well, as a counter point, it could be a huge win for real estate if given they could convert the office space into apartments for people which is much needed. I know these buildings aren't setup in regards to plumbing and what not, but we can adapt.
If demand falls off the price will decline. They might respond by rezoning some commercial into residential, which would be great for residential buyers, but the existing landlords would not be pleased by anything that makes any real estate more affordable (i.e. less valuable).
Which is, of course, good. But they're going to try to prevent it any way they can.