San Francisco’s very first IKEA is on schedule to open August 23 on Market Street, which is exciting in itself. But in a city that was rattled to the core by the pandemic, the opening of this 87,000-square-foot Swedish home goods giant is huge. The media is calling it “different from any IKEA store seen before” and asking whether it will single-handedly “fix San Francisco’s downtown woes.” Dramatic, to be sure, but let’s dive into the sentiment behind that question.

What Makes This IKEA Different?

First things first: at 87,000 square feet, this IKEA is roughly one third of its usual size and will anchor a mall called Livat, which is Swedish for lively happening or bustling gathering. The mall will include other retail, as well as dining, co-working and entertainment options. A New York-based co-working chain called Industrious has confirmed its plan to occupy 45,600 square feet on the fifth floor of Livat. 

IKEA is also thinking strategically. In addition to 165 underground parking spaces, there is nearby public transit. But because people are unlikely to haul huge boxes of unassembled furniture home on MUNI, the company is offering scheduled deliveries for $39 to those who join its free family members club. Not the DIY type? IKEA is planning to hire gig workers to handle assembly (the company purchased TaskRabbit in 2017).

The Halo Effect

At this point, most experts are excited about what this high-profile new store will do to halt or even reverse the decline in downtown San Francisco. The general consensus is that it won’t do it all on its own, but it could have what’s described as a halo effect, which lures other tenants in to create a hip, desirable part of town. Of course, that kind of thing takes time, and it’s a bit of a gamble. In April, the nearby Whole Foods closed due to crime and safety issues, and IKEA is certainly optimistic. Still, it’s a positive sign!

My Take

I have been selling in this part of South of Market in what can easily be labeled a blighted location since 1997, so I have seen many (unsuccessful) attempts at turning this particular block. I do, however, think this time might be different. IKEA is hugely popular and it’s not a store that lends itself easily to clearing out shelves by shoplifters. I’ve seen some great kitchen remodels in high end properties that turned out to be IKEA kitchens, so having access to the design element alone is a welcome addition. In any event that location definitely will benefit from some good news, so… Välkommen IKEA!