Exhibit 99.1
PRESS RELEASE
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Reckson Associates Realty Corp.
225 Broadhollow Road
Melville, NY 11747
(631) 694-6900 (Phone)
(631) 622-6790 (Facsimile) Rubenstein Communications
Contact: Scott Rechler, CEO Media Contact: Rick Matthews
Michael Maturo, CFO (212) 843-8267
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FOR IMMEDIATE RELEASE
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Reckson Acquires Long Island's Premier Office Complex For $240 Million
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Acquisition Caps-Off Robust Period of Investment Activity Totaling
Approximately $1 Billion Year to Date in Several Targeted Submarkets
(MELVILLE, NEW YORK, October 12, 2005) - Reckson Associates Realty Corp.
(NYSE: RA) announced today that the Company has acquired a 1.1 million square
foot, Class A trophy office complex, consisting of two 15-story office towers
located in Uniondale, Long Island, for approximately $240 million.
Reckson Plaza, formerly known as EAB Plaza, is the largest and most
recognizable office complex on Long Island. With this strategic acquisition,
Reckson has increased the Company's Long Island portfolio to approximately 5
million square feet, further enhancing Reckson's Class A office franchise on
Long Island and throughout the New York Tri-State area. In addition, Reckson
Plaza increases the Company's portfolio in the Mitchel Field area, which is
part of the Central Nassau County submarket, to approximately 2.6 million
square feet of Class A office space, further solidifying Reckson's position as
the leading provider of the highest quality office space and as the "Landlord
of Choice".
The property is approximately 90% occupied and is leased to high credit
quality tenants including Citibank, N.A, Washington Mutual and Dreyfus Service
Corporation. The remainder of Reckson's Long Island office portfolio is
approximately 96% leased. The Company believes that there will be strong
demand for a building of Reckson Plaza's quality, and views this acquisition
as an opportunity to continue to capitalize on the solid fundamentals of the
Long Island commercial real estate market. Reckson expects to generate an
initial GAAP net operating income (NOI) yield of approximately 6.5% on Reckson
Plaza.
Reckson believes it can increase the property's value by effectively
addressing its near-term vacancies, using its pricing power in the market to
increase rents and leveraging its scale to generate significant operating
expense efficiencies. Operating expenses prior to Reckson's acquisition of the
property were running materially higher than expenses at the Company's
neighboring Omni property which offers the same high quality space and
amenities. Reckson anticipates that its property operating initiatives will
result in cumulative annual NOI growth in excess of 5.0%.
Commenting on the transaction, Scott Rechler, Reckson's President and Chief
Executive Officer, said, "We have very exciting plans for Reckson Plaza. While
the complex is one of Long Island's premier landmarks, we believe that under
Reckson's ownership, the property can be restored to its original position as
one of the country's most impressive suburban office developments, commanding
premium rents and offering superior services and amenities. Reckson Plaza,
along with our nearby Omni property, are unparalleled quality suburban office
developments which serve as a strong foundation for Nassau County's commercial
hub."
In September of 2003, Reckson initiated its investment in Reckson Plaza in the
form of a mezzanine loan to the seller. Subsequently, Reckson increased its
investment which aggregated approximately $27.6 million. Reckson was able to
acquire the property as a result of this relationship without a competitive
bid. The mezzanine loan was re-paid upon Reckson's closing on the acquisition
of Reckson Plaza.
Michael Maturo, Reckson's Executive Vice President and Chief Financial
Officer, noted, "Including this acquisition, we have completed investments
totaling approximately $1 billion year to date, successfully acquiring Class A
office properties in several of our targeted submarkets located within the New
York Tri-State area. We have been very successful in sourcing off-market
transactions in our target submarkets thereby avoiding bid situations." Mr.
Maturo continued, "The purchase of Reckson Plaza allows us to effectively
recycle capital generated from the sales of core plus assets to our Australian
LPT into a strategic franchise enhancing asset."
In addition, Reckson has purchased the adjoining 8.2-acre development site,
for $19.0 million, which is anticipated to be contributed into a joint venture
between the New York Islanders owner Charles Wang and Reckson in connection
with its proposed redevelopment of the Nassau Coliseum site.
Both Reckson Plaza and the adjoining development site are subject to a
long-term ground lease from the County of Nassau having a term, including
extensions, in excess of 75-years with current annual ground rent of
approximately $0.53 per square foot.
Built in 1984, Reckson Plaza is a 1.1 million square foot, Class A trophy
office complex consisting of two 15-story office towers which are connected by
a three-story mezzanine, lobby and concourse which contains various service
retailers. The property is distinguished by a lobby with an atrium roof that
reaches 75 feet at its highest point and features a dramatic indoor winter
garden with a 60-foot waterfall and many full-
height trees, including exotic tropical plantings. The complex is situated on
28 acres and has superior building finishes such as an exterior facade of
green reflective glass and a lobby consisting of granite floors and walls.
The complex offers outstanding amenities that include a cafeteria, dry
cleaner, sundry shop, daycare center, florist, Citibank branch, U.S. Post
Office, Federal Express/Kinkos, four-story enclosed parking structure and
access and security on a 24/7 basis. The property also contains an outdoor
ice-skating rink that has helped to further establish the strong identity of
the office complex in the community. The rink is frequented by many nearby
residents and is the site of Long Island's best-known annual Holiday Tree
Lighting.
The seller was advised by Yoron Cohen of Cushman & Wakefield.
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 90 properties comprised of approximately 19.0 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.
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