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      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 1, 1999
    
                                            REGISTRATION STATEMENT NO. 333-67129

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               ------------------
   
                                 AMENDMENT NO. 3
                                       TO
                                    FORM S-3
    
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                               ------------------

                       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. - 11-3233650
RECKSON OPERATING PARTNERSHIP, L.P. - DELAWARE              RECKSON OPERATING PARTNERSHIP, L.P. -11-3233647
      (State or other jurisdiction                              (I.R.S. employer identification number)
   of incorporation or organization)


                              225 BROADHOLLOW ROAD
                            MELVILLE, NEW YORK 11747
                                 (516) 694-6900
          (Address, including zip code, and telephone number, including
           area code, of each registrant's principal executive office)

                                DONALD J. RECHLER
                      CHAIRMAN AND CHIEF EXECUTIVE OFFICER
                         RECKSON ASSOCIATES REALTY CORP.
                              225 BROADHOLLOW ROAD
                            MELVILLE, NEW YORK 11747
                                 (516) 694-6900

            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)
                               -------------------

                                    Copy to:

                            EDWARD F. PETROSKY, ESQ.
   
                             J. GERARD CUMMINS, ESQ.
    
                                BROWN & WOOD LLP
                       ONE WORLD TRADE CENTER, 58TH FLOOR
                              NEW YORK, N.Y. 10048
                               -------------------
          APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
     From time to time after this Registration Statement becomes effective.
                               -------------------
     If the only  securities  being  registered  on this form are being  offered
pursuant to dividend or interest  reinvestment plans, please check the following
box. / /
     If any of the securities being registered on this form are to be offered on
a delayed or continuous  basis  pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities  Act"),  other than securities offered only in
connection  with  dividend  or interest  reinvestment  plans,  please  check the
following box. /X/
     If this Form is filed to  register  additional  securities  for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list  the  Securities  Act  registration  statement  number  of the  earlier
effective registration statement for the same offering./ /
     If this Form is a  post-effective  amendment  filed pursuant to Rule 462(c)
under the  Securities  Act,  check the following box and list the Securities Act
registration  statement number of the earlier effective  registration  statement
for the same offering./ /
     If delivery of the  prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/

                               -------------------



                         CALCULATION OF REGISTRATION FEE

========================================================================== =========================== =============================
                      Title of Class of                                          Proposed Maximum           Amount of
                      Securities to be Registered(1)                             Aggregate Offering         Registration Fee
                                                                                 Price(1)
- -------------------------------------------------------------------------- --------------------------- -----------------------------
                                                                                                 
Common Stock, $.01 par value per share(2) ............................     }                            }
Common Stock Warrants of Reckson Associates Realty Corp...............     }                            }
Preferred Stock(3)....................................................     }       $744,739,654(5)      }     $220,867(5)
Depositary Shares representing Preferred Stock (4) ...................     }                            }
Preferred Stock Warrants of Reckson Associates Realty Corp............     }                            }
   
Debt Securities(6)(7).................................................             $500,000,000               $139,000(9)(10)
    
Guarantees(8).........................................................                  ---                      ---

========================================================================== =========================== =============================

(1)  Estimated solely for purposes of calculating the registration fee.

(2)  Such  indeterminate  number of shares of common stock of Reckson Associates
     Realty Corp.  as may from time to time be issued at  indeterminate  prices,
     upon exercise of common stock warrants of Reckson  Associates  Realty Corp.
     or upon conversion of preferred stock of Reckson Associates Realty Corp. or
     exchange for debt securities of Reckson Operating Partnership, L.P., as the
     case may be.

(3)  Such  indeterminate   number  of  shares  of  preferred  stock  of  Reckson
     Associates  Realty  Corp.  as may from  time to time be issued in series at
     indeterminate  prices, upon exercise of preferred stock warrants of Reckson
     Associates  Realty Corp.  or upon  exchange for debt  securities of Reckson
     Operating Partnership, L.P., as the case may be.

(4)  To be represented by depositary receipts of Reckson Associates Realty Corp.
     representing  an  interest  in all or a  specified  portion  of a share  of
     preferred stock of Reckson  Associates Realty Corp.

(5)  Under registration  statements nos.  333-28015 and 333-46883,  an aggregate
     amount of securities equal to $145,506,908 and $599,232,746 were registered
     thereunder and remain available for issuance by Reckson  Associates  Realty
     Corp.,  and registration  fees of  approximately  $44,093 and $176,774 were
     previously paid in respect of the remaining capacity thereunder.

(6)  Such indeterminate principal amount of debt securities of Reckson Operating
     Partnership,  L.P.  as may  from  time to  time  be  issued  in  series  at
     indeterminate  prices  or upon  exchange  for  preferred  stock of  Reckson
     Associates Realty Corp., as the case may be.

   
(7)  Or, in the event of the issuance of original issue discount  securities,  a
     higher  principal  amount as may be sold for an aggregate  initial offering
     price not to exceed $500,000,000.
    

(8)  Debt  securities not rated  investment  grade at the time of issuance by at
     least one nationally  recognized  statistical  rating  organization will be
     accompanied by guarantees to be issued by Reckson  Associates  Realty Corp.
     None of the  proceeds  from  the  sale of  these  debt  securities  will be
     received  by  Reckson  Associates  Realty  Corp.  for the  issuance  of the
     guarantees.  Pursuant to Rule 457(n) under the Securities  Act, no separate
     filing fee for the guarantees is required.

(9)  Calculated  pursuant to Rule 457(o) under the Securities  Act.

   
(10) $72,280 was previously paid.
    

     Pursuant to Rule 429 under the Securities  Act, the prospectus  included in
this Registration Statement is a combined prospectus and relates to registration
statement no.  333-28015 and  registration  statement no.  333-46883  previously
filed by Reckson  Associates  Realty Corp.  on Form S-3 in respect of its common
stock, common stock warrants,  preferred stock,  depositary shares and preferred
stock warrants and declared  effective on September 29, 1997 and March 25, 1998,
respectively.   This  registration  statement,   which  is  a  new  registration
statement,  also  constitutes  post-effective  amendment  no. 1 to  registration
statement  no.  333-28015  and  registration  statement  no.  333-46883 and such
post-effective  amendment no. 1 shall hereafter  become  effective  concurrently
with the effectiveness of this registration statement in accordance with Section
8(c) of the Securities Act.

     EACH REGISTRANT  HEREBY AMENDS THIS  REGISTRATION  STATEMENT ON THE DATE OR
DATES AS MAY BE  NECESSARY  TO DELAY ITS  EFFECTIVE  DATE UNTIL THE  REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY  STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER  BECOME EFFECTIVE WITH SECTION 8(A) OF THE SECURITIES
ACT OF 1933 OR UNTIL THIS  REGISTRATION  STATEMENT SHALL BECOME EFFECTIVE ON THE
DATE AS THE SECURITIES AND EXCHANGE COMMISSION,  ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.


   
Information   contained  herein  is  subject  to  completion  or  amendment.   A
registration  statement  relating  to these  securities  has been filed with the
Securities  and Exchange  Commission.  These  securities may not be sold nor may
offers to buy be accepted prior to the time the registration  statement  becomes
effective.  This  prospectus  shall  not  constitute  an  offer  to  sell or the
solicitation of an offer to buy nor shall there be any sale of these  securities
in any State in which such offer,  solicitation  or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
    

                              SUBJECT TO COMPLETION
   
                   PRELIMINARY PROSPECTUS DATED MARCH 1, 1999
    

PROSPECTUS
- ----------

                                  $744,739,654
                         RECKSON ASSOCIATES REALTY CORP.
                      COMMON STOCK, COMMON STOCK WARRANTS,
         PREFERRED STOCK, DEPOSITARY SHARES AND PREFERRED STOCK WARRANTS

   
                                  $500,000,000
    
                       RECKSON OPERATING PARTNERSHIP, L.P.
                                 DEBT SECURITIES
                                -----------------

     Reckson  Associates  Realty Corp. may offer up to $744,739,654 of shares of
its common stock, shares of its preferred stock,  depositary shares representing
interests in its preferred  stock, and warrants to purchase shares of its common
stock or preferred stock.  Reckson Associates' common stock is listed on the New
York Stock Exchange under the symbol "RA."

   
     Reckson  Operating  Partnership,  L.P. may offer up to  $500,000,000 of its
debt  securities in one or more series.  If any of the  Operating  Partnership's
debt  securities  are not  rated  investment  grade by at least  one  nationally
recognized  statistical  rating  organization  at the  time of  issuance,  these
non-investment   grade  debt  securities  will  be  fully  and   unconditionally
guaranteed by Reckson  Associates as to payment of principal,  premium,  if any,
and interest.
    

     We may offer the  securities  at prices and on terms to be set forth in one
or more supplements to this prospectus.  The securities may be offered directly,
through agents on our behalf or through underwriters or dealers.

     The terms of the  securities  may  include  limitations  on  ownership  and
restrictions on transfer thereof as may be appropriate to preserve the status of
Reckson  Associates as a real estate  investment trust for United States federal
income tax purposes.

     SEE "RISK FACTORS" BEGINNING ON PAGE 2 OF THIS PROSPECTUS FOR A DESCRIPTION
OF RISKS THAT SHOULD BE CONSIDERED BY PURCHASERS OF THE SECURITIES.

     NEITHER THE  SECURITIES AND EXCHANGE  COMMISSION  NOR ANY STATE  SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS  IS TRUTHFUL OR  COMPLETE.  ANY  REPRESENTATION  TO THE CONTRARY IS A
CRIMINAL OFFENSE.




              The date of this prospectus is ___________ __, 1999.


                                  RISK FACTORS

     This prospectus contains forward-looking statements which involve risks and
uncertainties.  Our actual  results  may differ  significantly  from the results
discussed  in  the  forward-looking  statements.  Factors  that  might  cause  a
difference include, but are not limited to, those discussed below. An investment
in the securities involves various risks. Prospective investors should carefully
consider the following  information  in conjunction  with the other  information
contained  in this  prospectus  and the  related  prospectus  supplement  before
purchasing the securities offered by the related prospectus supplement.

- -    WE ARE  DEPENDENT  ON THE NEW YORK  TRI-STATE  AREA  MARKET  DUE TO LIMITED
     GEOGRAPHIC DIVERSIFICATION AND OUR FINANCIAL RESULTS MAY SUFFER AS A RESULT
     OF A DECLINE IN ECONOMIC CONDITIONS IN SUCH AREA

     A decline in the economic conditions in the New York Tri-State area and for
commercial real estate could adversely affect our business,  financial condition
and results of  operations.  All of our  properties  are located in the New York
Tri-State area,  although our  organizational  documents do not restrict us from
owning properties  outside of this area. Each of our four markets are located in
the suburbs of New York City and may be similarly  affected by economic  changes
in this area. A  significant  downturn in the  financial  services  industry and
related  industries  would likely have a negative effect on these markets and on
the performance of our properties.

   
     The following is a breakdown of our office and  industrial  properties  for
each of our four markets at December 31, 1998:
    

                                                                     Annual Base
                          Number of Properties    Square Footage       Rent(1)
                          --------------------    --------------     -----------
Long Island
   
   - Office                       23                3,671,413       $71,152,658

   - Industrial                   94                5,638,435        29,268,258

Westchester
   - Office                       25                3,298,623        56,521,355

   - Industrial                    4                  256,948         2,130,019

New Jersey
   - Office                       17                1,993,999        34,946,506

   - Industrial                   30                4,497,662         18,391,236

Connecticut
   - Office                        8                1,123,188        22,020,613

   - Industrial                    1                  452,414         2,900,684

(1)  Represents base rents from leases in place as of December 31, 1998, for the
     period   January  1,  1999  through   December  31,  1999   excluding   the
     reimbursement by tenants of electrical costs.
    


- -    DEBT SERVICING AND  REFINANCING,  INCREASES IN INTEREST RATES AND FINANCIAL
     COVENANTS COULD ADVERSELY AFFECT OUR ECONOMIC PERFORMANCE

   
     DEPENDENCE UPON DEBT  FINANCING;  RISK OF INABILITY TO SERVICE OR REFINANCE
DEBT.  In order to qualify  as a real  estate  investment  trust,  or REIT,  for
federal  income tax  purposes,  Reckson  Associates is required to distribute at
least 95% of its taxable  income.  As a result,  we are more  reliant on debt or
equity  financings than many other companies that are not REITs and,  therefore,
are able to retain more of their income.

     We are subject to the risks  associated with debt financing.  Our cash flow
could be  insufficient to meet required  payments of principal and interest.  We
may not be able to refinance existing indebtedness, which in virtually all cases
requires  substantial  principal  payments  at  maturity,  or the  terms of such
refinancing might not be as favorable as the terms of the existing indebtedness.
As noted above,  as of December 31, 1998, the weighted  average  maturity of our
existing  indebtedness  was 4.4 years and our total  existing  indebtedness  was
approximately  $867  million.   We  also  may  not  be  able  to  refinance  any
indebtedness we incur in the future. Finally, we may not be able to obtain funds
by selling  assets or  raising  equity to make  required  payments  on  maturing
indebtedness.

     RISING  INTEREST  RATES  COULD  ADVERSELY  AFFECT CASH FLOW.  Increases  in
interest  rates could  increase the Operating  Partnership's  interest  expense,
which could adversely  affect the ability to service its  indebtedness or to pay
distributions  to  Reckson  Associates'  stockholders.  As  noted  above,  as of
December 31, 1998,  approximately 56% of our debt was variable rate debt and our
total debt was approximately $867 million. Outstanding advances under the credit
facilities of the Operating  Partnership  bear  interest at variable  rates.  In
addition,  we may incur indebtedness in the future that also bears interest at a
variable rate.
    

     REQUIREMENTS  OF CREDIT  FACILITIES  COULD  ADVERSELY  AFFECT OUR FINANCIAL
CONDITION  AND OUR ABILITY TO MAKE  DISTRIBUTIONS.  The ability of the Operating
Partnership  to  borrow  under our  credit  facilities  is  subject  to  certain
financial  covenants,  including  covenants relating to limitations on unsecured
and secured  borrowings,  minimum  interest and fixed charge coverage  ratios, a
minimum  equity  value  and a  maximum  dividend  payout  ratio.  The  Operating
Partnership  relies  on  borrowings  under  its  credit  facilities  to  finance
acquisition and development  activities and for working capital purposes and, if
the Operating  Partnership is unable to borrow under its credit  facilities,  it
could adversely affect our financial  condition.  The Operating  Partnership has
obtained a three-year  unsecured  credit facility from The Chase Manhattan Bank,
Union Bank of Switzerland and PNC Bank, National Association, which provides for
a maximum borrowing amount of up to $500 million. The Operating  Partnership has
also obtained a separate $75 million  one-year  unsecured  credit  facility from
Chase.  The credit  facilities  also contain a financial  covenant  limiting the
amount of  distributions  that  Reckson  Associates  may make to  holders of its
common  stock  during  any  fiscal  quarter  if they  exceed,  when added to all
distributions made during the three immediately preceding quarters,  the greater
of:

     -    90% of its funds from  operations  or 100% of its funds  available for
          distribution; and

     -    the amounts  required in order for Reckson  Associates  to continue to
          qualify as a REIT.

     Although the  Operating  Partnership  presently is in  compliance  with the
covenants under its credit facilities,  there is no assurance that the Operating
Partnership will continue to be in compliance or that it will be able to service
its  indebtedness  or pay  distributions  to Reckson  Associates so that Reckson
Associates may make distributions to its stockholders.

   
     No limitation on debt.  Currently,  we have a policy of incurring debt only
if our Debt Ratio is then 50% or less.  As of December 31, 1998,  our Debt Ratio
was 39.4%.  For these  purposes,  Debt Ratio is defined as the total debt of the
Operating  Partnership as a percentage of the market value of outstanding shares
of  common  stock and  preferred  stock of  Reckson  Associates,  including  the
conversion of outstanding  partnership units in the Operating Partnership,  plus
total debt. Under this policy, we could incur additional debt if our stock price
increases,  even if we may not have a  corresponding  increase in our ability to
repay the debt. In addition,  as of December 31, 1998, our debt-to-equity  ratio
was 1:1.54. We calculated our  debt-to-equity  ratio by comparing the total debt
of the Operating  Partnership  to the value of the  outstanding  common stock of
Reckson Associates and the common units of limited  partnership  interest of the
Operating Partnership, each based upon the market value of the common stock, and
the liquidation  preference of the preferred stock of Reckson Associates and the
preferred units of limited  partnership  interest in the Operating  Partnership,
excluding all units of general partnership interest owned by Reckson Associates.
As described  above, our credit  facilities  contain  financial  covenants which
limit the ability of the Operating Partnership to incur additional indebtedness.
However,  our  organizational  documents  do not contain any  limitation  on the
amount of indebtedness we may incur.  Accordingly,  the Board of Directors could
alter or  eliminate  this  policy  and  would  do so,  for  example,  if it were
necessary in order for Reckson  Associates  to continue to qualify as a REIT. If
this policy were changed,  we could become more highly  leveraged,  resulting in
higher  interest  payments  that  could  adversely  affect  the  ability  to pay
distributions to Reckson Associates' stockholders and could increase the risk of
default on the Operating Partnership's existing indebtedness.
    

- -    OUR ACQUISITION,  DEVELOPMENT AND  CONSTRUCTION  ACTIVITIES COULD RESULT IN
     LOSSES

     We intend to acquire  existing  office  and  industrial  properties  to the
extent  that  the  suitable  acquisitions  can be on  made  advantageous  terms.
Acquisitions of commercial  properties  entail risks,  such as the risks that we
may not be in a position or have the  opportunity in the future to make suitable
property  acquisitions on advantageous  terms and that our investments will fail
to  perform  as  expected.  Many  of the  properties  that  we  acquire  require
significant  additional investment and upgrades and are subject to the risk that
estimates of the cost of  improvements  to bring such properties up to standards
established for the intended market position may prove inaccurate. Since the IPO
of Reckson  Associates in June 1995, we have acquired 63 office  properties with
aggregate  square  footage  of  approximately  8.5  million  and  44  industrial
properties with aggregate square footage of approximately 4.3 million (excluding
our investment in the Morris Companies).

   
     We also intend to continue the selective  development  and  construction of
office  and  industrial  properties  in  accordance  with  our  development  and
underwriting   policies  as  opportunities  arise.  Since  the  IPO  of  Reckson
Associates,  we have  developed  or  re-developed  eight  properties  comprising
approximately  930,000 square feet. Our development and construction  activities
include the risks that:
    

     o    we may abandon development  opportunities after expending resources to
          determine feasibility
     o    construction costs of a project may exceed our original estimates
     o    occupancy  rates and rents at a newly  completed  property  may not be
          sufficient to make the property profitable
     o    financing  may  not  be  available  to  us  on  favorable   terms  for
          development of a property
     o    we may not complete  construction and lease-up on schedule,  resulting
          in increased debt service expense and construction costs

     Our  development  activities  are also  subject  to risks  relating  to the
inability to obtain,  or delays in obtaining,  all necessary  zoning,  land-use,
building,  occupancy and other required governmental permits and authorizations.
If any of the above events occur,  the ability to pay  distributions  to Reckson
Associates'  stockholders and service the Operating  Partnership's  indebtedness
could be adversely affected. In addition, new development activities, regardless
of  whether  or  not  they  are  ultimately  successful,   typically  require  a
substantial portion of management's time and attention.

   
- -  ADVERSE  REAL  ESTATE  MARKET  CONDITIONS, INCREASES IN OPERATING EXPENSES OR
CAPITAL  EXPENDITURES,  TENANT  DEFAULTS AND  UNINSURED  LOSSES COULD  ADVERSELY
AFFECT OUR FINANCIAL RESULTS
    

     Our properties' revenues and value may be adversely affected by a number of
factors, including:

     o    the  national,  state  and  local  economic  climate  and real  estate
          conditions,  such as  oversupply  of or  reduced  demand for space and
          changes in market rental rates
   
     o    the need to periodically renovate, repair and relet our space
    
     o    increasing operating costs, including real estate taxes and utilities,
          which may not be passed  through to tenants
   
     o    defaults by our tenants or their failure to pay rent on a timely basis
     o    uninsured losses
    
     A significant portion of our expenses of real estate  investments,  such as
mortgage  payments,  real estate taxes,  insurance and  maintenance  costs,  are
generally  not reduced  when  circumstances  cause a decrease in income from our
properties.  In addition,  our real estate values and income from properties are
also affected by our  compliance  with laws,  including tax laws,  interest rate
levels and the availability of financing.

     BECAUSE REAL ESTATE  INVESTMENTS  ARE ILLIQUID,  WE MAY NOT BE ABLE TO SELL
PROPERTIES WHEN APPROPRIATE.  Real estate  investments  generally cannot be sold
quickly.  We may not be able to vary  our  portfolio  promptly  in  response  to
economic or other  conditions.  In addition,  provisions of the Internal Revenue
Code limit a REIT's ability to sell properties in some situations when it may be
economically  advantageous  to do so,  thereby  adversely  affecting  returns to
Reckson Associates' stockholders.

     COMPETITION IN OUR MARKETS IS  SIGNIFICANT.  The competition for tenants in
the office and industrial  markets in the New York Tri-State area is significant
and includes  properties owned by other REITs, local  privately-held  companies,
institutional  investors and other owners. There is also significant competition
for acquisitions in our markets from the same types of competitors. In addition,
many  users of  industrial  space in our  markets  own the  buildings  that they
occupy.

     INCREASING OPERATING COSTS COULD ADVERSELY AFFECT CASH FLOW. Our properties
are subject to operating risks common to commercial real estate,  any and all of
which may adversely affect occupancy or rental rates. Our properties are subject
to increases in our operating expenses such as cleaning,  electricity,  heating,
ventilation and air conditioning; elevator repair and maintenance; insurance and
administrative  costs;  and other costs  associated with security,  landscaping,
repairs and  maintenance  of our  properties.  While our tenants  generally  are
currently  obligated to pay a portion of these costs, there is no assurance that
tenants  will agree to pay these  costs upon  renewal or that new  tenants  will
agree to pay these costs initially.  If operating expenses  increase,  the local
rental  market  may limit the  extent to which  rents may be  increased  to meet
increased expenses without at the same time decreasing occupancy rates. While we
have cost saving measures at each of our properties, if any of the above occurs,
our  ability  to  pay   distributions   to  our  stockholders  and  service  our
indebtedness could be adversely affected.

     SOME POTENTIAL LOSSES ARE NOT COVERED BY INSURANCE.  We carry comprehensive
liability,  fire,  extended  coverage  and rental loss  insurance  on all of our
properties.  However,  losses  arising from acts of war or relating to pollution
are  not  generally   insured  because  they  are  either   uninsurable  or  not
economically  insurable.  If an  uninsured  loss or a loss in excess of  insured
limits should occur, we could lose our capital  invested in a property,  as well
as any future  revenue  from the  property.  We would  remain  obligated  on any
mortgage indebtedness or other obligations related to the property.

     INVESTMENTS  IN  MORTGAGE  DEBT  COULD  LEAD TO  LOSSES.  We may  invest in
mortgages  secured  by office  or  industrial  properties.  We may  acquire  the
mortgaged properties through foreclosure  proceedings or negotiated settlements.
In addition to the risks associated with  investments in commercial  properties,
investments in mortgage  indebtedness  present  additional risks,  including the
risk that the fee owners of such properties may not make payments of interest on
a current basis and we may not realize our anticipated  return or sustain losses
relating  to the  investments.  Although  we  currently  have  no  intention  to
originate  mortgage  loans as a significant  part of our  business,  we may make
loans  to a  seller  in  connection  with  our  purchase  of  real  estate.  The
underwriting  criteria  we would use for  these  loans  would be based  upon the
credit and value of the underlying real estate.

- - PROPERTY  OWNERSHIP  THROUGH  PARTNERSHIPS  AND JOINT VENTURES COULD LIMIT OUR
CONTROL OF THOSE INVESTMENTS

     Partnership  or joint venture  investments  may involve risks not otherwise
present for investments  made solely by us,  including the possibility  that our
partners or co-venturer might become bankrupt,  that our partners or co-venturer
might at any time have  different  interests  or goals  than we do, and that our
partners or co-venturer may take action contrary to our instructions,  requests,
policies or  objectives,  including our policy with respect to  maintaining  the
qualification  of Reckson  Associates  as a REIT.  Other risks of joint  venture
investments  include impasse on decisions,  such as a sale,  because neither our
partner or  co-venturer  nor us would have full control over the  partnership or
joint venture.  There is no limitation under our organizational  documents as to
the amount of funds that may be invested in partnerships or joint ventures.

     The following is a description of the  significant  joint ventures in which
we are involved:

     OUR INVESTMENT IN THE OMNI, OUR LARGEST  PROPERTY,  INCLUDES THE RISKS THAT
WE CANNOT  REFINANCE  OR DISPOSE OF THE PROPERTY IN OUR SOLE  DISCRETION  AND WE
COULD HAVE OUR GENERAL PARTNERSHIP INTEREST CONVERTED INTO A LIMITED PARTNERSHIP
INTEREST.  The Operating Partnership owns a 60% general partner interest in Omni
Partners,  L.P. (the "Omni Partnership"),  the partnership that owns the Omni, a
575,000 square foot office building  located in our Nassau West Corporate Center
office  park.  Odyssey  Partners,  L.P.  and an  affiliate  of  Odyssey  own the
remaining 40% interest.  Through our  partnership  interest,  we act as managing
partner and have the sole  authority  to conduct the business and affairs of the
Omni  Partnership  subject  to the  limitations  set  forth in the  amended  and
restated  agreement of limited  partnership  of Omni  Partners,  L.P. (the "Omni
Partnership Agreement").  These limitations include Odyssey's right to negotiate
under certain  circumstances a refinancing of the mortgage debt  encumbering the
Omni and the right to approve  any sale of the Omni made on or before  March 13,
2007 (the "Acquisition Date"). The Operating Partnership will continue to act as
the sole managing  partner of the Omni  Partnership  unless  certain  conditions
specified in the Omni Partnership  Agreement shall occur. Upon the occurrence of
any of these conditions the Operating Partnership's general partnership interest
shall  convert to a limited  partnership  interest  and an  affiliate of Odyssey
shall be the sole managing partner,  or at the option of Odyssey,  the Operating
Partnership  shall be a  co-managing  partner with an  affiliate of Odyssey.  In
addition, on the Acquisition Date, the Operating Partnership will have the right
to purchase  Odyssey's  interest in the Omni Partnership at a price (the "Option
Price")  based on 90% of its fair market  value.  If the  Operating  Partnership
fails to exercise  this option,  Odyssey has the right to require the  Operating
Partnership  to  purchase  Odyssey's  interest  in the Omni  Partnership  on the
Acquisition Date at the Option Price. The Operating Partnership has the right to
extend the  Acquisition  Date until March 13, 2012. The Option Price shall apply
to the payment of all sums due under a loan made by the Operating Partnership in
March 1997 to Odyssey in the amount of  approximately  $17 million.  The Odyssey
loan matures on the  Acquisition  Date,  subject to the Operating  Partnership's
right to extend the  Acquisition  Date as set forth  above,  and is secured by a
pledge of Odyssey's interest in the Omni Partnership.

     OUR JOINT VENTURE IN AN OFFICE BUILDING IN TARRYTOWN, NEW YORK INCLUDES THE
RISKS  THAT WE CANNOT  ENTER INTO LARGE  LEASES OR  REFINANCE  OR DISPOSE OF THE
BUILDING IN OUR DISCRETION. The Operating Partnership owns a 60% managing member
interest in a limited  liability  company  that owns 520 White  Plains  Road,  a
171,761  square  foot  office  building  located  in  Tarrytown,  New York.  The
remaining 40% member  interest is held by Tarrytown  Corporate  Center III, L.P.
("TCC"),   a  partnership   affiliated  with  the  Halpern   organization,   the
organization  from  which  we  acquired  eight  Class A  office  properties  for
approximately  $86 million in February 1996. The member agreement  governing the
joint  venture  arrangement  requires  us to obtain the  consent of TCC prior to
engaging in activities  such as entering into or modifying a lease for more than
25,000 rentable square feet, financing or refinancing  indebtedness  encumbering
the property and selling or otherwise transferring the property.

   
     ALTHOUGH WE CONTROL RECKSON MORRIS OPERATING  PARTNERSHIP OUR JOINT VENTURE
PARTNER HAS APPROVAL RIGHTS OVER A NUMBER OF MATTERS, SUCH AS THE SALE OF ALL OR
SUBSTANTIALLY ALL OF THE RECKSON MORRIS PROPERTIES.  In October 1997, we entered
into an agreement to invest $150 million in the Morris  Companies,  a New Jersey
developer  and owner of "big box"  warehouse  facilities.  The Morris  Companies
properties  include  23  industrial  buildings  encompassing  approximately  4.0
million  square feet.  As of December 31,  1998,  we had invested  approximately
$93.8 million for an approximate  71.8%  controlling  interest in Reckson Morris
Operating  Partnership,  L.P. In  connection  with the  transaction,  the Morris
Companies contributed 100% of their interest in certain industrial properties to
Reckson Morris Operating Partnership in exchange for operating partnership units
in Reckson  Morris  Operating  Partnership.  Although we control  Reckson Morris
Operating  Partnership,  the former owners of the Morris Companies have approval
rights over a number of matters, such as the sale of all or substantially all of
the properties of Reckson Morris Operating Partnership

     OUR INTEREST IN JOINT VENTURES WITH MATRIX IS GENERALLY  SUBJECT TO A RIGHT
OF FIRST  OFFER OF MATRIX AND MATRIX CAN ALSO PUT ITS  INTEREST TO US IF LEASING
CONDITIONS  HAVE  BEEN  SATISFIED.  As  of  December  31,  1998,  the  Operating
Partnership had invested $15.3 million in joint ventures with Matrix Development
Group for the  development  of industrial and flex  properties  located in a New
Jersey submarket.  Although the terms of each of the joint ventures vary, Matrix
generally  identifies and develops projects for which we provide the capital. We
control  the joint  ventures  and  receive  a  priority  return on our  invested
capital. We also receive a return of our capital upon any sale or refinancing of
a project,  and,  generally,  three-quarters  of the proceeds in excess thereof.
Matrix typically has a right of first offer in the event we seek to dispose of a
project and has the right to put its interest in a project to us once  specified
leasing parameters have been satisfied.

     OUR   PRIVATIZATION   OF  GOVERNMENT   OFFICE  BUILDINGS  AND  CORRECTIONAL
FACILITIES  IS  DEPENDENT   UPON  CONTINUED   OUTSOURCING  BY  GOVERNMENTS   AND
COMPETITIVE BIDDING. From time to time, the Operating Partnership may make joint
venture  investments  in real  estate  assets  with  Reckson  Strategic  Venture
Partners,  LLC.  Reckson  Service  Industries,  Inc.,  an  entity  that  Reckson
Associates  spun-off  to its  shareholders  in  1998,  owns  100% of the  common
ownership  interests of Reckson  Strategic  Venture  Partners and,  accordingly,
controls Reckson Strategic  Venture Partners.  The strategy of Reckson Strategic
Venture  Partners  is  to  acquire  interests  in  established   entrepreneurial
enterprises with experienced management teams in market sectors which are in the
early  stages  of  their  growth  cycle or offer  circumstances  for  attractive
investments  as  well  as  opportunities   for  future  growth.   Joint  venture
investments with Reckson Strategic Venture Partners may involve various types of
real  estate  assets and  involve  different  risks than those in our office and
industrial  sectors,  as to which we have no prior  experience or expertise.  No
assurance  can be given as to the success of these  investments.  As of December
31, 1998, the Operating  Partnership  had made a joint venture  investment  with
Reckson Strategic Venture Partners of $10.1 million in the area of privatization
of government occupied office buildings and correctional facilities. In addition
to the joint  venture  risks  discussed  above,  this  investment  includes  the
following specific risks:
    

     o    dependence upon the continued  outsourcing of real estate functions by
          governmental entities;
     o    the ability to compete  effectively  in bidding on specific  projects;
          and
     o    significant government regulation and/or oversight

- - ENVIRONMENTAL PROBLEMS ARE POSSIBLE AND MAY BE COSTLY

     Federal, state and local laws and regulations relating to the protection of
the  environment  may  require a current or  previous  owner or operator of real
estate to  investigate  and clean up hazardous or toxic  substances or petroleum
product releases at a property.  An owner of real estate is liable for the costs
of removal or remediation of certain  hazardous or toxic substances on or in the
property.  These laws often impose such liability  without regard to whether the
owner knew of, or caused,  the presence of the contaminants.  Clean-up costs and
the owner's  liability  generally are not limited under the enactments and could
exceed the value of the property and/or the aggregate  assets of the owner.  The
presence of or the failure to properly  remediate the  substances  may adversely
affect the owner's  ability to sell or rent the  property or to borrow using the
property as  collateral.  Persons who arrange for the  disposal or  treatment of
hazardous or toxic  substances  may also be liable for the clean-up costs of the
substances at a disposal or treatment facility,  whether or not such facility is
owned or operated by the  person.  Even if more than one person was  responsible
for the contamination, each person covered by the environmental laws may be held
responsible for the clean-up costs incurred. In addition,  third parties may sue
the  owner  or  operator  of  a  site  for  damages  and  costs  resulting  from
environmental contamination emanating from that site.

     Environmental  laws also govern the  presence,  maintenance  and removal of
asbestos-containing  materials ("ACMs"). These laws impose liability for release
of ACMs  into  the air and  third  parties  may seek  recovery  from  owners  or
operators  of real  properties  for personal  injury  associated  with ACMs.  In
connection with the ownership  (direct or indirect),  operation,  management and
development  of real  properties,  we may be  considered an owner or operator of
properties  containing  ACMs.  Having  arranged for the disposal or treatment of
contaminants  we may be potentially  liable for removal,  remediation  and other
costs, including governmental fines and injuries to persons and property.

     All of our office properties and all of our industrial properties have been
subjected to a Phase I or similar  environmental  site assessment after April 1,
1994 that were  completed by  independent  environmental  consultant  companies,
except  for the  property  located  at 35  Pinelawn  Road  which was  originally
developed  by us and  subjected  to a Phase I in April  1992.  These  Phase I or
similar environmental site assessments involved general inspections without soil
sampling,  ground  water  analysis  or radon  testing  and,  for our  properties
constructed in 1978 or earlier, survey inspections to ascertain the existence of
ACMs. These  environmental  site assessments have not revealed any environmental
liability that would have a material adverse effect on our business.

- - FAILURE TO QUALIFY AS A REIT WOULD BE COSTLY

     Reckson  Associates  has operated (and intends to operate) so as to qualify
as a REIT under the Internal  Revenue Code beginning with our taxable year ended
December 31, 1995.  Although our management  believes that Reckson Associates is
organized and operated in a manner to so qualify, no assurance can be given that
Reckson Associates will qualify or remain qualified as a REIT.

     If  Reckson  Associates  fails to qualify  as a REIT in any  taxable  year,
Reckson  Associates  will be  subject  to  federal  income  tax  (including  any
applicable  alternative  minimum tax) on its taxable income at regular corporate
rates.  Moreover,  unless entitled to relief under certain statutory provisions,
Reckson  Associates also will be  disqualified  from treatment as a REIT for the
four taxable years following the year during which  qualification was lost. This
treatment  would   significantly   reduce  net  earnings  available  to  service
indebtedness,  make investments or pay distributions to shareholders  because of
the additional tax liability to Reckson Associates for the years involved. Also,
Reckson  Associates  would  not then be  required  to pay  distributions  to its
shareholders.

- - TAX  CONSEQUENCES  UPON A SALE OR  REFINANCING  OF  PROPERTIES  MAY  RESULT IN
CONFLICTS OF INTEREST FOR DIRECTORS AND OFFICERS OF RECKSON ASSOCIATES

     Holders of units of limited  partnership  of the Operating  Partnership  or
co-owners of properties not owned  entirely by us may suffer  different and more
adverse  tax  consequences  than we will  upon  the sale or  refinancing  of our
properties. We may have different objectives from these co-owners and holders of
limited  partnership  units regarding the appropriate  pricing and timing of any
sale or refinancing of these properties.  While Reckson Associates,  as the sole
general partner of the Operating Partnership,  has the exclusive authority as to
whether and on what terms to sell or refinance each property owned solely by the
Operating Partnership, the directors and officers of Reckson Associates who hold
limited  partnership units may seek to influence us not to sell or refinance the
properties,  even though such a sale might otherwise be financially advantageous
to us, or may seek to influence  us to refinance a property  with a higher level
of debt.

- - WE MAY HAVE CONFLICTS OF INTERESTS WITH RECKSON SERVICE INDUSTRIES

   
     CONFLICTS AS A RESULT OF OVERLAPPING  MANAGEMENT.  Donald J. Rechler serves
as our Chairman of the Board and our Chief Executive Officer and Chairman of the
Board of Reckson  Service  Industries.  Scott H. Rechler serves as our President
and our Chief  Operating  Officer and President and Chief  Executive  Officer of
Reckson Service  Industries and is a director of Reckson  Associates and Reckson
Service Industries. Michael Maturo serves as Executive Vice President, Treasurer
and Chief Financial Officer of Reckson Associates and Reckson Service Industries
and is a director of Reckson  Service  Industries.  Furthermore,  Roger Rechler,
Gregg Rechler and Mitchell Rechler are executive  officers of Reckson Associates
and Roger  Rechler and Mitchell  Rechler are  directors  of Reckson  Associates,
while all three individuals are members of the management advisory committee and
directors  of  Reckson  Service  Industries.  Although  each of the  individuals
referred to above is  committed to the success of Reckson  Associates,  they are
also  committed  to the  success  of  Reckson  Service  Industries.  Our  senior
management and directors beneficially owned approximately 12% of the outstanding
common stock of Reckson Associates,  with a total market value, based on the New
York Stock  Exchange  closing price of $22.19 per share on December 31, 1998, of
approximately  $132.3 million,  and approximately 27% of the outstanding  common
stock of Reckson Service Industries, with a total market value, at a stock price
of $4.125 per share on December 31, 1998, of  approximately  $27.3  million.  In
calculating the ownership of common stock of Reckson Associates, we have assumed
the  conversion of all limited  partnership  units in the Operating  Partnership
into shares of common stock and the exercise of all vested stock options.  There
is a risk that the common  membership  of  management,  members of the Boards of
Directors and ownership of Reckson  Associates  and Reckson  Service  Industries
will lead to conflicts of interest in the fiduciary  duties owed to stockholders
by common directors and officers in connection with transactions between the two
companies, as well as a conflict in allocating management time.
    

     CONFLICTS  IN  TRANSACTIONS  WITH  RECKSON  SERVICE  INDUSTRIES  UNDER  THE
INTERCOMPANY AGREEMENT. The Operating Partnership and Reckson Service Industries
have entered into an intercompany  agreement to formalize their  relationship at
the outset and to limit conflicts of interest.  The  intercompany  agreement was
not  negotiated  at arms'  length as it was  negotiated  while 95% of the common
stock of Reckson  Service  Industries  was owned by the  Operating  Partnership.
Under  the  intercompany  agreement,  Reckson  Service  Industries  granted  the
Operating  Partnership a right of first  opportunity to make any  REIT-qualified
investment that becomes available to Reckson Service Industries. In addition, if
a REIT-qualified  investment  opportunity  becomes  available to an affiliate of
Reckson Service Industries,  including Reckson Strategic Venture Partners,  100%
of the common ownership interest of which is indirectly owned by Reckson Service
Industries,  the intercompany agreement requires the Reckson Service Industries'
affiliate to allow the Operating  Partnership to participate in the  opportunity
to the extent of Reckson Service Industries' interest in the affiliate.

     Under the intercompany agreement, the Operating Partnership granted Reckson
Service  Industries  a right of first  opportunity  to provide to the  Operating
Partnership and its tenants any type of  non-customary  commercial  services for
occupants of office,  industrial and other property  types,  which we may not be
permitted to provide because they may generate REIT non-qualifying  income under
Federal  tax laws.  Reckson  Service  Industries  will  provide  services to the
Operating  Partnership  at rates and on terms as  attractive  as either the best
available  for  comparable  services  in the market or those  offered by Reckson
Service Industries to third parties. In addition, the Operating Partnership will
give Reckson Service Industries access to its tenants with respect to commercial
services that may be provided to tenants.

     Under the  intercompany  agreement,  subject  to  certain  conditions,  the
Operating  Partnership  granted  Reckson  Service  Industries  a right  of first
refusal to become  the lessee of any real  property  acquired  by the  Operating
Partnership if the Operating Partnership  determines that, because the operation
of the property may involve the performance of non-customary services that under
the Internal  Revenue Code a REIT may not generally  provide,  it is required to
enter  into  a  "master"  lease  arrangement.   Pursuant  to  a  "master"  lease
arrangement,  the Operating  Partnership  would own the  property,  but lease it
entirely to a single lessee that would operate the property.

     With respect to services that Reckson  Service  Industries  will provide to
the  Operating  Partnership,  management  will have a conflict  of  interest  in
determining  the market  rates to charge  the  Operating  Partnership  for these
services.  In  addition,   management  will  have  a  conflict  of  interest  in
determining  whether the Operating  Partnership  or Reckson  Service  Industries
would  pursue  a  REIT-qualified  investment  opportunity  outside  of our  core
business  strategy of investing in office and  industrial  properties in the New
York Tri-State area. Furthermore,  the Operating Partnership and Reckson Service
Industries  may  structure  investments  so  that  joint  ventures  between  the
Operating  Partnership  and Reckson  Strategic  Venture  Partners may pursue the
portion of investments  generating  REIT-qualified  income and Reckson Strategic
Venture  Partners will pursue  directly the other portion of these  investments.
Accordingly,  Reckson  Strategic  Venture Partners and Reckson Strategic Venture
Partners-Reckson  Operating  Partnership  joint  ventures may have  conflicts of
interest in the  structuring,  valuation,  management  and  disposition of these
investments.

   
     CONFLICTS IN OUR LOANS TO RECKSON  SERVICE  INDUSTRIES.  In June 1998,  the
Operating  Partnership  established  a  credit  facility  with  Reckson  Service
Industries  (the "Reckson  Service  Industries  Facility") in the amount of $100
million for Reckson  Service  Industries'  service  sector  operations and other
general corporate purposes. In addition, in June 1998, the Operating Partnership
also established a credit facility with Reckson Service Industries (the "Reckson
Strategic  Venture  Partners  Facility",  and together with the Reckson  Service
Industries Facility, the "Reckson Service Industries Credit Facilities") for the
funding of  investments of up to $100 million by Reckson  Service  Industries in
Reckson Strategic Venture Partners. Advances under the Reckson Strategic Venture
Partners  Facility  in excess of $25  million in respect of any single  platform
will be subject to approval  by the Board of  Directors  of Reckson  Associates,
while advances under the Reckson  Service  Industries  Facility in excess of $10
million  in  respect  of  any  single  investment  in  non-customary  commercial
services,  as well  as  advances  for  investments  in  opportunities  in  other
services,  will be  subject to  approval  by the Board of  Directors  of Reckson
Associates,  or a committee  thereof.  Each Reckson  Service  Industries  Credit
Facility  has a term of five  years and  advances  thereunder  will be  recourse
obligations of Reckson Service Industries. Interest will accrue on advances made
under the Reckson Service  Industries  Credit  Facilities at a rate equal to the
greater of (1) the prime  rate plus 2% and (2) 12% per  annum,  with the rate on
amounts that are  outstanding  for more than one year  increasing  annually at a
rate of 4% of the prior year's rate. Prior to maturity, interest will be payable
quarterly but only to the extent of net cash flow and on an interest-only  basis
and  will be  prepayable  without  penalty  at the  option  of  Reckson  Service
Industries.  As long as there are outstanding advances under any Reckson Service
Industries Credit Facility,  Reckson Service  Industries will be prohibited from
paying  dividends  on any  shares of its  capital  stock.  The  Reckson  Service
Industries Credit Facilities are subject to certain other covenants and prohibit
advances  thereunder  to the extent the  advances  could,  in our  determination
endanger the status of Reckson  Associates  as a REIT.  The terms of the Reckson
Service  Industries  Credit  Facilities  were not negotiated at arms' length and
thus may not reflect terms that could have been obtained from independent  third
parties.  Additional  indebtedness  may be incurred by  subsidiaries  of Reckson
Service  Industries.  As of  December  31,  1998,  borrowings  under the Reckson
Service Industries Credit Facilities aggregated approximately $33.7 million.
    

     POLICIES  WITH RESPECT TO CONFLICTS OF INTEREST MAY NOT BE  SUCCESSFUL.  We
have adopted policies  designed to eliminate or minimize  conflicts of interest.
These policies include the approval by of all transactions in which directors or
officers of Reckson Associates have a conflicting  interest by a majority of the
directors who are neither officers nor affiliated with us. These policies do not
prohibit sales of assets to or from  affiliates,  but would require the sales to
be approved by the independent directors of Reckson Associates.  However,  there
is no assurance  that these  policies  will be  successful  and, if they are not
successful,  decisions  could be made  that  might  fail to  reflect  fully  the
interests of all of our stockholders.

