SAN JOSE >> RH, previously known as Restoration Hardware, has struck a deal to open a new outlet store in San Jose in a leasing transaction that will fill up a large and empty retail space.

The upscale home furnishings, luxury retailer and hospitality company leased the site of a shuttered Big Lots store at 1832 Hillsdale Ave., according to David Taxin, a partner with Meacham Oppenheimer, a commercial real estate firm.

The space totals 20,000 square feet and is near the corner of Camden Avenue, said Taxin, who arranged the rental transaction. In the Bay Area, RH Outlet operates stores in Pleasanton, San Rafael and Vacaville, according to Google Maps.

The RH Outlet stores are magnets and destination retail sites, in Taxin’s view. He said he expects the San Jose outlet to be a big-time draw.

“I’m sure it will be a very busy store,” Taxin said. “People drive from all over to go to these outlets. People from Santa Clara County and the Peninsula will go to the RH outlets in Pleasanton and Vacaville.”

As of November 2024, RH operated 38 RH Outlet stores and 71 RH Gallery stores, as RH reported in a regulatory filing regarding its third-quarter financial results.

“Our outlet stores serve as a key part of our reverse logistics platform and provide an efficient means to sell primarily returned merchandise and, to a lesser extent, discontinued and overstock merchandise,” RH stated in a regulatory filing.

RH is eyeing the first half of this year to open the new San Jose outlet store, according to Taxin. Signs posted at the site suggest the retailer is already in hiring mode.

“Explore open roles at our new San Jose outlet,” the signs state. “We’re looking for a few good people who don’t know what can’t be done.”

RH is also expanding into other endeavors, as indicated by its purchase of a Wine Country property. In 2022, an RH affiliate paid $25 million to buy a historic Napa Valley resort.

A winery, guest house and residences are being planned for the 857-acre Napa Soda Springs property, according to information that RH CEO Gary Friedman provided in 2022 to Wall Street analysts soon after the purchase occurred.

RH’s deal to establish an outlet store is a reminder that some big-box retail spaces that were long empty are attracting a new crop of tenants.

In 2024, Vallarta Supermarkets signed a lease at the Plant Shopping Center in San Jose that will enable it to grab some of the space that was once occupied by Toys R Us and Babies R Us.

Earlier this year, Hobby Lobby opened a new store in San Jose on Almaden Expressway, taking over a Bed Bath & Beyond location. Sports Basement leased a large site in the same building after Barnes and Noble vacated the space.

“Certain retail segments are doing well right now, such as discount-type stores,” Taxin said.

The numerous vacancies for sites that were once occupied by big-box retailers have created more favorable rental rates.

“Rents have dropped a bit, which gives retailers a chance to expand at a lower cost than before,” Taxin said.