Quaint Maiden Lane near Union Square was a hot spot in July for Colton Hanley, a senior vice president at the real-estate services firm Avison Young, who helped three tech companies sign office deals in three buildings along the narrow, historic road.
“San Francisco is back, and so is Maiden Lane,” Hanley exulted on LinkedIn.
The succession of leases, totaling 15,000 square feet, apparently bolstered Hanley’s belief that The City — and areas close to Union Square in particular — are on the upswing.
The deals added to a series of developments, including new retail openings, that have fueled a growing sense of optimism about The City’s historic shopping and hospitality neighborhood.
One of the newest arrivals promises to be a toy store in a highly symbolic spot just at the end of Maiden Lane that was formerly occupied by Jeffrey’s Toys, the store at 45 Kearny St. that served as an inspiration for the Pixar movie “Toy Story” before closing in 2024 after about 85 years in business.
The new tenant is San Francisco-based Just For Fun, which is planning to open its fourth toy and variety outlet in the space in September. Owner Michelle O’Connor said the location was a natural fit and she wants to contribute to the resurgence of downtown that she thinks is gathering steam.
“We can see it coming back,” O’Connor said. “Things are getting busier, and we can also see that people are believing in it again.”
Jeffrey’s Toys at 45 Kearny St. in San Francisco, seen on Monday, Jan. 29, 2024, closed Feb. 10, 2024. The storefront now has a new tenant.
Jeremy Blatteis of Blatteis Realty Co., which brokered the deal, said he thought it was “cool” that the store would once again sell toys.
“It used to be a toy store, and now it’s going to be a toy store again,” Blatteis said. “We’re back!”
Like other real-estate professionals working around Union Square, Blatteis credited Mayor Daniel Lurie with improving the area’s prospects by leading an improvement in street conditions.
Among other measures, in February, newly elected Lurie announced the creation of a “hospitality zone” police task force to improve safety downtown from the convention halls of Moscone Center to the shopping hub around Union Square.
“Daniel Lurie is doing a good job. He’s really cleaning up the streets,” Blatteis said. “We’re really glad he’s mayor, and Union Square’s coming back under his watch.”
Just around the corner at 58 Geary St. from the prospective toy store, the men’s-clothing retailer John Varvatos on Aug. 2 celebrated the opening of its new store, a venue that replaced its former location in the troubled San Francisco Centre mall at Fifth and Market streets.
The space is in a structure built in 1907, where Hanley has also signed a small tech startup called Kaizen to take 2,500 square feet. Kaizen, which uses the address of 149 Maiden Lane on the other side of the building, is preparing to move in later in August.
Ken Acquah, a co-founder of the fledgling company, which uses artificial-intelligence technology to automate routine business tasks such as filling out forms, said he appreciated the character of what will be his company’s first office, as compared to other “cookie-cutter” offices in large commercial buildings in the downtown area.
“It feels very unique,” he said.
CEO Ken Acquah, left, and Chief Technology Officer Michael Silver of AI startup Kaizen are seen inside their new office at 149 Maiden Lane.
Craig Lee/The Examiner
Featuring copious exposed brick and a conference room with large windows looking out onto the Neiman Marcus department store and a large, old “Britex Fabrics” sign, the space was already fitted out with a kitchen and desks.
“This office stood out for its aesthetics,” said Acquah’s co-founder, Michael Silver.
The four-person company, which has raised $4 million in venture capital, previously operated out of Silver’s apartment. Silver, who said he met Acquah when they were studying at Massachusetts Institute of Technology, said the neighborhood’s access to transit and its proximity to other startups were also selling points.
Hanley said that demand for smaller, so-called “creative” spaces of 10,000 square feet or less has been relatively strong in the downtown area. One result has been that prospective tenants have increasingly widened their searches to include neighborhoods farther from the central business district, he said.
Creative spaces do not resemble typical professional-services offices — they can feature exposed ceilings, exposed brick, polished concrete and wood flooring, Hanley said. An added benefit in the Union Square area for tenants in recently signed deals has been lower prices and more flexible lease terms, he said.
Despite its attractions, the Union Square district has been marked in recent years by a large number of retail vacancies, though it has maintained a relatively strong roster of luxury brands.
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Numerous retailers have departed amid low post-COVID-19 foot traffic tied to varied factors, including a depressed convention-and-tourism market, fewer people commuting to work downtown, increased online shopping and widespread news coverage of crime incidents and street disorder.
