RNY Rny Property Trust

Reckson Associates Realty Corp. (NYSE: RA) today announced the execution of an underwriting agreement relating to the offering in Australia of approximately A$263 million (approximately US$202 million) of units in a newly-formed Reckson-sponsored property trust, Reckson NYPT (the LPT), to be traded on the Australian Stock Exchange (ASX). The Australian offer document was lodged with the Australian Securities and Investments Commission (ASIC) on Monday, August 15, 2005. The transaction is expected to close and Reckson NYPT (ASX: RNY) is to begin trading on the Australian Stock Exchange on September 26, 2005. The LPT will be managed by Reckson Australia Management Limited (RAML), an Australian licensed Responsible Entity which is wholly owned by Reckson Operating Partnership. Reckson anticipates that the LPT will focus on core plus investment opportunities in the New York Tri-State area markets. Scott Rechler, Reckson's President and Chief Executive Officer, stated, "We believe that the Australian LPT structure will enable us to achieve our strategic objective of increasing scale without diluting existing Reckson shareholders. It will enable us to focus on operating locally and financing globally, by allowing us to get deeper into our New York Tri-State area office markets to enhance our competitive advantage, while sourcing capital globally." Mr. Rechler continued, "Our successful launching of Reckson NYPT is a significant achievement because it is the first Australian listed property trust to focus on U.S. suburban office properties. I am extremely excited about the growth potential of this vehicle as we continue to actively pursue the acquisition of additional core plus assets in the New York Tri-State area." Reckson anticipates that it will continue to maintain a 25% indirect interest in future core plus investments of the LPT. Core plus assets are attractive investment opportunities that are derived from Reckson's market presence and expertise which add additional depth to Reckson's franchise in its markets. Based on current market conditions, Reckson anticipates an increase in attractive core plus investment opportunities. Typically, these types of properties are under-managed and offer the opportunity for Reckson to apply its expertise and scale to increase cash flow and enhance value. Generally, Reckson will continue to wholly own strategic assets, which are Class A trophy office properties in key markets that define Reckson's franchise and enhance its competitive advantage, as well as value creation opportunities, which include repositioning, development and redevelopment projects. Michael Maturo, Reckson's Chief Financial Officer, noted, "This transaction will enable us to achieve our stated goal of efficiently recycling capital to strategic and value-added investments. In addition, it allows us to leverage our operating infrastructure to enhance our ability to acquire core plus assets at superior risk-adjusted returns." Affiliates of Reckson will serve as property manager, leasing agent, asset manager, and construction manager and will provide other services to the properties in the LPT portfolio. The LPT will initially purchase a 75% indirect interest in a portfolio of 25 suburban core plus office properties, containing approximately 3.4 million square feet, for a purchase price of approximately US$563 million. Reckson will retain a 25% indirect interest in these properties. The LPT will have a two-year option to purchase an additional ten properties, comprising approximately 1.2 million square feet, to be priced at fair market value at the time the option is exercised. The LPT transaction, as well as the two-year option, have been structured to mitigate dilution to Reckson shareholders. The LPT closing will take place in three tranches. The first tranche is expected to close by the end of the third quarter of 2005, the second tranche is expected to close in the first quarter of 2006 and the third tranche is expected to close in the fourth quarter of 2006. Based on the properties being contributed, Reckson anticipates a 2005 net operating income (NOI) yield of 7.15% and a 2006 NOI yield of 7.91%, excluding the newly acquired 225 High Ridge property which Reckson will be contributing at cost. Reckson anticipates a 2006 annualized after tax cash yield, including the one-time fees, of approximately 18%, and excluding the one-time fees but including the ongoing recurring fees, of approximately 15%. Reckson intends to use the net proceeds from the LPT transaction to fund the Company's recently announced acquisitions and for the repayment of outstanding indebtedness. This offering is being made through Citigroup Global Markets Australia Pty Limited and UBS AG, Australia Branch in Australia. 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, with 90 properties comprised of approximately 18.9 million square feet either owned or controlled, or under contract. For additional information on Reckson Associates Realty Corp., please visit the Company's web site at www.reckson.com. The offering referred to above is being made outside of the United States. Nothing contained herein shall be construed as an offering of the interests of the LPT. 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, that development or operating costs may be greater than anticipated, or that closing of the proposed acquisitions do not occur as expected. 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.