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San Francisco District Office Success Stories

San Francisco District Office Success Stories

Kelly Hensley

                Kelly Hensley is the owner of Leftovers consignment store in San Francisco.  She works with over 5,000 consigners and currently has a wait list for consignment, which she attributes in part to her prime location at the epicenter of Russian Hill, Nob Hill, and other upscale San Francisco neighborhoods. 

                Consignors leave their goods at her store for sixty days, after which they can either reclaim what hasn’t sold or donate it.  All proceeds are split 50/50 between the consignor and the shop.  The constant flow of new and unique goods gives the store a different energy from a big box store that can be counted on to have the same types of furnishings indefinitely.  Kelly runs her business for two sets of customers, her consignors and her shoppers.

                By the nature of her business, Kelly is able to make monthly donations to mission-based thrift stores like Out of the Closet and Goodwill.

                Kelly also gives back to the community in a variety of other ways.  Some of those ways are listed under the Giving Back section of her website, like donations to A Leg Up Rescue, Toni’s Kitty Rescue, and Animal Care and Control, but they were also evident during our interview.  In addition to a cage filled with doves tucked into a back corner of the Leftovers showroom, our interview was periodically interrupted by Kelly’s two energetic and loving rescue dogs, a Chihuahua and a terrier named Madison. 

                Leftovers filled a previously vacant spot in the furniture industry between super-expensive high-end consignment and Goodwill.  Kelly provides great furniture that is also affordable.  She sent out postcard calls for inventory to specific neighboring zip codes.  The response was immediate.  Most of her business comes from people who are downsizing, remodeling, or leaving the city.  Kelly is happy to help good, solid pieces find new homes rather than ending up in a land fill, a process known as upcycling.

                In 2012, Kelly bought her 6000 square foot building with a 504 Certified Development Company loan through Capital Access Group. However, Kelly’s journey to buying commercial real estate was by no means straightforward.  First she had to move her business four times in four years.  Her first location was a former porn shop with 1,900 square feet of floor space.  At the time, she thought that would be enough for the table-top knick-knacks and linens she expected to be dealing with.  But within three months, it became apparent that she needed more space for all the furniture she was receiving. 

                Kelly started her literal trip “around the block” when she found a nearby space to supplement her first location.  Her second space had big skylights, which unfortunately leaked on her furniture.  A solution involving big blue tarps didn’t seem satisfactory.  Plus there were too many logistics to maintaining two neighboring locations. 

                In 2010, the third spot Kelly moved into was an old post office with 10,000 square feet for her rapidly growing business.  It seemed like all the issues had been addressed.  She had room to grow, which the business was doing despite the retail hangover of the Great Recession.  Her story was highlighted in the San Francisco Chronicle.  She had a good relationship with her landlord, who appreciated what a great job she was doing of caring for a building in a neighborhood that, while gentrifying, still had some colorful characters around who didn’t necessarily respect the storefronts on busy Van Ness Avenue. 

                Like a scene out of a movie, as Kelly was celebrating the renewal of her year-to-year lease with her employees and a bottle of champagne, a bike messenger rushed in with an envelope.  Assuming it was the signed lease papers from her landlord, she opened the envelope in front of everyone only to find out it was, in fact, an eviction notice.  The landlord had found a new tenant willing to pay more than three times what Leftovers was paying for the space.

                Kelly was sure she’d have to close the business.  Every time she moved, it was like starting a new business.  She didn’t want to switch neighborhoods.  She looked at locations in Cole Valley and SOMA, but she liked where her business was.  Someone suggested she look into buying a building, and gave her the contact information for Capital Access Group.

                At first Kelly didn’t think her nest egg, built from a combination of years in advertising in corporate America and a prior entrepreneurial foray into a San Francisco day spa, Mani Pedi Inc., would be nearly enough for a down payment.  Even if she could afford to buy, she’d need to find a building for sale.  Kelly actually stumbled upon a building that met all her criteria, but it was boarded up and not for sale.  Through sheer determination, she tracked down the owner, and discovered it was a real estate developer with no other buildings in the city who was completely open to selling.

                Kelly’s contact at Capital Access Group looked at the deal and told her simply, “We can make this happen.”  Kelly was impressed with the long amortization of the loan, the low 10% down payment, and the ability to lease some of the building out to other businesses for some additional income.  When Circle Bank came on as the third party lender, the deal was complete.  Kelly moved into her new owner-occupied building on the 4th of July, 2012.

                While Kelly had heard about SBA loan programs before, she never thought she could afford to participate in the program herself.  Buying commercial real estate allowed her to save ten employees jobs, and now she’s on her way to hiring two more.

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