Reckson Expands Presence in Premier New Jersey Office Park with Acquis

    Business Editors

    MELVILLE, N.Y.--(BUSINESS WIRE)--Jan. 18, 2005--Reckson Associates Realty Corp. (NYSE: RA) announced today that the Company has closed on the acquisition of a 150,000 square foot, Class A office building located at One Giralda Farms in Madison, New Jersey, for approximately $24.3 million.
    Reckson has acquired One Giralda Farms from Schering Plough who developed the property as its corporate headquarters and will lease the entire property from Reckson under a short-term lease agreement. Reckson plans to subsequently complete a $10 million repositioning of the building. Upon completion of the repositioning, One Giralda Farms will offer the highest quality services and amenities and accommodate tenants of varying sizes allowing Reckson to build upon its reputation as the "Landlord of Choice" in the New York Tri-State area.
    The One Giralda Farms acquisition follows Reckson's recent acquisition in July of 2004 of Three Giralda Farms, a 141,000 square foot, Class A office building acquired for a total anticipated investment of approximately $31 million. Within two months after acquiring Three Giralda Farms, the Company successfully signed a long-term lease with Daiichi Pharmaceutical Corporation to occupy the entire building.
    Both One and Three Giralda Farms are part of the highly desirable Giralda Farms Corporate Campus, a 1.25 million square foot complex of Class A office buildings located in Madison/Chatham Townships, New Jersey. Reckson also owns 154 acres of land at the Giralda Farms Corporate Campus with development rights for approximately 1.1 million square feet, with 436,000 square feet already fully designed and approved for construction.
    Scott Rechler, Reckson's President and Chief Executive Officer, stated, "We are proud to announce yet another important acquisition in our New Jersey Division. One Giralda Farms reflects our focus on acquiring core Class A office properties that leverage our market franchise power. This acquisition demonstrates our team's ability to source off-market opportunities that offer excellent market fundamentals and long-term growth potential."
    Reckson is purchasing One Giralda Farms at an approximate 25% discount to replacement cost on a fully invested basis and expects to generate stabilized net operating income ("NOI") and GAAP NOI yields of approximately 9.0%.
    One Giralda Farms is a superior quality, four story, Class A office building, situated within a pristine corporate park. The property contains high-grade finishes while featuring amenities that include a cafe, corporate dining facility, conference facilities and below grade parking. The building is strategically located with direct access to Route 24 and Interstate 287, minutes from the express trains to New York City and approximately 25 miles from both the Holland and Lincoln Tunnels.
    Todd Rechler, Corporate Senior Vice President and Managing Director of Reckson's New Jersey Division, said, "We are pleased to have acquired One Giralda on the heels of our recent success with the acquisition and lease-up of Three Giralda Farms, its neighboring property. Both of these assets offer outstanding amenities, state of the art infrastructures and premier locations within one of New Jersey's most desirable corporate parks, giving us the opportunity to once again offer tenants a premier asset in a prestigious market."
    The Route 24 Corridor sub-market, where One Giralda Farms is located, is known for its abundance of first-class amenities including the exclusive Mall at Short Hills, the 5-Diamond Hilton Short Hills, noted restaurants, conference centers and renowned arts venues like the Paper Mill Play House. This corridor, which is regarded as one of the most desirable sub-markets in New Jersey, extends from Short Hills to Chatham/Madison through the Florham Park region.
    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 87 properties comprised of approximately 15.9 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.
    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 (including FrontLine Capital Group); 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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CONTACT: Reckson Associates Realty Corp. Scott Rechler / Michael Maturo / Todd Rechler, 631/694-6900 Fax: 631/622-6790 or Beckerman Public Relations Anna Ciringione, 908/781-6420

KEYWORD: NEW YORK NEW JERSEY INDUSTRY KEYWORD: REAL ESTATE BUILDING/CONSTRUCTION BANKING SOURCE: Reckson Associates Realty Corp.

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