Landlords of former drugstore buildings in Downtown San Francisco are looking to divide their empty storefronts to draw in new tenants.
The owner of a 10,200-square-foot former Walgreens at 740 Market St. has proposed dividing it into five retail suites, the San Francisco Business Times reported. Similar plans have been proposed by the owner of a former CVS at 581 Market St.
What’s more, many ground-floor storefronts are on the market after Walgreens and CVS closed pharmacies in San Francisco because of national restructurings and organized retail theft.
The latest proposal was filed by Forge, a design firm based in San Francisco, on behalf of an affiliate of Houston-based Transwestern Property Co. West, which wants to add more doors to its building at 740 Market and divide it up into three or five retail storefronts.
Each new retail suite would measure between 1,100 square feet and 1,600 square feet, all with entrances onto Market Street.
The division for smaller retail tenants could provide more rental income, while allowing the landlord to rent out the basement, which a tenant like Walgreens might have received for free.
Splicing the building space could also allow Transwestern Property to avoid the city’s new commercial vacancy tax, as time spent waiting for the approval of a building permit doesn’t count toward the potential penalty for days a storefront remains unoccupied.
The conversion recognizes the challenge of finding a tenant willing to lease the entire building, which has been empty since March 2020.
There’s tenant interest in “about half of the space,” Forge architect and project manager Iku Joki told the Business Times in an email. He said common areas would be revamped if either of the multitenant proposals moves forward.
A representative of the former Walgreens isn’t alone in filing plans to subdivide one-time Downtown drugstores.
At the former CVS at 581 Market Street, an affiliate of Palo Alto-based John Fong aims to divide the 9,400-square-foot building into two separate storefronts.
Brick, an architecture firm based in Oakland, filed plans on behalf of Fong to split the property into a 3,200-square-foot retail store facing Market Street and a 6,200-square-foot office facing Stevenson Street.
Other landlords wish to lease their buildings after the drugstores left. Two former CVS stores, among the six that shut down in Downtown this year, are up for grabs at 731 Market Street and 351 Market Street.
Among the city’s Walgreens, at least 11 have closed since 2019. Former Walgreens now listed for lease are at 141 Kearny Street. and 88 Spear Street, as well as 2550 Ocean Avenue in Merced Manor, north of San Francisco State University.
— Dana Bartholomew
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