IKEA Opening New Smaller Format Store in San Francisco

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Re: IKEA Opening New Smaller Format Store in San Francisco

Post by buckguy »

The one they opened in Queens does home delivery rather than having pickup spots---Toronto seems more carbound the the outerboroughs of NYC. The hype about people leaving cities is just that. DC still has a tight condo (and house) market even though offices are below capacity and many are having people in the office part time. Still, the retail is holding on and despite a lot of restaurants closing, there seem to be new ones taking their places.
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Re: IKEA Opening New Smaller Format Store in San Francisco

Post by Alpha8472 »

San Francisco has apartment and condo vacancy rates on paper that make it look like it is more occupied than it really is.

Many rich people have multiple homes. Tech workers have condos and they bought homes in the suburbs to work from home. There are also many rich investors from China who have bought condos and homes in San Francisco. They are trying to make money on these properties. They may even keep them vacant waiting for the market to go back up and sell these properties for a huge profit.

So in reality many condos, houses, and apartments are vacant in San Francisco due to the situation with COVID and working from home. It is the Chinese speculators that keep many properties empty.

The people who lived in those condos and houses previously were the ones who spent a ton of money at IKEA. Now retail in San Francisco is down. Most of those former city dwellers have moved to the suburbs.

IKEA is delaying the opening of the new store on purpose. They know that their sales would be not so great if they opened at this time with so many empty condos and apartments.

Retail in San Francisco is down. The customers are not confident to shop at these stores. Their cars are robbed in broad daylight of any merchandise. Even if your car has nothing visible inside, they will break into your trunk. The criminals know the District Attorney will not prosecute car break-ins or robberies. You can get robbed on the street outside a store and the police will never respond. People wonder why retailers are fleeing San Francisco.
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Re: IKEA Opening New Smaller Format Store in San Francisco

Post by storewanderer »

I have doubts this store will ever open. Or if it will open as a "store." Maybe it will just open as a pick-up location.

If return to office picks up steam I think the store has a shot at reopening. But I think even if return to office picks up steam, it won't mean returning to the office in San Francisco. It will mean returning to the office in some suburb.
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Re: IKEA Opening New Smaller Format Store in San Francisco

Post by buckguy »

Alpha8472 wrote: July 10th, 2022, 1:14 pm San Francisco has apartment and condo vacancy rates on paper that make it look like it is more occupied than it really is.

Many rich people have multiple homes. Tech workers have condos and they bought homes in the suburbs to work from home. There are also many rich investors from China who have bought condos and homes in San Francisco. They are trying to make money on these properties. They may even keep them vacant waiting for the market to go back up and sell these properties for a huge profit.

So in reality many condos, houses, and apartments are vacant in San Francisco due to the situation with COVID and working from home. It is the Chinese speculators that keep many properties empty.

The people who lived in those condos and houses previously were the ones who spent a ton of money at IKEA. Now retail in San Francisco is down. Most of those former city dwellers have moved to the suburbs.

IKEA is delaying the opening of the new store on purpose. They know that their sales would be not so great if they opened at this time with so many empty condos and apartments.

Retail in San Francisco is down. The customers are not confident to shop at these stores. Their cars are robbed in broad daylight of any merchandise. Even if your car has nothing visible inside, they will break into your trunk. The criminals know the District Attorney will not prosecute car break-ins or robberies. You can get robbed on the street outside a store and the police will never respond. People wonder why retailers are fleeing San Francisco.
Urban real estate is doing very well in most places, including those that have struggled. I have a relative who sells residential real estate in Cleveland who has no trouble selling downtown and in nearby gentrified neighborhoods. A friend just bought in Center City Philadelphia and places turnover in a weekend there. Even in SF, the vacancies are concentrated in areas that have had a lot of construction and are mostly places that have been bought but aren't ready for occupancy.

