It’s build-or-bolt time for BXP on Madison Avenue.
The developer is itching to build a skyscraper at 343 Madison between East 44th and 45th streets, which is currently a block-long, empty lot owned by the MTA. But it needs an anchor tenant before the striking, 46-story, 950,000 square-foot tower — designed by Kohn Pedersen Fox — shown here for the first time — can rise.
BXP, previously known as Boston Properties, tapped a crack CBRE leasing team to make it happen. The ground-lease agreement with the MTA gives BXP an off-ramp to terminate its 99-year leasehold by July 31, 2025, if a tenant can’t be found.
BXP was chosen to develop the site in 2016. Now, after demolition of the old MTA headquarters and sale last year of a minority stake to Oslo-based Norges Bank Investment Fund, the developer hopes to exploit demand in the red-hot Grand Central district, where SL Green’s new One Vanderbilt leased up almost overnight.
CBRE’s Howard Fiddle said BXP’s “state-of-the-art, highly sustainable tower” would provide a “single-seat commute” from nearly everywhere in the tristate region. The CBRE leasing team also includes Peter Turchin, John Maher, Evan Haskell and Caroline Merck.
BXP is already building for the MTA a new above-ground entrance to Grand Central Terminal at the corner of Madison and 45th in what’s described as the first phase of the project.
During a recent investors call, BXP executive vice president for New York Hilary Spann cited “tightness in the Park Avenue district with very little Class-A premier workspace available” as reason for confidence in the tower, which BXP touts as a sustainability-driven, all-electric, “zero-carbon premier workplace.”
Amenities are to 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 a high-end lobby lounge.
Workplace floors range from 22,000 square feet in the tower to 27,500 square feet on podium floors.
But as a publicly traded REIT, BXP will need to keep a close eye on the situation. BXP president Douglas Linde told investors in August 2023 that rents will need to top $200 a square foot to make the project viable, Crains reported.
Although ground lease terms weren’t released, an MTA Finance Committee document from 2016 reviewed by Realty Check called for a $25 million upfront payment and ground rent to rise from $6.38 million annually in the first five years of the 99-year lease to $10.3 million in years 26-30, to be followed by resets at intervals.
Those costs were based on a building with a floor-to-area ratio of 15 as permitted at the time. The FAR has since risen to 30 under recent rezoning, and BXP is likely paying much more to the MTA. BXP declined to comment.