Yeah, stuff in SF is complex. Could be that, yeah, if they decided to add some residential, they got more NIMBY pushback, or some kind of requirement to add N% 'affordable' that made it pencil out as less profitable.
It's possible but honestly I don't think that's a factor only that commercial real estate in downtown SF is going to get them more bang for their buck right now. Their timeline is looking 5-10 years out so they have their shit together (as well as experience) to deal with SF stuff.
