When Equator Coffees opened a stunning new location inside a downtown San Francisco office building in 2016, it became a neighborhood hub. Office workers flocked to the public lobby of LinkedIn’s building for an afternoon cappuccino and a meeting, or to attend events, from cryptocurrency talks to new Audi car launches.

Today, the once-bustling 222 Second St. cafe sits empty. It has yet to reopen since the pandemic hit three years ago. Equator has been carefully monitoring the recovery of downtown San Francisco as it debates opening the doors again — considering cell phone data, occupancy rates and literally counting how many people walk by the cafe.

“It’s just not there anymore,” said Equator CEO JP Lachance. “It makes it challenging for us and every other lunch restaurant, dry cleaner — the small businesses that previously relied on those office employees.”

The state of downtown San Francisco’s coffee scene mirrors many of the issues the area is facing. Many of the cafes that fueled office workers pre-pandemic have since closed, leaving mostly large chains like Starbucks. Mom-and-pop cafes like the Creamery and Pentacle Coffee in SoMa are gone. Blue Bottle Coffee shut down its second-oldest cafe, at Mint Plaza, in April, attributing the closure in a statement to “a shift in traffic to the area since the pandemic.”

Downtown San Francisco is experiencing its worst office vacancy crisis on record, with just over 31% of space available for lease or sublease. The recent departure of the Westfield San Francisco Centre mall operator threw even more doubt into the future of the neighborhood.

Lachance is still holding out hope for a more substantial return-to-office wave that may never come. Some LinkedIn employees are going to the Second Street building two or three days a week, he said. A larger percentage of people coming in three days a week would be closer to the threshold needed to reopen the cafe.

But he’s lucky to have a supportive landlord in San Francisco real estate company Tishman Speyer; without a break in rent, he said, he would have permanently closed already. Equator’s other downtown cafe, at 986 Market St. inside the historic Warfield theater building, closed once the pandemic hit in spring 2020, but largely because of prior challenges with crime and declining foot traffic, Lachance said.

Brandon Jew, chef-owner of Michelin-starred Mister Jiu’s in Chinatown, opened a coffee shop in an adjoining space to the restaurant in late 2021, hoping to capitalize on what he felt was increasing foot traffic returning to downtown and the surrounding neighborhoods. Yet Soon and Soon cafe closed in less than a year. It was bleeding money, he said.

“I tried to stick it out, but we just kept seeing a downturn. We were basically losing money every day,” Jew said.

He kept expenses as low as possible, staying open for limited weekend hours and employing a single barista, but he thinks not having seating contributed to slow sales. He was quoted $30,000 to build a parklet outside the pocket-size Grant Avenue space. While he’d like to reopen Soon and Soon, it still feels “too risky,” Jew said.

Coffee shops in particular need a critical mass of customers to survive, said Robert Myers, who closed Paramo Coffee in the Embarcadero Center when downtown was eerily empty in summer 2020.

“It’s an industry that relies on volume. People are buying a $4 latte or a $6 latte or a muffin,” he said. “You make your money with a lot of people visiting.”

Despite downtown’s challenges, not all coffee shops are struggling — and their success may offer new models for how to operate in the neighborhood. On a recent weekday, Andytown Coffee Roasters’ cafe at Salesforce Park was packed, with tables full of laptops. The line got so long that two people gave up and went to Starbucks instead. In the lush rooftop park outside, people sat with coffee, and grandparents strolled with their grandchildren.

Before the pandemic, the Fremont Street cafe was open five days a week and catered almost completely to tech workers, said Andytown co-owner Lauren Crabbe. Today, it’s open daily and serves a mix of office employees, families, tourists and people who live in the neighborhood. Sales are back to pre-pandemic levels, just spread out over the entire week instead of five days, as locals drive weekend demand, Crabbe said. This despite Facebook parent Meta listing all the office space at 181 Fremont, where Andytown is located, for sublease.

“A certain percentage of our customers left because they’re not coming into the office anymore, but new people have started coming,” Crabbe said. “There’s no need to put all your eggs in that tech basket when there are so many things that the city has to offer.”

But much of Andytown’s success is specific to its circumstances. The cafe has a prime location in Salesforce Park, a public 5.4-acre oasis akin to New York City’s acclaimed High Line. People come to walk in the park, attend free yoga classes or drink in Barebottle Brewing Co.’s new rooftop beer garden — and then end up grabbing coffee, too.

Several owners said the city could help spur downtown’s recovery by making it easier for small businesses to open, such as waiving permitting fees and hosting more events that bring people to the area. A new city program is planning pop-ups to fill vacant storefronts.

Some owners, meanwhile, are choosing to open in and around downtown to fill the coffee vacuum. Jenny Ngo opened Telescope Coffee on Ninth Street in SoMa in 2021, feeling the neighborhood was lacking mom-and-pop cafes. Telescope’s honeycomb lattes and fresh pastries drew a steady stream of regulars — office workers as much as residents moving into nearby apartment complexes, Ngo said.

But Telescope’s optimistic arrival was followed by a cascade of retail closures. Nordstrom Rack shut down its Ninth Street store soon after, then Chase Bank, Bed Bath & Beyond, Samy’s Camera and Cole Hardware announced their departures, all citing economic difficulties in the neighborhood.

Ngo, who was born and raised in San Francisco, remains committed to the area. When Telescope eventually outgrew its tiny Ninth Street location earlier this year and needed to relocate, she chose to stay in SoMa. Telescope is set to reopen this month in a larger space a few blocks away, inside a new apartment building on Sixth Street.

Similarly, San Francisco’s popular Saint Frank Coffee closed a SoMa cafe in 2021, but is expanding into the ground floor of a new luxury condominium tower near the Embarcadero, where fast-casual salad chain Sweetgreen, a new wine bar and a wellness studio have also opened.

Yet Equator’s Lachance, who goes downtown these days only to methodically count foot traffic on Second Street, said he wouldn’t open a new coffee shop in the neighborhood.

“It just makes it too hard nowadays to open a store and pay that kind of rent if you don’t have the traffic,” he said.

  • kukkurovaca
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    1 year ago

    I mean, was downtown like a coffee destination before? This feels like a stretch