San Francisco Retailers, Landlords Shop Solutions For Ongoing Theft Spree
Retail tenants and landlords are keeping a close eye on the growing string of organized thefts in San Francisco, with many choosing to increase their own private security, close early or shutter locations altogether to avoid impacts to personnel and profits.
“What I’ve seen over the last few weeks is something I’ve never seen before,” Rachel Michelin, president of the California Association of Retailers, told Bisnow.
The problem is not a new one — smash-and-grab schemes have been prevalent throughout the Bay Area for several years — but these schemes have grown in frequency and intensity over the past few months, Michelin said.
Last week, the San Francisco District Attorney’s Office filed felony charges against nine people involved in organized crimes at city businesses, including a Louis Vuitton store where up to 40 people smashed windows and ran off with merchandise. In Walnut Creek, an estimated group of 80 masked people ransacked a Nordstrom department store with crowbars before fleeing in cars waiting outside.
The situation has industry watchers on edge, with some concerned about a dislocation of landlords and residents.
“If they start to feel unsafe ... people will leave the city very quickly if you don’t get a handle on that,” Jefferson Apartment Group CEO Jim Butz said during a Bisnow event in Washington, D.C., this week.
City officials have responded with heightened police presence, which has helped to tamper the impact, according to Michelin, but more crimes are expected throughout the holiday season, which has already posed challenges for retailers struggling to offset foot traffic declines and supply chain issues.
Retail landlords have been increasing private security and boarding up windows, Michelin said, while others were forced to close stores earlier than planned over the holiday weekend. In perhaps the most drastic response to the increased theft, Walgreens announced plans in October to shutter five locations in San Francisco.
“Organized retail crime continues to be a challenge facing retailers across San Francisco,” Phil Caruso, a spokesman for Walgreens, said in an email to The New York Times. “Retail theft across our San Francisco stores has continued to increase in the past few months to five times our chain average.”
Some, including Mayor London Breed, refuted the notion that theft was the sole reason for Walgreens’ closures.
“They are saying that’s the primary reason, but I also think when a place is not generating revenue, and when they’re saturated — SF has a lot of Walgreens locations all over the city — so I do think that there are other factors that come into play,” Breed said in a statement.
It’s unclear whether other retailers or landlords will make leasing decisions based on the increased theft.
“Most landlords are watching the situation carefully. It is too soon to know the impact if any on leasing decisions,” Laura Sagues Barr, a senior vice president in CBRE’s San Francisco office, told Bisnow via email.
Matthew Hargrove, senior vice president of governmental affairs at the California Business Properties Association, echoed this sentiment, noting Walgreens appears to be a rare example for now.
“We’re not hearing a big rush from our members to change how or where they operate,” Hargrove said.
On the policy front, Hargrove cited the pledge made last week by Gov. Gavin Newsom to increase the police presence near major retail sites and propose an increase in the 2022-2023 state budget to combat retail theft as a “positive first step.”
“Years ago, San Francisco was the poster child for retail across the nation, and that has diminished a lot,” Hargrove said. “There is an opportunity to get back to that, but we need to look at new policies, funding of law enforcement and collaboration between retailers and cities to find solutions.”