FIRST QUARTER PRESENTATION
May 3, 2001
RECKSON
THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
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FIRST QUARTER 2001 PRESENTATION
MAY 3, 2001
RECKSON ASSOCIATES REALTY CORP
SUMMARY OF HIGHLIGHTS
o Reported diluted FFO of $.69 per share for the first quarter of 2001, as
compared to $.62 per share for the comparable 2000 period, representing an
increase of 11.3%.
o Generated same property NOI increases of 14.9% (cash) and 13.4% (GAAP) for
the first quarter of 2001.
o Generated same space rent growth of 22.9% (GAAP) and 11.6% (cash) for
Office and 24.5% (GAAP) and 12.9% (cash) for Industrial/R&D for the first
quarter of 2001.
o Actively pursuing capital recycling program with over $600 million of
assets targeted for disposition.
o Successfully capitalized on strong market conditions by placing $1.1
billion of development projects into service and reducing lease expiration
exposure to less than 15% of portfolio through 2002.
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
FFO PER SHARE GROWTH
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1Q96 1Q97 1Q98 1Q99 1Q00 1Q01
---- ---- ---- ---- ---- ----
FPO $0.38 $0.41 $0.47 $0.57 $0.62 $0.69
Growth 7.9% 14.6% 21.3% 8.8% 11.3%
(Year over Year)
12.7% Diluted Compounded FFO Quarterly Growth Per Share
Diluted per share amounts are calculated in accordance with NAREIT guidelines
which adjust GAAP by replacing net income with FFO. If diluted per share amounts
were calculated in accordance with GAAP, weighted average diluted shares would
approximate weighted average basic shares. 97% of the incremental diluted shares
are attributable to the assumed conversion of outstanding convertible preferred
securities which on a weighted average basis were approximately 24% out of the
money for the three month period ended March 31, 2001.
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
DILUTED CAD PER SHARE ANALYSIS
FIRST QUARTER 2001
Diluted CAD Per Share Reported $0.50
Add Back Increase in 919 Third Avenue Straight-Line Rent $0.09
-----
Adjusted CAD Per Share $0.59
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CAD Prior Year Three Months $0.51
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Adjusted Percent Increase 15.7%
====
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Pro Forma CAD Payout Ratio 71.2%
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
919 THIRD AVENUE RENT TIMELINE
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GAAP Rent Cash Rent
--------- ---------
BNP
- ---
45,528 sq. ft. 4Q2000
28,059 sq. ft. 4Q2000 1Q2001
72,244 sq. ft. 4Q2000 3Q2001
SCHULTE ROTH
- ------------
213,426 sq. ft. 4Q2000 1Q2001
DEBEVOISE & PLIMPTON
- --------------------
44,024 sq. ft. 4Q2000 2Q2001
421,967 sq. ft. 4Q2000 1Q2002
4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02
---- ---- ---- ---- ----- ---- ----
Cash Rent $ 658,694 $ 3,059,578 $3,426,486 $4,185,099 $4,185,099 $5,882,746 $9,278,040
GAAP Rent $ 9,840,612 $ 9,840,612 $9,840,612 $9,840,612 $9,840,612 $9,840,612 $9,840,612
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
PORTFOLIO COMPOSITION
Net Operating Income (a)
Long Island 33%
Westchester 16%
New Jersey 12% [GRAPHIC OMITTED]
Connecticut 7%
New York City 32%
Pro Forma Portfolio Stats
- -------------------------
|X| 21.3 Million Square Feet
|X| 188 Properties
|X| 1,360 Tenants Representing a Diverse Industry Base
|X| Five Integrated Operating Divisions
|X| NOI:
Office 86%
Industrial 14%
|X| Average Tenant Size:
Office 12,000 sq. ft.
Industrial 25,500 sq. ft.
