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Boston Properties Suspends Midtown Project

NEW YORK CITY-The REIT is halting construction on 250 W. 55th St. after negotiations with an anchor tenant fell through.

By Cody Lyon | Updated on February 09, 2009

NEW YORK CITY-In yet another sign of the market’s softening amid the economic downturn, Boston Properties announced late Friday it will suspend construction of its one-million-square-foot office and retail project at 250 W. 55th St. in Midtown Manhattan. The REIT says the suspension results from its inability to conclude a lease transaction with a major law firm with which it had been negotiating over the past year.

The “large law firm,” reportedly Proskauer Rose, had been close to signing for around 500,000 square feet of the planned building. A release from Boston Properties says the law firm had agreed to financial terms on a lease transaction over the past year. However, the firm informed Boston Properties that it was “unable to proceed on those terms,” according to the release. As a result, the REIT deemed the Midtown project “economically infeasible in today’s environment.”

Another law firm, Gibson, Dunn & Crutcher, had agreed to take 250,000 square feet of space in the same building, according to published reports. A leasing agreement by both law firms would have secured around 70% occupancy for the building. A spokeswoman for Gibson Dunn had no comment; Proskauer Rose did not return GlobeSt.com’s calls by deadline.

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