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Turns out Midtown’s biggest housing developer might not be a construction crew—it’s your old corner office.
A new study from commercial debt firm The Kaplan Group finds that Midtown Manhattan could lead the country in converting unused office space into housing, with enough empty square footage to potentially yield 78,121 new apartments. That’s more than any other U.S. city, including San Francisco, Dallas, Houston and Chicago.
The finding lands amid NYC’s worsening housing shortage, where vacancy rates have dipped to historic lows and rent affordability continues to vanish faster than your last pay raise. Now, underused office towers—many emptied post-pandemic by hybrid work—are getting a second look as future apartment buildings.
It’s not just theory. A separate report from NYC Comptroller Brad Lander spotlights 44 conversion projects already in motion, including massive makeovers at 25 Water Street and 5 Times Square. All told, these could deliver 17,400 new apartments, 25-percent of which are required to be income-restricted thanks to a new tax incentive known as 467-m.
The math behind Kaplan’s estimate is straightforward: Using Q1 2025 vacancy data from Cushman & Wakefield and an average apartment size of 908 square feet, they mapped the office space that could be repurposed. Midtown, with its dense commercial footprint and post-pandemic vacancies, tops the list.
For city leaders, this wave of conversions offers a three-for-one opportunity: relieve housing pressure, breathe life back into languishing business districts and avoid the eyesore of empty towers.
But not everyone’s cheering. Lander’s report warns the city’s generous tax break program may cost New York $5.1 billion in lost revenue over the next 37 years, especially in areas like Lower Manhattan, where developers may have built anyway. And critics note that most of these new units skew small—think studios, not family-sized housing.
Still, the momentum is hard to ignore. Developers like SL Green and TF Cornerstone are plowing ahead, and a billion-dollar fund has been set up to scoop up underperforming office assets for conversion.
If Midtown’s corporate ghosts are going to stick around, they might as well bring 74,000 new neighbors with them.