IBM, Franklin Templeton eyeing SL Green’s One Madison

Chelsea Piers Fitness could soon have company at One Madison Avenue. Two companies, actually.

IBM and Franklin Templeton are in discussions about becoming anchor tenants at SL Green’s 1.4 million-square-foot office development, people familiar with the matter told Bloomberg. The outlet noted that no deal is done and the talks may still collapse.

IBM is looking at leasing approximately 350,000 square feet in the development. The company told Bloomberg it would like to consolidate its New York City staff into one location while maintaining its corporate headquarters in Armonk, New York.

The tech giant has been trying to configure its office plans in the city for some time. In 2020, it was reported the company hired Cushman & Wakefield to help find an office building for the company. IBM was searching for between 450,000 and 500,000 square feet and had narrowed it down to six buildings, One Madison reportedly being among them.

Franklin Templeton, meanwhile, is reportedly in discussions for more than 200,000 square feet at One Madison.

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Chelsea Piers is coming to SL Green's One Madison

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SL Green snags $1.25B construction loan for One Madison Avenue

SL Green locked in its first tenant in October at the development. Chelsea Piers Fitness signed a 20-year lease for portions of the first two levels and two basement floors. Asking rents were not disclosed, but the lease encompasses nearly 56,000 square feet.

One Madison Avenue occupies a full block, bound by Park Avenue and Madison Avenue, as well as East 23rd and East 24th Streets. The office landlord acquired the property in 2005 for $918 million and the redevelopment is expected to cost $2.3 billion.

In November 2020, SL Green secured a $1.25 billion construction loan for the project. It was provided by a number of banks, including Wells Fargo, TD Bank, Goldman Sachs, Bank of America and Axos Bank.

In May 2020, SL Green announced a partnership with Hines and the National Pension Service of Korea, selling a 49.5 percent stake in the development. The two firms committed at least $492.2 million to the project.

According to Bloomberg, SL Green sold a 25 percent stake to an anonymous international investor in December, who promised at least $259 million in equity. The project is expected to be finished in roughly two years.

[Bloomberg] — Holden Walter-Warner