SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
-------------
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 7, 2002
RECKSON ASSOCIATES REALTY CORP.
and
RECKSON OPERATING PARTNERSHIP, L.P.
(Exact name of each Registrant as specified in its Charter)
Reckson Associates Realty Corp. - Maryland Reckson Associates Realty Corp. -
Reckson Operating Partnership, L.P. - Delaware 11-3233650
(State or other jurisdiction of incorporation or Reckson Operating Partnership, L.P. -
organization) 11-3233647
(IRS Employer ID Number)
225 Broadhollow Road 11747
Melville, New York (Zip Code)
(Address of principal executive offices)
1-13762
(Commission File Number)
(631) 694-6900
(Registrant's telephone number, including area code)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Supplemental Operating and Financial Data for the Quarter
Ended December 31, 2001
ITEM 9. REGULATION FD DISCLOSURE
For the quarter ended December 31, 2001, Registrants intend to make
available supplemental data regarding their operations that is too voluminous
for a press release. Registrants are attaching the supplemental data as Exhibit
99.1 to this Current Report on Form 8-K.
Note: the information in this report (including the exhibit) is
furnished pursuant to Item 9 and shall not be deemed to be "filed" for the
purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise
subject to the liabilities of that section. This report will not be deemed an
admission as to the materiality of any information in the report that is
required to be disclosed solely by Regulation FD.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Michael Maturo
-----------------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.,
its General Partner
By: /s/ Michael Maturo
-----------------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
Date: March 7, 2002
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TABLE OF CONTENTS
Page(s)
-------
Company Information
o Corporate Information............................................................................1-2
o Reporting Period Highlights......................................................................3-4
o Stock Performance..................................................................................5
Financial Highlights
o Key Financial Data.................................................................................6
o Statements of Operations...........................................................................7
o Funds from Operations and Cash Available for Distribution..........................................8
o Consolidated Balance Sheets........................................................................9
o Debt Summary......................................................................................10
o Preferred Securities..............................................................................11
Portfolio Performance
o Same Store Performance.........................................................................12-13
o Portfolio Snapshot................................................................................14
o Occupancy Analysis.............................................................................15-16
o Leasing Statistics.............................................................................17-18
o Lease Expirations .............................................................................19-23
o Lease Distribution................................................................................24
o Capital Expenditures Analysis.....................................................................25
Market Statistics
o Suburban Market Overviews......................................................................26-27
o New York City Sub-Markets.........................................................................28
o Long Island Sub-Markets...........................................................................29
o Westchester Sub-Markets...........................................................................30
o New Jersey Sub-Markets............................................................................31
Value Creation Pipeline
o Value Creation Pipeline Schedule..................................................................32
Reckson Strategic Venture Partners (RSVP)
o Combined Balance Sheets ..........................................................................33
o Summary of Invested Capital.......................................................................34
o Summerized Platform Balanced Sheets...............................................................35
Certain matters discussed herein are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Although the
Company believes the expectations reflected in such forward-looking statements
are based on reasonable assumptions, forward-looking statements are not
guarantees of results and no assurance can be given that the expected results
will be delivered. Such forward-looking statements are subject to certain risks,
trends and uncertainties that could cause actual results to differ materially
from those expected. Among those risks, trends and uncertainties are the general
economic climate, including the conditions affecting industries in which our
principal tenants competes; changes in the supply of and demand for office and
industrial properties in the New York Tri-State area; changes in interest rate
levels; downturns in rental rate levels in our markets and our ability to lease
or re-lease space in a timely manner at current or anticipated rental rate
levels; the availability of financing to us or our tenants; changes in operating
costs, including utility costs; repayment of debt owed to the Company by third
parties (including FrontLine Capital Group); risks associated with joint
ventures, and other risks associated with the development and acquisition of
properties, including risks that development may not be completed on schedule,
that the tenants will not take occupancy or pay rent, or that development or
operating costs may be greater than anticipated. For further information on
factors that could impact Reckson, reference is made to Reckson's filings with
the Securities and Exchange Commission. Reckson is subject to the reporting
requirements of the Securities and Exchange Commission and undertakes no
responsibility to update or supplement information contained in this
supplemental package that subsequently becomes untrue.
###
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CORPORATE INFORMATION
CORPORATE PROFILE
Reckson Associates Realty Corp. is a self-administered and self-managed real
estate investment trust (REIT) that is one of the largest publicly traded
owners, developers and managers of Class A office and industrial properties in
the New York Tri-State area.
Through a predecessor entity, Reckson commenced operations in 1958 and grew
steadily by acquiring, developing and redeveloping Class A office and industrial
properties throughout Long Island. In June 1995, Reckson successfully completed
its initial public offering. Subsequently, the Company expanded from its Long
Island base and established operating divisions in Westchester, Connecticut, New
Jersey and New York City. By transporting the formula that built its success on
Long Island to the other Tri-State area markets, Reckson is now positioned as
the premier real estate franchise in the New York Tri-State area.
Today, Reckson owns 181 properties comprised of approximately 20.6 million
square feet located throughout the New York Tri-State area markets. These
properties are comprised of 13.8 million square feet of Class A office space and
6.8 million square feet of industrial space. The Company has a total market
capitalization of approximately $3.3 billion and has generated a total return to
its initial Class A common shareholders of approximately 196% for the period
June 2, 1995 through December 31, 2001.
Reckson is a fully integrated real estate operating company specializing in the
acquisition, leasing, financing, property and asset management, design and
development and construction of Class A office and industrial properties in the
New York Tri-State area.
CORPORATE HEADQUARTERS
225 Broadhollow Road
Melville, New York 11747-4883
Telephone: (631) 694-6900
(888) RECKSON
Facsimile: (631) 622-6790
Web site: www.reckson.com
---------------
EXECUTIVE OFFICER CONTACTS
Donald Rechler Co-Chief Executive Officer
Chairman of the Board
Scott Rechler Co-Chief Executive Officer
Chairman of the Executive Committee
Michael Maturo Chief Financial Officer
Executive Vice President
INVESTOR RELATIONS
Susan McGuire Vice President Investor Relations
Telephone: (631) 622-6642
Facsimile: (631) 622-6790
E-mail: smcguire@reckson.com
--------------------
To request an Investor Relations package or be added to our distribution list,
please contact us at:
Telephone: (631) 622-6746
Facsimile: (631) 622-6790
E-mail: investorrelations@reckson.com
-----------------------------
Web site: www.reckson.com (Go to Information Request in the Investor
Relations section)
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CORPORATE INFORMATION
RESEARCH COVERAGE
CIBC World Markets Legg Mason
Anthony Paolone David Fick/Ken Weinberg
(212) 667-8116 (410) 454-5018/(410) 454-5175
Credit Suisse First Boston Lehman Brothers
Lawrence Raiman David Shulman/Stuart Axelrod
(212) 538-2380 (646) 351-4260/(646) 351-4261
Deutsche Banc Alex. Brown McDonald & Company
Louis Taylor Anatole Pevnev
(212) 469-4912 (216) 263-4783
Goldman Sachs Merrill Lynch
David Kostin/James Kammert Steve Sakwa/Rahul Bhattacharjee
(212) 902-6781/(212) 855-0670 (212) 670-2158/(212) 449-1920
Greenstreet Advisors Salomon Smith Barney
John Lutzius Jonathan Litt/Gary Boston
(949) 640-8780 (212) 816-0231/(212) 816-1383
QUARTERLY REPORTING SCHEDULE
Quarterly results will be announced according to the following anticipated
schedule:
First Quarter Early May
Second Quarter Early August
Third Quarter Early November
Fourth Quarter and Year-End Early March
SENIOR UNSECURED DEBT RATINGS
Moody's Baa3
Standard & Poor's BBB-
STOCK LISTING
The stock of Reckson Associates Realty Corp. is traded primarily on the New York
Stock Exchange under the following symbols:
Class A Common Stock: RA
Class B Common Stock: RA.B
Series A Preferred Stock: RA.A
2
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REPORTING PERIOD HIGHLIGHTS
SUMMARY FOURTH QUARTER AND FULL YEAR 2001 RESULTS
Reported fourth quarter diluted funds from operations ("FFO") of $.57 per share
(inclusive of $.07 in non-recurring charges and reserves), as compared to FFO of
$.67 per share for the fourth quarter of 2000, representing a per share decrease
of 14.9%. FFO for the fourth quarter of 2001 attributable to core real estate
operations increased by $.02 per share over fourth quarter of 2000, representing
a per share increase of 3.3%. FFO for the fourth quarter of 2001 from core real
estate operations represents FFO per share adjusted for non-recurring charges
not applicable to the RSVP joint ventures ($.05 per share). FFO from core
operations for the prior year represents FFO per share adjusted to exclude
interest income relating to the FrontLine Capital Group loans and income from
the RSVP joint ventures ($.07 per share).
Reported diluted FFO for the year ended December 31, 2001 of $2.61 per share
(inclusive of $.07 in non-recurring charges and reserves) on total revenues of
$540.5 million, as compared to FFO of $2.59 per share for the year ended
December 31, 2000, representing a per share increase of 0.8%. FFO attributable
to core real estate operations increased by $.27 per share, representing a per
share increase of 11.8%. FFO from core real estate operations represents FFO per
share adjusted to exclude interest income relating to the FrontLine Capital
Group loans, income from the RSVP joint ventures and non-recurring charges,
($.06 per share for 2001 and $.31 per share for 2000).
SUMMARY PORTFOLIO PERFORMANCE
Portfolio performance remained strong during the fourth quarter of 2001 with
occupancies of 96.1% for the office portfolio and 91.7% for the industrial
portfolio as of December 31, 2001. Operating margins decreased to 65.2% in the
fourth quarter of 2001, as compared to 65.6% in the fourth quarter of 2000.
Same property net operating income ("NOI") for the fourth quarter of 2001
increased 13.2% (cash) and 2.7% (GAAP), compared to the fourth quarter of 2000
and 7.9% (cash) and 7.0% (GAAP) for 12 months ended December 31, 2001.
Rents on same space leases executed during the fourth quarter of 2001 increased
16.3% (GAAP) and 8.2% (cash) in the office properties and 21.0% (GAAP) and 4.9%
(cash) in the industrial/R&D properties. Rents on same space leases executed
during the year ended December 31, 2001 increased 20.8% (GAAP) and 12.2% (cash)
in the office properties and 20.7% (GAAP) and 5.5% (cash) in the industrial/R&D
properties.
During 2001, the Company executed 276 leases, encompassing 2.6 million square
feet, representing 13% of the total portfolio. As a result, the Company reduced
its overall lease expiration exposure to 6% in 2002 and 10% in 2003. Occupancy
rates for the office and industrial portfolio were 96.1% and 91.7% at December
31, 2001, as compared to 96.7% and 96.2%, respectively, at September 30, 2001
and 97.2% and 97.5% at December 31, 2000.
NON-RECURRING CHARGES AND RESERVES
During the fourth quarter of 2001, the Company reserved against its approximate
$700,000 ($.01 per share) investment in Captivate Network, Inc., a provider of
news and media services through devices located in office building elevators.
The Company believes this reserve is appropriate considering the difficulties
being experienced by start-up companies in the technology sector.
3
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REPORTING PERIOD HIGHLIGHTS (CONTINUED)
The Company generally uses the equity method of accounting to record income from
investments in joint ventures which provides for an investor to record in income
its allocable share of joint venture earnings. With respect to the RSVP joint
ventures, the Company will reserve against such joint venture earnings until it
is realized in cash. RSVP joint venture earnings not realized in cash and
excluded from FFO was approximately $1.5 million ($.02 per share) during the
fourth quarter.
During the fourth quarter of 2001, the Company expensed approximately $3.0
million ($.04 per share) relating to recoverability of recourse loans to certain
non-executive employees of the Company secured by shares in FrontLine Capital
Group. These shares were previously distributed to these employees in a prior
period when it was determined that the Company could no longer maintain any
equity position in FrontLine pursuant to certain provisions included in the REIT
Modernization Act. The Company believes this is prudent considering the
underlying value of the FrontLine shares.
SALES AND FINANCINGS
During the fourth quarter, the Company completed a strategic joint venture
transaction with New York State Teachers' Retirement System ("NYSTRS") for the
sale of a 49% interest in 919 Third Avenue for total consideration of
approximately $221 million. Proceeds from the sale were primarily used to repay
borrowings under the Company's credit facility.
Including the sale of the 49% interest in 919 Third Avenue, the Company sold
over $342 million of non-core assets and joint venture interests during 2001,
achieving an average unleveraged internal rate of return of 13.1%.
During 2001, the Company took advantage of the low fixed interest rate
environment and refinanced floating rate debt of $325 million at a weighted
average interest rate of 6.8% and a weighted average term of 8.8 years. At
December 31, 2001, the Company's floating rate debt comprised 18% of total
consolidated debt. In addition, pro forma for an $85 million paydown on the
credit facility in January of 2002 with proceeds from the sale of a 49% interest
in 919 Third Avenue, the Company's floating rate debt comprised only 13% of
total consolidated debt.
