The key issue is the extend and pretend thing that is preventing fore closures on these buildings and is artificially inflating the price per square meter for o

The key issue is the extend and pretend thing that is preventing fore closures on these buildings and is artificially inflating the price per square meter for office real estate. This artificial price is about as high as it is for apartment buildings. The problem of course is that this is an artificial price in a market where nobody in their right mind is going to pay those prices. The real price will have to come down for things to start moving. That will happen eventually as these buildings stay empty but it might take a while. Once foreclosures start happening and building owners default, the debt holders end up taking ownership of property that just isn't worth as much has housing real estate anymore. It then becomes a problem for them because empty offices still cost money. They can sell the building at a steep discount or do something else with it. It's the the price difference between office and housing prices that might make it economical to convert buildings. The issue with that of course is that housing real estate prices are also under pressure as people are no longer as eager to live close to their now empty office buildings. So, it's still a risky investment and whoever ends up owning the building would need to finance that somehow. And there are those pesky zoning rules that outright prevent this in a lot of places. Those rules are no accident of course. Banks have an interest in keeping housing prices artificially high as well. If those prices come down, they have another debt bubble to worry about.