Bucking fears of a bleak future for office buildings, SL Green is taking the plunge on a $2.3 billion speculative project that bets on a revived city three years from now.
The publicly traded developer started work on One Madison — a 1.4 million square-foot tower that superimposes 21st century environmentally attuned construction onto the original 19th century structure at Madison Avenue and East 23d Street.
The job won’t be finished until the fall of 2023, which gives the developer plenty of time to find tenants. Even so, it’s an audacious stroke by SLG and its joint-venture partners, Texas-based Hines and National Pension Service of Korea.
One Madison launched even as Manhattan’s office towers remain 85 percent unoccupied despite being 88 percent leased.
SL Green Chairman and CEO Marc Holliday termed the situation “frustrating” in a third-quarter earnings call, but said, “I think [that work-from-home employees] will be back.” Whenever that may be “doesn’t, in our estimation, affect any of the long-term fundamentals of things we look at.”
“I think 2023 is the perfect time to bring One Madison onto the market,” SL Green executive vice president and leasing director Steven Durels said this week. “I think we’ll be past COVID and the economy will be in growth mode.”
SL Green on Monday closed on a $1.25 billion construction loan for the project from a consortium of seven banks.
4W Mag 