UN Renovation Backed by Bonds for NYC Office Upgrades

According to Bloomberg, the United Nations Development Corp. is modernizing two of its longstanding office towers in Midtown Manhattan with the help of municipal bond financing and city support. This UN renovation aims to preserve and enhance the critical workspace for the UN and foreign missions near its global headquarters.

A Public-Private Push

UNDC, a public benefit corporation tasked with supporting the UN’s real estate needs, sold $365M in taxable municipal bonds this week. The funds will help upgrade One and Two UN Plaza — two office towers built in 1975 and 1983 that serve as key hubs for the UN and foreign consulates. This major UN renovation reflects the organization’s long-term investment in maintaining modern, functional diplomatic facilities.

The upgrades, totaling around $548M, will also be supported by $183M in equity from UNDC’s reserves.

What’s Being Upgraded

Bond documents detail improvements including:

• A fully redesigned lobby connecting the buildings
• HVAC system modernization
• Indoor bicycle parking facilities

Turner Construction Company is the general contractor, and Cushman & Wakefield will oversee project management.

Strong Backing, But Not Risk-Free

The bonds are primarily secured by rental income from the buildings’ long-term tenants — the UN and various missions. However, New York City has stepped in to backstop the bonds, pledging to cover any debt-service shortfalls. This support helped earn the bonds AA- ratings from S&P and Fitch.

“It provides comfort to bondholders,” said Fitch analyst Kevin Dolan, noting the city’s backing mitigates risk around lease renewals.

Despite strong tenancy — the towers are 99% leased — investor materials still flag potential risks, including:

• Heavy tenant concentration in diplomatic and UN-related offices
• Security risks, including the threat of terrorism
• Potential construction cost increases, with lingering concerns over international trade policies.

Why it Matters

Unlike much of the commercial office sector, which continues to grapple with high vacancy and tenant churn, the UNDC’s properties have shown remarkable stability. Since their opening, the UN has consistently renewed leases, creating a rare sense of reliability in NYC office real estate.

What’s Next

With the UN’s continued commitment to its East Side campus, the upgrades at One and Two UN Plaza further cement the buildings’ roles as essential diplomatic infrastructure — backed by public financing and city-level support. The scale of the UN renovation also signals confidence in the resilience of mission-critical office assets amid broader market uncertainty.