> whom would they sell this real estate in a tanking, high-interest rate market, exactly
Anyone with the political connections to get a residential conversion approved. The wealthy elite are uniquely positioned to profit from this in a civically inactive and politically insular city like San Francisco.
Residential conversions are wildly expensive and frequently infeasible, so even assuming you have the political connections, the financing is going to be a challenge, and of course your end goal is to fill them with tenants in a down market for tech jobs.
Congratulations, you’re basically back to square one of filling empty real estate, now at additional cost. And thus why the incentives are to try and ride out the status quo by forcing people back into offices.
This really depends on the specific building. There are many office buildings that could have slapdash remodels done to make them habitable and revenue positive, and there is plentiful pent up demand for affordable rents in urban cores.
Nevermind the knock on effects of retaining and growing the on street retail base that has fled entirely commercial sections of many urban cores. You don't get a safe, friendly neighborhood when the streets are deserted every evening after 5:30pm.
As cited elsewhere on this thread, it really only works for old buildings and not for huge swathes of the newer-built commercial real estate that’s sitting empty right now:
Again, we also have to think about what the incentives would be for preserving the value of the general case of the asset class, not whether individual buildings are convertible.
Generalizing the forest while ignoring large swathes of what it consists of is a bad idea, not every metro area has the same building makeup and composition as NYC.
NYC already has seen many extreme building conversions, for example turning large apartments into micro-apartments. Many other cities have not had the economic pressure for conversions to occur.
When these buildings default and their property taxes go unpaid, the locality will have to do something with these properties, and often the financing available to municipalities is much better than what the general market can get.
