New York Construction Report staff writer
The Empire State Development (ESD) Board of Directors has approved the conversion of 5 Times Square from commercial office space into a large-scale, mixed-use residential development.
The plan will transform nearly one million square feet of underused office space into up to 1,250 residential units, including 313 permanently affordable homes for individuals and families earning up to 80 percent of the Area Median Income (AMI). The project will also retain over 37,000 square feet of retail space.
Located at Seventh Avenue between 41st and 42nd Streets, the redevelopment takes advantage of extensive transit access, with connections to 12 subway lines and multiple regional rail systems. It addresses the building’s current 77 percent vacancy rate and repurposes an iconic Midtown property into housing during a time of acute demand.
Construction is expected to begin in the third quarter of 2025, with initial phases projected to be completed by 2027. The project is anticipated to generate approximately 1,400 construction jobs and 830 permanent jobs, contributing to both the city’s housing stock and its economy.
The conversion is made possible by recent state-level legislative changes, including the elimination of a 60-year-old cap that limited residential development in high-density areas. The repeal of the 12 Floor Area Ratio (FAR) cap and the creation of the Affordable Housing from Commercial Conversions Tax Incentive (467-m) opened the door for projects like 5 Times Square. Originally constructed with a FAR of 33.35, the building would not have qualified for residential use under previous laws.
The development will offer a mix of 1,050 studio units and 200 one-bedroom apartments, all with equal access to building amenities. It also includes a 30 percent participation goal for Minority and Women-Owned Business Enterprises (MWBE) and Service-Disabled Veteran-Owned Businesses (SDVOB), in compliance with state policies.
5 Times Square is one of several major office-to-residential conversions initiated under new housing policies. Since April 2024, around 10,000 new apartments have been completed or begun construction citywide under similar projects.
The broader strategy continues in the state’s FY26 budget, which includes $1 billion to support zoning changes under the “City of Yes for Housing Opportunity” initiative. These changes could enable up to 120 million square feet of space for conversion and the creation of as many as 18,000 additional homes.
The conversion of 5 Times Square reflects a growing shift in how New York repurposes commercial real estate to meet housing needs, especially in high-opportunity areas with access to jobs and infrastructure. The project is part of an evolving trend to revitalize central business districts by integrating residential life and reducing dependency on cars through transit-oriented development.
For more information about the project and related initiatives, visit esd.ny.gov.
