SEC Filing | SL Green Realty Corp.

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended December 31, 2001

OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from to

Commission File Number 1-13762

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RECKSON OPERATING PARTNERSHIP, L. P.
(Exact name of registrant as specified in its charter)

DELAWARE 11-3233647
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
225 BROADHOLLOW ROAD,
MELVILLE, NY 11747
(Address of principal (Zip Code)
executive offices)

Registrant's telephone number, including area code: (631) 694-6900

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Securities registered pursuant to Section 12(b) of the Act: None

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Securities registered pursuant to Section 12(g) of the Act: None

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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K, or any
amendment to this Form 10-K. [X]

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement of Reckson Associates Realty
Corp. relating to its Annual Shareholder's Meeting to be held May 23, 2002 are
incorporated by reference into Part III.

As of March 14, 2002, 3,688,408 common units of limited partnership
interest were held by non-affiliates of the Registrant. There is no established
trading market for such units.

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TABLE OF CONTENTS

ITEM
NO. PAGE
- ------- -----

PART I
1. Business .................................................................... I-1
2. Properties .................................................................. I-9
3. Legal Proceedings ........................................................... I-18
4. Submission of Matters to a Vote of Security Holders ......................... I-19
PART II
5. Market for Registrant's Common Equity and Related Security Matters .......... II-1
6. Selected Financial Data ..................................................... II-2
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations ............................................................... II-3
7(a). Quantitative and Qualitative Disclosures about Market Risk .................. II-15
8. Financial Statements and Supplementary Data ................................. II-16
9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure ............................................................... II-16

PART III
10. Directors and Executive Officers of the Registrant .......................... III-1
11. Executive Compensation ...................................................... III-1
12. Security Ownership of Certain Beneficial Owners and Management .............. III-1
13. Certain Relationships and Related Transactions .............................. III-1
PART IV
14. Financial Statements and Schedules, Exhibits and Reports on Form 8-K ........ IV-1

PART I

ITEM 1. BUSINESS

GENERAL

Reckson Operating Partnership, L. P. (the "Operating Partnership")
commenced operations on June 2, 1995. Reckson Associates Realty Corp. (the
"Company"), which serves as the sole general partner of the Operating
Partnership, is a fully integrated, self administered and self managed real
estate investment trust ("REIT"). The Operating Partnership and the Company were
formed for the purpose of continuing the commercial real estate business of
Reckson Associates, its affiliated partnerships and other entities ("Reckson").

All of the Company's interests in its properties, land and other
investments are held directly or indirectly by, and all of its operations are
conducted through, the Operating Partnership. The Company controls the Operating
Partnership as the sole general partner and as of December 31, 2001, owned
approximately 89% of the Operating Partnership's outstanding Class A common
units of limited partnership and Class B common units of limited partnership
interest.

For more than 40 years, Reckson has been engaged in the business of owning,
developing, acquiring, constructing, managing and leasing office and industrial
properties in the New York tri-state area (the "Tri-State Area"). Based on
industry surveys, management believes that the Operating Partnership is one of
the largest owners and operators of Class A suburban and commercial business
district ("CBD") office properties and industrial properties in the Tri-State
Area. As of December 31, 2001 the Operating Partnership owned 182 properties
(including 11 joint venture properties) in the Tri-State Area suburban and CBD
markets encompassing approximately 20.6 million rentable square feet, all of
which are managed by the Operating Partnership. These properties include 60
Class A suburban office properties encompassing approximately 8.5 million
rentable square feet, of which 42 of these properties or 74% as measured by
square footage, are located within the Operating Partnership's ten office parks.
Reckson has historically emphasized the development and acquisition of
properties that are part of large scale suburban office parks. The Operating
Partnership believes that owning properties in planned office and industrial
parks provides certain strategic advantages, including the following: (i)
certain tenants prefer being located in a park with other high quality companies
to enhance their corporate image, (ii) parks afford tenants certain aesthetic
amenities such as a common landscaping plan, standardization of signage and
common dining and recreational facilities, (iii) tenants may expand (or
contract) their business within a park, enabling them to centralize business
functions and (iv) a park provides tenants with access to other tenants and may
facilitate business relationships between tenants. The properties also include
17 Class A CBD office properties encompassing approximately 5.3 million rentable
square feet. The CBD office properties consist of five properties located in New
York City, eight properties located in Stamford, CT and four properties located
in White Plains, NY. Additionally, the properties include 103 industrial
properties encompassing approximately 6.8 million rentable square feet, of which
72 of these properties, or 59% as measured by square footage, are located within
the Operating Partnership's three industrial parks. The properties also include
two retail properties comprising approximately 20,000 rentable square feet.

Through its ownership of properties in the key CBD and suburban office
markets in the Tri-State Area, the Operating Partnership believes it has a
unique competitive advantage as the trend toward the regional decentralization
of the workplaces increases. Due to the events of September 11th, as well as
technological advances which further enable decentralization, companies are
strategically re-evaluating the benefits and feasibility of regional
decentralization and reassessing their long-term space needs. The Operating
Partnership believes this multi-location regional decentralization will continue
to take place, increasing as companies begin to have better visibility as to the
future of the economy, further validating our regional strategy of maintaining a
significant market share in each of the key CBD and suburban office markets in
the Tri-State Area.

I-1

sale for approximately $22.3 million. The closing is scheduled to occur during
2002. Since its formation, the Operating Partnership has developed or
redeveloped 14 properties encompassing approximately 2.1 million square feet of
office and industrial space.

The Operating Partnership also owns a 357,000 square foot office building
located in Orlando, Florida and has invested approximately $17.0 million in a
note receivable secured by a partnership interest in Omni Partners, L. P., owner
of the Omni, a 575,000 square foot Class A Office Property located in Uniondale,
NY, effectively increasing its economic interest in the property owning
partnership and $36.5 million under three notes which are secured by a minority
partner's preferred unit interest in the Operating Partnership and certain real
property.

During July 1998, the Operating Partnership formed Metropolitan Partners,
LLC ("Metropolitan") for the purpose of acquiring Class A office properties in
New York City. Currently the Operating Partnership owns, through Metropolitan,
five Class A office properties aggregating approximately 3.5 million square
feet.

During September 2000, the Operating Partnership formed a joint venture
(the "Tri-State JV") with Teachers Insurance and Annuity Association ("TIAA")
and contributed eight Class A suburban office properties aggregating
approximately $136 million for a 495 interest in the Tri-State JV which was then
distributed to the Operating Partnership. As a result, the Operating Partnership
realized a gain of approximately $15.2 million. For purposes of its financial
statements the Operating Partnership consolidates this joint venture.

On December 21, 2001, the Operating Partnership formed a joint venture with
the New York State Teachers' Retirement Systems ("NYSTRS") whereby NYSTRS
acquired a 49% indirect interest in the property located at 919 Third Avenue,
New York, NY for $220.5 million which included $122.1 million of its
proportionate share of secured mortgage debt and approximately $98.4 million of
cash which was then distributed to the Operating Partnership. As a result, the
Operating Partnership realized a gain of approximately $18.9 million. For
purposes of its financial statements the Operating Partnership consolidates this
joint venture.

As of December 31, 2001, the Operating Partnership has invested
approximately $59.8 million in REIT-qualified joint ventures with Reckson
Strategic Venture Partners, LLC ("RSVP"), a real estate venture capital fund
created as a research and development vehicle for the Operating Partnership to
invest in alternative real estate sectors outside the Operating Partnership's
core office and industrial focus (see Recent Developments-Other Investing
Activities).

The Operating Partnership seeks to maintain cash reserves for normal
repairs, replacements, improvements, working capital and other contingencies.
The Operating Partnership has established an unsecured credit facility (the
"Credit Facility") with a maximum borrowing amount of $575 million scheduled to
mature on September 7, 2003. The Credit Facility requires the Operating
Partnership to comply with a number of financial and other covenants on an
ongoing basis.

There are numerous commercial properties that compete with the Operating
Partnership in attracting tenants and numerous companies that compete in
selecting land for development and properties for acquisition.

The Operating Partnerships executive offices are located at 225 Broadhollow
Road, Melville, New York 11747 and its telephone number at that location is
(631) 694-6900. At December 31, 2001, the Operating Partnership had 311
employees.

I-2

RECENT DEVELOPMENTS

Acquisitions, Dispositions and Investing Activities

On October 29, 2001, the Operating Partnership, at its option, acquired the
lessor's rights to the air rights lease agreement for the property located at
120 West 45th Street, New York, NY for approximately $7.7 million. As a result,
the Operating Partnership's obligation to pay rent under this lease agreement
was eliminated.

On December 21, 2001, Metropolitan sold a 49% indirect interest in the
property located at 919 Third Avenue, New York, NY for $220.5 million which
included $122.1 million of its proportionate share of secured mortgage debt and
approximately $98.4 million of cash. As a result, the Operating Partnership
realized a gain of approximately $18.9 million.

During the year ended December 31, 2001, the Operating Partnership sold
five office properties aggregating approximately 678,000 square feet for $82.1
million, a 26,000 square foot industrial property for $2.8 million and its
remaining preferred interest in Keystone Property Trust for $35.7 million. As a
result of these sales the Operating Partnership realized a net gain of
approximately $1.3 million. Net proceeds from these sales were used primarily to
repay borrowings under the Credit Facility and to establish an escrow account
with a qualified intermediary for a future exchange ofreal property pursuant to
Section 1031 of the Internal Revenue Code of 1986. The Operating Partnership has
identified approximately 52.7 acres of land located in Valhalla, NY for the
purposes of this exchange.

Subsequent to December 31, 2001, the Operating Partnership entered into a
contract to sell two Class A office properties, located in Westchester County,
NY, aggregating approximately 157,000 square feet for approximately $18.5
million. The closing is scheduled to occur during the second quarter of 2002.

Other Investing Activities

During 1997, the Company formed FrontLine Capital Group, formerly Reckson
Service Industries, Inc. ("FrontLine") and RSVP. RSVP is a real estate venture
capital fund which invests primarily in real estate and real estate operating
companies outside the Operating Partnership's core office and industrial focus
and whose common equity is held indirectly by FrontLine. In connection with the
formation and spin-off of FrontLine, the Operating Partnership established an
unsecured credit facility with FrontLine (the "FrontLine Facility") in the
amount of $100 million for FrontLine to use in its investment activities,
operations and other general corporate purposes. The Operating Partnership has
advanced approximately $93.4 million under the FrontLine Facility. The Operating
Partnership also approved the funding of investments of up to $100 million
relating to RSVP (the "RSVP Commitment"), through RSVP-controlled joint ventures
(for REIT-qualified investments) or advances made to FrontLine under an
unsecured loan facility (the "RSVP Facility") having terms similar to the
FrontLine Facility (advances made under the RSVP Facility and the FrontLine
Facility hereafter, the "FrontLine Loans"). During March 2001, the Operating
Partnership increased the RSVP Commitment to $110 million and as of December 31,
2001, approximately $109.1 million had been funded through the RSVP Commitment,
of which $59.8 million represents investments by the Operating Partnership in
RSVP-controlled (REIT-qualified) joint ventures and $49.3 million represents
loans made to FrontLine under the RSVP Facility. As of December 31, 2001,
interest accrued (net of reserves) under the FrontLine Facility and the RSVP
Facility was approximately $19.6 million.

I-3

of anticipated costs, in its consolidated statements of operations relating to
its investments in the FrontLine Loans and joint ventures with RSVP. The
Operating Partnership has discontinued the accrual of interest income with
respect to the FrontLine Loans. The Operating Partnership has also reserved
against its share of GAAP equity in earnings from the RSVP controlled joint
ventures funded through the RSVP Commitment until such income is realized
through cash distributions.

At December 31, 2001, the Operating Partnership, pursuant to Section 166 of
the Internal Revenue Code of 1986, charged off $70 million of the aforementioned
reserve directly related to the FrontLine Facility, including accrued interest.
Subsequent to December 31, 2001, the Operating Partnership charged off an
additional $38 million of the reserve directly related to the FrontLine
Facility, including accrued interest and $47 million of the reserve directly
related to the RSVP Facility, including accrued interest.

FrontLine is in default under the FrontLine Loans from the Operating
Partnership and has reported that it is currently in discussions with its
creditors, including the Operating Partnership, and that it may be required to
seek protection from creditors under federal bankruptcy laws.

As a result of the foregoing, the net carrying value of the Operating
Partnership's investments in the FrontLine Loans and joint venture investments
with RSVP, inclusive of the Operating Partnership's share of previously accrued
GAAP equity in earnings on those investments, is approximately $65.0 million.
Such amount has been reflected in investments in service companies and affiliate
loans and joint ventures on the Operating Partnership's consolidated balance
sheet.

Both the FrontLine Facility and the RSVP Facility have a term of five
years, are unsecured and advances under each are recourse obligations of
FrontLine. Notwithstanding the valuation reserve, under the terms of the credit
facilities, interest accrues on the FrontLine Loans at a rate equal to the
greater of (a) the prime rate plus two percent and (b) 12% per annum, with the
rate on amounts that are outstanding for more than one year increasing annually
at a rate of four percent of the prior year's rate. In March 2001, the credit
facilities were amended to provide that (i) interest is payable only at maturity
and (ii) the Company may transfer all or any portion of its rights or
obligations under the credit facilities to its affiliates. The Company requested
these changes as a result of changes in REIT tax laws.

The Operating Partnership and FrontLine entered into an intercompany
agreement (the "Reckson Intercompany Agreement") to formalize their relationship
at the time of the spin-off of FrontLine and to limit conflicts of interest.
Under the Reckson Intercompany Agreement, among other provisions, (i) FrontLine
granted the Operating Partnership a right of first opportunity to make any
REIT-qualified investment that becomes available to FrontLine and (ii) the
Operating Partnership granted FrontLine a right to (a) provide the Operating
Partnership and its tenants with commercial services for occupants of office,
industrial and other property types and (b) become the lessee of any real
property acquired by the Operating Partnership if the Operating Partnership
determines that, consistent with the Company's status as a REIT, it is required
to enter into a "master" lease agreement.

The following table sets forth the Operating Partnership'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 (in thousands):

RSVP CONTROLLED AMOUNTS
JOINT VENTURES ADVANCED TOTAL
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Privatization $21,480 $ 3,520 $ 25,000
Student Housing 18,086 3,935 22,021
Medical Offices 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
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$59,751 $49,381 $109,132
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I-4

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.

Leasing Activity

During the year ended December 31, 2001, the Operating Partnership executed
276 leases encompassing approximately 2.6 million square feet. The following
table summarizes the leasing activity by location and property type:

LEASED SQUARE AVERAGE EFFECTIVE
NUMBER OF LEASES FEET RENT (1)
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CBD office properties
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Connecticut 26 148,443 $ 29.99
New York City 13 101,483 $ 55.26
Westchester 17 84,780 $ 24.87
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Subtotal/Weighted average 56 334,706 $ 36.36
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Suburban office properties
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Long Island 69 471,077 $ 25.67
New Jersey 28 422,322 $ 26.14
Westchester 59 443,448 $ 22.94
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Subtotal/Weighted average 156 1,336,847 $ 24.91
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Industrial properties
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Long Island 59 814,170 $ 7.67
New Jersey 4 97,998 $ 7.74
Westchester 1 8,169 $ 9.68
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Subtotal/Weighted average 64 920,337 $ 7.70
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Total 276 2,591,890
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(1) Base rent adjusted on a straight-line basis for free rent periods, tenant
improvements and leasing commissions

Financing Activities

On September 7, 2000, the Operating Partnership obtained its three year
$575 million unsecured revolving Credit Facility from The Chase Manhattan Bank,
as administrative agent, UBS Warburg LLC as syndication agent and Deutsche Bank
as documentation agent. The Credit Facility matures in September, 2003 and
borrowings under the Credit Facility are currently priced off LIBOR plus 105
basis points.

The Operating Partnership utilizes the Credit Facility primarily to finance
real estate investments, fund its real estate development activities and for
working capital purposes. At December 31, 2001, the Operating Partnership had
availability under the Credit Facility to borrow an additional $303.4 million
(of which, $37.4 million has been allocated for outstanding undrawn letters of
credit). Subsequent to December 31, 2001, the Operating Partnership paid down
the Credit Facility by $84.6 million which was received from the sale of a 49%
interest in the property located at 919 Third Avenue, New York, NY and thereby
increasing its availability under the Credit Facility to $388 million.

I-5

variable rate mortgage note with a ten year $250 million fixed rate mortgage
note, which bears interest at 6.867% per annum. The net proceeds of
approximately $50.4 million received by the Operating Partnership as a result of
these refinancings was used to repay maturing fixed rate debt, the Credit
Facility and for working capital purposes.

On July 24, 2001, the Operating Partnership repaid a mortgage note in the
amount of approximately $15.5 million from a portion of the proceeds received
from the secured debt financing of the property located at 919 Third Avenue, New
York, NY. In addition, during the fourth quarter of 2001, the Operating
Partnership repaid two mortgage notes in the aggregate amount of approximately
$8.8 million through a draw under the Credit Facility and from available cash on
hand.

Unit Issuances

During the year ended December 31, 2001, approximately 11,553 preferred
units of limited partnership interest, with a liquidation preference value of
approximately $11.6 million, were exchanged for 456,351 Class A Units at an
average price of $25.32 per Unit. In addition, the Company increased its general
partner interest in the Operating Partnership by acquiring 660,370 outstanding
Units from certain limited partners in exchange for an equal number of shares of
its Class A common stock.

Metropolitan is controlled by the Operating Partnership. A minority partner
owned an $85 million preferred equity investment in Metropolitan which accrued
distributions at a rate of 7.5% per annum for a two-year period (May 24, 1999
through May 30, 2001). On May 31, 2001, the minority partner, at its election,
converted its preferred equity investment into 3,453,881 shares of the Company's
Class A common stock based on a conversion price of $24.61 per share and the
Operating Partnership issued 3,453,881 Units to the Company. As a result of the
minority partner's conversion of their preferred equity investment, the
Operating Partnership owns 100% of Metropolitan.

The Board of Directors of the Company has authorized the purchase of up to
an additional five million shares of the Company's Class B common stock and/or
its Class A common stock. Previously, in conjunction with the Company's common
stock buy back program, the Operating Partnership purchased and retired
1,410,804 Class B common units at an average price of $21.48 per unit and 61,704
Class A common units at an average price of $23.03 per unit for an aggregate
purchase price of approximately $31.7 million.

OPERATING STRATEGIES AND GROWTH OPPORTUNITIES

The Operating Partnership's primary business objectives are to maximize
current return to its partners through increases in distributable cash flow and
to increase partner's long-term total return through the appreciation in the
value of its Class A common units and Class B common units. The Operating
Partnership plans to achieve these objectives by continuing Reckson's operating
strategies and capitalizing on the internal and external growth opportunities as
described below.

Operating Strategies. Management believes that throughout its 40-year
operating history, Reckson has created value in its properties through a variety
of market cycles by implementing the operating strategies described below. These
operating strategies include: (i) a multidisciplinary leasing approach that
involves architectural design and construction personnel as well as leasing
professionals, (ii) innovative marketing programs that strategically position
the Operating Partnership's properties and distinguish its portfolio from the
competition, increase brand equity and gain market-share. These cost-effective,
high-yield programs include electronic web-casting, targeted outdoor and print
media campaigns and sales promotion that enhances broker relationships and
influences tenant retention, (iii) a comprehensive tenant service program and
property amenities designed to maximize tenant satisfaction and retention, (iv)
cost control management and systems that take advantage of economies of scale
that arise from the Operating Partnership's market position and efficiencies
attributable to the state-of-the-art energy control systems at many of the
office properties, (v) a fully integrated infrastructure of proprietary and
property management accounting systems which encompasses technology advanced
systems and tools that provides meaningful information, on a real time basis,
throughout the entire organization and (vi) an acquisition and development
strategy that is continuously adjusted in light of anticipated changes in market
conditions and that seeks to capitalize on management's multidisciplinary
expertise and market knowledge to modify, upgrade and reposition a property in
its marketplace in order to maximize value.

