Written By Mauricio Segura // Photo: Golden Bay Times Graphics Dept.
Downtown San Francisco’s iconic shopping scene just got a little less uncertain. After a year of tension and speculation, Macy’s has announced it will not immediately shutter its flagship store at 170 O’Farrell Street in Union Square, but instead is teaming up with real estate powerhouse TMG Partners to chart the future of the massive near block-sized building.
The move comes after Macy’s revealed in February 2024 that it planned to close the Union Square store as part of a sweep of 150 underperforming locations nationwide. At the time, the announcement raised eyebrows and concern among downtown businesses because Macy’s isn’t just any retailer here, it’s been a cornerstone of the neighborhood for decades.
Fast forward to November 2025 and the story has shifted. Rather than closing the doors immediately, Macy’s and TMG are entering what they call a “strategic assessment” phase of the enormous property, specifically the 600,000-plus square foot building that fronts Union Square between Powell, Stockton, Geary, and O’Farrell streets.
So what’s actually happening? Macy’s is staying open for the foreseeable future. The Famous holiday window displays complete with adorable puppies and kittens, tree lighting, and everything else that the store brings to Union Square aren’t vanishing overnight. Meanwhile, TMG will help explore options: housing, offices, mixed-use space, perhaps a smaller footprint for Macy’s, perhaps something entirely different. CEO Michael Covarrubias of TMG said “housing is important for downtown,” signaling one of the possible directions.
From a larger lens, this makes sense. Union Square has taken a beating since the pandemic. Vacancies rose, foot traffic dropped, and lots of the big box flagship stores looked vulnerable. The area needed something to signal that it still mattered. Macy’s staying while planning ahead gives that signal.
Yet it’s not all smooth sailing. Converting or reimagining a massive department store footprint is expensive and complex. Zoning, design, cost, and market demand all come into play. Macy’s may own the building, but selling it, redeveloping it, or shrinking its retail presence is no small feat. In fact, the reason Macy’s didn’t sell earlier is partly because no one wanted to buy it off the rack, as one article put it.
What this means for shoppers, locals, employees, and downtown at large is that they’ve got a little breathing room. Macy’s won’t vanish next week. But keep your eyes open; eventually, the store could look different, smaller retail footprint, maybe replaced partly by new housing or offices. The neighborhood may shift from big department store mega anchor to a mixed-use experience hub.
Here’s a little scenario: you stroll into Macy’s in December for their holiday windows. Meanwhile above or beside the store, some apartment units are being built or new office tenants are moving in. Instead of Macy’s alone dominating the block, you get a blend of living, shopping, and working life in one place. That’s the kind of future both Macy’s and TMG seem to be seeking.
This is a reminder that the old model, giant department stores dominating downtown retail, no longer guarantees success on its own. Retailers must evolve. Buildings must evolve. The city and the district around Union Square are adapting, whether they like it or not. Macy’s decision to stay around for now while figuring out what comes next is a practical, forward-looking move.
In sum, Macy’s isn’t gone, but it’s not standing still either. At Union Square, the clock is ticking toward something new, but for now, the doors are open, the mannequins remain, and the holiday lights will still sparkle. Downtown wants to stay alive, and this gives it a fighting chance.
