[chii]

which is exactly what will happen, if there's no gov't intervention.

However, this will take years, if not a decade or two. The reason being that the real estate companies knows this is possible, and so is likely diversified, and therefore, can absorb the losses for a long time (as long as they have income elsewhere to make up for it), and hope for a reversal of demand for offices, or wait for organic growth to catch up.

They will not willingly bankrupt themselves and take a loss for no good reason - that's just stupid.

So in the mean time, the offices aren't being used efficiently. If the city is really keen on making good use of the space by making it residential, they can speed this process up by subsidizing.

[Spooky23]

The more leveraged companies will start failing in 3-5 years, especially if rates stay high.

Commercial leases are usually 10 year deals. Tenants who don’t walk will shrink and have leverage to negotiate.