The impending closure of Macy’s offers an opportunity for new uses in the building that could revitalize the Union Square area.

As a real estate and economic development professional who follows brick-and-mortar retail trends, I felt a sense of loss — but not surprise — when news broke of Macy’s impending exit from San Francisco’s Union Square.

The unique features of urban retail that drew crowds during the 2010s — buzzy city streets and sights, for example, or proximity to other retail and amenities like restaurants — were greatly diminished by pandemic-related closures. The retail apocalypse that largely affected suburban malls after the 2008 financial crisis has now clearly hit San Francisco.

Foot traffic downtown has fallen to 32% of pre-pandemic levels, according to data released by the University of Toronto last year. This has led many small stores to close and accelerated a pre-COVID trend toward more compact footprints for large stores in high-density locations. At just 85,000 square feet, the Ikea store that opened on Market Street last year is roughly a third the size of the furniture retailer’s traditional format. Macy’s Union Square complex contains more than 400,000 square feet.

Luxury chains like Chanel and Yves Saint Laurent (located in a building that was part of the Macy’s complex before a previous downsizing) have taken more space in Union Square in recent........

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