The areas around suburban office parks, which have often even higher vacancy rates than those in cities, still seem to be strong residential markets. The Tysons Corner area outside DC is filled with construction cranes and new buildings are going up as planned near where I work in the Bethesda/Rockville area. It helps that commercial real estate in those areas include a lot of 50-60 year old buildings ripe for tear downs and their redevelopment as something else including mixed use.
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Re: IKEA Opening New Smaller Format Store in San Francisco

Post by lake52 »

Despite all the doom and gloom from some in this thread, the math still works for IKEA. Last time I checked, IKEA’s core market wasn’t furnishing office or retail. As of last year, San Francisco has over 850,000 residents. It also is the fourth densest city in the country (two of which are in New York). Daly City, a very dense city directly adjacent, has over 100,000 people making almost a million people total. Without adding in other adjacent cities, you’re already at a similar size to many markets where IKEA is already present like Memphis (1.3 million), New Haven (500k), or Salt Lake City (1.2 million). Unlike those three markets, the million people within a few miles of this store all live in dense urban settings, many small apartments, otherwise known as IKEA’s key market.

All this location is is a showroom. It’s also a showroom that can’t get more accessible from transit, which believe it or not, many people still utilize in the Bay Area (600k daily riders between MUNI and BART in 2022). All of the transit in SF routes to directly outside this building under Market St. Almost a million people are a BART or MUNI ride away from being able to look at furniture, pick out what they want, and have it delivered.

I should also add that despite being relatively close by, the Emeryville store is not easily accessible to transit. It also isn’t set up with the delivery first format that this store will utilize. For the hundreds of thousands people in SF who don’t have a car, this format will expose them to IKEA which previously wasn’t incredibly accessible. I’ve seen plenty of Uber drivers at the Emeryville IKEA arguing over whether the furniture will fit in their sedan trunk.
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Re: IKEA Opening New Smaller Format Store in San Francisco

Post by storewanderer »

If this store is such a great idea that is going to perform so well, why does the opening keep getting delayed?

Typically when a retailer delays a site like this it means there is a landlord issue but that isn't the case here as they bought the building. So it isn't that either.

It isn't the City's fault. They've bent over backwards to make this store happen, and happen fast.

I will be surprised if it ever opens. Those transit stations adjacent to this site are some of the most dangerous in San Francisco. Tourists are told to avoid the Civoc Center BART station nearest this site. The amount of loitering, car break ins, needles, and feces in the streets surrounding this store are simply not a good place to have a retail store.

BART traffic is far off from pre pandemic, below forecasts, and ridership to downtown San Francisco being down so much is a big reason for their performance being so poor. The ridership reports are all public record on BART website.

More on the troubles with mass transit in San Francisco. Rider levels are down 70%+ from pre pandemic. Services have been cut and reliability is an issue due to staffing shortages.
https://www.kqed.org/news/11904449/tran ... ver-return

MUNI is doing a little better only down about 33% from pre pandemic. But that's still a devastating hit.

Not a great idea to open a new retail store in an area that is losing population and has mass transit systems that do not work nearly as effectively or efficiently as they did a few years ago.
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Re: IKEA Opening New Smaller Format Store in San Francisco

Post by lake52 »

These posts make it sound like San Francisco is some desolate ghost town. The Financial District is struggling because suburban workers are working from home. Almost every other neighborhood in the city is bustling and lively, just how they were Pre-COVID.

Transit ridership is down because suburban workers are not coming downtown. It is in the 30% range of workers who have returned, and although that number is steadily rising and some big leases have been signed recently (Google just signed a brand new 400k sq ft lease last week for instance, I also am privately aware of multiple 200k+ sq ft leases under negotiation), it is expected to maximum reach about 60% of pre-pandemic worker population.

However, the million people I previously mentioned are the ones riding transit. It’s why MUNI (within city limits) is not hurting a whole lot whereas BART (commuter subway) is struggling to recover. Additionally, the Powell Station is the 2nd busiest in the entire system.

IKEA is not planning to pull outside a 5 mile radius from this store, it’s why they have Palo Alto and Emeryville stores for the suburban folks. Even if downtown SF office workers fully recovered, no one is lugging home a Hemnes dresser on the BART Blue Line to Pleasanton. This store is being built exclusively for those who live in the city and although there will likely be some pickup system, a majority of the business will be through deliveries to the dense bustling neighborhoods within a 5 mile radius. Same concept they’ve done in similarly dense cities.