I-6

The Operating Partnership also intends to adhere to a policy of maintaining
a debt ratio (defined as the total debt of the Operating Partnership as a
percentage of the sum of the Operating Partnerships total debt and the value of
its equity) of not more than 50%. As of December 31, 2001, the Operating
Partnership's debt ratio was approximately 41.1%. This calculation is net of
minority partners' proportionate share of debt and including the Operating
Partnership's share of unconsolidated joint venture debt. This debt ratio is
intended to provide the Operating Partnership with financial flexibility to
select the optimal source of capital (whether through debt or partners
contributions) with which to finance external growth.

Growth Opportunities. The Operating Partnership intends to achieve its
primary business objectives by applying its operating strategies to the internal
and external growth opportunities described below.

Internal Growth. To the extent the Long Island, Westchester, New Jersey and
Southern Connecticut suburban office and industrial markets remain stable and
begin to recover with new supply management believes the Operating Partnership
is well positioned to benefit from rental revenue growth through: (i)
contractual annual compounding of 3-4% Base Rent increases (defined as fixed
gross rental amounts that excludes payments on account of real estate taxes,
operating expense escalations and base electrical charges) on approximately 85%
of existing leases from its Long Island properties, (ii) periodic contractual
increases in Base Rent on existing leases from its Westchester properties, the
New Jersey properties and the Southern Connecticut properties and (iii) the
potential for increases to Base Rents as leases expire and space is re-leased at
the higher rents that exist in the current market environment.

During 1999, the Operating Partnership entered the New York City office
market. The New York City office market is currently experiencing favorable
supply and demand characteristics exceeding those currently in the Operating
Partnership's suburban markets and is also characterized by similar lack of
available land supply and other barriers to entry that limit competition. The
Operating Partnership's New York City office buildings offer superior potential
for increase in Base Rents as described in (iii) above. Since the formation of
the Operating Partnership's New York City division, it has acquired five Class A
office properties aggregating approximately 3.5 million square feet.

External Growth. The Operating Partnership seeks to acquire multi-tenant
Class A office buildings in New York City and the surrounding Tri-State Area
core suburban markets as well as industrial properties located in the Tri-State
Area. Management believes that the Tri-State Area presents opportunities to
acquire or invest in properties at attractive yields. The Operating Partnership
believes that its (i) capital structure, in particular its Credit Facility
providing for a maximum borrowing amount of up to $575 million, (ii) ability to
acquire a property for Units and thereby defer the seller's income tax on gain,
(iii) operating economies of scale, (iv) relationships with financial
institutions and private real estate owners, (v) fully integrated operations in
its five existing divisions and (vi) its substantial position and franchise in
the submarkets in which it owns properties will enhance the Operating
Partnership's ability to identify and capitalize on acquisition opportunities.
The Operating Partnership also intends to selectively develop new Class A
suburban and CBD office and industrial properties and to continue to redevelop
existing properties as these opportunities arise. The Operating Partnership will
concentrate its development activities on industrial and Class A suburban and
CBD office properties within the Tri-State Area. The Operating Partnership's
expansion into the New York City office market has provided it with additional
opportunities to acquire interests in properties at attractive yields. The
Operating Partnership also believes that the addition of its New York City
division provides additional leasing and operational facilities and enhances its
overall franchise value by being the only real estate operating company in the
Tri-State Area with significant presence in both Manhattan and each of the
surrounding sub-markets.

I-7

Operating Partnership believes this multi-location regional decentralization
will continue to take place, increasing as companies begin to have better
visibility as to the future of the economy, further validating our regional
strategy of maintaining a significant market share in each of the key CBD and
suburban office markets in the Tri-State Area.

In addition, when valuations for commercial real estate properties are
high, the Operating Partnership will seek to sell certain properties or
interests therein to realize value and profit created. The Operating Partnership
will then seek opportunities to reinvest the capital realized from these
dispositions back into value-added assets in the Operating Partnership's core
Tri-State Area markets.

ENVIRONMENTAL MATTERS

Under various Federal, state and local laws, ordinances and regulations, an
owner of real estate is liable for the costs of removal or remediation of
certain hazardous or toxic substances on or in such property. These laws often
impose such liability without regard to whether the owner knew of, or was
responsible for, the presence of such hazardous or toxic substances. The cost of
any required remediation and the owners liability therefore as to any property
is generally not limited under such enactments and could exceed the value of the
property and/or the aggregate assets of the owner. The presence of such
substances, or the failure to properly remediate such substances, may adversely
affect the owners ability to sell or rent such property or to borrow using such
property as collateral. Persons who arrange for the disposal or treatment of
hazardous or toxic substances may also be liable for the costs of removal or
remediation of such substances at a disposal or treatment facility, whether or
not such facility is owned or operated by such person. Certain environmental
laws govern the removal, encapsulation or disturbance of asbestos-containing
materials ("ACMs") when such materials are in poor condition, or in the event of
renovation or demolition. Such laws impose liability for release of ACMs into
the air and third parties may seek recovery from owners or operators of real
properties for personal injury associated with ACMs. In connection with the
ownership (direct or indirect), operation, management and development of real
properties, the Operating Partnership may be considered an owner or operator of
such properties or as having arranged for the disposal or treatment of hazardous
or toxic substances and, therefore, potentially liable for removal or
remediation costs, as well as certain other related costs, including
governmental fines and injuries to persons and property.

All of the Operating Partnership's office and industrial properties have
been subjected to a Phase I or similar environmental audit after April 1, 1994
(which involved general inspections without soil sampling, ground water analysis
or radon testing and, for the Operating Partnership's properties constructed in
1978 or earlier, survey inspections to ascertain the existence of ACMs were
conducted) completed by independent environmental consultant companies (except
for 35 Pinelawn Road which was originally developed by Reckson and subjected to
a Phase 1 in April 1992). These environmental audits have not revealed any
environmental liability that would have a material adverse effect on the
Operating Partnerships business.

I-8

ITEM 2. PROPERTIES

GENERAL

As of December 31, 2001 the Operating Partnership owned 182 properties
(including 11 joint venture properties) in the Tri-State Area suburban and CBD
markets, encompassing approximately 20.6 million rentable square feet, all of
which are managed by the Operating Partnership. The properties include 60 Class
A suburban office properties encompassing approximately 8.5 million rentable
square feet, of which 42 of these properties or 74% as measured by square
footage, are located within the Operating Partnership's ten office parks.
Reckson has historically emphasized the development and acquisition of
properties that are part of large-scale suburban office parks. The Operating
Partnership believes that owning properties in planned office and industrial
parks provides certain strategic advantages, including the following: (i)
certain tenants prefer being located in a park with other high quality companies
to enhance their corporate image, (ii) parks afford tenants certain aesthetic
amenities such as a common landscaping plan, standardization of signage and
common dining and recreational facilities, (iii) tenants may expand (or
contract) their business within a park, enabling them to centralize business
functions and (iv) a park provides tenants with access to other tenants and may
facilitate business relationships between tenants. The properties also include
17 Class A CBD office properties encompassing approximately 5.3 million rentable
square feet. The CBD office properties consist of five properties located in New
York City, eight properties located in Stamford, CT and four properties located
in White Plains, NY. Additionally, the Operating Partnership owns 103 industrial
properties encompassing approximately 6.8 million rentable square feet, of which
72 of these properties, or 59% as measured by square footage, are located within
the Operating Partnership's three industrial parks. The properties also include
two retail properties comprising approximately 20,000 rentable square feet. The
Operating Partnership also owns a 357,000 square foot office property located in
Orlando, Florida.

Set forth below is a summary of certain information relating to the
Operating Partnership's properties, categorized by office and industrial
properties, as of December 31, 2001.

OFFICE PROPERTIES

General

As of December 31, 2001, the Operating Partnership owned or had an interest
in 60 Class A suburban office properties encompassing approximately 8.5 million
square feet and 17 Class A CBD office properties encompassing approximately 5.3
million square feet. As of December 31, 2001, the office properties were
approximately 96.1% leased (percent leased excludes properties under
development) to approximately 1,141 tenants.

The office properties are Class A office buildings and are well-located,
well-maintained and professionally managed. In addition, these properties are
modern with high finishes and achieve among the highest rent, occupancy and
tenant retention rates within their sub-markets. Forty two of the 60 suburban
office properties are located within the Operating Partnership's ten office
parks. The buildings in these office parks offer a full array of amenities
including health clubs, racquetball courts, sun decks, restaurants, computer
controlled HVAC access systems and conference centers. Management believes that
the location, quality of construction and amenities as well as the Operating
Partnership's reputation for providing a high level of tenant service have
enabled the Operating Partnership to attract and retain a national tenant base.
The office tenants include national service companies, such as
telecommunications firms, "Big Five" accounting firms, securities brokerage
houses, insurance companies and health care providers. The 17 Class A CBD office
properties consist of five properties located in New York City, eight properties
located in Stamford, CT and four properties located in White Plains, NY.

The office properties are leased to both national and local tenants. Leases
on the office properties are typically written for terms ranging from five to
ten years and require: (i) payment of a fixed gross rental amount that excludes
payments on account of real estate tax, operating expense escalations and base
electrical charges ("Base Rent"), (ii) payment of a base electrical charge,
(iii) payment of real estate

I-9

tax escalations over a base year, (iv) payment of compounded annual increases to
Base Rent and/or payment of operating expense escalations over a base year, (v)
payment of overtime HVAC and electric and (vi) payment of electric escalations
over a base year. In virtually all leases, the landlord is responsible for
structural repairs. Renewal provisions typically provide for renewal rates at
market rates or a percentage thereof, provided that such rates are not less than
the most recent renewal rates.

The following table sets forth certain information as of December 31, 2001
for each of the office properties.

OWNERSHIP
INTEREST
(GROUND
LEASE LAND
PERCENTAGE EXPIRATION YEAR AREA
PROPERTY OWNERSHIP DATE) (1) CONSTRUCTED (ACRES)
- -------- ------------ ------------ --------------- ---------

Suburban Office Properties:
Huntington Melville Corporate
Center, Melville, NY
Leasehold
395 North Service Rd .................. 100% (2,081) 1988 7.5
200 Broadhollow Rd .................... 100% Fee 1981 4.6
48 South Service Rd ................... 100% Fee 1986 7.3
35 Pinelawn Rd ........................ 100% Fee 1980 6.0
275 Broadhollow Rd .................... 51% Fee 1970 5.8
58 South Service Rd (3) ............... 100% Fee 2000 16.5
1305 Old Walt Whitman Rd .............. 51% Fee 1998 (5) 18.1
----
Total--Huntington Melville
Corporate Center (4) ................. 65.8
----
North Shore Atrium, Syosset, NY
6800 Jericho Turnpike (North Shore
Atrium I) ............................ 100% Fee 1977 13.0
6900 Jericho Turnpike (North Shore
Atrium II) ........................... 100% Fee 1982 5.0
----
Total--North Shore Atrium ............. 18.0
----
Nassau West Corporate Center,
Mitchel Field, NY
50 Charles Lindbergh Blvd. Leasehold
(Nassau West Corporate Center II) 100% (2,082) 1984 9.1
60 Charles Lindbergh Blvd. Leasehold
(Nassau West Corporate Center I) ..... 100% (2,082) 989 7.8
Leasehold
51 Charles Lindbergh Blvd ............. 100% (2,084) 1989 6.6
Leasehold
55 Charles Lindbergh Blvd. ............ 100% (2,082) 1982 10.0
Leasehold
333 Earl Ovington Blvd. (The Omni) 60% (2,088) 1991 30.6
Leasehold
90 Merrick Ave ........................ 51% (2,084) 1985 13.2
----
Total--Nassau West Corporate
Center ............................... 77.3
----
Tarrytown Corporate Center
Tarrytown, NY
505 White Plains Road ................. 100% Fee 1974 1.4
520 White Plains Road ................. 60% Fee (6) 1981 6.8
555 White Plains Road ................. 100% Fee 1972 4.2
560 White Plains Road ................. 100% Fee 1980 4.0
580 White Plains Road ................. 100% Fee 1977 6.1
660 White Plains Road ................. 100% Fee 1983 10.9
----
Total--Tarrytown Corporate Center ..... 33.4
----
Reckson Executive Park
Rye Brook, NY
1 International Dr .................... 100% Fee 1983 N/A
2 International Dr .................... 100% Fee 1983 N/A
3 International Dr .................... 100% Fee 1983 N/A
4 International Dr. ................... 100% Fee 1986 N/A
5 International Dr. ................... 100% Fee 1986 N/A
6 International Dr. ................... 100% Fee 1986 N/A
Total--Reckson Executive Park ......... 44.4
----
Summit at Valhalla Valhalla, NY
100 Summit Dr. ........................ 100% Fee 1988 11.3
200 Summit Dr. ........................ 100% Fee 1990 18.0
500 Summit Dr. ........................ 100% Fee 1986 29.1
----
Total--Summit at Valhalla ............. 58.4
----

ANNUAL
BASE
RENT NUMBER
NUMBER RENTABLE PER OF
OF SQUARE PERCENT ANNUAL BASE LEASED TENANT
PROPERTY FLOORS FEET LEASED RENT (2) SQ. FT. LEASES
- -------- -------- ------------ ----------- ------------- ----------- -------

Suburban Office Properties:
Huntington Melville Corporate
Center, Melville, NY
395 North Service Rd .................. 4 187,393 100.0% $ 5,290,551 $ 28.24 7
200 Broadhollow Rd .................... 4 67,432 99.9% $ 1,740,394 $ 25.84 12
48 South Service Rd ................... 4 125,372 97.9% $ 3,376,836 $ 27.51 8
35 Pinelawn Rd ........................ 2 105,241 99.9% $ 2,501,409 $ 23.80 30
275 Broadhollow Rd .................... 4 126,250 100.0% $ 3,249,912 $ 25.74 26
58 South Service Rd (3) ............... 4 277,500 36.1% $ 3,221,317 $ 37.13 5
1305 Old Walt Whitman Rd .............. 3 164,166 100.0% $ 4,333,478 $ 26.40 6
------- ----------- --
Total--Huntington Melville
Corporate Center (4) ................. 1,053,354 99.6% $23,713,897 $ 27.16 94
--------- ----------- --
North Shore Atrium, Syosset, NY
6800 Jericho Turnpike (North Shore
Atrium I) ............................ 2 209,028 95.3% $ 4,384,109 $ 22.01 44
6900 Jericho Turnpike (North Shore
Atrium II) ........................... 4 95,149 100.0% $ 2,322,699 $ 25.88 14
--------- ----------- --
Total--North Shore Atrium ............. 304,177 96.8% $ 6,706,808 $ 22.78 58
--------- ----------- --
Nassau West Corporate Center,
Mitchel Field, NY
50 Charles Lindbergh Blvd.
(Nassau West Corporate Center II) 6 211,845 95.4% $ 5,132,201 $ 25.40 22
60 Charles Lindbergh Blvd.
(Nassau West Corporate Center I) ..... 2 195,998 100.0% $ 4,739,146 $ 24.19 6

51 Charles Lindbergh Blvd ............. 1 108,000 100.0% $ 2,389,432 $ 22.12 1
55 Charles Lindbergh Blvd. ............ 2 214,581 100.0% $ 2,680,134 $ 12.49 3
333 Earl Ovington Blvd. (The Omni) 10 575,000 93.3% $17,328,627 $ 32.30 27
90 Merrick Ave ........................ 9 225,597 100.0% $ 6,097,485 $ 31.01 21
--------- ----------- --
Total--Nassau West Corporate
Center ............................... 1,531,021 96.8% $38,367,025 $ 25.89 80
--------- ----------- --
Tarrytown Corporate Center
Tarrytown, NY
505 White Plains Road ................. 2 26,468 94.3% $ 516,036 $ 21.40 22
520 White Plains Road ................. 6 171,761 100.0% $ 3,723,762 $ 21.68 3
555 White Plains Road ................. 5 121,585 78.2% $ 2,382,006 $ 25.04 9
560 White Plains Road ................. 6 126,471 80.5% $ 2,332,941 $ 24.93 18
580 White Plains Road ................. 6 170,726 99.3% $ 4,020,506 $ 23.73 23
660 White Plains Road ................. 6 258,715 94.1% $ 5,035,392 $ 21.03 44
--------- ----------- --
Total--Tarrytown Corporate Center ..... 875,726 92.1% $18,010,643 $ 22.33 119
--------- ----------- ---
Reckson Executive Park
Rye Brook, NY
1 International Dr .................... 3 90,000 100.0% $ 1,237,500 $ 13.75 1
2 International Dr .................... 3 90,000 100.0% $ 1,237,500 $ 13.75 1
3 International Dr .................... 3 91,174 100.0% $ 2,072,372 $ 24.37 6
4 International Dr. ................... 3 86,694 89.3% $ 2,067,378 $ 25.71 9
5 International Dr. ................... 3 90,000 100.0% $ 2,242,500 $ 24.42 1
6 International Dr. ................... 3 94,016 100.0% $ 975,777 $ 10.38 9
--------- ----------- ---
Total--Reckson Executive Park ......... 541,884 98.8% $ 9,833,027 $ 18.37 27
--------- ----------- ---
Summit at Valhalla Valhalla, NY
100 Summit Dr. ........................ 4 249,551 95.7% $ 5,499,974 $ 24.32 7
200 Summit Dr. ........................ 4 240,834 89.7% $ 4,265,547 $ 19.56 14
500 Summit Dr. ........................ 4 208,660 100.0% $ 5,216,500 $ 25.00 2
--------- ----------- ---
Total--Summit at Valhalla ............. 699,045 93.4% $14,982,021 $ 22.95 23
--------- ----------- ---

I-10

OWNERSHIP
INTEREST
(GROUND
LEASE LAND
PERCENTAGE EXPIRATION YEAR AREA
PROPERTY OWNERSHIP DATE) (1) CONSTRUCTED (ACRES)
- -------- ------------ ------------ ------------- ---------

Mt. Pleasant Corporate Center .............
115/117 Stevens Ave. ...................... 100% Fee 1984 5.0
-----
Total--Mt Pleasant Corporate Center 5.0
-----
Stand-alone Long Island Properties
400 Garden City Plaza
Garden City, NY .......................... 51% Fee 1989 5.7
88 Duryea Rd.
Melville, NY ............................. 100% Fee 1986 1.5
310 East Shore Rd.
Great Neck, NY ........................... 100% Fee 1981 1.5
333 East Shore Rd. Leasehold
Great Neck, NY ........................... 100% (2,030) 1976 1.5
520 Broadhollow Rd
Melville, NY ............................. 100% Fee 1978 7.0
1660 Walt Whitman Rd.
Melville, NY ............................. 100% Fee 1980 6.5
150 Motor Parkway
Hauppauge, NY ............................ 100% Fee 1984 11.3
120 Mineola Blvd
Mineola, NY .............................. 100% Fee 1989 0.7
538 Broadhollow Road
Melville, NY ............................. 100% Fee 1986 7.5
50 Marcus Drive,
Melville, NY ............................. 100% Fee 2000 12.9
-----
Total--Stand-alone Long Island ............ 56.1
-----
Stand-alone Westchester
Properties
120 White Plains Rd.
Tarrytown, NY ............................ 51% Fee 1984 9.7
80 Grasslands
Elmsford, NY ............................. 100% Fee 1989 4.9
-----
Total--Stand-alone Westchester
Properties ............................... 14.6
-----
Executive Hill Office Park
West Orange, NJ
100 Executive Dr .......................... 100% Fee 1978 10.1
200 Executive Dr .......................... 100% Fee 1980 8.2
300 Executive Dr .......................... 100% Fee 1984 8.7
10 Rooney Circle .......................... 100% Fee 1971 5.2
-----
Total--Executive Hill Office Park ......... 32.2
-----
University Square
Princeton, NJ
100 Campus Dr. ............................ 100% Fee 1987 N/A
104 Campus Dr. ............................ 100% Fee 1987 N/A
115 Campus Dr. ............................ 100% Fee 1987 N/A
Total--University Square .................. 11.0
-----
Short Hills Office Complex
Short Hills, NJ
101 John F. Kennedy Parkway ............... 100% Fee 1981 9.0
103 John F. Kennedy Parkway (3) ........... 100% Fee 1981 6.0
51 John F Kennedy Parkway ................. 51% Fee 1988 11.0
-----
Total--Short Hills Office (4) ............. 26.0
-----
Stand-alone New Jersey Properties
99 Cherry Hill Road
Parsippany, NJ ........................... 100% Fee 1982 8.8
119 Cherry Hill Road
Parsippany, NJ ........................... 100% Fee 1982 9.3
One Eagle Rock
Hanover, NJ .............................. 100% Fee 1986 10.4
3 University Plaza
Hackensack, NJ ........................... 100% Fee 1985 10.6
1255 Broad Street
Clifton, NJ .............................. 100% Fee 1968 11.1
492 River Rd,
Nutley, NJ ............................... 100% Fee 1952 17.3
-----
Total--Stand-alone New Jersey
Properties ............................... 67.5
-----
Total--Suburban Office Properties (4) ..... 509.7
-----
CBD Office Properties:

