uxury apartments in premium locations is the first thing I would think of too if I were a developer, but their target buyers don't sound like the sort of people who currently suffer from the housing crisis.

It'll have a domino effect, more apartments in Manhattan means less people in Brooklyn, Queens, etc. meaning prices go down in the latter boroughs. I live in Jersey City across the Hudson from Manhattan and a large part of the residents here are just people who can't afford to live in Manhattan.

are many people going to want to live in expensive converted office spaces if they don't work near there any longer?

Yes, I used to live in a converted office building in Newark NJ (not far from Manhattan) and really loved it. And yes people will always want to live in NYC and especially Manhattan. Many people, myself included simply prefer living in cities. I've also looked for apartments in Manhattan and it's completely different than anywhere else.