M
acy's San Francisco store may remain open for years as the retailer struggles to sell its 400,000-square-foot property at 170 O'Farrell Street. The New York-based company announced plans to close the site earlier this year due to a decline in demand for big-box retail.

    Selling such a large space is challenging, with one developer stating that potential buyers lack both the funds and desire to purchase it outright. As a result, Macy's may need to facilitate a deal by staying on as an anchor tenant and offering seller financing, where the buyer pays installments rather than taking out a traditional mortgage.

    City officials have expressed optimism about Macy's willingness to work with local developers to keep the site active in Union Square. The retailer has drawn interest from several parties, including TMG Partners and Prado Group, which are exploring possible uses such as retail, hotels, or housing.

    The closure of 150 underperforming stores nationwide is driving Macy's shift towards selling luxury goods, but this move may not be enough to boost sales in San Francisco. At its peak in the mid-1990s, Macy's dominated Union Square with over 1 million square feet of retail space across three locations.

    Developers have expressed concerns about reusing the massive O'Farrell building, which takes up nearly a city block, and may require a long-term vision to revitalize. Any potential buyer will need to be willing to take on this challenge, as previous proposals for the site have stalled.