ANNUAL
BASE
RENT NUMBER
NUMBER RENTABLE PER OF
OF SQUARE PERCENT ANNUAL BASE LEASED TENANT
PROPERTY FLOORS FEET LEASED RENT (2) SQ. FT. LEASES
- ------------------------------------------- -------- ------------ --------- --------------- ----------- -------

Mt. Pleasant Corporate Center .............
115/117 Stevens Ave. ...................... 3 162,004 98.3% $ 2,814,281 $ 17.67 19
------- ------------ --
Total--Mt Pleasant Corporate Center 162,004 98.3% $ 2,814,281 $ 17.67 19
------- ------------ --
Stand-alone Long Island Properties
400 Garden City Plaza
Garden City, NY .......................... 5 176,073 99.0% $ 4,331,760 $ 24.12 25
88 Duryea Rd.
Melville, NY ............................. 2 25,061 95.3% $ 514,134 $ 21.53 4
310 East Shore Rd.
Great Neck, NY ........................... 4 50,000 94.3% $ 1,116,541 $ 25.60 18
333 East Shore Rd.
Great Neck, NY ........................... 2 17,715 99.6% $ 386,981 $ 21.93 9
520 Broadhollow Rd
Melville, NY ............................. 1 85,784 100.0% $ 1,751,132 $ 20.41 3
1660 Walt Whitman Rd.
Melville, NY ............................. 1 73,115 74.9% $ 1,052,950 $ 19.23 6
150 Motor Parkway
Hauppauge, NY ............................ 4 191,447 85.8% $ 3,997,164 $ 24.34 27
120 Mineola Blvd
Mineola, NY .............................. 6 101,000 91.8% $ 2,452,486 $ 26.46 14
538 Broadhollow Road
Melville, NY ............................. 4 180,339 86.2% $ 3,972,297 $ 25.54 10
50 Marcus Drive,
Melville, NY ............................. 2 163,762 100.0% $ 1,852,302 $ 11.31 1
------- ------------ --
Total--Stand-alone Long Island ............ 1,064,296 92.0% $ 21,427,747 $ 21.88 117
--------- ------------ ---
Stand-alone Westchester
Properties
120 White Plains Rd.
Tarrytown, NY ............................ 6 197,785 97.0% $ 4,825,559 $ 25.14 15
80 Grasslands
Elmsford, NY ............................. 3 87,114 100.0% $ 1,861,347 $ 21.37 7
--------- ------------ ---
Total--Stand-alone Westchester
Properties ............................... 284,899 97.9% $ 6,686,906 $ 23.97 22
--------- ------------ ---
Executive Hill Office Park
West Orange, NJ
100 Executive Dr .......................... 3 92,872 89.6% $ 1,565,149 $ 18.81 9
200 Executive Dr .......................... 4 102,630 97.4% $ 2,187,825 $ 21.89 19
300 Executive Dr .......................... 4 126,196 84.9% $ 2,230,592 $ 20.81 16
10 Rooney Circle .......................... 3 69,684 100.0% $ 1,079,135 $ 15.49 2
--------- ------------ ---
Total--Executive Hill Office Park ......... 391,382 92.0% $ 7,062,701 $ 19.61 46
--------- ------------ ---
University Square
Princeton, NJ
100 Campus Dr. ............................ 1 27,888 100.0% $ 648,433 $ 23.25 3
104 Campus Dr. ............................ 1 70,239 100.0% $ 1,663,171 $ 23.68 2
115 Campus Dr. ............................ 1 33,600 100.0% $ 699,039 $ 20.80 2
--------- ------------ ---
Total--University Square .................. 131,727 100.0% $ 3,010,643 $ 22.86 7
--------- ------------ ---
Short Hills Office Complex
Short Hills, NJ
101 John F. Kennedy Parkway ............... 6 195,000 100.0% $ 5,908,500 $ 30.30 1
103 John F. Kennedy Parkway (3) ........... 4 129,508 0.0% $ 0 $ 0.00 0
51 John F Kennedy Parkway ................. 5 250,642 100.0% $ 8,790,239 $ 33.79 18
--------- ------------ ---
Total--Short Hills Office (4) ............. 575,150 100.0% $ 14,698,739 $ 32.98 19
--------- ------------ ---
Stand-alone New Jersey Properties
99 Cherry Hill Road
Parsippany, NJ ........................... 3 93,250 72.4% $ 1,318,140 $ 19.51 13
119 Cherry Hill Road
Parsippany, NJ ........................... 3 95,724 96.4% $ 1,902,254 $ 21.28 18
One Eagle Rock
Hanover, NJ .............................. 3 142,438 100.0% $ 3,253,993 $ 22.84 8
3 University Plaza
Hackensack, NJ ........................... 6 217,008 100.0% $ 4,815,746 $ 22.19 24
1255 Broad Street
Clifton, NJ .............................. 2 193,574 100.0% $ 4,259,924 $ 22.01 3
492 River Rd,
Nutley, NJ ............................... 13 130,009 100.0% $ 2,177,651 $ 16.75 1
--------- ------------ ---
Total--Stand-alone New Jersey
Properties ............................... 872,003 96.7% $ 17,727,708 $ 21.02 67
--------- ------------ ---
Total--Suburban Office Properties (4) ..... 8,486,668 95.8% $185,042,146 $ 23.49 698
--------- ------------ ------- ---

I-11

OWNERSHIP
INTEREST
(GROUND
LEASE LAND
PERCENTAGE EXPIRATION YEAR AREA
PROPERTY OWNERSHIP DATE) (1) CONSTRUCTED (ACRES)
- ---------------------------------- ------------ ------------ ------------- ---------

CBD Office Properties:
Landmark Square
Stamford, CT
One Landmark Square .............. 100% Fee 1973 N/A
Two Landmark Square .............. 100% Fee 1976 N/A
Three Landmark Square ............ 100% Fee 1978 N/A
Four Landmark Square ............. 100% Fee 1977 N/A
Five Landmark Square ............. 100% Fee 1976 N/A
Six Landmark Square .............. 100% Fee 1984 N/A
Total--Landmark Square ........... 7.2
-----
Stamford Towers
Stamford, CT
680 Washington Blvd. ............. 51% Fee 1989 1.3
750 Washington Blvd. ............. 51% Fee 1989 2.4
-----
Total--Stamford Towers ........... 3.7
-----
Stand-alone Westchester
Properties
235 Main Street,
White Plains, NY ................ 100% Fee 1974(5) 0.4
245 Main Street
White Plains, NY ................ 100% Fee 1983 0.4
360 Hamilton Avenue
White Plains, NY ................ 100% Fee 1977 1.5
140 Grand Street
White Plains, NY ................ 100% Fee 1991 2.2
-----
Total--Stand-alone Westchester
Properties ...................... 4.5
-----
New York City Properties
120 W. 45th Street
New York, NY .................... 100% Fee 1989 0.4
100 Wall Street
New York, NY .................... 100% Fee 1969 0.5
810 Seventh Avenue
New York, NY .................... 100% Fee 1970 0.6
919 Third Avenue
New York, NY .................... 51% Fee (7) 1971 1.5
1350 Avenue of the Americas
New York, NY .................... 100% Fee 1966 0.6
-----
Total--New York City Office
Properties ...................... 3.6
-----
Total--CBD Office Properties ..... 19.0
-----
Total--Office Properties (4) ..... 528.7
=====

ANNUAL
BASE
RENT NUMBER
NUMBER RENTABLE PER OF
OF SQUARE PERCENT ANNUAL BASE LEASED TENANT
PROPERTY FLOORS FEET LEASED RENT (2) SQ. FT. LEASES
- ---------------------------------- -------- ------------ --------- --------------- ----------- -------

Landmark Square
Stamford, CT
One Landmark Square .............. 22 296,716 88.0% $ 6,853,319 $ 26.40 57
Two Landmark Square .............. 3 39,701 84.7% $ 750,814 $ 23.33 9
Three Landmark Square ............ 6 128,286 94.7% $ 2,835,161 $ 23.34 17
Four Landmark Square ............. 5 104,446 92.2% $ 2,184,130 $ 23.44 15
Five Landmark Square ............. 3 58,000 100.0% $ 304,222 $ 5.25 3
Six Landmark Square .............. 10 171,899 97.4% $ 3,983,225 $ 23.80 11
------- ------------ --
Total--Landmark Square ........... 799,048 92.3% $ 16,910,871 $ 22.93 112
------- ------------ ---
Stamford Towers
Stamford, CT
680 Washington Blvd. ............. 11 132,759 99.5% $ 3,914,298 $ 29.64 6
750 Washington Blvd. ............. 11 192,108 99.6% $ 4,732,157 $ 24.74 12
------- ------------ ---
Total--Stamford Towers ........... 324,867 99.5% $ 8,646,455 $ 24.59 18
------- ------------ ---
Stand-alone Westchester
Properties
235 Main Street,
White Plains, NY ................ 6 83,237 93.3% $ 1,568,248 $ 20.81 30
245 Main Street
White Plains, NY ................ 6 73,543 87.4% $ 1,349,526 $ 21.00 18
360 Hamilton Avenue
White Plains, NY ................ 12 382,000 99.3% $ 9,888,592 $ 26.80 25
140 Grand Street
White Plains, NY ................ 9 130,136 93.0% $ 2,984,619 $ 24.66 16
------- ------------ ---
Total--Stand-alone Westchester
Properties ...................... 668,916 96.0% $ 15,790,985 $ 24.57 89
------- ------------ ---
New York City Properties
120 W. 45th Street
New York, NY .................... 40 443,109 89.4% $ 15,893,044 $ 40.21 42
100 Wall Street
New York, NY .................... 29 466,226 96.2% $ 14,351,760 $ 32.01 37
810 Seventh Avenue
New York, NY .................... 42 692,060 97.6% $ 23,523,107 $ 34.82 37
919 Third Avenue
New York, NY .................... 47 1,356,115 99.5% $ 52,773,806 $ 39.60 25
1350 Avenue of the Americas
New York, NY .................... 35 540,000 96.3% $ 18,359,230 $ 35.42 83
--------- ------------ ---
Total--New York City Office
Properties ...................... 3,497,510 96.9% $124,900,947 $ 36.71 224
--------- ------------ ---
Total--CBD Office Properties ..... 5,290,341 96.3% $166,249,258 $ 32.63 443
--------- ------------ ---
Total--Office Properties (4) ..... 13,777,009 96.1% $351,291,404 $ 27.34 1,141
========== ============ =====

- ----------------
(1) Ground lease expirations assume exercise of renewal options by the lessee.

(2) Represents Base Rent, net of electric reimbursment, of signed leases at
December 31, 2001 adjusted for scheduled contractual increases during the 12
months ending December 31, 2002. Total Base Rent for these purposes reflects
the effect of any lease expirations that occur during the 12-month period
ending December 31, 2002. Amounts included in rental revenue for financial
reporting purposes have been determined on a straight-line basis rather than
on the basis of contractual rent as set forth in the foregoing table.

(3) Property is currently under development.

(4) Percent leased and annual base rent per leased square foot excludes
properties under development.

(5) Year renovated.

(6) The actual fee interest in is held by the County of Westchester Industrial
Development Agency. The fee interest in 520 White Plains Road may be
acquired if the outstanding principal under certain loan agreements and
annual basic installments are prepaid in full.

(7) There is a ground lease in place on a small portion of the land which
expires in 2066.

INDUSTRIAL PROPERTIES

General.

As of December 31, 2001, the Operating Partnership owned or had an interest
in 103 industrial properties that encompass approximately 6.8 million rentable
square feet. As of December 31, 2001, the industrial properties were
approximately 91.7% leased (percentage leased excludes properties under

I-12

development) to approximately 238 tenants. Many of the industrial properties
have been constructed with high ceiling heights (i.e., above 18 feet), upscale
office building facades, parking in excess of zoning requirements, drive-in
and/or loading dock facilities and other features which permit them to be leased
for industrial and/or office purposes.

The industrial properties are leased to both national and local tenants.
These tenants utilize the industrial properties for distribution, warehousing,
research and development and light manufacturing/assembly activities. Leases on
the industrial properties are typically written for terms ranging from three to
seven years and require: (i) payment of a Base Rent, (ii) payments of real
estate tax escalations over a base year, (iii) payments of compounded annual
increases to Base Rent and (iv) reimbursement of all operating expenses.
Electric costs are generally borne and paid directly by the tenant. Certain
leases are "triple net" (i.e., the tenant is required to pay in addition to
annual Base Rent, all operating expenses and real estate taxes). In virtually
all of the industrial leases, the landlord is responsible for structural
repairs. Renewal provisions typically provide for renewal rents at market rates,
provided that such rates are not less than the most recent rental rates.

Approximately 87%, as measured by square footage, of the industrial
properties, are located on Long Island. Sixty eight percent of these properties,
as measured by square footage, are located in the following three industrial
parks developed by Reckson: (i) Vanderbilt Industrial Park, (ii) Airport
International Plaza and (iii) County Line Industrial Center.

In addition to the industrial properties on Long Island, the Operating
Partnership owns eight industrial properties encompassing approximately 917,000
square feet in the other suburban markets.

The following table sets forth certain information as of December 31, 2001
for each of the industrial properties. .

OWNERSHIP
INTEREST
(GROUND
LEASE LAND CLEARANCE
PERCENTAGE EXPIRATION YEAR AREA HEIGHT
PROPERTY OWNERSHIP DATE) CONSTRUCTED (ACRES) (FEET)(1)
- -------- ------------ ------------ ------------- --------- -----------

Industrial Properties:
Vanderbilt Industrial Park
Hauppauge, NY
360 Vanderbilt Motor
Parkway ..................... 100% Fee 1967 4.2 16
410 Vanderbilt Motor
Parkway ..................... 100% Fee 1965 3.0 15
595 Old Willets Path ......... 100% Fee 1968 3.5 14
611 Old Willets Path ......... 100% Fee 1963 3.0 14
631/641 Old Willets Path ..... 100% Fee 1965 1.9 14
651/661 Old Willets Path ..... 100% Fee 1966 2.0 14
681 Old Willets Path ......... 100% Fee 1961 1.3 14
740 Old Willets Path ......... 100% Fee 1965 3.5 14
325 Rabro Dr. ................ 100% Fee 1967 2.7 14
250 Kennedy Dr. .............. 100% Fee 1979 7.0 16
90 Plant Ave. ................ 100% Fee 1972 4.3 16
110 Plant Ave. ............... 100% Fee 1974 6.8 18
55 Engineers Rd. ............. 100% Fee 1968 3.0 18
65 Engineers Rd. ............. 100% Fee 1969 1.8 22
85 Engineers Rd. ............. 100% Fee 1968 2.3 18
100 Engineers Rd. ............ 100% Fee 1968 5.0 14
150 Engineers Rd. ............ 100% Fee 1969 6.8 22
20 Oser Ave. ................. 100% Fee 1979 5.0 16
30 Oser Ave. ................. 100% Fee 1978 4.4 16
40 Oser Ave. ................. 100% Fee 1974 3.1 16
50 Oser Ave. ................. 100% Fee 1975 4.1 21
60 Oser Ave. ................. 100% Fee 1975 3.3 21
63 Oser Ave. ................. 100% Fee 1974 1.2 20
65 Oser Ave. ................. 100% Fee 1975 1.2 18
73 Oser Ave. ................. 100% Fee 1974 1.2 20
80 Oser Ave. ................. 100% Fee 1974 1.1 18
85 Nicon Ct. ................. 100% Fee 1978 6.1 30
90 Oser Ave. ................. 100% Fee 1973 1.1 16
104 Parkway Dr. .............. 100% Fee 1985 1.8 15
110 Ricefield Ln. ............ 100% Fee 1980 2.0 15
120 Ricefield Ln. ............ 100% Fee 1983 2.0 15
125 Ricefield Ln. ............ 100% Fee 1973 2.0 14
135 Ricefield Ln. ............ 100% Fee 1981 2.1 15
85 Adams Dr. ................. 100% Fee 1980 1.8 15
395 Oser Ave. ................ 100% Fee 1980 6.1 14

PERCENTAGE ANNUAL
OFFICE/ BASE
RESEARCH RENT NUMBER
AND RENTABLE PER OF
DEVELOPMENT SQUARE PERCENT ANNUAL BASE LEASED TENANT
PROPERTY FINISH FEET LEASED RENT(2) SQ. FT. LEASES
- -------- ------------- ---------- ----------- ------------- --------- -------

Industrial Properties:
Vanderbilt Industrial Park
Hauppauge, NY
360 Vanderbilt Motor
Parkway ..................... 62% 54,000 100.0% $285,255 $ 5.28 1
410 Vanderbilt Motor
Parkway ..................... 7% 41,784 100.0% $266,688 $ 6.38 4
595 Old Willets Path ......... 14% 31,670 81.7% $162,043 $ 6.26 3
611 Old Willets Path ......... 11% 20,000 50.0% $ 43,810 $ 4.39 1
631/641 Old Willets Path ..... 31% 25,000 100.0% $125,868 $ 5.03 4
651/661 Old Willets Path ..... 45% 25,000 100.0% $163,755 $ 6.55 7
681 Old Willets Path ......... 10% 15,000 100.0% $106,511 $ 7.10 1
740 Old Willets Path ......... 5% 30,000 100.0% $ 29,670 $ 0.99 1
325 Rabro Dr. ................ 10% 35,473 100.0% $147,374 $ 4.15 2
250 Kennedy Dr. .............. 9% 127,980 100.0% $455,298 $ 3.56 1
90 Plant Ave. ................ 13% 74,915 100.0% $448,325 $ 5.98 3
110 Plant Ave. ............... 8% 125,000 0.0% $ 0 $ 0.00 0
55 Engineers Rd. ............. 8% 36,000 100.0% $362,434 $ 10.07 1
65 Engineers Rd. ............. 10% 23,000 100.0% $155,729 $ 6.77 1
85 Engineers Rd. ............. 5% 40,800 100.0% $119,988 $ 2.94 2
100 Engineers Rd. ............ 11% 88,000 0.0% $ 0 $ 0.00 0
150 Engineers Rd. ............ 11% 135,000 100.0% $424,195 $ 3.14 1
20 Oser Ave. ................. 18% 42,000 98.7% $377,060 $ 9.10 2
30 Oser Ave. ................. 21% 42,000 82.1% $252,082 $ 7.31 4
40 Oser Ave. ................. 33% 59,800 100.0% $402,543 $ 6.73 13
50 Oser Ave. ................. 15% 60,000 100.0% $246,000 $ 4.10 1
60 Oser Ave. ................. 19% 48,000 100.0% $196,800 $ 4.10 1
63 Oser Ave. ................. 9% 22,000 0.0% $ 0 $ 0.00 0
65 Oser Ave. ................. 10% 20,000 100.0% $111,673 $ 5.58 1
73 Oser Ave. ................. 15% 20,000 100.0% $134,493 $ 6.72 1
80 Oser Ave. ................. 25% 19,500 100.0% $ 70,525 $ 3.62
85 Nicon Ct. ................. 10% 104,000 100.0% $566,714 $ 5.45 1
90 Oser Ave. ................. 26% 37,500 100.0% $136,875 $ 3.65 1
104 Parkway Dr. .............. 50% 27,600 100.0% $106,536 $ 3.86 1
110 Ricefield Ln. ............ 25% 32,264 100.0% $172,038 $ 5.33 1
120 Ricefield Ln. ............ 24% 33,100 100.0% $187,360 $ 5.66 1
125 Ricefield Ln. ............ 20% 30,495 100.0% $213,524 $ 7.00 1
135 Ricefield Ln. ............ 10% 32,340 100.0% $215,685 $ 6.67 1
85 Adams Dr. ................. 90% 20,000 100.0% $280,000 $ 14.00 1
395 Oser Ave. ................ 100% 50,000 99.0% $452,925 $ 9.15 1