- - THE  TOWER  TRANSACTION  MAY  CAUSE  AN  INCREASE  IN  OUR  DEBT  RATIOS   AND
INVOLVES OUR ENTRY INTO A NEW MARKET; THE TOWER PROPERTIES MAY NOT PERFORM AS WE
ANTICIPATE

     As further  described below under the caption  "Reckson  Associates and the
Operating  Partnership",  on December 9, 1998,  we agreed to  purchase,  through
Metropolitan  Partners LLC, 100% of the outstanding common stock of Tower Realty
Trust,  Inc.  for a  combination  of  cash  and  securities,  including  Reckson
Associates' Class B exchangeable  common stock. We control  Metropolitan and own
100% of the common member interests therein. The Tower transaction is subject to
the approval of Tower stockholders and, as a result, may not occur. If the Tower
stockholders approve the transaction and we acquire Tower, we will be subject to
the following risks:

     o    as a result of the Tower  merger our debt ratios will  increase due to
          Tower's debt levels;

     o    if Reckson  Associates'  stockholders  fail to approve the issuance of
          the Class B exchangeable  common stock as the entire non-cash  portion
          of the merger  consideration,  we will incur additional  indebtedness,
          thereby further increasing our debt ratios. The table below sets forth
          historical  and pro forma  information  about our debt as of September
          30, 1998. Pro forma information gives effect to the Tower merger, both
          with  and  without  Reckson  Associates'  stockholders  approving  the
          issuance  of the  Class B  exchangeable  common  stock  as the  entire
          non-cash  portion of the merger  consideration.  In the event  Reckson
          Associates' stockholders do not approve of the issuance of the Class B
          exchangeable common stock as the entire non-cash portion of the merger
          consideration,  the  Operating  Partnership  will issue  approximately
          $95.7  million  of its 7%  Senior  Notes due 2009  (par  value  $101.5
          million) as part of the merger consideration.



                                ------------------ ------------------------- ---------------------------
                                                          PRO FORMA                  PRO FORMA
                                                             WITH                     WITHOUT
                                   HISTORICAL              APPROVAL                   APPROVAL
                                ------------------ ------------------------- ---------------------------
                                                                    
Total  Debt (in  millions and                                                                             
including proportionate share                                                                           
of  joint  debt  and  net  of                                                                                
minority interests)                  $814.4                  $1,162.0                    $1,257.7
                                ------------------ ------------------------- ---------------------------
Weighted average  maturity of                                                                            
debt (in years)                   4.8 years                 4.9 years                   5.4 years
                                ------------------ ------------------------- ---------------------------
Debt Ratio                            36.9%                     40.8%                       44.1%
                                ------------------ ------------------------- ---------------------------
Debt-to-equity ratio                 1:1.71                    1:1.45                      1:1.26
                                ------------------ ------------------------- ---------------------------
Portion   of   debt  that  is                                                                                 
variable rate                           54%                       58%                         54%
                                ------------------ ------------------------- ---------------------------


     o    the Tower portfolio may not perform as we anticipate
     o    we may not be able to effectively integrate Tower's operations,  which
          involve the  operation  and leasing of  buildings  in New York City, a
          market in which we have not previously owned and operated properties

     In  addition,  if the Tower  merger does not occur and a court of competent
jurisdiction  issues a final  non-appealable  judgment  determining that we were
obligated to consummate  the merger but we failed to do so, or that we failed to
use our  reasonable  best  efforts to take all  actions  necessary  to cause the
closing conditions to the merger to be satisfied, we will be obligated to return
to Tower for no  consideration  $30  million  of Tower  preferred  stock that we
purchased at the time of the signing of the merger agreement.

- - LIMITS ON OWNERSHIP AND CHANGES IN CONTROL MAY DETER CHANGES IN MANAGEMENT AND
THIRD PARTY ACQUISITION PROPOSALS

     OWNERSHIP LIMIT. To maintain the  qualification of Reckson  Associates as a
REIT,  five or fewer  individuals  (as defined in the  Internal  Revenue Code of
1986,  as  amended,  to  include  certain  entities)  may not own,  directly  or
indirectly,  more than 50% in value of the outstanding  capital stock of Reckson
Associates  during the last half of a taxable  year (other than the first year).
In order to protect against the risk of losing REIT status,  Reckson Associates'
charter  limits  ownership  of its issued and  outstanding  common  stock by any
single  stockholder  to  9.0%  of the  lesser  of the  number  or  value  of the
outstanding  shares of common  stock.  It also will limit  ownership  of Reckson
Associates' Class B exchangeable  common stock to be issued in the pending Tower
transaction by any single  stockholder to 9% in value of the outstanding  shares
of all of  Reckson  Associates'  common  stock and limits  ownership  of Reckson
Associates'  issued  and  outstanding  7-5/8%  Series A  convertible  cumulative
preferred  stock to 9% in  value of the  outstanding  shares  of all of  Reckson
Associates' capital stock. In addition,  a stockholder may not acquire shares of
Reckson   Associates'  Series  A  preferred  stock  that  would  result  in  the
stockholder's  owning in excess of 20% of the  lesser of the  number or value of
outstanding  shares  of the  Series A  preferred  stock.  See  "Restrictions  on
Ownership of Capital  Stock,"  "Description  of Common Stock -  Restrictions  on
Ownership" and "Description of Preferred Stock-Restrictions on Ownership." These
provisions may delay, defer or prevent a change of control in Reckson Associates
or other  transaction  by a third  party  without  the  consent  of the Board of
Directors  even if a  change  in  control  were  in the  best  interests  of the
stockholders of Reckson Associates.

     STAGGERED  BOARD.  The Board of Directors of Reckson  Associates is divided
into three  classes.  The terms of the Class I, Class II and Class III directors
expire  in  1999,  2000 and  2001,  respectively.  Directors  are  chosen  for a
three-year  term.  These  provisions may deter changes in control because of the
increased  time  period  necessary  for a third  party  to  acquire  control  of
management through positions on the Board of Directors of Reckson Associates.

     REQUIRED  CONSENT OF HOLDERS OF UNITS FOR CERTAIN  TRANSACTIONS.  Under the
terms of the  Operating  Partnership's  partnership  agreement,  through June 2,
2000, the Operating  Partnership may not sell,  transfer or otherwise dispose of
all or  substantially  all of its assets  (whether  by way of sale or by merger,
sale or consolidation into another person) without the consent of the holders of
85% of the outstanding common limited partnership units. This voting requirement
could delay, defer or prevent a change in control of Reckson Associates.

     FUTURE  ISSUANCES  OF COMMON  STOCK.  The  charter  of  Reckson  Associates
authorizes  the Board of  Directors to issue  additional  shares of common stock
without stockholder approval. Reckson Associates may also issue shares of common
stock in  exchange  for limited  partnership  units  pursuant  to the  Operating
Partnership's  partnership agreement. The Board of Directors has also authorized
the issuance of up to 11.7 million shares of Class B  exchangeable  common stock
in connection with the Tower transaction. These shares will be exchangeable on a
one-for-one  basis for shares of Reckson common stock and will be entitled to an
initial  annual  dividend of $2.24 per share,  subject to  adjustment  annually.
Issuance of common  stock or Class B  exchangeable  common  stock could have the
effect  of  diluting   existing  common   stockholders'   interests  in  Reckson
Associates.

     THE CHARTER OF RECKSON  ASSOCIATES  PERMITS THE ISSUANCE OF PREFERRED STOCK
WHICH COULD DELAY, DEFER OR PREVENT A CHANGE IN CONTROL.  The charter of Reckson
Associates authorizes the Board of Directors to issue up to 25 million shares of
preferred  stock, of which 9,200,000 shares of its Series A preferred stock have
been  issued  (8,000  shares of which  have been  converted  to shares of common
stock),  to reclassify  unissued  shares of capital stock,  and to establish the
preferences,   conversion  and  other  rights,   voting  powers,   restrictions,
limitations and restrictions on ownership,  limitations as to dividends or other
distributions,  qualifications,  and terms and conditions of redemption for each
class or series of any capital  stock  issued.  Although  the Board of Directors
does not intend to do so at the  present  time,  it could  establish a series of
preferred  stock that  could,  depending  on the terms of the  preferred  stock,
delay,  defer or prevent a change in control  of Reckson  Associates  that might
involve  a  premium  price  for the  common  stock or  otherwise  be in the best
interest of the stockholders of Reckson Associates.

     LIMITATIONS ON  ACQUISITION OF AND CHANGES IN CONTROL  PURSUANT TO MARYLAND
LAW. The Maryland General  Corporation Law contains  provisions,  referred to as
the "control share  acquisition  statute,"  which eliminate the voting rights of
shares  acquired in a Maryland  corporation  in  quantities  so as to constitute
"control shares," as defined under the MGCL. The MGCL also contains  provisions,
referred  to as  the  "business  combination  statute,"  which  generally  limit
business  combinations  between a Maryland corporation and any 10% owners of the
corporation's  stock or any affiliate  thereof.  These  provisions  may have the
effect of  inhibiting  a third party from  making an  acquisition  proposal  for
Reckson  Associates or of delaying,  deferring or preventing a change in control
of Reckson  Associates  under  circumstances  that  otherwise  could provide the
holders of shares of common stock with the opportunity to realize a premium over
the then-prevailing  market price. However, as permitted by the MGCL, the bylaws
of Reckson Associates contain a provision  exempting any and all acquisitions by
any person of shares of capital  stock of Reckson  Associates  from the  control
share  acquisition  statute.  In  addition,  the  Board of  Directors  adopted a
resolution  exempting  Reckson  Associates  from the  provisions of the business
combination statute.  Reckson Associates may amend or eliminate these provisions
at any time.

- - RISK OF IMPACT OF YEAR 2000 ISSUE ON OUR OPERATIONS AND FINANCIAL RESULTS

     Some of our older  computer  programs  were written using two digits rather
than four to define the applicable  year. As a result,  those computer  programs
have time-sensitive  software that recognizes a date using "00" as the year 1900
rather than the year 2000.  This could cause a system failure or  miscalculation
causing  disruptions of operations,  including,  among other things, a temporary
inability  to  process  transactions,  or  engage  in  similar  normal  business
activities.

     Our year 2000 project is estimated to be completed  not later than July 31,
1999,  which  is prior  to any  anticipated  impact  on our  operating  systems.
Additionally,  we have received  assurances from our contractors that all of our
building  management and mechanical systems are currently year 2000 compliant or
will be made compliant prior to any impact on those systems.  However, we cannot
guarantee that all contractors  will comply with their  assurances and therefore
we may not be able to determine year 2000  compliance of those  contractors.  At
that time, we will  determine the extent to which we will be able to replace non
compliant  contractors.  We believe that with modifications to existing software
and  conversion to new software,  the year 2000 issue will not pose  significant
operational  problems for our computer  systems.  However,  if modifications and
conversions are not made, or are not completed timely, the year 2000 issue could
have a material impact on our operations.

     To date,  we have expended  approximately  $375,000 and expect to expend an
additional one million dollars in connection with upgrading building management,
mechanical and computer systems.  The costs of the project and the date on which
we  believe  we will  complete  the year  2000  modifications  are  based on our
management's best estimates,  which were derived utilizing numerous  assumptions
of future events,  including the continued availability of certain resources and
other factors.  However,  there can be no guarantee that these estimates will be
achieved and actual  results  could differ  materially  from those  anticipated.
Specific  factors that might cause  material  differences  include,  but are not
limited to the  availability  and costs of personnel  trained in this area,  the
ability  to  locate  and  correct  all  relevant  computer  codes,  and  similar
uncertainties.

- - THE MARKET VALUE OF SECURITIES  COULD  DECREASE BASED ON OUR  PERFORMANCE  AND
MARKET PERCEPTION AND CONDITIONS

     EFFECT OF EARNINGS AND CASH  DISTRIBUTIONS.  The market value of the equity
securities of a REIT may be based primarily upon the market's  perception of the
REIT's growth potential and its current and future cash  distributions,  and may
be secondarily based upon the real estate market value of the underlying assets.
For  the  year  ended  December  31,  1998,   Reckson   Associates   distributed
approximately  75.7%  of its  cash  available  for  distribution  to its  common
stockholders.  Although we have retained  operating cash flow for investment and
working  capital  purposes,  which has  increased  the  value of our  underlying
assets,  this has not  proportionately  increased the market price of the equity
securities of Reckson Associates.  Our failure to meet the market's  expectation
with regard to future  earnings and cash  distributions  likely would  adversely
affect the market price of the equity securities of Reckson Associates.

     ADVERSE IMPACT OF RISING  INTEREST RATES.  One factor which  influences the
price of securities is the dividend or interest rate on the securities  relative
to market  interest rates.  Rising  interest rates may lead potential  buyers of
equity securities of Reckson  Associates to expect a higher dividend rate, which
would adversely affect the market price of the securities.  In addition,  rising
interest rates would result in increased  expense,  thereby adversely  affecting
cash  flow  and  the  ability  of  the  Operating  Partnership  to  service  its
indebtedness.

- -  TRANSACTIONS  BY  THE  OPERATING  PARTNERSHIP  OR  RECKSON  ASSOCIATES  COULD
ADVERSELY AFFECT DEBT HOLDERS

     Except with respect to a covenant  limiting the incurrence of indebtedness,
a covenant requiring the Operating  Partnership to maintain a certain percentage
of  unencumbered  assets and a covenant  requiring  any  successor in a business
combination  with the Operating  Partnership to assume all of the obligations of
the  Operating  Partnership  under  the  indenture  pursuant  to which  the debt
securities  will be issued,  the indenture does not contain any provisions  that
would protect holders of debt securities in the event of (i) a highly  leveraged
or similar transaction  involving the Operating  Partnership,  the management of
the Operating  Partnership or Reckson Associates,  or any affiliate of any these
parties,   (ii)  a  change  of  control,   or  (iii)  certain   reorganizations,
restructuring,   mergers  or  similar   transactions   involving  the  Operating
Partnership or Reckson Associates. Although we anticipate that the pending Tower
transaction  will increase our overall debt level, we do not anticipate that the
Tower  transaction  will cause a default under the indenture or otherwise affect
the rights of holders of debt securities issued under the indenture.

- - WE MAY NOT BE ABLE TO PAY ON GUARANTEES

   
     A guarantee  of the  Operating  Partnership's  debt  securities  by Reckson
Associates effectively provides no benefit to investors and should not be viewed
by investors as enhancing the credit of the debt  securities or as providing any
additional value to the debt securities.  The Operating Partnership conducts all
of Reckson Associates'  operations,  and the only asset of Reckson Associates is
its  interest  in the  Operating  Partnership.  As a  result,  if the  Operating
Partnership is unable to meet its  obligations on the debt  securities,  Reckson
Associates  will not have any assets from which to pay on its  guarantee of such
debt securities.
    



                            [ORGANIZATIONAL CHART OF
                        RECKSON ASSOCIATES REALTY CORP.]







                              AVAILABLE INFORMATION

     Reckson Associates is, and as a result of filing the registration statement
of which this prospectus is a part, the Operating  Partnership  will be, subject
to the  informational  requirements  of the Securities  Exchange Act of 1934, as
amended (the "Exchange Act"),  and in accordance  therewith  Reckson  Associates
files reports,  proxy  statements and other  information with the Securities and
Exchange  Commission (the "Commission") and the Operating  Partnership will file
reports  with  the  Commission.   These  reports,  proxy  statements  and  other
information  may be  inspected  and  copied at the public  reference  facilities
maintained by the Commission at Room 1024, 450 Fifth Street,  N.W.,  Washington,
D.C. 20549,  as well as the regional  offices of the Commission at 7 World Trade
Center (13th Floor),  New York, New York 10048,  and Citicorp  Center,  500 West
Madison  Street,  Suite  1400,  Chicago,  Illinois  60661-2511.  Copies  of such
information  can be  obtained by mail from the Public  Reference  Section of the
Commission at 450 Fifth Street,  N.W.,  Washington,  D.C.  20549,  at prescribed
rates. These materials can also be inspected at the office of the New York Stock
Exchange,  20 Broad  Street,  New York,  New York 10005,  the  exchange on which
Reckson  Associates'  common stock and Series A preferred  stock is listed.  The
Commission maintains a Web site at http://www.sec.gov  containing reports, proxy
and information statements and other information regarding registrants that file
electronically with the Commission.

     We have filed with the  Commission  a  registration  statement  on Form S-3
under the Securities Act, with respect to the  securities.  This prospectus does
not  contain all of the  information  set forth in the  registration  statement,
certain  parts of which  have  been  omitted  in  accordance  with the rules and
regulations  of the  Commission.  For further  information  regarding us and the
securities,  reference  is made to the  registration  statement,  including  the
exhibits filed as a part thereof, and the documents incorporated by reference in
this  prospectus.  Statements  made in this prospectus as to the contents of any
contract,  agreement or other document referred to are not necessarily complete;
with respect to each  contract,  agreement or other document filed as an exhibit
to the registration statement or to an Exchange Act report, reference is made to
the exhibit for a more complete  description  of the matter  involved,  and each
statement shall be deemed qualified in its entirety by reference.  Copies of the
registration statement and the exhibits may be inspected, without charge, at the
offices of the  Commission,  or  obtained  at  prescribed  rates from the Public
Reference Section of the Commission at the address set forth above.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     The following  documents  heretofore  filed by Reckson  Associates with the
Commission  pursuant to the Exchange Act are  incorporated  by reference in this
prospectus:



SEC FILINGS (FILE NO. 1-13762)                         PERIOD
- ------------------------------                         ------
                                                    

Annual Report on Form 10-K                             Year ended December 31, 1997

Quarterly Reports on Form 10-Q                         Quarters  ended  March  31,  1998, June 30, 1998  and
                                                       September 30, 1998

Current  Reports on Form 8-K                           Filed February 18, 1997, May 15, 1997, June 12, 1997,
(including  Form 8-K/A)                                August 7, 1997,  September 9, 1997,  October 21, 1997,
                                                       January 6, 1998, January 26, 1998, February 10, 1998,
                                                       February  12, 1998,  March 24, 1998,  March 25, 1998,
                                                       April  6,  1998,  July 22,  1998,  August  14,  1998,
   
                                                       November 2, 1998,  November  9, 1998 ,  December  22,
                                                       1998, February 5, 1999, February 5, 1999 and March 1,
                                                       1999
    

Registration Statement on Form 8-A                     Filed May 9, 1995 (as amended)

Registration Statement on Form 8-A                     Filed April 9, 1998


     We also  incorporate by reference  each of the following  documents that we
will  file  with the  Commission  after  the date of this  prospectus  until the
particular  offering is completed or after the date of the initial  registration
statement and prior to effectiveness of the registration statement:

     o    Reports filed under Section 13(a) and (c) of the Exchange Act;

     o    Definitive  proxy or information  statements filed under Section 14 of
          the  Exchange  Act in  connection  with any  subsequent  stockholders'
          meeting; and

     o    Any reports filed under Section 15(d) of the Exchange Act.

     Reckson Associates and the Operating Partnership will provide a copy of any
or all of these  documents  (exclusive  of  exhibits  unless  the  exhibits  are
specifically incorporated by reference therein),  without charge, to each person
to whom this  prospectus is  delivered,  upon written or oral request to Reckson
Associates Realty Corp., 225 Broadhollow Road,  Melville,  New York 11747, Attn:
Jason M. Barnett,  Senior Vice President and General  Counsel,  telephone number
(516) 694-6900.

                RECKSON ASSOCIATES AND THE OPERATING PARTNERSHIP

   
     Reckson  Associates  was  incorporated  in  September  1994  and  commenced
operations  effective with the  completion of its initial  public  offering (the
"IPO")  on June  2,  1995.  Reckson  Associates,  together  with  the  Operating
Partnership, was formed for the purpose of continuing the commercial real estate
business of the predecessors of Reckson Associates,  its affiliated partnerships
and other entities. For more than 40 years, we have been engaged in the business
of owning, developing,  acquiring,  constructing,  managing and leasing suburban
office and industrial  properties in the New York  metropolitan  area.  Based on
industry surveys,  we believe that we are one of the largest owners and managers
of Class A  suburban  office  and  industrial  properties  in the New York  City
Metropolitan  Tri-State area of New York, New Jersey and  Connecticut  (the "New
York  Tri-State  area").  When we  refer to  Class A  office  buildings  in this
prospectus, we mean well maintained,  high quality buildings that achieve rental
rates  that are at the  higher  end of the  range of  rental  rates  for  office
properties in the  particular  market.  We operate as a  self-managed  REIT with
in-house  capabilities in property  management,  development,  construction  and
acquisitions.  As of December 31,  1998,  we owned and  controlled,  directly or
indirectly,  204 properties (the "Properties")  encompassing  approximately 21.0
million rentable square feet, all of which we manage.  The Properties consist of
73 Class A suburban office properties  encompassing  approximately  10.1 million
rentable square feet, 129 industrial properties encompassing  approximately 10.8
million  rentable square feet and two 10,000 square foot retail  properties.  In
addition,  as of  December  31,  1998,  we owned or had  contracted  to  acquire
approximately 980 acres of land (including approximately 400 acres under option)
that may present future development opportunities. In addition, we have invested
$17 million in a note  receivable  secured by the interest of Odyssey  Partners,
L.P. in Omni Partners, L.P.
    

     The  office  properties  are Class A  suburban  office  buildings  that are
well-located,  well-maintained and professionally  managed.  In addition,  these
properties are modern or have been modernized to compete with newer buildings in
their markets.  We believe that these properties  achieve among the highest rent
and occupancy rates within their markets.  The majority of the office properties
are located in eleven  planned  office parks and are tenanted by, among  others,
national service firms, such as telecommunications  firms, "big five" accounting
firms,  securities  brokerage  houses,   insurance  companies  and  health  care
providers. The industrial properties are utilized for distribution, warehousing,
research and  development  and light  manufacturing/assembly  activities and are
located primarily in three planned industrial parks.

     On  December  8,  1998,  Reckson  Associates,  the  Operating  Partnership,
Metropolitan and Tower, executed a merger agreement pursuant to which Tower will
be  merged  into   Metropolitan,   with   Metropolitan   surviving  the  merger.
Concurrently  with the merger,  the Tower operating  partnership  will be merged
with and into a subsidiary of  Metropolitan.  The  consideration to be issued in
the mergers  will be  comprised of (1) 25% cash and (2) 75% of shares of Reckson
Associates'  Class B  exchangeable  common  stock,  or in certain  circumstances
described  below,  shares  of Class B common  stock and  unsecured  notes of the
Operating Partnership. We control Metropolitan and own 100% of the common equity
interests,  while Crescent Real Estate Equities  Company owns a preferred equity
interest in Metropolitan.  The merger agreement  replaces a previously  existing
merger agreement among Reckson, Crescent, Metropolitan and Tower relating to the
acquisition  by  Metropolitan,  which  at that  time was a 50/50  joint  venture
between Reckson Associates and Crescent.

     Pursuant  to the  terms of the  merger  agreement,  holders  of  shares  of
outstanding common stock of Tower, and outstanding units of limited  partnership
interest  of the Tower  operating  partnership  will have the option to elect to
receive cash or shares of Class B common stock, subject to proration.  Under the
terms of the  transaction,  Metropolitan  will effectively pay for each share of
Tower  common stock and each unit of limited  partnership  interest of the Tower
operating partnership:  (1) $5.75 (in cash) and (2) 0.6273 of a share of Class B
common  stock.  The shares of Class B common  stock are  entitled  to receive an
initial  annual  dividend  of $2.24 per share,  which is  subject to  adjustment
annually.  We may redeem any or all of the Class B common  stock in exchange for
an equal  number of  shares  of  Reckson  Associates'  common  stock at any time
following the four year, six-month anniversary of the issuance of Class B common
stock.  It is  anticipated  that Reckson  Associates'  Board of  Directors  will
recommend  to Reckson  Associates'  stockholders  the  approval of a proposal to
issue a number of shares of Class B Common  Stock equal to 75% of the sum of (1)
the number of outstanding shares of the Tower common stock and (2) the number of
units of limited  partnership  interest of the Tower operating  partnership,  in
each  case,  at the  effective  time  of the  mergers.  If  Reckson  Associates'
stockholders  do not  approve  the  issuance  of the  Class B  common  stock  as
proposed,  the merger  agreement  provides that  approximately  one-third of the
consideration  that was to be paid in the form of Class B common  stock  will be
replaced by senior  unsecured  notes of the Operating  Partnership,  which notes
will bear interest at the rate of 7% per annum and have a term of ten years.  In
addition,  if Reckson  Associates'  stockholders  do not approve the issuance of
Class B common stock as proposed and Reckson Associates' Board of Directors does
not  recommend,  or withdraws or amends or modifies in any material  respect its
recommendation for, approval of the proposal, then the total principal amount of
notes to be issued  and  distributed  in the  merger  will be  increased  by $15
million.

   
     Simultaneously  with the  execution of the merger  agreement,  Metropolitan
purchased  from Tower  approximately  2.2 million shares of Series A convertible
preferred stock of Tower, for an aggregate  purchase price of $40 million.  This
transaction  provided  Tower  with  funds  to  reduce  its  outstanding  secured
indebtedness  so that it  could  borrow  additional  amounts  under  its  credit
facility without violating  covenants  thereunder limiting the amount of secured
indebtedness.  If  the  merger  agreement  is not  consummated  and a  court  of
competent jurisdiction issues a final,  non-appealable judgment determining that
Reckson  Associates and  Metropolitan are obligated to consummate the merger but
have failed to do so, or determining  that Reckson  Associates and  Metropolitan
failed to use their  reasonable  best  efforts to take all actions  necessary to
cause certain closing  conditions to be satisfied,  Metropolitan is obligated to
return to Tower  $30  million  of the  Tower  Series A  preferred  stock.  Tower
required that these provisions be included in the preferred stock transaction in
its efforts to attain greater certainty that the merger would occur.

     We anticipate that we will dispose of the properties in the Tower portfolio
located  outside of New York City.  In  addition,  we are also  considering  the
disposition of certain of the Tower properties located in New York City.
    

     In connection with the new merger  agreement,  Tower,  Reckson  Associates,
Crescent and Metropolitan have exchanged mutual releases for any claims relating
to the previous merger agreement.

   
     In December 1998, New York State  announced it had selected us to develop a
655 acre tract of land in western  Suffolk  County on Long  Island.  We estimate
that we will invest  $250  million in the  development  of this  project  over a
number of years.
    

     Our executive  offices are located at 225 Broadhollow Road,  Melville,  New
York 11747 and our  telephone  number at that  location  is (516)  694-6900.  At
October 20, 1998, we had approximately 240 employees.


                                 USE OF PROCEEDS

     Unless otherwise specified in the applicable prospectus supplement, the net
proceeds to Reckson Associates or the Operating Partnership, as the case may be,
from the sale of the securities offered by the applicable  prospectus supplement
will be used for the  repayment of existing  indebtedness,  the  development  or
acquisition  of additional  properties as suitable  opportunities  arise and the
renovation,  expansion and improvement of our existing properties, in each case,
as  described  in  detail  in  the  prospectus   supplement   depending  on  the
circumstances  at the  time  of the  related  offering,  and for  other  general
corporate purposes.


                  RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
                          AND PREFERRED STOCK DIVIDENDS

     The following table sets forth the consolidated ratios of earnings to fixed
charges and preferred  stock  dividends of Reckson  Associates and the Operating
Partnership for the periods shown:



                                                            June 3, 1995       January 1, 1995
                                                                 To                  To
   
                            Year Ended December 31,         December 31,            June 2,            Year Ended
                                                                                                       December 31,
                         -----------------------------      ------------       ---------------   -------------------
                            1998      1997       1996           1995                 1995              1994         
                         ----------  ------     ------      ------------       ---------------   ---------------  
                                                                                             
Reckson Associates:
- ------------------
Ratio of Earnings to       2.11x     2.77x       2.72x           2.71x             1.02x(1)      ($493,000)(1)(3) 
Fixed Charges                                                                                                       

Ratio of Earnings to       1.89x(2)    --          --             --                  --                  --     
Combined Fixed
Charges and Preferred
Stock Dividends

Operating Partnership:
- ---------------------
Ratio of Earnings to       2.12x     2.78x       2.71x           2.71x             1.02x(1)       ($493,000)(1)(3)
Fixed Charges

Ratio of Earnings to
Combined Fixed             1.90x(2)
Charges and Preferred
Stock Dividends

    
(1)  Prior to completion of the IPO on June 2, 1995, our  predecessors  operated
     in a manner as to minimize  net taxable  income to the owners.  The IPO and
     the  related  formation   transactions   permitted  us  to  deleverage  our
     properties  significantly,  resulting in a significantly  improved ratio of
     earnings to fixed charges.

(2)  Neither  Reckson  Associates  nor the Operating  Partnership  had preferred
     stock outstanding prior to April 1998.

   
(3)  Represents  the excess of fixed  charges over  earnings for the year ended
     December 31, 1994.
    

     The ratios of earnings to fixed charges were computed by dividing  earnings
by fixed charges.  The ratio of earnings to combined fixed charges and preferred
dividends  were computed by dividing  earnings by the aggregate of fixed charges
and  preferred  dividends.  For this  purpose,  earnings  consist of income from
continuing  operations  before  minority  interest,  fixed charges and preferred
dividends.  Fixed charges consist of interest expense (including  interest costs
capitalized) and the amortization of debt issuance costs.

                         DESCRIPTION OF DEBT SECURITIES

     The debt securities of the Operating Partnership covered by this prospectus
(the "Debt  Securities")  will be issued  under an Indenture  (the  "Indenture")
among the  Operating  Partnership,  Reckson  Associates  and the  trustee  named
therein  (the  "Trustee").  The  Indenture  has been  filed as an exhibit to the
Registration  Statement of which this  prospectus is a part and is available for
inspection  at the corporate  trust office of the trustee or as described  above
under "Available Information." The Indenture is subject to, and governed by, the
Trust  Indenture  Act of 1939,  as amended  (the  "TIA").  The  statements  made
hereunder  relating  to the  Indenture  and the  Debt  Securities  to be  issued
thereunder are summaries of the material  provisions  thereof and do not purport
to be  complete  and are  subject  to, and are  qualified  in their  entirety by
reference  to, all  provisions of the  Indenture  and the Debt  Securities.  All
section  references  appearing  herein are to  sections  of the  Indenture,  and
capitalized terms used but not defined herein shall have the respective meanings
set forth in the Indenture.

GENERAL

     The Debt Securities will be direct,  unsecured obligations of the Operating
Partnership  and will rank equally with all other  unsecured and  unsubordinated
indebtedness  of the Operating  Partnership.  The Debt  Securities may be issued
without limit as to aggregate  principal  amount, in one or more series, in each
case as established  from time to time in or pursuant to authority  granted by a
resolution  of the Board of  Directors  of Reckson  Associates  as sole  general
partner  of  the  Operating  Partnership,  or as  established  in  one  or  more
indentures supplemental to the Indenture. All Debt Securities of one series need
not be issued at the same time and, unless otherwise  provided,  a series may be
reopened,  without  the  consent of the  holders of the Debt  Securities  of the
series, for issuances of additional Debt Securities of the same series.

     The Indenture provides that there may be more than one Trustee  thereunder,
each with respect to one or more series of Debt  Securities.  Any Trustee  under
the  Indenture  may resign or be removed  with  respect to one or more series of
Debt Securities, and a successor Trustee may be appointed to act with respect to
the series.  In the event that two or more  persons  are acting as Trustee  with
respect to different series of Debt Securities,  each Trustee shall be a trustee
of a trust under the Indenture separate and apart from the trust administered by
any other  Trustee,  and,  except as  otherwise  indicated  herein,  any  action
described  herein to be taken by a  Trustee  may be taken by each  Trustee  with
respect to, and only with respect to, the one or more series of Debt  Securities
for which it is Trustee under the Indenture.

     Reference is made to the  prospectus  supplement  relating to the series of
Debt Securities being offered for the specific terms thereof, including:

     (1)  the title of the Debt Securities;

     (2)  the aggregate principal amount of the Debt Securities and any limit on
          the aggregate principal amount;

     (3)  the  percentage of the principal  amount at which the Debt  Securities
          will be issued and, if other than the principal  amount  thereof,  the
          portion of the principal  amount thereof  payable upon  declaration of
          acceleration of the maturity thereof;

     (4)  the date or dates, or the method for determining the date or dates, on
          which the principal of such Debt Securities will be payable;

     (5)  the rate or rates (which may be fixed or  variable),  or the method by
          which  the  rate or  rates  shall be  determined,  at  which  the Debt
          Securities will bear interest, if any;

     (6)  the date or dates,  or the method for  determining  the date or dates,
          from which any interest  will accrue,  the dates on which any interest
          will be payable,  the record dates for such interest payment dates, or
          the method by which any date shall be  determined,  the person to whom
          the interest shall be payable, and the basis upon which interest shall
          be  calculated  if other than that of a 360-day year of twelve  30-day
          months;

     (7)  the place or places where the principal of (and  premium,  if any) and
          interest,  if any, on the Debt  Securities  will be payable,  the Debt
          Securities may be surrendered for registration of transfer or exchange
          and notices or demands to or upon the Operating Partnership in respect
          of the Debt Securities and the Indenture may be served;

     (8)  the date or dates on which or the period or periods within which,  the
          price or prices at which and the terms and  conditions  upon which the
          Debt Securities may be redeemed,  as a whole or in part, at the option
          of the Operating Partnership,  if the Operating Partnership is to have
          an option;

     (9)  the obligation,  if any, of the Operating Partnership to redeem, repay
          or  purchase  the Debt  Securities  pursuant  to any  sinking  fund or
          analogous provision or at the option of a holder thereof, and the date
          or dates on which or the period or periods within which,  the price or
          prices  at which  and the terms  and  conditions  upon  which the Debt
          Securities  will be redeemed,  repaid or  purchased,  as a whole or in
          part, pursuant to its obligation;

     (10) if other than U.S.  dollars,  the currency or  currencies in which the
          Debt Securities are  denominated  and payable,  which may be a foreign
          currency  or units of two or more  foreign  currencies  or a composite
          currency or currencies, and the terms and conditions relating thereto;

     (11) whether the amount of payments of principal of (and  premium,  if any)
          or interest,  if any, on the Debt  Securities  may be determined  with
          reference to an index,  formula or other method (which index,  formula
          or  method  may,  but need not be,  based on a  currency,  currencies,
          currency unit or units or composite  currency or  currencies)  and the
          manner in which the amounts shall be determined;

     (12) any additional events of default or covenants of the Debt Securities;

     (13) whether  the Debt  Securities  will be issued in  certificated  and/or
          book-entry form;

     (14) whether the Debt  Securities will be in registered or bearer form and,
          if in registered form, the denominations  thereof if other than $1,000
          and  any  integral  multiple  thereof  and,  if in  bearer  form,  the
          denominations  thereof if other than  $5,000 and terms and  conditions
          relating thereto;

     (15) whether  the  Debt  Securities  will  be  fully  and   unconditionally
          guaranteed  by Reckson  Associates  pursuant  to the  Guarantees  (the
          "Guaranteed Securities");

     (16) if the defeasance and covenant defeasance  provisions described herein
          are to be inapplicable or any modification of these provisions;

     (17) if the Debt  Securities  are to be issued  upon the  exercise  of debt
          warrants,  the time,  manner and place for the Debt  Securities  to be
          authenticated and delivered;

     (18) whether and under what  circumstances  the Operating  Partnership will
          pay additional  amounts on the Debt  Securities in respect of any tax,
          assessment or  governmental  charge and, if so,  whether the Operating
          Partnership  will have the option to redeem  such Debt  Securities  in
          lieu of making a payment;

     (19) if other than the  Trustee,  the identity of each  security  registrar
          and/or paying agent; and

     (20) any other material terms of the Debt Securities.

     The Debt Securities may provide for less than the entire  principal  amount
thereof to be payable upon  declaration of acceleration of the maturity  thereof
("Original Issue Discount Securities"). If material or applicable,  special U.S.
federal income tax, accounting and other  considerations  applicable to Original
Issue  Discount  Securities  will  be  described  in the  applicable  prospectus
supplement.

     Except with respect to a covenant  limiting the incurrence of indebtedness,
a covenant requiring a certain percentage of unencumbered  assets and a covenant
requiring any successor in a business combination with the Operating Partnership
to  assume  all of  the  obligations  of the  Operating  Partnership  under  the
Indenture,  the Indenture does not contain any other provisions that would limit
the  ability  of the  Operating  Partnership  or  Reckson  Associates  to  incur
indebtedness or that would afford Holders of the Debt  Securities  protection in
the case of any of the following events:

     o    a highly  leveraged or similar  transaction  involving  the  Operating
          Partnership,  the  management of the Operating  Partnership or Reckson
          Associates, or any affiliate of any these parties;

     o    a change of control; or

     o    a  reorganization,   restructuring,   merger  or  similar  transaction
          involving the Operating  Partnership  or Reckson  Associates  that may
          adversely affect the Holders of the Debt Securities.

     In addition,  subject to the  covenants  referred to above,  the  Operating
Partnership  or Reckson  Associates  may,  in the  future,  enter  into  certain
transactions,  such as the sale of all or substantially all of its assets or the
merger or consolidation of the Operating Partnership or Reckson Associates, that
would  increase  the  amount  of the  Operating  Partnership's  indebtedness  or
substantially reduce or eliminate the Operating  Partnership's assets, which may
have an adverse  effect on the  Operating  Partnership's  ability to service its
indebtedness,  including  the Debt  Securities.  In  addition,  restrictions  on
ownership and transfers of Reckson  Associates' common stock and preferred stock
which are designed to preserve its status as a REIT may act to prevent or hinder
a  change  of  control.  See  "Description  of  Common   Stock--Restrictions  on
Ownership" and "Description of Preferred Stock--Restrictions on Ownership."

GUARANTEES

     Reckson  Associates  will fully and  unconditionally  guarantee the due and
punctual  payment of  principal  of,  premium,  if any, and interest on any Debt
Securities  not rated  investment  grade by at least one  nationally  recognized
statistical  rating  organization  at the  time  of  issuance  by the  Operating
Partnership,  whether at a maturity date, by declaration of  acceleration,  call
for redemption or otherwise.

DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER

     Unless otherwise  described in the applicable  prospectus  supplement,  the
Debt  Securities  of any  series  which are  registered  securities,  other than
registered  securities issued in global form (which may be of any denomination),
shall be issuable in denominations  of $1,000 and any integral  multiple thereof
and  the  Debt  Securities  which  are  bearer  securities,  other  than  bearer
securities  issued in global form (which may be of any  denomination),  shall be
issuable in denominations of $5,000.

     Unless otherwise  specified in the applicable  prospectus  supplement,  the
principal of (and premium, if any) and interest on any series of Debt Securities
will be payable at the corporate  trust office of the Trustee  provided that, at
the option of the  Operating  Partnership,  payment of  interest  may be made by
check mailed to the address of the Person entitled  thereto as it appears in the
applicable  Security  Register or by wire  transfer of funds to the Person at an
account maintained within the United States.

     Any  interest  not  punctually  paid or duly  provided  for on any Interest
Payment  Date  with  respect  to a Debt  Security  ("Defaulted  Interest")  will
forthwith  cease to be payable to the Holder on the  applicable  Regular  Record
Date and may  either be paid to the Person in whose  name the Debt  Security  is
registered  at the close of  business  on a special  record  date (the  "Special
Record  Date") for the  payment  of the  Defaulted  Interest  to be fixed by the
Trustee,  notice  whereof  shall be given to the Holder of the Debt Security not
less than 10 days prior to the Special  Record Date,  or may be paid at any time
in any other lawful manner, all as more completely described in the Indenture.

     Subject to  certain  limitations  imposed  upon Debt  Securities  issued in
book-entry  form,  the Debt  Securities of any series will be  exchangeable  for
other  Debt  Securities  of the same  series and of a like  aggregate  principal
amount and tenor of different  authorized  denominations  upon  surrender of the
Debt Securities at the corporate trust office of the Trustee  referred to above.
In addition,  subject to certain limitations imposed upon Debt Securities issued
in book-entry  form, the Debt  Securities of any series may be  surrendered  for
registration  of transfer  thereof at the corporate  trust office of the Trustee
referred to above. Every Debt Security  surrendered for registration of transfer
or exchange  shall be duly endorsed or  accompanied  by a written  instrument of
transfer.  No service  charge will be made for any  registration  of transfer or
exchange of any Debt  Securities,  but the Trustee or the Operating  Partnership
may require  payment of a sum sufficient to cover any tax or other  governmental
charge payable in connection therewith.  If the applicable prospectus supplement
refers to any transfer agent (in addition to the Trustee)  initially  designated
by the Operating Partnership with respect to any series of Debt Securities,  the
Operating  Partnership  may at any time rescind the  designation of any transfer
agent or approve a change in the location through which any transfer agent acts,
except that the  Operating  Partnership  will be required to maintain a transfer
agent in each place of payment for the series. The Operating  Partnership may at
any time designate additional transfer agents with respect to any series of Debt
Securities.

     Neither the Operating Partnership nor the Trustee shall be required to:

     o    issue,  register the transfer of or exchange any Debt  Security if the
          Debt  Security  may be among those  selected for  redemption  during a
          period  beginning at the opening of business 15 days before  selection
          of the Debt  Securities  to be  redeemed  and  ending  at the close of
          business on the day of selection;

     o    register  the  transfer  of or  exchange  any  Registered  Security so
          selected for  redemption in whole or in part,  except,  in the case of
          any Registered  Security to be redeemed in part,  the portion  thereof
          not to be redeemed;

     o    exchange any Bearer  Security so selected for  redemption  except that
          the Bearer Security may be exchanged for a Registered Security of that
          series and like tenor,  provided that the Registered Security shall be
          simultaneously surrendered for redemption; or

     o    issue,  register the  transfer of or exchange  any Security  which has
          been surrendered for repayment at the option of the Holder, except the
          portion, if any, of the Debt Security not to be so repaid.

MERGER, CONSOLIDATION OR SALE

     The Operating  Partnership  or, with respect to the Guaranteed  Securities,
Reckson  Associates  may  consolidate  with,  or sell,  lease or  convey  all or
substantially  all of its assets to, or merge  with or into,  any other  entity,
provided that the following conditions are met:

     o    the Operating  Partnership or Reckson Associates,  as the case may be,
          shall be the continuing entity, or the successor entity (if other than
          the Operating  Partnership or Reckson Associates,  as the case may be)
          formed by or resulting from any consolidation or merger or which shall
          have received the transfer of assets shall expressly assume payment of
          the  principal of (and  premium,  if any) and interest on all the Debt
          Securities and the due and punctual  performance and observance of all
          of the covenants  and  conditions  contained in the Indenture  and, if
          applicable, the Guarantees;

     o    immediately  after  giving  effect  to the  transaction,  no  Event of
          Default under the Indenture,  and no event which,  after notice or the
          lapse of time, or both,  would become an Event of Default,  shall have
          occurred and be continuing; and

     o    an officer's  certificate and legal opinion  covering these conditions
          shall be delivered to the Trustee.

CERTAIN COVENANTS

     Limitations on Incurrence of Debt. The Operating  Partnership will not, and
will not permit any Subsidiary (as defined below) to, incur any Indebtedness (as
defined below),  other than Permitted Debt (as defined below),  if,  immediately
after giving effect to the incurrence of additional Indebtedness,  the aggregate
principal amount of all outstanding  Indebtedness of the Operating  Partnership,
and of its Subsidiaries  determined at the applicable  proportionate interest of
the Operating Partnership in each Subsidiary, determined in accordance with GAAP
(as defined below), is greater than 60% of the sum of:

     (1) the Total  Assets  (as  defined  below)  as of the end of the  calendar
quarter  covered in the  Operating  Partnership's  Annual Report on Form 10-K or
Quarterly  Report on Form 10-Q, as the case may be, most recently filed with the
Commission  prior to the incurrence of such additional  Indebtedness  or, if the
Operating  Partnership is not then subject to the reporting  requirements of the
Exchange Act, as of its most recent calendar quarter and

     (2)  any  increase  in the  Total  Assets  since  the  end of the  quarter,
including,  without limitation,  any increase in Total Assets resulting from the
incurrence  of  additional  Indebtedness  (the  Total  Assets  adjusted  by this
increase are referred to as the "Adjusted Total Assets").

     The Operating  Partnership will not, and will not permit any Subsidiary to,
incur any Indebtedness, other than Permitted Debt, if, for the period consisting
of the four consecutive fiscal quarters most recently ended prior to the date on
which  additional  Indebtedness  is to be  incurred,  the ratio of  Consolidated
Income  Available  for Debt  Service  (as defined  below) to the Annual  Service
Charge  (as  defined  below)  shall have been less than 1.5 to 1, on a pro forma
basis  after  giving  effect  to  the  incurrence  of  Indebtedness  and  to the
application of the proceeds therefrom, and calculated on the assumption that:

     o    the Indebtedness and any other Indebtedness  incurred by the Operating
          Partnership   or  its   Subsidiaries   since  the  first  day  of  the
          four-quarter  period and the  application  of the proceeds  therefrom,
          including  to  refinance  other  Indebtedness,  had  occurred  at  the
          beginning of the period,

     o    the repayment or retirement of any other Indebtedness by the Operating
          Partnership   or  its   Subsidiaries   since  the  first  day  of  the
          four-quarter  period  had been  incurred,  repaid or  retained  at the
          beginning of the period (except that, in making the  computation,  the
          amount of  Indebtedness  under any revolving  credit facility shall be
          computed based upon the average daily balance of borrowings  under the
          credit facility during the period),

     o    any income earned as a result of any increase in Adjusted Total Assets
          since  the end of the  four-quarter  period  had  been  earned,  on an
          annualized basis, for the period, and

     o    in  the  case  of an  acquisition  or  disposition  by  the  Operating
          Partnership or any of its Subsidiaries of any asset or group of assets
          since the first day of the  four-quarter  period,  including,  without
          limitation,  by merger,  stock  purchase or sale, or asset purchase or
          sale,  the  acquisition  or  disposition  or any related  repayment of
          Indebtedness  had  occurred as of the first day of the period with the
          appropriate adjustments with respect to the acquisition or disposition
          being  included in the pro forma  calculation of  Consolidated  Income
          Available for Debt Service to the Annual Service Charge.

