How Can San Francisco Fill Up Empty Offices and Stores?

Once bustling San Francisco neighborhoods such as Union Square and the Financial District have been plagued with high retail and office vacancy rates since the pandemic started five years ago. More than a third of all the office space in San Francisco is now vacant and hybrid schedules mean that even buildings that do have tenants don’t fill up with workers each day. Union Square has also lost its luster as a shopping destination with most of its department stores shuttering. San Francisco’s new mayor, Daniel Lurie, says he has plans to revive downtown. We talk about what it would take to refill and reuse commercial spaces, and bring people back to downtown.

Show Highlights

The pandemic delivered a seismic blow to San Francisco’s downtown commercial real estate market, leaving office towers empty and retail corridors hollowed out. With record-high vacancies, the city faces a defining moment: Will it successfully reinvent its urban core, or will downtown continue its decline? 

The Depth of the Crisis

“By the end of 2024, our vacancy rate did tick down,” says Robert Sammons, Senior Research Director at Cushman & Wakefield. “That’s the first time we saw a decline in our vacancy rate since the pandemic began.”

Office vacancies soared from just 5% before the pandemic—the lowest of any major U.S. city—to a staggering 34%. Retail is suffering too, with major closures like Macy’s signaling deeper struggles for brick-and-mortar businesses. While a slight dip in vacancies offers a glimmer of hope, the scale of the challenge remains daunting.

Signs of Recovery—And What’s Driving Demand

Despite the downturn, leasing activity is picking up, fueled by sectors like AI, law, and nonprofits. Companies are rediscovering the value of in-person collaboration for corporate culture and mentorship. Meanwhile, the city is working to reimagine downtown—not just as a business district, but as a vibrant, multi-use neighborhood.

“There has been a concerted effort by the city, which started under former mayor London Breed, to turn downtown into a kind of a neighborhood. And that includes entertainment zones. That includes a focus on events,” says Laura Waxman of The San Francisco Chronicle. Placemaking initiatives aim to inject life into the area, transforming it into a destination beyond the traditional 9-to-5 workday.

Revitalization Strategies—What Will It Take?

Experts propose a mix of  strategies: converting office towers into housing, fostering mixed-use developments, and enhancing amenities like fitness centers, conference spaces, and retail to attract tenants. Katie Buchanan suggests rethinking downtown as a livable neighborhood rather than just a corporate hub.

Transportation’s Role in Downtown’s Future

Matthew, a caller from Berkeley, argues that downtown’s design—built around car commuters—no longer fits today’s reality. Some push for a more walkable, human-centric model, while others, like Barry from San Francisco, criticize the city’s decision to closeMarket Street to vehicles, claiming it has drained the city’s energy.

Meanwhile, the remote work debate rages on. Some workers embrace hybrid schedules as a way to reconnect with downtown, while others see the shift as irreversible, questioning whether the office era will ever fully return.

Competing Visions—Reinvention or Inevitable Decline?

For some, downtown’s struggles are part of a natural urban cycle. Evan, a caller from San Francisco, argues that forcing a revival with public funds is misguided—only time and affordability will spark organic renewal.

Others see a crossroads: Does San Francisco cling to an outdated model, or does it fundamentally rethink what downtown should be?

“What does downtown San Francisco want to be? Does it want to be a destination for car commuters? Because by definition, that means it will never actually be a vibrant place.” — Matthew, Caller from Berkeley

Boom and Bust 

San Francisco faces a pivotal choice. Some push for a radical transformation—reimagining downtown as a 24/7 neighborhood with housing, culture, and public spaces. Others question whether downtown, as it once existed, is even worth saving.

As Robert Sammons puts it, “San Francisco has always been a boom-and-bust market. It’s ebbed and flowed a lot.”

The question now is whether the city can seize this moment to build a more resilient, dynamic downtown—or if its commercial core will fade into history.

This content was edited by the Forum production team but was generated with the help of AI.