I-13

185 Oser Ave. ................. 100% Fee 1974 2.0 18
25 Davids Dr. ................. 100% Fee 1975 3.2 20
45 Adams Ave. ................. 100% Fee 1979 2.1 18
225 Oser Ave. ................. 100% Fee 1977 1.2 14
180 Oser Ave. ................. 100% Fee 1978 3.4 16
360 Oser Ave. ................. 100% Fee 1981 1.3 18
400 Oser Ave. ................. 100% Fee 1982 9.5 16
375 Oser Ave. ................. 100% Fee 1981 1.2 18
425 Rabro Drive ............... 100% Fee 1980 4.0 16
390 Motor Parkway ............. 100% Fee 1980 10.0 14
400 Moreland Road(3) .......... 100% Fee 1967 6.3 17
600 Old Willets Path .......... 100% Fee 1965 4.5 14
-----
Total-Vanderbilt Industrial
Park(4) ...................... 160.4
-----
Airport International Plaza
Islip, NY
20 Orville Dr. ................ 100% Fee 1978 1.0 16
25 Orville Dr. ................ 100% Fee 1970 2.2 16
50 Orville Dr. ................ 100% Fee 1976 1.6 15
65 Orville Dr. ................ 100% Fee 1971 2.2 14
70 Orville Dr. ................ 100% Fee 1975 2.3 22
80 Orville Dr. ................ 100% Fee 1988 6.5 16
85 Orville Dr. ................ 100% Fee 1974 1.9 14
95 Orville Dr. ................ 100% Fee 1974 1.8 14
110 Orville Dr. ............... 100% Fee 1979 6.4 24
180 Orville Dr. ............... 100% Fee 1982 2.3 16
1101 Lakeland Ave. ............ 100% Fee 1983 4.9 20
1385 Lakeland Ave. ............ 100% Fee 1973 2.4 16
125 Wilbur Place .............. 100% Fee 1977 4.0 16
140 Wilbur Place .............. 100% Fee 1973 3.1 20
160 Wilbur Place .............. 100% Fee 1978 3.9 16
170 Wilbur Place .............. 100% Fee 1979 4.9 16
4040 Veterans Highway ......... 100% Fee 1972 1.0 14
120 Wilbur Place .............. 100% Fee 1972 2.8 16
2002 Orville Drive North ...... 100% Fee 2000 15.8 24
2004 Orville Drive North ...... 100% Fee 1998 7.4 24
2005 Orville Drive North ...... 100% Fee 1999 8.7 24
-----
Total-Airport
International Plaza .......... 87.1
-----
County Line Industrial
Center
Melville, NY
5 Hub Dr ...................... 100% Fee 1979 6.9 20
10 Hub Dr. .................... 100% Fee 1975 6.6 20
30 Hub Drive .................. 100% Fee 1976 5.1 20
265 Spagnoli Rd. .............. 100% Fee 1978 6.0 20
-----
Total-County Line
Industrial Center ............ 24.6
-----
Standalone Long Island
Properties
Islip/Islandia
32 Windsor Pl.
Islip, NY .................... 100% Fee 1971 2.5 18
42 Windsor Pl.
Islip, NY .................... 100% Fee 1972 2.4 18
208 Blydenburgh Rd.
Islandia, NY ................. 100% Fee 1969 2.4 14
210 Blydenburgh Rd.
Islandia, NY ................. 100% Fee 1969 1.2 14
71 Hoffman Ln.
Islandia, NY ................. 100% Fee 1970 5.8 16
135 Fell Ct.
Islip, NY .................... 100% Fee 1965 3.2 16
-----
Subtotal Islip/Islandia 17.5
-----
Farmingdale
70 Schmitt Boulevard,
Farmingdale, NY .............. 100% Fee 1975 4.4 18
105 Price Parkway,
Farmingdale, NY .............. 100% Fee 1969 12.0 26
110 Bi County Blvd.
Farmingdale, NY .............. 100% Fee 1984 9.5 19
-----
Subtotal Farmingdale 25.9
-----
Melville
70 Maxess Rd,
Melville, NY ................. 100% Fee 1969 9.3 15
20 Melville Park Rd,
Melville, NY ................. 100% Fee 1965 4.0 23

185 Oser Ave. ................. 40% 30,000 100.0% $ 195,250 $ 6.51 1
25 Davids Dr. ................. 90% 40,000 100.0% $ 340,000 $ 8.50 1
45 Adams Ave. ................. 90% 28,000 100.0% $ 245,000 $ 8.75 1
225 Oser Ave. ................. 80% 10,000 99.6% $ 116,175 $ 11.67 1
180 Oser Ave. ................. 35% 61,264 100.0% $ 491,344 $ 8.02 9
360 Oser Ave. ................. 35% 23,000 100.0% $ 135,777 $ 5.90 1
400 Oser Ave. ................. 30% 164,936 94.3% $ 1,358,265 $ 8.74 26
375 Oser Ave. ................. 40% 20,000 100.0% $ 69,626 $ 3.48 1
425 Rabro Drive ............... 25% 65,421 100.0% $ 695,098 $ 10.63 1
390 Motor Parkway ............. 4% 181,060 100.0% $ 998,576 $ 5.52 1
400 Moreland Road(3) .......... 10% 56,875 0.0% $ 0 $ 0.00 0
600 Old Willets Path .......... 25% 69,627 100.0% $ 421,264 $ 6.05 1
------- ----------- --
Total-Vanderbilt Industrial
Park(4) ...................... 2,379,404 88.4% $12,486,151 $ 6.08 110
--------- ----------- ---
Airport International Plaza
Islip, NY
20 Orville Dr. ................ 50% 12,900 100.0% $ 188,989 $ 14.65 1
25 Orville Dr. ................ 100% 33,655 100.0% $ 506,572 $ 15.05 2
50 Orville Dr. ................ 20% 28,000 99.8% $ 264,493 $ 9.48 3
65 Orville Dr. ................ 13% 32,000 100.0% $ 197,117 $ 6.16 2
70 Orville Dr. ................ 7% 41,508 100.0% $ 340,037 $ 8.19 2
80 Orville Dr. ................ 21% 92,544 90.4% $ 577,727 $ 6.90 6
85 Orville Dr. ................ 20% 25,000 100.0% $ 166,992 $ 6.66 2
95 Orville Dr. ................ 10% 25,300 100.0% $ 130,717 $ 5.17 1
110 Orville Dr. ............... 15% 110,000 100.0% $ 665,500 $ 6.05 1
180 Orville Dr. ............... 18% 37,612 100.0% $ 199,900 $ 5.31 2
1101 Lakeland Ave. ............ 8% 90,411 100.0% $ 546,987 $ 6.05 1
1385 Lakeland Ave. ............ 18% 35,000 100.0% $ 196,181 $ 5.61 3
125 Wilbur Place .............. 31% 62,686 87.0% $ 365,036 $ 6.69 10
140 Wilbur Place .............. 37% 48,500 100.0% $ 304,322 $ 6.27 2
160 Wilbur Place .............. 30% 62,710 100.0% $ 544,667 $ 8.69 2
170 Wilbur Place .............. 28% 72,062 100.0% $ 446,784 $ 6.19 6
4040 Veterans Highway ......... 100% 2,800 100.0% $ 20,649 $ 7.37 1
120 Wilbur Place .............. 15% 34,866 100.0% $ 234,011 $ 6.71 4
2002 Orville Drive North ...... 17% 206,000 100.0% $ 1,734,856 $ 8.42 2
2004 Orville Drive North ...... 20% 106,515 100.0% $ 761,324 $ 7.15 1
2005 Orville Drive North ...... 20% 130,010 100.0% $ 983,816 $ 7.57 1
--------- ----------- ---
Total-Airport
International Plaza .......... 1,290,079 98.7% $ 9,376,677 $ 7.36 55
--------- ----------- ---
County Line Industrial
Center
Melville, NY
5 Hub Dr ...................... 20% 88,001 100.0% $ 556,565 $ 6.32 2
10 Hub Dr. .................... 15% 95,671 100.0% $ 723,670 $ 7.56 3
30 Hub Drive .................. 18% 73,127 100.0% $ 499,492 $ 6.83 2
265 Spagnoli Rd. .............. 28% 85,555 100.0% $ 700,554 $ 8.19 3
--------- ----------- ---
Total-County Line
Industrial Center ............ 342,354 100.0% $ 2,480,281 $ 7.24 10
--------- ----------- ---
Standalone Long Island
Properties
Islip/Islandia
32 Windsor Pl.
Islip, NY .................... 10% 43,000 100.0% $ 149,892 $ 3.49 1
42 Windsor Pl.
Islip, NY .................... 8% 65,000 100.0% $ 151,667 $ 2.33 1
208 Blydenburgh Rd.
Islandia, NY ................. 17% 24,000 100.0% $ 123,430 $ 5.14 4
210 Blydenburgh Rd.
Islandia, NY ................. 16% 20,000 100.0% $ 114,224 $ 5.71 2
71 Hoffman Ln.
Islandia, NY ................. 10% 30,400 100.0% $ 82,561 $ 2.72 1
135 Fell Ct.
Islip, NY .................... 20% 30,124 100.0% $ 244,205 $ 8.11 1
--------- ----------- ---
Subtotal Islip/Islandia 212,524 100.0% $ 865,979 $ 4.07 10
--------- ----------- ---
Farmingdale
70 Schmitt Boulevard,
Farmingdale, NY .............. 10% 76,312 100.0% $ 582,060 $ 7.63 1
105 Price Parkway,
Farmingdale, NY .............. 9% 297,000 100.0% $ 1,473,075 $ 4.96 1
110 Bi County Blvd.
Farmingdale, NY .............. 45% 147,303 99.6% $ 1,435,514 $ 10.37 10
--------- ----------- ---
Subtotal Farmingdale 520,615 99.9% $ 3,490,649 $ 6.71 12
--------- ----------- ---
Melville
70 Maxess Rd,
Melville, NY ................. 38% 78,600 100.0% $ 720,577 $ 9.17 1
20 Melville Park Rd,
Melville, NY ................. 66% 67,922 100.0% $ 401,204 $ 5.91 1

I-14

45 Melville Park Drive,
Melville, NY .............. 100% Fee 1998 4.2 24
65 Marcus Drive.
Melville, NY .............. 100% Fee 1968 5.0 16
-----
Subtotal Melville 22.5
-----
Hauppauge
300 Motor Parkway,
Hauppauge, NY ............. 100% Fee 1979 4.2 14
1516 Motor Parkway,
Hauppauge, NY ............. 100% Fee 1981 7.9 24
-----
Subtotal Hauppauge ......... 12.1
-----
Other
933 Motor Parkway
Smithtown, NY ............. 100% Fee 1973 5.6 20
65 S. Service Rd.
Plainview, NY(5) .......... 100% Fee 1961 1.6 14
85 S. Service Rd.
Plainview, NY ............. 100% Fee 1961 1.6 14
19 Nicholas Dr.,
Yaphank, NY (6) ........... 100% Fee 1989 29.6 24
48 Harbor Park Dr.,
Port Washington, NY ....... 100% Fee 1976 2.7 16
110 Marcus Dr.,
Huntington, NY ............ 100% Fee 1980 6.1 20
35 Engle St.,
Hicksville, NY ............ 100% Leasehold(7) 1966 4.0 24
100 Andrews Rd.,
Hicksville, NY ............ 100% Fee 1954 11.7 25
-----
Subtotal other 62.9
-----
Total Long Island
Properties ................ 413.0
-----
Standalone Westchester
Properties
100 Grasslands Rd.,
Elmsford, NY .............. 100% Fee 1964 3.6 16
500 Saw Mill Rd.,
Elmsford, NY .............. 100% Fee 1968 7.3 22
-----
Total-Standalone
Westchester Industrial
Properties ................ 10.9
-----
Standalone New Jersey
Industrial Properties
40 Cragwood Rd,
South Plainfield, NJ ...... 100% Fee 1965 13.5 16
100 Forge Way,
Rockaway, NJ .............. 100% Fee 1986 3.5 24
200 Forge Way,
Rockaway, NJ .............. 100% Fee 1989 12.7 28
300 Forge Way,
Rockaway, NJ .............. 100% Fee 1989 4.2 24
400 Forge Way,
Rockaway, NJ .............. 100% Fee 1989 12.8 28
-----
Total New Jersey
Standalone
Industrial Properties ..... 46.7
-----
Standalone Connecticut
Industrial Property
710 Bridgeport
Shelton, CT ............... 100% Fee 1971-1979 36.1 22
-----
Total Connecticut
Standalone Industrial
Property 36.1
-----
Total-Industrial
Properties (4) 506.7
=====

45 Melville Park Drive,
Melville, NY .............. 22% 40,247 100.0% $ 584,542 $ 14.52 1
65 Marcus Drive.
Melville, NY .............. 50% 60,000 100.0% $ 646,375 $ 10.77 1
------ ----------- -
Subtotal Melville 246,769 100.0% $ 2,352,698 $ 9.53 4
------- ----------- -
Hauppauge
300 Motor Parkway,
Hauppauge, NY ............. 100% 55,942 96.8% $ 880,587 $ 17.92 9
1516 Motor Parkway,
Hauppauge, NY ............. 5% 140,000 100.0% $ 878,850 $ 6.28 1
------- ----------- -
Subtotal Hauppauge ......... 195,942 99.1% $ 1,759,437 $ 9.06 10
------- ----------- --
Other
933 Motor Parkway
Smithtown, NY ............. 26% 48,000 50.0% $ 153,387 $ 6.39 1
65 S. Service Rd.
Plainview, NY(5) .......... 10% 10,000 100.0% $ 61,499 $ 6.15 1
85 S. Service Rd.
Plainview, NY ............. 60% 20,000 100.0% $ 132,113 $ 6.61 2
19 Nicholas Dr.,
Yaphank, NY (6) ........... 5% 230,000 100.0% $ 1,353,042 $ 5.88 1
48 Harbor Park Dr.,
Port Washington, NY ....... 100% 35,000 100.0% $ 765,072 $ 21.86 1
110 Marcus Dr.,
Huntington, NY ............ 39% 78,240 100.0% $ 526,364 $ 6.73 1
35 Engle St.,
Hicksville, NY ............ 8% 120,283 100.0% $ 610,892 $ 5.08 1
100 Andrews Rd.,
Hicksville, NY ............ 12% 167,754 100.0% $ 1,188,780 $ 7.09 2
------- ----------- --
Subtotal other 709,277 96.6% $ 4,791,149 $ 7.00 10
------- ----------- --
Total Long Island
Properties ................ 5,896,964 94.7% $37,603,021 $ 6.80 216
--------- ----------- ---
Standalone Westchester
Properties
100 Grasslands Rd.,
Elmsford, NY .............. 100% 47,690 100.0% $ 825,670 $ 17.31 4
500 Saw Mill Rd.,
Elmsford, NY .............. 17% 92,000 100.0% $ 920,000 $ 10.00 1
--------- ----------- ---
Total-Standalone
Westchester Industrial
Properties ................ 139,690 100.0% $ 1,745,670 $ 12.50 5
--------- ----------- ---
Standalone New Jersey
Industrial Properties
40 Cragwood Rd,
South Plainfield, NJ ...... 49% 135,000 67.2% $ 1,421,202 $ 15.68 4
100 Forge Way,
Rockaway, NJ .............. 12% 20,150 100.0% $ 174,597 $ 8.66 5
200 Forge Way,
Rockaway, NJ .............. 23% 72,118 100.0% $ 586,560 $ 8.13 2
300 Forge Way,
Rockaway, NJ .............. 37% 24,200 100.0% $ 230,050 $ 9.51 2
400 Forge Way,
Rockaway, NJ .............. 20% 73,000 100.0% $ 499,620 $ 6.84 3
--------- ----------- ---
Total New Jersey
Standalone
Industrial Properties ..... 324,468 86.3% $ 2,912,029 $ 10.40 16
--------- ----------- ---
Standalone Connecticut
Industrial Property
710 Bridgeport
Shelton, CT ............... 30% 452,414 54.3% $ 2,032,502 $ 8.27 1
--------- ----------- ---
Total Connecticut
Standalone Industrial
Property 452,414 54.3% $ 2,032,502 $ 8.27 1
--------- ----------- ---
Total-Industrial
Properties (4) 6,813,536 91.7% $44,293,222 $ 7.15 238
========= =========== ===

I-15

- ----------------
(1) Calculated as the difference from the lowest beam to floor.

(2) Represents Base Rent, net of electric reimbursement, of signed leases at
December 31, 2001 adjusted for scheduled contractual increases during the 12
months ending December 31, 2002. Total Base Rent for these purposes reflects
the effect of any lease expirations that occur during the 12 month period
ending December 31, 2002. Amounts included in rental revenue for financial
reporting purposes have been determined on a straight-line basis rather than
on the basis of contractual rent as set forth in the foregoing table.

(3) Property under redevelopment.

(4) Percent leased and annual base rent per leased square foot excludes
properties under development.

(5) Property was sold subsequent to December 31, 2001.

(6) The actual fee interest is currently held by the Town of Brookhaven
Industrial Development Agency. The Company may acquire such fee interest by
making a nominal payment to the Town of Brookhaven Industrial Development
Agency.

(7) The Company has entered into a 20 year lease agreement in which it has the
right to sublease the premises.

RETAIL PROPERTIES

As of December 31, 2001, the Operating Partnership owned two free-standing
10,000 square foot retail properties located in Great Neck and Huntington, New
York of which one property is fully leased and one property is vacant.

DEVELOPMENTS IN PROGRESS

As of December 31, 2001, the Operating Partnership had invested
approximately $143.7 million in developments in progress. This amount includes
approximately $62.4 million relating to existing buildings encompassing
approximately 464,000 square feet. In addition, the Operating Partnership has
also invested approximately $81.3 million relating to 13 parcels of land which
it can develop approximately 2.8 million square feet of office and industrial
space. One of these parcels, a 32 acre land parcel located in Rye Brook, NY, is
currently under contract for sale and is scheduled to close during 2002. In
addition, the Operating Partnership is scheduled to acquire, during the first
quarter of 2002, 52.7 acres of land located in Valhalla, NY on which the
Operating Partnership can develop approximately 875,000 square feet of office
space.

THE OPTION PROPERTIES

In connection with the IPO, the Operating Partnership was granted a ten
year option to acquire ten properties (the "Option Properties") which were not
contributed to the Operating Partnership and are either owned by Reckson or in
which Reckson owns a non controlling minority interest.

As of December 31, 2001, the Operating Partnership has acquired four of the
Option Properties for an aggregate purchase price of approximately $35 million
and the issuance of approximately 475,000 Class A common units. In addition,
during 1998, one of the Option Properties was sold by Reckson to a third party.

The remaining Option Properties consist of three Class A office properties
encompassing approximately 311,000 square feet and two industrial properties
encompassing approximately 69,000 square feet.

HISTORICAL NON-INCREMENTAL REVENUE-GENERATING CAPITAL EXPENDITURES, TENANT
IMPROVEMENT COSTS AND LEASING COMMISSIONS

The following table sets forth annual and per square foot recurring,
non-incremental revenue-generating capital expenditures and non-incremental
revenue-generating tenant improvement costs and leasing commissions incurred by
the Operating Partnership to retain revenues attributable to existing leased
space for the period 1997 through 2001 for the Operating Partnership's office
and industrial properties. As noted, incremental revenue-generating tenant
improvement costs and leasing

I-16

commissions are excluded from the table set forth immediately below. The
historical capital expenditures, tenant improvement costs and leasing
commissions set forth below are not necessarily indicative of future recurring,
non-incremental revenue-generating capital expenditures or non-incremental
revenue-generating tenant improvement costs and leasing commissions.