|X| Occupancy: (b)
Office 97%
Industrial 98%
(a) Pro forma for 919 Third Avenue free rent add back and Tri-State joint
venture percent ownership interest
(b) Excluding properties under development
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
PORTFOLIO COMPOSITION
Focused Expansion on High Barrier to Entry CBD Markets
% of Revenue Derived from CBD Properties
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1995 1996 1997 1998 1999 2000 2001(E)
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0% 9% 18% 14% 35% 46% 47%
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
PORTFOLIO COMPOSITION
High Concentration of Suburban Office Portfolio in
Fully Serviced Office Parks
% Breakdown of NOI Based on First Quarter 2001
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28% - NOI Derived from Suburban Office Buildings Located
in Fully Serviced Office Parks
72% - NOI Derived from Stand-Alone Suburban Office Buildings
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
FAVORABLE MARKETS
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YE97 YE98 YE99 YE00 1Q01
---- ----- ---- ---- ----
SOUTHERN CONNECTICUT
Average Asking Rental Rates $28.96 $32.22 $31.78 $44.41 $39.76
Direct Vacancy 4.20% 3.60% 4.00% 7.20% 8.60%
WESTCHESTER
Average Asking Rental Rates $25.14 $26.67 $27.23 $29.62 $28.58
Direct Vacancy 13.30% 16.40% 15.00% 10.70% 12.50%
LONG ISLAND
Average Asking Rental Rates $26.14 $27.23 $27.69 $28.86 $30.49
Direct Vacancy 8.70% 6.10% 5.60% 6.30% 7.60%
NORTHERN NEW JERSEY
Average Asking Rental Rates $25.38 $27.42 $28.52 $29.66 $29.61
Direct Vacancy 4.70% 5.30% 4.60% 6.50% 7.30%
Source: Cushman & Wakefield Class A Statistics
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
FAVORABLE MARKETS
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YE97 YE98 YE99 YE00 1Q01
---- ----- ---- ---- ----
NYC FINANCIAL EAST
Average Asking Rental Rates $29.77 $40.21 $37.64 $52.90 $53.28
Direct Vacancy 8.20% 6.60% 3.40% 1.40% 2.50%
NYC MIDTOWN EAST SIDE
Average Asking Rental Rates $39.33 $47.85 $51.18 $61.46 $65.43
Direct Vacancy 5.60% 6.00% 3.80% 1.90% 1.50%
NYC MIDTOWN WEST SIDE
Average Asking Rental Rates $33.10 $43.36 $48.28 $60.89 $64.96
Direct Vacancy 3.70% 3.30% 4.60% 2.40% 1.50%
NYC SIXTH AVE./ROCKEFELLER CENTER
Average Asking Rental Rates $43.62 $51.33 $53.12 $65.91 $71.48
Direct Vacancy 2.70% 2.20% 1.60% 0.90% 0.70%
Source: Cushman & Wakefield Class A Statistics
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
HISTORICAL PORTFOLIO OCCUPANCY
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OFFICE
March 1997 March 1998 March 1999 March 2000 March 2001
- ---------- ---------- ---------- ---------- ----------
91.1% 92.2% 94.2% 95.3% 97.1%
INDUSTRIAL
MARCH 1997 MARCH 1998 MARCH 1999 MARCH 2000 MARCH 2001
- ---------- ---------- ---------- ---------- ----------
96.3% 95.8% 97.4% 97.9% 97.8%
Note: Excluding properties under development
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
PORTFOLIO PERFORMANCE
SAME PROPERTY NOI
(for the three months ended 3/31/01 as compared to 3/31/00)
Cash NOI 14.9% [GRAPHIC OMITTED]
GAAP NOI 13.4%
12.4% Cash Revenue Increase
8.0% Expense Increase
0.8% Occupancy Increase
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
Portfolio Performance
SAME PROPERTY NOI (a)
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Cash NOI GAAP NOI
Long Island 13.6% 11.5%
Westchester 5.8% 6.8%
Connecticut 8.2% 9.5%
New Jersey 21.9% 32.4%
New York City 24.8% 13.3%
(a) Based on comparison period for the three month period ended March 31, 2001
versus the three month period ended March 31, 2000
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
PORTFOLIO PERFORMANCE
FIRST QUARTER SAME SPACE AVERAGE RENT GROWTH
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Office Rent Growth: 23%
Expiring Leases - $24.23
New Leases - $29.78
Industrial/R&D Rent Growth: 24%
Expiring Leases - $6.09
New Leases - $7.58
o 66 Leases Executed Totaling 496,652 Sq. Ft.
o Same Space First Quarter Cash Increase of 12% for Office and 13% for
Industrial/R&D
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
LEASE EXPIRATION COMPARISON
EXPIRING RENT VS. MARKET RENT
CBD OFFICE PORTFOLIO
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Connecticut New York City
Expiring Rent (a) $25.31 $33.14
Market Rent (b) $39.76 $64.77
Increase 57% 95%
AS OF MARCH 31, 2001
(a) Represents average rent for leases expiring over the next 6 years
(b) Average asking rents as provided by Cushman & Wakefield. There can be no
assurance the Company's properties can achieve such average asking rents.
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
LEASE EXPIRATION COMPARISON
EXPIRING RENT VS. MARKET RENT
SUBURBAN OFFICE PORTFOLIO
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LONG ISLAND WESTCHESTER NEW JERSEY
Expiring Rent (a) $23.88 $22.07 $20.98
Market Rent (b) $30.49 $28.58 $29.61
Increase 28% 30% 41%
AS OF MARCH 31, 2001
(a) Represents average rent for leases expiring over the next 6 years
(b) Average asking rents as provided by Cushman & Wakefield. There can be no
assurance the Company's properties can achieve such average asking rents.
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
INTERNAL GROWTH - OFFICE PORTFOLIO
POTENTIAL FUTURE INCREASES IN CASH FLOW
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SUBURBAN OFFICE PORTFOLIO MARKET RENT: $31.00 (a)
In-Place Rent: $22.82
Cash Flow Increase:
$51.5 million
$0.65 diluted per share
6.3 Million Sq.Ft. Expiring Over the Next 6 Years
Portfolio Rents 36% Below Market
NEW YORK CITY OFFICE PORTFOLIO MARKET RENT: $64.77 (a)
In-Place Rent: $33.14
Cash Flow Increase:
$44.3 million
$0.56 diluted per share
1.4 Million Sq.Ft. Expiring Over the Next 6 Years
Portfolio Rents 95% Below Market
AS OF MARCH 31, 2001
(a) Average asking rents as provided by Cushman & Wakefield. Calculations based
on weighted average sq. ft. expiring in each of the respective sub-markets.
