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Nordstrom Rack announces Union Square return three years after closing downtown stores

Nordstrom Rack announces Union Square return three years after closing downtown stores

Money Moves San Francisco, CA local

Nordstrom Rack's Union Square return arrives as San Francisco reworks its old Market Street store into housing

Yesterday: SFMade opens permanent Union Square store

Overview

Updated 13 hours ago

Nordstrom will open a 51,500-square-foot Nordstrom Rack at 2 Stockton St. in fall 2027, returning to Union Square three years after closing its downtown San Francisco stores. The building is owned by Invesco Real Estate. Other retailers are moving the same way: Uniqlo reopened on Market Street on Oct. 9, and SFMade opened a shop for 105 local makers on Geary Street on Nov. 10.

San Francisco approved converting the former Rack at 901 Market St. into 136 apartments above ground-floor retail. Union Square retail vacancy was 19.9% in a Nov. 3 report, far above the 6.4% rate before the pandemic. Construction on the Powell Street cable car turnaround is expected to start soon and last about a year.

Why it matters

A Union Square rebound restores the foot traffic and sales tax base that anchor San Francisco's downtown economy.

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Key Indicators

2
Downtown SF stores closed in 2023
Nordstrom exited its San Francisco Centre flagship and Market Street Rack.
1
Downtown SF store now returning
Nordstrom Rack confirmed it will open at 2 Stockton St. in fall 2027.
20
New Rack stores planned for 2023
Nordstrom expanded its discount chain even as it left downtown San Francisco.
19.9%
Union Square retail vacancy
Union Square retail vacancy in a Nov. 3, 2026 report; an October report put it slightly above 15%. Both are far above the 6.4% pre-pandemic rate.
136
Apartments planned at former Rack site
San Francisco approved converting 901 Market St. into 136 apartments above ground-floor retail.

Voices

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People Involved

JN
Jamie Nordstrom
Chief stores officer, Nordstrom (at the time of the 2023 exit)
Led store operations through the downtown closures and Rack expansion
 Erik Nordstrom
Erik Nordstrom
Chief executive officer, Nordstrom
Announced the Union Square Rack return in October 2026
 Daniel Lurie
Daniel Lurie
Mayor of San Francisco
Said Nordstrom Rack's return shows growing confidence in the city, and backed the new SFMade storefront
JS
Joyce Shulman
Chief executive, SFMade
Opened SFMade's first permanent storefront in Union Square on Nov. 10, 2026

Organizations Involved

Nordstrom, Inc.
Nordstrom, Inc.
Department store retailer
Announced Nordstrom Rack's Union Square return (October 2026)

Seattle-based department store chain that ran two downtown San Francisco stores for about 35 years before exiting in 2023.
Nordstrom Rack
Nordstrom Rack
Off-price retail brand
Confirmed a 51,500-square-foot store at 2 Stockton St., opening fall 2027

Nordstrom's discount chain selling reduced-price brand-name goods.
Union Square Alliance
Union Square Alliance
Business improvement district
Monitors district retail; declined to comment on the 2023 closure

Nonprofit managing San Francisco's Union Square retail and hotel district.
SFMade
SFMade
Nonprofit manufacturing advocate
Opened its first permanent storefront at 373 Geary St. on Nov. 10, 2026

San Francisco nonprofit that helps local manufacturers start, grow and scale.

Timeline

May 2023 November 2026

8 events Latest: Yesterday
Tap a bar to jump to that date

  1. SFMade opens permanent Union Square store

    Latest Opening

    SFMade opened a 1,049-square-foot shop at 373 Geary St. selling goods from 105 San Francisco makers, its first permanent storefront after years of holiday pop-ups. A two-year $500,000 grant from JPMorgan Chase's philanthropic arm paid for it.

  2. Nordstrom Rack return announced

    Announcement

    Nordstrom said the Rack discount store will open at 2 Stockton St. in fall 2027, its return to downtown after closing both stores in 2023.

  3. Uniqlo reopens on Market Street

    Opening

    Uniqlo reopened a Market Street store, five years after leaving its Powell Street location near Union Square.

  4. Former Market Street Rack approved for housing conversion

    Approval

    San Francisco planners approved converting the former Nordstrom Rack at 901 Market St. into more than 100 homes above ground-floor retail. The approval came less than four months after the application and is valid for three years.