1997 1998 1999 2000 2001
--------------- --------------- --------------- --------------- ---------------

NON-INCREMENTAL REVENUE GENERATING
CAPITAL EXPENDITURES
Suburban Office Properties
Total ................................... $ 1,108,675 $ 2,004,976 $ 2,298,899 $ 3,289,116 $ 4,606,069
Per square foot ......................... $ 0.22 $ 0.23 $ 0.23 $ 0.33 $ 0.45
NYC Office Properties
Total ................................... N/A N/A N/A $ 946,718 $ 1,584,501
Per square foot ......................... N/A N/A N/A $ 0.38 $ 0.45
Industrial Properties ...................
Total ................................... $ 733,233 $ 1,205,266 $ 1,048,688 $ 813,431 $ 711,666
Per square foot ......................... $ 0.15 $ 0.12 $ 0.11 $ 0.11 $ 0.11
NON-INCREMENTAL REVENUE GENERATING TENANT
IMPROVEMENT COSTS AND LEASING COMMISSIONS
Long Island Office Properties
Annual Tenant Improvement Costs ......... $ 784,044 $ 1,140,251 $ 1,009,357 $ 2,853,706 $ 2,722,457
Per square foot improved ................ 7.00 3.98 4.73 6.99 8.47
Annual Leasing Commissions .............. $ 415,822 $ 418,191 $ 551,762 $ 2,208,604 $ 1,444,412
Per square foot leased .................. 4.83 1.46 2.59 4.96 4.49
Total per square foot ................... $ 11.83 $ 5.44 $ 7.32 $ 11.95 $ 12.96
Westchester Office Properties
Annual Tenant Improvement Costs ......... $ 1,211,665 $ 711,160 $ 1,316,611 $ 1,860,027 $ 2,584,728
Per square foot improved ................ 8.9 4.45 5.62 5.72 5.91
Annual Leasing Commissions .............. $ 366,257 $ 286,150 $ 457,730 $ 412,226 $ 1,263,012
Per square foot leased .................. 2.69 1.79 1.96 3.00 2.89
Total per square foot ................... $ 11.59 $ 6.24 $ 7.58 $ 8.72 $ 8.80
Connecticut Office Properties
Annual Tenant Improvement Costs ......... $ 1,022,421 $ 202,880 $ 179,043 $ 385,531 $ 213,909
Per square foot improved ................ 13.39 5.92 4.88 4.19 1.46
Annual Leasing Commissions .............. $ 256,615 $ 151,063 $ 110,252 $ 453,435 $ 209,322
Per square foot leased .................. 3.36 4.41 3.00 4.92 1.43
Total per square foot ................... $ 16.75 $ 10.33 $ 7.88 $ 9.11 $ 2.89
New Jersey Office Properties
Annual Tenant Improvement Costs ......... N/A $ 654,877 $ 454,054 $ 1,580,323 $ 1,146,385
Per square foot improved ................ N/A 3.78 2.29 6.71 2.92
Annual Leasing Commissions .............. N/A $ 396,127 $ 787,065 $ 1,031,950 $ 1,602,962
Per square foot leased .................. N/A 2.08 3.96 4.44 4.08
Total per square foot ................... N/A $ 5.86 $ 6.25 $ 11.15 $ 7.00
New York Office Properties
Annual Tenant Improvement Costs ......... N/A N/A N/A $ 65,267 $ 788,930
Per square foot improved ................ N/A N/A N/A 1.79 15.69
Annual Leasing Commissions .............. N/A N/A N/A $ 418,185 $ 1,098,829
Per square foot leased .................. N/A N/A N/A 11.50 21.86
Total per square foot ................... N/A N/A N/A $ 13.29 $ 37.55
Industrial Properties
Annual Tenant Improvement Costs ......... $ 230,466 $ 283,842 $ 375,646 $ 650,216 $ 1,366,488
Per square foot improved ................ 0.55 0.76 0.25 0.95 1.65
Annual Leasing Commissions .............. $ 81,013 $ 200,154 $ 835,108 $ 436,506 $ 354,572
Per square foot leased .................. 0.19 0.44 0.56 0.64 0.43
Total per square foot ................... $ 0.74 $ 1.20 $ 0.81 $ 1.59 $ 2.08

I-17

Mortgage Indebtedness

The following table sets forth certain information regarding the mortgage
debt of the Company, as of December 31, 2001.

PRINCIPAL
AMOUNT AMORTIZATION
PROPERTY OUTSTANDING INTEREST RATE MATURITY DATE SCHEDULE
- -------- --------------- ------------------ ------------------- -------------
(IN THOUSANDS)

80 Orville Drive .................... $ 2,616 10.10 % February 1, 2004 (3)
395 North Service Road .............. 20,117 6.45 % October 26, 2005 (2)
200 Summit Lake Drive ............... 19,770 9.25 % January 1, 2006 25 year
1350 Avenue of the Americas ......... 75,000 6.52 % June 1, 2006 30 year (5)
Landmark Square ..................... 46,069 8.02 % October 7, 2006 25 year
100 Summit Lake Drive ............... 20,373 8.50 % April 1, 2007 15 year
333 Earl Ovington Blvd (1) .......... 54,785 7.72 % August 14, 2007 25 year
810 7th Avenue ...................... 84,280 7.73 % August 1, 2009 25 year
100 Wall Street ..................... 36,522 7.73 % August 1, 2009 25 year
6800 Jericho Turnpike ............... 14,131 8.07 % July 1, 2010 25 year
6900 Jericho Turnpike ............... 7,458 8.07 % July 1, 2010 25 year
580 White Plains Road ............... 12,879 7.86 % September 1, 2010 25 year
919 3rd Avenue (6) .................. 249,080 6.867% August 1, 2011 30 year
110 Bi-County Blvd. ................. 3,849 9.125% November 30, 2012 20 year
120 West 45th Street ................ 65,214 6.82%(4) November 1, 2027 28 year
One Orlando Center .................. 38,934 6.82% (4) November 1, 2027 28 year
---------
Total ............................... $ 751,077
=========

- ----------------
(1) The Company has a 60% general partnership interest in this property and its
proportionate share of the aggregate principal amount of the mortgage debt
is approximately $32.9 million.

(2) Principal payments of $34,000 per month.

(3) Interest only

(4) Subject to interest rate adjustment on November 1, 2004.

(5) Interest only for the first year; 30 years thereafter.

(6) The company has a 51% membership interest in this property and its
proportionate share of the aggregate principal amount of the mortgage debt
is approximately $127.0 million.

ITEM 3. LEGAL PROCEEDINGS

Except as set forth below, the Operating Partnership is not presently
subject to any material litigation nor, to the Operating Partnership's
knowledge, is any litigation threatened against the Operating Partnership, other
than routine actions for negligence or other claims and administrative
proceedings arising in the ordinary course of business, some of which are
expected to be covered by liability insurance and all of which collectively are
not expected to have a material adverse effect on the liquidity, results of
operations, business or financial condition of the Operating Partnership.

On or about October 3, 2001, Burgess Services, LLC ("Burgess Services"),
Dominion Venture Group, LLC ("Dominion Venture Group") and certain affiliated
parties commenced an action in Oklahoma State Court against Reckson Strategic
Venture Partners ("RSVP"), the Company, and RAP-Dominion LLC ("RAP-Dominion"), a
joint venture through which the Operating Partnership invested with RSVP in a
venture with certain of the plaintiffs. The plaintiff's petition alleges, among
other things, that the defendants committed an anticipatory breach of the joint
venture agreements and defrauded them into contributing assets into the joint
venture. Plaintiff's petition seeks unspecified monetary damages, equitable
relief and a declaratory adjudication of the parties' contractual rights,
including whether a certain "buy-sell" provision has been properly triggered.
The case was removed to the United States District Court for the Western
District of Oklahoma. The Defendants have denied all allegations. In addition,
the defendants counter-sued plaintiffs for breach of their contractual and
fiduciary duties, and misappropriation of approximately $30 million of the

I-18

proceeds from the sale of an asset owned by the venture which the defendants
claim was wrongly applied to pay off certain loans that Burgess and his wife
personally guaranteed, rather than distributed to RAP-Dominion in accordance
with the joint venture agreement. The defendants also allege that not only was
the buy-sell trigger invalidly triggered, but the valuation formulas proposed
violate the agreement. The Operating Partnership believes that the claims
asserted against it and RAP-Dominion are without merit and intends to defend
against them vigorously. The Operating Partnership also intends to pursue its
rights to recover the misappropriated funds and other appropriate relief.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE SECURITY HOLDERS

None.

I-19

PART II

ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SECURITY MATTERS

There is no established trading market for the Registrant's common equity.
As of March 14, 2002, there were 93 holders of the Registrant's common equity.

The following table sets forth, for the periods indicated, the
distributions declared on the Class A common units and the Class B common units.

CLASS A COMMON UNITS

QUARTER ENDED DISTRIBUTION
------------- ------------

March 31, 2000 .............. $ .37125
June 30, 2000 ............... $ .3860 (1)
September 30, 2000 .......... $ .3860
December 31, 2000 ........... $ .3860

QUARTER ENDED DISTRIBUTION
------------- ------------
March 31, 2001 .............. $ .3860
June 30, 2001 ............... $ .4246 (2)
September 30, 2001 .......... $ .4246
December 31, 2001 ........... $ .4246

---------------
(1) Commencing with the distribution for the quarter ending June 30, 2000, the
Operating Partnership increased the quarterly distribution to $.386 per
unit, which is equivalent to an annual distribution of $1.544 per unit.

(2) Commencing with the distribution for the quarter ending June 30, 2001, the
Operating Partnership increased the quarterly distribution to $.4246 per
unit, which is equivalent to an annual distribution of $1.6984 per unit.

CLASS B COMMON UNITS

QUARTER ENDED DISTRIBUTION
------------- ------------
March 31, 2000 .............. $ .5600
June 30, 2000 ............... $ .5867 (1)
September 30, 2000 .......... $ .6000
December 31, 2000 ........... $ .6000

QUARTER ENDED DISTRIBUTION
------------- ------------
March 31, 2001 .............. $ .6000
June 30, 2001 ............... $ .6164 (2)
September 30, 2001 .......... $ .6492
December 31, 2001 ........... $ .6492

- ----------------
(1) Commencing with the distribution for the three month period ended July 31,
2000, the Operating Partnership increased the quarterly distribution to $.60
per unit, which is equivalent to an annual distribution of $2.40 per unit.

(2) Commencing with the distribution for the three month period ended July 31,
2001, the Operating Partnership increased the quarterly distribution to
$.6492 per unit, which is equivalent to an annual distribution of $2.5968
per unit.

II-1

ITEM 6. SELECTED FINANCIAL DATA (IN THOUSANDS EXCEPT PER UNIT DATA AND PROPERTY
COUNT)

RECKSON OPERATING PARTNERSHIP, L. P.
FOR THE YEAR ENDED DECEMBER
31,
-----------------------------
2001 2000
--------------- -------------

OPERATING DATA:
Total revenues ............................................. $ 540,454 $ 509,917
Total expenses ............................................. 391,446 371,561
Income before distribution to preferred unit holders,
minority interests, valuation reserves and
extraordinary loss ........................................ 149,008 138,356
Minority interests ......................................... 15,975 9,120
Extraordinary loss ......................................... 2,898 1,571
Valuation reserves on investments in affiliate loans and
joint ventures and other investments ...................... 166,101 --
Preferred distributions .................................... 23,977 28,012
Net income (loss) allocable to common unitholders .......... (59,943) 99,653
PER UNIT DATA: (1)
Net income (loss) per common unit:
Class A common unit ........................................ $ (.85) $ 1.50
Class B common unit ........................................ $ (1.23) $ 2.30
Weighted average common units outstanding:
Class A common units ....................................... 55,773 50,766
Class B common units ....................................... 10,284 10,284
BALANCE SHEET DATA: (PERIOD END)
Real estate, before accumulated depreciation ............... $ 2,880,879 $2,770,607
Cash and cash equivalents (5) .............................. 121,773 16,624
Total assets ............................................... 2,998,782 2,999,794
Mortgage notes payable ..................................... 751,077 728,971
Unsecured credit facility (5) .............................. 271,600 216,600
Unsecured term loan ........................................ -- --
Senior unsecured notes ..................................... 449,463 449,385
Market value of equity (2) ................................. 1,915,587 2,016,390
Total market capitalization including debt (2 and 3) ....... 3,251,599 3,397,204
OTHER DATA:
Funds from operations (4) .................................. $ 183,641 $ 169,911
Total square feet (at end of period) ....................... 20,611 21,291
Number of properties (at end of period) .................... 182 188

RECKSON OPERATING PARTNERSHIP, L. P.
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------
1999 1998 1997
-------------- -------------- --------------

OPERATING DATA:
Total revenues ............................................. $ 403,142 $ 266,312 $ 153,348
Total expenses ............................................. 297,476 201,003 107,639
Income before distribution to preferred unit holders,
minority interests, valuation reserves and
extraordinary loss ........................................ 105,666 65,309 45,709
Minority interests ......................................... 6,802 2,819 920
Extraordinary loss ......................................... 629 1,993 2,808
Valuation reserves on investments in affiliate loans and
joint ventures and other investments ...................... -- -- --
Preferred distributions .................................... 27,001 14,244 --
Net income (loss) allocable to common unitholders .......... 71,234 46,253 41,981
PER UNIT DATA: (1)
Net income (loss) per common unit:
Class A common unit ........................................ $ 1.21 $ .98 $ 1.06
Class B common unit ........................................ $ 1.94 $ -- $ --
Weighted average common units outstanding:
Class A common units ....................................... 47,975 47,201 39,743
Class B common units ....................................... 6,744 -- --
BALANCE SHEET DATA: (PERIOD END)
Real estate, before accumulated depreciation ............... $ 2,208,399 $ 1,737,133 $ 1,011,228
Cash and cash equivalents (5) .............................. 21,122 2,228 21,676
Total assets ............................................... 2,734,577 1,854,520 1,113,105
Mortgage notes payable ..................................... 459,174 253,463 180,023
Unsecured credit facility (5) .............................. 297,600 465,850 210,250
Unsecured term loan ........................................ 75,000 20,000 --
Senior unsecured notes ..................................... 449,313 150,000 150,000
Market value of equity (2) ................................. 1,726,845 1,332,882 1,141,592
Total market capitalization including debt (2 and 3) ....... 2,993,756 2,119,936 1,668,800
OTHER DATA:
Funds from operations (4) .................................. $ 132,444 $ 98,501 $ 69,619
Total square feet (at end of period) ....................... 21,385 21,000 13,645
Number of properties (at end of period) .................... 189 204 155

- ----------------
(1) Based on the weighted average common units outstanding for the period then
ended.

(2) Based on the market value of the Operating Partnership's common units, the
stated value of the Operating Partnership's preferred units and the number
of units outstanding at the end of the period.

(3) Debt amount is net of minority partners' proportionate share of joint
venture debt plus the Operating Partnership's share of unconsolidated joint
venture debt.

(4) See "Management's Discussion and Analysis of Financial Condition and Results
of Operations" for a discussion of funds from operations.

(5) On January 4, 2002, approximately $85 million of the cash proceeds received
from the sale of a 49% interest in the property located at 919 Third Avenue,
New York, NY, was used to pay down the Operating Partnership's unsecured
credit facility

II-2

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

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

The Operating Partnership considers certain statements set forth herein to
be forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, with respect to the Operating Partnership's
expectations for future periods. Certain forward-looking statements, including,
without limitation, statements relating to the timing and success of
acquisitions and the completion of development or redevelopment of properties,
the financing of the Operating Partnership's operations, the ability to lease
vacant space and the ability to renew or relet space under expiring leases,
involve risks and uncertainties. Although the Operating Partnership believes
that the expectations reflected in such forward-looking statements are based on
reasonable assumptions, the actual results may differ materially from those set
forth in the forward-looking statements and the Operating Partnership can give
no assurance that its expectation will be achieved. Among those risks, trends
and uncertainties are: the general economic climate, including the conditions
affecting industries in which our principal tenants compete; 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 release 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, security and
insurance costs; repayment of debt owed to the Operating Partnership 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. Consequently, such
forward-looking statements should be regarded solely as reflections of the
Operating Partnership's current operating and development plans and estimates.
These plans and estimates are subject to revisions from time to time as
additional information becomes available, and actual results may differ from
those indicated in the referenced statements.

CRITICAL ACCOUNTING POLICIES

The consolidated financial statements of the Operating Partnership include
accounts of the Operating Partnership and all majority-owned subsidiaries. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions in certain circumstances that affect amounts reported in the
Operating Partnership's consolidated financial statements and related notes. In
preparing these financial statements, management has utilized information
available including its past history, industry standards and the current
economic environment among other factors in forming its estimates and judgments
of certain amounts included in the consolidated financial statements, giving due
consideration to materiality. It is possible that the ultimate outcome as
anticipated by management in formulating its estimates inherent in these
financial statements may not materialize. However, application of the critical
accounting policies below involves the exercise of judgment and use of
assumptions as to future uncertainties and, as a result, actual results could
differ from these estimates. In addition, other companies may utilize different
estimates, which may impact comparability of the Operating Partnership's results
of operations to those of companies in similar businesses.

Revenue Recognition and Accounts Receivable

Rental revenue is recognized on a straight line basis, which averages
minimum rents over the terms of the leases. The excess of rents recognized over
amounts contractually due are included in deferred rents receivable on the
Operating Partnership's balance sheets. The leases also typically provide for
tenant reimbursements of common area maintenance and other operating expenses
and real estate taxes. Ancillary and other property related income is recognized
in the period earned.

II-3

The Operating Partnership makes estimates of the collectibility of its
accounts receivables related to base rents, tenant escalations and
reimbursements and other revenue or income. The Operating Partnership
specifically analyzes tenant receivables and analyzes historical bad debts,
customer credit worthiness, current economic trends and changes in customer
payment terms when evaluating the adequacy of its allowance for doubtful
accounts. In addition, when tenants are in bankruptcy the Operating Partnership
makes estimates of the expected recovery of pre-petition administrative and
damage claims. In some cases, the ultimate resolution of those claims can exceed
beyond a year. These estimates have a direct impact on the Operating
Partnership's net income, because a higher bad debt reserve results in less net
income.

The Operating Partnership records interest income on investments in
mortgage notes and notes receivable on an accrual basis of accounting. The
Operating Partnership does not accrue interest on impaired loans where, in the
judgment of management, collection of interest according to the contractual
terms is considered doubtful. Among the factors the Operating Partnership
considers in making an evaluation of the collectibility of interest are: (i) the
status of the loan, (ii) the value of the underlying collateral, (iii) the
financial condition of the borrower and (iv) anticipated future events.

Gain on sales of real estate are recorded when title is conveyed to the
buyer, subject to the buyer's financial commitment being sufficient to provide
economic substance to the sale.

Real Estate

Land, buildings and improvements, furniture, fixtures and equipment are
recorded at cost. Tenant improvements, which are included in buildings and
improvements, are also stated at cost. Expenditures for maintenance and repairs
are charged to operations as incurred. Renovations and/or replacements, which
improve or extend the life of the asset are capitalized and depreciated over
their estimated useful lives.

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

The Operating Partnership is required to make subjective assessments as to
the useful lives of its properties for purposes of determining the amount of
depreciation to reflect on an annual basis with respect to those properties.
These assessments have a direct impact on the Operating Partnership's net
income. Should the Operating Partnership lengthen the expected useful life of a
particular asset, it would be depreciated over more years, and result in less
depreciation expense and higher annual net income.

Assessment by the Operating Partnership of certain other lease related
costs must be made when the Operating Partnership has a reason to believe that
the tenant will not be able to execute under the term of the lease as originally
expected.

Long Lived Assets

On a periodic basis, management assesses whether there are any indicators
that the value of the real estate properties may be impaired. A property's value
is impaired only if management's estimate of the aggregate future cash flows
(undiscounted and without interest charges) to be generated by the property are
less than the carrying value of the property. Such cash flows consider factors
such as expected future operating income, trends and prospects, as well as the
effects of demand, competition and other factors. To the extent impairment has
occurred, the loss will be measured as the excess of the carrying amount of the
property over the fair value of the property.