     The Operating  Partnership will not, and will not permit any Subsidiary to,
incur any  Indebtedness  secured by any Lien (as defined below) of any kind upon
any of the property of the Operating Partnership or any of its Subsidiaries (the
"Secured  Debt") if,  immediately  after giving effect to the  incurrence of the
additional  Secured Debt,  the  aggregate  principal  amount of all  outstanding
Secured Debt of the Operating Partnership, and of its Subsidiaries determined at
the  applicable  proportionate  interest of the  Operating  Partnership  in each
Subsidiary, is greater than 40% of the Adjusted Total Assets.

     Maintenance of Total Unencumbered  Assets.  The Operating  Partnership will
maintain Total  Unencumbered  Assets (as defined below) of not less than 150% of
the aggregate principal amount of all outstanding Unsecured Debt.

     Existence.  Except as permitted under "Merger,  Consolidation or Sale," the
Operating Partnership is required to do or cause to be done all things necessary
to  preserve  and keep in full  force and  effect  their  existence,  rights and
franchises;  provided,  however,  that the  Operating  Partnership  shall not be
required  to  preserve  any  right  or  franchise  if  it  determines  that  the
preservation  thereof is no longer  desirable in the conduct of its business and
that the loss  thereof is not  disadvantageous  in any  material  respect to the
Holders of the Debt Securities.

     Maintenance of Properties.  The Operating  Partnership is required to cause
all of its material  properties used or useful in the conduct of its business or
the business of any  Subsidiary  to be  maintained  and kept in good  condition,
repair and working order and supplied with all necessary  equipment and to cause
to be made  all  necessary  repairs,  renewals,  replacements,  betterments  and
improvements thereof, all as in the judgment of the Operating Partnership may be
necessary  so that  the  business  carried  on in  connection  therewith  may be
properly and advantageously conducted at all times; provided,  however, that the
Operating  Partnership and its Subsidiaries  shall not be prevented from selling
or otherwise  disposing  for value their  respective  properties in the ordinary
course of business.

     Insurance.  The  Operating  Partnership  is required to, and is required to
cause each of its Subsidiaries to, keep all of its insurable  properties insured
against  loss or damage at least equal to their then full  insurable  value with
financially sound and reputable insurance companies.

     Payment of Taxes and Other Claims. The Operating Partnership is required to
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent,  (1) all  taxes,  assessments  and  governmental  charges  levied or
imposed upon them or any Subsidiary or upon their income, profits or property or
that of any  Subsidiary,  and (2) all lawful  claims for  labor,  materials  and
supplies which,  if unpaid,  might by law become a lien upon the property of the
Operating Partnership or any Subsidiary;  provided,  however, that the Operating
Partnership  shall not be  required to pay or  discharge  or cause to be paid or
discharged any tax, assessment,  charge or claim whose amount,  applicability or
validity is being contested in good faith by appropriate proceedings.

     Provision of Financial Information.  The Holders of Debt Securities will be
provided  with  copies  of the  annual  reports  and  quarterly  reports  of the
Operating  Partnership.  Whether or not the Operating  Partnership is subject to
Section 13 or 15(d) of the Exchange  Act and for so long as any Debt  Securities
are outstanding,  the Operating  Partnership will, to the extent permitted under
the Exchange Act, be required to file with the  Commission  the annual  reports,
quarterly reports and other documents which the Operating Partnership would have
been required to file with the  Commission  pursuant to such Section 13 or 15(d)
(the "Financial  Statements") if the Operating  Partnership were so subject, the
documents to be filed with the  Commission on or prior to the  respective  dates
(the "Required Filing Dates") by which the Operating Partnership would have been
required so to file the documents if the Operating  Partnership were so subject.
The Operating Partnership will also in any event:

     o    within 15 days of each  Required  Filing Date (1)  transmit by mail to
          all Holders of Debt Securities, as their names and addresses appear in
          the Security  Register,  without  cost to the  Holders,  copies of the
          annual reports and quarterly  reports which the Operating  Partnership
          would  have been  required  to file with the  Commission  pursuant  to
          Section 13 or 15(d) of the Exchange Act if the  Operating  Partnership
          were subject to these Sections and (2) file with the Trustee copies of
          the annual  reports,  quarterly  reports and other documents which the
          Operating  Partnership  would  have  been  required  to file  with the
          Commission  pursuant to Section 13 or 15(d) of the Exchange Act if the
          Operating Partnership were subject to these Sections and

     o    if  filing  these  documents  by the  Operating  Partnership  with the
          Commission  is not  permitted  under the Exchange  Act,  promptly upon
          written  request and payment of the reasonable cost of duplication and
          delivery, supply copies of the documents to any prospective Holder.

         As used herein and in the prospectus supplement:

     "Annual  Service  Charge" as of any date means the amount which is expensed
or capitalized in any 12-month period for interest on Indebtedness.

     "Consolidated  Income  Available  for Debt  Service"  for any period  means
Consolidated  Net Income of the Operating  Partnership and its  Subsidiaries (1)
plus amounts  which have been deducted for (a) interest on  Indebtedness  of the
Operating  Partnership  and its  Subsidiaries,  (b)  provision  for taxes of the
Operating  Partnership and its Subsidiaries based on income, (c) amortization of
debt discount, (d) depreciation and amortization,  (e) the effect of any noncash
charge  resulting  from  a  change  in  accounting   principles  in  determining
Consolidated Net Income for the period,  (f)  amortization of deferred  charges,
and (g)  provisions  for or realized  losses on properties  and (2) less amounts
which have been included for gains on properties.

     "GAAP" means accounting  principles as are generally accepted in the United
States of America as of the date or time of any required computation.

     "Indebtedness"  means  any  indebtedness,  whether  or not  contingent,  in
respect of (1) borrowed money evidenced by bonds,  notes,  debentures or similar
instruments,  (2) indebtedness  secured by any mortgage,  pledge,  lien, charge,
encumbrance or any security interest existing on property, (3) the reimbursement
obligations,  contingent or otherwise,  in connection with any letters of credit
actually issued or amounts  representing  the balance deferred and unpaid of the
purchase  price of any property  except any balance that  constitutes an accrued
expense or trade  payable or (4) any lease of property as lessee  which would be
reflected on a balance sheet as a capitalized  lease in accordance with GAAP, in
the case of items of indebtedness under (1) through (3) above to the extent that
any items  (other  than  letters of credit)  would  appear as a  liability  on a
balance  sheet in accordance  with GAAP,  and also  includes,  to the extent not
otherwise  included,  any  obligation  to be liable  for, or to pay, as obligor,
guarantor or otherwise  (other than for purposes of  collection  in the ordinary
course of business), indebtedness of another Person.

     "Lien"  means,  with respect to any Person,  any  mortgage,  lien,  pledge,
charge, security interest or other encumbrance,  or any interest or title of any
vendor,  lessor,  lender or other  secured  party to or of the Person  under any
conditional  sale or other title retention  agreement or Capital Lease,  upon or
with respect to any property or asset of the Person.  A Capital Lease is a lease
to which the lessee is required  concurrently to recognize the acquisition of an
asset and the incurrence of a liability in accordance with GAAP.

     "Permitted  Debt" means  Indebtedness  of the Operating  Partnership or any
Subsidiary owing to any Subsidiary or the Operating  Partnership;  provided that
any Indebtedness is made pursuant to an intercompany note and is subordinated in
right of payment  to the  Securities;  provided  further  that any  disposition,
pledge or transfer of any  Indebtedness  to a Person  (other than the  Operating
Partnership  or  another  Subsidiary)  shall be  deemed to be an  incurrence  of
Indebtedness by the Operating  Partnership or a Subsidiary,  as the case may be,
and not Permitted Debt.

     "Significant  Subsidiary" means each significant  subsidiary (as defined in
Regulation  S-X   promulgated   under  the  Securities  Act)  of  the  Operating
Partnership.

     "Subsidiary" means any entity of which the Operating  Partnership or one or
more other Subsidiaries owns or controls,  directly or indirectly, more than 50%
of the shares of Voting Stock.

     "Total Assets" as of any date means the sum of (1) the  Undepreciated  Real
Estate  Assets,  (2) all other assets of the Operating  Partnership,  and of its
Subsidiaries  determined  at  the  applicable   proportionate  interest  of  the
Operating  Partnership in each  Subsidiary,  determined in accordance  with GAAP
(but  excluding  intangibles  and accounts  receivable)  and (3) the cost of any
property of the Operating  Partnership,  or any Subsidiary thereof, in which the
Operating  Partnership,  or  Subsidiary,  as  the  case  may  be,  has  a  firm,
non-contingent purchase obligation.

     "Total  Unencumbered  Assets" means the sum of (1) those Undepreciated Real
Estate  Assets not  subject  to a Lien on a  consolidated  basis,  (2) all other
assets of the Operating Partnership,  and of its Subsidiaries  determined at the
applicable  proportionate  interest of the  Operating  Partnership  in each such
Subsidiary,  which are not subject to a Lien  determined in accordance with GAAP
(but  excluding  intangibles  and accounts  receivable)  and (3) the cost of any
property of the Operating  Partnership,  or any Subsidiary thereof, in which the
Operating  Partnership,  or  Subsidiary,  as  the  case  may  be,  has  a  firm,
non-contingent purchase obligation and which is not subject to a Lien.

     "Undepreciated  Real Estate Assets" means as of any date the cost (original
cost plus  capital  improvements)  of real  estate  assets of the Issuer and its
Subsidiaries on the date, before depreciating and amortization,  determined on a
consolidated basis in accordance with GAAP.

     "Unsecured  Debt" means  Indebtedness  of the Operating  Partnership or any
Subsidiary  which is not  secured  by any  mortgage,  lien,  charge,  pledge  or
security  interest of any kind upon any of the properties owned by the Operating
Partnership or any of its Subsidiaries.

     "Voting  Stock" means stock  having  general  voting  power under  ordinary
circumstances  to elect at least a majority of the board of directors,  managers
or  trustees,   provided  that  stock  that  carries  only  the  right  to  vote
conditionally on the happening of an event shall not be considered Voting Stock.

     Additional  Covenants.   Any  additional  or  different  covenants  of  the
Operating  Partnership or Reckson  Associates with respect to any series of Debt
Securities will be set forth in the prospectus supplement relating thereto.

Events of Default, Notice and Waiver

     The Indenture  provides  that the following  events are "Events of Default"
with respect to any series of Debt Securities issued thereunder:

     a.   default for 30 days in the payment of any  installment  of interest on
          any Debt Security of the series;

     b.   default in the payment of the  principal of (or  premium,  if any, on)
          any Debt Security of the series at its maturity;

     c.   default in making any sinking  fund  payment as required  for any Debt
          Security of the series;

     d.   default in the  performance  of any other  covenant  of the  Operating
          Partnership or Reckson  Associates  contained in the Indenture  (other
          than a covenant  added to the  Indenture  solely for the  benefit of a
          series of Debt Securities  issued  thereunder  other than the series),
          the  default  having  continued  for 60 days after  written  notice as
          provided in the Indenture;

     e.   the Operating Partnership,  Reckson Associates (if the Debt Securities
          of the series are Guaranteed Securities),  any Subsidiary in which the
          Operating  Partnership  has  invested,  or is  committed  or otherwise
          obligated to invest,  at least $20,000,000 in capital or any entity in
          which the Operating  Partnership is the general  partner shall fail to
          pay any  principal  of,  premium or  interest  on or any other  amount
          payable in respect of, any recourse  Indebtedness  that is outstanding
          in a principal  or  notional  amount of at least  $20,000,000  (or the
          equivalent   thereof  in  one  or  more  other   currencies),   either
          individually   or  in  the  aggregate  (but   excluding   Indebtedness
          outstanding   hereunder),   of  the  Operating   Partnership  and  its
          consolidated Subsidiaries, taken as a whole, when the same becomes due
          and  payable  (whether by  scheduled  maturity,  required  prepayment,
          acceleration,  demand or  otherwise),  and the failure shall  continue
          after the applicable grace period, if any,  specified in any agreement
          or instrument  relating to the Indebtedness,  or any other event shall
          occur or  condition  shall exist  under any  agreement  or  instrument
          evidencing, securing or otherwise relating to any the Indebtedness and
          shall continue after the applicable grace period, if any, specified in
          the agreement or  instrument,  if the effect of the event or condition
          is to accelerate,  or to permit the  acceleration  of, the maturity of
          the  Indebtedness  or otherwise  to cause,  or to permit the holder or
          holders  thereof  (or a trustee or agent on behalf of the  holders) to
          cause the Indebtedness to mature prior to its stated maturity;

     f.   one or more final,  non-appealable judgments or orders for the payment
          of money aggregating  $20,000,000 (or the equivalent thereof in one or
          more other currencies) or more are rendered against one or more of the
          Operating  Partnership,  Reckson Associates (if the Debt Securities of
          the series are  Guaranteed  Securities),  any  Subsidiary in which the
          Operating  Partnership  has  invested,  or is  committed  or otherwise
          obligated to invest, at least $20,000,000 in capital and any entity in
          which the  Operating  Partnership  is the  general  partner and remain
          unsatisfied  and either (1)  enforcement  proceedings  shall have been
          commenced  by any  creditor  upon any  judgment  or order or (2) there
          shall be a period of at least 60 days after entry thereof during which
          a stay of enforcement of any judgment or order, by reason of a pending
          appeal or otherwise,  shall not be in effect; provided,  however, that
          any judgment or order shall not give rise to an Event of Default under
          this  clause if and for so long as (A) the amount of the  judgment  or
          order is covered by a valid and binding  policy of  insurance  between
          the  defendant and the insurer  covering full payment  thereof and (B)
          the insurer has been notified, and has not disputed the claim made for
          payment, of the amount of the judgment or order; or

     g.   certain events of bankruptcy,  insolvency or reorganization,  or court
          appointment  of a  receiver,  liquidator  or trustee of the  Operating
          Partnership,  Reckson Associates or any Significant  Subsidiary or any
          of their respective property;

     h.   any other  Event of Default  provided  with  respect  to a  particular
          series of Debt Securities.

     If an Event of Default under the Indenture with respect to Debt  Securities
of any series at the time  Outstanding  occurs and is continuing,  then in every
case the Trustee or the Holders of not less than 25% in principal  amount of the
Outstanding Debt Securities of that series may declare the principal amount (or,
if the Debt Securities of that series are Original Issue Discount  Securities or
Indexed  Securities,  the portion of the principal amount as may be specified in
the terms  thereof) of all of the Debt  Securities  of that series to be due and
payable  immediately by written notice thereof to the Operating  Partnership and
Reckson Associates (and to the Trustee if given by the Holders). However, at any
time after the  declaration of  acceleration  with respect to Debt Securities of
the series (or of all Debt Securities then Outstanding  under the Indenture,  as
the case may be) has been made,  but before a judgment  or decree for payment of
the money due has been  obtained by the Trustee,  the Holders of not less than a
majority in principal amount of Outstanding Debt Securities of the series (or of
all Debt Securities then  Outstanding  under the Indenture,  as the case may be)
may rescind and annul the declaration and its consequences if

     (a) the Operating  Partnership or Reckson  Associates  shall have deposited
with the Trustee all required payments of the principal of (and premium, if any)
and  interest on the Debt  Securities  of the series (or of all Debt  Securities
then  outstanding  under the Indenture,  as the case may be), plus certain fees,
expenses, disbursements and advances of the Trustee and

     (b) all  Events of  Default,  other  than the  non-payment  of  accelerated
principal of (or specified portion thereof),  or premium (if any) or interest on
the Debt Securities of the series (or of all Debt  Securities  then  Outstanding
under the  Indenture,  as the case may be) have been cured or waived as provided
in the Indenture.

     The Indenture also provides that the Holders of not less than a majority in
principal  amount of the  Outstanding  Debt  Securities of any series (or of all
Debt Securities then  Outstanding  under the Indenture,  as the case may be) may
waive any past default with respect to the series and its consequences, except a
default

     o    in the payment of the principal of (or premium, if any) or interest on
          any Debt Security of the series or

     o    in respect of a covenant or provision  contained in the Indenture that
          cannot be  modified  or amended  without  the consent of the Holder of
          each Outstanding Debt Security affected thereby.

     The  Trustee  will  be  required  to give  notice  to the  Holders  of Debt
Securities  within 90 days of a default under the  Indenture  unless the default
has been cured or waived;  provided,  however,  that the  Trustee  may  withhold
notice to the  Holders  of any series of Debt  Securities  of any  default  with
respect to the series  (except a default in the payment of the  principal of (or
premium,  if any) or  interest  on any Debt  Security  of the  series  or in the
payment of any sinking fund  installment  in respect of any Debt Security of the
series)  if  specified   Responsible   Officers  of  the  Trustee  consider  the
withholding to be in the interest of the Holders.

     The Indenture provides that no Holders of Debt Securities of any series may
institute any proceedings,  judicial or otherwise, with respect to the Indenture
or for any remedy thereunder,  except in the case of failure of the Trustee, for
60 days, to act after it has received a written request to institute proceedings
in  respect  of an Event of  Default  from the  Holders  of not less than 25% in
principal amount of the Outstanding Debt Securities of the series, as well as an
offer of reasonable  indemnity.  This provision will not prevent,  however,  any
holder of Debt Securities from  instituting  suit for the enforcement of payment
of the principal of (and premium, if any) and interest on the Debt Securities at
the respective due dates thereof.

     Subject to provisions  in the  Indenture  relating to its duties in case of
default,  the Trustee is under no  obligation  to exercise  any of its rights or
powers  under the  Indenture  at the request or  direction of any Holders of any
series of Debt  Securities  then  Outstanding  under the  Indenture,  unless the
Holders  shall have  offered to the Trustee  thereunder  reasonable  security or
indemnity.  The Holders of not less than a majority in  principal  amount of the
Outstanding  Debt  Securities  of any  series  (or of all Debt  Securities  then
Outstanding  under the  Indenture,  as the case may be) shall  have the right to
direct the time,  method and place of conducting  any  proceeding for any remedy
available to the Trustee, or of exercising any trust or power conferred upon the
Trustee.  However,  the Trustee may refuse to follow any  direction  which is in
conflict with any law or the  Indenture,  or which may be unduly  prejudicial to
the Holders of Debt Securities of the series not joining therein.

     Within  120  days  after  the  close of each  fiscal  year,  the  Operating
Partnership  and Reckson  Associates  must deliver a  certificate  of an officer
certifying  to the  Trustee  whether or not the  officer  has  knowledge  of any
default under the Indenture and, if so,  specifying  each default and the nature
and status thereof.

MODIFICATION OF THE INDENTURE

     Modifications  and amendments of the Indenture will be permitted to be made
only with the consent of the  Holders of not less than a majority  in  principal
amount  of all  Outstanding  Debt  Securities  or  series  of  Outstanding  Debt
Securities  which are  affected  by the  modification  or  amendment;  provided,
however,  that no  modification  or  amendment  may,  without the consent of the
Holder of each Debt Security affected thereby:

     o    change the Stated Maturity of the principal of, or premium (if any) or
          any  installment  of  interest  on,  any  Debt  Security,  reduce  the
          principal  amount  of, or the rate or amount  of  interest  on, or any
          premium  payable on redemption  of, any Debt  Security,  or reduce the
          amount of principal of an Original Issue Discount  Security that would
          be due and payable upon  declaration of  acceleration  of the maturity
          thereof or would be provable in  bankruptcy,  or adversely  affect any
          right of  repayment  of the  holder of any Debt  Security,  change the
          place of payment,  or the coin or  currency,  for payment of principal
          of,  premium,  if any, or interest on any Debt  Security or impair the
          right to institute suit for the  enforcement of any payment on or with
          respect to any Debt Security;

     o    reduce the  above-stated  percentage of outstanding Debt Securities of
          any  series  necessary  to  modify or amend  the  Indenture,  to waive
          compliance  with certain  provisions  thereof or certain  defaults and
          consequences thereunder or to reduce the quorum or voting requirements
          set forth in the Indenture;

     o    modify or affect in any manner  adverse to the  Holders  the terms and
          conditions of the obligations of Reckson  Associates in respect of the
          payment  of  principal  (and  premium,  if any)  and  interest  on any
          Guaranteed Securities; or

     o    modify  any  of the  foregoing  provisions  or  any of the  provisions
          relating to the waiver of certain past defaults or certain  covenants,
          except to increase the required  percentage to effect the action or to
          provide that certain  other  provisions  may not be modified or waived
          without the consent of the Holder of the Debt Security.

     In addition to the Operating Partnership's  obligation to pay the principal
of, and premium (if any) and interest  on, the Debt  Securities,  the  Indenture
contains  several other  affirmative  and negative  covenants as described under
"--Certain Covenants." None of the Operating Partnership, Reckson Associates and
the Trustee may waive  compliance with the other covenants unless the Holders of
not less than a majority in  principal  amount of a series of  Outstanding  Debt
Securities consent to the waiver.

     Modifications  and amendments of the Indenture will be permitted to be made
by the Operating  Partnership,  Reckson  Associates and the Trustee  without the
consent of any Holder of Debt Securities for any of the following purposes:

     1.   to  evidence  the  succession  of  another  Person  to  the  Operating
          Partnership  as obligor or Reckson  Associates as guarantor  under the
          Indenture;

     2.   to add to  the  covenants  of the  Operating  Partnership  or  Reckson
          Associates for the benefit of the Holders of all or any series of Debt
          Securities  or to  surrender  any  right or power  conferred  upon the
          Operating Partnership or Reckson Associates in the Indenture;

     3.   to add Events of Default  for the benefit of the Holders of all or any
          series of Debt Securities;

     4.   to add or change any  provisions of the  Indenture to  facilitate  the
          issuance of, or to  liberalize  certain  terms of, Debt  Securities in
          bearer  form,  or  to  permit  or  facilitate  the  issuance  of  Debt
          Securities in uncertificated form, provided that this action shall not
          adversely  affect the interests of the Holders of the Debt  Securities
          of any series in any material respect;

     5.   to amend or supplement any provisions of the Indenture,  provided that
          no amendment  or  supplement  shall  materially  adversely  affect the
          interests of the Holders of any Debt Securities then Outstanding;

     6.   to secure the Debt Securities;

     7.   to establish the form or terms of Debt Securities of any series;

     8.   to provide for the acceptance of appointment by a successor Trustee or
          facilitate  the  administration  of the trusts under the  Indenture by
          more than one Trustee;

     9.   to cure any  ambiguity,  defect  or  inconsistency  in the  Indenture,
          provided that this action shall not adversely  affect the interests of
          Holders of Debt Securities of any series in any material respect; or

     10.  to  supplement  any of the  provisions  of the Indenture to the extent
          necessary  to permit or  facilitate  defeasance  and  discharge of any
          series of the Debt  Securities,  provided  that the  action  shall not
          adversely  affect the interests of the Holders of the Debt  Securities
          of any series in any material respect.

     In addition, with respect to Guaranteed Securities,  without the consent of
any Holder of Debt Securities,  Reckson Associates, or a subsidiary thereof, may
directly  assume the due and punctual  payment of the  principal of, any premium
and  interest on all the  Guaranteed  Securities  and the  performance  of every
covenant  of the  Indenture  on the  part  of the  Operating  Partnership  to be
performed or observed. Upon any assumption, Reckson Associates or the subsidiary
shall succeed to, and be substituted  for and may exercise every right and power
of, the Operating  Partnership  under the  Indenture  with the same effect as if
Reckson  Associates  or the  subsidiary  had been the  issuer of the  Guaranteed
Securities and the Operating  Partnership shall be released from all obligations
and covenants with respect to the Guaranteed Securities.  No assumption shall be
permitted  unless  Reckson  Associates  has  delivered  to  the  Trustee  (1) an
officers'  certificate and an opinion of counsel,  stating,  among other things,
that  the  Guarantee  and all  other  covenants  of  Reckson  Associates  in the
Indenture  remain in full force and  effect  and (2) an  opinion of  independent
counsel  that the  Holders of  Guaranteed  Securities  shall have no  materially
adverse United States federal tax  consequences  as a result of the  assumption,
and that, if any Debt Securities are then listed on the New York Stock Exchange,
that the Debt Securities shall not be delisted as a result of the assumption.

     In  determining  whether the Holders of the requisite  principal  amount of
Outstanding  Debt  Securities  of a  series  have  given  any  request,  demand,
authorization,  direction,  notice,  consent or waiver  thereunder  or whether a
quorum is present at a meeting of  Holders  of Debt  Securities,  the  Indenture
provides that:

     1.   the principal amount of an Original Issue Discount Security that shall
          be  deemed to be  Outstanding  shall be the  amount  of the  principal
          thereof  that  would  be  due  and  payable  as of  the  date  of  the
          determination   upon  declaration  of  acceleration  of  the  maturity
          thereof;

     2.   the  principal  amount  of a Debt  Security  denominated  in a foreign
          currency  that shall be deemed  Outstanding  shall be the U.S.  dollar
          equivalent, determined on the issue date for the Debt Security, of the
          principal  amount  (or,  in the  case of an  Original  Issue  Discount
          Security,  the U.S.  dollar  equivalent  on the issue date of the Debt
          Security of the amount determined as provided in (1) above);

     3.   the  principal  amount of an  Indexed  Security  that  shall be deemed
          Outstanding shall be the principal face amount of the Indexed Security
          at original  issuance,  unless otherwise  provided with respect to the
          Indexed Security pursuant to the Indenture; and

     4.   Debt  Securities  owned  by the  Operating  Partnership  or any  other
          obligor upon the Debt  Securities  or any  affiliate of the  Operating
          Partnership or of the other obligor shall be disregarded.

     The Indenture contains  provisions for convening meetings of the Holders of
Debt  Securities  of a series.  A meeting  will be permitted to be called at any
time by the Trustee,  and also,  upon  request,  by the  Operating  Partnership,
Reckson  Associates  (in respect of a series of  Guaranteed  Securities)  or the
Holders of at least 10% in principal  amount of the Outstanding  Debt Securities
of the  series,  in any case upon notice  given as  provided  in the  Indenture.
Except for any  consent  that must be given by the Holder of each Debt  Security
affected  by  certain  modifications  and  amendments  of  the  Indenture,   any
resolution  presented at a meeting or adjourned meeting duly reconvened at which
a quorum is present will be permitted to be adopted by the  affirmative  vote of
the Holders of a majority in principal amount of the Outstanding Debt Securities
of that  series;  provided,  however,  that,  except as referred  to above,  any
resolution  with  respect  to any  request,  demand,  authorization,  direction,
notice,  consent, waiver or other action that may be made, given or taken by the
Holders of a specified  percentage,  which is less than a majority, in principal
amount of the  Outstanding  Debt  Securities  of a series  may be  adopted  at a
meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the Holders of the specified  percentage in principal amount
of the  Outstanding  Debt  Securities of that series.  Any resolution  passed or
decision  taken at any meeting of Holders of Debt  Securities of any series duly
held in  accordance  with the  Indenture  will be binding on all Holders of Debt
Securities  of  that  series.  The  quorum  at any  meeting  called  to  adopt a
resolution,   and  at  any  reconvened  meeting,  will  be  Persons  holding  or
representing a majority in principal  amount of the Outstanding  Debt Securities
of a series; provided, however, that if any action is to be taken at the meeting
with  respect  to a consent or waiver  which may be given by the  Holders of not
less than a specified  percentage in principal  amount of the  Outstanding  Debt
Securities  of a series,  the  Persons  holding or  representing  the  specified
percentage in principal  amount of the Outstanding Debt Securities of the series
will constitute a quorum.

     Notwithstanding  the  foregoing  provisions,  any  action  to be taken at a
meeting of Holders of Debt  Securities  of any series with respect to any action
that the Indenture expressly provides may be taken by the Holders of a specified
percentage  which is less than a majority in principal amount of the Outstanding
Debt  Securities  of a series  may be taken at a  meeting  at which a quorum  is
present  by the  affirmative  vote of  Holders of the  specified  percentage  in
principal amount of the Outstanding Debt Securities of the series.

DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE

     The Operating  Partnership may discharge certain  obligations to Holders of
any  series of Debt  Securities  that have not  already  been  delivered  to the
Trustee  for  cancellation  and that  either have become due and payable or will
become due and payable within one year (or scheduled for  redemption  within one
year)  by  irrevocably  depositing  with the  Trustee,  in  trust,  funds in the
currency  or  currencies,  currency  unit or  units  or  composite  currency  or
currencies in which the Debt  Securities are payable in an amount  sufficient to
pay the entire  indebtedness on the Debt Securities in respect of principal (and
premium, if any) and interest to the date of the deposit (if the Debt Securities
have become due and payable) or to the Stated  Maturity or  Redemption  Date, as
the case may be.

     The Indenture  provides that, unless these provisions are made inapplicable
to the Debt  Securities of or within any series  pursuant to the Indenture,  the
Operating  Partnership may elect either (a) to defease and discharge  itself and
Reckson  Associates (if the Debt Securities are Guaranteed  Securities) from any
and  all  obligations  with  respect  to the  Debt  Securities  (except  for the
obligation to pay  additional  amounts,  if any, upon the  occurrence of certain
events of tax, assessment or governmental charge with respect to payments on the
Debt Securities and the obligations to register the transfer or exchange of Debt
Securities,  to replace temporary or mutilated,  destroyed,  lost or stolen Debt
Securities,  to maintain  an office or agency in respect of the Debt  Securities
and to hold moneys for payment in trust) ("defeasance") or (b) to release itself
and Reckson  Associates (if the Debt Securities are Guaranteed  Securities) from
their  obligations with respect to the Debt Securities under certain sections of
the Indenture  (including the restrictions  described under "Certain Covenants")
and, if provided  pursuant to the Indenture,  their  obligations with respect to
any other covenant,  and any omission to comply with the  obligations  shall not
constitute a default or an Event of Default with respect to the Debt  Securities
("covenant  defeasance"),  in either  case upon the  irrevocable  deposit by the
Operating  Partnership or Reckson  Associates with the Trustee,  in trust, of an
amount,  in the  currency or  currencies,  currency  unit or units or  composite
currency  or  currencies  in which the Debt  Securities  are  payable  at Stated
Maturity,  or Government  Obligations (as defined below), or both, applicable to
the Debt  Securities  which  through  the  scheduled  payment of  principal  and
interest  in  accordance  with  their  terms  will  provide  money in an  amount
sufficient  to pay the  principal of (and  premium,  if any) and interest on the
Debt Securities,  and any mandatory sinking fund or analogous  payments thereon,
on the scheduled due dates therefor.

     A trust will only be permitted to be  established  if, among other  things,
the Operating  Partnership or Reckson Associates has delivered to the Trustee an
Opinion  of Counsel  (as  specified  in the  Indenture)  to the effect  that the
Holders of the Debt Securities will not recognize income,  gain or loss for U.S.
federal income tax purposes as a result of the defeasance or covenant defeasance
and will be subject to U.S. federal income tax on the same amounts,  in the same
manner and at the same times as would  have been the case if the  defeasance  or
covenant defeasance had not occurred, and the Opinion of Counsel, in the case of
defeasance,  must  refer to and be based upon a ruling of the  Internal  Revenue
Service or a change in applicable United States federal income tax law.

     "Government  Obligations" means securities which are (1) direct obligations
of the United  States of  America or the  government  which  issued the  foreign
currency in which the Debt  Securities of a particular  series are payable,  for
the payment of which its full faith and credit is pledged or (2)  obligations of
a person controlled or supervised by and acting as an agency or  instrumentality
of the United  States of  America or the  government  which  issued the  foreign
currency in which the Debt Securities of the series are payable,  the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or other  government,  which,  in either case,  are not
callable  or  redeemable  at the  option of the issuer  thereof,  and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any  Government  Obligation  or a specific  payment of interest on or
principal of any Government  Obligation held by the custodian for the account of
the holder of a depository  receipt,  provided  that (except as required by law)
the custodian is not authorized to make any deduction from the amount payable to
the holder of the depository  receipt from any amount  received by the custodian
in respect of the Government  Obligation or the specific  payment of interest on
or principal of the Government Obligation evidenced by the depository receipt.

     Unless otherwise provided in the applicable prospectus supplement, if after
the Operating  Partnership  or Reckson  Associates  has  deposited  funds and/or
Government  Obligations to effect defeasance or covenant defeasance with respect
to Debt Securities of any series:

     (a) the Holder of a Debt  Security of the series is entitled  to, and does,
elect  pursuant to the  Indenture  or the terms of the Debt  Security to receive
payment in a currency,  currency unit or composite  currency  other than that in
which the deposit has been made in respect of the Debt Security, or

     (b) a  Conversion  Event  (as  defined  below)  occurs  in  respect  of the
currency,  currency  unit or  composite  currency  in which the deposit has been
made, the indebtedness  represented by the Debt Security shall be deemed to have
been,  and will be, fully  discharged  and satisfied  through the payment of the
principal of (and  premium,  if any) and  interest on the Debt  Security as they
become due out of the proceeds  yielded by converting the amount so deposited in
respect of the Debt  Security  into the  currency,  currency  unit or  composite
currency in which the Debt Security  becomes payable as a result of the election
or the Conversion Event based on the applicable market exchange rate.

     "Conversion Event" means the cessation of use of:

     o    a currency, currency unit or composite currency both by the government
          of the country  which issued the currency  and for the  settlement  of
          transactions  by a central  bank or other  public  institutions  of or
          within the international banking community or

     o    the  euro  both  within  the  European  Monetary  System  and  for the
          settlement of  transactions  by public  institutions  of or within the
          European Community.

     Unless  otherwise  provided in the applicable  prospectus  supplement,  all
payments of principal of (and premium, if any) and interest on any Debt Security
that is payable in a foreign  currency that ceases to be used by its  government
of issuance shall be made in U.S. dollars.

     In the event the Operating  Partnership  effects  covenant  defeasance with
respect to any Debt  Securities  and the Debt  Securities  are  declared due and
payable  because of the  occurrence of any Event of Default other than the Event
of Default  described in clause (d) under "Event of Default,  Notice and Waiver"
with  respect  to  sections  no  longer  applicable  to the Debt  Securities  or
described  in clause (h) under  "Events of  Default,  Notice  and  Waiver"  with
respect to any other  covenant as to which there has been  covenant  defeasance,
the amount in the  currency,  currency  unit or composite  currency in which the
Debt  Securities  are payable,  and  Government  Obligations on deposit with the
Trustee,  will be  sufficient  to pay amounts due on the Debt  Securities at the
time of their Stated  Maturity but may not be  sufficient  to pay amounts due on
the Debt Securities at the time of the acceleration  resulting from the Event of
Default.  However, the Operating Partnership and Reckson Associates (if the Debt
Securities are Guaranteed Securities) would remain liable to make payment of the
amounts due at the time of acceleration.

GOVERNING LAW

     The  Indenture  and the Notes shall be governed by the laws of the State of
New York.

CONVERSION RIGHTS

     The terms and  conditions,  if any,  upon  which  any Debt  Securities  are
convertible  into debt  securities of the Operating  Partnership or exchangeable
for equity securities of Reckson  Associates will be set forth in the applicable
prospectus supplement.  The terms will include the number or principal amount of
securities  into which the debt securities are convertible or for which the debt
securities  are  exchangeable,  the  conversion or exchange  price (or manner of
calculation  thereof),  the  conversion  or exchange  period,  provisions  as to
whether  conversion or exchange will be at the option of the holders of the debt
securities,   Reckson  Associates  or  the  Operating  Partnership,  the  events
requiring an  adjustment of the  conversion or exchange  price (or the manner of
calculation  thereof) and any provisions affecting conversion or exchange in the
event of the redemption of the debt securities.

GLOBAL SECURITIES

     The Debt  Securities  of a series  may be issued in whole or in part in the
form of one or more global  securities  (the "Global  Securities")  that will be
deposited with, or on behalf of, a depositary (the  "Depositary")  identified in
the applicable  prospectus  supplement relating to the series. Global Securities
may be issued in either  registered  or bearer form and in either  temporary  or
permanent form. The specific terms of the depositary arrangement with respect to
a series of Debt  Securities  will be  described  in the  applicable  prospectus
supplement relating to the series.

                           DESCRIPTION OF COMMON STOCK

GENERAL

     The charter of Reckson  Associates  (the  "Charter")  provides that Reckson
Associates  may issue up to 100 million  shares of common stock,  $.01 par value
per share. In addition,  units of limited partnership  interest in the Operating
Partnership  may be redeemed  for cash or, at the option of Reckson  Associates,
common stock of Reckson Associates on a one-for-one basis. See also "Description
of  Preferred  Stock"  for a  discussion  of the  7-5/8%  Series  A  Convertible
Cumulative  preferred stock and related units, as well as the convertible  units
issued by the Operating  Partnership in connection  with the  acquisition of the
Cappelli portfolio. On February 26, 1999, there were 40,053,358 shares of common
stock outstanding.

     The Board of Directors of Reckson Associates has authorized the issuance of
Class B exchangeable common stock in connection with the Tower transaction.  See
"Reckson Associates and The Operating Partnership." The shares of Class B common
stock will be entitled to receive an annual dividend of $2.24 per share, payable
quarterly,  for  the  first  four  full  quarters  immediately  following  their
issuance.  The cash  dividend  on the Class B common  stock  will be  subject to
adjustment  annually,  beginning  on the  first  anniversary  of the  end of the
quarter  following  the  issuance of the Class B common  stock,  by a percentage
equal to 70% of the cumulative  percentage change in Reckson Associates' FFO per
share above the FFO per share during the year prior to  issuance.  The shares of
Class B common  stock  will be  convertible  at any time,  at the  option of the
holder,  into an equal number of shares of common  stock of Reckson  Associates,
subject  to  customary  antidilution  adjustments.  Reckson  Associates,  at its
option,  may redeem any or all of the Class B common  stock in  exchange  for an
equal number of shares of its common stock at any time  following the four year,
six-month  anniversary of the issuance of the Class B common stock.  The Class B
common  stock will rank pari  passu with  Reckson  Associates'  existing  common
stock, including the common stock offered hereby.

     All shares of common stock  offered  hereby have been duly  authorized  and
will be fully paid and nonassessable.  Subject to the preferential rights of any
other shares or series of stock and to the  provisions of the Charter  regarding
Excess Stock (as defined under  "Restrictions  on Ownership of Capital  Stock"),
holders of shares of common  stock  offered  hereby  will be entitled to receive
dividends on the stock if, as and when  authorized  and declared by the Board of
Directors of Reckson  Associates out of assets legally available therefor and to
share  ratably  in the  assets  of  Reckson  Associates  legally  available  for
distribution  to its  common  stockholders  in  the  event  of its  liquidation,
dissolution  or winding up after payment of or adequate  provision for all known
debts and liabilities of Reckson Associates.

     Subject to the  provisions  of the Charter  regarding  Excess  Stock,  each
outstanding share of Reckson Associates'  existing common stock and, if and when
issued,  the Class B common stock entitles the holder to one vote on all matters
submitted to a vote of stockholders,  including the election of directors,  and,
except as  provided  with  respect  to any other  class or series of stock,  the
holders of these shares will possess the  exclusive  voting  power.  There is no
cumulative voting in the election of directors,  which means that the holders of
a majority of the  outstanding  shares of Reckson  Associates'  existing  common
stock and,  if and when  issued,  the Class B common  stock can elect all of the
directors  then  standing for election and the holders of the  remaining  shares
will not be able to elect any directors.

     Holders of shares of common stock have no preference, conversion, exchange,
sinking fund,  redemption or appraisal  rights and have no preemptive  rights to
subscribe  for any other  securities.  Subject to the  provisions of the Charter
regarding  Excess  Stock,  shares of common  stock  will  have  equal  dividend,
liquidation and other rights.

CERTAIN PROVISIONS OF THE CHARTER

     Under the MGCL, a Maryland corporation generally cannot dissolve, amend its
charter,  merge, sell all or substantially all of its assets,  engage in a share
exchange  or engage in  similar  transactions  outside  the  ordinary  course of
business  unless approved by the  affirmative  vote of  stockholders  holding at
least  two-thirds  of the shares  entitled to vote on the matter unless a lesser
percentage (but not less than a majority of all of the votes entitled to be cast
on the matter) is set forth in the corporation's  charter.  The Charter does not
provide for a lesser percentage in these situations.  In addition, the Operating
Partnership's  partnership  agreement  provides  that for the  five-year  period
following the completion of the IPO (i.e.  through June 2, 2000),  the Operating
Partnership may not sell,  transfer or otherwise dispose of all or substantially
all of its assets or engage in any other similar transaction  (regardless of the
form of the  transaction)  without  the  consent  of the  holders  of 85% of all
outstanding limited partnership units.

     The Charter  authorizes  the Board of  Directors of Reckson  Associates  to
reclassify  any unissued  shares of common stock into other classes or series of
classes of capital  stock and to establish the number of shares in each class or
series and to set the preferences,  conversion and other rights,  voting powers,
restrictions,  limitations  and  restrictions  on ownership,  limitations  as to
dividends or other  distributions,  qualifications  and terms or  conditions  of
redemption for each class or series.

     The Board of  Directors is divided into three  classes of  directors,  each
class  constituting  approximately  one-third of the total number of  directors,
with  the  classes   serving   staggered   terms.  At  each  annual  meeting  of
stockholders,  the class of  directors  to be  elected  at the  meeting  will be
elected for a  three-year  term and the  directors in the other two classes will
continue in office. We believe that classified directors will help to assure the
continuity  and stability of the Board of Directors and our business  strategies
and policies as determined by the Board.  The use of a staggered board may delay
or defer a change in  control  of Reckson  Associates  or  removal of  incumbent
management.

RESTRICTIONS ON OWNERSHIP

     In order to qualify as a REIT under the Code, not more than 50% in value of
the  outstanding  common stock of Reckson  Associates may be owned,  directly or
indirectly,  by five or fewer  individuals  (as defined in the Code)  during the
last half of a taxable year and the common stock must be  beneficially  owned by
100 or more persons  during at least 335 days of a taxable year of 12 months (or
during a  proportionate  part of a shorter  taxable year).  To satisfy the above
ownership  requirements and certain other  requirements  for  qualification as a
REIT, the Board of Directors has adopted,  and the stockholders prior to the IPO
approved, a provision in the Charter restricting the ownership or acquisition of
shares of common stock. See "Restrictions on Ownership of Capital Stock."

TRANSFER AGENT AND REGISTRAR

     The transfer  agent and  registrar  for the common stock is American  Stock
Transfer & Trust Company.

                         DESCRIPTION OF PREFERRED STOCK

GENERAL

     The Charter of Reckson  Associates  provides  that Reckson  Associates  may
issue up to 25 million shares of preferred  stock,  $.01 par value per share. On
February 26, 1999 there were  9,192,000  shares of 7-5/8%  Series A  Convertible
Cumulative  preferred  stock  outstanding.  Dividends  on the Series A Preferred
Stock are  payable  quarterly  in  arrears  at an  annual  rate of 7-5/8% of the
liquidation  preference  of $25 per  share.  The  Series  A  Preferred  Stock is
convertible  at any time at the  option of the holder at a  conversion  price of
$28.51  per  share  of  common   stock,   subject  to   adjustment   in  certain
circumstances.  On or after  April 13,  2003,  the shares of Series A  Preferred
Stock  will be  redeemable,  in whole  or in  part,  at the  option  of  Reckson
Associates.

     In connection with the acquisition of the Cappelli  portfolio,  the Amended
and Restated Agreement of Limited  Partnership of the Operating  Partnership was
supplemented (the "Supplements") to establish a series of 25,000 preferred units
of limited  partnership  interest of the  Operating  Partnership  designated  as
Series B preferred  units,  a series of 11,518  preferred  units  designated  as
Series C preferred  units and a series of 6,000  preferred  units  designated as
Series D preferred  units.  Each of the Series B, C and D preferred units have a
liquidation preference of $1,000 per unit. Distributions on each Series B, C and
D preferred  unit are  payable in arrears  quarterly  in an amount  equal to the
greater of: (1) $17.50 or (2) the quarterly  distribution  attributable  to each
Series B, C and D preferred  unit if the unit was  converted  into common stock,
subject to a maximum increase of 5% of the distributions on the Series B, C or D
preferred units over the immediately preceding year. The distribution amount due
on all Series B, C or D preferred  units may be reduced  during any period which
certain  Cappelli  indebtedness  remains  subject  to a  prepayment  premium  or
prepayment  penalty.  Commencing  two years  after the  issuance  of each of the
Series B, C or D preferred  units,  the  distribution  amount may be adjusted to
reflect  increases or decreases in the  dividends on the common stock of Reckson
Associates.

