5 Times Square’s $1.3B Office to Residential Conversion

Key Points

• Massive Flip: 917,745 square feet of office space is being converted into 1,250 apartments, including 313 affordable units for households earning up to 80% of AMI.
• Policy Tailwinds: Enabled by zoning shifts and the new 467-m tax incentive, this deal marks a milestone in NYC’s adaptive reuse strategy.
• Economic Impact: The $1.3B redevelopment will create 1,400 construction jobs and 830 permanent roles, signaling investor confidence from Morgan Stanley, Apollo, and Corebridge.

Office to Rental Conversion Hits Times Square
As Midtown office towers struggle with vacancy, RXR Realty, Apollo Global Management, and SL Green are turning one of Times Square’s most iconic buildings into a 1,250-unit residential hub. Designed by Gensler, the 38-story project at 5 Times Square will help meet NYC’s housing shortage while proving the financial and policy case for adaptive reuse at scale. With affordable housing baked in and major incentives in play, the conversion sets a new bar for landlords hunting returns in a shifting market.

From Office Anchor to Residential Engine
5 Times Square, once home to Ernst & Young, is now under major construction to shed its commercial identity. The tower, located between West 41st and 42nd Streets, will retain its 37,311 square feet of retail, keeping street-level revenue flowing during the transition. Streaming company Roku still occupies top-floor space and will remain during renovations. Phase one is set to deliver in 2027.

Financing Backed by Institutional Firepower
The $1.3 billion financing package was arranged by Morgan Stanley and includes Apollo Global Management and Corebridge as key partners. This shows strong institutional belief in multifamily’s long-term value compared to underperforming office assets. The project also benefits from policy changes, including the elimination of the outdated 12 FAR cap and access to the new 467-m tax incentive, making residential conversions more viable for landlords looking to reposition properties.

Transit and Tenant Ready Location
Directly atop the Times Square 42nd Street subway station, the building provides unmatched connectivity with access to the 1, 2, 3, 7, N, Q, R, W, and Shuttle lines. That transit advantage will attract a wide range of renters. With 25 percent of units reserved as permanently affordable, the project meets public policy requirements while still targeting stable, high-rent collections on the remaining market-rate units.

What Landlords Should Watch
This deal is a leading example of what’s possible when policy, capital, and location align. For owners sitting on aging office stock, conversions like this can generate new revenue streams while addressing a structural housing shortage. The tax tools and financing confidence on display here are a signal to act now before costs climb and supply saturates.

Bottom Line
5 Times Square proves that old office towers can become high-yield rental machines. For landlords with underused commercial assets in strong locations, now is the time to explore conversion strategies before the next wave of competition hits.