Condo market is running out of office-to-residential conversions

From today's SF Business Times, "The condo conversion craze which resulted in nearly 790,000 square feet of San Francisco offices being transformed to residential use since 2004 is slowing down."

"Although there are 15 properties totaling more than 1 million square feet which real estate sources say are conversion candidates, the pipeline after that is tiny -- and the ever improving office market means it's getting harder to make a conversion play pay. Experts say conversion activity will be brisk while these move through the pipeline, but then tail off sharply."

"Not all developers are giving up on the conversion game however. Bryan Domyan, a partner at Los Angeles- based Atlantic Pacific Partners, purchased 733 Front St. and 201 Sansome St. earlier this year and is converting them to high-end condos. The projects will include 69 and 46 units respectively."