     The holders of Series B, C or D  preferred  units have the right to convert
their  preferred  units into common stock of Reckson  Associates  at a price per
share of  $32.51,  $29.39  or  $29.12,  respectively.  The  holders  of Series B
preferred  units  also have the  right to  convert  their  units  into  Series C
preferred  units,  at any time  through  April 21,  2000.  Each Series B, C or D
preferred unit is exchangeable,  at the option of its holder,  for shares of the
preferred stock of Reckson Associates with a liquidation preference equal to the
liquidation  preference  of the Series B, C or D preferred  units and  otherwise
with the same  terms as the  Series B, C or D  preferred  units  other  than the
conversion and exchange  rights  referred to above.  The Operating  Partnership,
with regard to any notice of an exchange,  may elect to redeem all of the Series
B, C or D preferred  units that are the subject of the  exchange  for cash in an
amount  equal to the stated  value of Series B, C or D preferred  units plus any
accrued distributions thereon.

     The statements made hereunder relating to the preferred stock are summaries
of the material  terms thereof and do not purport to be complete and are subject
to,  and are  qualified  in their  entirety  by  reference  to,  the  applicable
provisions of the Charter and Bylaws and any applicable  articles  supplementary
to the Charter  designating terms of a series of preferred stock (a "Designating
Amendment").

     The issuance of preferred  stock could  adversely  affect the voting power,
dividend rights and other rights of holders of common stock.  Although the Board
of Directors has no intention at the present  time, it could  establish a series
of  preferred  stock that could,  depending  on the terms of the series,  delay,
defer or prevent a transaction or a change in control of Reckson Associates that
might  involve a premium  price for the common stock or otherwise be in the best
interest of the holders  thereof.  Management  believes that the availability of
preferred  stock  will  provide us with  increased  flexibility  in  structuring
possible future financing and acquisitions and in meeting other needs that might
arise.

TERMS

     Subject  to  the  limitations  prescribed  by the  Charter,  the  Board  of
Directors is authorized to fix the number of shares  constituting each series of
preferred  stock and the  designations  and powers,  preferences  and  relative,
participating, optional or other special rights and qualifications,  limitations
or restrictions  thereof,  including the provisions as may be desired concerning
voting,  redemption,  dividends,  dissolution  or the  distribution  of  assets,
conversion  or  exchange,  and  other  subjects  or  matters  as may be fixed by
resolution of the Board of Directors.  The preferred stock will, when issued, be
fully paid and nonassessable and will have no preemptive rights.

     Reference is made to the  prospectus  supplement  relating to the series of
preferred stock offered thereby for the specific terms thereof, including:

     o    The title and stated value of the preferred stock;

     o    The  number  of  shares  of  the  preferred   stock,  the  liquidation
          preference per share of the preferred  stock and the offering price of
          the preferred stock;

     o    The dividend rate(s), period(s) and/or payment date(s) or method(s) of
          calculation thereof applicable to the preferred stock;

     o    The date from which dividends on the preferred stock shall accumulate,
          if applicable;

     o    The  procedures  for any  auction  and  remarketing,  if any,  for the
          preferred stock;

     o    The provision for a sinking fund, if any, for the preferred stock;

     o    The provisions for redemption, if applicable, of the preferred stock;

     o    Any listing of the preferred stock on any securities exchange;

     o    The terms and  conditions,  if  applicable,  upon which the  preferred
          stock may or will be convertible into our common stock,  including the
          conversion price or manner of calculation thereof;

     o    The relative  ranking and  preferences  of the  preferred  stock as to
          dividend rights and rights upon liquidation, dissolution or winding up
          of the affairs of Reckson Associates;

     o    Any limitations on direct or beneficial  ownership and restrictions on
          transfer, in each case as may be appropriate to preserve the status of
          Reckson Associates as a REIT;

     o    A discussion of material federal income tax considerations  applicable
          to the preferred stock; and

     o    Any  other  specific  terms,  preferences,   rights,   limitations  or
          restrictions of the preferred stock.

RANK

     Unless otherwise  specified in the applicable  prospectus  supplement,  the
preferred   stock  will,  with  respect  to  dividend  rights  and  rights  upon
liquidation, dissolution or winding up of Reckson Associates, rank:

     i.   senior  to the  common  stock and to all  classes  or series of equity
          securities  issued by Reckson  Associates  the terms of which  provide
          that the equity securities shall rank junior to the preferred stock;

     ii.  on a parity with all classes or series of equity  securities issued by
          Reckson Associates, including the Series A preferred stock, other than
          those referred to in clauses (i) and (iii); and

     iii. junior to all classes or series of equity securities issued by Reckson
          Associates  which the terms of the  preferred  stock provide will rank
          senior  to  it.  The  term  "equity   securities"   does  not  include
          convertible debt securities.

DIVIDENDS

     Unless otherwise  specified in the applicable  prospectus  supplement,  the
preferred  stock will have the rights with respect to payment of  dividends  set
forth below.

     Holders of the preferred  stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of Reckson Associates, out of
assets of Reckson  Associates  legally available for payment,  cash dividends in
the  amounts  and on the  dates as will be set forth in,  or  pursuant  to,  the
applicable prospectus  supplement.  Each dividend shall be payable to holders of
record as they appear on the stock transfer  books of Reckson  Associates on the
record dates as shall be fixed by the Board of Directors of Reckson Associates.

     Dividends  on  any  series  of  preferred   stock  may  be   cumulative  or
non-cumulative,  as provided in the applicable prospectus supplement. Dividends,
if  cumulative,  will be  cumulative  from and  after  the date set forth in the
applicable  prospectus  supplement.   If  the  Board  of  Directors  of  Reckson
Associates fails to declare a dividend payable on a dividend payment date on any
series of  preferred  stock for which  dividends  are  non-cumulative,  then the
holders  of the  series  of  preferred  stock  will  have no right to  receive a
dividend in respect of the related  dividend period and Reckson  Associates will
have no  obligation to pay the dividend  accrued for the period,  whether or not
dividends  on the series of preferred  stock are declared  payable on any future
dividend payment date.

     If preferred stock of any series is outstanding,  no full dividends will be
declared or paid or set apart for payment on any of the capital stock of Reckson
Associates of any other series  ranking,  as to  dividends,  on a parity with or
junior to the preferred stock of the series for any period unless:

     o    if the  series of  preferred  stock has a  cumulative  dividend,  full
          cumulative dividends have been or  contemporaneously  are declared and
          paid or declared  and a sum  sufficient  for the  payment  thereof set
          apart  for the  payment  for all past  dividend  periods  and the then
          current dividend period or

     o    if the series of preferred stock does not have a cumulative  dividend,
          full  dividends  for the then  current  dividend  period  have been or
          contemporaneously  are  declared  and  paid  or  declared  and  a  sum
          sufficient  for the  payment  thereof set apart for the payment on the
          preferred stock of the series.

     When  dividends  are not  paid in full  (or a sum  sufficient  for the full
payment is not so set apart) upon  preferred  stock of any series and the shares
of any other series of preferred  stock ranking on a parity as to dividends with
the preferred stock of the series,  all dividends  declared upon preferred stock
of the series and any other series of preferred  stock ranking on a parity as to
dividends with the preferred stock shall be declared pro rata so that the amount
of dividends  declared per share of preferred  stock of the series and the other
series of  preferred  stock shall in all cases bear to each other the same ratio
that accrued  dividends per share on the  preferred  stock of the series and the
other series of preferred  stock  (which shall not include any  accumulation  in
respect of unpaid  dividends for prior dividend  periods if the preferred  stock
does not have a cumulative dividend) bear to each other. No interest,  or sum of
money in lieu of interest,  shall be payable in respect of any dividend  payment
or payments on preferred stock of the series which may be in arrears.

     Except as provided in the immediately  preceding  paragraph,  unless (1) if
the  series  of  preferred  stock has a  cumulative  dividend,  full  cumulative
dividends on the  preferred  stock of the series have been or  contemporaneously
are declared and paid or declared and a sum sufficient  for the payment  thereof
set  apart  for  payment  for all past  dividend  periods  and the then  current
dividend  period,  and (2) if the  series  of  preferred  stock  does not have a
cumulative  dividend,  full dividends on the preferred  stock of the series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment  thereof set apart for  payment  for the then  current  dividend
period,  no  dividends  (other than in shares of common  stock or other  capital
stock ranking  junior to the  preferred  stock of the series as to dividends and
upon  liquidation)  shall be  declared or paid or set aside for payment or other
distribution  shall be declared or made upon the common  stock,  or any other of
the capital stock of Reckson  Associates  ranking  junior to or on a parity with
the preferred stock of the series as to dividends or upon liquidation, nor shall
any shares of common stock,  or any other  capital  stock of Reckson  Associates
ranking  junior to or on a parity with the  preferred  stock of the series as to
dividends or upon liquidation, be redeemed,  purchased or otherwise acquired for
any consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares) by Reckson Associates except:

     (1)  by conversion  into or  exchange  for other  capital  stock of Reckson
Associates  ranking junior to the preferred  stock of the series as to dividends
and upon liquidation or

     (2)  redemption's  for the  purpose  of  preserving  the  status of Reckson
Associates as a REIT.

REDEMPTION

     If so provided in the applicable prospectus supplement, the preferred stock
will be subject to mandatory  redemption  or redemption at the option of Reckson
Associates, as a whole or in part, in each case upon the terms, at the times and
at the redemption prices set forth in the prospectus supplement.

     The prospectus  supplement  relating to a series of preferred stock that is
subject  to  mandatory  redemption  will  specify  the  number  of shares of the
preferred  stock that  Reckson  Associates  will redeem in each year  commencing
after a date to be specified,  at a redemption  price per share to be specified,
together with an amount equal to all  accumulated and unpaid  dividends  thereon
(which shall not, if the  preferred  stock does not have a cumulative  dividend,
include  any  accumulation  in respect of unpaid  dividends  for prior  dividend
periods) to the date of redemption.  The redemption price may be payable in cash
or other property, as specified in the applicable prospectus supplement.  If the
redemption  price for preferred stock of any series is payable only from the net
proceeds of the issuance of capital  stock of Reckson  Associates,  the terms of
the preferred stock may provide that, if no capital stock shall have been issued
or to the extent the net proceeds from any issuance are  insufficient  to pay in
full the  aggregate  redemption  price  then  due,  the  preferred  stock  shall
automatically and mandatorily be converted into the applicable  capital stock of
Reckson Associates pursuant to conversion provisions specified in the applicable
prospectus supplement.

     Notwithstanding the foregoing,  unless (1) if the series of preferred stock
has a cumulative dividend, full cumulative dividends on all shares of any series
of preferred stock shall have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment  thereof set apart for payment for
all past dividend periods and the then current  dividend period,  and (2) if the
series of preferred stock does not have a cumulative dividend, full dividends on
the preferred  stock of any series have been or  contemporaneously  are declared
and paid or declared and a sum sufficient for the payment  thereof set apart for
payment  for the then  current  dividend  period,  no  shares  of any  series of
preferred stock shall be redeemed unless all outstanding  preferred stock of the
series is simultaneously redeemed;  provided,  however, that the foregoing shall
not prevent the  purchase or  acquisition  of  preferred  stock of the series to
preserve the status of Reckson Associates as a REIT or pursuant to a purchase or
exchange  offer made on the same terms to holders of all  outstanding  preferred
stock of the series.  In addition,  unless (1) if the series of preferred  stock
has a cumulative  dividend,  full cumulative dividends on all outstanding shares
of any series of preferred stock have been or contemporaneously are declared and
paid or declared  and a sum  sufficient  for the  payment  thereof set apart for
payment for all past dividend periods and the then current dividend period,  and
(2) if the series of preferred stock does not have a cumulative  dividend,  full
dividends on the  preferred  stock of any series have been or  contemporaneously
are declared and paid or declared and a sum sufficient  for the payment  thereof
set apart for payment for the then current dividend period,  Reckson  Associates
shall not purchase or otherwise acquire,  directly or indirectly,  any shares of
preferred stock of the series (except by conversion into or exchange for capital
stock of Reckson  Associates ranking junior to the preferred stock of the series
as to dividends and upon  liquidation);  provided,  however,  that the foregoing
shall not prevent the purchase or acquisition  of preferred  stock of the series
to preserve the status of Reckson Associates as a REIT or pursuant to a purchase
or exchange offer made on the same terms to holders of all outstanding preferred
stock of the series.

     If fewer  than all of the  outstanding  shares  of  preferred  stock of any
series  are to be  redeemed,  the  number  of  shares  to be  redeemed  will  be
determined  by Reckson  Associates  and the shares may be redeemed pro rata from
the  holders of record of the shares in  proportion  to the number of the shares
held or for which  redemption  is requested by the holder (with  adjustments  to
avoid  redemption  of  fractional  shares) or by lot or in any other  reasonable
manner.

     Notice of  redemption  will be mailed at least 30 days but not more than 60
days before the redemption  date to each holder of record of preferred  stock of
any series to be redeemed at the address shown on the stock transfer books. Each
notice shall state:

     o    the redemption date;

     o    the number of shares and series of the preferred stock to be redeemed;

     o    the redemption price;

     o    the place or places where  certificates for the preferred stock are to
          be surrendered for payment of the redemption price;

     o    that  dividends on the shares to be redeemed  will cease to accumulate
          on the redemption date; and

     o    the date upon which the holder's  conversion rights, if any, as to the
          shares shall terminate.

     If fewer  than all the  shares of  preferred  stock of any series are to be
redeemed, the notice mailed to each holder thereof shall also specify the number
of shares of  preferred  stock to be  redeemed  from each  holder.  If notice of
redemption of any preferred  stock has been given and if the funds necessary for
redemption have been set aside by Reckson Associates in trust for the benefit of
the holders of any preferred stock so called for redemption, then from and after
the redemption  date dividends will cease to accumulate on the preferred  stock,
and all rights of the holders of the preferred stock will terminate,  except the
right to receive the redemption price.

LIQUIDATION PREFERENCE

     Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of Reckson Associates (referred to herein as a "liquidation"), then,
before any  distribution  or payment  shall be made to the holders of any common
stock or any other  class or  series  of  capital  stock of  Reckson  Associates
ranking  junior to the  preferred  stock of the  series in the  distribution  of
assets upon any  liquidation,  dissolution or winding up of Reckson  Associates,
the holders of the preferred stock shall be entitled to receive out of assets of
Reckson   Associates   legally   available  for   distribution  to  shareholders
liquidating  distributions in the amount of the liquidation preference per share
(set forth in the applicable prospectus supplement), plus an amount equal to all
dividends   accumulated   and  unpaid  thereon  (which  shall  not  include  any
accumulation  in respect of unpaid  dividends for prior dividend  periods if the
preferred stock does not have a cumulative dividend).  After payment of the full
amount of the liquidating  distributions to which they are entitled, the holders
of preferred stock will have no rights or claim to any remaining  assets. In the
event that,  upon any  voluntary  or  involuntary  liquidation,  dissolution  or
winding up, the available  assets of Reckson  Associates are insufficient to pay
the amount of the liquidating  distributions on all outstanding  preferred stock
of the  series  and the  corresponding  amounts  payable  on all shares of other
classes or series of capital  stock of  Reckson  Associates  ranking on a parity
with the preferred stock in the distribution of assets,  then the holders of the
preferred  stock and all other  classes or series of capital  stock  shall share
ratably in any  distribution  of assets in  proportion  to the full  liquidating
distributions to which they would otherwise be respectively entitled.

     The  consolidation  or merger of Reckson  Associates with or into any other
entity,  or the merger of another entity with or into Reckson  Associates,  or a
statutory share exchange by Reckson Associates, or the sale, lease or conveyance
of all or substantially  all of the property or business of Reckson  Associates,
shall not be deemed to constitute a  liquidation,  dissolution  or winding up of
Reckson Associates.

VOTING RIGHTS

     Holders of the preferred  stock will not have any voting rights,  except as
set  forth  below  or as  otherwise  from  time  to time  required  by law or as
indicated in the applicable prospectus supplement.

     Whenever dividends on any series of preferred stock shall be in arrears for
six or more  quarterly  periods,  the  holders of the  preferred  stock  (voting
separately  as a class with all other series of preferred  stock upon which like
voting rights have been conferred and are exercisable)  will be entitled to vote
for the election of two additional  directors of Reckson Associates at a special
meeting  called by the  holders of record of at least ten  percent  (10%) of any
series of  preferred  stock so in arrears,  unless the request is received  less
than 90 days before the date fixed for the next annual or special meeting of the
stockholders,  or at the  next  annual  meeting  of  stockholders,  and at  each
subsequent  annual  meeting  until (i) if the  series of  preferred  stock has a
cumulative dividend,  all dividends accumulated on the shares of preferred stock
for the past dividend  periods and the then current  dividend  period shall have
been fully paid or declared  and a sum  sufficient  for the payment  thereof set
aside for  payment  or (ii) if the  series of  preferred  stock  does not have a
cumulative  dividend,  four  quarterly  dividends  shall have been fully paid or
declared and a sum sufficient for the payment thereof set aside for payment.  In
these  cases,  the  entire  Board of  Directors  of Reckson  Associates  will be
increased by two directors.

     Unless provided otherwise for any series of preferred stock, so long as any
shares of the preferred stock remain  outstanding,  Reckson Associates will not,
without the affirmative vote or consent of the holders of at least two-thirds of
the shares of the series of preferred  stock  outstanding at the time,  given in
person or by proxy,  either  in  writing  or at a  meeting  (the  series  voting
separately as a class):

     (1)  authorize or create,  or increase the  authorized or issued amount of,
any class or series of capital stock ranking senior to the preferred  stock with
respect to payment of dividends or the distribution of assets upon  liquidation,
dissolution  or winding up of Reckson  Associates,  or reclassify any authorized
capital stock of Reckson  Associates into preferred stock, or create,  authorize
or issue any obligation or security  convertible into or evidencing the right to
purchase any stock; or

     (2) amend, alter or repeal the provisions of the Charter or the Designating
Amendment for the series of preferred stock, whether by merger, consolidation or
otherwise (an  "Event"),  so as to  materially  and adversely  affect any right,
preference,  privilege or voting  power of the series of preferred  stock or the
holders thereof;

     provided,  however, with respect to the occurrence of any of the Events set
forth in (2) above, so long as the series of preferred stock remains outstanding
with the terms thereof materially  unchanged,  taking into account that upon the
occurrence of an Event Reckson  Associates may not be the surviving entity,  the
occurrence of any Event shall not be deemed to materially  and adversely  affect
the rights, preferences, privileges or voting powers of holders of the series of
preferred stock; and provided,  further,  that (x) any increase in the amount of
the authorized  preferred  stock or the creation or issuance of any other series
of preferred  stock,  or (y) any increase in the amount of authorized  shares of
the series of preferred  stock or any other series of preferred  stock,  in each
case  ranking on a parity  with or junior to the  preferred  stock of the series
with  respect  to  payment  of  dividends  or the  distribution  of assets  upon
liquidation,  dissolution  or  winding up of  Reckson  Associates,  shall not be
deemed to materially and adversely affect the rights, preferences, privileges or
voting powers.

     The foregoing voting  provisions will not apply if, at or prior to the time
when the act with  respect  to which  the vote or  consent  would  otherwise  be
required shall be effected,  all  outstanding  shares of the series of preferred
stock  shall  have  been  converted,  redeemed  or  called  for  redemption  and
sufficient funds shall have been deposited in trust to effect the redemption.

CONVERSION RIGHTS

     The terms and conditions,  if any, upon which any series of preferred stock
is  convertible  into shares of common stock will be set forth in the applicable
prospectus  supplement.  The terms will  include  the number of shares of common
stock into which the shares of preferred stock are  convertible,  the conversion
price (or manner of calculation thereof),  the conversion period,  provisions as
to  whether  conversion  will be at the option of the  holders of the  preferred
stock  of  Reckson  Associates,  the  events  requiring  an  adjustment  of  the
conversion  price  and  provisions  affecting  conversion  in the  event  of the
redemption of the preferred stock.

SHAREHOLDER LIABILITY

     As  discussed  below  under   "Description  of  Common  Stock--   General,"
applicable  Maryland  law provides  that no  shareholder,  including  holders of
preferred  stock,  shall be personally  liable for the acts and  obligations  of
Reckson  Associates and that the funds and property of Reckson  Associates shall
be the only recourse for these acts or obligations.

RESTRICTIONS ON OWNERSHIP

     As discussed below under  "Restrictions on Ownership of Capital Stock," for
Reckson  Associates  to qualify  as a REIT under the Code,  not more than 50% in
value of the  outstanding  capital  stock of  Reckson  Associates  may be owned,
directly or indirectly,  by five or fewer individuals (as defined in the Code to
include certain entities) during the last half of a taxable year. Therefore, the
Designating  Amendment for each series of preferred stock may contain provisions
restricting  the ownership and transfer of the preferred  stock.  The applicable
prospectus  supplement will specify any additional ownership limitation relating
to a series of preferred stock.

Registrar and Transfer Agent

     Unless otherwise  specified in the applicable  prospectus  supplement,  the
Registrar  and Transfer  Agent for the  preferred  stock will be American  Stock
Transfer & Trust Company.

                        DESCRIPTION OF DEPOSITARY SHARES

GENERAL

     Reckson   Associates  may  issue  receipts   ("Depositary   Receipts")  for
Depositary Shares, each of which will represent a fractional interest or a share
of a  particular  series of a class of  preferred  stock,  as  specified  in the
applicable prospectus  supplement.  Preferred stock of each series of each class
represented  by  Depositary  Shares will be deposited  under a separate  Deposit
Agreement (each, a "Deposit Agreement") among Reckson Associates, the depositary
named  therein  (the   depositary  or  its  successor,   the  "Preferred   Stock
Depositary")  and the  holders  from  time to time of the  Depositary  Receipts.
Subject  to the  terms of the  Deposit  Agreement,  each  owner of a  Depositary
Receipt will be entitled, in proportion to the fractional interest of a share of
the  particular  series  of a  class  of  preferred  stock  represented  by  the
Depositary  Shares  evidenced by the Depositary  Receipt,  to all the rights and
preferences  of  the  preferred  stock  represented  by the  Depositary  Shares,
including dividend, voting, conversion, redemption and liquidation rights.

     The  Depositary  Shares will be evidenced  by  Depositary  Receipts  issued
pursuant to the applicable Deposit Agreement. Immediately following the issuance
and delivery of the preferred stock by Reckson Associates to the Preferred Stock
Depositary,  Reckson  Associates  will cause the Preferred  Stock  Depositary to
issue, on our behalf, the Depositary Receipts.  Copies of the applicable form of
Deposit Agreement and Depositary Receipt may be obtained from Reckson Associates
upon request.

DIVIDENDS AND OTHER DISTRIBUTIONS

     The Preferred Stock  Depositary will distribute all cash dividends or other
cash  distributions  received  in respect of the  preferred  stock to the record
holders of the Depositary  Receipts  evidencing the related Depositary Shares in
proportion to the number of the Depositary Receipts owned by the holder, subject
to  certain  obligations  of  holders  to file  proofs,  certificates  and other
information  and to pay certain  charges and  expenses  to the  Preferred  Stock
Depositary.

     In the event of a  distribution  other than in cash,  the  Preferred  Stock
Depositary  will  distribute  property  received by it to the record  holders of
Depositary Receipts entitled thereto,  subject to certain obligations of holders
to file proofs,  certificates  and other  information and to pay certain charges
and expenses to the  Preferred  Stock  Depositary,  unless the  Preferred  Stock
Depositary determines that it is not feasible to make the distribution, in which
case  the  Preferred  Stock   Depositary  may,  with  the  approval  of  Reckson
Associates,  sell the property and  distribute the net proceeds from the sale to
holders.

WITHDRAWAL OF SHARES

     Upon surrender of the Depositary  Receipts at the corporate trust office of
the  Preferred  Stock  Depositary  (unless  the related  Depositary  Shares have
previously been called for redemption),  the holders thereof will be entitled to
delivery at the office, to or upon the holder's order, of the number of whole or
fractional shares of preferred stock and any money or other property represented
by the  Depositary  Shares  evidenced  by the  Depositary  Receipts.  Holders of
Depositary  Receipts will be entitled to receive  whole or fractional  shares of
the related  preferred  stock on the basis of the proportion of preferred  stock
represented by each Depositary  Share as specified in the applicable  prospectus
supplement,  but holders of the preferred  stock will not thereafter be entitled
to receive Depositary Shares therefor.  If the Depositary  Receipts delivered by
the  holder  evidence a number of  Depositary  Shares in excess of the number of
Depositary  Shares  representing  the number of shares of preferred  stock to be
withdrawn, the Preferred Stock Depositary will deliver to the holder at the same
time a new Depositary Receipt evidencing the excess number of Depositary Shares.

REDEMPTION OF DEPOSITARY SHARES

     Whenever Reckson  Associates  redeems preferred stock held by the Preferred
Stock  Depositary,  the Preferred  Stock  Depositary  will redeem as of the same
redemption date the number of Depositary Shares representing the preferred stock
so  redeemed,  provided  Reckson  Associates  shall  have  paid  in  full to the
Preferred  Stock  Depositary the redemption  price of the preferred  stock to be
redeemed plus an amount equal to any accrued and unpaid dividends thereon to the
date fixed for  redemption.  The redemption  price per Depositary  Share will be
equal to the  redemption  price and any other  amounts  per share  payable  with
respect to the preferred stock. If less than all the Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed will be selected by the Preferred
Stock Depositary by lot.

     After the date fixed for  redemption,  the Depositary  Shares so called for
redemption  will no longer be deemed  to be  outstanding  and all  rights of the
holders of the Depositary  Receipts  evidencing the Depositary  Shares so called
for redemption  will cease,  except the right to receive any moneys payable upon
redemption  and any  money  or  other  property  to  which  the  holders  of the
Depositary  Receipts were entitled upon redemption upon surrender thereof to the
Preferred Stock Depositary.

VOTING OF THE UNDERLYING PREFERRED SHARES

     Upon receipt of notice of any meeting at which the holders of the preferred
stock  are  entitled  to vote,  the  Preferred  Stock  Depositary  will mail the
information  contained  in the notice of  meeting  to the record  holders of the
Depositary  Receipts  evidencing  the  Depositary  Shares  which  represent  the
preferred stock. Each record holder of Depositary Receipts evidencing Depositary
Shares on the record  date  (which  will be the same date as the record date for
the preferred stock) will be entitled to instruct the Preferred Stock Depositary
as to the exercise of the voting  rights  pertaining  to the amount of preferred
stock  represented  by the  holder's  Depositary  Shares.  The  Preferred  Stock
Depositary will vote the amount of preferred stock represented by the Depositary
Shares  in  accordance  with  the  instructions,  and we will  agree to take all
reasonable  action  which  may  be  deemed  necessary  by  the  Preferred  Stock
Depositary  in order to enable  the  Preferred  Stock  Depositary  to do so. The
Preferred  Stock  Depositary  will  abstain  from voting the amount of preferred
stock  represented  by the  Depositary  Shares to the extent it does not receive
specific  instructions  from the holders of Depositary  Receipts  evidencing the
Depositary Shares.

LIQUIDATION PREFERENCE

     In  the  event  of  liquidation,  dissolution  or  winding  up  of  Reckson
Associates,  whether  voluntary  or  involuntary,  each  holder of a  Depositary
Receipt will be entitled to the fraction of the liquidation  preference accorded
each share of preferred stock  represented by the Depositary  Share evidenced by
the Depositary Receipt, as set forth in the applicable prospectus supplement.

CONVERSION OF PREFERRED SHARES

     The Depositary  Shares,  as such, are not convertible  into common stock or
any other  securities  or property of Reckson  Associates.  Nevertheless,  if so
specified in the  applicable  prospectus  supplement  relating to an offering of
Depositary Shares, the Depositary Receipts may be surrendered by holders thereof
to the Preferred  Stock  Depositary  with written  instructions to the Preferred
Stock  Depositary  to instruct  Reckson  Associates  to cause  conversion of the
preferred  stock  represented by the Depositary  Shares  evidenced by Depositary
Receipts into whole shares of common  stock,  other  preferred  stock of Reckson
Associates or other shares of capital stock of Reckson  Associates,  and Reckson
Associates has agreed that upon receipt of instructions  and any amounts payable
in respect  thereof,  it will cause the  conversion  thereof  utilizing the same
procedures  as those  provided  for  delivery of  preferred  stock to effect the
conversion. If the Depositary Shares evidenced by a Depositary Receipt are to be
converted in part only, one or more new  Depositary  Receipts will be issued for
any Depositary Shares not to be converted.  No fractional shares of common stock
will  be  issued  upon  conversion,  and  if the  conversion  will  result  in a
fractional  share  being  issued,  an  amount  will be  paid in cash by  Reckson
Associates equal to the value of the fractional  interest based upon the closing
price of the common stock on the last business day prior to the conversion.

AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT

     The form of  Depositary  Receipt  evidencing  the  Depositary  Shares which
represent the preferred stock and any provision of the Deposit  Agreement may at
any time be amended by agreement  between  Reckson  Associates and the Preferred
Stock  Depositary.  However,  any amendment that materially and adversely alters
the rights of the holders of Depositary  Receipts  will not be effective  unless
the amendment  has been approved by the existing  holders of at least a majority
of the Depositary Shares evidenced by the Depositary Receipts then outstanding.

     The Deposit Agreement may be terminated by Reckson Associates upon not less
than 30 days' prior written notice to the Preferred Stock  Depositary if (1) the
termination  is to preserve the status of Reckson  Associates as a REIT or (2) a
majority of each class of preferred stock affected by the  termination  consents
to the  termination,  whereupon the Preferred Stock  Depositary shall deliver or
make  available to each holder of  Depositary  Receipts,  upon  surrender of the
Depositary Receipts held by the holder, the number of whole or fractional shares
of preferred  stock as are  represented  by the Depositary  Shares  evidenced by
Depositary  Receipts.  In addition,  the Deposit  Agreement  will  automatically
terminate if (1) all outstanding Depositary Shares shall have been redeemed, (2)
there shall have been a final  distribution in respect of the related  preferred
stock in connection with any  liquidation,  dissolution or winding up of Reckson
Associates and the  distribution  shall have been  distributed to the holders of
Depositary  Receipts evidencing the Depositary Shares representing the preferred
stock or (iii) each related share of preferred  stock shall have been  converted
into  capital  stock of Reckson  Associates  not so  represented  by  Depositary
Shares.

CHARGES OF PREFERRED SHARES DEPOSITARY

     Reckson  Associates will pay all transfer and other taxes and  governmental
charges arising solely from the existence of the Deposit Agreement. In addition,
Reckson  Associates  will pay the  fees  and  expenses  of the  Preferred  Stock
Depositary in connection  with the  performance  of its duties under the Deposit
Agreement.  However,  holders  of  Depositary  Receipts  will  pay the  fees and
expenses of the  Preferred  Stock  Depositary  for any duties  requested  by the
holders to be performed which are outside of those expressly provided for in the
Deposit Agreement.

RESIGNATION AND REMOVAL OF DEPOSITARY

     The  Preferred  Stock  Depositary  may resign at any time by  delivering to
Reckson  Associates notice of its election to do so, and Reckson  Associates may
at any time remove the Preferred Stock Depositary, any resignation or removal to
take effect upon the appointment of a successor  Preferred Stock  Depositary.  A
successor  Preferred  Shares  Depositary must be appointed  within 60 days after
delivery  of the notice of  resignation  or removal  and must be a bank or trust
company  having its principal  office in the United States and having a combined
capital and surplus of at least $50,000,000.

MISCELLANEOUS

     The  Preferred  Stock  Depositary  will  forward to  holders of  Depositary
Receipts  any reports  and  communications  from  Reckson  Associates  which are
received by the Preferred Stock Depositary with respect to the related preferred
stock.

     Neither  Reckson  Associates  nor the Preferred  Stock  Depositary  will be
liable if the Preferred Stock Depositary is prevented from or delayed in, by law
or any  circumstances  beyond its control,  performing its obligations under the
Deposit Agreement. The obligations of Reckson Associates and the Preferred Stock
Depositary under the Deposit  Agreement will be limited to performing  specified
duties  thereunder  in good faith and without  negligence,  gross  negligence or
willful  misconduct,  and Reckson  Associates and the Preferred Stock Depositary
will not be obligated to prosecute or defend any legal  proceeding in respect of
any  Depositary  Receipts,  Depositary  Shares or  preferred  stock  represented
thereby unless satisfactory  indemnity is furnished.  Reckson Associates and the
Preferred Stock Depositary may rely on written advice of counsel or accountants,
or information  provided by persons  presenting the preferred stock  represented
thereby for deposit, holders of Depositary Receipts or other persons believed to
be competent to give  information,  and on documents  believed to be genuine and
signed by a proper party.

     If  the  Preferred  Stock  Depositary  shall  receive  conflicting  claims,
requests or  instructions  from any holders of Depositary  Receipts,  on the one
hand,  and from  Reckson  Associates,  on the other hand,  the  Preferred  Stock
Depositary shall be entitled to act on claims, requests or instructions received
from Reckson Associates.

                   RESTRICTIONS ON OWNERSHIP OF CAPITAL STOCK

EXCESS STOCK

     The Charter  provides  that Reckson  Associates  may issue up to 75 million
shares of  excess  stock,  par value  $.01 per  share  ("Excess  Stock").  For a
description of Excess Stock, see "--Restrictions on Ownership" below.


RESTRICTIONS ON OWNERSHIP

     In order for Reckson  Associates to qualify as a REIT under the Code, among
other  things,  not more than 50% in value of the  outstanding  capital stock of
Reckson  Associates  may be  owned,  directly  or  indirectly,  by five or fewer
individuals  (defined in the Code to include certain  entities)  during the last
half of a  taxable  year  (other  than  the  first  year)  (the  "Five  or Fewer
Requirement"), and the shares of capital stock must be beneficially owned by 100
or more persons  during at least 335 days of a taxable year of 12 months  (other
than the first year) or during a  proportionate  part of a shorter taxable year.
Pursuant to the Code,  common stock held by certain  types of  entities,  the as
pension  trusts  qualifying  under  Section  401(a) of the Code,  United  States
investment  companies  registered  under  the  Investment  Company  Act of 1940,
partnerships,  trusts and  corporations,  will be attributed  to the  beneficial
owners of the entities for purposes of the Five or Fewer Requirement  (i.e., the
beneficial  owners of the entities  will be counted as  shareholders  of Reckson
Associates).

     In order to  protect  Reckson  Associates  against  the risk of losing  its
status as a REIT due to a  concentration  of ownership among  stockholders,  the
Charter, subject to certain exceptions, provides that no stockholder may own, or
be deemed to own by virtue of the attribution  provisions of the Code, more than
9.0% (the "Ownership Limit") of the aggregate number or value of the outstanding
shares of common stock.  Reckson  Associates may also impose  limitations on the
ownership of preferred stock. See "Description of Preferred Stock - Restrictions
on Ownership."  Any transfer of shares of stock that would result in a violation
of the  Ownership  Limit or that  would  result in  disqualification  as a REIT,
including  any transfer  that results in shares of capital  stock being owned by
fewer than 100 persons or results in Reckson  Associates  being  "closely  held"
within the meaning of Section  856(h) of the Code,  shall be null and void,  and
the intended  transferee  will acquire no rights to the shares of capital stock.
The foregoing  restrictions on  transferability  and ownership will not apply if
the Board of Directors  determines that it is no longer in the best interests of
Reckson Associates to attempt to qualify,  or to continue to qualify, as a REIT.
The Board of Directors may, in its sole discretion, waive the Ownership Limit if
evidence  satisfactory  to the Board of  Directors  and tax counsel is presented
that the changes in  ownership  will not then or in the future  jeopardize  REIT
status and the Board of Directors  otherwise  decides that waiving the Ownership
Limit is in the best interests of Reckson Associates.

     Shares of capital stock owned,  or deemed to be owned,  or transferred to a
stockholder  in excess of the Ownership  Limit will  automatically  be converted
into shares of Excess  Stock that will be  transferred,  by operation of law, to
the  trustee  of a trust for the  exclusive  benefit  of one or more  charitable
organizations  described  in  Section  170(b)(1)(A)  and 170(c) of the Code (the
"Charitable  Beneficiary").  The  trustee of the trust will be deemed to own the
Excess Stock for the benefit of the  Charitable  Beneficiary  on the date of the
violative  transfer  to the  original  transferee-stockholder.  Any  dividend or
distribution paid to the original  transferee-stockholder  of Excess Stock prior
to our  discovery  that capital stock has been  transferred  in violation of the
provisions  of the  Charter  shall be repaid to the  trustee  upon  demand.  Any
dividend or  distribution  authorized and declared but unpaid shall be rescinded
as void ab initio with respect to the original  transferee-stockholder and shall
instead be paid to the  trustee of the trust for the  benefit of the  Charitable
Beneficiary.  Any vote cast by an original  transferee-stockholder  of shares of
capital stock constituting Excess Stock prior to the discovery by us that shares
of capital  stock have been  transferred  in violation of the  provisions of the
Charter shall be rescinded as void ab initio.  While the Excess Stock is held in
trust,  the  original  transferee-stockholder  will be deemed  to have  given an
irrevocable  proxy to the trustee to vote the  capital  stock for the benefit of
the Charitable  Beneficiary.  The trustee of the trust may transfer the interest
in the trust  representing the Excess Stock to any person whose ownership of the
shares of capital stock converted into Excess Stock would be permitted under the
Ownership  Limit.  If the  transfer  is made,  the  interest  of the  Charitable
Beneficiary shall terminate and the proceeds of the sale shall be payable to the
original  transferee-stockholder  and to the Charitable Beneficiary as described
herein. The original  transferee-stockholder shall receive the lesser of (1) the
price  paid by the  original  transferee-stockholder  for the  shares of capital
stock   that  were   converted   into   Excess   Stock   or,  if  the   original
transferee-stockholder  did not give value for the shares  (e.g.,  the stock was
received through a gift, devise or other transaction), the average closing price
for the class of shares  from which the shares of capital  stock were  converted
for the ten trading days  immediately  preceding  the sale or gift,  and (2) the
price  received by the trustee from the sale or other  disposition of the Excess
Stock held in trust.  The trustee may reduce the amount  payable to the original
transferee-stockholder  by the amount of dividends and distributions relating to
the   shares   of  Excess   Stock   which   have  been  paid  to  the   original
transferee-stockholder  and are owed by the original  transferee-stockholder  to
the  trustee.  Any  proceeds  in excess of the amount  payable  to the  original
transferee-stockholder   shall  be  paid  by  the  trustee  to  the   Charitable
Beneficiary.  Any  liquidation  distributions  relating to Excess Stock shall be
distributed  in the same manner as proceeds  of a sale of Excess  Stock.  If the
foregoing  transfer  restrictions are determined to be void or invalid by virtue
of  any  legal  decision,  statute,  rule  or  regulations,  then  the  original
transferee-stockholder  of any  shares of Excess  Stock  may be  deemed,  at the
option of Reckson  Associates,  to have acted as an agent for Reckson Associates
in  acquiring  the shares of Excess Stock and to hold the shares of Excess Stock
for Reckson Associates.

     In addition,  Reckson  Associates  will have the right,  for a period of 90
days during the time any shares of Excess  Stock are held in trust,  to purchase
all or any portion of the shares of Excess  Stock at the lesser of (i) the price
initially paid for the shares by the original transferee-stockholder,  or if the
original  transferee-stockholder  did not give value for the shares  (e.g.,  the
shares were received through a gift, devise or other  transaction),  the average
closing  price for the class of stock from which the shares of Excess Stock were
converted for the ten trading days  immediately  preceding the sale or gift, and
(ii) the average  closing  price for the class of stock from which the shares of
Excess Stock were converted for the ten trading days  immediately  preceding the
date Reckson  Associates elects to purchase the shares.  Reckson  Associates may
reduce the amount payable to the original  transferee-stockholder  by the amount
of dividends and distributions relating to the shares of Excess Stock which have
been paid to the  original  transferee-stockholder  and are owed by the original
transferee-stockholder  to the trustee. Reckson Associates may pay the amount of
the reductions to the trustee for the benefit of the Charitable Beneficiary. The
90-day  period  begins on the later  date of which  notice  is  received  of the
violative  transfer  if the  original  transferee-stockholder  gives  notice  to
Reckson Associates of the transfer or, if no notice is given, the date the Board
of Directors determines that a violative transfer has been made.

     These restrictions will not preclude settlement of transactions through the
New York Stock Exchange.

     All certificates  representing shares of stock will bear a legend referring
to the restrictions described above.

     Each  stockholder  shall upon  demand be  required  to  disclose to Reckson
Associates in writing any information  with respect to the direct,  indirect and
constructive  ownership of the capital stock of Reckson  Associates as the Board
of  Directors  deems  necessary  to  comply  with  the  provisions  of the  Code
applicable to REITs, to comply with the  requirements of any taxing authority or
governmental agency or to determine any compliance.

     The  Ownership  Limit  may  have  the  effect  of  delaying,  deferring  or
preventing  a change  in  control  of  Reckson  Associates  unless  the Board of
Directors  determines  that  maintenance of REIT status is no longer in the best
interests of Reckson Associates.

                             DESCRIPTION OF WARRANTS

     Reckson  Associates  may issue Warrants for the purchase of common stock or
preferred  stock.  Warrants  may be issued  independently  or together  with any
securities and may be attached to or separate from the  securities.  Each series
of Warrants will be issued under a separate warrant  agreement (each, a "Warrant
Agreement")  to be entered into between  Reckson  Associates and a warrant agent
specified  therein  ("Warrant  Agent").  The  Warrant  Agent will act solely for
Reckson  Associates in  connection  with the Warrants of the series and will not
assume any obligation or relationship of agency or trust for or with any holders
or beneficial owners of Warrants.

     The applicable  prospectus  supplement  will describe the following  terms,
where  applicable,  of the Warrants in respect of which this prospectus is being
delivered:

     o    the title of the Warrants;

     o    the aggregate number of the Warrants;

     o    the price or prices at which the Warrants will be issued;

     o    the  currencies  in which the price or prices of the  Warrants  may be
          payable;

     o    the designation,  amount and terms of the Securities  purchasable upon
          exercise of the Warrants;

     o    the designation and terms of the other Securities,  if any, with which
          the  Warrants  are issued and the number of the  Warrants  issued with
          each security;

     o    if  applicable,  the date on and  after  which  the  Warrants  and the
          Securities   purchasable   upon  exercise  of  the  Warrants  will  be
          separately transferable;

     o    the price or prices at which and currency or  currencies  in which the
          Securities purchasable upon exercise of the Warrants may be purchased;

     o    the date on which the right to exercise  the Warrants  shall  commence
          and the date on which the right shall expire;

     o    the minimum or maximum  amount of the Warrants  which may be exercised
          at any one time;

     o    information with respect to book-entry procedures, if any;

     o    a discussion of material federal income tax considerations; and

     o    any other material terms of the Warrants,  including terms, procedures
          and limitations relating to the exchange and exercise of the Warrants.

                        FEDERAL INCOME TAX CONSIDERATIONS

     Based  on  various  assumptions  and  factual  representations  made  by us
regarding  our  operations,  in the  opinion of Brown & Wood LLP,  our  counsel,
commencing with our taxable year ended December 31, 1995, Reckson Associates has
been organized in conformity with the requirements  for  qualification as a REIT
under the Code, and the proposed  method of operating  Reckson  Associates  will
enable it to meet the requirements for qualification and taxation as a REIT. The
qualification of Reckson Associates depends upon our ability to meet the various
requirements  imposed  under the Code through  actual  operations,  as discussed
below. Brown & Wood LLP will not review our operations,  and no assurance can be
given that actual operations will meet these requirements.  The opinion of Brown
& Wood LLP is not  binding on the IRS or any court.  The opinion of Brown & Wood
LLP is  based  upon  existing  law,  IRS  regulations  and  currently  published
administrative positions of the IRS and judicial decisions, which are subject to
change either prospectively or retroactively.

     The  provisions of the Code  pertaining  to REITs are highly  technical and
complex. The following is a brief and general summary of certain provisions that
currently  govern Reckson  Associates and its  stockholders'  federal income tax
treatment.  For the particular provisions that govern Reckson Associates and its
stockholders'  federal income tax  treatment,  reference is made to Sections 856
through 860 of the Code and the regulations thereunder. The following summary is
qualified in its entirety by reference.

     Under the Code, if certain  requirements  are met in a taxable year, a REIT
generally  will not be subject to federal income tax with respect to income that
it  distributes  to its  stockholders.  If Reckson  Associates  fails to qualify
during  any  taxable  year as a  REIT,  unless  certain  relief  provisions  are
available,  it will be  subject to tax  (including  any  applicable  alternative
minimum tax) on its taxable income at regular corporate rates,  which could have
a material  adverse effect upon its  stockholders.  See "Risk  Factors-Risks  of
Failure to Qualify as a REIT."

