A struggling office tower in the heart of Midtown Manhattan is set to be converted into a residential building with 1,250 apartments, in one of the most notable examples of how New York City’s economic center has evolved after the coronavirus pandemic.
The board that runs New York State’s economic development corporation voted on Thursday to approve the conversion of the 38-story building, 5 Times Square, which has been mostly empty since 2022.
The converted building will mostly have studio apartments and is likely to open to tenants in 2027, state officials said. One-quarter of the 1,250 units will be designated as “affordable” and rent, on average, for around $2,174 a month. (The typical asking rent in April on a new lease for a one-bedroom Midtown apartment was at least $4,500, according to data from the real estate company StreetEasy.)
“The only way to address our housing crisis is to build more of the homes New Yorkers need,” Gov. Kathy Hochul said in a statement.
The vote on Thursday is another symbol of Midtown’s transformation and reflects how commercial areas and downtowns across the United States are continuing a rocky rebuild after the pandemic upended traditional work patterns. Many wondered if Midtown — and, as a result, New York City’s economy — would ever rebound.
But state and city officials are framing the vote as another example of a broader transformation. Nearby, the former headquarters of Pfizer are being turned into 1,600 apartments. A building in the financial district that once housed JPMorgan Chase, The National Enquirer and The New York Daily News is becoming 1,320 apartments.
The shift comes as the city is facing a major housing crisis, threatening its economy and long-term viability. Rents continue to climb, driven by a housing shortage that is at its worst point in nearly 60 years.
Ms. Hochul and Mayor Eric Adams have both sought to build more housing as a way of making the city more affordable.
Because the pandemic pushed many New Yorkers away from office work, Midtown has become something of a coveted target for city leaders, a rare opportunity to add housing density in a crowded place like Manhattan.
Mr. Adams is pushing a plan that would change the zoning for 42 blocks of the neighborhood and allow for some 9,700 additional homes.
The 5 Times Square project is one of the largest to be supported by new housing measures passed by the state in 2024, including a new state tax incentive designed to bolster these types of conversions and a law that removed restrictions on density in Manhattan.
The 5 Times Square building, which was built between 1999 and 2002, was “intended to be a commercial keystone in Times Square,” according to state documents.
The building sits between 41st and 42nd Streets along 7th Avenue and was first developed in 2002. It has been mostly empty since its main tenant, the auditing firm EY, moved its U.S. headquarters in 2022 to a newer Manhattan development on the West Side.
Today, it is nearly 80 percent vacant, according to state officials.
In addition to the apartments, the repurposed building will also have some office space and roughly 37,000 square feet of retail space. The construction itself involves expanding plumbing and electrical systems, adding bathrooms and kitchens and dividing open spaces into individual units.
Moses Gates, vice president for housing and neighborhood planning at the Regional Plan Association, a nonprofit civic organization, said the conversion reflected the importance of having flexibility as a city to adapt. But, he said, it was not yet clear whether these types of conversions would continue, or whether the office market “stabilizes and comes back a little bit.”
“We’re still in a little bit of uncharted territory here,” he said.
Mihir Zaveri covers housing in the New York City region for The Times.
The post A Times Square Office Tower Will Be Converted Into Apartments appeared first on New York Times.
