Last spring I had a points reservation at the Parc 55 for June. After it started to become clear that the world was shutting down for an extended period (I think in April), I got a call from someone at the Parc 55 (not the central Hilton offices). She explained they were going to be closed on my dates, and asked me if I was still coming. I told her I'd already decided not to take the trip, so she canceled it and returned my points.

HOWEVER: in chatting with her, I asked if they were re-locating guests to a different property. She said that the Hilton SF was also closing, but that they were transferring reservations for people who needed a room to the Hilton Financial District, which was staying open.

So the moral of that story is: call the hotel directly, just to make sure.

[ETA: She didn't specifically say HOW those reservations were being transferred, so maybe she would have told me what you've been told. But I was left with the impression that the hotel was just going to shift my reservation directly over if I had chosen to.]