     In any year in which  Reckson  Associates  qualifies to be taxed as a REIT,
distributions  made to its stockholders  out of current or accumulated  earnings
and  profits  will be taxed to  stockholders  as  ordinary  income  except  that
distributions of net capital gains  designated by Reckson  Associates as capital
gain  dividends  will  be  taxed  as  long-term   capital  gain  income  to  the
stockholders.  To the extent that  distributions  exceed  current or accumulated
earnings and  profits,  they will  constitute  a return of capital,  rather than
dividend or capital gain income, and will reduce the basis for the stockholder's
common stock or preferred  stock with respect to which the  distribution is paid
or, to the extent that they  exceed the basis,  will be taxed in the same manner
as gain from the sale of that common  stock or  preferred  stock.  Beginning  in
1998,  Reckson  Associates may elect to retain  long-term  capital gains and pay
corporate-level  income tax on them and treat the retained  gains as if they had
been distributed to stockholders.  In this case, each stockholder  would include
in  income,  as  long-term   capital  gain,  its  proportionate   share  of  the
undistributed  gains and would be deemed to have paid its proportionate share of
the tax paid by Reckson Associates with respect thereto. In addition,  the basis
for a  stockholder's  common stock or preferred  stock would be increased by the
amount of the undistributed  long-term capital gain included in its income, less
the amount of the tax it is deemed to have paid with respect thereto.

     Investors  are urged to consult  their own tax advisors with respect to the
appropriateness  of an  investment  in the  securities  offered  hereby and with
respect to the tax  consequences  arising  under federal law and the laws of any
state,  municipality or other taxing  jurisdiction,  including tax  consequences
resulting from the investor's own tax  characteristics.  In particular,  foreign
investors should consult their own tax advisors  concerning the tax consequences
of an investment in Reckson  Associates,  including  the  possibility  of United
States income tax withholding on our distributions.

                              PLAN OF DISTRIBUTION

     Reckson Associates and the Operating Partnership may sell the securities to
one or more  underwriters  for public  offering and sale by them or may sell the
securities to investors  directly or through  agents.  Any  underwriter or agent
involved in the offer and sale of the securities will be named in the applicable
prospectus supplement.

     Underwriters  may offer and sell the securities at a fixed price or prices,
which may be changed,  at prices related to the prevailing  market prices at the
time of sale or at  negotiated  prices.  Reckson  Associates  and the  Operating
Partnership also may, from time to time, authorize  underwriters acting as their
agents to offer and sell the securities upon the terms and conditions as are set
forth in the applicable  prospectus  supplement.  In connection with the sale of
securities,  underwriters  may be  deemed  to have  received  compensation  from
Reckson  Associates or the  Operating  Partnership  in the form of  underwriting
discounts or commissions  and may also receive  commissions  from  purchasers of
securities for whom they may act as agent.  Underwriters  may sell securities to
or  through  dealers,  and  dealers  may  receive  compensation  in the  form of
discounts,  concessions or commissions from the underwriters  and/or commissions
from the purchasers for whom they may act as agent.

     Any underwriting  compensation paid by Reckson  Associates or the Operating
Partnership  to  underwriters  or  agents in  connection  with the  offering  of
securities,   and  any  discounts,   concessions  for  commissions   allowed  by
underwriters  to  participating  dealers,  will be set  forth in the  applicable
prospectus  supplement.  Underwriters,  dealers and agents  participating in the
distribution  of the  securities  may be  deemed  to be  underwriters,  and  any
discounts and  commissions  received by them and any profit  realized by them on
resale  of the  securities  may  be  deemed  to be  underwriting  discounts  and
commissions,  under the Securities Act. Underwriters,  dealers and agents may be
entitled,  under  agreements  entered  into  with  Reckson  Associates  and  the
Operating  Partnership,  to  indemnification  against  and  contribution  toward
certain civil liabilities, including liabilities under the Securities Act.

     Certain of the  underwriters  and their  affiliates  may be  customers  of,
engage in transactions  with, and perform services for,  Reckson  Associates and
the  Operating  Partnership  and its  subsidiaries  in the  ordinary  course  of
business.

                                  LEGAL MATTERS

     The validity of the issuance of the  securities  offered hereby and certain
legal matters described under "Federal Income Tax Considerations" will be passed
upon for Reckson  Associates and the Operating  Partnership by Brown & Wood LLP,
New York, New York.

                                     EXPERTS

   
     Ernst & Young LLP,  independent  auditors,  have  audited our  consolidated
financial  statements and schedule as of December 31, 1998 and December 31, 1997
and for each of the years in the three  year  period  ended  December  31,  1998
appearing in our Form 8-K,  dated March 1, 1999;  and the combined  statement of
revenues and certain  expenses of the New Jersey  Portfolio (as defined therein)
for the year ended  December  31, 1996,  the combined  statement of revenues and
certain  expenses for the Hauppauge  Portfolio (as defined therein) for the year
ended  December 31, 1996 and the  statement of revenues and certain  expenses of
the Uniondale Office Property (as defined therein),  for the year ended December
31, 1996,  appearing in Reckson  Associates'  Form 8-K, dated February 18, 1997;
and the statement of revenues and certain expenses of 710 Bridgeport  Avenue (as
defined  therein),  for the year ended  December  31, 1996 and the  statement of
revenues  and  certain  expenses  of the  Shorthills  Office  Center (as defined
therein),  for the year ended December 31, 1996 appearing in Reckson Associates'
Form 8-K dated June 12, 1997; and the statement of revenues and certain expenses
of Garden City Plaza for the year ended December 31, 1996,  appearing in Reckson
Associates'  Form 8-K dated September 9, 1997, and the statement of revenues and
certain expenses of the Christiana  Office Property (as defined therein) for the
year ended  June 30,  1997,  appearing  in  Reckson  Associates'  Form 8-K dated
February 10,  1998,  and the  statement of revenues and certain  expenses of the
Stamford  Office  Property (as defined  therein) for the year ended December 31,
1997,  appearing in Reckson  Associates'  Form 8-K dated March 24, 1998; and the
statement of revenues and certain  expenses of the  Cappelli  Portfolio  for the
year ended December 31, 1997,  appearing in Reckson  Associates'  Form 8-K dated
April 6, 1998,  incorporated in this Registration Statement by reference.  These
consolidated and combined financial  statements are incorporated by reference in
reliance on their reports, given on their authority as experts in accounting and
auditing.

     Ernst & Young LLP,  independent  auditors,  have  audited the  consolidated
financial statements and schedule of Reckson Operating  Partnership,  L.P. as of
December  31, 1998 and  December 31, 1997 and for each of the years in the three
year  period  ended  December  31, 1998 as set forth in their  report,  which is
included in this Registration Statement. These financial statements are included
in reliance on their report,  given on their  authority as experts in accounting
and auditing.
    




                       RECKSON OPERATING PARTNERSHIP, L.P.


PAGE
- ----
                                                                                                                     
Selected Financial Data...........................................................................................
Management's Discussion and Analysis of Financial Condition and Results of Operations.............................
CONSOLIDATED FINANCIAL STATEMENTS.................................................................................
Report of Independent Auditors....................................................................................
Consolidated Balance Sheets as of December 31, 1998 and December 31, 1997 ........................................
Consolidated  Statements of Income for the years ended December 31, 1998, 1997 and 1996...........................
Consolidated Statements of Partners' Capital for the years ended December 31, 1998, 1997 and 1996.................
Consolidated  Statements  of Cash Flows for the years ended December 31, 1998, 1997 and 1996 .....................
Notes to Consolidated Financial Statements........................................................................
Schedule III - Real Estate and Accumulated Depreciation...........................................................





                                                      SELECTED FINANCIAL DATA
                                          (in thousands except unit and properties data)

                                                                                                           Reckson Group
                                                                                                   --------------------------------
                                        Reckson Operating Partnership, L.P.

                                           For the year ended December 31,        For the Period   For the Period    For the year
                                    --------------------------------------------  June 3, 1995     January 1, 1995       Ended
                                                                                  to December 31   to June 2, 1995   ------------
                                           1998          1997          1996           1995 (1)           (1)             1994
                                    -------------------------------------------- ---------------   ----------------  -------------
                                                                                                   
Operating Data:

Revenues............................    $266,312      $153,348       $ 96,030       $ 38,$55         $   20,889        $  56,931
Total expenses......................     201,003       107,639         70,935         27,892             20,695           55,685
Income (loss) before distribution to
  preferred unit holders, minority
  interests and extraordinary items.      65,309        45,709         25,095         10,563                194            1,246
Minority interests..................       2,819           920            915            246                ---              ---
Extraordinary items - gain (loss)...      (1,993)       (2,808)        (1,259)        (6,022)               ---            4,434
Preferred distributions.............      14,244          ---            ---             ---                ---              ---
Net income available to common unit
  holders...........................      46,253        41,981         22,921          4,295                194            5,680

Per Unit Data: (2)
Net income per common unit:

  General Partner...................        $ .98        $ 1.06        $  .87        $   .22                ---              ---
  Limited Partners..................        $ .98        $ 1.03        $  .86        $   .19                ---              ---

Weighted average common units
outstanding
  General Partner...................   39,473,000    32,727,000    19,928,000     14,678,000                ---              ---
  Limited Partners..................    7,728,000     7,016,000     6,503,000      5,648,000                ---              ---

Balance Sheet Data:
  (period end)
Real estate, before accumulated
depreciation........................   $1,743,223    $1,015,282     $ 519,504     $  290,712                ---        $ 162,192
Total assets........................    1,854,520     1,113,105       543,391        242,540                ---          132,035
Mortgage notes payable..............      253,463       180,023       161,513         98,126                ---          180,286
Unsecured credit facility...........      465,850       210,250       108,500         40,000                ---              ---
Unsecured term loan.................       20,000           ---           ---            ---                ---              ---
Senior unsecured notes..............      150,000       150,000           ---            ---                ---              ---
Market value of equity (3)..........    1,332,882     1,141,592       653,606        303,943                ---              ---
Total market capitalization 
  including debt(3 and 4)...........    2,119,936     1,668,800       921,423        426,798                ---              ---

Other Data:

Funds from operations (5)...........     $ 98,501    $   69,619     $  40,938      $  17,190                ---              ---
Total square feet (at end of period)       21,000        13,645         8,800          5,430              4,529            4,529
Number of properties (at end of
  period)...........................          204           155           110             81                 72               72

(1)     Represents certain financial information on a consolidated historical basis for Reckson Operating Partnership, L. P., and 
        on a combined historical basis for the Reckson Group.
(2)     Based on the weighted average units outstanding for the period then ended.
(3)     Based on the market value of the Operating Partnership's common units, the stated value of the Operating Partnership's 
        preferred units and the number of units outstanding at the end of the period.
(4)     Debt amount is net of minority partners' proportionate share of Omni debt plus the Company's share of joint venture debt.
(5)     See "Management's Discussion and Analysis" for a discussion of funds from operations.





    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                                  OF OPERATIONS

     The following  discussion should be read in conjunction with the historical
financial  statements of Reckson  Operating  Partnership,  L. P. (the "Operating
Partnership") and related notes.

     The Operating  Partnership considers certain statements set forth herein to
be  forward-looking  statements  within  the  meaning  of  Section  27A  of  the
Securities Act of 1933, as amended,  and Section 21E of the Securities  Exchange
Act  of  1934,  as  amended,   with  respect  to  the  Operating   Partnership's
expectations for future periods. Certain forward-looking statements,  including,
without   limitation,   statements   relating  to  the  timing  and  success  of
acquisitions,  the  financing of the  Operating  Partnership's  operations,  the
ability to lease  vacant  space and the  ability to renew of relet  space  under
expiring leases, involve certain risks and uncertainties. Although the Operating
Partnership  believes that the  expectations  reflected in such  forward-looking
statements  are based on reasonable  assumptions,  the actual results may differ
materially  from  those  set  forth in the  forward-looking  statements  and the
Operating  Partnership  can  give no  assurance  that  its  expectation  will be
achieved.  Certain  factors  that  might  cause  the  results  of the  Operating
Partnership to differ  materially from those  indicated by such  forward-looking
statements include,  among other factors,  general economic conditions,  general
real estate  industry  risks,  tenant  default and  bankruptcies,  loss of major
tenants,   the  impact  of  competition  and  acquisition,   redevelopment   and
development risks, the ability to finance business  opportunities and local real
estate  risks such as an  oversupply  of space or a reduction in demand for real
estate in the Operating  Partnership's real estate markets.  Consequently,  such
forward-looking  statements  should be  regarded  solely as  reflections  of the
Operating  Partnership's  current operating and development plans and estimates.
These  plans  and  estimates  are  subject  to  revisions  from  time to time as
additional  information  becomes  available,  and actual results may differ from
those indicated in the referenced statements.

Overview and Background

     The Reckson Group, the predecessor to Reckson  Associates Realty Corp. (the
"Company"),  was engaged in the ownership,  management,  operation,  leasing and
development  of  commercial  real  estate  properties,  principally  office  and
industrial buildings,  and also owned certain undeveloped land located primarily
on Long Island, New York. The Operating Partnership commenced operations on June
2, 1995 and is the successor to the  operations of the Reckson  Group.  The sole
general partner in the Operating Partnership, the Company is a self administered
and self managed Real Estate  Investment  Trust  ("REIT").  During June 1995 the
Company  contributed  approximately  $162  million  in  cash  to  the  Operating
Partnership in exchange for an approximate 73% general partnership  interest. As
a result,  the Operating  Partnership  owned or had an interest in 72 properties
(including one joint venture property).

     The  Operating  Partnership  owns all of the  interests  in its real estate
properties  either  directly  or  through  Reckson FS  Limited  Partnership.  At
December  31,  1998,  the  Operating   Partnership  owned  204  properties  (the
"Properties"),   (including   two   joint   venture   properties)   encompassing
approximately  21.0 million  square  feet.  The  Properties  include 73 suburban
office  properties  containing  approximately  10.1  million  square  feet,  129
industrial properties containing  approximately 10.8 million square feet and two
retail properties containing 20,000 square feet.



     Since the IPO, the  Operating  Partnership  has acquired or  contracted  to
acquire  approximately  $1.14 billion of Class A suburban  office and industrial
properties  encompassing  approximately  12.8 million square feet located in the
New York Tri-State Area of Long Island,  Westchester,  Southern  Connecticut and
New Jersey.  In that regard,  the Operating  Partnership  has acquired 13 Office
Properties and 33 Industrial Properties  encompassing  approximately 2.1 and 2.6
million  square  feet,  respectively,  located on Long  Island for an  aggregate
purchase price of approximately  $302 million.  Since its initial  investment in
Westchester  the  Operating   Partnership  has  acquired  17  Office  Properties
encompassing   approximately  2.4  million  square  feet  and  three  Industrial
Properties  encompassing  approximately  163,000  square  feet for an  aggregate
purchase price of approximately  $304 million.  Since its initial  investment in
Southern   Connecticut  the  Operating   Partnership  has  acquired  two  Office
Properties  encompassing  approximately  325,000  square  feet for an  aggregate
purchase  price of  approximately  $61.3  million.  In May 1997,  the  Operating
Partnership acquired five Office Properties  encompassing  approximately 496,000
square  feet  located  in  New  Jersey  for  an  aggregate   purchase  price  of
approximately   $56.9  million  and,  in  connection   with  this   acquisition,
established its New Jersey Division.  Since its initial investment in New Jersey
the  Operating  Partnership  has  acquired  12  Office  Properties  encompassing
approximately   1.5  million  square  feet  and  seven   Industrial   Properties
encompassing  approximately  1.1 million  square feet for an aggregate  purchase
price of approximately $231.6 million.  Additionally,  the Operating Partnership
has invested  approximately  $52.1 million for  approximately  154 acres of land
located in Long Island, 32 acres of land located in Westchester and 380 acres of
land  located in New Jersey which allows for  approximately  4.3 million  square
feet of future development opportunities. In addition, the Operating Partnership
has  invested  approximately  $61.3  million  in certain  mortgage  indebtedness
encumbering  four  Class  A  office  properties  on  Long  Island   encompassing
approximately  577,000  square feet, a 825,000 square foot  industrial  building
located in New Jersey  and a 400 acre  parcel of land  located  New  Jersey.  On
January 6, 1998, the Operating  Partnership  made its initial  investment in the
Morris  Companies,  a New  Jersey  developer  and owner of "Big  Box"  warehouse
facilities.  The Morris Companies'  properties  include 23 industrial  buildings
encompassing  approximately  4.0 million  square feet.  In  connection  with the
transaction the Morris Companies  contributed 100% of their interests in certain
industrial properties to Reckson Morris Operating Partnership, L. P., ("RMI") in
exchange for operating  partnership units in RMI. The Operating  Partnership has
agreed to invest up to $150 million in the Morris Companies.  As of December 31,
1998, the Operating Partnership has invested  approximately $93.8 million for an
approximate 71.8% controlling  interest.  In addition, at December 31, 1998, the
Operating  Partnership  had  advanced  approximately  $31  million to the Morris
Companies  primarily to fund certain  construction  costs related to development
properties to be contributed to RMI.

     During 1997, the Company formed Reckson Service  Industries,  Inc.  ("RSI")
and Reckson Strategic Venture Partners,  LLC ("RSVP"). The Operating Partnership
owned a 95% non voting  common stock  interest in RSI through June 10, 1998.  On
June 11,  1998,  the  Operating  Partnership  distributed  its 95% common  stock
interest  in RSI of  approximately  $3  million to its  partners.  Additionally,
during June 1998, the Operating  Partnership  established a credit facility with
RSI (the"RSI  Facility") in the amount of $100 million for RSI's service  sector
operations and other general  corporate  purposes.  As of December 31, 1998, the
Operating  Partnership  had advanced $33.7 million under the RSI facility all of
which is  outstanding.  In  addition,  the  Operating  Partnership  approved the
funding  of  investments  of up to  $100  million  with or in  RSVP  (the  "RSVP
Commitment"),  through RSVP-controlled joint venture REIT-qualified  investments
or advances made to RSI under terms similar to the RSI Facility.  As of December
31,  1998,  approximately  $17.3  million  had been  invested  through  the RSVP
Commitment,  of which $10.1 million  represents  RSVP  controlled  joint venture
investments  and  $7.2  million  represents  advances  to  RSI  under  the  RSVP
Commitment.  Such amounts have been  included in investment in real estate joint
ventures and  investments  in and advances to affiliates,  respectively,  on the
Operating  Partnership's  balance  sheet.  RSI serves as the managing  member of
RSVP.  RSI invests in operating  companies  that  generally  provide  commercial
services to the RSI customer base which includes the tenants of RSI's  executive
suite  business and to  properties  owned by the Operating  Partnership  and its
tenants and third parties.  RSVP was formed to provide the Operating Partnership
with a research and  development  vehicle to invest in  alternative  real estate
sectors. RSVP invests primarily in real estate and real estate related operating
companies  generally  outside of the  Operating  Partnership's  core  office and
industrial  focus.  RSVP's  strategy is to identify  and  acquire  interests  in
established  entrepreneurial  enterprises with  experienced  management teams in
market  sectors  which are in the early  stages of their  growth  cycle or offer
unique circumstances for attractive investments as well as a platform for future
growth.



     The  Operating  Partnership  and RSI  have  entered  into  an  intercompany
agreement (the "Reckson Intercompany Agreement") to formalize their relationship
and to limit conflicts of interest.  Under the Reckson  Intercompany  Agreement,
RSI granted the Operating  Partnership a right of first  opportunity to make any
REIT  -qualified  investment  that becomes  available to RSI. In addition,  if a
REIT-qualified  investment opportunity becomes available to an affiliate of RSI,
including RSVP, the Reckson  Intercompany  Agreement  requires such affiliate to
allow the Operating Partnership to participate in such opportunity to the extent
of RSI's interest.

     Under the Reckson Intercompany Agreement, the Operating Partnership granted
RSI a right of first opportunity to provide commercial services to the Operating
Partnership  and  its  tenants.  RSI  will  provide  services  to the  Operating
Partnership at rates and on terms as attractive as either the best available for
comparable  services in the market or those offered by RSI to third parties.  In
addition,  the  Operating  Partnership  will give RSI access to its tenants with
respect to commercial  services  that may be provided to such tenants  and,under
the Reckson Intercompany Agreement, subject to certain conditions, the Operating
Partnership  granted  RSI a right of first  refusal  to become the lessee of any
real property acquired by the Operating Partnership if the Operating Partnership
determines  that,  consistent with Reckson's status as a REIT, it is required to
enter into a "master" lease agreement.

     On August 27, 1998 the Operating  Partnership  announced the formation of a
joint   venture  with  RSVP  and  the   Dominion   Group,   an   Oklahoma-based,
privately-owned group of companies that focuses on the development,  acquisition
and  ownership  of  government   occupied  office   buildings  and  correctional
facilities.  The new venture,  Dominion Properties LLC (the "Dominion Venture"),
is owned by Dominion  Venture  Group LLC, and by a subsidiary  of the  Operating
Partnership. The Dominion Venture will engage primarily in acquiring, developing
and/or  owning  government-occupied  office  buildings  and  privately  operated
correctional facilities.  Under the Dominion Venture's operating agreement, RSVP
is to invest up to $100 million,  some of which may be invested by the Operating
Partnership ( the "RSVP Capital").  The initial contribution of RSVP Capital was
approximately $39 million of which approximately $10.1 million was invested by a
subsidiary of the Operating Partnership.  The Operating Partnership's subsidiary
funded its capital  contribution through the RSVP Commitment.  In addition,  the
Operating  Partnership  advanced  approximately  $2.9 million to RSI through the
RSVP  Commitment  for an  investment  in RSVP which was then invested on a joint
venture basis with the Dominion  Group in certain  service  business  activities
related to the real estate  activities.  As of December 31,  1998,  the Dominion
Venture had investments in 11 government  office  buildings and two correctional
facilities.

     In July 1998,  the Company formed a joint  venture,  Metropolitan  Partners
LLC, a Delaware limited liability company  ("Metropolitan"),  with Crescent Real
Estate Equities  Company,  a Texas real estate  investment  trust  ("Crescent").
Pursuant to a merger agreement executed on July 9, 1998 and amended and restated
on August 11, 1998 (the "Initial Merger Agreement")  between  Metropolitan,  the
Company, Crescent and Tower Realty Trust Inc., a Maryland corporation ("Tower"),
Metropolitan  agreed,  subject  to  the  terms  and  conditions  of  the  Merger
Agreement, to purchase the common stock of Tower.

     Prior  to the  execution  of the  Initial  Merger  Agreement,  Metropolitan
identified   certain   potential  tax  issues  regarding   Tower's   operations.
Metropolitan  entered into the Initial  Merger  Agreement  only after Tower made
detailed  representations and warranties  purporting to address these issues. In
the course of due  diligence,  however,  Metropolitan,  the Company and Crescent
discovered  that these  representations  and  warranties  may not be correct and
discussed these concerns with Tower,  specifically advising Tower that they were
not terminating  the Initial Merger  Agreement at that time.  Metropolitan,  the
Company and Crescent  invited Tower to respond to these  concerns.  However,  on
November 2, 1998,  Tower filed a complaint in the Supreme  Court of the State of
New York alleging Metropolitan,  the Company and Crescent willfully breached the
Initial Merger Agreement.  Tower, in the complaint,  was seeking declaratory and
other  relief,  including  damages  of not less than $75  million  and  specific
performance by Metropolitan, the Company and Crescent of their obligations under
the Initial Merger Agreement.



     On December 8, 1998,the Company,  Metropolitan and Tower executed a revised
merger agreement (the "Revised Merger Agreement"),  pursuant to which Tower will
be merged (the  "Merger") into  Metropolitan,  with  Metropolitan  surviving the
Merger.  Concurrently with the Merger, Tower Realty Operating Partnership,  L.P.
("Tower  OP") will be merged with and into a  subsidiary  of  Metropolitan.  The
consideration  to be issued in the mergers will be comprised of (i) 25% cash and
(ii) 75% of shares of Class B  Exchangeable  Common  Stock,  par value  $.01 per
share, of the Company (the "Class B Common Stock"), or in certain  circumstances
described  below,  shares  of Class B Common  Stock and  unsecured  notes of the
Operating  Partnership.  The Company controls  Metropolitan and owns 100% of the
common equity; Crescent owns a preferred equity investment in Metropolitan.  The
Revised Merger  Agreement  replaces the Initial Merger  Agreement (which at that
time was a 50/50 joint venture between the Company and Crescent) relating to the
acquisition by Metropolitan of Tower for $24 per share.

     Pursuant to the terms of the Revised Merger Agreement, holders of shares of
outstanding common stock of Tower ("Tower Common Stock"),  and outstanding units
of  limited  partnership  interest  of Tower OP will have the option to elect to
receive cash or shares of Class B Common Stock, subject to proration.  Under the
terms of the  transaction,  Metropolitan  will effectively pay for each share of
Tower Common Stock and each unit of limited partnership interest of Tower OP the
sum of (i) $5.75 in cash,  and (ii)  0.6273 of a share of Class B Common  Stock.
The shares of Class B Common  Stock are  entitled  to receive an initial  annual
dividend of $2.24 per share and is subject to adjustment annually. The shares of
Class B Common Stock are  exchangeable at any time, at the option of the holder,
into an equal number of shares of common stock, par value $.01 per share, of the
Company  subject to customary  antidilution  adjustments.  The  Company,  at its
option,  may redeem any or all of the Class B Common  Stock in  exchange  for an
equal number of shares of the Company's  common stock at any time  following the
four year,  six-month  anniversary  of the issuance of the Class B Common Stock.
The Company's Board of Directors have recommended to the Company's  stockholders
the  approval of a proposal to issue a number of shares of Class B Common  Stock
equal to 75% of the sum of (i) the  number  of  outstanding  shares of the Tower
Common Stock and (ii) the number of Tower OP limited  partnership units, in each
case, at the effective time of the mergers.  If the  stockholders of the Company
do not approve the issuance of the Class B Common Stock as proposed, the Revised
Merger Agreement provides that approximately one-third of the consideration that
was to be paid in the form of Class B Common  Stock will be  replaced  by senior
unsecured notes of the Operating Partnership,  which notes will bear interest at
the rate of 7% per  annum  and have a term of ten  years.  In  addition,  if the
stockholders  of the Company do not approve the issuance of Class B Common Stock
as proposed  and the Board of  Directors  of the Company  withdraws or amends or
modifies  in any  material  respect  its  recommendation  for,  approval of such
proposal,  then the total principal amount of notes to be issued and distributed
in the Merger will be increased by $15 million.

     Simultaneously   with  the  execution  of  the  Revised  Merger  Agreement,
Metropolitan and Tower executed and consummated a stock purchase  agreement (the
"Series A Stock Purchase  Agreement")  pursuant to which Metropolitan  purchased
from Tower  approximately  2.2 million shares of Series A Convertible  Preferred
Stock, par value $.01 per share, of Tower (the "Tower Preferred Stock"),  for an
aggregate purchase price of $40 million, $30 million of which was funded through
a capital  contribution by the Company to Metropolitan  and which is included in
prepaid  expenses and other assets on the  Company's  balance  sheet.  The Tower
Preferred  Stock has a stated  value of $18.44 per share and is  convertible  by
Metropolitan  into an equal  number of shares of Tower  Common  Stock at anytime
after the  termination,  if any, of the  Revised  Merger  Agreement,  subject to
customary  antidilution  adjustments.  The Tower  Preferred Stock is entitled to
receive  dividends  equivalent to those paid on the Tower Common  Stock.  If the
Revised  Merger   Agreement  is  not   consummated  and  a  court  of  competent
jurisdiction  issues  a  final,  non-appealable  judgment  determining  that the
Company and  Metropolitan are obligated to consummate the Merger but have failed
to do so, or determining that the Company and  Metropolitan  failed to use their
reasonable  best efforts to take all actions  necessary to cause certain closing
conditions  to be  satisfied,  Metropolitan  is obligated to return to Tower $30
million of the Series A Preferred Stock.



     Immediately  prior to the  execution of the Revised  Merger  Agreement  and
consummation of the Series A Stock Purchase Agreement,  the Company and Crescent
executed  the amended and restated  operating  agreement  of  Metropolitan  (the
"Metropolitan  Operating  Agreement")  pursuant  to  which  Crescent  agreed  to
purchase a convertible  preferred membership interest (the "Preferred Interest")
in  Metropolitan  for an aggregate  purchase  price of $85 million.  Ten million
dollars  of the  purchase  price  was  paid by  Crescent  to  Metropolitan  upon
execution of the Metropolitan Operating Agreement to acquire the Tower Preferred
Stock and the  remaining  portion is payable  prior to the closing of the Merger
and is expected  to be used to fund a portion of the cash merger  consideration.
Upon closing of the Merger, Crescent's investment will accrue distributions at a
rate of 7.5% per annum for a two-year period and may be redeemed by Metropolitan
at any time during that period for $85  million,  plus an amount  sufficient  to
provide a 9.5%  internal  rate of return.  If  Metropolitan  does not redeem the
preferred  interest,  upon the expiration of the two-year period,  Crescent must
convert  its  interest  into  either  (i)  a  common   membership   interest  in
Metropolitan or (ii) shares of the Company's  common stock at a conversion price
of $24.61.

     In connection with the revised transaction, Tower, the Company and Crescent
have  exchanged  mutual  releases for any claims  relating to the Initial Merger
Agreement.

     The  Company  anticipates  that it will  dispose of the assets in the Tower
portfolio  located  outside  of New  York.  In  addition,  the  Company  is also
considering  the disposition of certain of the Tower  properties  located in New
York.

     The market capitalization of the Operating Partnership at December 31, 1998
was   approximately   $2.2   billion.   The   Operating   Partnership's   market
capitalization  is calculated based on the value of the Operating  Partnership's
common units (which, for this purpose, is assumed to be the same per unit as the
value of a share of the  Company's  common  stock) and the stated  values of the
Operating  Partnership's  preferred  units and the $867 million  (including  its
share of joint  venture  debt and net of minority  partners'  interest)  of debt
outstanding at December 31, 1998. As a result, the Operating Partnership's total
debt  to  total  market  capitalization  ratio  at  December  31,  1998  equaled
approximately 39.4%.

Results of Operations

     The Operating  Partnership's  total  revenues  increased by $113 million or
73.7% from 1997 to 1998 and $57.3  million or 60% from 1996 to 1997.  The growth
in total revenues is substantially  attributable to the Operating  Partnership's
acquisition  of 47  properties  and  the  development  of two  properties  which
aggregate  approximately  7.4 million square feet in 1998, the acquisition of 45
properties  comprising  approximately  4.8  million  square feet in 1997 and the
acquisition of 29 properties comprising approximately 3.3 million square feet in
1996.  Total revenues were also positively  effected by increases in occupancies
in our  properties  and to  increases in rental  rates  throughout  our markets.
Property operating revenues, which include base rents and tenant escalations and
reimbursements  ("Property  Operating  Revenues") increased by $108.7 million or
75.6%  from  1997 to 1998 and $51  million  or 55% from  1996 to 1997.  The 1998
increase  in  Property   Operating   Revenues  is   comprised  of  $2.1  million
attributable  to increases in rental rates and changes in occupancies and $106.6
million attributable to acquisitions of properties. The remaining balance of the
increase in total  revenues in 1998 is  primarily  attributable  to increases in
interest income on the Operating Partnership's investments in mortgage notes and
notes receivable and income related to the Operating  Partnership's  interest in
its service companies  primarily  attributable to the executive center business.
The 1997  increase in Property  Operating  Revenues is comprised of $2.1 million
attributable  to increases in rental rates and changes in occupancies  and $48.9
million attributable to acquisitions of properties. The remaining balance of the
increase in total  revenues in 1997 is  substantially  attributable  to interest
income on the Operating  Partnership's  investments  in mortgage notes and notes
receivables.  The  increase  from 1996 to 1997 was offset by a  decrease  in the
equity in  earnings  of  service  companies  as a result of the  management  and
construction  companies  focusing  most  of  their  resources  on the  Operating
Partnership's core portfolio and redevelopment  opportunities  rather than third
party  services.  The  Operating  Partnership's  base rent was  increased by the
impact of the  straight-line  rent  adjustment  by $7.7  million  in 1998,  $4.5
million in 1997 and $3.8 million in 1996.



     Property operating expenses,  real estate taxes and ground rents ("Property
Expenses")  increased by $34.4  million  from 1997 to 1998 and by $16.8  million
from 1996 to 1997.  These  increases  are primarily  due to the  acquisition  of
properties. Gross operating margins (defined as Property Operating Revenues less
Property  Expenses,  taken as a percentage of Property  Operating  Revenues) for
1998, 1997and 1996 were 66.2%, 64.7% and 63.4%,  respectively.  The year to year
increases in gross operating  margins results from increases  realized in rental
rates,  the  Operating   Partnership's  ability  to  realize  certain  operating
efficiencies  as a result of  operating a larger  portfolio of  properties  with
concentrations   of  properties  in  office  and  industrial  parks  or  in  its
established  sub-markets,  a stable operating cost environment and the increased
ownership of net leased properties.

     Marketing,  general and administrative expenses were $15.0 million in 1998,
$8.0  million  in 1997 and $5.9  million in 1996.  The  increase  in  marketing,
general and  administrative  expenses is due to the increased  costs of managing
the  acquisition  properties,  the cost of opening and maintaining the Operating
Partnership's Westchester, Southern Connecticut and New Jersey divisions and the
increase in corporate  management and  administrative  costs associated with the
growth  of the  Operating  Partnership.  The  Operating  Partnership's  business
strategy has been to expand into the other  Tri-State  Area suburban  markets by
applying its standards for high quality office and industrial  space and premier
tenant  service  to  its  New  Jersey,   Westchester  and  Southern  Connecticut
divisions.  In doing this, the Operating  Partnership seeks to create a superior
franchise  value that it enjoys in its home base of Long  Island.  Over the past
three years the Operating  Partnership  has supported  this effort by increasing
the marketing  programs in the other divisions and  strengthening  the resources
and  operating  systems  in  these  divisions.  The cost of  these  efforts  are
reflected in both the marketing,  general and administrative  expense as well as
the  revenue  growth  of  the  Operating  Partnership.  Marketing,  general  and
administrative  expenses as a percentage  of total  revenues were 5.64% in 1998,
5.23% in 1997 and 6.18% in 1996.

     Interest expense was $47.8 million in 1998, $21.6 million in 1997 and $13.3
million in 1996. The increase of $26.2 million from 1997 to 1998 is attributable
to (i) an  increase in  mortgage  debt  including  approximately  $14.8  million
resulting  from the Morris  acquisition  in January  1998,  approximately  $45.1
resulting from the Cappelli acquisition in April 1998 and the refinancing of 395
North Service Road in the amount $21.4 million in October 1998; (ii) a full year
of interest on the Operating  Partnership's  senior unsecured notes (the "Senior
Unsecured  Notes")  and (iii) an  increased  average  balance  on the  Operating
Partnership's credit facilities.  The increase of $8.3 million from 1996 to 1997
is attributable to an increase in mortgage debt including a $50 million mortgage
note incurred in connection  with the  acquisition of Landmark Square in October
1996,  the  refinancing  of Omni in the amount of $58  million  in August  1997,
increased  interest cost  attributable  to an increased  average  balance on the
Operating   Partnership's  credit  facilities  and  interest  on  the  Operating
Partnership's  $150 million of Senior  Unsecured  Notes.  The  weighted  average
balance outstanding on the Operating  Partnership's credit facilities was $377.9
million for 1998, $103.2 million for 1997and $71.2 million for 1996.

     Included in amortization expense is amortized finance costs of $1.6 million
in 1998,  $.80  million in 1997 and $.53  million in 1996.  The increase of $.80
million from 1997 to 1998 is primarily  attributable  to loan costs  incurred in
connection with the Operating Partnership's $500 million credit facility and $50
million term loan. The increase of $.27 million from 1996 to 1997 was the result
of the  amortization of financing costs  associated with the credit  facilities,
the  Landmark  Square  mortgage,  the Omni  refinanced  mortgage  and the Senior
Unsecured Notes.

     Extraordinary  items, net of minority  interest  resulted in a $1.7 million
loss in 1998, a $2.2  million  loss in 1997and a $.9 million  loss in 1996.  The
extraordinary  items were all attributed to the  write-offs of certain  deferred
loan costs incurred in connection with the Operating Partnership's restructuring
of its credit facilities.



Liquidity and Capital Resources

Summary of Cash Flows

     Net cash provided by operating  activities  totaled $119.2 million in 1998,
$75.8  million in 1997 and $41.8  million in 1996.  Increases for each year were
primarily attributable to the growth in cash flow provided by the acquisition of
properties  and to a lesser extent from interest  income from mortgage notes and
notes receivable.

     Net cash used by  investing  activities  totaled  $613.3  million  in 1998,
$549.3  million in  1997 and  $274.6  million  in 1996.  Cash used in  investing
activities related primarily to investments in real estate properties  including
development  costs and  investments in mortgage notes and notes  receivable.  In
addition,  in December 1998, the Operating  Partnership purchased $40 million of
preferred  stock of Tower  Realty  Trust,  Inc.  in  connection  with the Merger
transaction.

     Net cash provided by financing activities totaled $474.6 million in 1998,
$482.9 million in 1997 and $238.3 million in 1996.  Cash provided by financing
activities  during 1998, 1997 and 1996 was primarily  attributable to proceeds
from partner  contributions  and draws on the Operating  Partnership's  credit
facilities and  additionally,  in 1998 the issuance of preferred  units and in
1997 proceeds from the issuance of Senior Unsecured Notes.

Investing Activities

     During 1998, the Operating  Partnership  acquired (i) on Long Island, three
office properties encompassing an aggregate of approximately 674,000 square feet
for  approximately  $63.4  million and two  industrial  properties  encompassing
approximately  200,000  square  feet for  approximately  $4.4  million;  (ii) in
Westchester,  six office properties  encompassing  approximately  980,000 square
feet for approximately $173 million; (iii) in Connecticut, two office properties
encompassing an aggregate of approximately 325,000 square feet for approximately
$61.3  million  and  (iv)  in  New  Jersey,   four  Class  A  office  properties
encompassing  approximately  522,000 square feet for approximately $90.9 million
and six industrial properties encompassing approximately 985,000 square feet for
approximately  $41.6  million.  In addition,  on January 6, 1998,  the Operating
Partnership  invested  approximately  $72  million  and  acquired a  controlling
interest in the Morris Companies,  an owner and operator of "Big Box" industrial
properties located in Secaucus, New Jersey.

     In June 1998, the Operating Partnership established the RSI credit facility
in the amount of $100 million for RSI's service sector  operations and for other
general corporate purposes. As of December 31, 1998, approximately $33.7 million
had been  advanced  to RSI under  this  facility.  In  addition,  the  Operating
Partnership approved a commitment to fund investments of up to $100 million with
or in RSVP.  As of December 31, 1998,  the  Operating  Partnership  has invested
approximately $17.3 million under this commitment.

Financing Activities

     In connection with the $173 million acquisition of the Cappelli Portfolio
and the $10 million purchase of the Cappelli  interest in 360 Hamilton Avenue,
the Operating  Partnership issued series B, C and D preferred  operating units
in the amount of approximately $42.5 million.  The series B, C and D preferred
units have a current  distribution rate of 6.25% and are convertible to common
units at  conversion  prices  of  approximately  $32.51,  $29.39  and  $29.12,
respectively for each preferred unit.



     During  the  year  ended  Decemeber   31,1998,   the  Company   contributed
approximately  $53 million in cash to the Operating  Partnership in exchange for
2,265,261  common  units.  Proceeds  from the  contributions  were used to repay
borrowings under the credit facilities.

     Additionally, during April 1998, the Company contributed approximately $221
million  to the  Operating  Partnership  in  exchange  for  9,200,000  Series  A
preferred units.  The Series A preferred units have a liquidation  preference of
$25 per  unit,  a  distribution  rate of  7.625  % and  are  convertible  to the
Operating  Partnership's common units at a conversion rate of .8769 common units
for each preferred unit. Net proceeds from the  contribution  were used to repay
borrowings under credit facilities.

     On July 23,  1998,  the  Operating  Partnership  obtained a three year $500
million unsecured  revolving credit facility (the "Credit  Facility") from Chase
Manhattan  Bank,  Union Bank of  Switzerland  and PNC Bank as co-managers of the
credit  facility  bank  group.  Interest  rates on  borrowings  under the Credit
Facility are priced off of LIBOR plus a sliding  scale  ranging from 112.5 basis
points  to 137.5  basis  points  based on the  leverage  ratio of the  Operating
Partnership.   Upon the  Operating  Partnership  receiving an  investment  grade
rating on its senior  unsecured  debt by two  rating  agencies,  the  pricing is
adjusted  based off of LIBOR  plus a scale  ranging  from 65 basis  points to 90
basis  points  depending  upon the  rating.  The Credit  Facility  replaced  and
restructured the Operating Partnership `s existing $250 million unsecured credit
facility  and $200  million  unsecured  bridge  facility.  As a result,  certain
deferred loan costs incurred in connection  with those  facilities  were written
off. Such amount has been  reflected as an  extraordinary  loss on the Operating
Partnership `s statement of operations.  The Operating  Partnership utilizes the
Credit  Facility  primarily to finance the  acquisitions of properties and other
real estate investments, fund its development activities and for working capital
purposes. At December 31, 1998, the Operating Partnership had availability under
the Credit Facility to borrow an additional $8.1 million (net of $26.1million of
outstanding undrawn letters of credit).

     On  December 4, 1998,  the  Operating  Partnership  obtained a one year $50
million  unsecured  term loan (the "Term Loan") from Chase  Manhattan  Bank.  On
January 13, 1999, the Operating  Partnership  and Chase Manhattan Bank increased
the total  availability  under the Term Loan to $75 million.  Interest  rates on
borrowings  under the Term Loan are priced  off LIBOR plus 150 basis  points for
the first nine months and 175 basis points for the remaining  three  months.  At
December 31, 1998, the Operating  Partnership  had  availability  under the Term
Loan to borrow an  additional  $30 million which was increased to $55 million on
January 13, 1999.

Capitalization

     The Operating Partnership's  indebtedness at December 31, 1998 totaled $867
million  (including  its  share of joint  venture  debt and net of the  minority
partners'  interests)  and was comprised of $464 million  outstanding  under the
Credit Facility,  $20 million  outstanding  under the Term Loan, $150 million of
Senior Unsecured Notes and approximately $233 million of mortgage  indebtedness.
Based  on  the   Operating   Partnership's   total  market   capitalization   of
approximately $2.2 billion at December 31, 1998,  (calculated based on the value
of the Operating Partnership's common units(which,  for this purpose, is assumed
to be the same per unit as the value of a share of the Company's  common stock),
the stated value of the Operating  Partnership's preferred units), the Operating
partnership's  debt  represented   approximately   39.4%  of  its  total  market
capitalization.



     Historically,  rental revenue has been the principal source of funds to pay
operating   expenses,   debt   service  and  capital   expenditures,   excluding
non-recurring capital expenditures of the Operating  Partnership.  The Operating
Partnership's  investments  in mortgage  notes,  RSVP and advances under the RSI
facility are expected to produce cash flows. The Operating  Partnership  expects
to meet its short term  liquidity  requirements  generally  through its net cash
provided by operating  activities  along with the Credit  Facility and Term Loan
previously  discussed.  The Operating Partnership expects to meet certain of its
financing  requirements  through long-term secured and unsecured  borrowings and
the  issuance  of  debt  securities  and  additional  equity  securities  of the
Operating Partnership.  The Operating Partnership also expects certain strategic
dispositions  of assets or  interests  in assets to  generate  cash  flows.  The
Operating   Partnership  will  refinance   existing  mortgage   indebtedness  or
indebtedness  under the Credit  Facility at maturity or retire such debt through
the issuance of additional debt securities or additional equity securities.  The
Operating  Partnership  anticipates  that the  current  balance of cash and cash
equivalents  and cash  flows  from  operating  activities,  together  with  cash
available  from  borrowings and debt and equity  offerings,  will be adequate to
meet the capital and liquidity requirements of the Operating Partnership in both
the short and long-term.

Inflation

     Certain  office  leases  provide for fixed base rent  increases  or indexed
escalations. In addition, certain office leases provide for separate escalations
of real estate  taxes and  electric  costs over a base  amount.  The  industrial
leases also generally provide for fixed base rent increases, direct pass through
of certain  operating  expenses and separate real estate tax  escalation  over a
base amount. The Operating  Partnership believes that inflationary  increases in
expenses  will  generally be offset by  contractual  rent  increases and expense
escalations described above.

     The Credit  Facility  and the Term Loan bear  interest at a variable  rate,
which will be  influenced  by  changes in  short-term  interest  rates,  and are
sensitive to inflation.

Impact of Year 2000

     Some of the Operating  Partnership's  older computer  programs were written
using two digits  rather than four to define the  applicable  year. As a result,
those  computer  programs have  time-sensitive  software that  recognizes a date
using "00" as the year 1900 rather than the year 2000. This could cause a system
failure or miscalculation  causing disruptions of operations,  including,  among
other  things,  a  temporary  inability  to process  transactions,  or engage in
similar normal business activities.

