A wave of upzoning across the San Francisco Peninsula is opening the door for more office-to-residential redevelopment, as developers target aging office properties in some of the region’s most housing-constrained markets, according to BisNow.
Cities including Sunnyvale, San Mateo, and Menlo Park are easing zoning rules to help meet California’s Housing Element requirements, encouraging new multifamily development as demand for apartments continues to outpace supply.
Office Sites Make Way for Housing
Developers are increasingly choosing to demolish outdated office buildings rather than convert them, avoiding common challenges such as deep floor plates, limited natural light, and inefficient layouts.
Beam Reach plans to replace office properties in Sunnyvale and Menlo Park with two five-story apartment communities totaling 472 units, including 61 affordable homes.
San Mateo is also seeing a growing pipeline of redevelopment projects. Jemcor Development Partners has proposed replacing a five-story office building at 1700 El Camino Real with 441 apartments across two eight-story buildings, including 188 senior housing units. O’Farrell Development has also submitted plans to replace a low-rise office building with an 87-unit apartment project.
To date, San Mateo has received applications for more than 5,000 proposed housing units.
Strong Apartment Market Supports Redevelopment
The Peninsula’s apartment market has strengthened as supply remains limited. According to Marcus & Millichap, apartment vacancy in San Jose has fallen below 3.5%, while rents have increased 4.4% year over year. In San Francisco and San Mateo County, rents have climbed 5.2%, with vacancy also sitting in the mid-3% range.
Those market conditions, combined with higher-density zoning, are making more redevelopment projects financially viable.
Not every project involves demolition. Tourbineau Real Estate Partners plans to convert a vacant 12-story office building at 2121 El Camino Real in San Mateo into 144 apartments after acquiring the property in 2025. The building’s narrow floor plates, existing parking, and previous seismic upgrades made it well suited for residential conversion.
Housing Push Continues
California’s housing goals, along with local zoning changes and Senate Bill 79, are helping accelerate residential development near transit and along key commercial corridors.
As cities work to increase housing supply and older office buildings remain underused, developers are increasingly viewing obsolete office properties as opportunities for new multifamily housing.
