Pop-Up Stores Putting Down Roots in San Francisco

Big things come in small packages.

That’s what San Francisco’s city leaders were hoping last summer when they started the Vacant to Vibrant program, a city-funded effort that matches small pop-up businesses with empty downtown retail space.

Now, as the city unveils the participants and locations for the second round of Vacant to Vibrant—which gives small businesses grants and technical support to set up pop-up shops at downtown locations for three months—the results from the first round are generating green shoots of hope for a retail recovery.

Four of the seven retail tenants that signed new leases this month at one of San Francisco’s premier commercial addresses—Boston Properties’ 3.3M SF Embarcadero Center—participated in the first round of Vacant to Vibrant, which matched 17 business “activators” that popped up with nine Financial District storefronts.

The four Vacant to Vibrant grads included Devil’s Teeth Baking, Rosalind Bakery, vegan donut shop Whack Donuts and Teranga, a Senegalese-inspired restaurant, the San Francisco Business Times reported.

The three other retail tenants who converted temporary activations to long-term leases—a wine bar, a plant store and a Thai restaurant—were participants in Boston Properties’ internal pop-up program. The seven new leases at the Embarcadero Center encompass a total of about 7,700 SF.

According to Mayor London Breed’s office, seven of the 17 activators in the first round of Vibrant to Vacant have extended their leases beyond the three months supported by the program.

The second cohort of Vibrant to Vacant participants have been announced by the mayor’s office, including Aurora Centro, a deli that will operate out of retail space facing Salesforce Park on the fifth floor of Salesforce Tower; Hungry Crumbs, a cookie bakery at 215 Fremont Street; and 7×7 Social Club, a publication at 524 Washington Street.

The program’s second cohort includes five locations in San Francisco’s East Cut neighborhood, two in the Financial District and one in Yerba Buena. SF New Deal, a small business-focused nonprofit, operates Vacant to Vibrant in tandem with the city.

The mayor’s office is working to extend the program to Union Square. Worsening conditions in Union Square and surrounding downtown areas drove San Francisco’s retail vacancy rate to a new record high in the first quarter.

The continuing exodus of stores drove vacancies to 20.6% in Union Square in Q1, a new peak that is 510 bps higher than the rate a year ago. Overall, the retail vacancy rate in San Francisco also hit a new record of 7.9% in the first quarter, a 120 bps increase from the previous quarter, according to a market report from Cushman & Wakefield.