Boston Properties sells stake in 343 Madison project, leases land from MTA

Developer will build entrance to LIRR’s Grand Central Madison, then tower

Boston Properties Sells 45% Stake in 343 Madison Avenue
Boston Properties' Hilary Spann, rendering of 343 Madison Avenue (Kohn Pedersen Fox, Getty, BXP)

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.

Sign Up for the undefined Newsletter

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.

Read more

Boston Properties' Owen Thomas and SL Green's Marc Holliday (Boston Properties, SL Green, Getty)
New York
Office developers widen their sights as sector’s uncertainty persists
Tishman Speyer's Rob Speyer, LeFrak’s Richard LeFrak, Equity Group Investments' Sam Zell and BXP's Owen Thomas with 520 Madison Ave, 59-17 Junction Boulevard, 180 Montague Street and 601 Lexington Ave (Tishman Speyer, Getty, BXP, Google Maps)
New York
As city wields stick, real estate players seek state’s de-carb carrot
Boston Properties CEO Owen Thomas and 200 Fifth Avenue (Getty, Boston Properties, Metro Manhattan Office Space)
New York
Boston Properties takes $280M minority stake in Flatiron offices
Recommended For You