Japanese-inspired San Francisco eatery finds footing in post-COVID real estate market
As work-from-home trends and out-of-city migration patterns continue to evolve, urban neighborhoods are facing challenges to keep them vibrant. Many residents and workers say they want more small stores within a short walking distance.
Recent retail leasing data in San Francisco shows there are opportunities to be had, especially for first-time small businesses.
One of those is a small business that started in 2023 and is making its mark. There's a dedication to perfecting each meal Simon Li sells at Komeya No Bento, a Japanese-inspired takeout eatery.
He places the dried seaweed on a scale, before placing it into a pot of simmering broth.
"I want to make sure everything has a standard so the taste stays consistent," said Li. "I'm adding Kombu Dashi to the soup base."
Sashimi-grade slices of salmon with a sprinkle of tobiko - Japanese caviar - placed over warm seasoned rice, and vegetables neatly packed to the side, is a top-seller.
But it's the combination of Li's carefully crafted duck-based broth that can be poured over rice, and other meats like chicken, duck breast, and salmon in a chazuke bowl that this semi self-taught chef continues to experiment with.
"I came up with the idea to use a ramen broth for the chazuke," said Li.
Nearby residents in the Marina District and workers within walking distance have noticed the new eatery, which has replaced an old Chinese restaurant that closed during the pandemic.
The buzz over Komeya No Bento has given this often overlooked section of Laguna Street, with gas stations around the corner on Lombard, a bit of a boost and more bustle.
"I think there's a lot more foot traffic, especially on this block," said Skylar Wigan. "It doesn't get a lot."
Wigan and her friend frequent the shop, also known for its popular foam-layered matcha, made with ceremonial-grade green tea from Kyoto.
Lawmakers like former Berkeley City Councilmember Rigel Robinson believe more storefronts in places such as the Outer Sunset district - where real estate is cheaper and many residents don't have access to everyday stores within walking distance - can benefit more communities with more residents working from home.
"There are policy choices we can make to encourage these sorts of environments and encourage this kind of vitality for our commercial environment and for our neighborhoods," said Robinson.
According to a McKinsey Global Institute analysis, cities like San Francisco are facing a reality in which hybrid work worsens vacancy rates and threatens the vibrancy of neighborhoods. One way cities could adapt is through mixed-use neighborhoods not dominated by a single type of real estate, but instead incorporating a diverse mix of office, residential, and retail space.
But policymakers acknowledge transforming urban neighborhoods will take time. High costs aren't helping. According to commercial real estate company Avison Young, construction costs have remained largely unchanged over the previous year but are still up more than 40% compared to pre-COVID.
Leasing activity rose more than 18% quarter-over-quarter but continues to be well below pre-COVID levels and will likely remain the case until construction costs and inflation ease.
For Li, the timing to open his first small business last year was right.
"There was no hesitation because I knew what I wanted to do. I really wanted to give it a try," he said.
He wants to open a dine-in restaurant that opens past midnight one day. But for now, he's making the most of his opportunity to make it in San Francisco.
