BXP Sells Equity Stake in 343 Madison Development
BXP keeps pushing forward with its latest Manhattan office project, bringing in Edmond Safra’s AVRS Partners as an equity partner in the development.
AVRS Partners bought a 10.6 percent equity stake in 343 Madison Avenue, Bisnow reported. The Midtown Manhattan office project comes with a $2 billion price tag.
The equity infusion gives BXP more financial flexibility, according to a release on the deal. Owen Thomas’ firm is leaving the door open for more equity deals in the future.
“BXP has been a valued partner to my family for more than a decade,” Safra said in a statement regarding the acquisition.
Over the summer, BXP scored a $1.2 billion construction loan for its development next to Grand Central Terminal. The loan carries an interest rate of SOFR plus 2.5 percentage points, with the spread dropping to 2.25 percentage points after leasing and construction benchmarks are hit.
Wells Fargo led the financing package, which also featured support from BofA Securities, Bank of New York Mellon and JPMorgan Chase. The loan has an initial four-year term and a one-year extension option.
The development at the site of the Metropolitan Transportation Authority’s former headquarters has dealt with financial difficulties. Last September, BXP lowered its dividend by 30 percent to help pay for the office tower, hoping to realize $50 million in quarterly savings. Norges Bank, Norway’s sovereign wealth fund, backed out of a plan to be a 45 percent partner in the project last summer.
But leasing at the 46-story, 930,000-square-foot project is moving in the right direction. Insurance firm Starr signed a 275,000-square-foot lease in December to anchor the building, then exercised an expansion option to bring its total occupancy to 320,000 square feet across 14 floors.
In June, McDermott Will & Schulte, a Chicago law firm, signed a lease for roughly 150,000 square feet. Additionally, BXP disclosed during its second-quarter earnings call that two more tenants were in negotiations, according to the Commercial Observer, which would bring the tower to 70 percent pre-leased.
Construction recently reached the podium level, according to the New York Post. The building is not expected to open until 2029.
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