Boston Properties sold a 45 percent stake in 343 Madison Avenue, a planned 49-story tower in Midtown, according to a statement from the company. Boston Properties retains a 55 percent interest in the joint venture and the new partner, identified only as an institutional investor, owns the rest. The price was not disclosed.
The publicly traded real estate firm filed plans for the 25,000-square-foot site — the former Metropolitan Transportation Authority headquarters, between East 44th and East 45th streets — in 2022, calling for a 900,000-square foot office building with ground floor retail.
Boston Properties and its new partner signed a 99-year ground lease this month with the transit agency that requires the developer to construct a direct access entrance to Grand Central Madison, the new Long Island Railroad station under Grand Central Terminal.
The agreement gives the developer an option to terminate the ground lease by July 31, 2025, and be reimbursed for the cost of constructing the station entrance. Construction of the tower, which will follow the entrance project, had been slated to wrap up by 2026. Boston Properties will handle development, property management and leasing of the property.
Though the building hasn’t even been designed yet, one executive, Hilary Spann, said on Boston Properties’ earnings call this week that prospective office tenants have inquired about anchoring the development, given the paucity of modern office space available so close to the transit hub.
“This has to do … with the tightness in the Park Avenue district,” Spann said. “There’s very little Class A premier workplace available … and as businesses are expanding in that district, they find themselves boxed out of larger space options.”
The MTA bought 347 Madison Avenue for $11.9 million in 1979 and adjacent sites for $12.25 million and $23.75 million in 1991. In 2013, the agency began seeking bids to revitalize the site. The MTA moved to 2 Broadway, but kept paying roughly $4 million a year to maintain the empty building.
Boston Properties won the bid in 2016, but the city objected over questions about the developer’s share of owed property taxes. Not until the pandemic hit did the entities reach an agreement to move forward. Boston Properties filed applications in 2021 to demolish the three buildings at the site.
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