MELVILLE, N.Y.--(BUSINESS WIRE)--Jan. 5, 2006--Reckson Associates
Realty Corp. (NYSE: RA) announced today that the Company has closed on
a 1.6 million square foot office portfolio, consisting of 14
buildings, concentrated within five business parks, located in
Westchester County, for approximately $255 million or $163 per square
foot.
The office portfolio is exceptionally well located on the Platinum
Mile on Interstate-287, at the intersection of Interstate-684 and the
Hutchinson River Parkway. The properties are located in the heart of
the Westchester County office market that historically has been the
choice location for the county's most prestigious companies. The
location offers excellent access to the White Plains Central Business
District, the rail and bus transportation center, as well as easy
access to the most sought after residential communities in
Westchester. This acquisition enhances the Company's critical mass in
Westchester and complements its current portfolio locations on the
Interstate-287 corridor in the very attractive eastern submarket.
Commenting on the transaction, Michael Maturo, Reckson's Executive
Vice President and Chief Financial Officer, said, "A prerequisite for
being selected to acquire this portfolio at such an attractive
valuation was our commitment to close on the acquisition by year end."
Mr. Maturo continued, "Within three weeks of executing the contract we
were able to close, further reinforcing the value of our financial
flexibility and our local market expertise."
Reckson financed this core plus office portfolio through the
Company's unsecured revolving credit facility. The Company will seek
to create value by repositioning the portfolio and anticipates
recapitalizing its position through a joint venture transaction.
Reckson is purchasing the portfolio at an attractive price of
approximately $163 per square foot, representing a discount to
replacement cost in excess of 35%. The portfolio is approximately 70%
occupied, compared to an approximate 91% occupancy rate for the
balance of Reckson's Westchester office portfolio. This acquisition
reflects Reckson's focus on acquiring properties that offer the
opportunity to apply the Company's expertise to create value. Reckson
is uniquely equipped to increase the portfolio's value by effectively
addressing its vacancies, increasing rents, leveraging the Company's
scale to generate significant operating expense efficiencies and to
capitalize on the value-added nature of the transaction based on its
mix of properties in need of redevelopment and repositioning. Reckson
anticipates that these operating initiatives will increase the
portfolio's initial GAAP net operating income (NOI) yield of
approximately 5% to approximately 9% upon stabilization.
With this acquisition Reckson continues a robust period of
investment activity. During 2005, the Company completed investments
totaling approximately $1.3 billion, successfully acquiring office
properties in several of Reckson's targeted submarkets located in New
York City, Westchester, Connecticut, Northern New Jersey and Long
Island.
The properties in this office portfolio are distinguished by
architectural glass exteriors, well maintained landscaping and lobbies
with high-end finishes. The properties and office parks offer many
outstanding amenities which include full service cafeterias,
cafe/coffee bars, generous parking allocations, retail banking, bus
service, daycare centers, sundry shops and conference facilities.
Reckson Associates Realty Corp. is a self-administered and
self-managed real estate investment trust (REIT) specializing in the
acquisition, leasing, financing, management and development of Class A
office properties.
Reckson's core growth strategy is focused on the markets
surrounding and including New York City. The Company is one of the
largest publicly traded owners, managers and developers of Class A
office properties in the New York Tri-State area, and wholly owns, has
substantial interests in, or has under contract, a total of 103
properties comprised of approximately 20.1 million square feet. For
additional information on Reckson Associates Realty Corp., please
visit the Company's web site at www.reckson.com.
Certain matters discussed herein, including guidance concerning
the Company's future performance, are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995. Although the Company believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions,
forward-looking statements are not guarantees of results and no
assurance can be given that the expected results will be delivered.
Such forward-looking statements are subject to certain risks, trends
and uncertainties that could cause actual results to differ materially
from those expected. Among those risks, trends and uncertainties are
the general economic climate, including the conditions affecting
industries in which our principal tenants compete; financial condition
of our tenants; changes in the supply of and demand for office
properties in the New York Tri-State area; changes in interest rate
levels; changes in the Company's credit ratings; changes in the
Company's cost of and access to capital; downturns in rental rate
levels in our markets and our ability to lease or re-lease space in a
timely manner at current or anticipated rental rate levels; the
availability of financing to us or our tenants; changes in operating
costs, including utility, real estate taxes, security and insurance
costs; repayment of debt owed to the Company by third parties; risks
associated with joint ventures; liability for uninsured losses or
environmental matters; and other risks associated with the development
and acquisition of properties, including risks that development may
not be completed on schedule, that the tenants will not take occupancy
or pay rent, or that development or operating costs may be greater
than anticipated. For further information on factors that could impact
Reckson, reference is made to Reckson's filings with the Securities
and Exchange Commission. Reckson undertakes no responsibility to
update or supplement information contained in this press release.
CONTACT: Reckson Associates Realty Corp.
Scott Rechler, CEO
Michael Maturo, CFO
Salvatore Campofranco, COO
Phone: 631-694-6900
Facsimile: 631-622-6790
or
Media:
Rubenstein Communications
Rick Matthews, 212-843-8267
SOURCE: Reckson Associates Realty Corp.
