It's time to build or bolt for Madison Avenue's BXP.
Developers are itching 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 impressive 46-story, 950,000-square-foot tower, designed by Kohn Pedersen Fox and unveiled here for the first time, needs an anchor tenant to complete.
BXP, formerly known as Boston Properties, leveraged the excellent CBRE leasing team to make this happen. Under the land lease agreement with the MTA, BXP has until July 31, 2025 to terminate the 99-year lease if a tenant cannot be found.
BXP was selected to develop the site in 2016. Now that the former MTA headquarters has been demolished and a minority stake was sold to Oslo-based Norges Bank Investment Fund last year, the developer hopes to tap into demand in the battleground Grand Central district. , SL Green's new One Vanderbilt was leased up almost overnight.
CBRE's Howard Fiddle said BXP's “state-of-the-art, highly sustainable tower” will enable “single-person commuting” from nearly anywhere in the tri-state region. CBRE's leasing team also includes Peter Turchin, John Maher, Evan Haskell and Caroline Merck.
BXP is already building a new above-ground entrance to Grand Central Terminal at 45th Street in Madison for the MTA in what is said to be the first phase of the project.
On a recent investor conference call, BXP executive vice president in New York, Hilary Spann, cited BXP's confidence in the tower, which it touts as sustainability-driven, because “the Park Avenue district is small and the available class “There is almost no premier workspace available for A.” An all-electric “Zero Carbon Premier Workplace”.
Facilities include double-height lounges and meeting spaces on the 45th and 46th floors, indoor and outdoor dining spaces on a “biophilic” terrace overlooking Midtown, and an upscale lobby lounge.
Workshop floor space ranges from 22,000 square feet in the tower to 27,500 square feet on the podium floor.
However, as a publicly traded REIT, BXP will need to monitor the situation closely. BXP President Douglas Linde told investors in August 2023 that rents would need to exceed $200 per square foot to make the project a reality, Crain's reported.
Terms of the land lease have not been made public, but a 2016 MTA Finance Committee document reviewed by Realty Check shows an upfront payment of $25 million and ground lease payments of $638 per year for the first five years of the 99-year lease. It is requested that the amount be increased from $10,000 to $10.3 million. From 26 to 30 years and then reset at regular intervals.
These costs are based on a building with a floor area ratio of 15, which was permitted at the time. With recent rezoning raising the FAR to 30, BXP is likely paying even more to the MTA. BXP declined to comment.