CONSOLIDATED FINANCIAL RESULTS
The Company reported diluted operating earnings per share ("OEPS") (income
before gain (loss) on sales of real estate, extraordinary loss and valuation
reserves) of $.27 for the fourth quarter of 2001, as compared to $.36 per share
for the comparable 2000 period. The Company also reported diluted OEPS of $1.28
for the year ended December 31, 2001, as compared to $1.31 per share for the
comparable 2000 period.
The Company reported diluted earnings per Class A common share ("EPS") of $.46
for the fourth quarter of 2001, as compared to $.28 per Class A common share for
the comparable 2000 period. The Company also reported EPS per Class A common
share of ($.92) for the year ended December 31, 2001, as compared to $1.45 per
Class A common share for the comparable 2000 period.
4
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STOCK PERFORMANCE
The following summarizes recent activity of Reckson's Class A common stock (RA):
3rd Quarter 4th Quarter 1/1/02 to
2001 2001 2/28/02
-----------------------------------------------
High Price* $24.15 $24.46 $23.60
Low Price* $21.90 $22.15 $22.54
Closing Price* $24.15 $23.36 $23.29
Average daily trading volume* 356,224 329,145 350,120
Indicated dividend per share** $1.6984 $1.6984 $1.6984
Closing dividend yield 7.03% 7.27% 7.29%
Closing shares and units outstanding (thousands) 57,445 57,470 57,491
Closing market value of shares and units outstanding (thousands) $1,387,297 $1,342,499 $1,338,965
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The following summarizes recent activity of Reckson's Class B common stock
(RA.B):
3rd Quarter 4th Quarter 1/1/02 to
2001 2001 2/28/02
-----------------------------------------------
High Price* $25.60 $25.76 $25.64
Low Price* $23.29 $23.55 $23.86
Closing Price* $25.51 $25.51 $24.45
Average daily trading volume* 65,825 73,142 109,548
Indicated dividend per share** $2.5968 $2.5968 $2.5968
Closing dividend yield 10.18% 10.18% 10.62%
Closing shares outstanding (thousands) 10,284 10,284 10,284
Closing market value of shares outstanding (thousands) $262,345 $262,345 $251,444
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The following summarizes recent activity of Reckson's Series A preferred stock
(RA.A):
3rd Quarter 4th Quarter 1/1/02 to
2001 2001 2/28/02
-----------------------------------------------
High Price* $23.10 $23.79 $24.35
Low Price* $21.95 $22.45 $22.65
Closing Price* $23.00 $23.79 $23.99
Average daily trading volume* 41,439 22,789 31,371
Indicated dividend per share** $1.9064 $1.9064 $1.9064
Closing dividend yield 8.29% 8.01% 7.95%
Closing shares outstanding (thousands) 9,192 9,192 9,192
Closing market value of shares outstanding (thousands) $211,416 $218,678 $220,516
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* New York Stock Exchange trades only
** On an annual basis
5
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KEY FINANCIAL DATA
(Dollars in thousands, except per share data)
FOR THE THREE MONTHS ENDED OR AS OF
------------------------------------------------------------------------
12/31/01 9/30/01 6/30/01 3/31/01 12/31/00
------------------------------------------------------------------------
SHARES AND UNITS
Common Shares Outstanding - Class A 49,982,377 49,806,885 49,619,419 45,812,864 45,352,286
Common Shares Outstanding - Class B 10,283,513 10,283,513 10,283,513 10,283,513 10,263,513
Operating Partnership Units Outstanding 7,487,218 7,638,043 7,644,135 7,692,142 7,694,642
------------------------------------------------------------------------
Total Shares and Operating Partnership Units 67,753,108 67,728,441 67,547,067 63,788,519 63,330,441
------------------------------------------------------------------------
SHARE PRICE & DIVIDENDS - CLASS A
End of period $23.36 $24.15 $23.00 $22.30 $25.06
High during period $24.46 $24.15 $23.90 $25.88 $26.00
Low during period $22.15 $21.90 $21.14 $21.90 $21.88
Dividend declared $0.42 $0.42 $0.42 $0.39 $0.39
Closing dividend yield 7.3% 7.0% 7.4% 6.9% 6.2%
SHARE PRICE & DIVIDENDS - CLASS B
End of period $25.51 $25.51 $24.61 $23.55 $27.19
High during period $25.76 $25.60 $25.00 $27.50 $27.56
Low during period $23.55 $23.29 $22.40 $22.90 $22.50
Dividend declared $0.65 $0.65 $0.65 $0.60 $0.60
Closing dividend yield 10.2% 10.2% 10.6% 10.2% 8.8%
MARKET CAPITALIZATION
Market Value of Common Equity (a) $1,604,822 $1,649,627 $1,570,139 $1,435,338 $1,609,072
Stated Value of Preferred Equity 310,765 310,765 314,533 407,318 407,318
Total Debt (b) 1,336,011 1,444,473 1,500,081 1,466,965 1,380,814
------------------------------------------------------------------------
Total Market Capitalization $3,251,598 $3,404,865 $3,384,753 $3,309,621 $3,397,204
------------------------------------------------------------------------
Total Debt / Total Market Capitalization 41.1% 42.4% 44.3% 44.3% 40.6%
SELECTED BALANCE SHEET DATA
Book Value of Real Estate Assets before Depreciation $2,880,879 $2,814,024 $2,860,491 $2,811,894 $2,770,607
Total Assets $2,994,218 $2,861,651 $3,112,242 $3,063,644 $2,998,030
Total Liabilities $1,592,811 $1,566,012 $1,639,095 $1,584,621 $1,519,150
SELECTED OPERATING DATA
Property Operating Revenues $122,261 $126,722 $125,349 $123,439 $119,994
Property Operating Expenses $42,565 $44,231 $40,874 $40,994 $41,270
Property Operating NOI $79,696 $82,491 $84,475 $82,445 $78,724
Property Gross Operating Margin 65.2% 65.1% 67.4% 66.8% 65.6%
Other Revenues (excluding gain on sales of real estate) $2,706 $5,333 $7,038 $7,447 $9,728
Marketing, General & Administrative Expenses $7,160 $7,679 $8,411 $7,497 $7,626
as a percent of Total Revenues (excluding gain
on sales of real estate) 5.7% 5.8% 6.4% 5.7% 5.9%
Interest Expense $22,369 $23,510 $23,562 $23,631 $23,670
Capitalized Interest $2,442 $2,627 $2,434 $2,703 $3,015
Non-Incremental Capital Expenditures to NOI as a percent 8.62% 6.18% 6.78% 3.98% 4.09%
FINANCIAL RATIOS
Debt Service Coverage Ratio 3.11 3.27 3.35 3.29 3.22
Fixed Charge Coverage Ratio 2.44 2.60 2.67 2.60 2.55
EPS, FFO AND CAD
Class A Common stock:
Basic Net Income (loss) per share $0.47 ($1.97) $0.32 $0.34 $0.28
Diluted Net Income (loss) per share $0.46 ($1.97) $0.32 $0.33 $0.28
Class B Common stock:
Basic Net Income (loss) per share $0.71 ($3.01) $0.45 $0.52 $0.44
Diluted Net Income (loss) per share $0.50 ($3.01) $0.34 $0.37 $0.31
Basic operating earnings per share (d) $0.27 $0.31 $0.34 $0.37 $0.36
Diluted operating earnings per share (d) $0.27 $0.31 $0.34 $0.37 $0.36
Diluted FFO per share $0.57 $0.66 $0.70 $0.69 $0.67
Diluted FFO payout ratio 80.2% 68.7% 64.9% 60.2% 62.1%
Diluted CAD per share $0.33 $0.46 $0.48 $0.50 $0.43
Diluted CAD payout ratio 138.9% 99.3% 95.4% 84.0% 97.0%
TRI-STATE PORTFOLIO STATISTICS
Office Properties 77 78 82 82 82
Office Square Footage 13,777,009 13,863,565 14,438,850 14,444,838 14,437,238
Office Occupancy at end of Quarter (c) 96.1% 96.7% 97.0% 97.1% 97.2%
Industrial Properties 103 103 104 104 104
Industrial Square Footage 6,813,536 6,812,158 6,836,803 6,834,113 6,834,113
Industrial Occupancy at end of Quarter (c) 91.7% 96.2% 97.9% 97.8% 97.5%
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(a) Includes Operating Partnership Units valued at the closing price of the
Class A common stock
(b) Includes pro rata share of consolidated and unconsolidated joint venture
debt
(c) Excludes properties under development
(d) Before, when applicable, gain (loss) on sales of real estate, extraordinary
loss and valuation reserves on investment in affiliate loans and joint
ventures and other investments.
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6
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STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
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REVENUES 2001 2000 2001 2000
- -----------------------------------------------------------------------------------------------------------------------------------
Base Rents $ 107,730 $ 105,974 $ 437,802 $ 397,327
Tenant escalations and reimbursements 14,531 14,020 59,969 54,750
Equity in earnings of service companies and real
estate joint ventures 383 489 2,087 4,383
Interest income on mortgage notes and notes receivable 1,587 1,836 6,238 8,212
Investment and other income 736 7,403 14,199 26,597
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Total Operating Revenues 124,967 129,722 520,295 491,269
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EXPENSES
- -----------------------------------------------------------------------------------------------------------------------------------
Property operating expenses 25,333 23,805 98,914 91,265
Real estate taxes 17,232 17,465 69,750 66,191
Marketing, general and administrative 7,160 7,626 30,747 27,371
Depreciation and amortization 25,710 25,028 102,931 92,547
Interest expense 22,369 23,670 93,072 96,337
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Total Expenses 97,804 97,594 395,414 373,711
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Income from operations before minority interests 27,163 32,128 124,881 117,558
Minority partners' interests in consolidated partnerships (3,090) (3,348) (15,975) (9,120)
Limited partners' minority interest in the operating
partnership (1,949) (2,613) (9,587) (9,533)
Distributions to preferred unitholders (481) (660) (2,111) (2,641)
- -----------------------------------------------------------------------------------------------------------------------------------
Income from operations 21,643 25,507 97,208 96,264
Adjust for non operating items, net of limited partners'
minority interest:
Valuation reserves on investments in affiliate loans
and joint ventures and other investments (2,783) - (148,717) -
Gain (loss) on sales of real estate 17,233 (2,843) 18,103 16,533
Extraordinary loss on extinguishment of debt - - (2,595) (1,396)
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before dividends to preferred shareholders 36,093 22,664 (36,001) 111,401
Dividends to preferred shareholders (5,487) (5,425) (21,866) (25,371)
- -----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) allocable to common shareholders $ 30,606 $ 17,239 $ (57,867) $ 86,030
===================================================================================================================================
Net income (loss) allocable to:
Class A Shareholders $ 23,284 $ 12,745 $ (44,243) $ 62,989
Class B Shareholders $ 7,322 $ 4,494 $ (13,624) $ 23,041
PER SHARE DATA
Basic operating earnings (a) $0.27 $0.36 $1.29 $1.33
Diluted operating earnings (a) $0.27 $0.36 $1.28 $1.31
Basic net income (loss):
Class A common stock before extraordinary loss $0.47 $0.28 ($0.88) $1.49
Extraordinary loss per Class A common share
- - (0.04) (0.03)
------------------------------- ---------------------------
Basic net income (loss) per Class A common share $0.47 $0.28 ($0.92) $1.46
=============================== ===========================
Class B common stock before extraordinary loss $0.71 $0.44 ($1.26) $2.28
Extraordinary loss per Class B common share
- - (0.06) (0.04)
------------------------------- ---------------------------
Basic net income (loss) per Class B common share $0.71 $0.44 ($1.32) $2.24
=============================== ===========================
Diluted net income (loss):
Class A common stock $0.46 $0.28 ($0.92) $1.45
Class B common stock $0.50 $0.31 ($1.32) $1.59
Basic weighted average common shares outstanding:
Class A common stock 49,994 45,326 48,121 43,070
Class B common stock 10,284 10,284 10,284 10,284
Diluted weighted average common shares outstanding:
Class A common stock 51,005 45,954 48,121 43,545
Class B common stock 10,284 10,284 10,284 10,284
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(a) Operating earnings per share data is calculated before, when
applicable, gain (loss) on sales of real estate, extraordinary loss and
valuation reserves on investment in affiliate loans and joint ventures
and other investments.