The Operating Partnership is required to make subjective assessments as to
whether there are impairments in the value of its real estate properties and
other investments. These assessments have a direct impact on the Operating
Partnership's net income, because taking an impairment results in an immediate
negative adjustment to net income.

II-4

OVERVIEW AND BACKGROUND

The Operating Partnership, which commenced operations on June 2, 1995, is
engaged in the ownership, management, operation, leasing and development of
commercial real estate properties, principally office and industrial buildings,
and also owns certain undeveloped land located in the New York tri-state area
(the "Tri-State Area"). Reckson Associates Realty Corp. (the "Company"), is a
self administered and self managed real estate investment trust ("REIT"), and
serves as the sole general partner in the Operating Partnership.

As part of the Company's REIT structure it is provided management, leasing
and construction related services through taxable REIT subsidiaries as defined
by the Internal Revenue Code of 1986. These services are currently provided by
Reckson Management, Inc., RANY Management Group, Inc., and Reckson Construction
Group, Inc. (collectively, the "Service Companies"). The Operating Partnership
owns a 97% non-controlling interest in the Service Companies. An entity which is
owned by certain executive officers of the Company owns a 3% controlling
interest in the Service Companies.

During July 1998, the Operating Partnership formed Metropolitan Partners,
LLC ("Metropolitan") for the purpose of acquiring Class A office properties in
New York City. Currently, the Operating Partnersihp owns, through Metropolitan,
five Class A office properties aggregating approximately 3.5 million square
feet.

During September 2000, the Operating Partnership formed a joint venture
(the "Tri-State JV") with Teachers Insurance and Annuity Association ("TIAA")
and contributed eight Class A suburban office properties aggregating
approximately 1.5 million square feet to the Tri-State JV for a 51% majority
ownership interest. TIAA contributed approximately $136 million for a 49%
interest in the Tri-State JV which was then distributed to the Operating
Partnership. As a result, the Operating Partnership realized a gain of
approximately $15.2 million. For purposes of its financial statements the
Operating Partnership consolidates this joint venture.

On December 21, 2001, the Operating Partnership formed a joint venture with
the New York State Teachers' Retirement Systems ("NYSTRS") whereby NYSTRS
acquired a 49% indirect interest in the property located at 919 Third Avenue,
New York, NY for $220.5 million which included $122.1 million of its
proportionate share of secured mortgage debt and approximately $98.4 million of
cash which was then distributed to the Operating Partnership. As a result, the
Operating Partnership realized a gain of approximately $18.9 million. For
purposes of its financial statements, the Operating Partnership consolidates
this joint venture.

As of December 31, 2001 the Operating Partnership owned 182 properties
(including 11 joint venture properties) in the Tri-State Area suburban and CBD
markets, encompassing approximately 20.6 million rentable square feet, all of
which are managed by the Operating Partnership. These properties include 60
Class A suburban office properties encompassing approximately 8.5 million
rentable square feet, of which 42 of these properties or 74% as measured by
square footage, are located within the Operating Partnership's ten office parks.
Reckson has historically emphasized the development and acquisition of
properties that are part of large-scale suburban office parks. The Operating
Partnership believes that owning properties in planned office and industrial
parks provides certain strategic advantages, including the following: (i)
certain tenants prefer being located in a park with other high quality companies
to enhance their corporate image, (ii) parks afford tenants certain aesthetic
amenities such as a common landscaping plan, standardization of signage and
common dining and recreational facilities, (iii) tenants may expand (or
contract) their business within a park, enabling them to centralize business
functions and (iv) a park provides tenants with access to other tenants and may
facilitate business relationships between tenants. The properties also include
17 Class A CBD office properties encompassing approximately 5.3 million rentable
square feet. The CBD office properties consist of five properties located in New
York City, eight properties located in Stamford, CT and four properties located
in White Plains, NY. Additionally, the Company owned 103 industrial properties
encompassing approximately 6.8 million rentable square feet, of which 72 of
these properties, or 59% as measured by square footage, are located within the
Operating Partnership's three industrial parks. The properties also include two
retail properties comprising approximately 20,000 rentable square feet.

II-5

Through its ownership of properties in the key CBD and suburban office
markets in the Tri-State Area, the Operating Partnership believes it has a
unique competitive advantage as the trend toward the regional decentralization
of the workplace increases. Due to the events of September 11th, as well as
technological advances which further enable decentralization, companies are
strategically re-evaluating the benefits and feasibility of regional
decentralization and reassessing their long-term space needs. The Operating
Partnership believes this multi-location regional decentralization will continue
to take place, increasing as companies begin to have better visibility as to the
future of the economy, further validating our regional strategy of maintaining a
significant market share in each of the key CBD and suburban office markets in
the Tri-State Area.

The Operating Partnership also owns approximately 254 acres of land in 12
separate parcels of which the Operating Partnership can develop approximately
two million square feet of office space and approximately 450,000 square feet of
industrial space. The Operating Partnership is also obligated to purchase,
during the first quarter of 2002, 52.7 acres of land located in Valhalla, NY on
which the Operating Partnership can develop approximately 875,000 square feet of
office space. In addition, the Operating Partnership owns a 32 acre land parcel
located in Rye Brook, NY which is under contract for sale for approximately
$22.3 million. The closing is scheduled to occur during 2002. Since its
formation, the Operating Partnership has developed or redeveloped 14 properties
encompassing approximately 2.1 million square feet of office and industrial
space.

The market capitalization of the Operating Partnership at December 31, 2001
was approximately $3.3 billion. The Operating Partnership's market
capitalization is calculated based on the sum of (i) the value of the Operating
Partnership's Class A common units and Class B common units (which, for this
purpose, is assumed to be the same per unit as the value of a share of the
Company's Class A common stock and Class B common stock), (ii) the liquidation
preference values of the Operating Partnership's preferred units and (iii)
approximately $1.3 billion (including its share of joint venture debt and net of
minority partners' interests share of joint venture debt) of debt outstanding at
December 31, 2001. As a result, the Operating Partnership's total debt to total
market capitalization ratio at December 31, 2001 equaled approximately 41.1%. At
December 31, 2001, the Operating Partnership had approximately $122 million of
cash and cash equivalents on hand of which approximately $98.4 million was
generated from the sale of a 49% interest in one of its major CBD assets. On
January 4, 2002, the Operating Partnership repaid approximately $85 million of
its short term debt from its cash and cash equivalents on hand.

During 1997, the Company formed FrontLine Capital Group, formerly Reckson
Service Industries, Inc. ("FrontLine") and Reckson Strategic Venture Partners,
LLC ("RSVP"). RSVP is a real estate venture capital fund which invests primarily
in real estate and real estate operating companies outside the Operating
Partnership's core office and industrial focus and whose common equity is held
indirectly by FrontLine. In connection with the formation and spin-off of
FrontLine, the Operating Partnership established an unsecured credit facility
with FrontLine (the "FrontLine Facility") in the amount of $100 million for
FrontLine to use in its investment activities, operations and other general
corporate purposes. The Operating Partnership has advanced approximately $93.4
million under the FrontLine Facility. The Operating Partnership also approved
the funding of investments of up to $100 million relating to RSVP (the "RSVP
Commitment"), through RSVP-controlled joint ventures (for REIT-qualified
investments) or advances made to FrontLine under an unsecured loan facility (the
"RSVP Facility") having terms similar to the FrontLine Facility (advances made
under the RSVP Facility and the FrontLine Facility hereafter, the "FrontLine
Loans"). During March 2001, the Operating Partnership increased the RSVP
Commitment to $110 million and as of December 31, 2001, approximately $109.1
million had been funded through the RSVP Commitment, of which $59.8 million
represents investments by the Operating Partnership in RSVP-controlled
(REIT-qualified) joint ventures and $49.3 million represents loans made

II-6

to FrontLine under the RSVP Facility. As of December 31, 2001, interest accrued
(net of reserves) under the FrontLine Facility and the RSVP Facility was
approximately $ 19.6 million.

At June 30, 2001, the Company assessed the recoverability of the FrontLine
Loans and reserved approximately $3.5 million of the interest accrued during the
three-month period then ended. In addition, the Company formed a committee of
its Board of Directors, comprised solely of independent directors, to consider
any actions to be taken by the Company in connection with the FrontLine Loans
and its investments in joint ventures with RSVP. During the third quarter of
2001, the Company noted a significant deterioration in FrontLine's operations
and financial condition and, based on its assessment of value and recoverability
and considering the findings and recommendations of the committee and its
financial advisor, the Operating Partnership recorded a $163 million valuation
reserve charge, inclusive of anticipated costs, in its consolidated statements
of operations relating to its investments in the FrontLine Loans and joint
ventures with RSVP. The Operating Partnership has discontinued the accrual of
interest income with respect to the FrontLine Loans. The Operating Partnership
has also reserved against its share of GAAP equity in earnings from the RSVP
controlled joint ventures funded through the RSVP Commitment until such income
is realized through cash distributions.

II-7

of these office centers (including one joint venture location) aggregating
55,000 square feet with current contractual annual base rents of $1.4 million
are in default under their lease terms. In addition, HQ has been experiencing
financial difficulties and on March 13, 2002, voluntarily filed a petition for
relief under Chapter 11 of the U.S. Bankruptcy Code. There can be no assurances
as to whether HQ will affirm or reject its existing leases with the Operating
Partnership. At this time it cannot be determined what impact their financial
difficulties and bankruptcy filing will have on their ability to meet their
future lease obligations with the Operating Partnership.

Scott H. Rechler, who serves as Co-Chief Executive Officer and a director
of the Company, serves as Chief Executive Officer and Chairman of the Board of
Directors of FrontLine. The Company's directors and officers own approximately
15.9% of FrontLine's outstanding common stock. Scott H, Rechler also serves as
non-executive Chairman of the Board of HQ.

RESULTS OF OPERATIONS

The Operating Partnership's total revenues increased by $30.5 million or
6.0% from 2000 to 2001 and $106.8 million or 26.5% from 1999 to 2000. Property
operating revenues, which include base rents and tenant escalations and
reimbursements ("Property Operating Revenues") increased by $45.7 million or
10.1% from 2000 to 2001 and $82.9 million or 22.5% from 1999 to 2000. The 2001
increase in Property Operating Revenues is primarily attributable to increases
in rental rates in our "same store" properties amounting to $29.3 million. In
addition, $12.4 million of the increase was generated by the lease up of newly
developed and redeveloped properties added to the operating portfolio. The
increase in Property Operating Revenues offset the decrease of $15.2 million in
other revenues. This decrease is primarily due to a decrease of $11.6 million
related to interest earned on advances made under the FrontLine Loans. In
addition, $2.3 million of the decrease is attributable to lower equity in
earnings of real estate joint ventures and service companies. The 2000 increase
in Property Operating Revenues is substantially attributable to the Operating
Partnership's entrance into the New York City market. The 1999 and 2000
acquisitions of the five properties comprising the New York City portfolio
represented $48.6 million, or 58.6%, of the increase in Property Operating
Revenues. Property Operating Revenues were also positively impacted by
approximately $15.3 million from increases in occupancies and rental rates in
our "same store" properties, and approximately $9.6 million from the lease up of
newly developed and redeveloped properties added to the operating portfolio.
These increases offset the impact of $14.8 million of Property Operating
Revenues that were generated from "Big Box" industrial properties that were sold
in 1999. The remaining balance of the increase in total revenues for 2000 is
primarily attributable to an increase in gain on dispositions of real estate of
approximately $11.8 million and an increase of approximately $8.1 million in
other revenue related to interest earned on advances made under the FrontLine
Loans.

The Operating Partnership's base rent reflects the positive impact of the
straight-line rent adjustment of $41.6 million in 2001, $38.8 million in 2000
and $10.7 million in 1999. The 2001 and 2000 straight-line rent adjustment
includes $26.9 million and $23.3 million, respectively, generated from the
property located at 919 Third Avenue, New York, NY, which is attributable to
rental abatement periods for the three largest tenants.

Property operating expenses, real estate taxes and ground rents ("Property
Expenses") increased by $11.2 million or 7.1% from 2000 to 2001 and $31.5
million or 25.0% from 1999 to 2000. The 2001 increase in Property Expenses is
primarily due to an increase of $10.2 million in our "same-store" properties
which consists of a $6.2 million increase in property operating expenses and a
$4.0 million increase in real estate taxes. The increase in Property Expenses is
also attributable to increases in labor costs, maintenance contracts and
security costs. In addition, there was an increase in Property Expenses of $2.7
million due to higher occupancy levels at our developed and redeveloped
properties. The 2000 increase in Property Expenses is substantially attributable
to the Operating Partnership's entrance into the New York City market. The 1999
and 2000 acquisitions of the five properties comprising the New York City
portfolio represented $25.0 million, or 79.4%, of the increase in Property
Expenses. In addition, $6.5 million of the increase is attributable to expense
growth in our "same store" properties.

II-8

Gross operating margins (defined as Property Operating Revenues less
Property Expenses, taken as a percentage of Property Operating Revenues) for
2001, 2000 and 1999 were 66.1%, 65.2% and 65.9%, respectively. The increase from
2000 to 2001 is primarily due to an increase in rental rates. The slight
decrease from 1999 to 2000 in the gross operating margin percentages resulted
from a larger proportionate share of gross operating margin derived from office
properties, which has a lower gross margin percentage. The higher proportionate
share of the gross operating margin attributable to the office properties was a
result of the acquisition of five properties representing the Operating
Partnership's entrance into the New York City market and the disposition of net
leased "Big Box" industrial properties. This shift in the composition of the
portfolio was offset by increases in rental rates and operating efficiencies
realized as a result of operating a larger portfolio of properties with
concentration of properties in office and industrial parks or in its established
sub-markets.

Marketing, general and administrative expenses were $26.8 million in 2001,
$25.2 million in 2000 and $22.3 million in 1999. The increase in marketing,
general and administrative expenses is primarily due to the increased costs of
opening and maintaining the Operating Partnership's New York City division and
maintaining offices and infrastructure in each of the Operating Partnership's
markets including Long Island, Westchester, Southern Connecticut and Northern
New Jersey and administrative costs associated with the growth of the Operating
Partnership. The Operating Partnership's business strategy has been to expand
further into the Tri-State Area suburban and CBD markets and the New York City
market by applying its standards for high quality office and industrial space
and premier tenant service to its New Jersey, Westchester, Southern Connecticut
and New York City divisions. In doing this, the Operating Partnership seeks to
create a superior franchise value that it enjoys in its home base of Long
Island. Over the past three years the Operating Partnership has supported this
effort by increasing its marketing programs and strengthening its resources and
operating systems. The cost of these efforts is reflected in both marketing,
general and administrative expenses as well as the revenue growth of the
Operating Partnership. To a lesser extent, in 2001, the increase in marketing,
general and administrative costs was impacted by legal and professional fees
incurred in connection with certain cancelled acquisition transactions and
amortization of deferred compensation costs. Marketing, general and
administrative expense as a percentage of total revenues were 5.0% in 2001, 4.9%
in 2000 and 5.5% in 1999.

Interest expense was $93.1 million in 2001, $96.3 million in 2000 and $74.7
million in 1999. The decrease of $3.2 million from 2000 to 2001 is attributable
to lower interest rates and a decreased average balance on the Operating
Partnership's unsecured credit facility. This was partially offset by an
increase in the Operating Partnership's mortgage notes payable which was the
result of the refinancing of the property located at 919 Third Avenue, New York,
NY. The increase of $21.6 million from 1999 to 2000 is primarily attributable to
the debt incurred in connection with the acquisition of the five properties
comprising the New York City portfolio. In addition, the increase was also
attributable to a full year of interest on $300 million of senior unsecured
notes issued in March 1999. The weighted average balance outstanding on the
Operating Partnership's unsecured credit facility was $284.5 million in 2001,
$416.5 million in 2000 and $423.8 million in 1999.

Included in depreciation and amortization expense is amortized financing
costs of $4.5 million in 2001, $4.1 million in 2000 and $3.4 million in 1999.
The increase of approximately $700,000 from 1999 to 2000 is primarily
attributable to the secured financings of the 919 Third Avenue and 1350 Avenue
of the Americas properties located in New York, NY.

For the year ended December 31, 2001, the Operating Partnership's
consolidated statement of operations includes valuation reserve charges of
$166.1 million which is comprised of the following: (i) valuation reserve
charges, inclusive of anticipated costs, of $163 million related to the
Operating Partnership's investments in the FrontLine Loans and joint ventures
with RSVP (see Overview and Background for a further discussion of this
valuation reserve charge), (ii) in November 1999, the Company received 176,186
shares of the common stock of FrontLine as fees in connection with the FrontLine
Loans. As a result of certain tax rule provisions included in the REIT
Modernization Act, it was determined that the Company could no longer maintain
any equity position in FrontLine. As part of a compensation program, the Company
distributed these shares to certain non-executive employees subject to recourse
loans. The loans were scheduled to be forgiven over time based on continued

II-9

employment with the Company. Based on the current value of FrontLine's common
stock the Operating Partnership has established a valuation reserve charge
relating to the outstanding balance of these loans in the amount of $2.4 million
and (iii) based on the Company's value assessment of its investment in Captivate
Network, Inc., an unrelated technology based service company, the Operating
Partnership recorded a valuation reserve charge of approximately $700,000.

Extraordinary losses resulted in a $2.9 million loss in 2001, a $1.6
million loss in 2000 and a $629,000 loss in 1999. The extraordinary losses were
all attributed to the write-offs of certain deferred loan costs incurred in
connection with the Operating Partnership's refinancing of its debt.

LIQUIDITY AND CAPITAL RESOURCES

Summary of Cash Flows

Net cash provided by operating activities totaled $188.8 million in 2001,
$170.2 million in 2000 and $154.6 million in 1999. Increases each year were
primarily attributable to the growth in cash flow provided by the acquisition of
properties and/or the increased occupancy levels of the Operating Partnership's
development properties and the increase in rental rates in all of the Operating
Partnership's markets.

Net cash used in investing activities totaled $87.5 million in 2001, $261.3
million in 2000 and $391.8 million in 1999. Cash used in investing activities
related primarily to investments in real estate properties including development
costs. Included in these investing activities is the Operating Partnership's
investments of approximately $18.7 million, $16.3 million and $14.7 million in
RSVP-controlled (REIT qualified) joint ventures in each of the years then ended.
In addition, during 1999, the Operating Partnership invested approximately
$277.5 million for the acquisition of the first mortgage note securing the
property located at 919 Third Avenue, New York, NY. Cash used in investing
activities was offset by proceeds from the redemption of the Operating
Partnership's preferred equity investments in Keystone Property Trust in 2001
and 2000 as well as from sales of real estate, securities and mortgage note
receivable repayments in each of the years then ended.

Net cash provided by financing activities totaled $3.8 million in 2001,
$86.6 million in 2000 and $256.1 million in 1999. Cash provided by financing
activities related primarily to proceeds from secured debt financings, minority
partner contributions and advances under the Operating Partnership's unsecured
credit facility and term loan in each of the years then ended. Cash provided by
financing activities in 1999 was also provided by proceeds from the issuance of
preferred units and senior unsecured notes. Cash provided by financing
activities was offset by advances made under the FrontLine Loans of
approximately $7.2 million, $13.6 million and $81.0 million in each of the years
then ended. Cash provided by financing activities was also offset by principal
payments on secured borrowings, the unsecured credit facility and term loan as
well as loan equity issuance costs and dividends and distributions.

Investing Activities

II-10

unsecured credit facility and to establish an escrow account with a qualified
intermediary for a future exchange of real property pursuant to Section 1031 of
the Internal Revenue Code of 1986. The Operating Partnership has identified
approximately 52.7 acres of land located in Valhalla, NY, for the purposes of
this exchange.

Subsequent to December 31, 2001, the Operating Partnership entered into a
contract to sell two Class A office properties, located in Westchester County,
NY aggregating approximately 157,000 square feet for approximately $18.5
million. The closing is scheduled to occur during the second quarter of 2002.

