TRD Exclusive: Bulgari moves SF store to Grosvenor’s 200 Grant in Union Square

Bulgari is leaving its long-time home at One Union Square, also known as the Bulgari Building, when its lease ends next year and will move to more than 9,000 square feet across two floors of Grosvenor’s 200 Grant Avenue, TRD has learned.

Grosvenor was in talks with the luxury jeweler for more than a year before the deal was finally signed in February, said Nathan Lundell, vice president of asset management for the property owner. Laura Barr, Alex Sagues and Madeline Mandanis with CBRE represented Grosvenor in the transaction.

“Grosvenor was intentional in their selection of an iconic, long-term partner for one of the most productive and elevated retail intersections on the West Coast,” Barr said in a statement. 

The retailer and the property owner have agreed to reconfigure the space to combine some of what used to be the Coach space on the ground floor with some of what was The North Face space on the floor above, Lundell said. Factoring the demolition and buildout costs into the 10-plus-year lease term led to the long timeline. 

“It was a very complicated deal,” Lundell said, declining to specify the price per square foot or other lease terms. “But I think on both sides you had two parties that felt like this really made a lot of sense.” 

“Luxury anchor” corner

Lundell said that, despite media reports last month focusing on the downturn in Union Square when The North Face departure was revealed, the outdoor clothing retailer actually terminated its lease early at Grosvenor’s request. The departure allowed the landlord to move forward with the two-floor reconstruction plan, which will also see the former Icebreaker space on the ground floor combined with what remains of The North Face space after the Bulgari carve-out for a new 8,600-square-foot two-level suite with an entrance on Post Street. 

“It was a pretty easy decision to make,” Lundell said of the early termination.

He put Grosvenor’s costs for the renovation at several million dollars and declined to speak about Bulgari’s build-out budget, but said “they don’t pinch pennies when they build stores.” 

Bulgari declined to comment on the deal other than a statement from Vincenzo Pujia, vice president of global sales and retail, saying the Rome-based company strongly believes in the San Francisco retail market and that it maintains “a long-term vision in the city.”

“This new location, in the heart of the city, is the perfect environment for the brand to express itself and welcome our clients,” he said.

The new Bulgari presence will occupy the corner of Grant and Post, across from Harry Winston. The other corner tenants on that intersection are Dior and Cartier. 

“It really solidifies this corner as a true luxury anchor for Union Square,” Lundell said, adding that the company was in “early innings” on finding a tenant for the other new space it is creating and would wait for the right tenant there, just as it did on the corner.

Grosvenor will finish its work on the new Bulgari location this summer and then the jeweler will take over with tenant improvements. It is expected to move in by the fall of 2025. 

Union Square shuffle

Bulgari’s lease on more than 16,000 square feet a few blocks away at One Union Square ends at the start of next year. The building is currently in the initial stages of foreclosure after owners Ashkenazy Acquisition and Brookfield defaulted on a $50 million loan. Ashkenazy said in February that it was trying to work out a deal with lenders, but that may be more difficult after Bulgari’s departure, according to Morningstar analyst David Putro. 

In 2022, Vera Wang left the building that Ashkenazy and Brookfield bought for $95.8 million in 2013, and last year WeWork said it would seek to terminate its lease as part of its Chapter 11 workout. Those exits bring occupancy to about 56 percent, per servicer comments. Bulgari represents another 40 percent of the 42,000 square feet at 200 Stockton Street. 

That leaves just Moncler and Lacoste in the building, for a total of about 6,000 square feet, leaving it 85 percent vacant. 

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“I’m not sure how a borrower navigates that in the current market,” Putro said.

Bulgari is leaving its current space, but Lundell said the fact that the Italian company sees value in staying in the square is a good sign for the neighborhood. He hopes other tenants “take notice” and ask themselves if they should make similar moves to maximize the down market.

“I think it says a lot when a smart sophisticated tenant makes that type of investment into Union Square,” he said. “The smart tenants are trying to figure out if they’re in the right spot, if they have the right configuration, if there’s something else that they could do to optimize their business for the long term, because now’s the time to do that.”