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7
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FUNDS FROM OPERATIONS ("FFO") AND CASH AVAILABLE FOR DISTRIBUTION ("CAD")
(In thousands, except per share / unit data)
Three Months Ended
December 31,
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2001 2000
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FUNDS FROM OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net income (loss) allocable to common shareholders $ 30,606 $ 17,239
Add back: Real estate depreciation and amortization 24,911 24,368
Minority partners' interests in consolidated partnerships 3,090 3,348
Limited partners' minority interest in the operating partnership 3,599 2,256
Valuation reserves on investments in affiliate loans and joint ventures - -
Extraordinary loss on extinguishment of debt (net of limited
partners' minority interest) - -
Less: Limited partners' minority interest in the operating partnership - -
Gain (loss) on sales of real estate 19,201 (3,200)
Amounts distributable to minority partners in consolidated partnerships 4,072 5,552
- -----------------------------------------------------------------------------------------------------------------------------------
Basic Funds From Operations $ 38,933 $ 44,859
- -----------------------------------------------------------------------------------------------------------------------------------
Add dividends and distributions on dilutive shares and units:
Series A preferred stock $ 4,381 $ 4,381
Series B preferred stock - 1,044
Minority partners' preferred interest - 1,594
Limited partners' preferred interest 481 660
- -----------------------------------------------------------------------------------------------------------------------------------
Diluted FFO $ 43,795 $ 52,538
===================================================================================================================================
Diluted weighted average shares and units outstanding:
Common shares 60,278 55,610
Limited operating partnership units 7,505 7,695
Common stock equivalents 445 628
Series A preferred stock 8,060 8,060
Series B preferred stock - 1,919
Minority partners' preferred interest - 3,454
Limited partners' preferred interest 1,009 1,367
- -----------------------------------------------------------------------------------------------------------------------------------
Total diluted weighted average shares and units outstanding 77,297 78,733
===================================================================================================================================
Diluted FFO per weighted average share or unit $ 0.57 $ 0.67
Diluted weighted average dividends or distributions per share or unit $ 0.45 $ 0.41
Diluted FFO payout ratio 80.2% 62.1%
- -----------------------------------------------------------------------------------------------------------------------------------
CASH AVAILABLE FOR DISTRIBUTION
- -----------------------------------------------------------------------------------------------------------------------------------
Basic FFO $ 38,933 $ 44,859
Less: Straight line rents (a) 9,550 13,893
Non-incremental capitalized tenant improvements
and leasing commissions 4,432 2,221
Non-incremental capitalized improvements 2,437 1,002
- -----------------------------------------------------------------------------------------------------------------------------------
Basic Cash Available for Distribution $ 22,514 $ 27,743
- -----------------------------------------------------------------------------------------------------------------------------------
Add dividends and distributions on dilutive shares and units:
Series A preferred stock $ - $ -
Series B preferred stock - -
Minority partners' preferred interest - -
Limited partners' preferred interest - -
- -----------------------------------------------------------------------------------------------------------------------------------
Diluted CAD $ 22,514 $ 27,743
===================================================================================================================================
Diluted weighted average shares and units outstanding:
Common shares 60,278 55,610
Limited operating partnership units 7,505 7,695
Common stock equivalents 445 628
Series A preferred stock - -
Series B preferred stock - -
Minority partners' preferred interest - -
Limited partners' preferred interest - -
- -----------------------------------------------------------------------------------------------------------------------------------
Diluted weighted average shares and units outstanding 68,228 63,933
===================================================================================================================================
Diluted CAD per weighted average share or unit $ 0.33 $ 0.43
Diluted weighted average dividends or distributions per share or unit $ 0.46 $ 0.42
Diluted CAD payout ratio 138.9% 97.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Year Ended
December 31,
- ---------------------------------------------------------------------------------------------------------------------------------
2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
FUNDS FROM OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net income (loss) allocable to common shareholders $ (57,867) $ 86,030
Add back: Real estate depreciation and amortization 100,967 90,552
Minority partners' interests in consolidated partnerships 15,975 9,120
Limited partners' minority interest in the operating partnership - 11,669
Valuation reserves on investments in affiliate loans and joint ventures 163,000 -
Extraordinary loss on extinguishment of debt (net of limited
partners' minority interest) 2,595 1,396
Less: Limited partners' minority interest in the operating partnership 5,727 -
Gain (loss) on sales of real estate 20,173 18,669
Amounts distributable to minority partners in consolidated partnerships 19,083 12,316
- --------------------------------------------------------------------------------------------------------------------------------
Basic Funds From Operations $ 179,687 $ 167,782
- --------------------------------------------------------------------------------------------------------------------------------
Add dividends and distributions on dilutive shares and units:
Series A preferred stock $ 17,524 $ 17,524
Series B preferred stock 4,342 7,847
Minority partners' preferred interest 2,624 6,375
Limited partners' preferred interest 2,111 2,641
- --------------------------------------------------------------------------------------------------------------------------------
Diluted FFO $ 206,288 $ 202,169
================================================================================================================================
Diluted weighted average shares and units outstanding:
Common shares 58,405 53,354
Limited operating partnership units 7,652 7,696
Common stock equivalents 433 475
Series A preferred stock 8,060 8,060
Series B preferred stock 1,919 3,713
Minority partners' preferred interest 1,419 3,454
Limited partners' preferred interest 1,139 1,367
- --------------------------------------------------------------------------------------------------------------------------------
Total diluted weighted average shares and units outstanding 79,027 78,119
================================================================================================================================
Diluted FFO per weighted average share or unit $ 2.61 $ 2.59
Diluted weighted average dividends or distributions per share or unit $ 1.77 $ 1.64
Diluted FFO payout ratio 67.9% 63.3%
- --------------------------------------------------------------------------------------------------------------------------------
CASH AVAILABLE FOR DISTRIBUTION
- --------------------------------------------------------------------------------------------------------------------------------
Basic FFO $ 179,687 $ 167,782
Less: Straight line rents (a) 41,293 38,884
Non-incremental capitalized tenant improvements
and leasing commissions 14,281 11,203
Non-incremental capitalized improvements 6,697 4,775
- --------------------------------------------------------------------------------------------------------------------------------
Basic Cash Available for Distribution $ 117,416 $ 112,920
- --------------------------------------------------------------------------------------------------------------------------------
Add dividends and distributions on dilutive shares and units:
Series A preferred stock $ - $ -
Series B preferred stock - -
Minority partners' preferred interest - -
Limited partners' preferred interest - 1,088
- --------------------------------------------------------------------------------------------------------------------------------
Diluted CAD $ 117,416 $ 114,008
================================================================================================================================
Diluted weighted average shares and units outstanding:
Common shares 58,405 53,354
Limited operating partnership units 7,652 7,696
Common stock equivalents 433 475
Series A preferred stock - -
Series B preferred stock - -
Minority partners' preferred interest - -
Limited partners' preferred interest - 598
- --------------------------------------------------------------------------------------------------------------------------------
Diluted weighted average shares and units outstanding 66,490 62,123
================================================================================================================================
Diluted CAD per weighted average share or unit $ 1.77 $ 1.84
Diluted weighted average dividends or distributions per share or unit $ 1.79 $ 1.67
Diluted CAD payout ratio 101.6% 90.8%
- --------------------------------------------------------------------------------------------------------------------------------
(a) Includes straight line rental income attributable to 919 Third Avenue,
New York, NY of $6,410, $9,765, $26,733 and $23,324, respectively.
- -------------------------------------------------------------------------------
8
- -------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------------------------------------
Commercial real estate properties, at cost:
Land $ 408,837 $ 396,482
Building and improvements 2,328,374 2,219,448
Developments in progress:
Land 69,365 60,918
Development costs 74,303 93,759
Furniture, fixtures, and equipment 7,725 7,138
- --------------------------------------------------------------------------------------------------------------------------------
2,888,604 2,777,745
Less: accumulated depreciation and amortization (361,960) (288,479)
- --------------------------------------------------------------------------------------------------------------------------------
Investment in real estate, net of accumulated depreciation 2,526,644 2,489,266
Investments in real estate joint ventures 5,744 5,348
Investments in mortgage notes and notes receivable 56,234 58,220
Investments in sevice companies and affiliate loans and joint ventures 79,184 215,660
Cash and cash equivalents 121,975 17,843
Tenant receivables 9,633 11,511
Deferred rents receivable 81,089 67,930
Prepaid expenses and other assets 45,495 68,895
Contract and land deposits and pre-acquisition costs 3,782 1,676
Deferred leasing and loan costs 64,438 61,681
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 2,994,218 $ 2,998,030
================================================================================================================================
LIABILITIES AND STOCKHOLDER'S EQUITY
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Mortgage notes payable $ 751,077 $ 728,971
Unsecured credit facility 271,600 216,600
Senior unsecured notes 449,463 449,385
Accrued expenses and other liabilities 87,683 95,393
Dividends and distributions payable 32,988 28,801
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,592,811 1,519,150
- --------------------------------------------------------------------------------------------------------------------------------
MINORITY INTERESTS:
Minority partners' interests in consolidated partnerships 242,698 226,350
Preferred unit interest in the operating partnership 30,965 42,518
Limited partners' minority interest in the operating partnership 81,887 97,353
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL MINORITY INTERESTS 355,550 366,221
- --------------------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Preferred Stock, $.01 par value, 25,000,000 shares authorized Series A -
9,192,000 shares issued and outstanding 92 92
Series B - 2,000,000 shares issued and outstanding 20 20
Common Stock, $.01 par value, 100,000,000 shares authorized
Class A - 49,982,377 and 45,352,286 shares issued and outstanding, respectively 500 454
Class B - 10,283,513 shares issued and outstanding 103 103
Additional paid in capital 1,045,142 1,111,990
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 1,045,857 1,112,659
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,994,218 $ 2,998,030
================================================================================================================================
9
- -------------------------------------------------------------------------------
DEBT SUMMARY AT DECEMBER 31, 2001
(Dollars in thousands)
DEBT BREAKDOWN
- -----------------------------------------------------------------------------------------------------------------------------------
% of Weighted Average Weighted Average
Balance Total Interest Rate Maturity (Years)
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed Rate Secured Debt $751,077 51.0% 7.3% 10.0
Fixed Rate Senior Unsecured Notes (a) 449,463 30.5% 7.5% 5.6
Variable Rate Unsecured Credit Facility 271,600 18.5% 3.5% 1.7
- -----------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average $1,472,140 100.0% 6.7% 7.1
===================================================================================================================================
DEBT AMORTIZATION AND MATURITY
- -----------------------------------------------------------------------------------------------------------------------------------
Secured Debt Senior Unsecured Unsecured Credit
Year Amortization Due at Maturity Notes Facility Total
- -----------------------------------------------------------------------------------------------------------------------------------
2002 $11,356 $0 $11,356
2003 12,559 0 271,600 284,159
2004 13,493 2,616 100,000 (a) 116,109
2005 14,462 18,553 33,015
2006 14,097 129,920 144,017
2007 11,637 60,539 150,000 222,176
2008 10,756 0 10,756
2009 10,367 100,254 200,000 (a) 310,621
2010 8,218 28,423 36,641
2011 5,717 214,457 220,174
Thereafter 83,653 0 83,653
- -----------------------------------------------------------------------------------------------------------------------------------
Total Debt $196,315 $554,762 $450,000 $271,600 1,472,677
===================================================================================================================================
PROPERTY MORTGAGE DETAIL
- -----------------------------------------------------------------------------------------------------------------------------
Interest Maturity Amortization
Property $ Outstanding Rate Date Term (Years)
- -----------------------------------------------------------------------------------------------------------------------------
80 Orville Dr, Islip, NY 2,616 10.10% February-04 Interest only
395 North Service Road, Melville, NY 20,117 6.45% October-05 $34k per month
200 Summit Lake Drive, Valhalla, NY 19,770 9.25% January-06 25
1350 Avenue of the Americas, NY, NY 75,000 6.52% June-06 (b)
Landmark Square, Stamford, CT 46,069 8.02% October-06 25
100 Summit Lake Drive, Valhalla, NY 20,373 8.50% April-07 15
333 Earle Ovington Blvd, Mitchel Field, NY (c) 54,785 7.72% August-07 25
810 Seventh Avenue, NY,NY 84,280 7.73% August-09 25
100 Wall Street, NY, NY 36,522 7.73% August-09 25
6900 Jericho Turnpike, Syosset, NY 7,458 8.07% July-10 25
6800 Jericho Turnpike, Syosset, NY 14,131 8.07% July-10 25
580 White Plains Road, Tarrytown, NY 12,879 7.86% September-10 25
919 Third Ave, NY, NY (d) 249,080 6.867% August-11 30
110 Bi-County Blvd., Farmingdale, NY 3,849 9.125% November-12 20
One Orlando Center, Orlando, FL (e) 38,934 6.82% November-27 28
120 West 45th Street, NY,NY (e) 65,214 6.82% November-27 28
- -----------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average $751,077 7.27%
===================================================================================================================================
(a) These notes were issued at an aggregate discount of $738,000, which is
being amortized over the term of the Senior Unsecured Notes to which they
relate. Current unamortized discount is $537,000
(b) Interest only for the 1st year; 30 years thereafter
(c) The Company has a 60% general partnership interest in this property and its
proportionate share of the aggregate principal amount is approximately
$32.9 million
(d) The Company has a 51% membership interest in this property and its
proportionate share of the aggregate principal amount is approximately
$127.0 million
(e) Subject to interest rate adjustment on November 1, 2004
In addition, the Company has a 60% interest in an unconsolidated joint venture
property. The pro rata share of this debt is approximately $7.8 million.
- --------------------------------------------------------------------------------
10
- --------------------------------------------------------------------------------
PREFERRED SECURITIES AT DECEMBER 31, 2001
(in thousands)
The following table sets forth certain information regarding the Company's
preferred securites, as of December 31, 2001.