The Mid-Market location not only has available retail but it is a very central to the entire city. There’s a reason Amazon is trying to build an urban distribution center a few blocks south. If San Francisco was on the edge of death, you certainly wouldn’t see this long term investment from Amazon and IKEA amongst many other conglomerates. This building also comes with a built in parking garage which will surely be valuable for the pickup operation mentioned above. Not to mention the apartment development occurring in this area. About 2500 units have opened in this area this year with another 1000 or so under construction.

IKEA is not pulling out of this store. They announced it during the most uncertain part of COVID when cases and lockdowns were at their worst. Frankly when San Francisco was at its worst, especially this part of the city with no foot traffic. The time to pull out would have been when before closing on the property, before announcing your intents, before hiring an architect and a contractor, and before starting construction (started back in February on the interior). As they’ve progressed with the store, they finalized an exterior design which is the permit they applied for. And as this is a big ticket new store, the news jumped on it.
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Re: IKEA Opening New Smaller Format Store in San Francisco

Post by Alpha8472 »

I used to take the Bart train to work every workday until 2020. After the service cuts of 2020, it was so unreliable that I had to switch to driving a car. The San Francisco transit stations are the most dangerous and drug addict infested train stations that I have ever seen. I have even been to New York and San Francisco was far worse.

I have seen used needles under train seats and on the seats. It is just luck that I have never been poked. I have been attacked by a mob of juvenile delinquents and witnessed 3 muggings. I have walked the streets from the BART train stations in downtown San Francisco and have seen homeless people poop in public in front of dozens of people.

I would never go to that neighborhood just for IKEA. I would drive the extra distance to the IKEA in nearby Emeryville which does not have homeless drug addicts. They keep the streets clean in Emeryville. I don't have to worry about my car getting broken into in Emeryville. They have security patrols. The street traffic in San Francisco is the worst. Just driving a short distance could trap you in a traffic jam. Literally, I have seen deranged homeless people stand in the middle of the road blocking traffic. Emeryville is easy to drive to and easy to park.

If I still took the train, there is a convenient free shuttle from the train station to IKEA in Emeryvile. I much prefer the safer and more pleasant Bay Street shopping center in Emeryville.

I will never go to the IKEA in San Francisco. It is not worth risking your life.
Last edited by Alpha8472 on July 11th, 2022, 11:58 pm, edited 1 time in total.
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Re: IKEA Opening New Smaller Format Store in San Francisco

Post by storewanderer »

lake52 wrote: July 11th, 2022, 10:09 pm These posts make it sound like San Francisco is some desolate ghost town. The Financial District is struggling because suburban workers are working from home. Almost every other neighborhood in the city is bustling and lively, just how they were Pre-COVID.

Transit ridership is down because suburban workers are not coming downtown. It is in the 30% range of workers who have returned, and although that number is steadily rising and some big leases have been signed recently (Google just signed a brand new 400k sq ft lease last week for instance, I also am privately aware of multiple 200k+ sq ft leases under negotiation), it is expected to maximum reach about 60% of pre-pandemic worker population.

However, the million people I previously mentioned are the ones riding transit. It’s why MUNI (within city limits) is not hurting a whole lot whereas BART (commuter subway) is struggling to recover. Additionally, the Powell Station is the 2nd busiest in the entire system.

IKEA is not planning to pull outside a 5 mile radius from this store, it’s why they have Palo Alto and Emeryville stores for the suburban folks. Even if downtown SF office workers fully recovered, no one is lugging home a Hemnes dresser on the BART Blue Line to Pleasanton. This store is being built exclusively for those who live in the city and although there will likely be some pickup system, a majority of the business will be through deliveries to the dense bustling neighborhoods within a 5 mile radius. Same concept they’ve done in similarly dense cities.

MUNI is down 33% from pre-pandemic at the present time... losing 33% of riders is a pretty serious blow. Either the people who live in San Francisco don't go out anymore or 33% of the people basically skipped town...

