Key Takeaways
- • BXP closed a $1.2 billion construction loan for 343 Madison Avenue, a 46-story, 930,000-square-foot office tower in Midtown Manhattan with direct Grand Central Terminal access, representing a major financing milestone for the $2 billion project.
- • The construction facility carries a four-year initial term plus one-year extension option, with an initial interest rate of Term SOFR plus 2.50 percent stepping down to Term SOFR plus 2.25 percent upon achievement of specified leasing and construction milestones.
- • Approximately 50 percent of the building is pre-leased, with major tenants including law firm McDermott Will & Schulte signing roughly 150,000 square feet, demonstrating strong market demand for newly delivered Midtown office space.
- • BXP expects project delivery in late 2029, positioning 343 Madison as one of the few newly completed office towers arriving in Midtown Manhattan over the coming years amid limited new supply.
- • Wells Fargo led the financing, completed on highly competitive terms reflecting institutional confidence in the project's location, pre-leasing progress, and sponsor quality.
Summary
BXP has secured $1.2 billion in construction financing for 343 Madison Avenue, closing a critical funding piece for the $2 billion development in Midtown Manhattan. The 46-story, approximately 930,000-square-foot office tower will feature direct access to Grand Central Terminal's Madison Concourse, a significant amenity that differentiates the asset within the Manhattan office market.
The construction loan facility features a four-year initial term with a one-year extension option subject to customary conditions. The financing was structured with favorable economics: the initial interest rate is set at Term SOFR plus 2.50 percent, with the rate stepping down to Term SOFR plus 2.25 percent upon achievement of specified leasing and construction milestones. Wells Fargo led the financing, which was completed on highly competitive terms despite the current macroeconomic environment facing commercial real estate lending.
Pre-leasing momentum supports the project's viability. Approximately 50 percent of the building is already committed, with McDermott Will & Schulte, a major law firm, accounting for roughly 150,000 square feet of the total rentable area. This level of pre-commitment for a newly delivered office tower in Manhattan signals strong tenant demand and reduces speculative risk for lenders and the sponsor.
BXP targets project delivery in late 2029, positioning 343 Madison as one of a limited number of newly constructed office towers coming to market in Midtown Manhattan over the next several years. The scarcity of new supply in the core Manhattan office market, combined with the asset's prime location and Grand Central connectivity, underscore the strategic importance of this development. The financing closing represents tangible progress on a marquee trophy asset for BXP's Midtown portfolio.
The construction loan facility features a four-year initial term with a one-year extension option subject to customary conditions. The financing was structured with favorable economics: the initial interest rate is set at Term SOFR plus 2.50 percent, with the rate stepping down to Term SOFR plus 2.25 percent upon achievement of specified leasing and construction milestones. Wells Fargo led the financing, which was completed on highly competitive terms despite the current macroeconomic environment facing commercial real estate lending.
Pre-leasing momentum supports the project's viability. Approximately 50 percent of the building is already committed, with McDermott Will & Schulte, a major law firm, accounting for roughly 150,000 square feet of the total rentable area. This level of pre-commitment for a newly delivered office tower in Manhattan signals strong tenant demand and reduces speculative risk for lenders and the sponsor.
BXP targets project delivery in late 2029, positioning 343 Madison as one of a limited number of newly constructed office towers coming to market in Midtown Manhattan over the next several years. The scarcity of new supply in the core Manhattan office market, combined with the asset's prime location and Grand Central connectivity, underscore the strategic importance of this development. The financing closing represents tangible progress on a marquee trophy asset for BXP's Midtown portfolio.
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