RSVP CONTROLLED
JOINT VENTURES AMOUNTS ADVANCED TOTAL
---------------- ------------------ ----------

Privatization ..................... $21,480 $ 3,520 $ 25,000
Student Housing ................... 18,086 3,935 22,021
Medical Offices ................... 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
------- ------- --------
$59,751 $49,381 $109,132
------- ------- --------

Financing Activities:

During 2001, the Operating Partnership paid cash distributions on its Class
A common units of approximately $1.62 per unit and approximately $2.50 per unit
on its Class B common units.

During the year ended December 31, 2001, approximately 11,553 preferred
units of limited partnership interest, with a liquidation preference value of
approximately $11.6 million, were exchanged for 456,351 Units at an average
price of $25.32 per Unit. In addition, the Company increased its general partner
interest in the Operating Partnership by acquiring 660,370 outstanding Units
from certain limited partners in exchange for an equal number of shares of it's
Class A common stock.

Metropolitan is controlled by the Operating Partnership. A minority partner
owned an $85 million preferred equity investment in Metropolitan which accrued
distributions at a rate of 7.5% per annum for a two-year period (May 24, 1999
through May 30, 2001). On May 31, 2001, the minority partner, at its election,
converted its preferred equity investment into 3,453,881 shares of the Company's
Class A common stock based on a conversion price of $24.61 per share and the
Operating Partnerhsip issued 3,453,881 Class A common units to the Company. As a
result of the minority partner's conversion of its preferred equity investment,
the Operating Partnership owns 100% of Metropolitan.

As of December 31, 2000, the Operating Partnership had a three year $575
million unsecured revolving credit facility (the "Credit Facility") from The
Chase Manhattan Bank, as administrative agent, UBS Warburg LLC as syndication
agent and Deutsche Bank as documentation agent. The Credit Facility matures in
September, 2003 and borrowings under the Credit Facility are currently priced
off LIBOR plus 105 basis points.

II-11

On June 1, 2001, the Operating Partnership refinanced a $70 million short
term variable rate mortgage note with a five year $75 million fixed rate
mortgage note, which bears interest at 6.52% per annum. In addition, on July 18,
2001, the Operating Partnership refinanced a $200 million short term variable
rate mortgage note with a ten year $250 million fixed rate mortgage note, which
bears interest at 6.867% per annum. The net proceeds of approximately $50.4
million received by the Operating Partnership as a result of these refinancings
was used to repay maturing fixed rate debt, the Credit Facility and for working
capital purposes.

Capitalization

The Operating Partnership's indebtedness at December 31, 2001 totaled
approximately $1.3 billion (including its share of joint venture debt and net of
the minority partners' interests share of joint venture debt) and was comprised
of $271.6 million outstanding under the Credit Facility, approximately $449.5
million of senior unsecured notes and approximately $614.9 million of mortgage
indebtedness. Based on the Operating Partnership's total market capitalization
of approximately $3.3 billion at December 31, 2001, (calculated based on the
value of the Operating Partnership's Class A common units and Class B common
units (which, for this purpose, is assumed to be the same per unit as the value
of a share of the Company's Class A common stock and Class B common stock), the
liquidation preference value of the Operating Partnership's preferred units and
the $1.3 billion of debt), the Operating Partnership's debt represented
approximately 41.1% of its total market capitalization. At December 31, 2001,
the Operating Partnership had approximately $122 million of cash and cash
equivalents on hand of which approximately $98.4 million was generated from the
sale of a 49% interest in one of its major CBD assets. On January 4, 2002, the
Operating Partnership repaid approximately $85 million of its short-term debt
from cash and cash equivalents on hand.

Contractual Obligations and Commercial Commitments

The following table sets forth the Operating Partnership's significant debt
obligations by scheduled principal cash flow payments and maturity date and its
commercial commitments by scheduled maturity at December 31, 2001 (in
thousands):

MATURITY DATE
--------------------------------------------------------------------
2002 2003 2004 2005 2006 THEREAFTER TOTAL
----------- ---------- ---------- ---------- ---------- ------------ -------------

Mortgage notes payable(1) ............ $ 11,356 $ 12,559 $ 13,493 $14,462 $ 14,097 $130,347 $ 196,314
Mortgage notes payable (2) ........... -- -- 2,616 18,553 129,920 403,674 554,763
Senior unsecured notes ............... -- -- 100,000 -- -- 350,000 450,000
Unsecured credit facility ............ -- 271,600 -- -- -- -- 271,600
Land lease obligations ............... 2,688 2,687 2,811 2,814 2,795 49,921 63,716
Air rights lease obligations ......... 366 369 379 379 379 4,658 6,530
-------- -------- -------- ------- -------- -------- ----------
$ 14,410 $287,215 $119,299 $36,208 $147,191 $938,600 $1,542,923
-------- -------- -------- ------- -------- -------- ----------

- ----------------
(1) Scheduled principal amortization payments
(2) Principal payments due at maturity

II-12

Certain of the mortgage notes payable are guaranteed by certain limited
partners in the Operating Partnership and/or the Company. In addition,
consistent with customary practices in non-recourse lending, certain
non-recourse mortgages may be recourse to the Company under certain limited
circumstances including environmental issues and breaches of material
representations.

In addition, at December 31, 2001, the Operating Partnership had
approximately $24.3 million and $13.1 million in outstanding undrawn standby
letters of credit issued under the Credit Facility which expire in 2002 and
2003, respectively.

The Operating Partnership is also obligated to purchase, for approximately
$23.8 million, 52.7 acres of land located in Valhalla, NY on which the Operating
Partnership can develop approximately 875,000 square feet of office space. This
acquisition will be financed in part from the sale proceeds of an office
property currently being held by a qualified intermediary for the purposes of an
exchange of real property pursuant to Section 1031 of the Internal Revenue Code
of 1986 and is scheduled to close during the first quarter of 2002.

Thirteen of the Operating Partnership's office properties and two of the
Operating Partnership's industrial properties which were acquired by the
issuance of Units are subject to agreements limiting the Operating Partnership's
ability to transfer them prior to agreed upon dates without the consent of the
limited partner who transferred the respective property to the Operating
Partnership. In the event the Operating Partnership transfers any of these
properties prior to the expiration of these limitations, the Operating
Partnership may be required to make a payment relating to taxes incurred by the
limited partner. The limitations on nine of the properties expire prior to June
30, 2003. The limitations on the remaining properties expire between 2007 and
2013.

Eleven of the Operating Partnership's office properties are held in joint
ventures which contain certain limitations on transfer. These limitations
include requiring the consent of the joint venture partner to transfer a
property prior to various specified dates ranging from 2003 to 2005, rights of
first offer, and buy/sell provisions.

Historically, rental revenue has been the principal source of funds to pay
operating expenses, debt service and capital expenditures, excluding
non-recurring capital expenditures of the Operating Partnership. The Operating
Partnership expects to meet its short-term liquidity requirements generally
through its net cash provided by operating activities along with the Credit
Facility previously discussed. The Credit Facility contains several financial
covenants with which the Operating Partnership must be in compliance in order to
borrow funds thereunder. The Operating Partnership expects to meet certain of
its financing requirements through long-term secured and unsecured borrowings
and the issuance of debt and equity securities of the Operating Partnership. In
addition, the Operating Partnership also believes that it will, from time to
time, generate funds from the disposition of certain of its real estate
properties or interests therein. The Operating Partnership will refinance
existing mortgage indebtedness or indebtedness under the Credit Facility at
maturity or retire such debt through the issuance of additional debt securities
or additional equity securities. The Operating Partnership anticipates that the
current balance of cash and cash equivalents and cash flows from operating
activities, together with cash available from borrowings and equity offerings,
will be adequate to meet the capital and liquidity requirements of the Operating
Partnership in both the short and long-term.

As a result of current economic conditions, certain companies who make up
our tenant base have either not renewed their leases upon expiration or have
paid the Operating Partnership to terminate their leases. In addition, vacancy
rates in our markets have been trending higher and in some instances our asking
rents in our markets have been trending lower. Additionally, due to the events
of September 11th, the Operating Partnership anticipates higher operating
expenses as they relate to certain insurance coverage and security measures.

In order to qualify as a REIT for federal income tax purposes, the Company
is required to make distributions to its stockholders of at least 90% of REIT
taxable income. As a result, it is anticipated that the Operating Partnership
will make distributions in amounts sufficient to meet this requirement. The
Operating Partnership expects to use its cash flow from operating activities for
distributions to unit holders and for payment of recurring, non-incremental
revenue-generating expenditures. The Operating Partnership intends to invest
amounts accumulated for distribution in short-term investments.

II-13

On October 16, 2000, the Company's Board of Directors announced that it
adopted a Shareholder Rights Plan designed to protect its shareholders from
various abusive takeover tactics, including attempts to acquire control of the
Company at an inadequate price, depriving its shareholders of the full value of
their investment. The Operating Partnership has adopted a similar rights plan
(the "Rights Plan") which would be triggered in the event the Company's
Shareholder Rights Plan is triggered. A description of the Rights Plan is
included in the Notes to Financial Statements of the Operating Partnership.

INFLATION

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

The Credit Facility bears interest at a variable rate, which will be
influenced by changes in short-term interest rates, and is sensitive to
inflation.

FUNDS FROM OPERATIONS

Management believes that funds from operations ("FFO") is an appropriate
measure of performance for the Operating Partnership. FFO is defined by the
National Association of Real Estate Investment Trusts (NAREIT) as net income or
loss, excluding gains or losses from debt restructuring and sales of properties
plus depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. FFO does not represent cash generated from
operating activities in accordance with GAAP and is not indicative of cash
available to fund cash needs. FFO should not be considered as an alternative to
net income as an indicator of the Company's operating performance or as an
alternative to cash flow as a measure of liquidity. (See Selected Financial
Data). FFO for the year ended December 31, 2001 excludes $163 million of
valuation reserves on investments in affiliate loans and joint ventures.

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

The following table presents the Operating Partnerships FFO calculation for
the years ended December 31, (in thousands):

2001 2000 1999
------------- ------------ -----------

Income (loss) before extraordinary loss ....................... $ (57,045) $ 101,224 $ 71,863
Less: .........................................................
Extraordinary loss ........................................... 2,898 1,571 629
--------- --------- ---------
Net Income .................................................... (59,943) 99,653 71,234
Adjustment for Funds From Operations:
Add:
Real estate depreciation and amortization .................... 100,967 90,552 72,124
Minority interests' in consolidated partnerships ............. 15,975 9,120 6,802
Valuation reserves on investments in affiliate loans and joint
ventures ................................................... 163,000 -- --
Extraordinary loss ........................................... 2,898 1,571 629
Less:
Gain on sales of real estate ................................. 20,173 18,669 10,052
Amount distributable to minority partners in consolidated
partnerships ............................................... 19,083 12,316 8,293
--------- --------- ---------
Funds From Operations ......................................... $ 183,641 $ 169,911 $ 132,444
--------- --------- ---------
Weighted average units outstanding ............................ 66,057 61,050 54,719
========= ========= =========

II-14

ITEM 7 (A). QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The primary market risk facing the Operating Partnership is interest rate
risk on its long term debt, mortgage notes and notes receivable. The Operating
Partnership will, when advantageous, hedge its interest rate risk using
financial instruments. The Operating Partnership is not subject to foreign
currency risk.

The Operating Partnership manages its exposure to interest rate risk on its
variable rate indebtedness by borrowing on a short-term basis under its Credit
Facility until such time as it is able to retire the short-term variable rate
debt with either a long-term fixed rate debt offering, long term mortgage debt,
general partner contributions or through sales or partial sales of assets.

The Operating Partnership will recognize all derivatives on the balance
sheet at fair value. Derivatives that are not hedges will be adjusted to fair
value through income. If a derivative is a hedge, depending on the nature of the
hedge, changes in the fair value of the derivative will either be offset against
the change in fair value of the hedged asset, liability or firm commitment
through earnings, or recognized in other comprehensive income until the hedged
item is recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately recognized in earnings.

The fair market value ("FMV") of the Operating Partnership's long term
debt, mortgage notes and notes receivable is estimated based on discounting
future cash flows at interest rates that management believes reflects the risks
associated with long term debt, mortgage notes and notes receivable of similar
risk and duration.

The following table sets forth the Operating Partnership's long term debt
obligations by scheduled principal cash flow payments and maturity date,
weighted average interest rates and estimated FMV at December 31, 2001 (dollars
in thousands):

FOR THE YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------
2002 2003 2004 2005 2006
------------- ------------- -------------- ------------- --------------

Long term debt:
Fixed rate ......... $ 11,356 $ 12,559 $ 116,109 $ 33,015 $ 144,017
Weighted average
interest rate .... 7.52% 7.50% 7.47% 6.92% 7.38%

Variable rate ...... $ -- $ 271,600 $ -- $ -- $ --
Weighted average
interest rate .... --% 3.53% --% --% --%

THEREAFTER TOTAL (1) F M V
-------------- ---------------- --------------

Long term debt:
Fixed rate ......... $ 884,021 $ 1,201,077 $ 1,221,125
Weighted average
interest rate .... 7.34% 7.35%
Variable rate ...... $ -- $ 271,600 $ 271,600
Weighted average
interest rate .... --% 3.53%

- ----------------
(1) Includes unamortized issuance discounts of $537 on the 5 and 10 year senior
unsecured notes issued on March 26, 1999 which are due at maturity.

In addition, the Operating Partnership has assessed the market risk for its
variable rate debt, which is based upon LIBOR, and believes that a one percent
increase in the LIBOR rate would have an approximate $2.7 million annual
increase in interest expense based on approximately $271.6 million outstanding
at December 31, 2001.

II-15

The following table sets forth the Operating Partnership's mortgage notes
and notes receivable by scheduled maturity date, weighted average interest rates
and estimated FMV at December 31, 2001 (dollars in thousands):

FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------------------
2002 2003 2004 2005 2006 THEREAFTER TOTAL (2) F M V
------------ --------- ------------- --------- --------- ------------ ------------- -----------

Mortgage notes and notes receivable:
Fixed rate .............. $ 1,165 $ -- $ 36,500 $ -- $ -- $ 16,990 $ 54,655 $ 55,939
Weighted average
interest rate ......... 9.00% --% 10.23% --% --% 11.88% 10.72%

- ----------------
(2) Excludes mortgage note receivable acquisition costs and interest receivables
aggregating approximately $1,579.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this item is included in a separate section of this Form
10-K

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

II-16

PART III

ITEMS 10, 11, 12, AND 13.

The Company is the sole managing general partner of the Operating
Partnership. All of the Company's business is conducted through the Operating
Partnership. As a result, the information required by items 10, 11, 12, and 13
is identical to the information contained in Items 10, 11, 12 and 13 of the
Company's Form 10-K, which incorporates by reference information appearing in
the Company's Proxy Statement furnished to shareholders in connection with the
Company's 2002 Annual Meeting. Such information is incorporated by reference in
this Form 10-K.

III-1

PART IV

ITEM 14. FINANCIAL STATEMENTS AND SCHEDULES, EXHIBITS AND REPORTS ON FORM 8-K

(a)(1 and 2) Financial Statements and Schedules

The following consolidated financial information is included as a separate
section of this annual report on Form 10-K:

PAGE
------

RECKSON OPERATING PARTNERSHIP, L. P.
Report of Independent Auditors .................................................... IV-5
Consolidated Balance Sheets as of December 31, 2001 and December 31, 2000 ......... IV-6
Consolidated Statements of Operations for the years ended December 31, 2001, 2000,
and 1999 ........................................................................ IV-7
Consolidated Statements of Partners' Capital for the years ended December 31, 2001,
2000, and 1999 .................................................................. IV-8
Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000,
and 1999 ........................................................................ IV-9
Notes to Financial Statements ..................................................... IV-10
Schedule III -- Real Estate and Accumulated Depreciation .......................... IV-25

All other schedules are omitted since the required information is not
present in amounts sufficient to require submission of the schedule or because
the information required is included in the financial statements and notes
thereto.

IV-1

(3) Exhibits

EXHIBIT FILING
NUMBER REFERENCE
- --------- -----------

3.1 a Amended and Restated Agreement of Limited Partnership of the Registrant
3.2 e Supplement to the Amended and Restated Agreement of Limited Partnership of the Registrant Establishing
3.3 e Series A Preferred Units of Limited Partnership Interest
3.4 e Supplement to the Amended and Restated Agreement of Limited Partnership of the Registrant Establishing
3.5 e Series B Preferred Units of Limited Partnership Interest
3.6 h Supplement to the Amended and Restated Agreement of Limited Partnership of the Registrant Establishing
3.7 h Series C Preferred Units of Limited Partnership Interest
3.8 k Supplement to the Amended and Restated Agreement of Limited Partnership of the Registrant Establishing
4.1 g Series D Preferred Units of Limited Partnership Interest
4.2 g Supplement to the Amended and Restated Agreement of Limited Partnership of the Registrant Establishing
4.3 g Series B Common Units of Limited Partnership Interest
4.4 k Supplement to the Amended and Restated Agreement of Limited Partnership of the Registrant Establishing
10.1 d Series E Preferred Partnership Units of Limited Partnership
10.2 i Supplement to the Amended and Restated Agreement of Limited Partnership of the Registrant Establishing
10.3 i Series F Junior Participating Preferred Partnership Units Issuable Under the Rights Plan
10.4 i Form of 7.40% Notes due 2004 of the Registrant
10.5 i Form of 7.75% Notes due 2009 of the Registrant
10.6 i Indenture, dated March 26, 1999, among the Registrant, Reckson Associates Realty Corp. (the "Company"),
10.7 i The Bank of New York, as trustee
10.8 i Rights Agreement, dated as of October 13, 2000, between the Registrant and American Stock Transfer and
10.9 a Company
10.10 a Third Amended and Restated Agreement of Limited Partnership of Omni Partners, L.P.
10.11 n Amendment and Restatement of Employment and Non-Competition Agreement, dated as of August 15, 2000
10.12 c between the Company and Donald Rechler
10.13 b Amendment and Restatement of Employment and Non-Competition Agreement, dated as of August 15, 2000
10.14 a between the Company and Scott Rechler
10.15 n Amendment and Restatement of Employment and Non-Competition Agreement, dated as of August 15, 2000
10.16 d between the Company and Mitchell Rechler
10.17 d Amendment and Restatement of Employment and Non-Competition Agreement, dated as of August 15, 2000
10.18 i between the Company and Gregg Rechler
10.19 i Amendment and Restatement of Employment and Non-Competition Agreement, dated as of August 15, 2000
10.20 i between the Company and Roger Rechler
10.21 i Amendment and Restatement of Employment and Non-Competition Agreement, dated as of August 15, 2000
10.22 i between the Company and Michael Maturo
10.23 i Amendment and Restatement of Employment and Non-Competition Agreement, dated as of August 15, 2000
10.24 i between the Company and Jason Barnett
10.25 f Purchase Option Agreements relating to the Reckson Option Properties
10.26 h Purchase Option Agreements relating to the Other Option Properties
10.27 h Amended and Restated 1995 Stock Option Plan
10.28 h 1996 Employee Stock Option Plan
10.29 l Ground Leases for certain of the properties
10.30 m Indemnity Agreement relating to 100 Oser Avenue
10.31 m Amended and Restated 1997 Stock Option Plan
10.32 i 1998 Stock Option Plan
10.33 i Note Purchase Agreement for the Senior Unsecured Notes
10.34 i Amended and Restated Severance Agreement, dated August 15, 2000 between the Company and Donald Rechler
10.35 j Amended and Restated Severance Agreement, dated August 15, 2000 between the Company and Scott Rechler
10.36 j Amended and Restated Severance Agreement, dated August 15, 2000 between the Company and Mitchell
10.37 o Rechler
12.1 Amended and Restated Severance Agreement, dated August 15, 2000 between the Company and Gregg Rechler
21.1 Amended and Restated Severance Agreement, dated August 15, 2000 between the Company and Roger Rechler
23.0 Consent of Independent Auditors
24.1 Power of Attorney (included in Part IV of the Form 10-K)

IV-2

- --------------
(a) Previously filed as an exhibit to Registration Statement Form S-11 (No.
333-1280) and incorporated herein by reference.

(b) Previously filed as an exhibit to Registration Statement Form S-11 (No.
33-84324) and incorporated herein by reference.

