Shareholders of BXP will see a 30 percent reduction in dividends as the company seeks to finance its $2 billion office tower project at 343 Madison Avenue. The dividend will decrease from 98 cents per share to 70 cents per share, which is expected to retain $50 million each quarter for the developer.
“When you launch something like 343, our needs for capital are greater, and $50 million a quarter is very significant,” said Owen Thomas, chief executive officer of BXP, during an investor conference.
The new office development, covering one million square feet and located next to Grand Central Terminal on the former site of the Metropolitan Transportation Authority’s headquarters, faced a setback when Norges Bank withdrew from its plan to take a 45 percent stake in the project earlier this summer.
BXP is currently seeking another partner that could cover up to half of the development cost. According to Thomas, securing such a partnership would make it possible for BXP to obtain a $1 billion construction loan and reduce its own costs to $500 million. In the absence of a partner, BXP plans to raise funds by selling land and suburban office properties.
Vertical construction has started at the site. Additionally, BXP has reached a letter of intent with a tenant for 30 percent of the building’s leasable space.
On Monday, BXP’s stock price declined by 1 percent to $76 per share. This figure remains about one-third lower than its value before the pandemic.