- -----------------------------------------------------------------------------------------------------------------------------------
Liquidation Current Conversion price
Security Preference Value Yield Per Share Issuance date
- -----------------------------------------------------------------------------------------------------------------------------------
7 5/8 % Series A Convertible Cumulative Preferred Stock $229,800 7.625% $28.51 April 1998
Series B Convertible Cumulitive Peferred Stock 50,000 8.850% $26.05 June 1999
Series B Preferred Units of Limited Partnership Interest 14,384 6.210% $32.51 April 1998
Series C Preferred Units of Limited Partnership Interest 10,581 6.210% $29.39 April 1998
Series D Preferred Units of Limited Partnership Interest 6,000 6.210% $29.12 July 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Total $310,765
===================================================================================================================================
11
- --------------------------------------------------------------------------------
SAME STORE PERFORMANCE
For the 3 month period December 31, 2001 vs. December 31, 2000
(In thousands)
REGIONAL BREAKDOWN PROPERTY TYPE BREAKDOWN
CASH REVENUE CASH REVENUE
4Q01 4Q00 $ Change % Change 4Q01 4Q00 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 34,837 $ 33,642 $ 1,195 3.6% Office $ 98,456 $ 89,201 $ 9,255 10.4%
Westchester 19,746 19,008 738 3.9% Industrial (b) 12,445 11,776 669 5.7%
Connecticut 8,536 8,288 248 3.0% --------------------------------------------------------
New Jersey 13,756 11,261 2,495 22.2% (a)
New York City 31,764 26,467 5,297 20.0% Total $ 110,901 $ 100,977 $ 9,924 9.8%
Florida 2,262 2,311 (49) -2.1% ========================================================
- ---------------------------------------------------------------
Total $ 110,901 $ 100,977 $ 9,924 9.8%
===============================================================
GAAP REVENUE GAAP REVENUE
4Q01 4Q00 $ Change % Change 4Q01 4Q00 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 35,479 $ 34,439 $ 1,040 3.0% Office $ 106,692 $ 102,670 $ 4,022 3.9%
Westchester 20,136 20,068 68 0.3% Industrial (b) 12,620 12,065 555 4.6%
Connecticut 8,656 8,284 372 4.5% --------------------------------------------------------
New Jersey 13,829 12,165 1,664 13.7% (a)
New York City 38,933 37,424 1,509 4.0% Total $ 119,312 $ 114,735 $ 4,577 4.0%
Florida 2,279 2,355 (76) -3.2% ========================================================
- ---------------------------------------------------------------
Total $ 119,312 $ 114,735 $ 4,577 4.0%
===============================================================
OPERATING EXPENSES OPERATING EXPENSES
4Q01 4Q00 $ Change % Change 4Q01 4Q00 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 6,075 $ 5,177 $ 898 17.3% Office $ 22,923 $ 21,214 $ 1,709 8.1%
Westchester 4,824 4,775 49 1.0% Industrial (b) 1,187 873 314 36.0%
Connecticut 2,370 2,025 345 17.0% --------------------------------------------------------
New Jersey 2,271 2,072 199 9.6%(a)
New York City 8,131 7,658 473 6.2% Total $ 24,110 $ 22,087 $ 2,023 9.2%
Florida 439 380 59 15.5% ========================================================
- ---------------------------------------------------------------
Total $ 24,110 $ 22,087 $ 2,023 9.2%
===============================================================
REAL ESTATE TAXES REAL ESTATE TAXES
4Q01 4Q00 $ Change % Change 4Q01 4Q00 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 6,012 $ 5,939 $ 73 1.2% Office $ 15,033 $ 14,552 $ 481 3.3%
Westchester 2,384 2,339 45 1.9% Industrial (b) 2,033 2,006 27 1.3%
Connecticut 741 717 24 3.3% --------------------------------------------------------
New Jersey 1,681 1,424 257 18.0% (a)
New York City 6,025 5,871 154 2.6% Total $ 17,066 $ 16,558 $ 508 3.1%
Florida 223 268 (45) -16.8% ========================================================
- ---------------------------------------------------------------
Total $ 17,066 $ 16,558 $ 508 3.1%
===============================================================
CASH NOI CASH NOI
4Q01 4Q00 $ Change % Change 4Q01 4Q00 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 22,750 $ 22,526 $ 224 1.0% Office $ 60,500 $ 53,435 $ 7,065 13.2%
Westchester 12,538 11,894 644 5.4% Industrial (b) 9,225 8,897 328 3.7%
Connecticu 5,425 5,546 (121) -2.2% --------------------------------------------------------
New Jersey 9,804 7,765 2,039 26.3%
New York City 17,608 12,938 4,670 36.1% Total $ 69,725 $ 62,332 $ 7,393 11.9%
Florida 1,600 1,663 (63) -3.8% ========================================================
- ---------------------------------------------------------------
Total $ 69,725 $ 62,332 $ 7,393 11.9%
===============================================================
GAAP NOI GAAP NOI
4Q01 4Q00 $ Change % Change 4Q01 4Q00 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 23,392 $ 23,323 $ 69 0.3% Office $ 68,736 $ 66,904 $ 1,832 2.7%
Westchester 12,928 12,954 (26) -0.2% Industrial (b) 9,400 9,186 214 2.3%
Connecticut 5,545 5,542 3 0.1% --------------------------------------------------------
New Jersey 9,877 8,669 1,208 13.9%
New York City 24,777 23,895 882 3.7% Total $ 78,136 $ 76,090 $ 2,046 2.7%
Florida 1,617 1,707 (90) -5.3% ========================================================
- ---------------------------------------------------------------
Total $ 78,136 $ 76,090 $ 2,046 2.7%
===============================================================
- -------------------------------------------------------------------------------
(a) A single tenant 195,000 sf building changed from a net lease to a gross
lease commencing October 2001.
(b) Includes two retail properties.
- -------------------------------------------------------------------------------
12
- -------------------------------------------------------------------------------
SAME STORE PERFORMANCE
For the 12 month period December 31, 2001 vs. December 31, 2000
(In thousands)
REGIONAL BREAKDOWN PROPERTY TYPE BREAKDOWN
CASH REVENUE CASH REVENUE
2001 2000 $ Change % Change 2001 2000 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 130,826 $ 124,147 $ 6,679 5.4% Office $ 369,218 $ 341,660 $ 27,558 8.1%
Westchester 67,593 67,504 89 0.1% Industrial (a) 47,979 46,287 1,692 3.7%
Connecticut 34,862 32,268 2,594 8.0% --------------------------------------------------------
New Jersey 49,068 43,758 5,310 12.1%
New York City 125,604 111,073 14,531 13.1% Total $ 417,197 $ 387,947 $ 29,250 7.5%
Florida 9,244 9,197 47 0.5% ========================================================
- ---------------------------------------------------------------
Total $ 417,197 $ 387,947 $ 29,250 7.5%
===============================================================
GAAP REVENUE GAAP REVENUE
2001 2000 $ Change % Change 2001 2000 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 135,051 $ 128,401 $ 6,650 5.2% Office $ 405,088 $ 376,741 $ 28,347 7.5%
Westchester 69,123 69,220 (97) -0.1% Industrial (a) 49,184 47,769 1,415 3.0%
Connecticut 35,088 32,393 2,695 8.3% --------------------------------------------------------
New Jersey 49,517 45,061 4,456 9.9%
New York City 156,157 139,981 16,176 11.6% Total $ 454,272 $ 424,510 $ 29,762 7.0%
Florida 9,336 9,454 (118) -1.2% ========================================================
- ---------------------------------------------------------------
Total $ 454,272 $ 424,510 $ 29,762 7.0%
===============================================================
OPERATING EXPENSES OPERATING EXPENSES
2001 2000 $ Change % Change 2001 2000 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 21,696 $ 20,893 $ 803 3.8% Office $ 85,769 $ 80,218 $ 5,551 6.9%
Westchester 16,578 17,024 (446) -2.6% Industrial (a) 3,940 3,275 665 20.3%
Connecticut 8,322 7,523 799 10.6% --------------------------------------------------------
New Jersey 8,233 7,428 805 10.8%
New York City 33,234 29,160 4,074 14.0% Total $ 89,709 $ 83,493 $ 6,216 7.4%
Florida 1,646 1,465 181 12.4% ========================================================
- ---------------------------------------------------------------
Total $ 89,709 $ 83,493 $ 6,216 7.4%
===============================================================
REAL ESTATE TAXES REAL ESTATE TAXES
2001 2000 $ Change % Change 2001 2000 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 23,318 $ 22,303 $ 1,015 4.6% Office $ 58,071 $ 54,194 $ 3,877 7.2%
Westchester 9,065 8,849 216 2.4% Industrial (a) 8,163 8,078 85 1.1%
Connecticut 2,917 2,609 308 11.8% --------------------------------------------------------
New Jersey 5,996 4,920 1,076 21.9% Total $ 66,234 $ 62,272 $ 3,962 6.4%
New York City 23,978 22,635 1,343 5.9% ========================================================
Florida 960 956 4 0.4%
- ---------------------------------------------------------------
Total $ 66,234 $ 62,272 $ 3,962 6.4%
===============================================================
CASH NOI CASH NOI
2001 2000 $ Change % Change 2001 2000 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 85,812 $ 80,951 $ 4,861 6.0% Office $ 225,378 $ 207,248 $ 18,130 8.7%
Westchester 41,950 41,631 319 0.8% Industrial (a) 35,876 34,934 942 2.7%
Connecticut 23,623 22,136 1,487 6.7% --------------------------------------------------------
New Jersey 34,839 31,410 3,429 10.9%
New York City 68,392 59,278 9,114 15.4% Total $ 261,254 $ 242,182 $ 19,072 7.9%
Florida 6,638 6,776 (138) -2.0% ========================================================
- ---------------------------------------------------------------
Total $ 261,254 $ 242,182 $ 19,072 7.9%
===============================================================
GAAP NOI GAAP NOI
2001 2000 $ Change % Change 2001 2000 $ Change % Change
- --------------------------------------------------------------- --------------------------------------------------------
Long Island $ 90,037 $ 85,205 $ 4,832 5.7% Office $ 261,248 $ 242,329 $ 18,919 7.8%
Westchester 43,480 43,347 133 0.3% Industrial (a) 37,081 36,416 665 1.8%
Connecticut 23,849 22,261 1,588 7.1% --------------------------------------------------------
New Jersey 35,288 32,713 2,575 7.9% Total $ 298,329 $ 278,745 $ 19,584 7.0%
New York City 98,945 88,186 10,759 12.2% ========================================================
Florida 6,730 7,033 (303) -4.3%
- ---------------------------------------------------------------
Total $ 298,329 $ 278,745 $ 19,584 7.0%
===============================================================
- -------------------------------------------------------------------------------
(a) Includes two retail properties
- -------------------------------------------------------------------------------
13
- -------------------------------------------------------------------------------
PORTFOLIO SNAPSHOT
Based on 4th quarter 2001
GAAP CONSOLIDATED AMOUNTS (A) PRO FORMA AMOUNTS (B)
---------------------------------------------- ----------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
GEOGRAPHIC DISTRIBUTION
- ------------------------------------------------------------------------------------------------------------------------------------
Square Cash Cash GAAP Square Cash Cash GAAP
Feet Revenue NOI NOI Feet Revenue NOI NOI
- ------------------------------------------------------------------------------------------------------------------------------------
Long Island
Office 19% 22% 21% 20% 17% 19% 18% 18%
Industrial (c) 29% 10% 11% 10% 30% 10% 12% 11%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal - Long Island 48% 32% 33% 31% 47% 29% 30% 29%
Westchester
Office 16% 19% 19% 18% 16% 20% 20% 19%
Industrial 1% 0% 1% 1% 1% 0% 1% 1%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal - Westchester 17% 19% 20% 19% 17% 20% 21% 20%
Connecticut
Office 5% 7% 7% 6% 5% 6% 6% 6%
Industrial 2% 1% 1% 1% 2% 1% 1% 1%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal - Connecticut 7% 8% 8% 7% 7% 7% 7% 7%
New Jersey
Office 9% 11% 13% 11% 9% 11% 11% 10%
Industrial 2% 1% 1% 1% 2% 1% 1% 1%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal - New Jersey 11% 12% 14% 12% 11% 12% 12% 11%
New York City
Office 17% 29% 26% 32% 18% 31% 31% 34%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal - New York City 17% 29% 26% 32% 18% 31% 31% 34%
- ------------------------------------------------------------------------------------------------------------------------------------
PROPERTY TYPE
- ------------------------------------------------------------------------------------------------------------------------------------
Office 66% 88% 86% 87% 65% 88% 86% 87%
Industrial 34% 12% 14% 13% 34% 12% 14% 13%
- ------------------------------------------------------------------------------------------------------------------------------------
SUBURBAN VS CBD ( OFFICE SPACE ONLY )
- ------------------------------------------------------------------------------------------------------------------------------------
Suburban 62% 54% 52% 55% 60% 52% 44% 53%
CBD 38% 46% 48% 45% 40% 48% 56% 47%
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Information in accordance with GAAP accounting
(b) Adjusted for pro rata share of consolidated and unconsolidated joint venture
properties and free rent addback at 919 3rd Avenue
(c) Includes 2 retail properties
(d) The Company also owns a 357,000 square foot office building in Orlando, FL.
