BXP Secures $1.2B Construction Loan for 343 Madison Avenue Office Tower

BXP, the largest Class A office owner in the country, has landed a $1.2 billion construction loan to build its 930,000-square-foot office tower development at 343 Madison Avenue in Midtown, the real estate investment trust (REIT) announced Wednesday morning during its second-quarter earnings call.

The financing for BXP’s 46-story development came from Wells Fargo, Bank of America Securities, Bank of New York Mellon and J.P. Morgan Chase. The loan has a four-year initial term, plus a one-year extension option, according to BXP.

Once construction is completed — a finish date is set for 2029 — the $2 billion project at 343 Madison Avenue will feature offices, dining spaces, terraces and plenty of amenities. The anticipated tower just west of Grand Central Terminal is also already 50 percent pre-leased, after insurance and investment giant C.V. Starr signed a 275,000-square-foot deal in October to anchor the property, and law firm McDermott Will & Schulte took roughly 150,000 square feet there in April. Starr later expanded its initial lease by another two full floors.

BXP executives said during Wednesday’s earnings call that the firm is in negotiations with two more prospective tenants, which would bring the building to nearly 70 percent pre-leased. CEO Owen Thomas said the REIT will lease the rest of the floors closer to delivery to secure “market-leading rents.”

“The pricing power in Manhattan remains quite favorable to landlords, and it is expanding geographically,” Hilary Spann, executive vice president of BXP’s New York region, said during the call. “We are getting inbound interest at our highest-quality buildings and at 343 Madison at rents that are consistently 10 to 15 percent above where they were last year. … And, in the lower stack of our buildings where rents are slightly more affordable, we’re still seeing 20 percent increases year-over-year, and that is fundamentally because there’s a lack of available space in the market. So there’s great strength from the landlord perspective in New York City.”

To continue the good news for BXP, the REIT reported approximately 1.8 million square feet of leasing across 106 transactions during the second quarter of 2026, representing roughly 129 percent of the firm’s 10-year average for second-quarter leasing. That success was largely driven by McDermott’s lease at 343 Madison Avenue and a 322,000-square-foot deal with Boston Dynamics at its Reservoir Place office building in Waltham, Mass. The REIT’s second-quarter leasing success was also a significant increase from the 1.1 million square feet of leasing across 68 transactions it reported during the first quarter of this year.

BXP, too, reported funds from operations (FFO) of $283.4 million, or $1.78 per diluted share, for the second quarter, compared to $271.1 million, or $1.71 per share, during the same period last year.

Meanwhile, the REIT’s revenue increased 3.1 percent to $895.7 million during the second quarter compared to $868.5 million during the second quarter of 2025. It was also up from the $872.1 million during the first quarter of this year.

As for net income, BXP’s $68.6 million for the second quarter was a decrease from $89 million during the same period in 2025 and from $101.6 million during the first quarter. In its earnings release, BXP attributed the drop in net income to its anticipated disposition of Sumner Square, its multi-building office and retail complex in Washington, D.C., which is expected to sell for $63 million.

BXP currently has six assets under contract for sale for total net proceeds of $240 million, including two office buildings in D.C.

In addition, Commercial Observer reported this month that BXP is putting its 7 Times Square ground lease in Manhattan’s Midtown on the market for just north of $700 million.

Isabelle Durso can be reached at idurso@commercialobserver.com.