It’s build or bolt time for BXP on Madison Avenue.
The developer is looking to build a skyscraper at 343 Madison between East 44th and 45th Streets, a block-long, vacant lot currently owned by the MTA. But the eye-catching 46-story, 950,000-square-foot tower designed by Kohn Pedersen Fox—shown here for the first time—needs an anchor tenant before it can stand.
BXP, formerly known as Boston Properties, tapped a crack CBRE leasing team to make this possible. The ground-lease agreement with the MTA gives BXP the flexibility to terminate its 99-year leasehold by July 31, 2025, if it does not find a tenant.
BXP was selected to develop the site in 2016. Now, following the demolition of the old MTA headquarters and the sale of a minority stake to Oslo-based Norges Bank Investment Fund last year, the developer hopes to exploit demand in the red-hot Grand Central district. , where SL Green’s new One Vanderbilt was leased almost overnight.
CBRE’s Howard Fiddle said BXP’s “state-of-the-art, highly sustainable tower” will provide “single-seat commuting” from almost everywhere in the tristate area. The CBRE Leasing team also includes Peter Turchin, John Maher, Evan Haskell and Caroline Merk.
BXP is already building a new above-ground entrance for the MTA to Grand Central Terminal on the corner of Madison and is being described as the 45th entrance in the first phase of the project.
During a recent investor call, BXP’s executive vice president for New York, Hillary Spann, cited “the tightness in the Park Avenue district with very little Class-A premier workspace available” as a reason for confidence in the tower, which BXP presents itself as stability-driven. All-electric, “zero-carbon premier workplace.”
Features include a double-height lounge and conference space on the 45th and 46th floors, indoor and outdoor dining spaces on “biophilic” terraces overlooking Midtown, and an upscale lobby lounge.
Workplace floors range from 22,000 square feet in the tower to 27,500 square feet on the podium floors.
But as a publicly traded REIT, BXP will need to keep a close eye on the situation. BXP Chairman Douglas Linde told investors in August 2023 that rents would need to rise above $200 per square foot to make the project viable, Crain’s reported.
Although terms of the ground lease were not released, a 2016 MTA Finance Committee document reviewed by Realty Check described a $25 million upfront payment and an increase in ground rent from $6.38 million to $10.3 million over the first five years of a 99-year lease. There was a call to do million dollars. At 26-30 years, the interval should be reset.
Those costs were based on a building with a floor-to-area ratio of 15, as permitted at the time. Under recent rezoning the FAR has increased to 30, and BXP is likely to pay much more to the MTA. BXP declined to comment.
