TL;DR: “Here’s the big “why not” when it comes to office-to-housing conversions: Gutting a building and rebuilding the inside as housing is expensive, especial

TL;DR: “Here’s the big “why not” when it comes to office-to-housing conversions: Gutting a building and rebuilding the inside as housing is expensive, especially in San Francisco and especially while construction costs are high. Asking rents for downtown commercial leases have dropped around 15% from pre-pandemic peaks, but haven’t dipped further because of the relatively long lease terms signed by commercial tenants, as well as market optimism that the return to office will continue at a gradual pace. Essentially, the city and the market aren’t convinced that empty offices downtown are here to stay. “People would need to believe that office uses are going away,” said Louis Cornejo, president and CEO of Urban Group Real Estate. “You talk to 10 people you get 10 different comments. Are we really going to take a chance on our economy based on: ‘Well, it worked for a year or two?’”