NEW YORK | 343 Madison Avenue | 844 FT | 49 FLOORS

[NYguy]

https://www.crainsnewyork.com/real-estate/bxp-cuts-dividend-30-pay-development-343-madison-ave

BXP cuts dividend by 30% to pay for development of 343 Madison Ave.


AARON ELSTEIN
September 8, 2025

Developer BXP lowered its dividend by 30% and will use the savings to help pay for the $2 billion office tower that is starting to rise up at 343 Madison Ave.

BXP, one of the nation’s largest office landlords, said Monday that lowering its payout to 70 cents a share from 98 cents will help it retain $50 million in cash every quarter that otherwise would have been gone to shareholders.

“When you launch something like 343, our needs for capital are greater, and $50 million a quarter is very significant,” CEO Owen Thomas said at an investor conference Monday morning.

BXP’s capital needs for the 1 million-square-foot tower grew when Norges Bank unexpectedly backed out in July as a 45% partner at 343 Madison. The $1.7 trillion-in-assets Norwegian sovereign wealth fund hasn’t explained why it stepped away from financing the new tower, but last week it agreed to buy an older one at 1177 Sixth Ave. for $571 million from Silverstein Properties and the California State Teachers Retirement System.

At Monday’s conference, BXP officials made it clear they are all-in when it comes to developing 343 Madison. It’s considered the best development site in Manhattan because it’s connected directly to Grand Central Terminal and close to Park Avenue, which analysts say has the lowest vacancy rate in the city and commands top rents. Although none of the space is leased at 343 Madison, which recently began vertical construction, BXP said one potential tenant has signed a letter of intent for 30% of the space.

In addition to cutting its dividend, BXP is also looking for a new partner to shoulder as much as half of 343 Madison’s development cost. Securing a partner would help BXP obtain a $1 billion construction loan, Thomas said, and reduce its share of the cost to as little as $500 million.

If a new partner can’t be found, Thomas indicated the firm is prepared to finance the tower on its own. He said BXP is trying to raise $1 billion by selling land. It is also ready to part with office buildings in suburban locations.

[DCReid]

I kind of have a concerning feeling about this development...I just hope it does not impact the development of the wonderful 175 Park Avenue (Grand Hyatt) masterpiece...

[streetscaper]

Originally Posted by DCReid

I kind of have a concerning feeling about this development...I just hope it does not impact the development of the wonderful 175 Park Avenue (Grand Hyatt) masterpiece...

No need to worry...Nothing at all can ever impact the development of the wonderful 175 Park Avenue (Grand Hyatt) masterpiece

[NYguy]

Originally Posted by DCReid

I kind of have a concerning feeling about this development...I just hope it does not impact the development of the wonderful 175 Park Avenue (Grand Hyatt) masterpiece...

It would impact that no more than any of the other surrounding developments. However, the smaller floorplates here are more suited to smaller leases than what is needed at 175 Park Avenue.

[ajbeaver25]

With all of the new class A offices being built, do you think the old but iconic towers like ESB and 30 rock will struggle to sign tenants? Similar to how the twin towers were quickly outdated with the asbestos and low ceilings.

[NYguy]

Originally Posted by ajbeaver25

With all of the new class A offices being built, do you think the old but iconic towers like ESB and 30 rock will struggle to sign tenants? Similar to how the twin towers were quickly outdated with the asbestos and low ceilings.

No. For all the new office space being built and planned, it's still just a relatively small amount of the NY office market overall. That's because. like the residential market for example, there are tiers to what people want and will spend. What you see being built in Hudson Yards and Grand Central area stand at the top of that as far as the office market is concerned. But that doesn't mean all the rest is trash. Sixth Avenue does pretty well, and often goes toe-to-toe with Park Avenue. As Park Avenue is limited, we are now seeing an emerging Madison Avenue in terms of that kind of space.