SL Green has signed global investment firm Franklin Templeton to a 15-year lease for 347,000 square feet at the company’s One Madison Avenue office tower in New York City. The firm will relocate to the building and occupy floors 11 through 22 in the tower portion of the building, located in the heart of the city’s Flatiron District, when it opens next year. Franklin Templeton’s lease is the second largest lease deal in Manhattan so far this year, following KPMG’s 450,000 lease announcement at Two Manhattan West in August. With this latest deal, One Madison Avenue is now 55 percent leased, according to SL Green.
The REIT is hoping its latest tower will be a gamechanger for the neighborhood. “One Madison will transform the Midtown South market much in the same way that One Vanderbilt Avenue has transformed the Midtown East market,” said SL Green Chairman & CEO Marc Holliday in the announcement. The lease comes several months after IBM signed on to One Madison Avenue as anchor tenant, taking 300,000 square feet. The tech company is consolidating its Manhattan offices into one location at the building that will span three entire floors and portions of two other floors. One Madison Avenue is an adaptive reuse project by SL Green that kicked off construction in the fall of 2020. The $2.3 billion development entails a 26-story office tower with 500,000 square feet of office space being built atop an existing 13-story building that will be extensively renovated. Building features include two full garden floors and state-of-the-art HVAC systems, as well as a restaurant, food hall and tenant lounge.
Manhattan office leasing had a stellar month in August, with 3.4 million square feet leased across the borough, the most since January of 2020, according to Colliers. It’s a market that has bounced back considerably since the early months of the pandemic. Year-over-year, Manhattan leasing activity is up 39.5 percent. Major relocations like Franklin Templeton’s move to One Madison Avenue and law firm Freshfields Bruckhaus Deringer’s move downtown to 3 World Trade Center is good news for developers of new, Class A product. But it’s more bad news for owners of older office buildings who are struggling to compete for tenants amid the persistent flight-to-quality trend.