[NYguy]

https://www.crainsnewyork.com/real-estat...ts-weigh-plan-developing-343-madison-ave

Rising construction costs weigh on plan for Midtown tower


AARON ELSTEIN
May 12, 2025

Thanks to soaring prices for steel and other commodities, the cost of a Midtown tower has grown to $2,000 per square foot, Goldfarb said. That’s 66% more than JPMorgan paid for its tower nearing completion at 270 Park Ave.
“Even to the big boys, $2,000 a foot is a big number,” Goldfarb said.

Thomas, who teamed up with Norway’s $1.7 trillion sovereign wealth fund to develop 343 Madison, insisted on a recent conference call that work will begin this year.

BXP officials have said rents of $225 per square foot will be needed for the math to work at 343 Madison, a price that only a handful of floors in Manhattan command. Real estate experts say 343 Madison, which is being marketed as a “zero carbon premier workplace” could achieve those rents thanks to its location, just a five-minute walk from the Grand Central clock.

Thomas said BXP has made lease proposals to seven potential anchor tenants and another 10 are “considering” the building.

For now, however, the only work underway is a new entrance for the Long Island Rail Road.

On Monday, 343 Madison’s backers got encouraging news when the U.S. and China agreed to a 90-day truce on their tariff war. BXP shares rose by 4%, and the price fell for copper, though the industrial metal remains 25% higher than 12 months ago.

Tomorrow, BXP president Douglas Linde will make his case that 343 Madison will be worth waiting for. He’ll be interviewed by Bank of Montreal real estate analyst John Kim at the InterContinental Hotel, just half a block from Park Avenue, one of the few corridors left where developers can reliably fill office buildings at top-dollar rents. In addition to the new JPMorgan tower, a plan to redevelop 350 Park into a 62-floor, 1.8 million square-foot headquarters for financial firm Citadel is being reviewed by the Department of City Planning.

343 Madison’s relatively small size means BXP and its partner will need to raise less money than 350 Park’s developers. The question is how deep they’ll dig into their own pockets to pay the estimated $2 billion in construction costs.