The city is hardly bustling outside the Financial District. Union Square is in terrible shape. Chinatown and North Beach have seen so many restaurants close, some very long term ones at that. I guess there are some areas on the edges like near Stonestown that are doing better, yes. But in much of the city, numerous store closures by various retailers, hundreds of closed restaurants throughout the city, major brand hotels that have never reopened since closing for COVID, convention business is off something like 80%........ Also if you look at the area around where Ikea is opening you will see numerous surrounding businesses have gone out of business on the surrounding blocks, including multiple restaurants, a "We Work" space, a CVS, bars...

Retailers build stores with the hopes that the stores will grow. Pre-pandemic, San Francisco was on a growth trajectory. Companies were adding office workers, more and more people were moving into the city, and it was clearly a great place for a retailer like Ikea to land. The situation today is much different. Now, perhaps you will see Ikea open when the city is at truly "rock bottom" and it will start to recover from there in terms of more people who are living/working in the city again, but I question how many decades it will take to get it up to where it would have been today, had the pandemic and the whole work at home thing never happened... so maybe that is why they are stalling on this. They want to buy time to see what exactly happens with this recovery.

Also not sure how many delivery drivers will want to pick anything up at Ikea in San Francisco when the folks are going up and down blocks breaking windows of vehicles just for the heck of it, and now there are groups deflating SUV tires "for the environment" in major cities. I read there will be a 165 car parking garage, perhaps they can let the pick up drivers go into the garage. That will need to be a very secure garage. Restricted access, strong floor to ceiling garage doors for secure entry like a castle or like Minneapolis though it is for weather reasons and heated garages there (not the little gates you can just walk under or drive through that are at most garages in San Francisco), etc.

I would argue a location closer to Stonestown would be better.
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Re: IKEA Opening New Smaller Format Store in San Francisco

Post by storewanderer »

Alpha8472 wrote: July 11th, 2022, 10:13 pm I used to take the Bart train to work every workday until 2020. After the service cuts of 2020, it was so unreliable that I had to switch to driving a car. The San Francisco transit stations are the most dangerous and drug addict infested train stations that I have ever seen. I have even been to New York and San Francisco was far worse.

I have seen used needles under train seats and on the seats. It is just luck that I have never been poked. I have been attacked by a mob of juvenile delinquents and witnessed 3 muggings. I have walked the streets from the BART train stations in downtown San Francisco and have seen homeless people poop in public in front of dozens of people.

I would never go to that neighborhood just for IKEA. I would drive the extra distance to the IKEA in nearby Emeryville which does not have homeless drug addicts. They keep the streets clean in Emeryville. I don't have to worry about my car getting broken into in Emeryville. They have security patrols. The street traffic in San Francisco is the worst. Just driving a short distance could trap you in a traffic jam. Literally, I have seen deranged homeless people stand in the middle of road blocking traffic. Emeryville is easy to drive to and easy to park.

If I still took the train, there is a convenient free shuttle from the train station to IKEA in Emeryvile. I much prefer the safer and more pleasant Bay Street shopping center in Emeryville.

I will never go to the IKEA in San Francisco. It is not worth risking your life.
It is unfortunate what has happened. Even 4-5 years ago things like what you describe above were not happening. I have talked to many people who have traveled to San Francisco recently mostly for business reasons and the stories they told me have been quite horrifying. I think the core problem is Union Square. The City has got to get that area cleaned up. Almost every tourist or business person who travels into the city sees it. It is an absolute disgrace of homeless, feces on the roads, needles, constant police activity, vandalism, litter, bad odors. You do not want to go shopping there anymore. You want to do whatever it is you are there for and GET OUT. Before dark.

The last thing you want to do is go linger at an Ikea. Ikea is making a mistake with this location, if they ever actually open it. We see how Target is doing in this neighborhood- closing at 6 PM- still. That is all anyone needs to know to understand what the situation here is.

It isn't all doom and gloom. Trader Joe's has done quite well with their newish store down near Union Square. Somehow that store has been somewhat insulated from issues despite its location. Sure they have theft, but the store is in good order.
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