San Francisco pursues office-to-residential conversions without completed projects

Completion of even a handful of conversion projects would likely validate the policy model and could ease pressure on office REITs by demonstrating a viable exit strategy for stranded assets, while simultaneously tightening residential supply constraints and supporting housing valuations in the Bay Area.

Continued policy pursuit without material project completion would plausibly reinforce the narrative that office-to-residential conversion faces structural barriers (financing, zoning, construction costs), leaving office vacancy rates elevated and REIT portfolios under sustained pressure while residential supply remains constrained.

If conversion efforts stall and office vacancy accelerates further, or if regulatory/financial obstacles mount visibly, this could trigger broader reassessment of commercial real estate viability in San Francisco, potentially widening REIT discounts and prompting more aggressive write-downs of office holdings.