     The Operating  Partnership has completed an assessment to modify or replace
portions of its software so that its computer  systems  will  function  properly
with  respect to dates in the year 2000 and  thereafter.  Currently,  the entire
property  management  system  is year  2000  compliant  and has been  thoroughly
tested. Since the Operating Partnership's  accounting software is maintained and
supported by an unaffiliated third party, the total year 2000 project cost as it
relates to the accounting software is estimated to be minimal.

     The year 2000 project is estimated to be completed  not later than July 31,
1999,  which  is prior  to any  anticipated  impact  on its  operating  systems.
Additionally,  the  Operating  Partnership  has  received  assurances  from  its
contractors  that all of the Operating  Partnership's  building  management  and
mechanical  systems are currently  year 2000 compliant or will be made compliant
prior to any impact on those systems.  However, the Operating Partnership cannot
guarantee that all contractors  will comply with their assurances and therefore,
the Operating  Partnership  may not be able to determine year 2000 compliance of
those  contractors.  At that time, the Operating  Partnership will determine the
extent to which the Operating  Partnership will be able to replace non compliant
contractors.  The  Operating  Partnership  believes that with  modifications  to
existing software and conversions to new software,  the year 2000 issue will not
pose significant operational problems for its computer systems. However, if such
modifications  and  conversions are not made, or are not completed  timely,  the
year 2000 issue could have a material  impact on the operations of the Operating
Partnership.



     To date, the Operating Partnership has expended  approximately $375,000 and
expects to expend an additional one million dollars in connection with upgrading
building  management,  mechanical and computer systems. The costs of the project
and the date on which the  Operating  Partnership  believes it will complete the
year 2000  modifications  are based on management's  best estimates,  which were
derived utilizing numerous assumptions of future events, including the continued
availability of certain  resources and other factors.  However,  there can be no
guarantee that these  estimates will be achieved and actual results could differ
materially  from those  anticipated.  Specific  factors  that  might  cause such
material differences include, but are not limited to, the availability and costs
of  personnel  trained in this area,  the  ability  to locate  and  correct  all
relevant computer codes, and similar uncertainties.

     In a "worst case scenario", the Operating Partnership believes that failure
of the building  management  and  mechanical  systems to operate  properly would
result in inconveniences to the building tenants which might include no elevator
service,  lighting  or entry and egress.  In this case,  the  management  of the
Operating  Partnership  would manually override such systems in order for normal
operations to resume. Additionally, in a "worst case scenario" of the failure of
the third party to deliver,  on a timely basis,  the  necessary  upgrades to the
accounting  software,  the  Operating  Partnership  would be required to process
transactions,  such  as  the  issuance  of  disbursements,   manually  until  an
alternative system was implemented.

     If the Operating  Partnership is not successful in implementing  their year
2000 compliance  plan, the Operating  Partnership may suffer a material  adverse
impact on their  consolidated  results of operations  and  financial  condition.
Because of the  importance  of  addressing  the year 2000 issue,  the  Operating
Partnership  expects to develop  contingency  plans if they  determine  that the
compliance plans will not be implemented by July 31, 1999.



Funds From Operations

     Management  believes that funds from  operations  ("FFO") is an appropriate
measure  of  performance  of an equity  REIT.  FFO is  defined  by the  National
Association  of Real Estate  Investment  Trusts  (NAREIT) as net income or loss,
excluding gains or losses from debt restructurings and sales of properties, plus
depreciation  and  amortization,   and  after  adjustments  for   unconsolidated
partnerships  and joint  ventures.  FFO does not represent  cash  generated from
operating activities in accordance with generally accepted accounting principles
and is not  indicative of cash  available to fund cash needs.  FFO should not be
considered  as an  alternative  to net income as an indicator  of the  Operating
Partnership's  operating  performance  or as an  alternative  to cash  flow as a
measure of  liquidity.  (See Selected  Financial  Data).  In March 1995,  NAREIT
issued a "White Paper" analysis to address certain interpretive issues under its
definition  of FFO.  The White  Paper  provides  that  amortization  of deferred
financing costs and  depreciation of non-rental real estate assets are no longer
to be added back to net income to arrive at FFO.

     Since all companies and analysts do not calculate FFO in a similar fashion,
the  Operating  Partnership's  calculation  of FFO  presented  herein may not be
comparable to similarly titled measures as reported by other companies.

The following  table presents the Operating  Partnership's  FFO  calculation (in
thousands):



                                                            Year Ended Decmeber 31,
                                     -----------------------------------------------------------------------
                                                       1998                    1997                   1996
                                                       ----                    ----                   ----
                                                                                          
Income before extraordinary items                   $ 48,246                 $44,789                $24,180
Less:
   Extraordinary loss ................                 1,993                   2,808                  1,259
                                                    --------                 -------                -------
Net Income............................                46,253                  41,981                 22,921
Adjustment for Funds From Operations:
Add:
   Depreciation and Amortization......                51,424                  26,834                 17,429
   Minority interests in
   consolidated partnerships..........                 2,819                     920                    915
   Extraordinary loss.................                 1,993                   2,808                  1,259
Less:
   Gain on sale of property...........                   ---                     672                    ---
   Amount distributed to minority
   partners in consolidated
   partnerships.......................                 3,988                   2,252                  1,586
                                                    --------                   -----                -------
Funds From Operations (FFO)........                 $ 98,501                 $69,619                $40,938
                                                    ========                 =======                =======
Weighted average units outstanding                    47,201                  39,743                 26,431
                                                    ========                 =======                =======




                         REPORT OF INDEPENDENT AUDITORS

To the Partners
Reckson Operating Partnership, L. P.

     We have audited the  accompanying  consolidated  balance  sheets of Reckson
Operating  Partnership,  L. P. (the "Operating  Partnership") as of December 31,
1998 and 1997,  and the related  consolidated  statements  of income,  partners'
capital, and cash flows for each of the three years in the period ended December
31 1998. We have also audited the  financial  statement  schedule  listed in the
Index.  These  financial  statements  and financial  statement  schedule are the
responsibility of the Operating Partnership's management.  Our responsibility is
to express an opinion on these  financial  statements  and  financial  statement
schedule based on our audits.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all  material  respects,  the  consolidated  financial  position  of  Reckson
Operating Partnership, L. P. at December 31, 1998 and 1997, and the consolidated
results of its  operations and its cash flows for each of the three years in the
period ended December 31, 1998 in conformity with generally accepted  accounting
principles.  Also, in our opinion,  the financial statement schedule referred to
above, when considered in relation to the basic financial  statements taken as a
whole,  presents  fairly,  in all material  respects,  the information set forth
therein.

                                            ERNST & YOUNG LLP

New York, New York
February 11, 1999

                      RECKSON OPERATING PARTNERSHIP, L. P.
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)



                                                                                          December 31,
                                                                                --------------------------------
                                                                                     1998              1997
                                                                                ---------------  ---------------
                                                                                           
ASSETS
Commercial real estate properties, at cost (Notes 2, 3, 5, 7 and 8 )
   Land.......................................................................  $       212,540     $  138,526
   Buildings and improvements.................................................        1,372,549        818,229
Developments in progress:
   Land.......................................................................           69,143         36,857
   Development costs..........................................................           82,901         17,616
Furniture, fixtures and equipment.............................................            6,090          4,054
                                                                                ---------------  ---------------
                                                                                      1,743,223      1,015,282
      Less accumulated depreciation...........................................         (159,049)      (111,068)
                                                                                ---------------  ---------------
                                                                                      1,584,174        904,214

Investments in real estate joint ventures.....................................           15,104          7,223
Investment in mortgage notes and notes receivable (Note 8)....................           99,268        104,509
Cash and cash equivalents (Note 12)...........................................            2,228         21,676
Tenant receivables............................................................            5,159          4,975
Investments in and advances to affiliates (Note 7)............................           53,154         18,090
Deferred rent receivable......................................................           22,526         14,973
Prepaid expenses and other assets (Notes 7 and 8).............................           46,372         13,705
Contract and land deposits and pre-acquisition costs..........................            2,253          7,559
Deferred lease and loan costs, less accumulated amortization of $18,170
  and  $14,844  respectively..................................................           24,282         16,181
                                                                                ---------------  ---------------
   Total Assets...............................................................  $     1,854,520     $1,113,105
                                                                                ===============  ===============

LIABILITIES
Mortgage notes payable (Note 2)...............................................  $       253,463     $  180,023
Unsecured credit facility (Notes 3 and 12)....................................          465,850        210,250
Unsecured term loan (Note 3)..................................................           20,000           ---
Senior unsecured notes ( Note 4)..............................................          150,000        150,000
Accrued expenses and other liabilities (Note 5)...............................           48,384         30,799
Distributions payable.........................................................           19,663            120
Affiliate payables (Note 7)...................................................            2,395          1,764
                                                                                ---------------  ---------------
   Total Liabilities..........................................................          959,755        572,956
                                                                                ---------------  ---------------

Commitments and other comments (Notes 9, 10, and 12)..........................             ---            ---

Minority interests in consolidated partnerships                                          52,173          7,697
                                                                                ---------------  ---------------

PARTNERS' CAPITAL (Note 6)

Preferred Capital, 9,234,518 and --- units outstanding, respectively..........          263,126          ---
General Partner's Capital, 40,035,419 and 37,770,158 units
  outstanding,  respectively..................................................          485,341        446,702
Limited Partners' Capital, 7,764,630 and 7,218,688 units
  outstanding,  respectively..................................................           94,125         85,750
                                                                                ---------------  ---------------
   Total Partners' Capital....................................................          842,592        532,452

      Total Liabilities and Partners' Capital.................................  $     1,854,520     $1,113,105
                                                                                ===============  ===============



                (see accompanying notes to financial statements)

                      RECKSON OPERATING PARTNERSHIP, L. P.
                        CONSOLIDATED STATEMENTS OF INCOME
                        (IN THOUSANDS, EXCEPT UNIT DATA)





                                                                  For the year ended December 31,
                                                  -----------------------------------------------------------------
                                                           1998                    1997                 1996
                                                  ----------------------- --------------------- -------------------
                                                                                    

REVENUES (Note 10):
Base rents.......................................            $224,703           $128,778              $82,150
Tenant escalations and reimbursements............              27,744             14,981               10,628
Equity in earnings of service companies..........               1,233                 55                1,031
Equity in earnings of real estate joint
  ventures.......................................                 603                459                  266
Interest income on mortgage notes and                    
  notes receivable...............................               7,739              5,437                  ---
Investment and other income (Note 8).............               4,290              3,638                1,955
                                                  ----------------------- --------------------- -------------------
    Total Revenues...............................             266,312            153,348               96,030
                                                  ----------------------- --------------------- -------------------
EXPENSES:
Property operating expenses......................              47,919             28,943               18,959
Real estate taxes................................              35,541             20,579               13,935
Ground rents.....................................               1,761              1,269                1,107
Marketing, general and administrative............              15,030              8,026                5,933
Interest.........................................              47,795             21,585               13,331
Depreciation and amortization....................              52,957             27,237               17,670
                                                  ----------------------- --------------------- -------------------
Total Expenses..................................              201,003            107,639               70,935
                                                  ----------------------- --------------------- -------------------

Income before distributions to preferred
  unitholders, minority interests and 
  extraordinary items                                          65,309             45,709               25,095
Preferred unit distributions  ..................              (14,244)              ---                   ---
Minority partners' interest in consolidated
  partnerships income...........................               (2,819)              (920)                (915)
                                                  ----------------------- --------------------- -------------------

 Income before extraordinary items...............              48,246             44,789               24,180
 Extraordinary items - (loss)  on  
   extinguishment of debts. (Notes 1 and 3)......              (1,993)            (2,808)              (1,259)
                                                  ----------------------- --------------------- -------------------
Net income available to common unitholders.......            $ 46,253            $41,981              $22,921
                                                  ======================= ===================== ===================
Net Income:
 General Partner................................              $38,667            $34,742              $17,325
 Limited Partners'...............................               7,586              7,239                5,596
                                                  ----------------------- --------------------- -------------------
Total............................................             $46,253            $41,981              $22,921
                                                  ======================= ===================== ===================
                                             
Net income per common unit:
 General Partner.................................                $.98              $1.06                 $.87
 Limited Partners'...............................                $.98              $1.03                 $.86

Weighted average common units outstanding:
 General Partner.................................          39,473,000         32,727,000           19,928,000
 Limited Partners'...............................           7,728,000          7,016,000            6,503,000


                (see accompanying notes to financial statements)

                      RECKSON OPERATING PARTNERSHIP, L. P.
                   CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
                                 (in thousands)



                                                                           General             Limited              Total
                                                     Preferred            Partner's           Partners'            Partners'
                                                      Capital              Capital             Capital             Capital
                                                -----------------    ------------------   ----------------    -----------------
                                                                                                  
                                                
Balance December 31, 1995...................... $             ---    $           59,893   $         26,148    $         86,041
                                                              ---
Net Income.....................................               ---                17,325              5,596              22,921
Contributions..................................               ---               131,716             27,881             159,597
Distributions..................................               ---               (24,136)            (7,746)            (31,882)
                                                -----------------    ------------------   ----------------    -----------------
Balance December 31, 1996......................               ---               184,798             51,879             236,677
                                                              ---
Net Income.....................................               ---                34,742              7,239              41,981
Contributions..................................               ---               267,827             35,339             303,166
Distributions..................................               ---               (40,665)            (8,707)            (49,372)

                                                -----------------    ------------------   ----------------    -----------------
Balance December 31, 1997......................               ---               446,702             85,750             532,452
                                                              ---
Net Income.....................................               ---                38,667              7,586              46,253
Contributions..................................           263,126                54,089             11,484             328,699
Distributions..................................               ---               (55,193)           (10,695)            (65,888)
Contribution of a 1% interest in Reckson FS                                                                                      
  Limited Partnership..........................               ---                 1,076                ---               1,076
                                                -----------------    ------------------   ----------------    -----------------
Balance December 31, 1998                       $         263,126    $          485,341   $         94,125    $        842,592
                                                =================    ==================   ================    =================







                (see accompanying notes to financial statements)



                      RECKSON OPERATING PARTNERSHIP, L. P.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)




                                                                          For the year ended December 31,
                                               -------------------------------------------------------------------------------------

                                                          1998                            1997                       1996
                                               ---------------------------      ------------------   -------------------------


                                                                                                                 
NET INCOME AVAILABLE TO COMMON UNITHOLDERS....       $             46,253       $           41,981           $         22,921
Adjustments to reconcile net income to net cash                                                                                     
provided by operating activities:
   Depreciation and amortization...............                    52,957                   27,237                     17,670
   Extraordinary loss on extinguishment of 
     debts.....................................                     1,993                    2,808                      1,259
   Minority partners' interests in consolidated
    partnerships...............................                     2,819                      920                        915
   Gain on sale of interest in Reckson Executive
    Centers, LLC                                                       (9)                     ---                        ---
   Gain on sales of property and securities....                       (43)                    (672)                       ---
   Distribution from and share of net loss
    (income) from investments in partnerships..                       470                      408                        191
   Equity in earnings of service companies.....                    (1,233)                     (55)                      (931)
   Equity in earnings of real estate joint 
    ventures...................................                      (603)                    (459)                      (266)
Changes in operating assets and liabilities:
   Prepaid expenses and other assets...........                    (6,499)                  (1,931)                      (619)
   Tenant and affiliate receivables............                      (184)                  (1,183)                      (256)
   Deferred rents receivable...................                    (7,553)                  (4,500)                    (3,837)
   Accrued expenses and other liabilities......                    30,849                   11,240                      4,716
                                                     ---------------------      -------------------          -----------------
   Net cash provided by operating activities...                   119,217                   75,794                     41,763
CASH FLOWS FROM INVESTING ACTIVITIES:                ---------------------      -------------------          -----------------
   Increase in capital escrow reserves.........                      (700)                     ---                         ---
   Cash from contributed net assets............                       ---                      ---                         ---
   Purchases of commercial real estate
    properties.................................                  (449,241)                (429,379)                  (181,130)
   Interest receivables........................                     2,602                   (2,392)                      (870)
   Investment in mortgage notes and notes 
    receivable.................................                     4,072                  (50,282)                   (50,892)
   Contract deposits and preacquisition costs..                     8,839                   (1,303)                    (6,668)
   Additions to developments in progress.......                   (97,570)                 (40,367)                    (8,427)
   Additions to commercial real estate 
    properties.................................                   (21,181)                 (12,038)                   (12,441)
   Payment of leasing costs....................                    (8,802)                  (5,417)                    (5,028)
   Investments in securities...................                   (42,299)                  (1,756)                       ---
   Additions to furniture, fixtures and 
    equipment..................................                    (2,071)                  (1,159)                      (115)
   Investments in real estate joint ventures...                    (7,773)                  (1,734)                    (5,832)
   Investment in service companies.............                       ---                   (4,241)                    (3,170)
   Distribution from a service company.........                        15                      ---                       ---
   Proceeds from sales of property and 
    securities.................................                       809                      725                       ---
                                                     -----------------------    ----------------------       ----------------------
   Net cash (used in) investing activities.....                  (613,300)                (549,343)                 (274,573)
                                                     -----------------------    ----------------------       ----------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from borrowings....................                      ---                       ---                    54,402
   Principal payments on borrowings............                    (4,735)                  (1,624)                     (380)
   Proceeds from issuance of senior unsecured
    notes......................................                      ---                   150,000                       ---
   Proceeds from mortgage refinancing's, net of
    refinancing costs..........................                    11,458                   20,134                       ---
   Payment of loan costs and prepayment
    penalties..................................                    (4,738)                  (4,983)                   (2,525)
   Investments in and advances to affiliates...                   (24,409)                 (20,182)                   (2,952)
   Proceeds from  credit facilities............                   393,100                  421,000                   144,500
   Principal payments on credit facilities.....                  (137,500)                (319,250)                  (76,000)
   Proceeds from term loan.....................                    20,000                     --                         --
   Contributions...............................                   272,734                  299,991                   145,317
   Distributions ..............................                   (57,683)                 (53,327)                  (22,546)
   Contribution by a minority partner in a                                                                                          
    consolidated partnership...................                    10,000                     --                         --
   Distributions to minority partners in                                                                                            
    consolidated partnerships..................                    (3,592)                  (8,855)                   (1,492)
                                                     ---------------------      --------------------         ----------------
Net cash provided by financing 
  activities...................................                   474,635                  482,904                   238,324
                                                     ---------------------      --------------------         ----------------


Net increase (decrease) in cash and cash                                                                                            
 equivalents...................................                   (19,448)                   9,355                     5,514
Cash and cash equivalents at beginning of 
 period........................................                    21,676                   12,321                     6,807
                                                     ---------------------      --------------------         ----------------
Cash and cash equivalents at end of period.....      $              2,228       $           21,676          $         12,321
                                                     =====================      ====================        =================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW                                                                                                
INFORMATION:
   Cash paid during the period for interest....      $             41,822       $           20,246          $         13,261
                                                     =====================      ====================        =================



                (see accompanying notes to financial statements)



                      RECKSON OPERATING PARTNERSHIP, L. P.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.    Description of Business and Significant Accounting Policies

Description of Business

     Reckson  Operating  Partnership,  L. P. (the  "Operating  Partnership")  is
engaged in the  ownership,  management,  operation,  leasing and  development of
commercial real estate properties,  principally office and industrial  buildings
and also own certain undeveloped land (collectively,  the "Properties")  located
in the New York tri-state area (the "Tri State Area").

Organization and Formation of the Operating Partnership

     The Operating  Partnership  commenced operations on June 2, 1995 and is the
successor to the  operations of the Reckson Group.  The sole general  partner in
the Operating Partnership,  Reckson Associates Realty Corp. (the "Company") is a
self administered and self managed Real Estate Investment Trust ("REIT"). During
June, 1995, the Company  contributed  approximately  $162 million in cash to the
Operating  Partnership  in exchange for an approximate  73% general  partnership
interest.

     The Operating  Partnership  executed various option and purchase agreements
whereby it issued 2,758,960 units in the Operating  Partnership ("Units") to the
continuing  investors  and assumed  approximately  $163 million (net of the Omni
mortgages)  of  indebtedness  in  exchange  for  interests  in certain  property
partnerships,  fee simple and leasehold  interests in properties and development
land,  certain  business assets of the executive center entities and 100% of the
non-voting preferred stock of the management and construction companies.

     During 1997, the Company formed Reckson Service  Industries,  Inc.  ("RSI")
and Reckson Strategic Venture Partners,  LLC ("RSVP"). The Operating Partnership
owned a 95% non voting  common stock  interest in RSI through June 10, 1998.  On
June 11,  1998,  the  Operating  Partnership  distributed  its 95% common  stock
interest in RSI of approximately $3 million to its owners, including the Company
which,  in  turn,  distributed  the  common  stock  of RSI to its  stockholders.
Additionally,  during June 1998, the Operating Partnership  established a credit
facility  with RSI (the "RSI  Facility") in the amount of $100 million for RSI's
service sector operations and other general corporate  purposes.  As of December
31, 1998,  the Company had advanced $ 33.7 million under the RSI facility all of
which is  outstanding.  In  addition,  the  Operating  Partnership  approved the
funding  of  investments  of up to  $100  million  with or in  RSVP  (the  "RSVP
Commitment"),  through RSVP- controlled joint venture REIT-qualified investments
or advances made to RSI under terms similar to the RSI Facility.  As of December
31,  1998,  approximately  $17.3  million  had been  invested  through  the RSVP
Commitment,  of which $10.1 million  represents  RSVP  controlled  joint venture
investments  and  $7.2  million  represents  advances  to  RSI  under  the  RSVP
Commitment.  Such amounts have been  included in investment in real estate joint
ventures and  investments  in and advances to affiliates,  respectively,  on the
Company's  balance sheet. RSI serves as the managing member of RSVP. RSI invests
in operating  companies that generally  provide  commercial  services to the RSI
customer base which includes the tenants of RSI's  executive  suite business and
to properties  owned by the Company and its tenants and third parties.  RSVP was
formed to provide the Company with a research and development  vehicle to invest
in alternative  real estate sectors.  RSVP invests  primarily in real estate and
real estate related operating  companies generally outside of the Company's core
office  and  industrial  focus.  RSVP's  strategy  is to  identify  and  acquire
interests in established entrepreneurial enterprises with experienced management
teams in market  sectors  which are in the early stages of their growth cycle or
offer unique circumstances for attractive  investments as well as a platform for
future growth.



     On January 6, 1998, the Operating Partnership made an initial investment in
the Morris  Companies,  a New Jersey  developer and owner of "Big Box" warehouse
facilities.  The Morris  Companies  properties  include 23 industrial  buildings
encompassing  approximately  4.0 million  square feet.  In  connection  with the
transaction the Morris Companies  contributed 100% of their interests in certain
industrial properties to Reckson Morris Operating  Partnership,  L.P. ("RMI") in
exchange for operating  partnership units in RMI. The Operating  Partnership has
agreed to invest up to $150 million in the Morris Companies.  As of December 31,
1998, the Operating Partnership has invested  approximately $93.8 million for an
approximate 71.8% controlling interest in RMI.

Basis of Presentation and Summary of Significant Accounting Policies

     The accompanying consolidated financial statements include the consolidated
financial  position of the  Operating  Partnership  and its  subsidiaries  as at
December  31, 1998 and 1997 and the results of their  operations  and their cash
flows for each of the three years in the period ended  December  31,  1998.  The
Operating Partnership's  investments in Metropolitan Partners, LLC, RMI and Omni
Partners, L. P. ("Omni"), are reflected in the accompanying financial statements
on a consolidated  basis with a reduction for minority partners'  interest.  The
operating  results of the  service  businesses  currently  conducted  by Reckson
Management Group,  Inc.,  ("RMG"),  and Reckson  Construction  Group,  Inc., are
reflected  in the  accompanying  financial  statements  on the equity  method of
accounting. The operating results of Reckson Executive Centers, L.L.C., ("REC"),
a  service  business  of  the  Operating   Partnership  were  reflected  in  the
accompanying  financial  statements on the equity  method of accounting  through
March 31,  1998.  On April 1,  1998,  the  Operating  Partnership  sold its 9.9%
interest  in REC  to  RSI.  Additionally,  the  operating  results  of RSI  were
reflected  in the  accompanying  financial  statements  on the equity  method of
accounting  through June 10, 1998.  On June 11, 1998 the  Operating  Partnership
distributed  its 95% common stock  interest in RSI to its owners,  including the
Company which, in turn, distributed the common stock of RSI to its stockholders.
The Operating  Partnership  also invests in real estate joint  ventures where it
may own less than a controlling interest, such investments are also reflected in
the accompanying  financial  statements on the equity method of accounting.  All
significant  intercompany  balances and transactions have been eliminated in the
consolidated financial statements

     During  1997 the  Financial  Accounting  Standards  Board  ("FASB")  issued
statement  No.  130,  "Reporting  Comprehensive  Income"  ("SFAS  130") which is
effective  for  fiscal  years  beginning  after  December  15,  1997.  SFAS  130
established standards for reporting comprehensive income and its components in a
full set of  general-purpose  financial  statements.  SFAS 130 requires that all
components of comprehensive  income be reported in a financial statement that is
displayed with the same prominence as other financial  statements.  The adoption
of this standard had no impact on the Operating Partnership's financial position
or results of operations.  Additionally  in June 1997, the FASB also issued SFAS
No. 131  "Disclosures  about segments of an Enterprise and Related  Information"
("SFAS 131") which is effective for fiscal years  beginning  after  December 15,
1997. SFAS 131 establishes  standards for reporting  information about operating
segments in annual financial  statements and in interim  financial  reports.  It
also establishes  standards for related disclosures about products and services,
geographic  areas and major  customers.  The  adoption of this  standard  had no
impact  on  the  Operating   Partnership's  financial  position  or  results  of
operations, but did affect the disclosure of segment information. See Note 11.



The following table presents the minority partners' interest in the consolidated
partnerships income:

                                         December 31,

                                 ----------------------------------------
                                    1998           1997           1996
                                 ----------     -----------   -----------

Omni Partners, L. P............       40%            40%          40%

Metropolitan Partners, LLC.....       25%            ---          ---

Reckson Morris Operating 
  Partnership, L.P. (1) .......       28%            ---          ---

Reckson FS Limited 
  Partnership (2)..............       ---             1%           1%

______________
         (1) Approximate

         (2) On May  26,  1998,  the  general  partner  of  Reckson  FS  Limited
Partnership  transferred and assigned its 1% general partnership interest to the
Operating  Partnership  in  exchange  for 101,970  units of general  partnership
interest.

Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the amounts  reported in the financial  statements  and
accompanying notes. Actual results could differ from those estimates.

Real Estate

     Depreciation  is  computed  utilizing  the  straight-line  method  over the
estimated useful lives of ten to thirty years for buildings and improvements and
five to ten years for furniture,  fixtures and equipment.  Tenant  improvements,
which  are  included  in  buildings  and   improvements,   are  amortized  on  a
straight-line basis over the term of the related leases.

Cash Equivalents

     The  Operating  Partnership  considers  highly  liquid  investments  with a
maturity of three months or less when purchased, to be cash equivalents.

Deferred Costs

     Lease fees and loan costs are  capitalized  and amortized  over the life of
the related lease or loan.

Income Taxes

     No  provision   has  been  made  for  income  taxes  in  the   accompanying
consolidated   financial   statements   since  such  taxes,   if  any,  are  the
responsibility of the individual partners.


Revenue Recognition

     Minimum rental income is recognized on a straight-line  basis over the term
of the lease. The excess of rents recognized over amounts  contractually due are
included  in deferred  rents  receivable  on the  accompanying  balance  sheets.
Contractually  due but unpaid  rents are included in tenant  receivables  on the
accompanying balance sheets.  Certain lease agreements provide for reimbursement
of real  estate  taxes,  insurance,  common area  maintenance  costs and indexed
rental increases, which are recorded on an accrual basis.

     The  Operating  Partnership  records  interest  income  on  investments  in
mortgage  notes and notes  receivable  on an accrual  basis of  accounting.  The
Operating  Partnership  does not accrue interest on impaired loans where, in the
judgment of  management,  collection  of interest  according to the  contractual
terms is  considered  doubtful.  Among the  factors  the  Operating  Partnership
considers in making an  evaluation  of the  collectibility  of interest are, the
status  of the loan,  the  value of the  underlying  collateral,  the  financial
condition of the borrower and  anticipated  future  events.  Loan  discounts are
amortized over the life of the real estate using the constant interest method.

Net Income Per Common Partnership Unit

     Net income per common  partnership  unit is determined  by  allocating  net
income after preferred  distributions to the general and limited partners' based
on their  weighted  average  common  partnership  units  outstanding  during the
respective periods presented.

Distributions to Preferred Unit Holders

     Holders of preferred units of limited  partnership  interest are entitled
to  distributions  based on the stated rates of return (subject to adjustment)
for those units.

     Holders of preferred units of general partnership interest are entitled to
distributions based on an annual distribution rate of 7.625%.

Capitalized Interest

     Interest  incurred on borrowings used to fund the property  development and
construction  are  capitalized as  developments in progress and allocated to the
individual property costs once construction is completed

Construction Operations

     Construction  operations are accounted for utilizing the completed contract
method.  Under this method,  costs and related  billings are deferred  until the
contract is substantially  complete.  Estimated losses on uncompleted  contracts
are  recorded  in the  period  that  management  determines  that a loss  may be
incurred.

Reclassifications

     Certain prior year amounts have been reclassified to conform to the current
year presentation.

2.       Mortgage Notes Payable

     At  December  31,  1998,  there  were 17  mortgage  notes  payable  with an
aggregate outstanding principal amount of approximately $253 million. Properties
with an  aggregate  carrying  value at December 31, 1998 of  approximately  $330
million are  pledged as  collateral  against  the  mortgage  notes  payable.  In
addition,  $48.6  million of the $253  million  are  recourse  to the  Operating
Partnership.  The mortgage  notes bear  interest at rates  ranging from 6.45% to
9.25%,  and mature between 1999 and 2012. The weighted  average interest rate on
the outstanding  mortgage notes payable at December 31, 1998 is 7.8%. Certain of
the mortgage  notes payable are guaranteed by certain  minority  partners in the
Operating Partnership.



Scheduled principal  repayments during the next five years and thereafter are as
follows (in thousands):

          Year Ended December 31,
          ----------------------------

          1999............................                       $10,752
          2000............................                        32,131
          2001............................                        19,440
          2002............................                        12,937
          2003............................                        19,295
          Thereafter......................                       158,908
                                                ------------------------
                                                                $253,463
                                                ========================

3.        Credit Facilities

     On July 23, 1998,  the Operating  Partnership  obtained a three year $500
million unsecured revolving credit facility (the "Credit Facility") from Chase
Manhattan  Bank,  Union Bank of Switzerland and PNC Bank as co-managers of the
credit  facility bank group.  Interest  rates on  borrowings  under the Credit
Facility are priced off of LIBOR plus a sliding scale ranging from 112.5 basis
points to 137.5 basis  points  based on the  leverage  ratio of the  Operating
Partnership.  Upon the Operating  Partnership  receiving an  investment  grade
rating on its senior  unsecured  debt by two rating  agencies,  the pricing is
adjusted  based off of LIBOR plus a scale  ranging  from 65 basis points to 90
basis  points  depending  upon the rating.  The Credit  Facility  replaced and
restructured  the  Operating  Partnership's  existing  $250 million  unsecured
credit  facility  and $200 million  unsecured  bridge  facility.  As a result,
certain  deferred loan costs incurred in connection with those facilities were
written off. Such amount has been  reflected as an  extraordinary  loss on the
Operating  Partnership's  statement of operations.  The Operating  Partnership
utilizes  the  Credit  Facility  primarily  to  finance  the  acquisitions  of
properties and other real estate investments,  fund its development activities
and for  working  capital  purposes.  At  December  31,  1998,  the  Operating
Partnership had availability under the Credit Facility to borrow an additional
$8.1 million (net of $26.1 million of outstanding undrawn letters of credit).

     On  December 4, 1998,  the  Operating  Partnership  obtained a one year $50
million  unsecured  term loan (the "Term Loan") from Chase  Manhattan  Bank.  On
January 13, 1999, the Operating  Partnership  and Chase Manhattan Bank increased
the total  availability  under the Term Loan to $75 million.  Interest  rates on
borrowings  under the Term Loan are priced  off LIBOR plus 150 basis  points for
the first nine months and 175 basis points for the remaining  three  months.  At
December 31, 1998, the Operating  Partnership  had  availability  under the Term
Loan to borrow an  additional  $30 million which was increased to $55 million on
January 13, 1999.

     The Operating  Partnership  capitalized  interest incurred on borrowings to
fund  certain  development  costs in the amount of  $7,344,102,  $2,351,201  and
$800,434 for the years ended December 31, 1998, 1997 and 1996, respectively.


4.       Senior Unsecured Notes

     On August 28, 1997, the Operating  Partnership sold $150 million of 10-year
senior unsecured notes in a privately placed  transaction.  The senior unsecured
notes were  priced at par with  interest  at 110 basis  points over the 10- year
treasury  note for an all in coupon of 7.2%.  Interest  is payable  semiannually
with principal and unpaid interest due on August 28, 2007.

5.        Land Leases

     The Operating  Partnership  leases,  pursuant to  noncancellable  operating
leases,  the land on which ten of its buildings  were  constructed.  The leases,
which contain renewal options,  expire between 2018 and 2080. The leases contain
provisions  for  scheduled  increases  in the minimum rent and one of the leases
additionally  provides for  adjustments to rent based upon the fair market value
of the underlying land at specified intervals. Minimum ground rent is recognized
on a  straight-line  basis over the terms of the  leases.  The excess of amounts
recognized  over  amounts  contractually  due is  approximately  $2,316,000  and
$1,948,000  at  December  31,  1998 and 1997  respectively.  These  amounts  are
included in accrued expenses and other  liabilities on the accompanying  balance
sheets.  Future  minimum  lease  commitments  relating  to the land leases as of
December 31, 1998 are as follows (in thousands):

               1999.................................               $1,781
               2000.................................                1,783
               2001.................................                1,800
               2002.................................                1,819
               2003.................................                1,818
               Thereafter...........................               50,174
                                                         ----------------------
                                                                  $59,175
                                                         ======================

6.        Partners' Capital

     The Operating Partnership made loans to certain senior officers to purchase
units at market  prices  ranging  from  $12.13 per unit to $21.94 per unit.  The
loans bear interest at rates  ranging  between 8% to 8.5% and are secured by the
units  purchased.  Approximately  $436  thousand  of such loans will be forgiven
ratably at each  anniversary of employment  over a three to four year period and
approximately $176,000 of such loans is due and payable with accrued interest on
January 9, 2002.  The loan  balances of  approximately  $248,000 and $362,000 at
December 31, 1998 and 1997,  respectively  have been  included as a reduction of
general  partner's  capital  on  the  accompanying   consolidated  statement  of
partners' capital.

     On April  21,  1998,  the  Operating  Partnership  issued  25,000  Series B
preferred units of limited partnership  interest at a stated value of $1,000 per
unit and 11,518 Series C preferred  units of limited  partnership  interest at a
stated  valued of $1,000  per unit in  connection  with the  acquisition  of the
Cappelli  portfolio.  The Series B preferred  units have a current  distribution
rate of 6.25% and are  convertible  to  common  units at a  conversion  price of
approximately  $32.51 for each preferred unit. The Series C preferred units have
a current  distribution  rate of 6.25% and are  convertible to common units at a
conversion price of approximately $29.39 for each preferred unit.

     During the year ended December 31, 1998, the Operating  Partnership  issued
2,265,261 units of general  partnership  interest to the Company in exchange for
approximately $53 million.  The proceeds were used to repay borrowings under the
credit facilities.

     Additionally, the Operating Partnership issued 9,200,000 Series A preferred
units  of  general   partnership   interest  to  the  Company  in  exchange  for
approximately  $221  million.  The Series A preferred  units have a  liquidation
preference of $25 per unit, a distribution rate of 7.625% and are convertible to
common units at a conversion rate of .8769 common units for each preferred unit.


     On July 2, 1998, the Operating  Partnership issued 6,000 Series D preferred
units of limited  partnership  interest at a stated  value of $1,000 per unit in
connection  wit the  acquisition  of the  remaining 50% interest in 360 Hamilton
Avenue located in White Plains,  New York.  The Series D preferred  units have a
current  distribution  rate of 6.25% and are  convertible  to common  units at a
conversion price of approximately $29.12 for each preferred unit.

7.        Related Party Transactions

     The  Operating  Partnership,   through  its  subsidiaries  and  affiliates,
provides   management,   leasing  and  other  tenant  related  services  to  the
Properties.  Certain executive officers of the Company have continuing ownership
interests in the unconsolidated service companies.

     The Operating  Partnership in connection  with its  formation,  was granted
options,  exercisable  over a 10 year period to acquire six properties  owned by
the Reckson Group (the "Predecessor") (the "Reckson Option Properties") and four
properties in which the Predecessor  owns a  non-controlling  minority  interest
(the "Other Option Properties" and, together with the Reckson Option Properties,
the "Option  Properties") at a purchase price equal to the lesser of (i) a fixed
purchase price and (ii) the Net Operating  Income,  as defined,  attributable to
such Option  Property  during the 12 month period  preceding the exercise of the
option divided by a  capitalization  rate of 11.5%, but the purchase price shall
in no case be less than the outstanding balance of the mortgage debt encumbering
the Option Property on the acquisition date.

     As of December 31, 1998,  the  Operating  Partnership  acquired four of the
Reckson Option  Properties for an aggregate  purchase price of approximately $35
million. In connection with the purchase of such Option Properties the Operating
Partnership  issued  475,032 common units at prices ranging from $16.38 per unit
to  $21.00  per  unit  (split   adjusted)  as  partial   consideration   in  the
transactions.  Such units  were  issued to certain  members  of  management  and
entities whose partners  included  members of management.  Additionally,  during
1998, one of the Other Option  Properties was sold by the Predecessor to a third
party.

     The Operating  Partnership made  construction loan advances to fund certain
redevelopment and leasing costs relating to one of the Other Option  Properties.
At December  31, 1997 and 1996,  advances  due the  Operating  Partnership  were
approximately  $4,200,000  and  $2,940,000,   respectively.  Such  amounts  bear
interest  at the rate of 11% per annum and are due on demand.  In January  1998,
the  outstanding  advances  including  accrued and unpaid interest was repaid in
full.

     The  Operating  Partnership  and RSI  have  entered  into  an  intercompany
agreement (the "Reckson Intercompany Agreement") to formalize their relationship
and to limit conflicts of interest.  Under the Reckson  Intercompany  Agreement,
RSI granted the Operating  Partnership a right of first  opportunity to make any
REIT  qualified  investment  that becomes  available  to RSI. In addition,  if a
REIT-qualified  investment opportunity becomes available to an affiliate of RSI,
including RSVP, the Reckson  Intercompany  Agreement  requires such affiliate to
allow the Operating Partnership to participate in such opportunity to the extent
of RSI's interest.

     Under the Reckson Intercompany Agreement, the Operating Partnership granted
RSI a right of first opportunity to provide commercial services to the Operating
Partnership  and  its  tenants.  RSI  will  provide  services  to the  Operating
Partnership at rates and on terms as attractive as either the best available for
comparable  services in the market or those offered by RSI to third parties.  In
addition,  the  Operating  Partnership  will give RSI access to its tenants with
respect to commercial  services that may be provided to such tenants and,  under
the Reckson Intercompany Agreement, subject to certain conditions, the Operating
Partnership  granted  RSI a right of first  refusal  to become the lessee of any
real property acquired by the Operating Partnership if the Operating Partnership
determines  that,  consistent with Reckson's status as a REIT, it is required to
enter into a "master" lease agreement.

     On March 23, 1998,  the Company sold  approximately  $5.9 million of common
stock  to RSI at the  market  closing  price  of $25 per  share.  The  Operating
Partnership loaned RSI the $5.9 million to execute this transaction. Such amount
was repaid to the Operating Partnership by RSI during August 1998.

     On June 11, 1998,  the  Operating  Partnership  distributed  its 95% voting
common  stock  interest  in RSI of  approximately  $3 million  to its  partners.
Additionally,  during June 1998, the Operating Partnership  established a credit
facility  with RSI (the "RSI  Facility") in the amount of $100 million for RSI's
service sector operations and other general corporate  purposes.  As of December
31, 1998,  the Company had advanced  $33.7 million under the RSI facility all of
which is  outstanding.  In  addition,  the  Operating  Partnership  approved the
funding  of  investments  of up to  $100  million  with or in  RSVP  (the  "RSVP
Commitment"),  through RSVP-controlled joint venture REIT- qualified investments
or advances made to RSI under terms similar to the RSI Facility.  As of December
31,  1998,  approximately  $17.3  million  had been  invested  through  the RSVP
Commitment,  of which $10.1 million  represents  RSVP  controlled  joint venture
investments  and  $7.2  million  represents  advances  to  RSI  under  the  RSVP
Commitment.  Such amounts have been  included in investment in real estate joint
ventures and  investments  in and advances to affiliates,  respectively,  on the
Operating Partnership's balance sheet.

     On August 27, 1998 the Operating  Partnership  announced the formation of a
joint   venture  with  RSVP  and  the   Dominion   Group,   an   Oklahoma-based,
privately-owned group of companies that focuses on the development,  acquisition
and  ownership  of  government   occupied  office   buildings  and  correctional
facilities.  The new venture,  Dominion Properties LLC (the "Dominion Venture"),
is owned by Dominion  Venture  Group LLC, and by a subsidiary  of the  Operating
Partnership. The Dominion Venture will engage primarily in acquiring, developing


and/or  owning  government-occupied  office  buildings  and  privately  operated
correctional facilities.  Under the Dominion Venture's operating agreement, RSVP
is to invest up to $100 million,  some of which may be invested by the Operating
Partnership ( the "RSVP Capital").  The initial contribution of RSVP Capital was
approximately $39 million of which approximately $10.1 million was invested by a
subsidiary of the Operating Partnership.  The Operating Partnership's subsidiary
funded its capital  contribution through the RSVP Commitment.  In addition,  the
Operating  Partnership  advanced  approximately  $2.9 million to RSI through the
RSVP  Commitment  for an  investment  in RSVP which was then invested on a joint
venture basis with the Dominion  Group in certain  service  business  activities
related to the real estate  activities.  As of December 31,  1998,  the Dominion
Venture  had  investments in 11 government office buildings and two correctional
facilities.

     During 1998, the Operating  Partnership made investments in and advances to
RMG of approximately  $29.5 million.  Such investments and advances were used by
RMG in  connection  with  RMG's  acquisition  of an  approximate  64%  ownership
interest  in  an  executive  office  suite  business.  Concurrently  with  RMG's
investment,  RSI received an option to purchase  RMG's interest at cost plus 8%.
RMG is owned  97% by the  Operating  Partnership  and 3% by an  entity  owned by
certain  officers of the Company.  On November 9, 1998, RSI exercised its option
and,  as  a  result  RMG  earned  income  during  the  period  of  ownership  of
approximately  $707,000.  In  addition,  RSI assumed the  outstanding  debt plus
accrued interest owing to the Operating Partnership.

8.       Commercial Real Estate Investments

     During 1997,  the Operating  Partnership  acquired  five office  properties
encompassing  approximately  881,000  square feet and 15  industrial  properties
encompassing  approximately  968,000 square feet on Long Island for an aggregate
purchase price of approximately $131 million.

     During 1997, the Operating  Partnership  acquired  eight office  properties
encompassing  approximately  830,000 square feet and three industrial properties
encompassing  approximately  163,000 square feet in Westchester for an aggregate
purchase  price of  approximately  $117  million.  In  addition,  the  Operating
Partnership acquired approximately 32 acres of land located in Westchester for a
purchase price of approximately $8 million.

     During 1997, the Operating  Partnership  acquired one  industrial  property
encompassing  approximately  452,000 square feet in  Connecticut  for a purchase
price of approximately $27 million.

     During  1997,  the  Operating  Partnership  acquired  13 office  properties
encompassing  approximately 1.5 million square feet and one industrial  property
encompassing  approximately  128,000  square feet in New Jersey for an aggregate
purchase  price of  approximately  $156  million.  In  addition,  the  Operating
Partnership  acquired  approximately 303 acres of land located in New Jersey for
an aggregate purchase price of approximately $16.2 million.

     In October  1997,  the Operating  Partnership  sold 671 Old Willets Path in
Hauppauge,  New York for approximately  $725,000 and recorded a gain on the sale
of approximately $672,000.

     On January 6, 1998, the Operating Partnership made an initial investment in
the Morris  Companies,  a New Jersey  developer and owner of "Big Box" warehouse
facilities.  The Morris  Companies  properties  include 23 industrial  buildings
encompassing  approximately  4.0 million  square feet.  In  connection  with the
transaction the Morris Companies  contributed 100% of their interests in certain
industrial properties to RMI in exchange for operating partnership units in RMI.
The Operating  Partnership has agreed to invest up to $150 million in the Morris
Companies.  As of December  31, 1998,  the  Operating  Partnership  has invested
approximately  $93.8 million for an approximate  71.8%  controlling  interest in
RMI.

