Street Target location has been keeping rows and rows of merchandise under wraps.

“Mothers Against Drug Addiction and Death” put up this billboard in Union Square.@ABCLiz/Twitter

San Francisco Mayor London Breed said the mall’s exit — where dozens of retailers including Godiva Chocolatier, Clarks, Kay Jewelers, Hugo Boss and Tiffany & Co. have already packed up — came as no surprise. The parent company announced plans last year to sell all of its malls in the United States.

Shops at the mall remain open as law enforcement officers, in coordination with Westfield security personnel, patrol the facility.

Parc 55 is one of two luxury Hilton properties to leave the area.David G McIntyre

A Whole Foods market in downtown San Francisco abruptly closed in April after being open for little more than a year. Widespread drug use and rising crime near the 6,000-square-foot store in the city’s mid-market area prompted the closure after syringes and pipes were found in the bathroom, the San Francisco Standard reported.

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Retailers in sectors that have seen outsized gains from US consumers are capitalizing on the favorable market for tenants that exists in most urban corridors. That’s one of the key takeaways from JLL’s City Retail 2022 report, which found that home goods, athleisure and outdoors retailers are taking the lead in urban leasing. The report also found that while landlords are still open to negotiation, pandemic-related concessions such as percent-sale rent are increasingly harder to come by.

Here are a few of the companies moving into the nation’s urban corridors.

Active wear/outdoors
• Vuori, a direct-to-consumer activewear brand with a $4 billion valuation, plans to open 100 stores in the US over the next five years. Vuori opened on Abbot Kinney in Los Angeles this past summer next to a handful of other DTC brands.

• Lululemon opened a pop-up-turned-permanent store also on Abbot Kinney and expanded its location on Robson in Vancouver.

• Alo Yoga will be moving into The Superette, a new Seaport development in Boston. Developed by WS Development, The Superette will open by summer 2022 with 40 stores, restaurants and entertainment venues built around a central courtyard.

Outdoor clothing retailers have also been busy.

• Arc’teryx opened three stores over the past year and a half: along West 4th in Vancouver, in Union Square in San Francisco (one of the only 2020 deals in the corridor) and in SoHo in New York City.

• Icebreaker, an outdoor clothing retailer that specializes in merino wool, relocated to North Michigan Avenue in Chicago.

• Blocks away in the Gold Coast corridor, Wilson Sporting Goods opened its first brick-and-mortar location this past summer. The company opened its second store in Manhattan’s SoHo neighborhood in late January.

[Read More: First Look: Wilson Sporting Goods celebrates sports, play at NYC flagship]

Home Goods
• Joybird, a DTC home furnishings retailer, has opened several stores over the past year including on Melrose in Los Angeles and is expected to move into the former Williams-Sonoma location in the Marina in San Francisco.

• Avocado Green Mattress moved onto M Street in Washington, DC. The Sill, which began as an online plant delivery business and now has physical stores in five cities, opened on Newbury Street in Boston in the fourth quarter of 2021

Lease Negotiations: Back to business
Throughout 2020, landlords made concessions unheard of on prime urban corridors, according to the report. Rents came down and more months of free rent were given. There were also far more lease covenants, increased tenant improvement allowances, kickout clauses and shorter terms.

However, as rent collection improved in late 2020 and into 2021, percent sales and rent relief agreements have become rarer, the report noted. While rents haven’t returned to pre-COVID levels in most corridors and markets are still tenant-favorable, it is (mostly) back to business in terms of traditional lease negotiations. Incentives still exist, especially for the first year, terms are shorter, pandemic language exists — but many of the drastic concessions are 2020 history, JLL reported.

The JLL report can be downloaded here.

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The San Francisco District Attorney on Wednesday sued three online retailers for selling “ghost guns,” undetectable firearms that can be made from do-it-yourself kits, part of an intensified nationwide effort to break the tide of deadly homemade weapons contain American cities.

In a civil lawsuit filed in California Superior Court, District Attorney Chesa Boudin accused the companies – GS Performance, BlackHawk Manufacturing Group, and MDX Corporation – of marketing a range of products in the state that provide buyers with parts and accessories that can be quickly assembled into one working weapon.

The lawsuit alleges that the companies that specifically say their products comply with federal and state laws are targeting buyers who want to bypass criminal background checks and purchase guns without traceable serial numbers. The plaintiffs want to ban the sale of such parts.

Companies did not immediately respond to requests for comment.

As the popularity of ghost weapons grows nationwide, California has seen a particularly sharp increase in the use of undetectable firearms in shootings, coinciding with an overall increase in gun-related crimes.

“Ghost weapons are a massive problem in San Francisco – they are becoming increasingly implicated in murders, attempted murders and firearm attacks,” said Boudin, who filed the lawsuit in conjunction with the gun control group founded by former MP Gabrielle Giffords of Arizona.

“We know that the rise in gun violence is related to the proliferation of, and easy access to, weapons that cannot be found, weapons that are easier to obtain from people who would otherwise be prohibited by law,” he added.

The number of homicides in California rose about 27 percent from 2019 to 2020 to about 2,300; it was the largest increase in decades, and the increase has continued this year, according to the California Department of Health.

In 2020, 44 percent of guns found in San Francisco murders were ghost weapons, compared to 6 percent in 2019, Police Chief Bill Scott told the city’s board of directors in May.

Los Angeles Police Chief Michel Moore told reporters earlier this year that ghost weapons – made up of parts that can be bought for hundreds of dollars – now make up a third of all weapons recovered by his department.

In May, Attorney General Merrick Garland proposed closing a state loophole that allowed the sale of gun parts used in homemade kits on the grounds that parts, when sold individually, do not constitute a working “firearm”, which is subject to the same rules as licensed handguns.

“Criminals and others who are denied possession of a weapon should not be able to exploit a loophole to bypass background checks and avoid detection by law enforcement,” Garland said at the time, adding that the change “the Making law enforcement easier “would track down weapons used to commit violent crimes.”

But the process of reviewing the new rule and implementing it takes months, and local governments, gun control groups and crime victims are keen to take immediate action if the crisis deepens.

This month, two Los Angeles County sheriffs seriously wounded in an ambush sued Polymer80, a Nevada-based company that is the largest manufacturer of ghost weapon components, for delivering an “untraceable, homemade ‘ghost gun’ kit” to one Felon who was charged with shooting police officers while they were in a patrol car in Compton last September.

In February, the City of Los Angeles and Everytown for Gun Safety, a group founded by former New York City Mayor Michael Bloomberg, sued Polymer80 after a 16-year-old student used the company’s branded parts in a shootout at Saugus High School, she left three children dead.

The company replied that its products are not “firearms” as defined by the Federal Office for Alcohol, Tobacco, Firearms and Explosives and therefore no serial numbers or background checks are required.

“Although the lawsuit cites definitions of ‘firearm’ and ‘handgun’ under federal law, it does not adequately explain how Defendants’ products meet the various technical elements of each of those definitions,” wrote Sean A. Brady, the company’s attorney, in response on the lawsuit in Los Angeles.

Gun rights groups, including the National Rifle Association, have spoken out against Mr Garland’s proposed rule changes, arguing that they will violate the rights of the Second Amendment and restrict the legal trade in gun parts.

But the San Francisco lawsuit and others like it allege that companies selling components used in ghost weapons are engaging in fraudulent business practices and must be stopped.

“All of these players are guilty,” said Hannah Shearer, Giffords Law Center litigator for the prevention of gun violence. “These kits are designed to be undetectable and everyone knows.”

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