Percentage calculations exclude this property
- -------------------------------------------------------------------------------
14
- --------------------------------------------------------------------------------------------------------------------------
OCCUPANCY ANALYSIS
As of December 31, 2001
- --------------------------------------------------------------------------------------------------------------------------
NUMBER OF RENTABLE OCCUPANCY AS OF
PROPERTY BUILDINGS SQUARE FEET SEP-01 DEC-01
- --------------------------------------------------------------------------------------------------------------------------
OFFICE PROPERTIES
SUBURBAN OFFICE PARKS
LONG ISLAND
Nassau West Corporate Center, Mitchel Field, NY 6 1,531,021 97.2% 96.8%
Huntington Melville Corporate Center, Melville, NY (1) 7 1,053,354 99.6% 99.6%
North Shore Atrium, Syosset, NY 2 304,177 96.8% 96.8%
- --------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - LONG ISLAND (2) 15 2,888,552 97.9% 97.7%
WESTCHESTER
Tarrytown Corporate Center, Tarrytown, NY 6 875,726 93.2% 92.1%
Summit at Vallhalla, Vahalla, NY 3 699,045 83.9% 93.4%
Mt. Pleasant Corporate Center, Valhalla, NY 2 162,004 95.8% 98.3%
Reckson Executive Park, Rye Brook, NY 6 541,884 99.2% 98.8%
- --------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - WESTCHESTER 17 2,278,659 92.0% 94.5%
NEW JERSEY
Short Hills Office Center, Short Hills, NJ (3) 3 575,150 100.0% 100.0%
Executive Hill Office Park, West Orange, NJ 4 391,382 94.6% 92.0%
University Square, Princeton, NJ 3 131,727 100.0% 100.0%
- --------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - NEW JERSEY (2) 10 1,098,259 98.0% 96.8%
- --------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - SUBURBAN OFFICE PARK (2) 42 6,265,470 95.6% 96.3%
==========================================================================================================================
SUBURBAN STAND ALONE
Long Island Office Properties 10 1,064,296 97.9% 92.0%
New Jersey Office Properties 6 872,003 98.8% 96.7%
Westchester Office Properties 2 284,899 98.1% 97.9%
- --------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - SUBURBAN STANDALONE 18 2,221,198 98.3% 94.6%
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - SUBURBAN OFFICE (2) 60 8,486,668 96.8% 95.8%
==========================================================================================================================
CBD Office
CONNECTICUT
Landmark Square, Stamford, CT 6 799,048 93.7% 92.3%
Stamford Towers, Stamford, CT 2 324,867 100.0% 100.0%
- --------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - CONNECTICUT 8 1,123,915 95.4% 94.4%
WESTCHESTER
Standalone Office 4 668,916 96.1% 96.0%
- --------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - WESTCHESTER OFFICE 4 668,916 96.1% 96.1%
NEW YORK CITY
919 Third Avenue 1 1,356,115 98.1% 99.5%
810 Seventh Avenue 1 692,060 99.5% 97.6%
100 Wall Street 1 466,226 98.6% 96.2%
120 W. 45th Street 1 443,109 91.4% 89.4%
1350 Ave. of the Americas 1 540,000 95.5% 96.3%
- --------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - NEW YORK CITY 5 3,497,510 97.2% 96.9%
- --------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - CBD OFFICE 17 5,290,341 96.7% 96.3%
==========================================================================================================================
SUBTOTAL-OFFICE PROPERTIES (2) 77 13,777,009 96.7% 96.1%
==========================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
SQUARE FEET AS O% OF NOI AS A %
PROPERTY PROPERTY TYPE TOTAL PORTFOLIO PROPERTY TYPE TOTAL PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
OFFICE PROPERTIES
SUBURBAN OFFICE PARKS
LONG ISLAND
Nassau West Corporate Center, Mitchel Field, NY 11.1% 7.4% 10.7% 9.2%
Huntington Melville Corporate Center, Melville, NY (1) 7.6% 5.1% 6.6% 5.6%
North Shore Atrium, Syosset, NY 2.2% 1.5% 1.6% 1.4%
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - LONG ISLAND (2) 21.0% 14.0% 18.9% 16.3%
WESTCHESTER
Tarrytown Corporate Center, Tarrytown, NY 6.4% 4.2% 5.6% 4.8%
Summit at Vallhalla, Vahalla, NY 5.1% 3.4% 4.5% 3.9%
Mt. Pleasant Corporate Center, Valhalla, NY 1.2% 0.8% 0.6% 0.5%
Reckson Executive Park, Rye Brook, NY 3.9% 2.6% 3.4% 2.9%
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - WESTCHESTER 16.5% 11.1% 14.1% 12.1%
NEW JERSEY
Short Hills Office Center, Short Hills, NJ (3) 4.2% 2.8% 5.1% 4.4%
Executive Hill Office Park, West Orange, NJ 2.8% 1.9% 2.6% 2.3%
University Square, Princeton, NJ 1.0% 0.6% 1.0% 0.8%
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - NEW JERSEY (2) 8.0% 5.3% 8.6% 7.4%
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - SUBURBAN OFFICE PARK (2) 45.5% 30.4% 41.6% 35.8%
===================================================================================================================================
SUBURBAN STAND ALONE
Long Island Office Properties 7.7% 5.2% 6.1% 5.2%
New Jersey Office Properties 6.3% 4.2% 6.0% 5.2%
Westchester Office Properties 2.1% 1.4% 2.2% 1.9%
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - SUBURBAN STANDALONE 16.1% 10.8% 14.3% 12.3%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - SUBURBAN OFFICE (2) 61.6% 41.2% 55.9% 48.1%
===================================================================================================================================
CBD Office
CONNECTICUT
Landmark Square, Stamford, CT 5.8% 3.9% 5.5% 4.7%
Stamford Towers, Stamford, CT 2.4% 1.6% 2.7% 2.4%
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - CONNECTICUT 8.2% 5.5% 8.3% 7.1%
WESTCHESTER
Standalone Office 4.9% 3.2% 5.4% 4.7%
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - WESTCHESTER OFFICE 4.9% 3.2% 5.4% 4.7%
NEW YORK CITY
919 Third Avenue 9.8% 6.6% 6.9% 6.0%
810 Seventh Avenue 5.0% 3.4% 7.6% 6.6%
100 Wall Street 3.4% 2.3% 4.6% 4.0%
120 W. 45th Street 3.2% 2.1% 5.1% 4.4%
1350 Ave. of the Americas 3.9% 2.6% 6.1% 5.3%
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - NEW YORK CITY 25.4% 17.0% 30.5% 26.2%
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - CBD OFFICE 38.4% 25.7% 44.1% 38.0%
===================================================================================================================================
SUBTOTAL-OFFICE PROPERTIES (2) 100.0% 66.8% 100.0% 86.0%
===================================================================================================================================
- -------------------------------------------------------------------------------
(1) Rentable square feet includes a recently completed 277,500 sf Class A office
building which is currently 36% leased; percent leased excludes this
property.
(2) Percent leased excludes properties under development.
(3) Rentable square feet includes a 129,508 sf building under redevelopment;
percent leased excludes this property.
- -------------------------------------------------------------------------------
15
- ------------------------------------------------------------------------------------------------------------------------
OCCUPANCY ANALYSIS
As of December 31, 2001
- ------------------------------------------------------------------------------------------------------------------------
NUMBER OF RENTABLE OCCUPANCY AS OF
PROPERTY BUILDINGS SQUARE FEET SEP-01 DEC-01
- ------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL PROPERTIES
LONG ISLAND INDUSTRIAL PROPERTIES
Vanderbilt Industrial Park, Hauppauge, NY (1) 47 2,379,404 93.6% 88.4%
Airport International Plaza, Bohemia, NY 21 1,290,079 98.1% 98.7%
County Line Industrial Center, Melville, NY 4 342,354 100.0% 100.0%
Other Submarkets
Farmingdale 3 520,615 99.9% 99.9%
Melville 4 246,769 100.0% 100.0%
Islip/Islandia 6 212,524 100.0% 100.0%
Hauppauge 2 195,942 99.1% 99.1%
Other 8 709,277 96.7% 96.6%
- ------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - LONG ISLAND INDUSTRIAL (2) 95 5,896,964 96.6% 94.7%
========================================================================================================================
Stand-alone Westchester Industrial Properties 2 139,690 100.0% 100.0%
Stand-alone Connecticut Industrial Properties 1 452,414 100.0% 54.3%
Stand-alone New Jersey Industrial Properties 5 324,468 82.4% 86.3%
- ------------------------------------------------------------------------------------------------------------------------
SUBTOTAL-
INDUSTRIAL PROPERTIES (2) 103 6,813,536 96.2% 91.7%
========================================================================================================================
RETAIL PROPERTIES 2 20,000 50.0% 50.0%
- ------------------------------------------------------------------------------------------------------------------------
TOTAL - ALL PROPERTIES (2) 182 20,610,545 96.0% 94.6%
========================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
SQUARE FEET AS A % OF NOI AS A %
PROPERTY PROPERTY TYPE TOTAL PORTFOLIO PROPERTY TYPE OTAL PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL PROPERTIES
LONG ISLAND INDUSTRIAL PROPERTIES
Vanderbilt Industrial Park, Hauppauge, NY (1) 34.9% 11.5% 25.6% 3.6%
Airport International Plaza, Bohemia, NY 18.9% 6.3% 21.3% 3.0%
County Line Industrial Center, Melville, NY 5.0% 1.7% 5.0% 0.7%
Other Submarkets
Farmingdale 7.6% 2.5% 7.6% 1.1%
Melville 3.6% 1.2% 6.1% 0.9%
Islip/Islandia 3.1% 1.0% 1.9% 0.3%
Hauppauge 2.9% 1.0% 4.2% 0.6%
Other 10.4% 3.4% 10.6% 1.5%
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL - LONG ISLAND INDUSTRIAL (2) 86.5% 28.6% 82.3% 11.5%
===================================================================================================================================
Stand-alone Westchester Industrial Properties 2.1% 0.7% 4.2% 0.6%
Stand-alone Connecticut Industrial Properties 6.6% 2.2% 6.3% 0.9%
Stand-alone New Jersey Industrial Properties 4.8% 1.6% 7.2% 1.0%
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL-
INDUSTRIAL PROPERTIES (2) 100.0% 33.1% 100.0% 14.0%
===================================================================================================================================
RETAIL PROPERTIES 0.1% 0.1% 0.2% 0.1%
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL - ALL PROPERTIES (2) 100.0% 100.0% 100.0% 100.0%
===================================================================================================================================
- -------------------------------------------------------------------------------
(1) Rentable square feet includes a 56,875 square foot vacant building under
redevelopment; percent leased excludes this property.
(2) Percent leased excludes properties under development.
