Zara Rebounds With 40K SF in San Francisco’s Union Square

Zara is doubling down on San Francisco’s Union Square as other retailers bolt toward the exits.

The Spanish-based retailer, which a year ago announced it would abandon the luxury shopping district, has inked a lease for a four-story flagship store at 400 Post Street, the San Francisco Chronicle reported.

The new store will open a block from Zara’s shop at 250 Post, which the company plans to shutter after its lease expires early next year.

The 40,000-square-foot replacement store, to open next year, will be nearly twice the size of its current digs.

“San Francisco is on the rise,” Mayor Daniel Lurie said of Zara’s recommitment to Union Square. “Residents and visitors alike want to shop here, and global brands want to grow here.”

The news is a glimmer of hope for Union Square, which has had a parade of outgoing businesses since the pandemic, leaving behind empty storefronts with still visible names.

Uniqlo, H&M, North Face, DSW and Walgreens are among the retailers that have closed up shop in the once-bustling shopping district, citing crime and a shift to online shopping, both causing diminishing foot traffic.

Macy’s, which for decades has occupied its three-building flagship store in Union Square plaza, plans to sell the property and close the doors of its only San Francisco store.

Last month, Saks Fifth Avenue appeared ready to cut the cord for its appointment-only store at 384 Post Street when its lease expires in 2027.

Meanwhile, Nordstrom, which for decades anchored the nearby San Francisco Centre mall at 865 Powell Street, packed up in 2023. Bloomingdale’s, which occupied more than 300,000 square feet at the nearly empty mall, closed last month.

Crime, the bane of any high-end retail area, is on the wane, however, with green shoots returning to Union Square. Next month, Nintendo is slated to open on Powell Street, its second U.S. store, according to the Chronicle.

Since taking office in January, Lurie has focused on tackling crime to raise perceptions and bring businesses back downtown.

“We are working every day to deliver safe and clean streets in Union Square and across downtown,” Lurie told the Chronicle. “Zara’s decision to open a flagship store in Union Square is the latest vote of confidence in the future of our city.”

The Zara lease at the 116-year-old building at Post and Powell streets mixes money with blood relations. The building is owned by Pontegadea, the Spanish-based family office and real estate holding company of Zara founder and billionaire Amancio Ortega. Terms of the lease were not disclosed.

Pontegadea bought the 61,800-square foot building in 2007 for $103 million, or $1,667 per square foot. The four-story structure has been largely vacant since DSW pulled out in 2021, per the Chronicle.

The Spanish investor also owns the nearby Tiffany & Co. building at 350 Post Street, and Pacific Place on Market Street, the now-vacant storefront where Gap closed its Old Navy shop in 2023.

— Dana Bartholomew