  5. Nordstrom scouts Union Square sites

    Report

    San Francisco Business Journal reported Nordstrom was eyeing the former Saks Fifth Avenue building off Union Square.

  6. San Francisco Centre location closes

    Closure

    The flagship Nordstrom at the Westfield mall closed at the end of August.

  7. Market Street Rack closes

    Closure

    The Nordstrom Rack on Market Street shut its doors.

  8. Nordstrom announces downtown exit

    Announcement

    Nordstrom said it would not renew leases for its San Francisco Centre flagship or Market Street Rack store.

Scenarios

1

Nordstrom Rack opens at 2 Stockton St. on schedule in fall 2027

Likely Resolves by End of 2027

Discussed by: San Francisco Standard (Oct. 15, 2026)

Nordstrom opens the Rack at 2 Stockton St. as announced, in fall 2027. The opening adds to the string of returns that brokers say is drawing other retailers back to Union Square.

2

Union Square Rack return delayed or cancelled

Unlikely Resolves by Q2 2028

Discussed by: Skeptical Retail Watchers posters ("If these replacement stores even happen")

A market downturn, permitting delay, or renewed downtown safety concerns pushes back or kills the project. The Rack's return joins a string of announced-but-unbuilt Union Square openings.

3

Nordstrom expands beyond the Rack, full-line store returns

Possible Resolves by Jan 31, 2029

Discussed by: Retail Watchers speculation, San Francisco Business Journal reporting

Buoyed by the Rack's success, Nordstrom returns with a larger-format store, possibly in the former Saks space or the old San Francisco Centre. This would be the strongest signal that Union Square has recovered its status as a shopping destination.

4

Bloomingdale's follows Nordstrom back to Union Square

Possible Resolves by End of 2027

Discussed by: SF Business Journal via SFist (April 2026)

April 2026 real estate reports said Bloomingdale's was also hunting for non-mall space near Union Square. If it signs, the district adds a second big department-store return within a year of the Rack announcement.

5

Powell Street construction dents Union Square holiday foot traffic

Possible Resolves by Jan 15, 2027

Discussed by: San Francisco Standard (Nov. 10, 2026)

The Powell Street Project is set to tear up sidewalks near the cable car turnaround for about a year and install a new light display. The Standard reported that construction isn't good for business, and the work overlaps the 2026 and 2027 holiday shopping seasons.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

June 2023

Westfield hands San Francisco Centre back to lenders (2023)

Two months after Nordstrom announced its exit, Westfield returned the San Francisco Centre mall to its lender, citing Nordstrom's departure and deteriorating conditions. The mall lost both its anchor tenant and its operator.

Then

The mall went into receivership, becoming the symbol of downtown's collapse.

Now

The property awaits redevelopment plans as the district's retail landscape reshuffles.

Why this matters now

The same anchor's return next door to that mall now signals the district's recovery rather than its decline.

1994-1998

Times Square turnaround (mid-1990s)

New York's Times Square, a district marked by vacancy and crime, lured corporate anchors like Disney and major retailers through tax incentives and a public-private cleanup. Disney's renovation of the New Amsterdam Theatre drew other brands in.

Then

Tourist spending and retail rents climbed sharply within a few years.

Now

Times Square became a global retail destination.

Why this matters now

Shows a city center known for decline can reverse course when officials and businesses coordinate; Union Square is attempting a similar recovery.

December 2023-early 2024

Saks Fifth Avenue leaves Union Square (2024)

Saks announced it would close its Union Square flagship, a building real estate sources later said Nordstrom might want. The luxury chain's exit widened the district's vacancy problem.

Then

Another flagship vacancy darkened Union Square.

Now

The building became a potential asset for Nordstrom after the 2024 merger.

Why this matters now

The Rack is going instead into the Invesco-owned tower at 2 Stockton St. The former Saks building remains a possible site for a larger Nordstrom store, per an April 2026 report.

Sources

(10)
+4
San Francisco Standard ABC7 San Francisco Retail Watchers forum PRNewswire via ADVFN San Francisco YIMBY We Are San Francisco KTVU FOX 2 ABC7 San Francisco San Francisco Standard San Francisco Standard