Boston Properties, Inc (BXP), a real estate investment trust, recently signed a lease with law firm Morrison & Foerster LLP, for 180,000-square feet space at 250 West 55th Street in Midtown Manhattan in New York City.
Boston Properties plans to restart construction at the 1 million-square feet building after securing the services of the law firm as a major tenant. The company began constructing this 39-storey building in late 2007 but suspended the same in late 2009 as a lease transaction with another major law firm fell through. The company now expects to recommence construction by fall 2011 and intends to complete it by spring 2014.
The resumption of the project is expected to cost the company an additional $400 million, excluding capitalized interest, thus bringing the total cost of the building upon completion to approximately $1.05 billion. The company has begun interest capitalization on its existing investment of $480 million and will capitalize the remaining project costs as incurred.
After the development of 250 west 55th street, the office tower will be considered as one of the most elite office buildings in Manhattan. The resumption of construction is a testimony to the city’s improving economy as well as the overall office market.
Massachusetts-based Boston Properties, Inc. is a fully integrated, self-administered and self-managed real estate investment trust (REIT) that owns and develops one of the largest first-class office portfolios in the U.S.Boston Properties concentrates on a few select high-rent, high barrier-to-entry geographic markets, which usually fare better in a faltering economy. Two of the largest markets of the company, New York and Washington DC, are still considered the best office markets in the U.S.
Boston Properties currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Vornado Realty Trust (VNO) currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
BOSTON PPTYS (BXP): Free Stock Analysis Report
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