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What BXP's 343 Madison Lease Means for Office Investors in 2026
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Key Takeaways
BXP signed McDermott for 150,000 square feet at 343 Madison, set for occupancy in October 2029.
With McDermott joining Starr, 343 Madison is now 56% pre-leased, reducing leasing risk.
BXP raised its 2026 FFO guidance midpoint and generated about $1.2B in asset-sale proceeds.
BXP Inc. (BXP - Free Report) has added another important tenant to 343 Madison Avenue, its 930,000-square-foot office tower under construction in Midtown Manhattan. McDermott Will & Schulte signed a lease for about 150,000 square feet, covering floors 31 through 37. The law firm is expected to begin occupying the space in October 2029, around the time BXP plans to deliver the project.
For BXP, the deal is more than just another lease. It helps reduce leasing risk at one of the company’s biggest development projects and supports the case for 343 Madison as a premium office asset near Grand Central Terminal. With McDermott joining Starr, which now has about 320,000 square feet after exercising an expansion option, the building is now 56% pre-leased.
The lease also fits with a broader trend BXP has been highlighting: demand remains strongest for high-quality office space in top locations. The company’s first-quarter results showed more than 1.1 million square feet of leasing, while total portfolio occupancy rose 70 basis points to 87.4%. Its leased percentage reached 90.9%, suggesting more occupancy gains could follow as signed leases begin contributing rent.
There are other positives for investors. BXP raised its 2026 FFO guidance midpoint slightly to a range of $6.90-$7.04 per share and has been selling assets to improve flexibility. Management said asset sales have generated about $1.2 billion of net proceeds through April 28, 2026, which can help fund development needs and support balance sheet goals.
Still, investors should keep a balanced view. 343 Madison will not deliver until late 2029, so the benefits will take time to show up in earnings. Development costs, financing conditions and execution risk remain important. BXP also faces the broader challenge of an office market that is improving in premium buildings but is still uneven overall. The McDermott lease is clearly a positive step, but the stock’s outlook depends on continued leasing progress, disciplined capital use and successful delivery of major projects.
Shares of this Zacks Rank #3 (Hold) company have gained 24.2% over the past three months, outperforming the industry's growth of 7.8%.
The Zacks Consensus Estimate for Vornado’s 2026 FFO per share has been revised marginally upward over the past month to $2.34.
The consensus estimate for CUZ’s 2026 FFO per share is pegged at $2.93, up 3.2% year over year.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
View the Zacks #1 Rank List
Image: Bigstock
What BXP's 343 Madison Lease Means for Office Investors in 2026
Key Takeaways
BXP Inc. (BXP - Free Report) has added another important tenant to 343 Madison Avenue, its 930,000-square-foot office tower under construction in Midtown Manhattan. McDermott Will & Schulte signed a lease for about 150,000 square feet, covering floors 31 through 37. The law firm is expected to begin occupying the space in October 2029, around the time BXP plans to deliver the project.
For BXP, the deal is more than just another lease. It helps reduce leasing risk at one of the company’s biggest development projects and supports the case for 343 Madison as a premium office asset near Grand Central Terminal. With McDermott joining Starr, which now has about 320,000 square feet after exercising an expansion option, the building is now 56% pre-leased.
The lease also fits with a broader trend BXP has been highlighting: demand remains strongest for high-quality office space in top locations. The company’s first-quarter results showed more than 1.1 million square feet of leasing, while total portfolio occupancy rose 70 basis points to 87.4%. Its leased percentage reached 90.9%, suggesting more occupancy gains could follow as signed leases begin contributing rent.
There are other positives for investors. BXP raised its 2026 FFO guidance midpoint slightly to a range of $6.90-$7.04 per share and has been selling assets to improve flexibility. Management said asset sales have generated about $1.2 billion of net proceeds through April 28, 2026, which can help fund development needs and support balance sheet goals.
Still, investors should keep a balanced view. 343 Madison will not deliver until late 2029, so the benefits will take time to show up in earnings. Development costs, financing conditions and execution risk remain important. BXP also faces the broader challenge of an office market that is improving in premium buildings but is still uneven overall. The McDermott lease is clearly a positive step, but the stock’s outlook depends on continued leasing progress, disciplined capital use and successful delivery of major projects.
Shares of this Zacks Rank #3 (Hold) company have gained 24.2% over the past three months, outperforming the industry's growth of 7.8%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are Vornado Realty Trust (VNO - Free Report) and Cousins Properties (CUZ - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Vornado’s 2026 FFO per share has been revised marginally upward over the past month to $2.34.
The consensus estimate for CUZ’s 2026 FFO per share is pegged at $2.93, up 3.2% year over year.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.