Since this design does not appear on BP’s or KPF’s websites, I wonder if the design is still being tweaked. I don’t even recall seeing a massing design with this tower on the DOB’s website. I’ve just seen it on windtunnnel tests.
Thanks for the update!
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https://www.bloomberg.com/news/artic…uverify%20wall
Jefferies Explores Moving, Expanding Bank’s NYC Office Space
Bank is looking for new offices but may opt to stay put
Jefferies is currently at 520 Madison Ave. in Manhattan
ByNatalie Wong and Katherine Doherty
April 26, 2023
Quote:
Jefferies Financial Group Inc. is exploring options for more office space in Manhattan as its headquarters lease is set to expire near the end of the decade.
The New York-based bank is seeking roughly 600,000 square feet (55,740 square meters) of space, according to people familiar with the matter who asked not to be identified citing confidential information.
A space that large would be bigger than the roughly 460,000 square feet Jefferies has at its current spot at 520 Madison Ave., a 43-story building owned by Tishman Speyer. The bank, which hired brokerage Cushman & Wakefield for its search, could also decide to stay put at the Madison Avenue tower, one of the people said.
With large lease expirations on the horizon, a handful of big finance firms are looking to potentially upgrade to newer spaces in areas such as Midtown Manhattan or Hudson Yards. While New York’s office vacancies have hit record heights, tenants who still want space are seeking the highest-quality offices in newer developments.
Other banks are on the hunt as well. The US unit of Tokyo-based Nomura Holdings Inc. is also looking for new offices, Bloomberg reported Tuesday.
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It woulda been cool if the two classics on the block were somehow integrated into the new building as a hotel or something, with the central light well as a giant atrium.
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Some news on financing, tenants, and design via SSP:
Boston Properties has secured a partner and finalized the ground lease for its planned office tower at 343 Madison Ave., by Grand Central Terminal, the firm said on its second quarter earnings call Wednesday morning.
CEO Owen Thomas identified the partner only as “a leading global real estate investor who will own a 45% interest in the project” and declined to provide additional details. The company’s 99-year ground lease for the site with the Metropolitan Transportation Authority will require it to build a direct entrance to Grand Central Madison, the new portion of Grand Central that allows Long Island Rail Road trains to access the station.
Boston Properties, Inc. (BXP) Q2 2023 Earnings Call Transcript
John Kim
I think I’ll try to ask a multipart question on 343 Madison. Any additional commentary you could provide on the total costs of both the site access and the building itself, development yields that you expect, who the partner is or at least what regions they’re in? And what level of pre-leasing you need to move forward for the project?
Douglas Linde
So let me answer the first three parts of your question, and then we’ll let Hilary answer the fourth. So we’re designing the building. The building hasn’t been designed yet. We are not in a position to discuss the economics of the development or the returns. Clearly, the capital markets are different than they were, so the return thresholds necessary to rationalize putting capital into building are going to be higher than they would have been in 2019 or 2020. I will let Hilary talk about the demand side.
Hilary Spann
Thanks, Doug. The demand side for this building has been interesting in the sense that, as Doug pointed out, the building is still being designed and yet we’re receiving inbound calls from clients who are interested in anchoring the development even in spite of the fact that it would take several years to build the building. This has to do, as Owen mentioned, with the tightness in the Park Avenue district and the Plaza submarket more generally in the sense that there’s very little Class A premier workplace available for folks to occupy and as businesses are expanding in that district, they’re finding themselves boxed out of larger space options.
And so I would say, particularly given the fact that we have not had a very active marketing program in place for 343, the interest in the building has been very, very robust with multiple clients ranging from call it, 200,000 to 300,000 square feet seeking information on the building.
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To me the good news is that demand is there, meaning the building will be as large as the architects can make it given the zoning for the site.
That’s actually not a parameter/decision that the architects make, that’s up to the developer.
But outside of that, the building is still as large as it was when it was downsized.
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„ Boston Properties probably won’t be developing properties in Midtown for a while, either, even though a few months ago the firm finalized a ground lease for a planned 982,000 square-foot office tower at 343 Madison Ave., next to Grand Central Terminal. The project doesn’t have a lead tenant and officials said they will wait a year or two before deciding how to proceed. If the tower doesn’t get built, the ground lease will be returned to the Metropolitan Transportation Authority and Boston Properties would get a refund, Linde said.“
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And this is right next to Grand Central! And so many of you are soooo confident that 175 Park (in its current form) is an absolute sure bet because of the area it’s in. I’m not so optimistic (though I’m not too pessimistic either, just wouldn’t necessarily hold my breath for it to come to come to fruition in present form) .
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Yah this is not ideal news. In fairness they are 2 different companies who of course can have different thresholds for what they are willing to put up and risk, but still, worrying.
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I’m also skeptical any of the proposed office towers will be built. But if there’s one point of optimism, it’s that the sole completed new office tower in the neighborhood, One Vanderbilt, has already gotten leases of $200 psf or more. The “double” in the headline is referring to average Class A office rents which are much lower than the huge rents the newest towers command.
Average rents:
Class A space is more expensive, costing an average of around $91 per square foot per year
One Vanderbilt rents:
It is important to note that despite the average office rent for the building being $250.0 per square foot in 2021, it has decreased to $216.75 per square foot in 2022
Even after declining, the average rent in 1 Vandy is still over $200.
And here’s an extreme case: the highest office floor in 1Vandy sold for over $300 psf.
Sources say GFL Environmental signed a deal for all 9,871 available square feet on the building’s highest office floor, right below its Summit observatory. The asking rent was $322, TRD reported last summer.
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NYC Project Near Grand Central Draws Norway Sovereign Wealth Fund as Investor - Bloomberg
Norges Bank Investment Management purchased a 45% stake in a planned 900,000-square-foot (84,000-square-meter) tower at 343 Madison Ave., according to people with knowledge of the transaction, who asked not to be identified discussing a private matter. Last month, Boston Properties Inc. said that it had a joint-venture partner on the project, which would replace a former Metropolitan Transportation Authority headquarters, but didn’t name the investor.
The venture signed a 99-year ground lease with the MTA for the site. Under the agreement, the developers are required to construct a new entrance to the rail terminal.
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343 Madison Avenue Designed by Kohn Pedersen Fox
Can the design of the skyscraper still change completely? Because I would like the building better with vertical lines in the facade and a top.
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its basically the same building it was a couple years ago.
structurally, it cannot change very much because of the MTA easement.
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