The owner of Ross Dress for Less has renewed its lease for its 55,300-square-foot flagship store in Downtown San Francisco, even with the building on the market for sale.
Ross Stores, a discount retailer based in Dublin, re-upped its lease at the eight-story building at 799 Market Street, where it has operated for nearly 40 years just south of Union Square, the San Francisco Chronicle reported. The retailer also plans to open a 40,000-square-foot store nearby.
An unidentified spokesperson for the clothing chain declined to disclose terms of the lease. Ross now takes up four floors, including a basement and three upper floors, at its flagship store. The rest are mostly unoccupied offices, with Airtable among the last office tenants.
But unidentified industry insiders told the Chronicle it’s a 10-year leasing deal with two renewal options that could last through 2045.
The deal may be a shot in the arm for Maryland-based owner ASB Real Estate Investments, which last month listed the 145,400-square-foot building at Market and Fourth streets for $50 million, or $344 per square foot.
ASB, a unit of ASB Capital Management, bought the South of Market building in 2016 for $141.5 million, or $973 per square foot.
The deal with Ross comes as the bustling clothier plans to open a second store covering 40,000 square feet at 901 Market Street, to take “pressure” off of its flagship store. The scheduled opening was not disclosed.
The six-story building at Market and Fifth streets, owned by Los Angeles-based Hudson Pacific Properties, was the former home of Nordstrom Rack.
In May, Seattle-based Nordstrom announced that it would not renew its lease at 901 Market and planned to close its more than 300,000-square-foot store at the former Westfield mall across the street.
The Union Square shopping district is dotted with empty storefronts, with the loss of such brands as Nordstrom, Old Navy and the Gap.
Ross Stores, founded in 1982, has 1,836 stores in 43 states, the District of Columbia and Guam, according to its website. It’s also among the few chain department stores with plans to expand in San Francisco.
In a third-quarter earnings call last week, Ross Stores executives said total sales grew to $5.1 billion year over year, from $4.9 billion, and that revenue from its stores increased by 1 percent.
Despite reporting “solid gains” in the first half of the year, CEO Barbara Rentler said that the company was “disappointed with our third-quarter sales results as business slowed.”
“Although our low to moderate-income customers continue to face persistently high costs on necessities, pressuring discretionary spending, we believe we should have better executed some of our merchandising initiatives,” she said, adding that severe weather over the quarter also negatively impacted sales.
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Ross Dress for Less to open second shop on SF’s Market Street
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Ross Stores shrinks headquarters office in Dublin
Early last year, the company closed its Richmond District store at 5200 Geary Boulevard, bringing its San Francisco locations to three, including 2300 16th Street and 1545 Sloat Boulevard. The new SoMa store will bring its presence back up to four locations.
Ross also put 74,000 square feet of its headquarters at 5130 Hacienda Drive up for lease. By shedding offices, Ross joins Chevron and Oracle in shrinking its Tri-Valley footprint.
— Dana Bartholomew