- -------------------------------------------------------------------------------
16
- -----------------------------------------------------------------------------------------------------------------------------------
LEASING STATISTICS
For the 3 months ended December 31, 2001
- -----------------------------------------------------------------------------------------------------------------------------------
EXECUTED LEASES (A)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
# of Total Average Average Average
Transactions Sq. Ft. Base Rent Effective Rent Term (Years)
- -----------------------------------------------------------------------------------------------------------------------------------
OFFICE PORTFOLIO
Long Island 23 159,415 $29.72 $27.06 6.4
Westchester 15 155,660 $24.63 $22.64 4.3
Connecticut 7 56,763 $33.18 $33.03 4.4
New Jersey 1 3,241 $23.25 $21.42 3.0
New York City 4 35,334 $61.96 $56.49 11.7
- -----------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average 50 410,413 $30.99 $28.70 5.8
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL PORTFOLIO
Long Island 20 230,732 $6.81 $6.52 6.1
New Jersey 1 36,059 $9.85 $7.81 5.0
- -----------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average 21 266,791 $7.22 $6.69 6.0
===================================================================================================================================
RESEARCH & DEVELOPMENT PORTFOLIO
Long Island 4 149,004 $11.06 $10.65 3.3
New Jersey 1 13,013 $17.60 $12.02 5.0
- -----------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average 5 162,017 $11.59 $10.76 3.4
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO TOTALS 76 839,221
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
SAME SPACE STATISTICS
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Total Base Rent GAAP Rent
Property Type Sq. Ft. Expiration Current (b) % Change Expiration Current (b) % Change
- -----------------------------------------------------------------------------------------------------------------------------------
Office 355,485 $25.29 $27.36 8.2% $24.37 $28.35 16.3%
Industrial 263,791 $5.98 $6.64 11.0% $5.68 $7.19 26.6%
Research & Development 119,004 $11.79 $11.56 -2.0% $10.41 $11.90 14.3%
- -----------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average 738,280 $16.21 $17.41 7.4% $15.44 $18.14 17.5%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TENANT RETENTION
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Leases Sq. Ft Sq. Ft Renewal
Property Type Expiring (c) Expiring (c) Renewing Percentage
- -----------------------------------------------------------------------------------------------------------------------------
Office 44 272,972 164,915 60.4%
Industrial 15 147,013 144,513 98.3%
Research & Development 5 365,700 154,000 42.1%
- -----------------------------------------------------------------------------------------------------------------------------
Totals 64 785,685 463,428 59.0%
=============================================================================================================================
- ---------------------------------------------------------------------
(a) Includes new and renewed leases during the period
(b) Represents either renewed or released space
(c) Includes early renewals
- -------------------------------------------------------------------------------
17
- -----------------------------------------------------------------------------------------------------------------------------------
LEASING STATISTICS
For the 12 months ended December 31, 2001
- -----------------------------------------------------------------------------------------------------------------------------------
EXECUTED LEASES (A)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
# of Total Average Average Average
Transactions Sq. Ft. Base Rent Effective Rent Term (Years)
- -----------------------------------------------------------------------------------------------------------------------------------
OFFICE PORTFOLIO
Long Island 69 471,077 $28.56 $25.71 6.5
Westchester 76 528,228 $25.22 $23.25 5.1
Connecticut 26 148,443 $30.54 $29.99 4.9
New Jersey 28 422,322 $28.12 $26.14 3.4
New York City 13 101,483 $61.14 $55.26 10.7
- -----------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average 212 1,671,553 $29.55 $27.22 5.4
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL PORTFOLIO
Long Island 52 646,171 $7.21 $6.91 6.4
New Jersey 3 84,985 $8.36 $7.08 5.0
- -----------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average 55 731,156 $7.34 $6.93 6.2
===================================================================================================================================
RESEARCH & DEVELOPMENT PORTFOLIO
Long Island 7 167,999 $11.18 $10.59 3.5
Westchester 1 8,169 $14.26 $9.68 5.1
New Jersey 1 13,013 $17.60 $12.02 5.0
- -----------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average 9 189,181 $11.75 $10.65 3.7
===================================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO TOTALS 276 2,591,890
- -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
SAME SPACE STATISTICS
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Total Base Rent GAAP Rent
Property Type Sq. Ft. Expiration Current (b) % Change Expiration Current (b) % Change
- ----------------------------------------------------------------------------------------------------------------------------------
Office 1,342,825 $24.34 $27.30 12.2% $23.60 $28.50 20.8%
Industrial 710,280 $6.22 $6.74 8.4% $5.92 $7.29 23.1%
Research & Development 132,888 $11.76 $11.44 -2.7% $10.40 $11.78 13.3%
- ----------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average 2,185,993 $17.69 $19.66 11.1% $17.05 $20.59 20.8%
==================================================================================================================================
- ---------------------------------------------------------------------------------------------------------------------------
TENANT RETENTION
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Leases Sq. Ft Sq. Ft Renewal
Property Type Expiring (c) Expiring (c) Renewing Percentage
- ---------------------------------------------------------------------------------------------------------------------------
Office 150 1,038,981 639,619 61.6%
Industrial 38 648,457 437,161 67.4%
Research & Development 8 403,584 154,000 38.2%
===========================================================================================================================
Totals 196 2,091,022 1,230,780 58.9%
- ---------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------
(a) Includes new and renewed leases during the period
(b) Represents either renewed or released space
(c) Includes early renewals
- -------------------------------------------------------------------------------
18
- -------------------------------------------------------------------------------------------------------------------------------
LEASE EXPIRATION SCHEDULE
As of December 31, 2001
TOTAL PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Number of Square % of Total Cumulative
Year of Leases Feet Leased % of Total
Expiration Expiring Expiring Sq Ft Leased Sq Ft
- -------------------------------------------------------------------------------------------------------------------------------
2002 160 1,126,088 5.9% 5.9%
2003 174 1,976,568 10.3% 16.2%
2004 201 1,885,833 9.9% 26.1%
2005 233 2,639,546 13.8% 39.9%
2006 218 2,785,201 14.6% 54.5%
2007 85 1,305,095 6.8% 61.3%
2008 and thereafter 269 7,399,169 38.7% 100.0%
- -------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average 1,340 19,117,500 100.0% --
===============================================================================================================================
OFFICE PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Number of Square % of Total Cumulative
Year of Leases Feet Leased % of Total
Expiration Expiring Expiring Sq Ft Leased Sq Ft
- -------------------------------------------------------------------------------------------------------------------------------
2002 140 878,649 6.8% 6.8%
2003 145 1,197,918 9.3% 16.1%
2004 158 1,224,945 9.5% 25.5%
2005 203 1,749,112 13.5% 39.0%
2006 172 1,722,827 13.3% 52.4%
2007 65 1,029,323 8.0% 60.3%
2008 and thereafter 215 5,131,114 39.7% 100.0%
- -------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average 1,098 12,933,888 100.0% --
===============================================================================================================================
INDUSTRIAL/R&D PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
Number of Square % of Total Cumulative
Year of Leases Feet Leased % of Total
Expiration Expiring Expiring Sq Ft Leased Sq Ft
- -------------------------------------------------------------------------------------------------------------------------------
2002 20 247,439 4.0% 4.0%
2003 29 778,650 12.6% 16.6%
2004 43 660,888 10.7% 27.3%
2005 30 890,434 14.4% 41.7%
2006 46 1,062,374 17.2% 58.9%
2007 20 275,772 4.5% 63.3%
2008 and thereafter 54 2,268,055 36.7% 100.0%
- -------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average 242 6,183,612 100.0% --
===============================================================================================================================
19
- --------------------------------------------------------------------------------------------------------------------------------
LEASE EXPIRATION SCHEDULE
As of December 31, 2001
LONG ISLAND OFFICE (EXCLUDING OMNI)
- ----------------------------------------------------------------------------------------------------------------------------------
Number of Square % of Total Cumulative Expiring Expiring
Year of Leases Feet Leased % of Total GAAP Cash
Expiration Expiring Expiring Sq Ft Leased Sq Ft Rent (1) Rent (2)
- ----------------------------------------------------------------------------------------------------------------------------------
2002 28 111,646 3.6% 3.6% $22.58 $25.22
2003 47 326,722 10.6% 14.2% $24.08 $26.58
2004 45 281,356 9.1% 23.3% $23.73 $26.27
2005 64 381,431 12.3% 35.6% $24.81 $27.74
2006 40 165,193 5.3% 40.9% $25.42 $28.67
2007 25 406,748 13.1% 54.1% $24.69 $30.46
2008 and thereafter 71 1,420,299 45.9% 100.0% -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average 320 3,093,395 100.0% -- -- --
================================================================================================================================
OMNI
- --------------------------------------------------------------------------------------------------------------------------------
Number of Square % of Total Cumulative Expiring Expiring
Year of Leases Feet Leased % of Total GAAP Cash
Expiration Expiring Expiring Sq Ft Leased Sq Ft Rent (1) Rent (2)
- --------------------------------------------------------------------------------------------------------------------------------
2002 2 33,890 6.3% 6.3% $33.55 $36.58
2003 3 49,793 9.3% 15.6% $29.54 $35.06
2004 5 113,793 21.2% 36.8% $27.27 $34.65
2005 6 59,115 11.0% 47.8% $27.91 $35.34
2006 -- -- 0.0% 47.8% -- --
2007 2 59,722 11.1% 59.0% $26.86 $34.31
2008 and thereafter 9 220,105 41.0% 100.0% -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average 27 536,418 100.0% -- -- --
================================================================================================================================
WESTCHESTER OFFICE
- --------------------------------------------------------------------------------------------------------------------------------
Number of Square % of Total Cumulative Expiring Expiring
Year of Leases Feet Leased % of Total GAAP Cash
Expiration Expiring Expiring Sq Ft Leased Sq Ft Rent (1) Rent (2)
- --------------------------------------------------------------------------------------------------------------------------------
2002 48 344,580 11.2% 11.2% $21.89 $21.23
2003 49 242,853 7.9% 19.1% $22.18 $23.87
2004 35 171,448 5.6% 24.7% $21.43 $22.48
2005 49 460,793 15.0% 39.7% $22.96 $24.04
2006 40 728,397 23.7% 63.3% $22.80 $24.57
2007 19 334,429 10.9% 74.2% $25.88 $27.80
2008 and thereafter 34 793,228 25.8% 100.0% -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average 274 3,075,728 100.0% -- -- --
================================================================================================================================
- -----------------------------------------------------------------------------
(1) Represents annualized straightline rent as of the lease expiration date
(2) Represents annualized base rent as of the lease expiration date plus
non-recoverable operating expense pass-throughs
- -------------------------------------------------------------------------------
20
- -----------------------------------------------------------------------------------------------------------------------------------
LEASE EXPIRATION SCHEDULE
As of December 31, 2001
STAMFORD OFFICE
- -----------------------------------------------------------------------------------------------------------------------------------
Number of Square % of Total Cumulative Expiring Expiring
Year of Leases Feet Leased % of Total GAAP Cash
Expiration Expiring Expiring Sq Ft Leased Sq Ft Rent (1) Rent (2)
- -----------------------------------------------------------------------------------------------------------------------------------
2002 21 56,475 5.3% 5.3% $24.16 $24.97
2003 19 144,235 13.6% 18.9% $30.94 $31.78
2004 26 233,501 22.0% 40.9% $21.96 $23.04
2005 20 117,510 11.1% 52.0% $26.70 $28.64
2006 24 291,313 27.5% 79.4% $24.17 $25.06
2007 9 92,541 8.7% 88.2% $31.92 $34.29
2008 and thereafter 7 125,617 11.8% 100.0% -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average 126 1,061,192 100.0% -- -- --
===================================================================================================================================
NEW JERSEY OFFICE
- -----------------------------------------------------------------------------------------------------------------------------------
Number of Square % of Total Cumulative Expiring Expiring
Year of Leases Feet Leased % of Total GAAP Cash
Expiration Expiring Expiring Sq Ft Leased Sq Ft Rent (1) Rent (2)
- -----------------------------------------------------------------------------------------------------------------------------------
2002 20 144,155 8.1% 8.1% $20.02 $21.01
2003 20 319,328 17.9% 26.0% $27.16 $28.21
2004 28 206,608 11.6% 37.6% $23.08 $23.89
2005 27 271,611 15.3% 52.9% $23.78 $24.78
2006 18 197,563 11.1% 64.0% $24.33 $25.73
2007 2 35,421 2.0% 66.0% $20.69 $23.30
2008 and thereafter 16 605,601 34.0% 100.0% -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average 131 1,780,287 100.0% -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
NEW YORK CITY OFFICE
- -----------------------------------------------------------------------------------------------------------------------------------
Number of Square % of Total Cumulative Expiring Expiring
Year of Leases Feet Leased % of Total GAAP Cash
Expiration Expiring Expiring Sq Ft Leased Sq Ft Rent (1) Rent (2)
- -----------------------------------------------------------------------------------------------------------------------------------
2002 21 187,903 5.5% 5.5% $32.28 $33.64
2003 7 114,987 3.4% 8.9% $32.08 $33.00
2004 19 218,239 6.4% 15.4% $36.23 $39.50
2005 37 458,652 13.5% 28.9% $35.69 $38.26
2006 50 340,361 10.0% 39.0% $30.16 $31.74
2007 8 100,462 3.0% 41.9% $33.89 $35.74
2008 and thereafter 78 1,966,264 58.1% 100.0% -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total/Weighted Average 220 3,386,868 100.0% -- -- --
===================================================================================================================================
- -------------------------------------------------------------------------------
(1) Represents annualized straightline rent as of the lease expiration date
(2) Represents annualized base rent as of the lease expiration date plus
non-recoverable operating expense pass-throughs
- -------------------------------------------------------------------------------
21
- -----------------------------------------------------------------------------------------------------------------------------------
LEASE EXPIRATION SCHEDULE
As of December 31, 2001
INDUSTRIAL
- -----------------------------------------------------------------------------------------------------------------------------------
Number of Square % of Total Cumulative Expiring Expiring
Year of Leases Feet Leased % of Total GAAP Cash
Expiration Expiring Expiring Sq Ft Leased Sq Ft Rent (1) Rent (2)
- -----------------------------------------------------------------------------------------------------------------------------------
2002 17 227,970 4.5% 4.5% $6.18 $7.04
2003 24 686,712 13.5% 18.0% $5.40 $6.36
2004 34 561,670 11.0% 29.0% $6.56 $7.61
2005 23 432,994 8.5% 37.5% $5.93 $7.99
2006 41 982,113 19.3% 56.8% $6.64 $8.00
2007 16 190,328 3.7% 60.5% $7.61 $8.89
2008 and thereafter 41 2,010,920 39.5% 100.0% -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total / Weighted Average 196 5,092,707 100.0% -- -- --
===================================================================================================================================
RESEARCH & DEVELOPMENT
- ----------------------------------------------------------------------------------------------------------------------------------
Number of Square % of Total Cumulative Expiring Expiring
Year of Leases Feet Leased % of Total GAAP Cash
Expiration Expiring Expiring Sq Ft Leased Sq Ft Rent (1) Rent (2)
- ----------------------------------------------------------------------------------------------------------------------------------
2002 3 19,469 1.8% 1.8% $14.05 $15.52
2003 5 91,938 8.4% 10.2% $10.36 $10.76
2004 9 99,218 9.1% 19.3% $13.86 $15.05
2005 7 457,440 41.9% 61.2% $8.98 $11.42
2006 5 80,261 7.4% 68.6% $18.15 $20.97
2007 4 85,444 7.8% 76.4% $12.60 $13.95
2008 and thereafter 13 257,135 23.6% 100.0% -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total / Weighted Average 46 1,090,905 100.0% -- -- --
===================================================================================================================================
- -------------------------------------------------------------------------------
(1) Represents annualized straightline rent as of the lease expiration date
(2) Represents annualized base rent as of the lease expiration date plus
non-recoverable operating expense pass-throughs
- -------------------------------------------------------------------------------
22
LEASE EXPIRATION COMPARISON
Expiring Rents vs. Reckson Forecast Rents (a)
Office Portfolio
[GRAPHIC OMITTED]
As of December 31, 2001
CBD OFFICE PORTFOLIO SUBURBAN OFFICE PORTFOLIO
500,000 SQ. FT. EXPIRING 1.6 MILLION SQ. FT. EXPIRING
------------------------ ----------------------------
CASH
Expiring $31.51 $24.75
Forecasted (b) $41.81 $25.33
Increase 33% 2%
GAAP
Expiring Rent $30.94 $23.66
Forecasted (b) $42.28 $26.14
Increase 37% 10%
(a) Represents leases expiring over the next 2 years
(b) Company's forecast rent for space to be re-leased. There can be no
assurance that the Company's properties can achieve such rents.