     During 1998, the Operating  Partnership  acquired  three office  properties
encompassing  approximately  674,000  square  feet,  two  industrial  properties
encompassing  approximately  200,000 square feet and approximately 79.9 acres of
vacant  land  which  allows  for  approximately  816,000  square  feet of future
development  opportunities  on Long Island for an  aggregate  purchase  price of
approximately $82.8 million.

     During 1998,  the Operating  Partnership  acquired  four office  properties
encompassing  approximately  522,000  square feet,  six  industrial  properties
encompassing  approximately 985,000 square feet and approximately 112.2 acres of
vacant  land  which  allows  for  approximately  815,000  square  feet of future
development  opportunities  in New Jersey  for an  aggregate  purchase  price of
approximately $138.1 million.



     During 1998, the Operating  Partnership acquired Stamford Towers located in
Stamford,  Connecticut  for  approximately  $61.3 million.  Stamford Towers is a
Class  A  office  complex   consisting  of  two  eleven  story  towers  totaling
approximately 325,000 square feet.

     During 1998, the Operating  Partnership  acquired a portfolio of six office
properties encompassing approximately 980,000 square feet in Westchester County,
New York from Cappelli  Enterprises and affiliated  entities  ("Cappelli") for a
purchase price of approximately $173 million.  The Cappelli acquisition includes
a five  building,  850,000 square foot Class A office park in Valhalla and Court
House Square,  a 130,000  square foot Class A office  building  located in White
Plains. The Operating  Partnership also obtained from Cappelli the remaining 50%
interest in 360 Hamilton  Avenue,  a 365,000  square foot vacant office tower in
downtown   White  Plains  for  $10  million  plus  the  return  of  his  capital
contributions  of  approximately  $1.5  million.  In  addition,   the  Operating
Partnership   received  an  option  from   Cappelli  to  acquire  the  remaining
development  parcels  within  the  Valhalla  office  park on which up to 875,000
square feet of office space can be developed.  These  acquisitions were financed
in part through proceeds from a draw under the credit  facilities,  the issuance
of 42,518  (approximately  $42.5 million) preferred operating  partnership units
(the "Cappelli  Preferred  Units"),  and the assumption of  approximately  $47.1
million of mortgage debt.  Additionally,  during 1998, the Operating Partnership
issued and  advanced to  Cappelli  $19 million  under two  liquidity  loans (the
"Cappelli Liquidity Loans"). The Cappelli Liquidity Loans bear interest at rates
ranging from 10% to 10.5% per annum and are secured by Cappelli's  right,  title
and interest in the Cappelli Preferred Units. Such amounts have been included in
investments in mortgage notes and notes receivable on the  accompanying  balance
sheet.  On February 3, 1999,  the  Operating  Partnership  made an additional $5
million advance under the Cappelli Liquidity Loans.

     In July 1998,  the Company formed a joint  venture,  Metropolitan  Partners
LLC, a Delaware limited liability company  ("Metropolitan"),  with Crescent Real
Estate Equities  Company,  a Texas real estate  investment  trust  ("Crescent").
Pursuant to a merger agreement executed on July 9, 1998 and amended and restated
on August 11, 1998 (the "Initial Merger Agreement")  between  Metropolitan,  the
Company, Crescent and Tower Realty Trust Inc., a Maryland corporation ("Tower"),
Metropolitan  agreed,  subject  to  the  terms  and  conditions  of  the  Merger
Agreement, to purchase the common stock of Tower.

     Prior  to the  execution  of the  Initial  Merger  Agreement,  Metropolitan
identified   certain   potential  tax  issues  regarding   Tower's   operations.
Metropolitan  entered into the Initial  Merger  Agreement  only after Tower made
detailed  representations and warranties  purporting to address these issues. In
the course of due  diligence,  however,  Metropolitan,  the Company and Crescent
discovered  that these  representations  and  warranties  may not be correct and
discussed these concerns with Tower,  specifically advising Tower that they were
not terminating  the Initial Merger  Agreement at that time.  Metropolitan,  the
Company and Crescent  invited Tower to respond to these  concerns.  However,  on
November 2, 1998,  Tower filed a complaint in the Supreme  Court of the State of
New York alleging Metropolitan,  the Company and Crescent willfully breached the
Initial Merger Agreement.  Tower, in the complaint,  was seeking declaratory and
other  relief,  including  damages  of not less than $75  million  and  specific
performance by Metropolitan, the Company and Crescent of their obligations under
the Initial Merger Agreement.

     On December 8, 1998,the Company,  Metropolitan and Tower executed a revised
merger agreement (the "Revised Merger Agreement"),  pursuant to which Tower will
be merged (the  "Merger") into  Metropolitan,  with  Metropolitan  surviving the
Merger.  Concurrently with the Merger, Tower Realty Operating Partnership,  L.P.
("Tower  OP") will be merged with and into a  subsidiary  of  Metropolitan.  The
consideration  to be issued in the mergers will be comprised of (i) 25% cash and
(ii) 75% of shares of Class B  Exchangeable  Common  Stock,  par value  $.01 per
share, of the Company (the "Class B Common Stock"), or in certain  circumstances
described  below,  shares  of Class B Common  Stock and  unsecured  notes of the
Operating  Partnership.  The Company controls  Metropolitan and owns 100% of the
common equity; Crescent owns a preferred equity investment in Metropolitan.  The
Revised Merger  Agreement  replaces the Initial Merger  Agreement (which at that
time was a 50/50 joint venture between the Company and Crescent) relating to the
acquisition by Metropolitan of Tower for $24 per share.

     Pursuant to the terms of the Revised Merger Agreement, holders of shares of
outstanding common stock of Tower ("Tower Common Stock"),  and outstanding units
of  limited  partnership  interest  of Tower OP will have the option to elect to
receive cash or shares of Class B Common Stock, subject to proration.  Under the
terms of the  transaction,  Metropolitan  will effectively pay for each share of
Tower Common Stock and each unit of limited partnership interest of Tower OP the
sum of (i) $5.75 in cash,  and (ii)  0.6273 of a share of Class B Common  Stock.
The shares of Class B Common  Stock are  entitled  to receive an initial  annual
dividend of $2.24 per share and is subject to adjustment annually. The shares of
Class B Common Stock are  exchangeable at any time, at the option of the holder,
into an equal number of shares of common stock, par value $.01 per share, of the
Company  subject to customary  antidilution  adjustments.  The  Company,  at its
option, may


redeem any or all of the Class B Common Stock in exchange for an equal number of
shares  of the  Company's  common  stock at any time  following  the four  year,
six-month anniversary of the issuance of the Class B Common Stock. The Company's
Board of Directors have  recommended to the Company's  stockholders the approval
of a proposal  to issue a number of shares of Class B Common  Stock equal to 75%
of the sum of (i) the number of outstanding shares of the Tower Common Stock and
(ii) the  number of Tower OP limited  partnership  units,  in each case,  at the
effective time of the mergers. If the stockholders of the Company do not approve
the  issuance  of the  Class B Common  Stock as  proposed,  the  Revised  Merger
Agreement provides that approximately one-third of the consideration that was to
be paid in the form of Class B Common Stock will be replaced by senior unsecured
notes of the Operating  Partnership,  which notes will bear interest at the rate
of 7% per annum and have a term of ten years. In addition,  if the  stockholders
of the Company do not approve the  issuance of Class B Common  Stock as proposed
and the Board of Directors of the Company withdraws or amends or modifies in any
material respect its  recommendation  for,  approval of such proposal,  then the
total principal  amount of notes to be issued and distributed in the Merger will
be increased by $15 million.

     Simultaneously   with  the  execution  of  the  Revised  Merger  Agreement,
Metropolitan and Tower executed and consummated a stock purchase  agreement (the
"Series A Stock Purchase  Agreement")  pursuant to which Metropolitan  purchased
from Tower  approximately  2.2 million shares of Series A Convertible  Preferred
Stock, par value $.01 per share, of Tower (the "Tower Preferred Stock"),  for an
aggregate purchase price of $40 million, $30 million of which was funded through
a capital  contribution by the Company to Metropolitan  and which is included in
prepaid expenses and other assets on the  accompanying  balance sheet. The Tower
Preferred  Stock has a stated  value of $18.44 per share and is  convertible  by
Metropolitan  into an equal  number of shares of Tower  Common  Stock at anytime
after the  termination,  if any, of the  Revised  Merger  Agreement,  subject to
customary  antidilution  adjustments.  The Tower  Preferred Stock is entitled to
receive  dividends  equivalent to those paid on the Tower Common  Stock.  If the
Revised  Merger   Agreement  is  not   consummated  and  a  court  of  competent
jurisdiction  issues  a  final,  non-appealable  judgment  determining  that the
Company and  Metropolitan are obligated to consummate the Merger but have failed
to do so, or determining that the Company and  Metropolitan  failed to use their
reasonable  best efforts to take all actions  necessary to cause certain closing
conditions  to be  satisfied,  Metropolitan  is obligated to return to Tower $30
million of the Series A Preferred Stock.

     Immediately  prior to the  execution of the Revised  Merger  Agreement  and
consummation of the Series A Stock Purchase Agreement,  the Company and Crescent
executed  the amended and restated  operating  agreement  of  Metropolitan  (the
"Metropolitan  Operating  Agreement")  pursuant  to  which  Crescent  agreed  to
purchase a convertible  preferred membership interest (the "Preferred Interest")
in  Metropolitan  for an aggregate  purchase  price of $85 million.  Ten million
dollars  of the  purchase  price  was  paid by  Crescent  to  Metropolitan  upon
execution of the Metropolitan Operating Agreement to acquire the Tower Preferred
Stock and the  remaining  portion is payable  prior to the closing of the Merger
and is expected  to be used to fund a portion of the cash merger  consideration.
Upon closing of the Merger, Crescent's investment will accrue distributions at a
rate of 7.5% per annum for a two-year period and may be redeemed by Metropolitan
at any time during that period for $85  million,  plus an amount  sufficient  to
provide a 9.5%  internal  rate of return.  If  Metropolitan  does not redeem the
preferred  interest,  upon the expiration of the two-year period,  Crescent must
convert  its  interest  into  either  (i)  a  common   membership   interest  in
Metropolitan or (ii) shares of the Company's  common stock at a conversion price
of $24.61.

     In connection with the revised transaction, Tower, the Company and Crescent
have  exchanged  mutual  releases for any claims  relating to the Initial Merger
Agreement.

     The  Company  anticipates  that it will  dispose of the assets in the Tower
portfolio  located  outside  of New  York.  In  addition,  the  Company  is also
considering  the disposition of certain of the Tower  properties  located in New
York.



     In addition,  the Operating  Partnership has invested  approximately  $61.3
million  in  certain  mortgage  indebtedness  encumbering  four  Class A  office
properties encompassing approximately 577,000 square feet, a 825,000 square foot
industrial  building located in New Jersey and a 400 acre parcel of land located
in New Jersey. In addition,  the Operating  Partnership loaned approximately $17
million to its  minority  partner  in Omni,  its  flagship  Long  Island  office
property, and effectively increased its economic interest in the property owning
partnership.

9.        Fair Value of Financial Instruments

     The following disclosures of estimated fair value at December 31, 1998 were
determined by management,  using  available  market  information and appropriate
valuation methodologies.  Considerable judgment is necessary to interpret market
data and develop  estimated fair value. The use of different market  assumptions
and/or estimation methodologies may have a material effect on the estimated fair
value amounts.

     Disclosure about fair value of financial  instruments is based on pertinent
information available to management as of December 31, 1998. Although management
is not aware of any factors that would significantly  affect the reasonable fair
value amounts, such amounts have not been comprehensively  revalued for purposes
of these  financial  statements  since that date and current  estimates  of fair
value may differ significantly from the amounts presented herein.

     Cash  equivalents  and  variable  rate debt are  carried at  amounts  which
reasonably approximate their fair values.

     Mortgage  notes  payable  have an  estimated  aggregate  fair  value  which
approximates its carrying value. Estimated fair value is based on interest rates
currently  available  to the  Operating  Partnership  for  issuance of debt with
similar terms and remaining maturities.

10.       Rental Income

     The  Properties  are being leased to tenants under  operating  leases.  The
minimum rental amount due under certain  leases are generally  either subject to
scheduled  fixed  increases  or indexed  escalations.  In  addition,  the leases
generally also require that the tenants reimburse the Operating  Partnership for
increases  in certain  operating  costs and real  estate  taxes  above base year
costs.

     Included in base rents and tenant  escalations  and  reimbursements  in the
accompanying  statements  of  operations  are  amounts  from  Reckson  Executive
Centers,  LLC, a service business of the Operating Partnership through March 31,
1998 and, a related party as follows (in thousands):

                                                                    Tenant
                                                             Escalations and
For the Periods                                 Base Rents    Reimbursements

January 1 through March 31, 1998...................  $597             $149
Year ended December 31, 1997.......................  $2,154           $441
Year ended December 31, 1996.......................  $1,898           $417



     Expected  future  minimum rents to be received over the next five years and
thereafter  from  leases in effect  at  December  31,  1998 are as  follows  (in
thousands):

          1999.......................................................$241,071
          2000....................................................... 222,112
          2001....................................................... 187,503
          2002....................................................... 165,730
          2003....................................................... 135,441
          Thereafter................................................. 386,953
                                                                     ---------
                                                                    1,338,810
                                                                    ==========
11.      Segment Disclosure

     The Operating  Partnership's  portfolio consists of Class A suburban office
and  industrial  properties  located  in the  Tri-State  Area  of  Long  Island,
Westchester,  Southern  Connecticut  and  New  Jersey.  In  addition,  with  the
acquisition and merger  transaction  with Tower,  the Operating  Partnership has
entered the Manhattan office market.  Additionally  the Operating  Partnership's
portfolio includes 23 industrial  properties owned by RMI. Each of the divisions
has a managing  director who reports directly to the Chief Operating Officer and
Chief Financial Officer who have been identified as the Chief Operating Decision
Makers  ("CODM")  because of their  final  authority  over  resource  allocation
decisions and performance assessment.

     The CODM evaluates the operating  performance of these  divisions  based on
geographic area. In addition,  as the Operating  Partnership expects to meet its
short term liquidity  requirements  in part through the Credit Facility and Term
Loan, interest incurred on borrowings under the Credit Facility and Term Loan is
not  considered  as part  of  property  operating  performance.  The  accounting
policies  of the  reportable  segments  are the same as those  described  in the
summary of significant accounting policies.

     The   following   table  sets  forth  the   components   of  the  Operating
Partnership's revenues and expenses and other related disclosures as required by
FAS Statement 131 for the year ended December 31, 1998 (in thousands):





                                                                                                                                 

                                                                          Southern                                   Consolidated
                          Long Island     Westchester      New Jersey     Connecticut         RMI            Other        Totals
                        ---------------  --------------    ------------  ------------  -------------   -------------  -----------
                                                                                                  
REVENUES:
  Base rents............  $    102,421     $   51,983      $    35,425    $    22,134    $    12,740    $       ---    $  224,703
  Tenant escalations and
    reimbursements......        10,721          7,433            3,746          3,242          2,397            205        27,744
  Equity in earnings of 
    service companies             ---            ---               ---            ---            ---          1,233         1,233
  Equity in earnings of 
    real estate joint
    ventures............          ---            ---               ---            ---            ---            603           603
  Interest income on 
    mortgage notes and
    notes receivable....          ---            ---               ---            ---            ---          7,739         7,739
  Investment and other 
    income..............           407             15               29               9           ---          3,830         4,290
                          ---------------  --------------   -------------- --------------  -------------   -------------  ---------
Total Revenues..........       113,549         59,431           39,200          25,385        15,137         13,610       266,312
                          ---------------  --------------   -------------- --------------  -------------   -------------  ---------

EXPENSES:
  Property operating 
    expenses............        20,774         13,476            5,245           5,932           392          2,100        47,919
    Real estate taxes...        20,400          7,379            4,442           1,125         2,195           ---         35,541
    Ground rents........         1,681              1               34            ---            ---             45         1,761
    Marketing, general and
     administrative.....         6,835          1,530            1,820           1,514           456          2,875        15,030
    Interest............         9,281          3,421               15           3,934         1,101         30,043        47,795
    Depreciation and 
     amortization.......        20,930         10,810            7,536           4,425         3,491          5,765        52,957
                          ---------------  --------------   --------------  --------------  -------------   -------------  --------
Total Expenses..........        79,901         36,617           19,092          16,930         7,635         40,828       201,003
                          ---------------  --------------   --------------  --------------  -------------   ------------- ---------

Income before distributions to
  preferred unitholders, 
  minority interests' and 
  extraordinary items...  $     33,648     $   22,814       $   20,108      $    8,455      $  7,502        $(27,218)      $65,309
                          ===============  ==============   ==============  ==============  =============   ===========  ==========
Total Assets............  $    518,648     $  405,836       $  170,623      $  329,365      $156,430        $273,618     $1,854,520
                          ===============  ==============   ==============   ============== =============   ===========  ==========




12.  Non-Cash Investing and Financing Activities

     Additional  supplemental  disclosures  of non-cash  investing and financing
activities are as follows (in thousands):

         (1) In January  1997,  the  Operating  Partnership  acquired one of the
             Reckson Option Properties as follows:

             Mortgage assumed...........................           $4,667
             Issuance of 203,804 common units...........            4,280
             Cash paid..................................               61
                                                         ----------------
             Total purchase price.......................           $9,008
                                                         ================

         (2) In November 1997, the Operating Partnership purchased a 181,000 
             square foot industrial building located in Hauppauge, New York 
             as follows:

             Mortgage assumed and repaid................           $3,037
             Issuance of 62,905 common units............            1,578
             Cash paid..................................               10
                                                         ----------------
             Total purchase price.......................           $4,625
                                                         ================

         (3) In December 1997, the Operating Partnership purchased a 92,000 
             square foot industrial building located in Elmsford, New York 
             as follows:

             Issuance of 183,469 common units...........           $4,700
                                                         =================


     On January 2, 1998, the Operating  Partnership  issued an additional 18,752
common  units  in  connection  with the  acquisition  of a  92,000  square  foot
industrial  building  located in Elmsford,  New York for an additional  non cash
investment of approximately $.48 million.

     On January 6, 1998, the Operating  Partnership  acquired an office property
located in  Uniondale,  New York which  included the issuance of 513,259  common
units  for a  total  non  cash  investment  of  $12  million.  Additionally,  in
connection with the Operating Partnership's  investment in the Morris Companies,
the Operating  Partnership  assumed  approximately $10.8 million of indebtedness
net of minority partners interest.

     On April 21,  1998,  in  connection  with the  acquisition  of the Cappelli
portfolio,  the Operating  Partnership  assumed  approximately  $45.1 million of
indebtedness  and issued 36,518  (approximately  $36.6 million) units of limited
partnership  interest for a total non cash  investment  of  approximately  $81.6
million.  Additionally, in connection with the acquisition of 155 Passaic Avenue
in Fairfield,  New Jersey,  the Operating  Partnership issued 1,979 common units
for a total non cash investment of approximately $50,000.

     On June 11, 1998,  the  Operating  Partnership  distributed  its 95% common
stock interest in RSI of approximately $3 million to its partners.

     On July 2, 1998, in connection  with the acquisition of 360 Hamilton Avenue
located in White Plains, New York, the Operating Partnership issued 6,000 Series
D preferred  units for a total non cash  investment  of $6.0 million and assumed
approximately  $2.0 million of  indebtedness  for a total non cash investment of
approximately $8.0 million.

     On August  13,  1998,  in  connection  with the  acquisition  of two office
properties located in Parsippany,  New Jersey, the Operating  Partnership issued
50,072 OP Units for a total non cash investment of approximately $1.2 million.



     During 1998, in connection with the Operating  Partnership's  investment in
the Morris  Companies,  the  Operating  Partnership  assumed  approximately  $23
million of indebtedness  ($16.9 million net of minority partners  interest).  In
addition,  the Morris  Companies  contributed  net assets of  approximately  $36
million to the  Operating  Partnership  in  exchange  for an  approximate  28.2%
minority partners interest in RMI.

13.       Commitments and Other Comments

     The Operating Partnership had outstanding undrawn letters of credit against
its credit facilities of approximately  $26.1 million and $4 million at December
31, 1998 and 1997, respectively

14.      Quarterly Financial Data (Unaudited)

     The following  summary  represents the Operating  Partnership's  results of
operations  for each  quarter  during 1998 and 1997 (in  thousands,  except unit
data):






                                                                         1998
                                               -------------------------------------------------------------------
                                                  First              Second             Third              Fourth
                                                  Quarter            Quarter            Quarter            Quarter
                                               ----------------     ------------      ----------         ---------

Total revenues...........................      $      55,062         $    66,267      $    71,595        $   73,388
                                               ================     ============      ===========        ==========
                                                                                             
Income before distributions to preferred                                                                                         
  unitholders, minority interests and
  extraordinary items ...................      $      12,387         $    17,664      $    17,348        $   17,910
Preferred distributions..................               ---               (4,168)          (5,034)           (5,042)
Minority partners' interest in consolidated
   partnerships income...................               (561)               (712)            (665)             (881)
Extraordinary (loss).....................               ---                  ---           (1,993)              ---
                                               ----------------     -------------     ------------       -----------
Net income available to common 
unitholders..............................      $      11,826         $    12,784      $     9,656        $   11,987
                                               ================     =============     ============       ===========
Net income:
   General Partner.......................      $       9,835         $    10,022            8,770            10,040
   Limited Partners'.....................              1,991               2,762              886             1,947
                                               ----------------      --------------   ------------       -----------
Total....................................      $      11,826         $    12,784            9,656            11,987
                                               ================     =============     ============       ===========
Net income per common unit:
   General Partner.......................      $         .26                 .25              .22               .25
   Limited Partners'.....................      $         .26                 .36              .11               .25

Weighted average common units outstanding:
   General Partner.......................         38,182,577          39,636,815       40,011,627        40,034,781
   Limited Partners'.....................          7,709,228           7,694,349        7,741,227         7,764,630









                                                                                  1997
                                             ------------------------------------------------------------------------------
                                              First Quarter     Second Quarter      Third Quarter      Fourth Quarter
                                             ----------------   --------------      -------------      --------------------
                                                                                           

Total revenues..............................  $31,670           $36,188             $40,328            $45,162
                                              ===============   ==============      =============      ====================
Income before, minority interests and                                                                                      
  extraordinary items.......................  $ 8,806           $12,006             $11,544            $13,353
Minority partners' interest in consolidated                                                                                
  partnerships income.......................     (268)             (228)               (228)              (196)
Extraordinary (loss)........................      ---            (2,362)               (446)               --
                                              ---------------   --------------      --------------     -----------------
Net income..................................  $ 8,538           $ 9,416              $10,870           $13,157
                                              ===============   ==============      =============      ====================
Net Income:
   General Partner..........................  $ 6,760           $ 7,823             $  9,039           $11,120
   Limited Partners'........................    1,778             1,593                1,831             2,037
                                              ---------------   --------------      --------------     -----------------
Total.......................................  $ 8,538           $ 9,416             $ 10,870           $13,157
                                              ---------------   ----------------    ----------------   -----------------
Net income per unit:
   General Partner..........................  $   .25           $   .23             $    .26           $   .31
   Limited Partners'........................  $   .26           $   .23             $    .26           $   .29

Weighted average common units outstanding:
   General Partner..........................26,569,162       34,298,137           34,477,050        35,445,213
   Limited Partners'........................ 6,960,428        6,974,814            6,974,031         7,153,848



15.   Pro Forma Results (unaudited)

     The  following  unaudited  pro forma  operating  results  of the  Operating
Partnership  for the year ended  December 31, 1998 have been  prepared as if the
property  acquisitions  made  during  1998 had  occurred  on  January  1,  1998.
Unaudited  pro  forma  financial  information  is  presented  for  informational
purposes only and may not be indicative of what the actual results of operations
of the  Operating  Partnership  would  have been had the events  occurred  as of
January 1, 1998,  nor does it purport to represent the results of operations for
future periods (in thousands):

          Revenues.................................           $         284,643
                                                              =================
          Income before extraordinary items .......           $          57,480
                                                              =================
          Net Income...............................           $          55,486
                                                              =================
          Net Income per common unit...............           $            1.18
                                                              =================


                      RECKSON OPERATING PARTNERSHIP, L. P.
              SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION
                                DECEMBER 31, 1998
                                 (IN THOUSANDS)




            COLUMN A              COLUMN B              COLUMN C                   COLUMN D
            --------              --------              --------                   --------

                                                                               COST CAPITALIZED
                                                                                SUBSEQUENT TO
                                                      INITIAL COST               ACQUISITION
                                                      ------------               -----------

                                                          BUILDINGS AND              BUILDINGS AND
           DESCRIPTION              ENCUMBRANCE   LAND     IMPROVEMENTS     LAND     IMPROVEMENTS
           -----------              -----------   ----     ------------     ----     ------------
                                                                       
Vanderbilt Industrial                                                                               
   Park, Hauppauge,                                                                                  
   New York 27 buildings in                                                                          
   an industrial park)......                  B   $1,940           $9,955      --_            $9,858

 Airport International                                                                               
   Plaza, Islip, New York                                                                            
   (17 buildings in an                                                                               
   industrial park).........           2,616(C)    1,263           13,608      --_            10,133

 County Line Industrial                                                                              
   Center, Huntington,                                                                               
   New York (3 buildings in                                                                          
   an industrial park)......                  B      628            3,686      --_             2,638

 32 Windsor Place, Islip,                                                                            
   New York.................                  B       32              321      --_                46

 42 Windsor Place, Islip,                                                                            
   New York.................                  B       48              327      --_               542

 505 Walt Whitman Rd.,                                                                               
   Huntington, New York.....                  B      140               42      --_                59

 1170 Northern Blvd., N.                                                                             
   Great Neck, New York.....                  B       30               99      --_                31

 50 Charles Lindbergh                                                                                
   Blvd., Mitchel Field,                                                                             
   New York.................             15,479        A           12,089      --_             4,179

 200 Broadhollow Road,                                                                               
   Melville New York........              6,621      338            3,354      --_             2,994

 48 South Service Road,                                                                              
   Melville, New York.......                  B    1,652           10,245      --_             3,760

 395 North Service Road,                                                                             
   Melville, New York.......             21,375        A           15,551      --_             6,616

 6800 Jericho Turnpike,                                                                              
   Syosset, New York........             15,001      582            6,566      --_             7,238

 6900 Jericho Turnpike,                                                                              
   Syosset, New York........              5,279      385            4,228      --_             2,531

 300 Motor Parkway,                                                                                  
   Hauppauge, New c York....                  B      276            1,136      --_             1,489

 88 Duryea Road, Melville,                                                                           
   New York.................                  B      200            1,565      --_               669

 210 Blydenburgh Road,                                                                               
   Islandia, New York.......                  B       11              158      --_               155

 208 Blydenburgh Road,                                                                               
   Islandia, New York.......                  B       12              192      --_               145

 71 Hoffman Lane, Islandia,                                                                          
   New York.................                  B       19              260      --_               171

 933 Motor Parkway,                                                                                  
   Hauppauge, New York......                  B      106              375      --_               356









            COLUMN A                       COLUMN E                   COLUMN F         COLUMN G        COLUMN H       COLUMN I
            --------                       --------                   --------         --------        --------       --------

                                     GROSS AMOUNT AT WHICH                                                                         
                                   CARRIED AT CLOSE OF PERIOD                                                                       

                                                                                                                   LIFE ON WHICH
                                         BUILDINGS AND              ACCUMULATED         DATE OF         DATE        DEPRECIATION
           DESCRIPTION          LAND     IMPROVEMENTS     TOTAL     DEPRECIATION     CONSTRUCTION      ACQUIRED     IS COMPUTED
           -----------          ----     ------------     -----     ------------     ------------      --------     -----------
                                                                                                 
Vanderbilt Industrial
   Park, Hauppauge,
   New York (27 buildings                                                                1961-           1961-
   in an industrial park)...    $1,940           $19,813  $21,753          $12,431       1979            1979          10-30 Years

 Airport International
   Plaza, Islip, New York
   (17 buildings in an                                                                   1970-           1970-
   industrial park).........     1,263            23,741   25,004           13,555       1988            1988          10-30 Years

 County Line Industrial
   Center, Huntington,
   New York (3 buildings in                                                              1975-          1975-
   an industrial park)......       628             6,324    6,952            4,029       1979            1979          10-30 Years

 32 Windsor Place, Islip,
   New York.................        32               367      399              315       1971            1971          10-30 Years

 42 Windsor Place, Islip,
   New York.................        48               869      917              666       1972            1972          10-30 Years

 505 Walt Whitman Rd.,
   Huntington, New York.....       140               101      241               70       1950            1968          10-30 Years

 1170 Northern Blvd., N.
   Great Neck, New York.....        30               130      160              121       1947            1962          10-30 Years

 50 Charles Lindbergh
   Blvd., Mitchel Field,
   New York.................         0            16,268   16,268            8,155       1984            1984          10-30 Years

 200 Broadhollow Road,
   Melville New York........       338             6,348    6,686            3,454       1981            1981          10-30 Years

 48 South Service Road,
   Melville, New York.......     1,652            14,005   15,657            6,566       1986            1986          10-30 Years

 395 North Service Road,
   Melville, New York.......         0            22,167   22,167           10,014       1988            1988          10-30 Years

 6800 Jericho Turnpike,
   Syosset, New York........       582            13,804   14,386            7,918       1977            1978          10-30 Years

 6900 Jericho Turnpike,
   Syosset, New York........       385             6,759    7,144            3,261       1982            1982          10-30 Years

 300 Motor Parkway,
   Hauppauge, New c York....       276             2,625    2,901            1,236       1979            1979          10-30 Years

 88 Duryea Road, Melville,
   New York.................       200             2,234    2,434            1,148       1980            1980          10-30 Years

 210 Blydenburgh Road,
   Islandia, New York.......        11               313      324              277       1969            1969          10-30 Years

 208 Blydenburgh Road,
   Islandia, New York.......        12               337      349              318       1969            1969          10-30 Years

 71 Hoffman Lane, Islandia,
   New York.................        19               431      450              379       1970            1970          10-30 Years

 933 Motor Parkway,
   Hauppauge, New York......       106               731      837              540       1973            1973          10-30 Years

                                                                                                      Continued-









            COLUMN A              COLUMN B              COLUMN C                   COLUMN D
            --------              --------              --------                   --------

                                                                               COST CAPITALIZED
                                                                                SUBSEQUENT TO
                                                      INITIAL COST               ACQUISITION
                                                      ------------               -----------

                                                          BUILDINGS AND              BUILDINGS AND
           DESCRIPTION           ENCUMBRANCE      LAND     IMPROVEMENTS     LAND     IMPROVEMENTS
           -----------           -----------      ----     ------------     ----     ------------

                                                                       
 65 and 85 South Service                                                                             
   Road Plainview, New York.                  B       40              218      ---                10

 333 Earl Ovington Blvd.,                                                                            
   Mitchel Field, New York                                                                           
   (Omni)...................             57,162        A           67,221      --_            16,548

 135 Fell Court, Islip,                                                                              
   New York.................                  B      462            1,265      ---                47

 40 Cragwood Road, South                                                                             
   Plainfield, New Jersey...                  B      708            7,131      ---             4,772

 110 Marcus Drive,                                                                                   
   Huntington, New York.....                  B      390            1,499      --_                97

 333 East Shore Road, Great                                                                          
   Neck, New York...........                  B        A              564      --_               176

 310 East Shore Road, Great                                                                          
   Neck, New York...........              2,322      485            2,009      --_               304

 70 Schmitt Blvd.,                                                                                   
   Farmingdale New York.....                150      727            3,408      --_                24

 19 Nicholas Drive,
   Yaphank, New York........                  B      160            7,399      --_                38

 1516 Motor Parkway,                                                                                 
   Hauppauge, New York......                  B      603            6,722      --_                13

 125 Baylis Road, Melville,                                                                          
   New York.................                  B    1,601            8,626      --_               814

 35 Pinelawn Road,                                                                                   
   Melville, New York.......                  B      999            7,073      --_             1,937

 520 Broadhollow Road,                                                                               
   Melville, New York.......                  B      457            5,572      --_             1,424

 1660 Walt Whitman Road,                                                                             
   Melville,New York........                  B      370            5,072      --_               429

 70 Maxess Road, Melville,                                                                           
   New York.................                  B      367            1,859       95             2,753

 85 Nicon Court, Hauppauge,                                                                          
   New York.................                  B      797            2,818      --_                54

 104 Parkway Drive So.,                                                                              
   Hauppauge, New York......                  B       54              804      ---               130

 20 Melville Park Rd.,                                                                               
   Melville, New York.......                  B      391            2,650      ---                96

 105 Price Parkway,                                                                                  
   Hauppauge, New York......                  B    2,030            6,327      ---               453

 48 Harbor Park Drive,                                                                               
   Hauppauge, New York......                  B    1,304            2,247      ---                93

 125 Ricefield Lane,                                                                                 
   Hauppauge, New York......                  B       13              852      ---               330












            COLUMN A                       COLUMN E                   COLUMN F         COLUMN G        COLUMN H       COLUMN I
            --------                       --------                   --------         --------        --------       --------

                                     GROSS AMOUNT AT WHICH                                                                         
                                  CARRIED AT CLOSE OF PERIOD                                                                       
                                  --------------------------
                                                                                                                   LIFE ON WHICH

                                         BUILDINGS AND              ACCUMULATED         DATE OF         DATE        DEPRECIATION
           DESCRIPTION          LAND     IMPROVEMENTS     TOTAL     DEPRECIATION     CONSTRUCTION      ACQUIRED     IS COMPUTED
           -----------          ----     ------------     -----     ------------     ------------      --------     -----------
                                                                                               
 65 and 85 South Service                                                                                                           
   Road Plainview, New York.        40               228      268              223       1961            1961          10-30 Years

 333 Earl Ovington Blvd.,                                                                                                          
   Mitchel Field, New York                                                                                                         
   (Omni)...................         0            83,769   83,769           15,947       1990            1995          10-30 Years

 135 Fell Court, Islip,                                                                                                            
   New York.................       462             1,312    1,774              284       1965            1992          10-30 Years

 40 Cragwood Road, South                                                                                                           
   Plainfield, New Jersey...       708            11,903   12,611            6,331       1970            1983          10-30 Years

 110 Marcus Drive,                                                                                                                 
   Huntington, New York.....       390             1,596    1,986            1,149       1980            1980          10-30 Years

 333 East Shore Road, Great                                                                                                        
   Neck, New York...........         0               740      740              473       1976            1976          10-30 Years

 310 East Shore Road, Great                                                                                                        
   Neck, New York...........       485             2,313    2,798            1,349       1981            1981          10-30 Years

 70 Schmitt Blvd.,                                                                                                                 
   Farmingdale New York.....       727             3,432    4,159              382       1965            1995          10-30 Years

 19 Nicholas Drive,                                                                                                                
   Yaphank, New York........       160             7,437    7,597              845       1989            1995          10-30 Years

 1516 Motor Parkway,                                                                                                               
   Hauppauge, New York......       603             6,735    7,338              785       1981            1995          10-30 Years

 125 Baylis Road, Melville,                                                                                                        
   New York.................     1,601             9,440   11,041              980       1980            1995          10-30 Years

 35 Pinelawn Road,                                                                                                                 
   Melville, New York.......       999             9,010   10,009            1,089       1980            1995          10-30 Years

 520 Broadhollow Road,                                                                                                             
   Melville, New York.......       457             6,996    7,453            1,097       1978            1995          10-30 Years

 1660 Walt Whitman Road,                                                                                                           
   Melville,New York........       370             5,501    5,871              621       1980            1995          10-30 Years

 70 Maxess Road, Melville,                                                                                                         
   New York.................       462             4,612    5,074              385       1967            1995          10-30 Years

 85 Nicon Court, Hauppauge,                                                                                                        
   New York.................       797             2,872    3,669              286       1984            1995          10-30 Years

 104 Parkway Drive So.,                                                                                                            
   Hauppauge, New York......        54               934      988               89       1985            1996          10-30 Years

 20 Melville Park Rd.,                                                                                                             
   Melville, New York.......       391             2,746    3,137              208       1965            1996          10-30 Years

 105 Price Parkway,                                                                                                                
   Hauppauge, New York......     2,030             6,780    8,810              603       1969            1996          10-30 Years

 48 Harbor Park Drive,                                                                                                             
   Hauppauge, New York......     1,304             2,340    3,644              208       1976            1996          10-30 Years

 125 Ricefield Lane,                                                                                                               
   Hauppauge, New York......        13             1,182    1,195              162       1973            1996          10-30 Years

                                                                                                      Continued-











 Column A                          Column B                    COLUMN C                    COLUMN D
 --------                          --------                    --------                    --------           

                                                                                       COST CAPITALIZED
                                                                                         SUBSEQUENT TO
                                                             INITIAL COST                 ACQUISITION
                                                             ------------                 -----------           

                                                                 BUILDINGS AND               BUILDINGS AND
 Description                          ENCUMBRANCE       LAND      IMPROVEMENTS      LAND      IMPROVEMENTS
 -----------                          -----------       ----      ------------      ----      ------------

                                                                               
 110 Ricefield Lane,                                                                                          
   Hauppauge, New York......                        B       33              1,043      ---                 52

 120 Ricefield Lane,                                                                                          
   Hauppauge, New York......                        B       16              1,051      ---                 30

 135 Ricefield Lane,                                                                                          
   Hauppauge, New York......                        B       24                906      ---                473

 30 Hub Drive, Huntington,                                                                                    
   New York.................                        B      469              1,571      ---                295

 60 Charles Lindbergh,                                                                                        
   Mitchel Field, New York..                        B        A             20,800      ---              1,594

 155 White Plains Rod.,                                                                                       
   Tarrytown, New York......                        B    1,613              2,542      ---                876

 2 Church Street,                                                                                             
   Tarrytown, New York .....                        B      232              1,307      ---                375

 235 Main Street,                                                                                             
   Tarrytown, New York......                        B      955              5,375      ---                760

 245 Main Street,                                                                                             
   Tarrytown, New York......                        B    1,294              7,284      ---                849

 505 White Plains Road,                                                                                       
   Tarrytown, New York......                        B      236              1,332      ---                318

 555 White Plains Road,                                                                                       
   Tarrytown, New York......                        B      712              4,133       51              2,668

 560 White Plains Road,                                                                                       
   Tarrytown, New York......                        B    1,553              8,756      ---              1,795

 580 White Plains Road,                                                                                       
   Tarrytown, New York......                    8,503    2,591             14,595      ---              2,040

 660 White Plains Road,                                                                                       
   Tarrytown, New York......                        B    3,929             22,640       45              2,505

 Landmark Square, Stamford,                                                                                   
   Connecticut..............                   48,579   11,603             64,466      ---             12,176

 110 Bi-County Blvd.,                                                                                         
   Farmingdale, New York....                    4,383    2,342              6,665      ---                123

 RREEF Portfolio,                                                                                             
   Hauppauge, New York (10                                                                                    
   additional buildings in                                                                                    
   Vanderbuilt Industrial                                                                                     
   Park)....................                        B      930             20,619      ---              1,880

 275 Broadhollow Road,                                                                                        
   Melville, New York.......                        B    5,250             11,761      ---                514

 One Eagle Rock, East                                                                                         
   Hanover, New Jersey......                        B      803              7,563      ---              1,580

 710 Bridgeport Avenue,                                                                                       
   Shelton, Connecticut.....                        B    5,405             21,620        7                533

 101 JFK Expressway, Short                                                                                    
   Hills, New Jersey........                        B    7,745             43,889      ---              1,019











            COLUMN A                           COLUMN E                   COLUMN F         COLUMN G        COLUMN H       COLUMN I
            --------                           --------                   --------         --------        --------       --------

                                         GROSS AMOUNT AT WHICH
                                      CARRIED AT CLOSE OF PERIOD


                                                                                                                       LIFE ON WHICH
                                             BUILDINGS AND              ACCUMULATED         DATE OF         DATE        DEPRECIATION
           Description              LAND     IMPROVEMENTS     TOTAL     DEPRECIATION     CONSTRUCTION      ACQUIRED     IS COMPUTED
                                    ----     ------------     -----     ------------     ------------      --------     -----------

                                                                                                           
 110 Ricefield Lane,
   Hauppauge, New York......            33             1,095    1,128              109       1980            1996       10-30 Years

 120 Ricefield Lane,
   Hauppauge, New York......            16             1,081    1,097               84       1983            1996       10-30 Years

 135 Ricefield Lane,
   Hauppauge, New York......            24             1,379    1,403              200       1981            1996       10-30 Years

 30 Hub Drive, Huntington,
   New York.................           469             1,866    2,335              181       1976            1996       10-30 Years

 60 Charles Lindbergh,
   Mitchel Field, New York..             0            22,394   22,394            2,143       1989            1996       10-30 Years

 155 White Plains Rod.,
   Tarrytown, New York......         1,613             3,418    5,031              258       1963            1996       10-30 Years

 2 Church Street,
   Tarrytown, New York .....           232             1,682    1,914              166       1979            1996       10-30 Years

 235 Main Street,
   Tarrytown, New York......           955             6,135    7,090              612       1974            1996       10-30 Years

 245 Main Street,
   Tarrytown, New York......         1,294             8,133    9,427              836       1983            1996       10-30 Years

 505 White Plains Road,
   Tarrytown, New York......           236             1,650    1,886              183       1974            1996       10-30 Years

 555 White Plains Road,
   Tarrytown, New York......           763             6,801    7,564            1,043       1972            1996       10-30 Years

 560 White Plains Road,
   Tarrytown, New York......         1,553            10,551   12,104            1,494       1980            1996       10-30 Years

 580 White Plains Road,
   Tarrytown, New York......         2,591            16,635   19,226            1,786       1997            1996       10-30 Years

 660 White Plains Road,
   Tarrytown, New York......         3,974            25,145   29,119            2,767       1983            1996       10-30 Years

 Landmark Square, Stamford,
   Connecticut..............        11,603            76,642   88,245            5,438     1973-1984         1996       10-30 Years

 110 Bi-County Blvd.,
   Farmingdale, New York....         2,342             6,788    9,130              477       1984            1997        10-30 Years

 RREEF Portfolio,                      930            22,499    23,429            1,370     1974-1982         1997       10-30 Years
   Hauppauge, New York (10
   additional buildings in
 Vanderbuilt Industrial Park)

 275 Broadhollow Road,
   Melville, New York.......         5,250            12,275   17,525              740       1970            1997      10-30 Years

 One Eagle Rock, East
   Hanover, New Jersey......           803             9,143    9,946              566       1986            1997      10-30 Years

 710 Bridgeport Avenue,
   Shelton, Connecticut.....         5,412            22,153   27,565            1,295     1971-1979         1997      10-30 Years

 101 JFK Expressway, Short
   Hills, New Jersey........         7,745            44,908   52,653            2,462       1981            1997      10-30 Years

                                                                                                          Continued-









            COLUMN A                  COLUMN B              COLUMN C                  COLUMN D
            --------                  --------              --------                  --------

                                                                                  COST CAPITALIZED
                                                                                    SUBSEQUENT TO
                                                          INITIAL COST               ACQUISITION
                                                          ------------               -----------





                                                              BUILDINGS AND             BUILDINGS AND
           DESCRIPTION               ENCUMBRANCE      LAND     IMPROVEMENTS     LAND     IMPROVEMENTS
           -----------               -----------      ----     ------------     ----     ------------
                                                                              
 10 Rooney Circle, West                                                                                  
   Orange, New Jersey.......                      B    1,302            4,615        1               418

 Executive Hill Office                                                                                   
   Park, West Orange,                                                                                    
   New Jersey...............                      B    7,629           31,288        4               814

 3 University Plaza,                                                                                     
   Hackensack, New Jersey...                      B    7,894           11,846      ---               595

 400 Garden City Plaza,                                                                                  
   Garden City, New York....                      B   13,986           10,127      ---               389

 425 Rabro Drive,                                                                                        
   Hauppauge, New York......                      B      665            3,489      ---                67

 One Paragon Drive,                                                                                      
   Montvale, New Jersey.....                      B    2,773            9,901      ---               463

 90 Merrick Avenue, East                                                                                 
   Meadow, New York.........                      B        A           19,193      ---             2,152

 150 Motor Parkway,                                                                                      
   Hauppauge, New York......                      B    1,114           20,430      ---             2,365

 390 Motor Parkway,                                                                                      
   Hauppauge, New York......                      B      240            4,459      ---               237

 Royal Executive Park,                                                                                   
   Ryebrook, New York.......                      B   18,343           55,028       --             1,191

 120 White Plains Road,                                                                                  
   Tarrytown, New York......                      B    3,355           24,605      ---                89

 University Square,                                                                                      
   Princeton, New Jersey....                      B    3,288            8,888      ---                70

 100 Andrews Road,                                                                                       
   Hicksville, New York.....                      B    2,337            1,711      151             5,697

 2 Macy Road, Harrison,                                                                                  
   New York.................                      B      642            2,131      ---                47

 80 Grasslands, Elmsford,                                                                                
   New York.................                      B    1,208            6,728      ---               175

 65 Marcus Drive, Melville,                                                                              
   New York.................                      B      295            1,966       57               885

 200 Carter Drive, Edison,                                                                               
   New Jersey...............                      B      240            2,745      ---               ---

