(Bloomberg) — International Business Machines Corp. and Franklin Templeton are in talks to relocate their New York headquarters to a $2.3 billion office project in the Flatiron district.
The companies are both exploring large leases at One Madison, according to people familiar with the matter, who asked not to be named because the negotiations are private. No deal is done and the talks may fall apart.
SL Green Realty Corp. and Hines are gutting and transforming the skyscraper overlooking Madison Square Park, while keeping the base and adding a second tower on top of it. In October, Chelsea Piers Fitness agreed to be the project’s first retail tenant. Plans also call for an upscale restaurant, artisanal food market and tenant-exclusive lounge with elevator access to a rooftop deck. The project is set to be completed in about two years.
IBM is considering roughly 350,000 square feet (32,500 square meters) in the tower, and Franklin Templeton is in talks for more than 200,000 square feet, one of the people said.
IBM declined to comment on One Madison but said it’s moving forward with plans to bring all its New York City staff into one location. Representatives for Franklin Templeton, SL Green and Hines declined to comment.
Technology and finance firms are committing to offices in Manhattan even amid a surge in coronavirus cases. Leasing jumped to 9.3 million square feet in the fourth quarter, the most in two years, according to Savills Research. Morgan Stanley recently signed one of New York’s biggest office deals since the pandemic started.
The building, formerly home to Credit Suisse Group AG, is owned by a consortium including SL Green, the National Pension Service of Korea and Hines. In December, SL Green sold a 25% stake to an unnamed international investor, which has committed at least $259 million of equity to the project.
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