Enough future residential space for 40k people in San Francisco.
> And yet again, while it’s tempting to see, promote or editorialize an opportunity to convert all the vacant office space in San Francisco into housing, the conversion of existing office space to residential use still makes absolutely no economic sense for the vast majority of San Francisco buildings, due to the relative value of each use and the costs of conversion.
This is why rent doesn't always track purchase prices. People who bought a long time ago, or are picking up distressed assets have a lower capital base than those who bought recently or at peak prices. Because they have a lower capital base they only need to compete with, on a risk adjusted basis, with other recurring revenue investments (like bonds).
Now, because bond rates have sky rocketed recently, that means the value of the buildings has plummeted (remember risk adjusting).
If a building value has plummeted, and it's vacant, the owner has a good chance, potentially an incentive to just walk away from it.
I suspect that relative value may shift significantly once building owners accept that office workers _really really_ aren't coming back.
However I expect companies will try to push people to go back to the cubicle.