Property & market · Market
BXP Favors Office Development Over Acquisitions, With 343 Madison Underway
On Oct. 28, BXP said it expects higher returns from office development than acquisitions under current market conditions. Its 930,000-square-foot 343 Madison project in Midtown is 56% leased, with a potential lease under discussion that could lift that figure to 70%.
Development takes priority
BXP expects to put more new investment dollars into office development than acquisitions, CEO Owen Thomas said on the company’s third-quarter earnings call on Oct. 28. The Boston-based REIT has potential development sites across each of its operating cities, he said, provided it can secure an anchor tenant before construction.
Thomas said the company expects cash development yields of about 8% for its New York projects and more than 9% for its Washington, D.C., projects. In his view, acquisitions of the quality BXP seeks would be unlikely to offer comparable value in current conditions, though the company continues to review acquisition opportunities.
Manhattan project and pipeline leasing
BXP has three office developments underway: a 930,000-square-foot building at 343 Madison in Midtown Manhattan, plus two 320,000-square-foot Washington projects, one under construction and one in planning. The company’s office development pipeline is 70% preleased.
The Washington developments at Metro Center and in the West End are approximately 90% and 75% preleased, respectively. 343 Madison is 56% leased; BXP said it is discussing a lease for the building’s bottom five floors that would bring leasing to 70%.
BXP also reiterated that it is pursuing another preleased Washington office development, with an expected 2028 groundbreaking. Bisnow previously reported that the company had been considering 1133 Connecticut Ave. NW near Dupont Circle, a site owned by the New York State Teachers’ Retirement System.
Asset sales fund development
For more than a year, BXP has been selling land, residential holdings and nonstrategic office assets to help fund its office and multifamily development pipelines. The company announced a $1.9 billion disposition target by 2028 in September 2025.
Thomas said BXP had completed $1.37 billion of that target, or $1.45 billion including four sales under contract once they close. During the prior quarter, it sold two downtown Washington office buildings for a combined $155.4 million, generating $150.3 million in net proceeds.
The REIT is also seeking a joint-venture partner for its Washington office project underway, after selling a 10.6% stake in 343 Madison earlier in October. In the third quarter, BXP reported $911.4 million in revenue, up 4.6% year over year, and net income of $114.5 million, compared with a $121.7 million net loss a year earlier.
Its central business district premier-workplace portfolio was 91.8% occupied and 94.1% leased, while the total portfolio was 89.4% occupied and 91.9% leased. BXP executed 74 leases totaling 1.2 million square feet during the quarter, including a 206,000-square-foot Google lease in Washington and a 112,000-square-foot Seattle renewal by Davis Wright Tremaine.
Homix perspective
For Manhattan’s 343 Madison, the key reported marker is leasing: BXP said a prospective lease for five lower floors could raise the project from 56% to 70% leased. The company’s Oct. 28 comments indicate that preleasing and projected development yields, rather than acquisition pricing, are guiding its current office investment plans.
Source & further reading
Bisnow New York ↗Source published: October 28, 2026
This briefing is based on the cited original reporting and is general market education, not legal, tax, lending, or investment advice. Facts and rules can change; verify them with the appropriate licensed professional before a transaction.
