City Prompts Interest in SF Office-to-Home Conversions

San Francisco landlords are stepping up for office-to-home conversions that could deliver as many as 1,100 apartments or condominiums to the market.

Eight office building owners have responded to a city request for information targeting landlords interested in turning their offices into homes, the San Francisco Chronicle reported.

“We were pleased with the responses — it was more than we had expected and there was a good variety of buildings,” Anne Taupier, director of development for the city’s Office of Economic and Workforce Development, told the newspaper. “We think there is a chance to see some game-changing activation.”

They include five buildings around Mid-Market and Civic Center, two in the Financial District and one near Yerba Buena.

If all eight office properties were converted, it would create 1,100 units. The largest building could be turned into 300 homes, while the smallest would create 40.

The city didn’t disclose the addresses of buildings because discussions are preliminary and because of a potential impact to office tenants, Taupier said. City officials are meeting the landlords face to face.

Converting eight commercial buildings containing less than 1 million square feet wouldn’t greatly impact a record office vacancy rate of 33.9 percent, with 30 million square feet of empty offices.

But the interest by prospective landlords suggests many think the pandemic and remote work have made certain office buildings obsolete, according to the Business Times.

For more than two years, San Francisco has come to realize that many of its smaller office buildings would be hard to fill in the era of remote work — but that conversions could take years.

The high cost of turning office buildings into housing and the city’s glacial approval process have made landlords loath to spend money on conversions. That’s starting to change.

The city has passed legislation to relax zoning, reduce red tape and cut fees. Local and state elected officials are eager to pass laws to spur office-to-home conversions.

State Sen. Scott Wiener, D-San Francisco, plans to introduce downtown revitalization legislation in January that would include tax breaks for conversions. A recent study found that one in 10 offices in Downtown could be converted into housing.

The city’s first conversion since the pandemic is a plan by Taiwan-based Group i to create 27 units in the century-old Warfield Building at 988 Market Street, while retaining some offices.

Group i principal Mark Shkolnikov said the company will start interior demolition as soon as next month. Construction would start early next year and take nine months. Earlier plans called for 34 apartments.

“The support from the city has just been remarkable,” Shkolnikov told the Chronicle. “They have been frequently checking in to see what they can do to help move this along. It’s obviously a timely conversion — we’ve sort of become this poster child.”

— Dana Bartholomew