SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
-------------
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: May 24, 1999
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)
1-13762
(Commission File Number)
225 Broadhollow Road 11747
Melville, New York (Zip Code)
Address of principal executive offices)
(516) 694-6900
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 24, 1999, Reckson Associates Realty Corp. ("Reckson") announced
that the stockholders of Tower Realty Trust, Inc. ("Tower") approved the merger
of the two companies and that the merger was completed. As a result of the
approval by Reckson stockholders relating to the consideration to be paid in the
merger, only Reckson class B common stock and cash was issued in the merger.
Approximately 11.7 million shares of Reckson class B exchangeable
common stock and $107.2 million in cash was paid in total to former Tower
shareholders and unitholders. The merger consideration was paid as follows: (i)
approximately 0.5633 of a share of Reckson class B stock and approximately $7.51
in cash for each Tower share or unit with respect to which Tower shareholders
and unitholders made the cash election and (ii) approximately 0.8364 of a share
of Reckson class B stock for each Tower share or unit with respect to which
Tower shareholders and unitholders made the non-cash election.
Prior to the closing of the merger, Tower sold its Class B New York
City properties consisting of four properties aggregating approximately 671,000
square feet to SL Green Realty Corp., another publicly traded REIT. Reckson has
acquired, through Metropolitan Partners LLC, Tower's remaining 22 properties
with an aggregate of approximately 3.5 million square feet in the Manhattan,
Phoenix/Tuscon and Orlando markets.
ITEM 5. OTHER EVENTS
On May 24, 1999 Metropolitan Operating Partnership, L.P. ("MOP"),
entered into a credit agreement with the institutions from time to time party
thereto as Lenders, Warburg Dillon Read, as Arranger and Book Manager, and UBS
AG, Stamford Branch ("UBS"), as Administrative Agent (the "Credit Agreement").
The Credit Facility matures on November 24, 1999. The Credit Facility is
unconditionally guaranteed by Metropolitan Partners LLC and various
subsidiaries of MOP. The Credit Facility provides for a maximum borrowing of
up to $130 million on the closing date thereof, which amount was fully
borrowed on May 24, 1999. Approximately $60 million of the loan under the
Credit Agreement is secured by a mortgage (the "Secured Portion"). A
subsidiary of MOP is co-obligor of the portion of the loan which is secured.
The remaining $70 million of the loan is unsecured (the "Unsecured Portion").
Borrowings under the Credit Facility will bear interest, at the option of MOP,
at the Base Rate or the one month Eurodollar Rate, plus 2.0% on the Secured
Portion and 2.25% on the Unsecured portion. The Base Rate is defined as the
fluctuating rate equal to the higher of: (i) the rate of interest announced
publicly by UBS in New York, New York from time to time, as UBS's prime rate;
and (ii) the sum of (A) one-half of one percent (0.50%) per annum plus (B) the
federal funds rate in effect from time to time during such period. The
Eurodollar Rate is generally the rate at which deposits in U.S. dollars are
offered by the principal office of UBS in London, England to major banks on
the London interbank market at approximately 11:00 A.M. (London time) two
business days prior to the beginning of the applicable interest period, as
adjusted for applicable reserve requirements.
On June 2, 1999, Reckson closed on a private placement sale of
6,000,000 Series B Convertible Cumulative Preferred Shares, for aggregate
proceeds of $150 million, to Stichting Pensioenfonds ABP and The Travelers
Insurance Company. Shares of said Series B Preferred Stock are redeemable by
Reckson on or after March 2, 2002. In addition, such shares are convertible
into Reckson's common stock at a price of $26.05 per share. The Series B
Shares accumulate dividends at an initial rate of 7.85% per annum with such
rate increasing annually to a rate of 8.85% per annum from and after April 30,
2001.
On May 26, 1999, Reckson announced that Scott Rechler has been named
co-chief executive officer and president. Scott Rechler now shares the chief
executive title with Chairman and co-Chief Executive Officer Donald Rechler.
Additionally, Mitchell Rechler and Gregg Rechler, both executive vice presidents
at Reckson, have been named co-chief operating officers.
Reckson also announced that it has increased the dividend on its common
stock by ten percent to an annualized dividend rate of $1.485 per share.
Reckson's quarterly dividend of $0.37125 is payable on July 16 to shareholders
of record as of July 8.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
3.1 Articles Supplementary Establishing and Fixing the Rights and
Preferences of a Series of Shares of Preferred Stock
10.1 Credit Agreement dated as of May 24, 1999 among Metropolitan
Operating Partners, L.P., Warburg Dillon Read and UBS AG,
Stamford Branch
10.2 Guaranty Agreement dated as of May 24, 1999 among Metropolitan
Operating Partners, L.P., Warburg Dillon Read and UBS AG,
Stamford Branch
10.3 Purchase Agreement dated as of May 27, 1999 among Stichting
Pensioenfonds ABP, The Travelers Insurance Company, The Travelers
Life and Annuity Company, The Standard Fire Insurance Company,
Travelers Casualty and Surety Company, Reckson Associates Realty
Corp. and Reckson Operating Partnership, L.P. relating to 6,000,000
shares of Series B Convertible Cumulative Preferred Stock
10.4 Registration Rights Agreement among Stichting Pensioenfonds
ABP, The Travelers Insurance Company, The Travelers Life and
Annuity Company, The Standard Fire Insurance Company, Travelers
Casualty and Surety Company and Reckson Associates Realty Corp.
relating to 6,000,000 shares of Series B Convertible Cumulative
Preferred Stock
99.1 May 24, 1999 Press Release
99.2 May 26, 1999 Press Release
99.3 June 1, 1999 Press Release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RECKSON ASSOCIATES REALTY CORP.
By:/s/ Michael Maturo
---------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.,
its General Partner
By:/s/ Michael Maturo
---------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
Date: June 6, 1999