The only downside I can see are restaurants/shops that work with those office employees. Some might not survive. In fact, even if offices are converted 100% into housing, the turnover of people is gonna be smaller. Anyway, rent should also decrease for those after a bit.
That's a good point, but then, it's not as if these businesses are going to benefit from buildings standing empty either. Also, the hypothetical future residents of these buildings are going to need somewhere to get their food, toiletries, etc.
Aren't a lot of pension funds and such heavily invested in real estate?