TMG Partners, a veteran Bay Area developer, signed on to help reimagine Macy’s 600K SF flagship department store in Union Square, the San Francisco Chronicle reported.
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The store, which remains open to customers, announced a planned closure in February 2024.
Would-be buyers began to emerge in November of that year, including TMG Partners. Retail, a hotel and housing are all potential options for redevelopment.
Michael Covarrubias, who heads up TMG, has extensive experience developing in the Bay Area. He will work with Macy’s to assess the potential for adaptive reuse of the Union Square property, which stretches along an entire block on Geary Street. It had become a symbol of Union Square’s decline.
Union Square’s retail market struggled since the pandemic, with a slew of retail exits, including Old Navy, the Gap and Nordstrom. Saks Fifth Avenue shuttered its flagship location in May. In August, the Jackson Group defaulted on two Union Square properties worth a combined $67.8M.
But the area has since gained momentum and renewed interest. Ian Jacobs, heir of the Reichmann real estate family, acquired two Union Square buildings earlier this year, 111 Ellis St. and 200 Powell St.
The latter is home to the viral Pop Mart store, which opened in September, joining the Nintendo store, which opened in May. Ross Dress for Less doubled its footprint with a second location at 901 Market St. and Bulgari opened a new flagship in the historic 1908 Hastings Building.
In April, Mayor Daniel Lurie announced the “Vacant to Vibrant” initiative meant to revitalize the downtown area, including Union Square. The program supports short-term retail popups that could convert into long-term leases. In March, B. Patisserie moved into a Union Square storefront after a popup run.
Lurie also implemented a tax incentive to spur office-to-residential conversions and launched a permit-streamlining initiative meant to reduce red tape in redevelopment projects.
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