UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 26, 2005
RECKSON ASSOCIATES REALTY CORP.
and
RECKSON OPERATING PARTNERSHIP, L.P.
(Exact name of each Registrant as specified in its Charter)
Reckson Associates Realty Corp. - Maryland Reckson Associates Realty Corp. -
Reckson Operating Partnership, L.P. - Delaware 11-3233650
(State or other jurisdiction of incorporation or organization) Reckson Operating Partnership, L.P. -
11-3233647
(IRS Employer ID Number)
225 Broadhollow Road 11747
Melville, New York (Zip Code)
(Address of principal executive offices)
1-13762
(Commission File Number)
(631) 694-6900
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrants under any of
the following provisions (see General Instruction A.2. below):
/ / Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
/ / Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
/ / Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
/ / Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 8.01. Other Events.
Australian Offering and Formation of Joint Venture. Reckson
Associates Realty Corp. has announced the commencement of marketing of an
offering in Australia of A$271 million (approximately US$203 million) of units
in Reckson New York Property Trust ("Reckson LPT"), a newly-formed listed
property trust to be traded on the Australia Securities Exchange (ASX). It is
contemplated that Reckson LPT will contribute the net proceeds of the offering
in exchange for a 75% indirect interest in a newly-formed joint venture in the
United States. Reckson will transfer 25 of its properties with a value of
approximately $563 million and containing an aggregate of 3.4 million square
feet to the joint venture in exchange for a 25% interest and approximately
US$502 million in cash (inclusive of proceeds from mortgage debt). Reckson
will arrange for approximately US$319 million of debt, including approximately
US$247 million of fixed rate debt and approximately US$72 million of floating
rate debt, that will encumber the properties transferred to the joint venture.
Reckson will also grant the joint venture options to acquire 10 additional
properties containing an aggregate of approximately 1.2 million square feet
over a two year period at a price based upon the fair market value at the time
of transfer to the joint venture.
Pursuant to the terms of the offering of the units of Reckson LPT,
investors will pay 65% of the price of the units in a closing scheduled to
occur in late September 2005 and the remaining 35% in October 2006. Reckson
will transfer the 25 properties to the joint venture in three tranches, with
properties having a value of approximately US$367 million being transferred in
late September 2005, approximately US$72 million being transferred in January
2006 (such transfer to be funded entirely from the proceeds of mortgage debt)
and approximately US$124 million being transferred in October 2006.
Reckson also announced the formation of Reckson Australia Management
Limited ("RAML"), a wholly-owned subsidiary, that will manage Reckson LPT and
serve as its "Responsible Entity." The Responsible Entity will be managed by a
six member board that will include three independent directors from Australia.
Affiliates of Reckson will provide asset management, property management,
leasing, construction and other services to the joint venture.
It is anticipated that a portion of the gain relating to the
properties transferred to the joint venture will be deferred through an
exchange qualifying under Section 1031 of the Internal Revenue Code in
connection with Reckson's acquisition of EAB Plaza in Uniondale, New York.
Reckson does not currently anticipate that it will make any special
distribution to stockholders with regard to the gain.
Transaction Fees. Under the terms of the offering, Reckson will be
entitled to receive a structuring fee of 1% of Reckson LPT's indirect share of
the joint venture's initial enterprise value (including each of the three
tranches), and a capital structuring fee of 0.50% of Reckson LPT's indirect
share of the initial debt of the joint venture.
Ongoing Fees. It is contemplated that RAML and a wholly-owned,
indirect U.S. subsidiary of Reckson will share an annual management fee for
managing Reckson LPT equal to 0.45% of the gross value of Reckson LPT's
indirect interest in the joint venture. Affiliates of Reckson will also
receive property management fees of 3.5% of gross revenues at the properties
held by the joint venture, a debt placement fee of 0.50% of any indebtedness
of the joint venture (other than the initial indebtedness) less any fees
payable to third parties, an acquisition fee of 1%, and a due diligence fee of
0.25%, of the purchase price of any properties acquired by the joint venture
other than the initial 25 properties and the option properties, a disposition
fee of 1% of the value of any property sold by the joint venture less any fees
payable to third parties, construction management fees on properties owned by
the joint venture equal to 10% of the cost of improvements performed by
Reckson and 3.5% of the cost of improvements supervised by Reckson, and
leasing fees payable at market rates.
Although the marketing of the units of Reckson LPT has commenced,
the underwriting agreement relating to the offering, contribution agreement
relating to the contribution of the properties to the joint venture and other
documents have not been executed. There can be no assurance that the offering
will be completed and that the joint venture will be formed on the terms
described above or at all. The offering is being made outside of the United
States. Nothing contained herein shall be construed as an offering of the
units of Reckson LPT.
Properties to be contributed to the Joint Venture. The following is
a list of the properties anticipated to be contributed by Reckson to the joint
venture and the properties that will be subject to the option:
Property Location
-------- --------
Tranche I
- ------------------------------------------------------------------------------
1) 150 Motor Parkway Hauppage, NY
2) 300 Motor Parkway Hauppage, NY
3) 35 Pinelawn Road Melville, NY
4) 88 Duryea Road Melville, NY
5) 200 Broadhollow Road Melville, NY
6) 55 Charles Lindbergh Blvd Uniondale, NY
7) 100 Executive Drive West Orange, NJ
8) 200 Executive Drive West Orange, NJ
9) 10 Rooney Circle West Orange, NJ
10) 492 River Road Nutley, NJ
11) 100 Grasslands Road Elmsford, NY
12) 80 Grasslands Road Elmsford, NY
13) 660 White Plains Road Tarrytown, NY
14) 505 White Plains Road Tarrytown, NY
15) 560 White Plains Road Tarrytown, NY
16) 555 White Plains Road Tarrytown, NY
17) 225 High Ridge Road Stamford, CT
Tranche II
- ------------------------------------------------------------------------------
18) 6800 Jericho Turnpike Syosset, NY
19) 6900 Jericho Turnpike Syosset, NY
20) 580 White Plains Road Tarrytown, NY
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Property Location
Tranche III
- ------------------------------------------------------------------------------
21) 1660 Walt Whitman Road Melville, NY
22) 520 Broadhollow Road Melville, NY
23) 50 Marcus Drive Melville, NY
24) 300 Executive Drive West Orange, NJ
25) 710 Bridgeport Avenue Shelton, CT
Option Properties
- ------------------------------------------------------------------------------
1) 225 Broadhollow Road (1) Melville, NY
2) 50 Charles Lindbergh Boulevard Uniondale, NY
3) 51 Charles Lindbergh Boulevard Uniondale, NY
4) 40 Cragwood Road South Plainfield, NJ
5) 100 Campus Drive (2) Princeton, NJ
6) 104 Campus Drive (2) Princeton, NJ
7) 115 Campus Drive (2) Princeton, NJ
8) 99 Cherry Hill Road Parsippany, NJ
9) 119 Cherry Hill Road Parsippany, NJ
10) 520 White Plains Road Tarrytown, NY
- ---------------
(1) Option is subject to Reckson exercising its option to acquire the
property.
(2) Option is on Reckson's 97% interest and subject to a potential additional
performance-based promote payment due to the minority partner.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Jason M. Barnett
-----------------------------------
Jason M. Barnett
Executive Vice President
and General Counsel
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.,
its General Partner
By: /s/ Jason M. Barnett
-----------------------------------
Jason M. Barnett
Executive Vice President
and General Counsel
Date: July 26, 2005
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