Moreover, no one is converting these unused offices in to residential properties. I’m guessing because the average price per square foot is significantly lower for SF property targeting residential use.

That’s part of it, but there’s also significant up-front costs to doing that type of conversion. If enough spaces become apartments, the remaining commercial space will profit without needing nearly as much investment, so the property owners are in a bit of a game of chicken to see who will break first and convert or sell low and start tanking the market.