This is not surprising. Even with remote working getting pushback (how much/how far remains to be seen) in the post covid world office space needs are going to be a lot less than it has been in the past (it amazes me when I see new office space going up around me here in the burbs).
This process happened in lower manhattan, when financial firms that used to be clustered there moved, either uptown or to places like Jersey City or the burbs. They converted more than a few of those buildings to residential units as lower manhattan became more residential (when I worked there in the mid to late 80s, it was a ghost town after like 6pm, now it is like the rest of NYC).
It would seem an ideal solution, given there is a big problem with housing that is affordable. One of the problems is it isn’t that easy, plumbing and electricity in office buildings are generally arranged to support business use, so for example water lines and plumbing is routed to centralized bathrooms and kitchenette areas. So you basically have to gut the building to allow re-routing the plumbing (electricity may be easier). Plus things like HVAC in an office building may not translate easily into an apartment building (that could be as simple as rerouting ducting, but still can be a challenge).
The other problem is who is doing the conversion? If it is owned by the landlord, they are going to want to maximize there investment, so likely will do what new apartment construction seems to do around here, it is all ‘luxury’ rentals or condos/co-ops and you have the same problem. A landlord will make a lot more money with a 3500 a month 1 bedroom then they would with a bunch of small ‘studio-ette’ apartments. In theory if there is a large supply of new housing the price would drop, but it really depends on just how much unfilled demand there is too.
On the other hand if office space is sitting there empty and there is a need, likely a way will come about. If office buildings go under and banks take over the properties, they likely will try and unload them, take the losses on the loans, and get them off their portfolio and non profit groups potentially could get involved, or even towns/cities.
Will definitely be interesting to see how this plays out.