Shoppers at Union Square in San Francisco, on May 29, 2023.
Alex Sagues, a senior vice president at CBRE, agreed via email with other real-estate brokers that there is “strong positive momentum” in Union Square and a recovery is underway, but he also said “there is still a lot of vacant space to be absorbed.”
According to a recent report from Cushman & Wakefield, the overall retail-vacancy rate in the Union Square/Post Street area in the second quarter was 23%, up from 21.7% a year earlier. Those numbers are far above the citywide vacancy rate of 6.9%, which was down from 7.1% a year earlier.
The company reported that the direct vacancy rate — space available for lease through landlords — was 20.9% in the second quarter. For the fourth quarter of 2019, it previously said the number was 6.4%.
Despite the numbers, leasing interest remained strong. Both national and international retailers continued to actively tour spaces, and rents for premier ground-floor retail spaces in Union Square were recorded at $500 per square foot per year — up 1% year over year — while rents on Post Street climbed to $325 per square foot for an 8.3% annual gain, the report said.
The report said the May closure of Saks Fifth Avenue at 384 Post St. is expected to push the vacancy rate higher once the space is officially returned to the market.
Kazuko Morgan, a Cushman & Wakefield executive vice chairman based in San Francisco, said the statistics don't tell the whole story. She said she believes the success of recently opened stores near Union Square shows that “a lot of good things are happening.”
“For us, the proof is in stores getting open and deals getting signed,” Morgan said.
Two recent additions to the square that Morgan cited are the Nintendo of America store at 331 Powell St., which opened in May, and Shoe Palace at 301 Geary St., which had its grand opening in March. The stores occupy opposite corners at the intersection of Geary and Powell streets, which marks one corner of Union Square.
Lodged at the base of the Westin St. Francis Hotel, the Nintendo San Francisco store has regularly drawn lines of customers willing to brave long waits in order to gain entry.
“You walk around on the streets and Union Square on the weekends, you can see people carrying Nintendo bags, you see people carrying Shoe Palace bags,” said Laci Jackson Ravina, a vice president of retail leasing at Colliers.
People wait in line for the new Nintendo Switch 2 video game consoles at Union Square, Thursday, June 5, 2025, in San Francisco.
Godofredo A. Vásquez/Associated Press
The activity at Geary and Powell streets has added life to one end of a three-block stretch that has been particularly hard hit by retailer departures since the pandemic.
Cushman & Wakefield cited another highly anticipated development on the horizon for that street — the expected arrival of a Pop Mart outlet featuring the Chinese company’s wildly popular character-based toys, which will occupy a long-vacant building at the corner of Powell and O’Farrell streets.
The two-story green art-deco structure at 200 Powell St. sold in April for $7.4 million to a company connected to Ian Jacobs, a scion of a Toronto-based real-estate “dynasty,” according to a February 2024 Wall Street Journal article about Jacobs’ plan for scooping up San Francisco properties at relative bargain prices.
Other stores that have launched near Union Square recently include the jeweler Bulgari’s new location at 206 Grant Ave., which opened in April at an intersection filled with luxury retailers. The company relocated from larger quarters directly on Union Square at the corner of Geary and Stockton streets, a building that sold in late June in a trustee’s sale after a foreclosure.
In July, Mexico City-style eatery Al Pastor Papi celebrated its grand opening at 232 O’Farrell St. a short distance west of Powell Street. The restaurant is one of several businesses opened in empty storefronts in the Union Square area through the civically and privately funded Vacant to Vibrant program, which provides grants, technical assistance and other resources for both small-businesses and property owners.
Other new stores emerging from the program include local apparel brand Nooworks at 236 Powell St. and the fashion boutique Taylor Jay at 220 O’Farrell St.
Such developments are in marked contrast to the scene just across Market Street at the giant San Francisco Centre mall, where many of the retailers have left.
Fashion retailer Zara, for one, shut down its two-level store in the mall last month. The company in April earned plaudits from Lurie after it announced that plans for a new store of more than 40,000 square feet at 400 Post St., a historic four-story building that prominently occupies one corner of Union Square.
Set to open in 2026, the new store will be a relocation and expansion of another Zara store at Union Square at 250 Post St.,which the company said it will close early next year when its lease expires.
Real-estate brokers pointed to the new Ross Dress for Less store that opened at 901 Market St. last month across 5th Street from the San Francisco Centre as a bright spot.
A number of tenants still in the mall, meanwhile, are looking for space “on the street,” including closer to Union Square, Ravina said.