23
- ------------------------------------------------------------------------------------------------------------------------------
LEASE DISTRIBUTION
As of December 31, 2001
OFFICE PORTFOLIO (A)
- ------------------------------------------------------------------------------------------------------------------------------
Leased % of Occupied Contract % of Weighted Avg
Square Feet Under Lease Sq Ft Sq Ft Rent (b) Contract Rent Maturity (Years)
- ------------------------------------------------------------------------------------------------------------------------------
2,500 or Less 487,826 3.8% $12,434,441 3.5% 3.7
2,501 - 5,000 880,551 6.8% 22,133,305 6.3% 3.9
5,001 - 10,000 1,441,817 11.1% 39,600,775 11.2% 4.3
10,001 - 20,000 2,249,449 17.4% 62,076,426 17.6% 5.0
20,001 - 40,000 2,899,937 22.4% 82,312,332 23.4% 5.5
40,001 - 60,000 1,127,597 8.7% 29,632,427 8.4% 6.5
60,001 - 100,000 1,354,633 10.5% 30,756,417 8.7% 6.6
100,001 or Greater 2,492,078 19.3% 73,066,437 20.8% 10.3
- ------------------------------------------------------------------------------------------------------------------------------
Total 12,933,888 100.0% $352,012,559 100.0% 6.2
==============================================================================================================================
INDUSTRIAL PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------------
Leased % of Occupied Contract % of Weighted Avg
Square Feet Under Lease Sq Ft Sq Ft Rent (b) Contract Rent Maturity (Years)
- ------------------------------------------------------------------------------------------------------------------------------
10,000 or Less 639,503 10.3% $5,204,282 11.9% 4.5
10,001 - 20,000 631,448 10.2% 5,252,225 12.0% 3.4
20,001 - 40,000 1,163,699 18.8% 7,982,123 18.3% 3.8
40,001 - 60,000 869,424 14.1% 6,889,712 15.8% 4.4
60,001 - 100,000 683,560 11.1% 4,965,219 11.4% 6.6
100,001 or Greater 2,195,978 35.5% 13,305,605 30.5% 6.5
- ------------------------------------------------------------------------------------------------------------------------------
Total 6,183,612 100.0% $43,599,165 100.0% 5.2
==============================================================================================================================
- -------------------------------------------------------------------------------
(a) Excludes office property located in Orlando, FL.
(b) Represents contract rent in place for the 12 month period January 1, 2002
through December 31, 2002.
- -------------------------------------------------------------------------------
24
- -----------------------------------------------------------------------------------------------------------------------------------
NON-INCREMENTAL REVENUE GENERATING CAPITAL EXPENDITURES, TENANT IMPROVEMENT COSTS AND LEASING COMMISSIONS
The following table summarizes the expenditures incurred for capital
expenditures for the entire portfolio and tenant improvements and leasing
commissions for space leased at the Company's office and industrial
properties for the years 1997 through 2001.
- -----------------------------------------------------------------------------------------------------------------------------------
NON-INCREMENTAL REVENUE GENERATING CAPITAL EXPENDITURES
- -----------------------------------------------------------------------------------------------------------------------------------
1997-2000
1997 1998 1999 2000 average 2001
---------- ---------- ------------ ----------- --------------- -----------
Suburban Office Properties
Total $1,108,675 $2,004,976 $2,298,899 $3,289,116 $2,175,417 $4,606,069
Per Square Foot 0.22 0.23 0.23 0.33 0.25 0.45
NYC Office Properties
Total N/A N/A N/A $946,718 $946,718 $1,584,501
Per Square Foot N/A N/A N/A 0.38 0.38 0.45
Industrial Properties
Total $733,233 $1,205,266 $1,048,688 $813,431 $950,155 $711,666
Per Square Foot 0.15 0.12 0.11 0.11 0.12 0.11
- -----------------------------------------------------------------------------------------------------------------------------------
NON-INCREMENTAL REVENUE GENERATING TENANT IMPROVEMENTS AND LEASING COMMISSIONS
- -----------------------------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000
---------- --------- ---------- ---------
Long Island Office Properties
Tenant Improvements $784,044 $1,140,251 $1,009,357 $2,853,706
Per Square Foot Improved 3.98 4.73 6.99
7.00
Leasing Commissions $415,822 $418,191 $551,762 $2,208,604
Per Square Foot Leased 4.83 1.46 2.59 4.96
---------- ---------- ---------- ----------
Total Per Square Foot $11.83 $5.44 $7.32 $11.95
========== ========== ========== ==========
Westchester Office Properties
Tenant Improvements $1,211,665 $711,160 $1,316,611 $1,860,027
Per Square Foot Improved 8.90 4.45 5.62 5.72
Leasing Commissions $366,257 $286,150 $457,730 $412,226
Per Square Foot Leased 2.69 1.79 1.96 3.00
---------- ---------- ---------- ----------
Total Per Square Foot $11.59 $6.24 $7.58 $8.72
========== ========== ========== ==========
Connecticut Office Properties
Tenant Improvements $1,022,421 $202,880 $179,043 $385,531
Per Square Foot Improved 13.39 5.92 4.88 4.19
Leasing Commissions $256,615 $151,063 $110,252 $453,435
Per Square Foot Leased 3.36 4.41 4.92
3.00
---------- ---------- ---------- ----------
Total Per Square Foot $16.75 $10.33 $7.88 $9.11
========== ========== ========== ==========
New Jersey Office Properties
Tenant Improvements N/A $654,877 $454,054 $1,580,323
Per Square Foot Improved N/A 3.78 2.29 6.71
Leasing Commissions N/A $396,127 $787,065 $1,031,950
Per Square Foot Leased N/A 2.08 3.96 4.44
---------- ---------- ---------- ----------
Total Per Square Foot N/A $5.86 $6.25 $11.15
========== ========== ========== ==========
New York City Office Properties
Tenant Improvements N/A N/A N/A $65,267
Per Square Foot Improved N/A N/A N/A 1.79
Leasing Commissions N/A N/A N/A $418,185
Per Square Foot Leased N/A N/A N/A
11.50
---------- ---------- ---------- ----------
Total Per Square Foot N/A N/A N/A $13.29
========== ========== ========== ==========
Industrial Properties
Tenant Improvements $230,466 $283,842 $375,646 $650,216
Per Square Foot Improved 0.55 0.76 0.25 0.95
Leasing Commissions $81,013 $200,154 $835,108 $436,506
Per Square Foot Leased 0.19 0.44 0.56 0.64
---------- ---------- ---------- ----------
Total Per Square Foot $0.75 $1.20 $0.81 $1.59
========== ========== ========== ==========
25
1997-2000
average 2001 New Renewal
---------- ---------- ---------- ----------
Long Island Office Properties
Tenant Improvements $1,466,840 $2,722,457 $1,469,697 $1,252,760
Per Square Foot Improved 5.68 8.47 12.95 6.03
Leasing Commissions $898,595 $1,444,412 $722,206 $722,206
Per Square Foot Leased 3.46 4.49 6.36 3.47
---------- ---------- ---------- ----------
Total Per Square Foot $9.14 $12.96 $19.31 $9.50
========== ========== ========== ==========
Westchester Office Properties
Tenant Improvements $1,274,866 $2,584,728 $1,702,928 $881,800
Per Square Foot Improved 6.17 5.91 6.97 4.56
Leasing Commissions $380,591 $1,263,012 $1,080,066 $182,946
Per Square Foot Leased 2.36 2.89 4.42 0.95
---------- ---------- ---------- ----------
Total Per Square Foot $8.53 $8.80 $11.39 $5.51
========== ========== ========== ==========
Connecticut Office Properties
Tenant Improvements $447,469 $213,909 $133,543 $80,366
Per Square Foot Improved 7.10 1.46 4.87 0.68
Leasing Commissions $242,841 $209,322 $132,333 $76,989
Per Square Foot Leased 3.92 1.43 4.82 0.65
---------- ---------- ---------- ----------
Total Per Square Foot $11.02 $2.89 $9.69 $1.33
========== ========== ========== ==========
New Jersey Office Properties
Tenant Improvements $896,418 $1,146,385 $1,102,974 $43,411
Per Square Foot Improved 4.26 2.92 3.54 0.54
Leasing Commissions $738,381 $1,602,962 $1,283,112 $319,850
Per Square Foot Leased 3.49 4.08 4.12 3.96
---------- ---------- ---------- ----------
Total Per Square Foot $7.75 $7.00 $7.66 $4.50
========== ========== ========== ==========
New York City Office Properties
Tenant Improvements $65,267 $788,930 $788,930 $0
Per Square Foot Improved 1.79 15.69 15.69 -
Leasing Commissions $418,185 $1,098,829 $1,098,829 $0
Per Square Foot Leased 11.50 21.86 21.86 -
---------- ---------- ---------- ----------
Total Per Square Foot $13.29 $37.55 $37.55 $0.00
========== ========== ========== ==========
Industrial Properties
Tenant Improvements $385,043 $1,366,488 $905,234 $461,254
Per Square Foot Improved 0.63 1.65 3.15 -
Leasing Commissions $388,195 $354,572 $346,145 $8,427
Per Square Foot Leased 0.46 0.43 1.21 0.02
---------- ---------- ---------- ----------
Total Per Square Foot $1.09 $2.08 $4.36 $0.02
========== ========== ========== ==========
26
CLASS A OFFICE STATISTICS
[GRAPHICS OMITTED]
LONG ISLAND STATISTICS
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Direct Vacancy 8.7% 6.1% 5.6% 6.3% 7.7%
Overall Vacancy 9.7% 6.7% 6.5% 8.4% 11.9%
Average Asking Rental Rates $26.14 $27.23 $27.69 $28.86 $30.06
WESTCHESTER STATISTICS
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Direct Vacancy 13.3% 16.4% 15.0% 10.7% 16.3%
Overall Vacancy 15.6% 19.2% 16.3% 12.0% 20.5%
Average Asking Rental Rates $25.14 $26.67 $27.23 $29.62 $30.15
SOUTHERN CONNECTICUT STATISTICS
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Direct Vacancy 4.2% 3.6% 4.0% 7.2% 8.8%
Overall Vacancy 5.7% 4.2% 4.7% 8.1% 13.6%
Average Asking Rental Rates $28.96 $32.22 $31.78 $44.41 $ 36.10
NORTHERN NEW JERSEY STATISTICS
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Direct Vacancy 4.7% 5.3% 4.6% 6.5% 8.1%
Overall Vacancy 7.3% 7.5% 7.1% 9.9% 13.4%
Average Asking Rental Rates $25.38 $27.42 $28.52 $29.66 $30.92
Source: Cushman & Wakefield
27
- --------------------------------------------------------------------------------
NEW YORK CITY CLASS A OFFICE STATISTICS
[GRAPHICS OMITTED]
AVERAGE ASKING RENTS 1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Financial East Side $29.77 $40.21 $37.64 $52.90 $48.07
Midtown West Side $33.10 $43.36 $48.28 $60.89 $61.22
Midtown East Side $39.33 $47.85 $51.18 $61.46 $59.81
6th Ave./Rockefeller Center $43.62 $51.33 $53.12 $65.91 $67.15
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
FINANCIAL EAST SIDE
Overall Vacancy 8.9% 7.3% 4.1% 2.1% 7.0%
Direct Vacancy 8.2% 6.6% 3.4% 1.4% 2.3%
MIDTOWN WEST SIDE
Overall Vacancy 6.9% 4.3% 6.0% 2.7% 6.2%
Direct Vacancy 3.7% 3.3% 4.6% 2.4% 4.0%
MIDTOWN EAST SIDE
Overall Vacancy 7.2% 8.0% 5.0% 2.6% 8.9%
Direct Vacancy 5.6% 6.0% 3.8% 1.9% 3.1%
6TH AVE./ROCKEFELLER CENTER
Overall Vacancy 4.7% 5.0% 2.6% 1.2% 4.3%
Direct Vacancy 2.7% 2.2% 1.6% 0.9% 2.7%
Source: Cushman & Wakefield
Breakdown of New York City Revenue:
Midtown West Side 38%
Midtown East Side 31%
6th Ave./Rockefeller Center 18%
Financial East 13%
28
- -------------------------------------------------------------------------------
LONG ISLAND SUBMARKET CLASS A OFFICE STATISTICS
[GRAPHICS OMITTED]
AVERAGE ASKING RENTS 1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Central Nassau County $28.79 $29.10 $29.93 $31.15 $31.94
Western Suffolk County $26.55 $26.22 $27.34 $28.22 $30.06
Eastern Nassau County $25.22 $27.49 $26.23 $28.75 $29.02
DIRECT VACANCY RATES 1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Central Nassau County 7.5% 5.1% 5.1% 4.7% 5.6%
Western Suffolk County 7.7% 7.7% 11.6% 15.4% 17.5%
Eastern Nassau County 6.4% 4.9% 0.9% 1.4% 1.2%
Source: Cushman & Wakefield
Breadown of Long Island office revenue:
Central Nassau 50%
Western Suffolk 32%
Eastern Nassau 8%
Other 10%
29
- --------------------------------------------------------------------------------
WESTCHESTER SUBMARKETS CLASS A OFFICE STATISTICS
[GRAPHICS OMITTED]
AVERAGE ASKING RENTS 1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Central 5.7% 12.3% 13.5% 12.0% 20.6%
Tarrytown / Western 7.9% 7.8% 8.0% 6.0% 8.4%
Eastern 8.6% 12.2% 10.1% 8.1% 16.6%
White Plains CBD 25.7% 22.7% 22.6% 11.5% 15.3%
DIRECT VACANCY RATES 1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Central $22.39 $22.91 $27.07 $28.49 $29.53
Tarrytown / Western $24.43 $24.66 $27.30 $27.03 $28.37
Eastern $26.53 $29.35 $27.70 $29.65 $30.62
White Plains CBD $25.09 $26.84 $27.44 $30.62 $30.52
Source: Cushman & Wakefield
Breakdown of Westchester office revenue:
Tarrytown / Western 28%
White Plains 25%
Central 23%
Eastern 17%
Other 7%
Note: The 20.6% vacancy in Central Westchester is impacted by IBM
selling a 383,000 owner occupied building. The location of
this building is not easily accessible to major thoroughfares and
employee bedroom communities. Excluding this building the vacancy
rate is 17.5%.
