BXP’s high-profile Manhattan trophy office tower under construction has landed its first tenant: global investment and insurance giant Starr.
Starr signed a 20-year lease spanning 275,000 square feet across floors 16 through 27 to occupy about 30% of 343 Madison Ave., a 930,000-square-foot tower with direct access to Grand Central Terminal, BXP said Wednesday in a statement. The location will serve as Starr’s New York headquarters.
Starr’s New York home is currently at 399 Park Ave., also owned by BXP and where Starr has been a tenant for over 20 years, according to CoStar data. Its footprint there spans about 191,000 square feet.
Starr also has an office spanning 49,264 square feet at 1177 Avenue of the Americas in a lease signed in May, CoStar data shows.
Starr’s lease at 343 Madison was signed in December, a BXP spokesperson told CoStar News, declining to specify the terms. A Starr spokesperson said the firm will relocate from 399 Park but did not comment on its plans for 1177 Avenue of the Americas and other details.
“This move marks our continued growth, not only in the U.S., but globally,” Jeff Greenberg, chairman and co-chief executive officer of Starr, said in the statement.
Office market rebound
Starr’s lease comes as Manhattan’s office leasing volume last year rose 20.1% from a year earlier to 42.9 million square feet, its highest level since 2014, according to a study from the brokerage Savills. Demand has been driven by tenants seeking new or renovated office properties near transit hubs such as Grand Central, leading to what a separate Colliers report has described as Manhattan’s office rebound reaching a “watershed” moment.
The market asking rent around Grand Central has reached a record high of $82.14 per square foot, above New York metro’s average of $60, according to a CoStar analysis.
Top-dollar office rent deals rose to record highs in Manhattan last year, according to a JLL study. Tenants signed 313 transactions at $100-plus starting per-square-foot rents, totaling 9.9 million square feet, JLL data shows. Towers on corporate-headquarters-heavy Park Avenue and near Grand Central commanded some of the largest deals. A case in point: SL Green Realty’s One Vanderbilt, also with direct access to Grand Central, secured Manhattan’s highest starting rent last year at $305 per square foot, JLL said.
343 Madison, also near JPMorgan Chase’s new ground-up headquarters building at 270 Park Ave., has implied net rents of $170 per square foot or gross rents "well in excess" of $200 per square foot, Evercore ISI analyst Steve Sakwa previously estimated. Piper Sandler analyst Alexander Goldfarb said last year 343 Madison marked “the best current development site in" New York.
"Starr’s commitment to 343 Madison underscores the strength of this location and the enduring demand for high-performance workplaces in Midtown,” said Hilary Spann, executive vice president of the New York region for BXP, in a statement.
Designed by Kohn Pedersen Fox, the 46-story tower, with an estimated cost of $2 billion, is set to feature a dramatic double-height, client-exclusive club with terraces overlooking midtown Manhattan. There are also plans for a lobby cafe and bicycle storage with cabanas and showers, BXP said. The building will be fully electric and feature a direct outside air system. Construction is expected to wrap up in late 2029, BXP said.
For the record
Starr was represented by John Picco, Peter Van Duyne and Alex Lachmund from Cushman & Wakefield in the transaction. BXP was represented by Peter Turchin, John Maher, Evan Haskell and Caroline Merck from CBRE. Legal counsel was provided to Starr by Skadden, Arps, Slate, Meagher and Flom and to BXP by Fried, Frank, Harris, Shriver & Jacobson.