 118 Moonachie Avenue,                                                                                   
   Carlstadt, New Jersey....                      B    6,270           12,727      ---               ---

 24 Abeel Road, Monroe,                                                                                  
   New Jersey...............                      B      138            1,195      ---               ---

 275 / 285 Pierce Street,                                                                                
   Franklin New Jersey......                      B      277            1,414      ---                16

 301 / 321 Herrod Blvd.,                                                                                 
   S Brunswick, New Jersey..                      B    3,833           19,342      ---               ---

 1 Nixon Lane, Edison,                                                                                   
   New Jersey...............                      B    1,113            4,918      ---               ---









            COLUMN A                           COLUMN E                   COLUMN F         COLUMN G        COLUMN H       COLUMN I
            --------                           --------                   --------         --------        --------       --------

                                         GROSS AMOUNT AT WHICH
                                      CARRIED AT CLOSE OF PERIOD
                                      --------------------------




                                                                                                                       LIFE ON WHICH
                                             BUILDINGS AND              ACCUMULATED         DATE OF         DATE        DEPRECIATION
           DESCRIPTION              LAND     IMPROVEMENTS     TOTAL     DEPRECIATION     CONSTRUCTION      ACQUIRED     IS COMPUTED
           -----------              ----     ------------     -----     ------------     ------------      --------     -----------
                                                                                                   
 10 Rooney Circle, West
   Orange, New Jersey.......         1,303             5,033    6,336              312       1971            1997       10-30 Years

 Executive Hill Office
   Park, West Orange,
   New Jersey...............         7,633            32,102   39,735            1,619     1978-1984         1997       10-30 Years

 3 University Plaza,
   Hackensack, New Jersey...         7,894            12,441   20,335              638       1985            1997       10-30 Years

 400 Garden City Plaza,
   Garden City, New York....        13,986            10,516   24,502              512       1989            1997       10-30 Years

 425 Rabro Drive,
   Hauppauge, New York......           665             3,556    4,221              176       1980            1997       10-30 Years

 One Paragon Drive,
   Montvale, New Jersey.....         2,773            10,364   13,137              456       1980            1997       10-30 Years

 90 Merrick Avenue, East
   Meadow, New York.........             0            21,345   21,345              892       1985            1997       10-30 Years

 150 Motor Parkway,
   Hauppauge, New York......         1,114            22,795   23,909            1,028       1984            1997       10-30 Years

 390 Motor Parkway,
   Hauppauge, New York......           240             4,696    4,936              208       1980            1997       10-30 Years

 Royal Executive Park,
   Ryebrook, New York.......        18,343            56,219   74,562            2,133     1983-1986         1997       10-30 Years

 120 White Plains Road,
   Tarrytown, New York......         3,355            24,694   28,049              890       1984            1997       10-30 Years

 University Square,
   Princeton, New Jersey....         3,288             8,958   12,246              322       1987            1997       10-30 Years

 100 Andrews Road,
   Hicksville, New York.....         2,488             7,408    9,896              463       1954            1996       10-30 Years

 2 Macy Road, Harrison,
   New York.................           642             2,178    2,820               83       1962            1997       10-30 Years

 80 Grasslands, Elmsford,
   New York.................         1,208             6,903    8,111              268     1989/1964         1997       10-30 Years

 65 Marcus Drive, Melville,
   New York.................           352             2,851    3,203              167       1968            1996       10-30 Years

 200 Carter Drive, Edison,
   New Jersey...............           240             2,745    2,985               91       1985            1998       10-30 Years

 118 Moonachie Avenue,
   Carlstadt, New Jersey....         6,270            12,727   18,997              423       1989            1998       10-30 Years

 24 Abeel Road, Monroe,
   New Jersey...............           138             1,195    1,333               40       1979            1998       10-30 Years

 275 / 285 Pierce Street,
   Franklin New Jersey......           277             1,430    1,707               48       1988            1998       10-30 Years

 301 / 321 Herrod Blvd.,
   S Brunswick, New Jersey..         3,833            19,342   23,175              643       1991            1998       10-30 Years

 1 Nixon Lane, Edison,
   New Jersey...............         1,113             4,918    6,031              164       1988            1998       10-30 Years

                                                                                                          Continued-









            COLUMN A                  COLUMN B              COLUMN C                   COLUMN D
            --------                  --------              --------                   --------

                                                                                      COST CAPITALIZED
                                                                                        SUBSEQUENT TO
                                                               INITIAL COST               ACQUISITION
                                                               ------------               -----------

                                                              BUILDINGS AND              BUILDINGS AND
           DESCRIPTION               ENCUMBRANCE      LAND     IMPROVEMENTS     LAND     IMPROVEMENTS
           -----------               -----------      ----     ------------     ----     ------------
                                                                           
 18 Madison Road,                                                                                        
   Fairfield, New Jersey....                      B       76              871      ---                --

 200 / 250 Kennedy Drive,                                                                                
   Sayreville, New Jersey...                      B    1,018            6,851      ---               ---

 24 Madison Road,                                                                                        
   Fairfield, New Jersey....                      B      131            2,176      ---               ---

 243 St Nicholas Avenue,                                                                                 
   So. Plainfield,                                                                                       
   New Jersey...............                      B      172              551      ---               ---

 26 Madison Road,                                                                                        
   Fairfield, New Jersey....                      B        A            1,492      ---               ---

 300 / 350 Kennedy Drive,                                                                                
   Sayreville, New Jersey...                      B    1,003            7,303      ---               ---

 309 Kennedy Drive,                                                                                      
   Sayreville, New Jersey...                 10,345      297            9,102      ---               ---

 34 Englehard Drive,                                                                                     
   Monroe, New Jersey.......                      B    1,073            6,656      ---               ---

 409 Kennedy Drive,                                                                                      
   Sayreville, New Jersey...                  4,434      126            9,650      ---               ---

 535 Secaucus Road,                                                                                      
   Secaucus, New Jersey.....                      B      798            2,713      ---               ---

 55 Carter Drive, Edison,                                                                                
   New Jersey...............                      B       84            3,905      ---                30

 Mount Ebo Corporate Park,                                                                               
   Brewster, New Jersey.....                      B    1,031            7,204       --                16

 Teterboro-Industrial                                                                                    
   Avenue, Teterboro,                                                                                    
   New jersey...............                      B    2,671           18,875      ---               ---

 22 Madison Road,                                                                                        
   Fairfield, New Jersey....                      B      655            1,445      ---                 1

 135 Fieldcrest Ave.,                                                                                    
   Edison, New Jersey.......                      B      370            3,774      ---               ---

 400 Cabot Drive, Hamilton,                                                                              
   New Jersey...............                      B    2,068           18,614      ---                71

 51 JFK Parkway, Short                                                                                   
   Hills, New York..........                      B    8,732           58,437      ---               323

 Triad V - 1979 Marcus                                                                                   
   Ave., Lake Success,                                                                                   
   New York.................                      B    3,528           31,786      ---             2,966

 100 Forge Way, Rockaway,                                                                                
   New Jersey...............                      B      315              902      ---                53

 200 Forge Way, Rockaway,                                                                                
   New Jersey...............                      B    1,128            3,228      ---               168

 300 Forge Way, Rockaway,                                                                                
   New Jersey...............                      B      376            1,075      ---                63

 400 Forge Way, Rockaway,                                                                                
   New Jersey...............                      B    1,142            3,267      ---               168

 51 -55 Charles Lindergh                                                                                 
   Blvd., Uniondale,                                                                                     
   New York.................                      B        A           27,975      ---             4,119

 155 Passaic Avenue,                                                                                     
   Fairfield, New Jersey....                      B        3            3,538       --               174

 100 Summit Drive,                                                                                       
   Valhalla, New York.......                 23,600    3,007           41,351      ---             1,148










            COLUMN A                           COLUMN E                   COLUMN F         COLUMN G        COLUMN H       COLUMN I
            --------                           --------                   --------         --------        --------       --------

                                         GROSS AMOUNT AT WHICH
                                      CARRIED AT CLOSE OF PERIOD

           DESCRIPTION              LAND     BUILDINGS AND    TOTAL     ACCUMULATED         DATE OF         DATE      LIFE ON WHICH
           -----------              ----     IMPROVEMENTS     -----     DEPRECIATION     CONSTRUCTION      ACQUIRED    DEPRECIATION
                                             ------------               ------------     ------------      --------    IS COMPUTED
                                                                                                                       -----------
                                                                                                   
 18 Madison Road,                       76               871      947               29       1979            1998       10-30 Years
   Fairfield, New Jersey....

 200 / 250 Kennedy Drive,            1,018             6,851    7,869              228       1988            1998       10-30 Years
   Sayreville, New Jersey...

 24 Madison Road,                      131             2,176    2,307               72       1980            1998       10-30 Years
   Fairfield, New Jersey....

 243 St Nicholas Avenue,               172               551      723               18       1974            1998       10-30 Years
   So. Plainfield,
   New Jersey...............


 26 Madison Road,                        0             1,492    1,492               50       1980            1998       10-30 Years
   Fairfield, New Jersey....

 300 / 350 Kennedy Drive,            1,003             7,303    8,306              223       1988            1998       10-30 Years
   Sayreville, New Jersey...

 309 Kennedy Drive,                    297             9,102    9,399              303       1996            1998       10-30 Years
   Sayreville, New Jersey...

 34 Englehard Drive,                 1,073             6,656    7,729              221       1980            1998       10-30 Years
   Monroe, New Jersey.......

 409 Kennedy Drive,                    126             9,650    9,776              321       1996            1998       10-30 Years
   Sayreville, New Jersey...

 535 Secaucus Road,                    798             2,713    3,511               90       1979            1998       10-30 Years
   Secaucus, New Jersey.....

 55 Carter Drive, Edison,               84             3,935    4,019              131       1987            1998       10-30 Years
   New Jersey...............

 Mount Ebo Corporate Park,           1,031             7,220    8,251              120                       1998       10-30 Years
   Brewster, New Jersey.....

 Teterboro-Industrial                2,671            18,875   21,546              224       1998            1998       10-30 Years
   Avenue, Teterboro,
   New jersey...............


 22 Madison Road,                      655             1,446    2,101               20       1980            1998       10-30 Years
   Fairfield, New Jersey....
 135 Fieldcrest Ave.,                  370             3,774    4,144               10       1980            1998       10-30 Years
   Edison, New Jersey.......

 400 Cabot Drive, Hamilton,          2,068            18,685   20,753              624       1989            1998       10-30 Years
   New Jersey...............

 51 JFK Parkway, Short               8,732            58,760   67,492            1,636       1988            1998       10-30 Years
   Hills, New York..........

 Triad V - 1979 Marcus               3,528            34,752   38,280            1,089       1987            1998       10-30 Years
   Ave., Lake Success,
   New York.................


 100 Forge Way, Rockaway,              315               955    1,270               31       1986            1989       10-30 Years
   New Jersey...............

 200 Forge Way, Rockaway,            1,128             3,396    4,524              112       1989            1998       10-30 Years
   New Jersey...............

 300 Forge Way, Rockaway,              376             1,138    1,514               37       1989            1998       10-30 Years
   New Jersey...............

 400 Forge Way, Rockaway,            1,142             3,435    4,577              113       1989            1998       10-30 Years
   New Jersey...............

 51 -55 Charles Lindergh                 0            32,094   32,094            1,469       1981            1998       10-30 Years
   Blvd., Uniondale,
   New York.................


 155 Passaic Avenue,                     3             3,712    3,715               83       1984            1998       10-30 Years
   Fairfield, New Jersey....

 100 Summit Drive,                   3,007            42,499   45,506              986       1988            1998       10-30 Years
   Valhalla, New York.......

                                                                                                          Continued-









            COLUMN A                  COLUMN B              COLUMN C                   COLUMN D
            --------                  --------              --------                   --------

                                                          INITIAL COST             COST CAPITALIZED
                                                          ------------              SUBSEQUENT TO
                                                                                     ACQUISITION
                                                                                     -----------

           DESCRIPTION               ENCUMBRANCE      LAND    BUILDINGS AND     LAND     BUILDINGS AND
                                                               IMPROVEMENTS              IMPROVEMENTS
          ------------               -----------      ----    -------------     ----     ------------

                                                                           
 115 / 117 Stevens Avenue,                        B    1,094           22,490      ---               407
   Valhalla, New York.......

 200 Summit Lake Drive,                      20,764    4,343           37,305      ---               349
   Valhalla, New York.......

 140 Grand Street.,                               B    1,931           18,743      ---               149
   Valhalla, New York ......

 500 Summit Lake Drive,                           B    7,052           37,309      ---               242
   Valhalla, New York.......

 5 Henderson Drive, West                          B    2,450            6,984      ---                30
   Caldwell, New Jersey.....

 Stamford Towers, Stamford,                       B   13,556           47,915       --               930
   Connecticut..............

 99 Cherry Hill Road,                             B    2,359            7,508       --                42
   Parsippany, New Jersey...

 119 Cherry Hill Road,                            B    2,512            7,622      ---               196
   Parsipanny, New Jersey...

 120 Wilbur Place, Bohemia,                       B      202            1,154      ---                44
   New York ................

 45 Melville Park Road,                           B      354            1,487      ---             1,581
   Melville, New York ......

 500 Saw Mill River Road,                         B    1,542            3,796      ---               169
   Elmsford, New York.......

 2004 Orville Drive,                              B      633            4,225      ---             1,208
   No. Bohemia, New York....



 Land held for development                        B   69,143              ---      ---               ---

 Development in progress                      6,850      ---           82,901      ---               ---

 Other property                                   B      ---              ---      ---             2,589
                                           --------  --------      ----------     ----          -------- 
 Total......................               $253,463 $281,272       $1,305,937     $411          $149,513
                                           ======== =========      ==========     ====          ========











            COLUMN A                           COLUMN E                   COLUMN F         COLUMN G       COLUMN H       COLUMN I
            --------                           --------                   --------         --------       --------       --------

                                         GROSS AMOUNT AT WHICH
                                      CARRIED AT CLOSE OF PERIOD


           DESCRIPTION              LAND     BUILDINGS AND    TOTAL     ACCUMULATED         DATE OF         DATE       LIFE ON WHICH
           -----------              ----     IMPROVEMENTS     -----     DEPRECIATION     CONSTRUCTION      ACQUIRED     DEPRECIATION
                                             ------------               ------------     ------------      --------     IS COMPUTED
                                                                                                                        -----------
                                                                                                     
 115 / 117 Stevens Avenue,           1,094            22,897   23,991              514      1984             1998       10-30 Years
   Valhalla, New York.......

 200 Summit Lake Drive,              4,343            37,654   41,997              841      1990             1998       10-30 years
   Valhalla, New York.......

 140 Grand Street.,                  1,931            18,892   20,823              424      1991             1998       10-30 Years
   Valhalla, New York ......

 500 Summit Lake Drive,              7,052            37,551   44,603              632      1986             1998       10-30 Years
   Valhalla, New York.......

 5 Henderson Drive,                  2,450             7,014    9,464              118      1967             1998       10-30 Years
   West Caldwell, New Jersey

 Stamford Towers,                   13,556            48,845   62,401              855      1989             1998       10-30 Years
   Stamford, Connecticut....

 99 Cherry Hill Road,                2,359             7,550    9,909              106      1982             1998       10-30 Years
   Parsippany, New Jersey...

 119 Cherry Hill Road,               2,512             7,818   10,330              108      1982             1998       10-30 Years
   Parsipanny, New Jersey...

 120 Wilbur Place,                     202             1,198    1,400               16      1972             1998       10-30 Years
   Bohemia, New York .......

 45 Melville Park Road,                354             3,068    3,422               57      1998             1998       10-30 Years
   Melville, New York ......

 500 Saw Mill River Road,            1,542             3,965    5,507              132      1968             1998       10-30 Years
   Elmsford, New York.......

 2004 Orville Drive, No.               633             5,433    6,066              128      1998             1998       10-30 Years
   Bohemia, New York........


 Land held for development          69,143                 0   69,143                0        N/A          Various          N/A

Developments in progress               ---            82,901   82,901                0

Other property                         ---             2,589    2,589              325
                                   -------        ----------  ----------      ---------
Total.......................      $281,682        $1,455,450  $1,737,132      $156,231
                                  ========        ==========  ==========      ========
- -------------------------------------------------------------------------------




A These land  parcels  are leased (see Note 4). B There are no  encumbrances  on
these properties. C The Encumbrance of $2,616 is related to one property.

   The aggregate cost for Federal Income Tax purposes was approximately $1,575
million at December 31, 1998.




           The changes in real estate for each of the periods in the three years
ended December 31, 1998 are as follows:




                                                  JANUARY 1, 1998     JANUARY 1, 1997      JUNE 1, 1996
                                                         TO                 TO                  TO
                                                 DECEMBER 31, 1998   DECEMBER 31, 1997   DECEMBER 31, 1996
                                                 -----------------   -----------------   -----------------
                                                                                  
  Real estate balance at beginning of                    $1,011,228            $516,768            $288,056
   period

  Improvements                                              134,582              37,778              15,174

  Disposal, including write-off of fully                        ---               (154)               (936)
   depreciated building improvements

  Acquisitions                                              591,323             456,836             214,474
                                                        -----------          ----------            --------

  Balance at end of period                               $1,737,133          $1,011,228            $516,768
                                                        ===========          ==========            ========



     The changes in accumulated  depreciation,  exclusive of amounts relating to
equipment,  autos,  furniture and fixtures, for each of the periods in the three
years ended December 31, 1998 are as follows:


                                                  JANUARY 1, 1998     JANUARY 1, 1997     JANUARY 1, 1996
                                                         TO                 TO                  TO
                                                 DECEMBER 31, 1998   DECEMBER 31, 1997   DECEMBER 31, 1996
                                                 -----------------   -----------------   -----------------
                                                                                   
  Balance at beginning of period                           $108,652             $86,344             $72,499

  Depreciation for period                                    47,579              22,442              14,781

  Disposal, including write-off of fully                        ---               (134)               (936)
  depreciated    building improvements
                                                           --------            ---------           ---------

  Balance at end of period                                 $156,231            $108,652             $86,344
                                                           ========            =========           =========





                                                                   
=========================================================             =================================================







   
    

                                                                                          Reckson
                                                                                         Associates
                                                                                        Realty Corp.

                   TABLE OF CONTENTS

                       Prospectus


Risk Factors........................................  2
Available Information .............................. 18
Incorporation of Certain Documents by Reference..... 18
Reckson Associates and The Operating
  Partnership....................................... 19
Use of Proceeds..................................... 21
   
Ratios of Earnings to Combined Fixed Charges
  and Preferred Stock Dividends..................... 22
    
Description of Debt Securities...................... 23
Description of Common Stock......................... 41
Description of Preferred Stock...................... 43
Description of Depositary Shares.................... 51
Restrictions on Ownership of Capital Stock.......... 55
Description of Warrants............................. 58
Federal Income Tax Considerations................... 59
Plan of Distribution................................ 60
Legal Matters....................................... 60
Experts............................................. 61
Selected Financial Data............................. F-
Management's Discussion and Analysis of
 Financial Condition and Results of Operations...... F-
Financial Statements................................ F-


=========================================================             =================================================



                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The  following  sets forth the estimated  expenses in  connection  with the
issuance  and  distribution  of the  Registrant's  securities  being  registered
hereby, other than underwriting discounts and commissions,  all of which will be
borne by the Registrant:

Securities and Exchange Commission registration fee.................    $139,000
Printing and engraving expenses.....................................     200,000
Legal fees and expenses.............................................     150,000
Accounting fees and expenses........................................      40,000
Blue Sky fees and expenses..........................................      20,000
Trustee's fees......................................................      10,000
Miscellaneous.......................................................      66,000
                                                                        --------
Total                                                                   $625,000
                                                                        ========

ITEM 15.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     The  Maryland  General  Corporation  Law, as amended from time to time (the
"MGCL"),  permits a Maryland  corporation  to include in its Charter a provision
limiting the liability of its directors and officers to the  corporation and its
stockholders  for money damages  except for liability  resulting from (a) actual
receipt of an improper  benefit or profit in money,  property or services or (b)
active  and  deliberate  dishonesty  established  by a final  judgment  as being
material  to the cause of action.  The Charter of the  Company  contains  such a
provision  which  eliminates  such liability to the maximum extent  permitted by
Maryland law.

     The Charter of the Company  authorizes  the Company,  to the maximum extent
permitted  by  Maryland  law,  to  obligate  itself to  indemnify  and to pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any present or former director or officer or (b) any individual who, while a
director of the Company and at the request of the Company,  serves or has served
another corporation,  real estate investment trust, partnership,  joint venture,
trust,  employee  benefit plan or any other  enterprise as a director,  officer,
partner  or  trustee  of  such   corporation,   real  estate  investment  trust,
partnership, joint venture, trust, employee benefit plan or other enterprise and
who is made a party to the  proceeding  by reason of his or her  service in that
capacity. The Bylaws of the Company obligate it, to the maximum extent permitted
by Maryland  law, to indemnify  and to pay or reimburse  reasonable  expenses in
advance  of final  disposition  of a  proceeding  to (a) any  present  or former
director  or  officer  who is made a party to the  proceeding  by  reason of his
service in that  capacity  or (b) any  individual  who,  while a director of the
Company  and at the  request  of  the  Company,  serves  or has  served  another
corporation,  real estate investment trust,  partnership,  joint venture, trust,
employee benefit plan or any other enterprise as a director, officer, partner or
trustee of such corporation,  real estate investment trust,  partnership,  joint
venture,  trust,  employee  benefit plan or other  enterprise  and who is made a
party to the proceeding by reason of his service in that  capacity.  The Charter
and Bylaws  also  permit the Company to  indemnify  and advance  expenses to any
person  who  served  a  predecessor  of the  Company  in  any of the  capacities
described  above and to any employee or agent of the Company or a predecessor of
the Company.

     The MGCL requires a  corporation  (unless its charter  provides  otherwise,
which the Company's Charter does not) to indemnify a director or officer who has
been successful, on the merits or otherwise, in the defense of any proceeding to
which he is made a party by reason of his  service  in that  capacity.  The MGCL
permits a  corporation  to  indemnify  its  present  and  former  directors  and
officers,  among others, against judgments,  penalties,  fines,  settlements and
reasonable  expenses actually incurred by them in connection with any proceeding
to which  they may be made a party by reason of their  service in those or other
capacities unless it is established that (a) the act or omission of the director
or officer was material to the matter giving rise to the  proceeding and (i) was
committed  in bad  faith  or (ii)  was  the  result  of  active  and  deliberate
dishonesty,  (b) the director or officer actually  received an improper personal
benefit  in  money,  property  or  services  or (c) in the case of any  criminal
proceeding, the director or officer had reasonable cause to believe that the act
or omission was unlawful.  However,  under the MGCL, a Maryland  corporation may
not  indemnify  for an  adverse  judgment  in a suit by or in the  right  of the
corporation  or for a judgment of liability on the basis that  personal  benefit
was improperly  received,  unless in either case a court orders  indemnification
and then only for  expenses.  In  addition,  the MGCL permits a  corporation  to
advance  reasonable  expenses,  upon the corporation's  receipt of (a) a written
affirmation  by the director or officer of his good faith belief that he has met
the standard of conduct necessary for  indemnification  by the Company and (b) a
written  statement by or on his behalf to repay the amount paid or reimbursed by
the  Corporation  if it shall  ultimately  be  determined  that the  standard of
conduct was not met.

     The Company has entered into  indemnification  agreements  with each of its
executive officers and directors. The indemnification  agreements require, among
other matters,  that the Company indemnify its executive  officers and directors
to the fullest extent permitted by law and advance to the executive officers and
directors all related  expenses,  subject to reimbursement if it is subsequently
determined that  indemnification is not permitted.  Under these agreements,  the
Company  must also  indemnify  and advance all  expenses  incurred by  executive
officers and directors seeking to enforce their rights under the indemnification
agreements and may cover  executive  officers and directors  under the Company's
directors'  and  officers'   liability   insurance.   Although   indemnification
agreements offer  substantially  the same scope of coverage afforded the Bylaws,
they  provide  greater  assurance  to  directors  and  executive  officers  that
indemnification  will be  available,  because,  as  contracts,  they  cannot  be
modified   unilaterally  in  the  future  by  the  Board  of  Directors  or  the
stockholders to eliminate the rights they provide.

     The Partnership  Agreement of the Operating Partnership contains provisions
indemnifying its partners and their officers and directors to the fullest extent
permitted by the Delaware Limited Partnership Act.

ITEM 16.  EXHIBITS.


                         
        1         --        Form of Underwriting Agreement.(1)

      4.1         --        Form of Common Stock Certificate.(2)

      4.2         --        Form of Designating Amendment for Preferred Stock.(1)

      4.3         --        Form of Preferred Stock Certificate.(1)

      4.4         --        Form of Warrant Agreement.(1)

      4.5         --        Form of Warrant.(1)

      4.6         --        Form of Indenture.(3)

        5         --        Opinion of Brown & Wood LLP as to the legality of the Securities.(4)

        8         --        Opinion of Brown & Wood LLP as to tax matters.(3)

   
     12.1         --        Calculation of Reckson Associates Realty Corp. Ratios of Earnings to Combined Fixed  Charges.

     12.2         --        Calculation of Reckson Associates Realty Corp. Ratios of Earnings to Fixed Charges and Preferred
                            Dividends.

     12.3         --        Calculation of Reckson Operating Partnership L.P. Ratios of Earnings to Combined Fixed  Charges.

     12.4         --        Calculation of Reckson Operating Partnership L.P. Ratios of Earnings to Fixed Charges and Preferred
                            Dividends.
    

     23.1         --        Consent of Brown & Wood LLP  (included in Exhibits 5 and 8).

     23.2         --        Consent of Ernst & Young LLP.

       24         --        Power of attorney (included on the signature page of this Registration Statement)

   
       27         --        Financial Data Schedule
    

______________
(1)  To be filed by amendment or  incorporated  by reference in connection  with
     the offering of Securities.
(2)  Previously filed as an exhibit to Registration  Statement on Form S-11 (No.
     33-84324) and incorporated herein by reference.
(3)  Previously  filed as an exhibit  to  Amendment  No. 1 to this  Registration
     Statement.
(4)  A revised  opinion will be filed by amendment or  incorporated by reference
     in connection with the offering of Securities.


ITEM 17.  UNDERTAKINGS.

     (a) Each Registrant hereby undertakes:

     (1) To file,  during any period in which  offers or sales are being made, a
post-effective amendment to the Registration Statement;

          (i) To include  any  prospectus  required  by Section  10(a)(3) of the
     Securities Act;

          (ii) To reflect in the  prospectus  any facts or events  arising after
     the  effective  date of the  Registration  Statement  (or the  most  recent
     post-effective amendment thereof) which,  individually or in the aggregate,
     represent  a  fundamental  change  in  the  information  set  forth  in the
     Registration  Statement.  Notwithstanding  the  foregoing,  any increase or
     decrease  in volume of  securities  offered (if the total  dollar  value of
     securities  offered  would not exceed  that which was  registered)  and any
     deviation from the low or high end of the estimated  maximum offering range
     may be  reflected  in the form of  prospectus  filed  with  the  Commission
     pursuant  to Rule  424(b) if, in the  aggregate,  the changes in volume and
     price represent no more than a 20% change in the maximum offering price set
     forth in the  "Calculation  of  Registration  Fee"  table in the  effective
     registration statement;

          (iii) To include any material  information with respect to the plan of
     distribution not previously disclosed in the Registration  Statement or any
     material change to such information in the Registration Statement.

                           Provided, however, that paragraphs (1)(i) and (1)(ii)
                  do not apply if the  information  required to be included in a
                  post-effective  amendment by those  paragraphs is contained in
                  periodic  reports filed by the Registrant  pursuant to Section
                  13 or 15(d) of the  Exchange  Act  that  are  incorporated  by
                  reference in the Registration Statement.

     (2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  bona fide  offering
thereof; and

     (3) To remove from registration by means of a post-effective  amendment any
of the securities being registered which remain unsold at the termination of the
offering.

     (b) Each Registrant hereby undertakes that, for purposes of determining any
liability  under the  Securities  Act, each filing of such  Registrant's  annual
report  pursuant  to  Section  13(a) or 15(d) of the  Exchange  Act (and,  where
applicable,  each filing of an employee benefit plan's annual report pursuant to
Section  15(d) of the  Exchange  Act) that is  incorporated  by reference in the
Registration  Statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, partners and controlling persons of
a Registrant pursuant to the foregoing provisions, or otherwise, the Registrants
have been advised that in the opinion of the Securities and Exchange  Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore,  unenforceable. In the event that a claim for indemnification
against such  liabilities  (other than the payment by a  Registrant  of expenses
incurred or paid by a director,  officer,  partner or controlling  person of the
Registrant  in the  successful  defense of any action,  suit or  proceeding)  is
asserted by such director,  officer, partner or controlling person in connection
with the securities being registered,  the applicable Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by it is against  public policy as expressed in the  Securities
Act and will be governed by the final adjudication of such issue.

     (d)  Each  registrant  hereby  undertakes  to file an  application  for the
purpose of determining  the  eligibility of the trustee to act under  subsection
(a) of Section 310 of the Trust  Indenture Act in accordance  with the rules and
regulations prescribed by the Commission under Section 305 (b)(2) of the Act.



                                   SIGNATURES

   
         Pursuant to the  requirements  of the Securities  Act of 1933,  Reckson
Associates Realty Corp. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,  thereunto
duly authorized,  in the Township of Huntington,  State of New York, on February
26, 1999.
    

                                RECKSON ASSOCIATES REALTY CORP.


                                By:      /s/ Scott H. Rechler
                                   ---------------------------------------------
                                     Scott H. Rechler
                                     President

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated.



              Signature                                    Title                                  Date
              ---------                                    -----                                  ----
                                                                                         
                                           Chairman of the Board, Chief Executive
            Donald J. Rechler*             Officer and Director (Principal Executive
          ----------------------
            Donald J. Rechler              Officer)

   
          /s/ Scott H. Rechler             President, Chief Operating Officer and              February 26, 1999
          ----------------------
            Scott H. Rechler               Director
    

                                           Executive Vice President, Treasurer and
             Michael Maturo*               Chief Financial Officer (Principal
          ----------------------
             Michael Maturo                Financial Officer and Principal Accounting
                                           Officer)

            Roger M. Rechler*              Vice-Chairman of the Board and Director
          ----------------------
            Roger M. Rechler

          Mitchell D. Rechler*             Executive Vice President and Director
          ----------------------
           Mitchell D. Rechler

             Harvey R. Blau*               Director
          ----------------------
             Harvey R. Blau

           Leonard Feinstein*              Director
          ----------------------
            Leonard Feinstein

           Herve A. Kevenides*             Director
          ----------------------
           Herve A. Kevenides

            John V.N. Klein*               Director
          ----------------------
             John V.N. Klein

            Lewis S. Ranieri*              Director
          ----------------------
            Lewis S. Ranieri

                                           Director
          ----------------------
          Conrad D. Stephenson

   
       *By: /s/ Scott H. Rechler                                                               February 26, 1999
          -----------------------
              Attorney-in-Fact
    



                                  Exhibit Index



    Exhibits                                          Description                                  Page
    --------                                          -----------                                  ----
                                                                                             
   1                -- Form of Underwriting Agreement.(1)
   4.1              -- Form of Common Stock Certificate.(2)
   4.2              -- Form of Designating Amendment for Preferred Stock.(1)
   4.3              -- Form of Preferred Stock Certificate.(1)
   4.4              -- Form of Warrant Agreement.(1)
   4.5              -- Form of Warrant.(1)
   4.6              -- Form of Indenture.(3)
   5                -- Opinion of Brown & Wood LLP as to the legality of the
                          Securities.(4)
   8                -- Opinion of Brown & Wood LLP as to tax matters.(3)
   
   12.1             -- Calculation of Reckson Associates Realty Corp. Ratios of
                          Earnings to Combined Fixed  Charges.
   12.2             -- Calculation of Reckson Associates Realty Corp. Ratios of
                          Earnings to Fixed Charges and Preferred  Dividends.
   12.3             -- Calculation of Reckson Operating Partnership L.P. Ratios of
                          Earnings to Combined Fixed  Charges.
   12.4             -- Calculation of Reckson Operating Partnership L.P. Ratios of
                          Earnings to Fixed Charges and Preferred  Dividends.
   23.1             -- Consent of Brown & Wood LLP (included in Exhibits 5 and  8).
   23.2             -- Consent of Ernst & Young LLP.
    
   24               -- Power of attorney (included on the signature page of this
                          Registration Statement)
   
    27              -- Financial Data Schedule
    

______________
(1)  To be filed by amendment or  incorporated  by reference in connection  with
     the offering of Securities.
(2)  Previously filed as an exhibit to Registration  Statement on Form S-11 (No.
     33-84324) and incorporated herein by reference.
(3)  Previously filed as an exhibit to this Registration Statement.
(4)  A revised  opinion will be filed by amendment or  incorporated by reference
     in connection with the offering of Securities.


                                                               Exhibit 5
                               March 1, 1999


Reckson Associates Realty Corp.
Reckson Operating Partnership, L.P.
225 Broadhollow Road
Melville, New York  11747

Ladies and Gentlemen:

        This opinion is  furnished in  connection  with  Amendment  No. 3 to the
Registration  Statement  on Form S-3  filed  with the  Securities  and  Exchange
Commission under the Securities Act of 1933, as amended (the "Securities  Act"),
relating  to  the   registration  of  Debt   Securities  of  Reckson   Operating
Partnership, L.P., a Delaware limited partnership (the "Operating Partnership"),
in an aggregate  initial public offering price not to exceed  $500,000,000  (the
"Debt  Securities").  The  Debt  Securities  may be  fully  and  unconditionally
guaranteed (the "Guarantees") under certain  circumstances by Reckson Associates
Realty Corp., a Maryland corporation (the "Company"). The Registration Statement
provides  that the Debt  Securities  may be  issued  in one or more  series,  in
amounts,  at  prices  and on  terms to be set  forth  in one or more  prospectus
supplements  to  the  prospectus   contained  in  the   Registration   Statement
(collectively,  the  "Prospectus")  and,  if  issued,  will be  issued  under an
indenture in the form attached as an Exhibit to the Registration  Statement (the
"Indenture").

        In  connection  with  rendering  this  opinion,  we  have  examined  the
Certificate  of Limited  Partnership  and the Amended and Restated  Agreement of
Limited Partnership,  as amended, of the Operating  Partnership and the Articles
of  Incorporation  and the  Bylaws,  as  amended,  of the  Company;  records  of
corporate proceedings of the Company; the Registration Statement; and such other
certificates, receipts, records and documents as we considered necessary for the
purposes of this opinion.

        Based upon the foregoing, we are of the opinion that the Debt Securities
have been duly authorized by all necessary  partnership  action of the Operating
Partnership  and the  Guarantees  have been  duly  authorized  by all  necessary
corporate action of the Company,  and when (i) the applicable  provisions of the
Securities Act and such state "blue sky" or securities laws as may be applicable
have been complied  with,  (ii) the Operating  Partnership,  the Company and the
trustee have duly executed and delivered the Indenture and (iii) the final terms
of the Debt  Securities  and,  if  applicable,  the  Guarantees  have  been duly
established and approved and have been duly executed, authenticated (in the case
of  the  Debt  Securities)  and  delivered  against  consideration  therefor  as
contemplated in the Registration Statement,  such Debt Securities and Guarantees
will  constitute  valid  and  legally  binding   obligations  of  the  Operating
Partnership and the Company,  respectively,  and registered holders of such Debt
Securities will be entitled to the benefits of the Indenture; provided, however,
that the foregoing  opinion is subject,  as to  enforcement,  to (i) bankruptcy,
insolvency,  reorganization,  moratorium  or other  similar laws  relating to or
affecting  the  enforcement  of  creditors'  rights   generally,   (ii)  general
principles  of equity  (regardless  of whether  enforcement  is  considered in a
proceeding  in  equity  or at law) and (iii)  provisions  of law that  require a
judgment for money  damages  rendered by a court in the United States of America
be expressed only in U.S. dollars.

          We are  attorneys  admitted to  practice in the State of New York.  We
express  no  opinion  concerning  the laws of any  jurisdiction  other  than the
federal  laws of the United  States of  America,  the  Revised  Uniform  Limited
Partnership Act of the State of Delaware,  the laws of the State of Maryland and
the laws of the State of New York.

        We hereby  consent  to the  filing of this  opinion as an exhibit to the
Registration  Statement and the  reference to our firm under the caption  "Legal
Matters" in the Prospectus.

                                      Very truly yours,


                                      /s/ Brown & Wood LLP

   
                                                                    Exhibit 12.1

Reckson Associates Realty Corp.
Ratios of Earnings to Combined Fixed Charges

     The  following   table  sets  forth  the   calculation   of  the  Company's
consolidated  ratios of  earnings to fixed  charges  for the  periods  shown (in
Thousands):
    


   
=================== ========== ========== ========== ==================== ====================== ============= 
                                                     For the Period from   For the Period from
                                                         June 3, 1995         January 1, 1995
                                                             To                    to
Description            1998       1997       1996      December 31, 1995       June 2, 1995           1994     
- ------------------- ---------- ---------- ---------- -------------------- ---------------------- ------------- 
                                                                                          
Interest              $55,139   $23,936    $13,331         $5,331                $7,622            $17,426     
- ------------------- ---------- ---------- ---------- -------------------- ---------------------- ------------- 
Rent Expense            1,321       952        830            434                   176                375     
- ------------------- ---------- ---------- ---------- -------------------- ---------------------- ------------- 
Amortization of
Debt Issuance
Costs                   1,600       797        525            400                   195                564     
- ------------------- ---------- ---------- ---------- -------------------- ---------------------- ------------- 
                       58,060    25,685     14,686          6,165                 7,993             18,365     
- ------------------- ---------- ---------- ---------- -------------------- ---------------------- ------------- 
Income from
Continuing
Operations                                                                                            
before Minority
Interest and                                                                                                 
Fixed Charges        $122,541   $71,175    $39,876        $16,719                $8,187            $17,872     
- ------------------- ---------- ---------- ---------- -------------------- ---------------------- ------------- 
Ratio of Earnings
to Fixed Charges         2.11      2.77       2.72             2.71                1.02                 0.97   
=================== ========== ========== ========== ==================== ====================== =============


   
                                                                    Exhibit 12.2

     The  following   table  sets  forth  the   calculation   of  the  Company's
consolidated Ratios of Earnings to fixed charges and preferred dividends for the
periods shown (in thousands)

Description                                                           1998
- -----------                                                           ----

Interest                                                            $55,139

Rent Expense                                                          1,321

Amortization of debt issuance costs                                   1,600

Preferred dividends                                                  14,244

                                                                    $72,304

Income from continuing operations
before minority interests, fixed
charges & preferred dividends                                       $136,785

Ratio of Earnings to fixed charges and
preferred dividends                                                     1.89

   
                                                                    Exhibit 12.3

Reckson Operating Partnership, L.P.
Ratios of Earnings to Combined Fixed Charges

     The  following   table  sets  forth  the   calculation   of  the  Operating
Partnership's  consolidated  ratios of earnings to fixed charges for the periods
shown (in Thousands):



===================== =========== ========= ========== =================== ==================== ============= 
                                                       For the Period from For the Period from
                                                         June 3, 1995       January 1, 1995
                                                              To                  to
Description              1998        1997       1996     December 31, 1995     June 2, 1995           1994    
- --------------------- ----------- --------- ---------- ------------------- -------------------- ------------- 
                                                                                         
Interest                $55,139    $23,936   $13,331        $5,331              $7,622            $17,426     
- --------------------- ----------- --------- ---------- ------------------- -------------------- ------------- 
Rent Expense              1,321        952       830           434                 176                375     
- --------------------- ----------- --------- ---------- ------------------- -------------------- ------------- 
Amortization of
Debt
Issuance Costs            1,600        797       525           400                 195                564     
- --------------------- ----------- --------- ---------- ------------------- -------------------- ------------- 
                         58,060     25,685    14,686         6,165               7,993             18,365     
- --------------------- ----------- --------- ---------- ------------------- -------------------- ------------- 
Income from
Continuing
Operations                                                                                           
before Minority
Interest and                                                                                                
Fixed Charges          $123,369    $71,394   $39,781       $16,728              $8,187            $17,872     
- --------------------- ----------- --------- ---------- ------------------- -------------------- ------------- 
Ratio of Earnings
to Fixed Charges           2.12       2.78      2.71          2.71             1.02                  0.97     
===================== =========== ========= ========== =================== ==================== =============

   
                                                                    Exhibit 12.4

     The  following   table  sets  forth  the   calculation   of  the  Operating
Partnership's  consolidated  Ratios of Earnings to fixed  charges and  preferred
dividends for the periods shown (in thousands)

Description                                                          1998

Interest                                                           $55,139

Rent Expense                                                         1,321

Amortization of debt issuance costs                                  1,600

Preferred dividends                                                 14,244

                                                                   $72,304

Income from continuing operations before minority
interests, fixed charges & preferred dividends                    $137,613

Ratio of Earnings to fixed charges and preferred
dividends                                                             1.90

                                                                    Exhibit 23.2

                         Consent of Independent Auditors

   
We  consent to the  reference  to our firm under the  caption  "Experts"  in the
Registration  Statement  (Form  S-3) of Reckson  Associates  Realty  Corp.  (the
"Company") and Reckson Operating Partnership, L.P. (the "Operating Partnership")
for the  registration of  $744,739,654  of common stock,  common stock warrants,
preferred stock,  depositary shares and preferred stock warrants with respect to
the Company and  $500,000,000  of debt  securities with respect to the Operating
Partnership.  We also  consent  to the  inclusion  of our  report  herein  dated
February 11, 1999,  with respect to the  consolidated  financial  statements and
schedule of the  Operating  Partnership  for each of the years in the three year
period  ended  December  31, 1998 and to the  incorporation  by reference of our
reports dated (i) February 11, 1999, with respect to the consolidated  financial
statements  and  schedule of the Company for each of the years in the three year
period  ended  December  31,  1998  included  in its  Form  8-K  filed  with the
Securities and Exchange Commission on March 1, 1999, (ii) February 4, 1997, with
respect to the combined  statement  of revenues and certain  expenses of the New
Jersey Portfolio for the year ended December 31, 1996, included in the Company's
Form 8-K filed with the Securities and Exchange Commission on February 19, 1997,
(iii)  January 16, 1997,  with respect to the  statement of revenues and certain
expenses of the Uniondale  Office Property for the year ended December 31, 1996,
included  in the  Company's  Form 8-K filed  with the  Securities  and  Exchange
Commission  on February  19, 1997,  (iv)  January 17, 1997,  with respect to the
combined  statement of revenues and certain expenses of the Hauppauge  Portfolio
for the year ended  December 31, 1996,  included in the Company's Form 8-K filed
with the  Securities  and Exchange  Commission on February 19, 1997, (v) May 23,
1997 with  respect to the  statement  of revenues  and  certain  expenses of 710
Bridgeport  Avenue  for the  year  ended  December  31,  1996,  included  in the
Company's Form 8-K filed with the Securities and Exchange Commission on June 12,
1997,  (vi) May 16, 1997 with  respect to the  statement of revenues and certain
expenses of the  Shorthills  Office Center for the year ended December 31, 1996,
included  in the  Company's  Form 8-K filed  with the  Securities  and  Exchange
Commission  on June 12, 1997,  (vii) July 22, 1997 with respect to the statement
of  revenues  and  certain  expenses  of Garden  City  Plaza for the year  ended
December 31, 1996,  included in the Company's Form 8-K filed with the Securities
and Exchange  Commission  on September  9, 1997,  (viii)  February 17, 1998 with
respect to the statement of revenues and certain expenses of the Stamford Office
Property for the year ended  December 31, 1997,  included in the Company's  Form
8-K filed with the  Securities and Exchange  Commission on March 24, 1998,  (ix)
December  17,  1997,  with  respect to the  statement  of  revenues  and certain
expenses of the Christiana  Office  Property,  for the year ended June 30, 1997,
included  in the  Company's  Form 8-K filed  with the  Securities  and  Exchange
Commission  on February  10, 1998,  and (x) March 27, 1998,  with respect to the
combined  statement of revenues and certain expenses of the Cappelli  Portfolio,
for the year ended  December 31, 1997,  included in the Company's Form 8-K filed
with the Securities and Exchange Commission on April 6, 1998.
    

                                Ernst & Young LLP

   
New York, New York
 March 1, 1999

 


                     5
                         0000930810
                        RECKSON OPERATING PARTNERSHIP, L.P.
                                   1,000
                                     U.S. DOLLARS
       
                                       
                   12-MOS 
                              DEC-31-1998
                                 JAN-1-1998
                                   DEC-31-1998
                                    1
                                         2,228
                                       0
                                 80,839
                                       0
                                        0
                              83,967
                                     1,743,223
                              (159,049)
                             1,854,520
                         70,442
                                      889,313
                              0
                                  263,126
                                     579,466
                                         0
               1,854,520
                                      252,447
                             266,312
                                              0
                                100,251
                                   0
                                   0
                            47,795
                               65,309
                                       0
                           65,309
                                     0
                               (1,993)
                                          0
                                   46,253
                                     .98
                                       0