August 17, 2025
In a city starved for housing, New York’s empty office buildings may be the unlikely solution. A fresh report from Comptroller Brad Lander shines a light on how the pandemic-era vacancies have opened the door for large-scale office-to-residential conversions. As a realtor working the NYC market, this is a development that’s impossible to ignore.
According to Lander, the first wave of these conversion projects could bring over 17,400 new apartments to market, spread across 44 major developments. That translates to roughly 15.2 million square feet of underutilized office space being repurposed into housing—most of it located in the prime corridors of Manhattan, south of 59th Street.
We’re already seeing high-profile transformations take shape:
Even more ambitious projects are on the horizon. Developers are proposing to turn the 38-story 5 Times Square into 1,250 apartments, and there’s talk of a 72-story tower in Downtown Brooklyn with more than 1,200 units.
This wave of development has been fast-tracked by the recently passed 467-m tax exemption, which offers substantial tax breaks to developers who reserve at least 25% of units as affordable housing. The legislation also eases prior restrictions on building density, giving developers more flexibility to revitalize older office spaces.
But it’s not all smooth sailing. Lander’s report warns of potential downsides: the city could forgo an estimated $5.1 billion in tax revenue over the next 37 years. Critics argue some of these buildings, especially in Lower Manhattan, were headed for conversion regardless of incentives. There's concern the tax breaks may be overly generous in areas where market demand is already strong.
That said, the bigger picture remains promising. These conversions won’t just fill vacant towers—they’ll help diversify housing stock, create mixed-use neighborhoods, and take pressure off the rental market in key areas of the city.
As a real estate professional, this is a trend worth watching. Inventory growth—especially affordable units—could shake up pricing dynamics and offer new opportunities for both renters and investors.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