30
- -------------------------------------------------------------------------------
NEW JERSEY SUBMARKETS CLASS A OFFICE STATISTICS
[GRAPHICS OMITTED]
AVERAGE ASKING RENT 1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Essex County $26.47 $27.74 $28.78 $28.90 $30.24
Bergen County $26.02 $27.37 $28.07 $29.41 $29.78
Mercer County $23.01 $24.49 $27.46 $30.32 $30.06
DIRECT VACANCY RATE 1997 1998 1999 2000 2001
---- ---- ---- ---- ----
Essex County 4.7% 3.3% 6.0% 9.6% 6.8%
Bergen County 7.8% 6.8% 5.3% 5.1% 9.9%
Mercer County 2.5% 1.5% 5.2% 6.3% 6.2%
Source: Cushman & Wakefield
Breakdown of New Jersey office revenue:
Essex County 52%
Bergen County 11%
Mercer County 7%
Other 30%
31
- ---------------------------------------------------------------------------------------------------------------------------------
VALUE CREATION PIPELINE
As of December 31, 2001
- ---------------------------------------------------------------------------------------------------------------------------------
Square Feet/ Investment Anticipated
Stage / Property Acres To Date Total Investment (a)
- ---------------------------------------------------------------------------------------------------------------------------------
PROJECTS IN STABILIZATION
Melville Expressway Corporate Center, Melville, NY ( Phase I ) 277,500 $50,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL PROJECTS IN STABILIZATION 277,500 $46,873,655 $50,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
PROJECTS UNDER DEVELOPMENT OR REPOSITIONING
103 JFK Expressway, Short Hills, NJ 129,508 $30,000,000
400 Moreland Road, Commack, NY 56,875 $2,967,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL PROJECTS UNDER DEVELOPMENT OR REPOSITIONING 186,383 $27,865,738 $32,967,000
- ---------------------------------------------------------------------------------------------------------------------------------
PROJECTS IN PLANNING
Melville Square Corporate Center II, Melville, NY 255,000 $33,660,000
University Square , Princeton, NJ 315,000 $50,397,000
Melville Expressway Corporate Center, Melville, NY ( Phase II ) 277,500 $49,290,000
Reckson Executive Park, Rye Brook, NY 345,000 $55,799,000
AIP 2001, Islip, NY 71,000 $5,692,000
Landmark 7, Stamford, CT 61,000 $13,208,000
Giralda Farms, Morris County, NJ 430,000 $80,091,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL PROJECTS IN PLANNING 1,754,500 $65,606,655 $288,137,000
- ---------------------------------------------------------------------------------------------------------------------------------
LAND
70 Andrews Road, Hicksville, NY 3.8 $3,309,000
Old Willets Path, Hauppauge, NY 2.0 $2,995,000
Eagle Rock 3, East Hanover, NJ 15.0 $17,625,000
AIP Recapture, Islip, NY 4.2 $0
AIP, Islip NY 3.8 $2,200,000
AIP, Islip NY 2.0 $1,400,000
East Patchogue, East Patchogue, NY 23.0 $0
40 Cragwood, South Plainfield, NJ 7.0 $0
Giralda Farms , Chatham County, NJ 113.0 $130,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL LAND 173.8 $11,701,911 $157,529,000
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL UNREALIZED PIPELINE $152,047,959 $528,633,000
- ---------------------------------------------------------------------------------------------------------------------------------
Investments that reached realization during 2001
50 Marcus Dr 163,762 sf
100 Grasslands 47,690 sf
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL REALIZED VALUE CREATION PROJECTS 7,684,640 $1,003,187,765 $1,003,187,765
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL VALUE CREATION PIPELINE $1,155,235,724 $1,531,820,765
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Current % Estimated Anticipated
Stage / Property Leased Stabilization Date (a) Stabilized Return (a)
- -----------------------------------------------------------------------------------------------------------------------------
PROJECTS IN STABILIZATION
Melville Expressway Corporate Center, Melville, NY (Phase I) Q3 2002
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL PROJECTS IN STABILIZATION 36.0% 12.0%
- ------------------------------------------------------------------------------------------------------------------------------
PROJECTS UNDER DEVELOPMENT OR REPOSITIONING
103 JFK Expressway, Short Hills, NJ Q4 2002
400 Moreland Road, Commack, NY Q4 2002
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL PROJECTS UNDER DEVELOPMENT OR REPOSITIONING 0.0% 10.2%
- ------------------------------------------------------------------------------------------------------------------------------
PROJECTS IN PLANNING
Melville Square Corporate Center II, Melville, NY Q3 2003
University Square , Princeton, NJ Q4 2003
Melville Expressway Corporate Center, Melville, NY (Phase II) Q4 2003
Reckson Executive Park, Rye Brook, NY Q4 2003
AIP 2001, Islip, NY Q4 2002
Landmark 7, Stamford, CT Q1 2003
Giralda Farms , Morris County, NJ Q1 2004
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL PROJECTS IN PLANNING 0.0% 12.0%
- ------------------------------------------------------------------------------------------------------------------------------
LAND
70 Andrews Road, Hicksville, NY - -
Old Willets Path, Hauppauge, NY - -
Eagle Rock 3, East Hanover, NJ - -
AIP Recapture, Islip, NY - -
AIP, Islip NY - -
AIP, Islip NY - -
East Patchogue, East Patchogue, NY - -
40 Cragwood, South Plainfield, NJ - -
Giralda Farms , Chatham County, NJ - -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LAND 11.3%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL UNREALIZED PIPELINE 11.7%
- ------------------------------------------------------------------------------------------------------------------------------
Investments that reached realization during 2001
50 Marcus Dr 163,762 sf
100 Grasslands 47,690 sf
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL REALIZED VALUE CREATION PROJECTS 96.8% 12.5%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL VALUE CREATION PIPELINE
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
(a) Forward looking statement based upon management's estimates. Actual results
may differ materially.
- -------------------------------------------------------------------------------
32
- -------------------------------------------------------------------------------
RSVP (AND IT'S EQUITY INVESTMENTS)
Combined Balance Sheets
(amounts in thousands)
- ----------------------
(UNAUDITED)
DECEMBER 31, DECEMBER 31,
2001 2000
--------------- ---------------
Assets
- ------
Cash and other assets $ 5,321 $ 9,702
Equity investments 235,669 157,481
--------------- ---------------
Total assets $ 240,990 $ 167,183
=============== ===============
Liabilities
- -----------
Accounts payable and accrued expenses 227 1,009
Other liabilities 3,995 9,791
--------------- ---------------
Total liabilities $ 4,222 $ 10,800
--------------- ---------------
Member's equity (a)
- -------------------
Preferred equity 155,500 105,435
Common equity 88,972 58,652
Offering costs (7,704) (7,704)
--------------- ---------------
Total member's equity 236,768 156,383
--------------- ---------------
Total liabilities and member's equity $ 240,990 $ 167,183
=============== ===============
- -------------------------------------------------------------------------------
(a) RSVP has guaranteed $8 million of secured first mortgage debt to third
party financial institutions with respect to the Resort platform.
- -------------------------------------------------------------------------------
33
- -------------------------------------------------------------------------------
RSVP
Summary of Invested Capital
The following table sets forth the Company's invested capital (before valuation
reserves) in RSVP controlled (REIT-qualified) joint ventures and amounts which
were advanced under the RSVP Commitment to FrontLine, for its investment in RSVP
controlled investments:
(amounts in thousands)
- -----------------------------------------------------------------------------------------------------------------------
RSVP CONTROLLED AMOUNTS
PLATFORM JOINT VENTURES ADVANCED TOTAL
- -----------------------------------------------------------------------------------------------------------------------
Privatization (Prisons/Gov't offices) $ 21,480 $ 3,520 $ 25,000
Student housing 18,086 3,935 22,021
Medical office 20,185 - 20,185
Parking - 9,091 9,091
Resorts - 8,057 8,057
Net leased retail - 3,180 3,180
Other assets and overhead - 21,598 21,598
---------------------------------------------------------------------------
Total $ 59,751 $ 49,381 $ 109,132
===========================================================================
- ------------------------------------------------------------------------------
Included in these investments is approximately $18.9 million of cash that has
been contributed to the respective RSVP controlled joint ventures or advanced
under the RSVP Commitment to FrontLine and is being held, along with cash from
the preferred investors.
- ------------------------------------------------------------------------------
34
- ------------------------------------------------------------------------------
RSVP
Summarized Platform Balance Sheets as of December 31, 2001(unaudited)
(amounts in thousands)
-----------------------------------------------------------------------
STUDENT MEDICAL
PRIVATIZATION HOUSING OFFICE PARKING
-----------------------------------------------------------------------
ASSETS:
- -------
Real estate assets $ 133,616 $ 270,202 $ 59,815 $ 58,790
Other assets 30,594 54,722 50,129 6,525
-----------------------------------------------------------------------
Total Assets $ 164,210 $ 324,924 $ 109,944 $ 65,315
=======================================================================
LIABILITIES:
- ------------
Accounts payable & other liabilities $ 9,861 $ 38,237 $ 1,357 $ 2,167
Property related debt 11,313 234,158 44,767 32,900
-----------------------------------------------------------------------
Total Liabilities 21,174 272,395 46,124 35,067
-----------------------------------------------------------------------
PARTNER'S CAPITAL
- -----------------
RSVP / RAP capital 89,118 52,825 59,107 20,680
Other partners (2) 53,918 (296) 4,713 9,568
-----------------------------------------------------------------------
Total Partner's Capital 143,036 52,529 63,820 30,248
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Total Liabilities and Partner's Capital $ 164,210 $ 324,924 $ 109,944 $ 65,315
=======================================================================
---------------------------------------------
NOT LEASED
RESORTS RETAIL OTHER (1)
---------------------------------------------
ASSETS:
- -------
Real estate assets $ 54,705 $ 5,947 $ -
Other assets 12,899 2,255 9,486
---------------------------------------------
Total Assets $ 67,604 $ 8,202 $ 9,486
=============================================
LIABILITIES:
- ------------
Accounts payable & other liabilities $ 6,214 $ 891 $ -
Property related debt 22,500 4,253 0
---------------------------------------------
Total Liabilities 28,714 5,144 0
---------------------------------------------
PARTNER'S CAPITAL
- -----------------
RSVP / RAP capital 22,118 3,058 9,486
Other partners (2) 16,772 0 0
---------------------------------------------
Total Partner's Capital 38,890 3,058 9,486
---------------------------------------------
---------------------------------------------
Total Liabilities and Partner's Capital $ 67,604 $ 8,202 $ 9,486
=============================================
- -------------------------------------------------------------------------------
(1) Represents note receivable collateralized by interests in certain senior
living facilities
(2) Includes amounts that are subordinated to RSVP / RAP capital
- -------------------------------------------------------------------------------
35
