Nordstrom is coming back to downtown San Francisco. The retailer announced it will open a 51,500-square-foot Nordstrom Rack store at 2 Stockton Street in fall 2027, taking over a prominent four-story building at the corner of Market and Stockton streets that has sat largely dormant for years.
The building is owned and managed by Invesco Real Estate, according to a Nordstrom announcement distributed through PR Newswire. Mayor Daniel Lurie
celebrated the news on social media, writing that “three years ago, companies were leaving San Francisco,” but that “today, they want to be here,” framing Nordstrom Rack's decision as another sign of growing confidence in the city.
The site has a long and winding retail history. According to the San Francisco Business Times, 2 Stockton Street previously housed a Forever 21 flagship that closed in 2019, followed by a temporary pop-up from candy retailer It'Sugar, and before that served as home to the Roos Bros. department store and Virgin Megastore.
A Renovation Comes With the New Tenant
Nordstrom Rack's arrival isn't happening in a vacant shell. Public records and local reporting indicate the building is slated for a $60 million renovation that includes a permit for a three-story vertical office addition and a full replacement of its Market and Stockton street facades, per SFist.
The project pairs a major renovation with a new retail tenant in Union Square. Nordstrom's return itself reflects a strategic shift: rather than coming back as a full-scale department store anchor inside a traditional mall, the company is opting for a smaller, value-oriented footprint focused on off-price retail.
Why Nordstrom Left Downtown in the First Place
Nordstrom's history in San Francisco took a sharp turn in the summer of 2023, when the company closed both its 312,000-square-foot flagship store inside the Westfield San Francisco Centre and its nearby Nordstrom Rack location at 901 Market Street, citing declining foot traffic and changing downtown dynamics, according to SFGATE. That exit contributed significantly to Westfield eventually surrendering the San Francisco Centre mall to its lenders, a saga Hoodline detailed in its report on the mall's original decision to abandon downtown.
The former Nordstrom Rack space at 901 Market Street won't return to retail use. Mayor Lurie announced in August that the building is being repurposed into 136 residential apartments as part of his administration's broader strategy for downtown revitalization, SFGATE reports.
A Growing Cluster of Returning Retailers
Nordstrom Rack isn't arriving alone. Directly across the intersection at 801 Market Street, Japanese retailer Uniqlo opened a 20,000-square-foot flagship in the former Old Navy space earlier in October, five years after leaving its previous Powell Street location — a move Hoodline previously reported was touted by city officials as an early signal of renewed retail confidence downtown.
Fast-fashion retailer Zara is also preparing to relocate from 250 Post Street into a larger four-story, 40,000-square-foot flagship at 400 Post Street in 2026. That move joins other recent arrivals and expansions around Union Square, including Nintendo, Pop Mart, Kith, and luxury jewelers Bulgari and Patek Philippe, the San Francisco Business Times reports.
Vacancy and Public Safety Downtown
The retail resurgence shows up in the numbers. Hoodline reported that Union Square's retail vacancy was about 15%, down from a 22% peak in 2025.
Mayor Lurie said the city is making streets safer and cleaner, bringing people back downtown, cutting red tape, and creating conditions for businesses to succeed.
An Off-Price Retail Hub Takes Shape
When Nordstrom Rack opens at 2 Stockton Street, it will anchor an off-price retail cluster at Market and Stockton streets, directly across from Ross Dress for Less at 799 Market Street.
Nordstrom said it is choosing to invest in San Francisco again, and Lurie said he looks forward to welcoming Nordstrom Rack as the city builds on its momentum. The former 901 Market Street Rack becoming housing, paired with new retail commitments nearby, points to a downtown core evolving into a mixed-use district rather than simply rebuilding its pre-pandemic retail footprint.
