And this is a smart investment if you can afford to hold for a while. SF will come back eventually, it always does. The weather is too nice and the location too good not to.
If the property is under private control, the city can only make requests. If they own the property, they have direct control over its use, incentives, etc. Lower rent could translate to a more vibrant distribution of businesses leasing space (versus only businesses who can afford market rate rent). Non market public housing is very common, and while I can only speculate on the motives of the City of SF based on publicly available information, I could see why they would do it. As you said, values will jump at some point, so acquiring these properties at the bottom is somewhat savvy. Could they issue muni bonds to fund these purchases perhaps (if needed, issuing debt at reasonable interest rates to pick CRE up while on a fire sale)? Wouldn't be the worst way to spend borrowed money as a city.
Call and ask? Genuinely, not snarky. I'm sure someone at the city is willing to share the motives, and I too am curious.
Change isn't merely possible. It's inevitable. And looking at public housing in United States through the decades, the most likely change is going to be spending a lot of money to do very little good.
And this is a smart investment if you can afford to hold for a while. SF will come back eventually, it always does. The weather is too nice and the location too good not to.
This property will jump in value at some point.