There can be no assurance the Company's properties can achieve such average
asking rents.
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
VALUE CREATION
$1.1 Billion of Projects put into Service in Strong Markets -
Lowered Future Development Exposure
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(in millions)
1995 1996 1997 1998 1999 2000 2001(E) 2002(E)
---- ---- ---- ---- ---- ---- ---- ----
X Cumulative Completed Pipeline Projects $63 $242 $336 $407 $525 $1,065 $1,092 $1,135
X Unrealized Projects $0 $289 $804 $1,099 $864 $755 $363 $320
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
VALUE CREATION ACTIVITY REPORT
SQUARE PERCENT TOTAL ANTICIPATED ESTIMATED
PROJECTS UNDER DEVELOPMENT OR REPOSITIONING FEET LEASED INVESTMENT(A) NOI YIELD(A)
- ------------------------------------------- ------------------------------------------------------------
Melville Expressway Corporate Center,
Melville, NY (Phase I) 277,500 8.0% $43,446,000 12.0%
University Square, Princeton, NJ 315,000 0.0% $50,397,000 12.0%
AIP 2001, Islip, NY 71,000 0.0% $5,692,000 12.2%
400 Mooreland Road, Commack, NY 56,875 0.0% $2,967,000 12.0%
PROJECTS UNDER DEVELOPMENT OR REPOSITIONING DURING 2001 720,375 $102,502,000 12.0%
PROJECTS IN PLANNING
Melville Square Corporate Center II, Melville, NY 255,000 0.0% $33,660,000 12.5%
Melville Expressway Corporate Center,
Melville, NY (Phase II) 277,500 0.0% $49,290,000 13.0%
Reckson Executive Park, Rye Brook, NY 345,000 0.0% $55,799,000 12.0%
Landmark 7, Stamford, CT 61,000 0.0% $13,208,000 12.3%
PROJECTS IN PLANNING 938,500 $151,957,000 12.5%
(a) Forward-looking statements based upon management's estimates. Actual
results may differ materially.
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
FINANCIAL RATIOS
(in millions except ratios)
MARCH 31, 2001
RATIOS HISTORICAL
- ------ ----------
Total Debt (a) $1,467
Total Equity $1,843
Total Market Cap $3,310
Interest Coverage Ratio 3.29x
Fixed Charge Coverage Ratio 2.60x
Debt to Total Market Cap 44.3%
(a) Including pro-rata share of joint venture debt and net of minority
partners' interests
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
DEBT SCHEDULE
(in millions)
PRINCIPAL AMOUNT WEIGHTED AVERAGE AVERAGE TERM
OUTSTANDING INTEREST RATE TO MATURITY
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DEBT SCHEDULE
Mortgage Notes Payable $727.1 7.2% 7.8 yrs.
Senior Unsecured Notes $450.0 7.5% 6.3 yrs.
Sub-Total $1,177.1 7.3% 7.2 yrs.
Corporate Unsecured
Credit Facility $304.6 LIBOR + 105bps
No significant near term refinancing needs - Long-term staggered debt maturity
schedule
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(maturities in millions)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
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Mortgage Debt $85 $8 $200 $3 $19 $59 $61 $0 $100 $28 $0
Unsecured Notes $100 $150 $200
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
CAPITAL RECYCLING PROGRAM
Status Report
Primary
- -------
919 Third Avenue - Sale of JV Interest $225,000,000
Non-Core Office Assets 200,000,000
(9 buildings totaling approximately
1.8 million sq. ft. in multiple markets)
FrontLine Capital Group 110,000,000
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Subtotal $535,000,000
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Secondary
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RSVP (a) $108,000,000
Other 40,000,000
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Subtotal $148,000,000
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Total $683,000,000
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(a) Represents Investment Basis
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
2001 Objectives
|X| Execute Exit Strategy of Non-Core Holdings - Strengthen Focus
|X| Execute Capital Recycling Program - Source of Equity Capital
|X| Opportunistic Investments - Positioned for Next Round of
Growth Opportunities
|X| Stabilize Development Properties - Capitalize on Strong Market Rents
|X| Manage Operating Expense Pressure - Maintain Margins
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
FORWARD LOOKING STATEMENTS
This information contains forward-looking information that is subject to certain
risks, trends and uncertainties that could cause actual results to differ
materially from those projected. Among those risks, trends and uncertainties are
the general economic climate; the supply of and demand for office and industrial
properties in the New York Tri-State area; interest rate levels; downturns in
rental rate levels in the company's markets; the availability of financing;
repayment of debt owed to company; risks associated with joint ventures; 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 is subject to the reporting requirements of the
Securities and Exchange Commission and undertakes no responsibility to update
information contained in this slide show presentation.
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THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
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RECKSON