How Does the Starr Lease at 343 Madison Shape BXP's Growth Story?

BXP BXP has added fresh momentum to its Midtown Manhattan portfolio with the announcement of a major lease at 343 Madison Avenue. The company disclosed that Starr has signed a long-term lease at the property, which is currently under development near Grand Central. The deal highlights continued tenant interest in modern, transit-connected office assets and marks an important step in leasing up one of BXP’s most visible projects.

The lease is a clear positive for BXP’s earnings and risk profile. Starr, a global investment and insurance organization, will occupy roughly 275,000 square feet, or about 30% of the approximately 930,000-square-foot building, under a 20-year agreement. Securing a tenant of this scale well ahead of completion improves future cash flow visibility and reduces leasing risk. It also supports BXP’s strategy of focusing capital on large, high-quality developments that can attract blue-chip tenants. 

343 Madison Avenue is designed as a next-generation office building, with direct access to Grand Central’s Madison Concourse and a strong emphasis on sustainability, wellness and amenities. These features align with BXP’s broader push to upgrade its portfolio and meet evolving tenant expectations. Recent company efforts point to disciplined capital deployment, active leasing across core markets and a focus on strengthening the balance sheet.

This lease comes as part of broader positive leasing trends at BXP. In the third quarter of 2025, the company reported a strong leasing quarter with more than 1.5 million square feet signed with a weighted-average lease term of 7.9 years, its best third quarter of leasing since 2019.

The office real estate market remains selective, with tenants prioritizing fewer but better offices. While overall demand is uneven, newer and well-located buildings in Midtown Manhattan continue to see interest from companies willing to commit to long-term, high-quality space. This environment favors landlords like BXP that own and develop premier assets rather than commodity offices.

Wrapping Up on BXP

The Starr lease at 343 Madison Avenue reinforces BXP’s positioning in a changing office market. By securing a sizable, long-term tenant at a flagship development, the company improves income visibility and validates its focus on prime locations and modern design. Although office fundamentals are still stabilizing, BXP’s emphasis on quality assets and disciplined execution should help it navigate near-term challenges while building long-term value.

While shares of this Zacks Rank #3 (Hold) company have declined 4.2% over the past six months against the industry’s gain of 0.1%, analysts have raised its 2025 FFO per share estimates marginally over the past two months to $6.89.

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Prologis PLD and First Industrial Realty Trust FR. Both Prologis and First Industrial Realty Trust carry a Zacks Rank of 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 Prologis’ 2025 FFO per share is pegged at $5.80, which indicates year-over-year growth of 4.32%.

The Zacks Consensus Estimate for First Industrial Realty Trust’s 2025 FFO per share stands at $2.96, which calls for an increase of 11.70% from the year-ago period. 

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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