BXP Lands $1.2 Billion Construction Loan for Midtown Office Tower

Boston-based BXP’s planned 930,000-square-foot tower at 343 Madison Ave. has secured a $1.2 billion construction loan, a massive chunk of the estimated $2 billion needed to complete the development of 46-story prime office space in Manhattan, N.Y., situated near Grand Central Terminal’s Madison Concourse.

The loan was provided by Wells Fargo with support from BofA Securities, Bank of New York Mellon and JPMorgan Chase. BXP’s Fried Frank and Wells Fargo’s Riemer Braunstein provided legal counsel for the four-year mortgage, which carries a one-year extension. The initial 2.5% interest rate will drop to 2.25% upon the completion of certain leasing and construction benchmarks.

“We are pleased to complete this financing, which reflects the quality of 343 Madison Avenue, continued confidence in BXP’s development platform and our ability to secure attractive financing terms in today’s market,” said Mike LaBelle, executive vice president and chief financial officer at BXP. “This transaction advances one of our most compelling value-creation opportunities, strengthens our financial flexibility and supports our strategy to deliver long-term value for our shareholders.”

The project, expected to be delivered by 2029, is targeting several sustainability and energy efficiency certifications, including LEED Platinum, Well Core, Energy Star 85+, Fitwel and WiredScore Platinum. Upon completion, 343 Madison will feature a dramatic, double-height, client-exclusive club on the top floors with terraces providing stunning views of Midtown. The list of amenities also includes a lobby café, as well as bicycle storage with cabanas and showers.

Previously, the development faced some financial headwinds. Last year, BXP had to lower dividend payments by 30%, while also contending with Norges Bank, Norway’s sovereign wealth fund, which backed out of a plan to be a 45% partner in the project. However, things have taken a much more positive turn lately as insurance firm Starr signed a 275,000-square-foot lease to anchor the building and then expanded its total occupancy to 320,000 square feet across 14 floors. Law firm McDermott Will & Schulte also took roughly 150,000 square feet there in April.