(c) Previously filed as an exhibit to the Company's Form 8-K report filed with
the SEC on November 25, 1996 and incorporated herein by reference.

(d) Previously filed as an exhibit to the Company's Form 10-K filed with the SEC
on March 26, 1998 and incorporated herein by reference.

(e) Previously filed as an exhibit to the Company's Form 8-K report filed with
the SEC on March 1, 1999 and incorporated herein by reference.

(f) Previously filed as an exhibit to the Company's Form 10-K filed with the SEC
on March 16, 1999 and incorporated herein by reference.

(g) Previously filed as an exhibit to the Registrant's Form 8-K filed with SEC
on March 26, 1999 and incorporated herein by reference.

(h) Previously filed as an exhibit to the Company's Form 10-K filed with the SEC
on March 17, 2000 and incorporated herein by reference.

(i) Previously filed as an exhibit to the Registrant's Form 8-K filed with the
SEC on October 17, 2000 and incorporated herein by reference.

(j) Previously filed as an exhibit to the Company's Form 10-K filed with the SEC
on March 21, 2001 and incorporated herein by reference.

(k) Previously filed as an exhibit to the Registrant's Form 10-K filed with the
SEC on March 22, 2001 and incorporated herein by reference.

(l) Previously filed as an exhibit to the Registrant's Form 10-Q filed with the
SEC on May 14, 2001 and incorporated herein by reference.

(m) Previously filed as an exhibit to the Registrant's Form 10-Q filed with the
SEC on August 14, 2001 and incorporated herein by reference.

(n) Previously filed as an exhibit to the Company's Form 10-Q filed with the SEC
on November 14, 2001 and incorporated herein by reference.

(o) Previously filed as an exhibit to the Registrant's Form 8-K filed with the
SEC on January 8, 2002 and incorporated herein by reference.

(B) REPORTS ON FORM 8-K

On October 16, 2001, the Registrant filed a report on Form 8-K relating to the
status of FrontLine Capital Group's indebtedness to the Registrant.

On November 6, 2001, the Registrant submitted a report on Form 8-K under Item 9
thereof in order to submit its third quarter presentation.

On November 7, 2001, the Registrant submitted a report on Form 8-K under Item 9
thereof in order to submit supplemental operating and financial data for the
third quarter.

IV-3

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on mARCH 19, 2002.

RECKSON OPERATING PARTNERSHIP, L. P.

By: RECKSON ASSOCIATES REALTY CORP.,
its general partner

By: /s/ Donald J. Rechler
---------------------------
Donald J. Rechler,
Chairman of the Board and Co-Chief
Executive Officer

KNOW ALL MEN BY THESE PRESENTS,that we, the undersigned officers and directors
of Reckson Associates Realty Corp., the corporate general partner of the
registrant, hereby severally constitute Scott H. Rechler, Mitchell D. Rechler
and Michael Maturo, and each of them singly, our true and lawful attorneys with
full power to them, and each of them singly, to sign for us and in our names in
the capacities indicated below, the Form 10-K filed herewith and any and all
amendments to said Form 10-K, and generally to do all such things in our names
and in our capacities as officers and directors to enable the registrant to
comply with the provisions of the Securities Exchange Act of 1934, and all
requirements of the Securities and Exchange Commission, hereby ratifying and
confirming our signatures as they may be signed by our said attorneys, or any of
them, to said Form 10-K and any and all amendments thereto. Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant in the capacities
indicated on March 19, 2002.

SIGNATURE TITLE SIGNATURE TITLE
--------- ----- --------- -----

/s/ Donald J. Rechler Chairman of the Board, /s/ Scott H. Rechler Co-Chief Executive
- ------------------------- Co-Chief Executive ----------------------- Officer and Director of
Donald J. Rechler Officer and Director Scott H. Rechler Reckson Associates
(Principal Executive Realty Corp.
Officer) of Reckson
AssociatesRealty Corp.

/s/ Mitchell D. Rechler Co-President, Chief /s/ Gregg M. Rechler Co-President, Chief
- ------------------------- Administrative Officer ------------------------ Operating Officer and
Mitchell D. Rechl and Director of Reckson Gregg M. Rechler Director of Reckson
Associates Realty Corp. Associates Realty Corp.

/s/ Michael Maturo Executive Vice President, /s/ Roger M. Rechler Executive Vice-President,
- ------------------------- Treasurer and Chief -------------------------- Vice-Chairman of the
Michael Maturo Financial Officer (Principal Roger M. Rechler Board and Director of
Financial Officer and Reckson Associates
Principal Accounting Realty Corp.
Officer) of Reckson
Associates Realty Corp.

Director of Reckson Director of Reckson
- ------------------------- Associates Realty Corp. --------------------------- Associates Realty
Harvey R. Blau Leonard Feinstein Corp.

Director of Reckson /s/ John V. Klein Director of Reckson
- ------------------------- Associates Realty Corp. --------------------------- Associates Realty
Herve A. Kevenides John V. N. Klein Corp.

/s/ Lewis S. Ranieri Director of Reckson /s/ Conrad D. Stephensen Director of Reckson
- ------------------------- Associates Realty Corp. ---------------------------- Associates Realty
Lewis S. Ranieri Conrad D. Stephensen Corp.

IV-4

REPORT OF INDEPENDENT AUDITORS

To the Partners
Reckson Operating Partnership, L. P.

We have audited the accompanying consolidated balance sheets of Reckson
Operating Partnership, L. P. (the "Operating Partnership") as of December 31,
2001 and 2000, and the related consolidated statements of operations, partners'
capital, and cash flows for each of the three years in the period ended December
31 2001. We have also audited the financial statement schedule listed in the
index at item 14 (a). These financial statements and financial statement
schedule are the responsibility of the Operating Partnership's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Reckson
Operating Partnership, L. P. at December 31, 2001 and 2000, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States. Also, in our opinion, the financial
statement schedule referred to above, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.

ERNST & YOUNG LLP

New York, New York
February 20, 2002,
except for Note 13,
as to which the date is
March 13, 2002

IV-5

RECKSON OPERATING PARTNERSHIP, L. P.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT UNIT DATA)

DECEMBER 31,
---------------------------------
2001 2000
--------------- ---------------

ASSETS
Commercial real estate properties, at cost (Notes 2, 3, 5, and 6) .........
Land ..................................................................... $ 408,837 $ 396,482
Buildings 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 .......................................... (361,960) (288,479)
----------- -----------
2,526,644 2,489,266
Investments in real estate joint ventures ................................. 5,744 5,348
Investment in mortgage notes and notes receivable (Note 6) ................ 56,234 58,220
Cash and cash equivalents (Note 9) ........................................ 121,773 16,624
Tenant receivables ........................................................ 9,633 11,511
Investments in service companies and affiliate loans and joint ventures
(Note 8) ................................................................. 84,142 218,779
Deferred rents receivable ................................................. 81,089 67,930
Prepaid expenses and other assets ......................................... 45,303 68,759
Contract and land deposits and pre-acquisition costs ...................... 3,782 1,676
Deferred leasing and loan costs, less accumulated amortization of
$41,411 and $32,773, respectively ........................................ 64,438 61,681
----------- -----------
Total Assets ............................................................. $ 2,998,782 $ 2,999,794
=========== ===========
LIABILITIES
Mortgage notes payable (Note 2) ........................................... $ 751,077 $ 728,971
Unsecured credit facility (Note 3) ........................................ 271,600 216,600
Senior unsecured notes (Note 4) ........................................... 449,463 449,385
Accrued expenses and other liabilities .................................... 84,651 93,520
Distributions payable ..................................................... 32,988 28,801
----------- -----------
Total Liabilities ........................................................ 1,589,779 1,517,277
----------- -----------
Minority interests in consolidated partnerships ........................... 242,698 226,350
----------- -----------
Commitments and contingencies (Notes 9, 10, and 13) ....................... -- --
PARTNERS' CAPITAL (Note 7)
Preferred Capital, 11,222,965 and 11,234,518 units outstanding,
respectively ............................................................. 301,573 313,126
General Partners Capital:
Class A common units, 49,982,377 and 45,352,286 outstanding,
respectively ........................................................... 551,417 575,570
Class B common units, 10,283,513 outstanding ............................. 231,428 270,118
Limited Partners Capital, 7,487,218 and 7,694,642 units outstanding,
respectively ............................................................. 81,887 97,353
----------- -----------
Total Partners Capital ................................................... 1,166,305 1,256,167
----------- -----------
Total Liabilities and Partners Capital ................................. $ 2,998,782 $ 2,999,794
=========== ===========

(see accompanying notes to financial statements)

IV-6

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

FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------------
2001 2000 1999
-------------- -------------- --------------

REVENUES (Note 10):
Base rents ....................................................... $ 437,802 $ 397,327 $ 324,146
Tenant escalations and reimbursements ............................ 59,969 54,750 44,989
Equity in earnings of service companies and real estate joint
ventures ........................................................ 2,087 4,383 2,148
Interest income on mortgage notes and notes receivable ........... 6,238 8,212 7,944
Gain on sales of real estate (Note 6) ............................ 20,173 18,669 10,052
Investment and other income ...................................... 14,185 26,576 13,863
----------- ----------- -----------
Total Revenues .................................................. 540,454 509,917 403,142
----------- ----------- -----------
EXPENSES:
Property operating expenses ...................................... 168,664 157,456 125,994
Marketing, general and administrative ............................ 26,794 25,221 22,269
Interest ......................................................... 93,057 96,337 74,709
Depreciation and amortization .................................... 102,931 92,547 74,504
----------- ----------- -----------
Total Expenses .................................................. 391,446 371,561 297,476
----------- ----------- -----------
Income before distributions to preferred unit holders,
minority interests, valuation reserves and extraordinary
loss ............................................................ 149,008 138,356 105,666
Minority partners' interest in consolidated partnerships ......... (15,975) (9,120) (6,802)
Valuation reserves on investments in affiliate loans and joint
ventures and other investments (Notes 8 and 13) ................. (166,101) -- --
----------- ----------- -----------
Income (loss) before extraordinary loss and distributions to
preferred unitholders ........................................... (33,068) 129,236 98,864
Extraordinary loss on extinguishment of debts .................... (2,898) (1,571) (629)
----------- ----------- -----------
Net income (loss) ................................................ (35,966) 127,665 98,235
Preferred unit distributions ..................................... (23,977) (28,012) (27,001)
----------- ----------- -----------
Net income (loss) allocable to common unitholders ................ $ (59,943) $ 99,653 $ 71,234
=========== =========== ===========
Net income (loss) allocable to:
Class A common units .......................................... $ (47,283) $ 76,046 $ 58,124
Class B common units .......................................... (12,660) 23,607 13,110
----------- ----------- -----------
Total ........................................................... $ (59,943) $ 99,653 $ 71,234
=========== =========== ===========
Net income (loss) per weighted average units:
Class A common unit before extraordinary loss ................. $ (.81) $ 1.52 $ 1.22
Extraordinary loss per Class A common unit .................... ( .04) ( .02) ( .01)
----------- ----------- -----------
Net income (loss) per weighted average Class A
common unit .................................................. $ (.85) $ 1.50 $ 1.21
=========== =========== ===========
Class B common unit before extraordinary loss ................. $ (1.17) $ 2.34 $ 1.96
Extraordinary loss per Class B common unit .................... ( .06) ( .04) ( .02)
----------- ----------- -----------
Net income (loss) per weighted average Class B
common unit .................................................. $ (1.23) $ 2.30 $ 1.94
=========== =========== ===========
Weighted average common units outstanding:
Class A common units .......................................... 55,773,000 50,766,000 47,975,000
Class B common units .......................................... 10,284,000 10,284,000 6,744,000

(see accompanying notes to financial statements)

IV-7

RECKSON OPERATING PARTNERSHIP, L. P.
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
(IN THOUSANDS)

GENERAL PARTNERS' CAPITAL
-------------------------------------------
PREFERRED CLASS B CLASS A LIMITED TOTAL
CAPITAL COMMON UNITS COMMON UNITS PARTNERS' CAPITAL PARTNERS' CAPITAL
------------- -------------- -------------- ------------------- ------------------

BALANCE JANUARY 1, 1999 .............. $ 263,126 $ -- $ 485,341 $ 94,125 $ 842,592
Net Income ........................... -- 13,110 48,791 9,333 71,234
Contributions ........................ 150,000 302,653 1,601 -- 454,254
Distributions ........................ -- (14,787) (58,561) (10,987) (84,335)
Retirement of units .................. -- (30,287) -- (1,485) (31,772)
---------- --------- --------- --------- -----------
BALANCE DECEMBER 31, 1999 ............ 413,126 270,689 477,172 90,986 1,251,973
Net Income ........................... -- 23,607 64,552 11,494 99,653
Contributions ........................ -- -- 6,701 -- 6,701
Distributions ........................ -- (24,132) (66,096) (11,765) (101,993)
Retirement / redemption of units ..... (100,000) (46) 93,241 6,638 (167)
---------- --------- --------- --------- -----------
BALANCE DECEMBER 31, 2000 ............ 313,126 270,118 575,570 97,353 1,256,167
Net loss ............................. -- (12,660) (41,253) (6,030) (59,943)
Contributions ........................ -- -- 82,821 18,745 101,566
Distributions ........................ -- (26,030) (81,142) (12,604) (119,776)
Retirement/redemption of units
(Note7) ............................. (11,553) -- 15,421 (15,577) (11,709)
---------- --------- --------- --------- -----------
BALANCE DECEMBER 31, 2001 ............ $ 301,573 $ 231,428 $ 551,417 $ 81,887 $ 1,166,305
========== ========= ========= ========= ===========

(see accompanying notes to financial statements)

IV-8

RECKSON OPERATING PARTNERSHIP, L. P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------
2001 2000 1999
-------------- ------------- -------------

Net income (loss) ........................................................ $ (35,966) $ 127,665 $ 98,235
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization ........................................... 102,931 92,547 74,504
Extraordinary loss on extinguishment of debts ........................... 2,898 1,571 629
Minority partners' interests in consolidated partnerships ............... 15,975 9,120 6,802
Gain on sales of real estate, securities and mortgage repayment ......... (20,173) (18,669) (9,657)
Valuation reserves on investments in affiliate loans and joint
ventures and other investments ........................................ 166,101 -- --
Equity in earnings of service companies and real estate joint
ventures. ............................................................. (2,087) (4,383) (2,148)
Changes in operating assets and liabilities:
Prepaid expenses and other assets ....................................... (4,869) (9,568) (24,292)
Tenant and affiliate receivables ........................................ 1,878 (6,394) 42
Deferred rents receivable ............................................... (38,186) (35,798) (2,158)
Accrued expenses and other liabilities .................................. 342 14,152 12,618
---------- ---------- ----------
Net cash provided by operating activities ............................... 188,844 170,243 154,575
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of commercial real estate properties .......................... -- (190,548) (284,741)
Investment in mortgage notes and notes receivable ....................... -- -- (295,048)
Increase in contract deposits and preacquisition costs .................. (3,267) (2,023) (12,650)
Additions to developments in progress ................................... (8,260) (13,392) (9,615)
Additions to commercial real estate properties .......................... (152,074) (89,818) (28,135)
Distributions from investments in real estate joint ventures ............ 82 368 442
Payment of leasing costs ................................................ (10,513) (24,082) (16,467)
Additions to furniture, fixtures and equipment .......................... (635) (742) (461)
Investments in affiliate joint ventures ................................. (25,056) (10,780) (15,033)
Proceeds from redemption of Keystone Property Trust preferred
securities ............................................................ 35,700 19,903 --
Proceeds from sales of real estate, securities and mortgage note
receivable repayments ................................................. 76,503 49,810 269,916
---------- ---------- ----------
Net cash used in investing activities ................................... (87,520) (261,304) (391,792)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from secured borrowings ........................................ 325,000 297,163 125,548
Principal payments on secured borrowings ................................ (302,894) (27,367) (4,714)
Proceeds from issuance of senior unsecured notes, net of issuance
costs ................................................................. -- -- 299,262
Payment of loan costs and prepayment penalties .......................... (6,252) (11,649) (8,264)
Investments in affiliate loans and service companies .................... (14,227) (14,568) (126,249)
Proceeds from unsecured credit facility and term loan ................... 153,000 689,600 397,500
Principal payments on unsecured credit facility and term loan ........... (98,000) (845,600) (510,750)
Contributions ........................................................... 2,813 4,010 149,512
Distributions ........................................................... (139,568) (128,369) (104,246)
Retirement of units ..................................................... (1,421) -- (30,287)
Contributions by minority partners in consolidated partnerships ......... 101,832 135,975 75,500
Distributions to minority partners in consolidated partnerships ......... (16,458) (12,632) (6,701)
---------- ---------- ----------
Net cash provided by financing activities ................................ 3,825 86,563 256,111
---------- ---------- ----------
Net increase (decrease) in cash and cash equivalents ..................... 105,149 (4,498) 18,894
Cash and cash equivalents at beginning of period ......................... 16,624 21,122 2,228
========== ========== ----------
Cash and cash equivalents at end of period ............................... $ 121,773 $ 16,624 $ 21,122
========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest, including interest
capitalized ........................................................... $ 105,087 $ 106,106 $ 77,014
========== ========== ----------

(see accompanying notes to financial statements)

IV-9

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

DECEMBER 31, 2001

1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

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

ORGANIZATION AND FORMATION OF THE OPERATING PARTNERSHIP

The Operating Partnership commenced operations on June 2, 1995. The sole
general partner in the Operating Partnership, Reckson Associates Realty Corp.
(the "Company") is a self administered and self managed real estate investment
trust ("REIT"). During June, 1995, the Company contributed approximately $162
million in cash to the Operating Partnership in exchange for an approximate 73%
general partnership interest. All properties acquired by the Company are held by
or through the Operating Partnership. In addition, in connection with the
formation of the Operating Partnership, the Operating Partnership executed
various option and purchase agreements whereby it issued units in the Operating
Partnership ("Units") to the continuing investors and assumed certain
indebtedness in exchange for interests in certain property partnerships, fee
simple and leasehold interests in properties and development land, certain
business assets of the executive center entities and 100% of the non-voting
preferred stock of the management and construction companies. At December 31,
2001, the Company's ownership percentage in the Operating Partnership is
approximately 88.9%.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated financial statements include the consolidated
financial position of the Operating Partnership and its subsidiaries at December
31, 2001 and 2000 and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2001. The Operating
Partnership's investments in majority owned and/or controlled real estate joint
ventures are reflected in the accompanying financial statements on a
consolidated basis with a reduction for minority partners' interest. The
operating results of the service businesses currently conducted by Reckson
Management Group, Inc., RANY Management Group, Inc. and Reckson Construction
Group, Inc. ("RCG"), in which the Operating Partnership owns a non-controlling
interest, are reflected in the accompanying financial statements on the equity
method of accounting. The Operating Partnership also invests in real estate
joint ventures where it may own less than a controlling interest. Such
investments are also reflected in the accompanying financial statements on the
equity method of accounting. All significant intercompany balances and
transactions have been eliminated in the consolidated financial statements.

The minority interests at December 31, 2001 represent a 49% interest in RT
Tri-State LLC, owner of an eight property suburban office portfolio, a 40%
interest in Omni Partners, L.P., owner of a 575,000 square foot suburban office
property and a 49% interest in Metropolitan 919 Third Avenue, LLC, owner of the
property located at 919 Third Avenue, New York, NY.

Use of Estimates

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

IV-10

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

Real Estate

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

Cash Equivalents

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

Tenant's lease security deposits aggregating approximately $5.1 million and
$6.1 million at December 31, 2001 and 2000, respectively have been included in
cash and cash equivalents on the accompanying balance sheets.

Deferred Costs

Tenant leasing commissions and related costs incurred in connection with
leasing tenant space are capitalized and amortized over the life of the related
lease. In addition, loan costs incurred are capitalized and amortized over the
term of the related loan.

Income Taxes

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

Revenue Recognition

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

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

Gain on sales of real estate are recorded when title is conveyed to the
buyer, subject to the buyer's financial commitment being sufficient to provide
economic substance to the sale.

Net Income (Loss) Per Common Partnership Unit

Net income (loss) per Class A common partnership unit and Class B Common
partnership unit is determined by allocating net income (loss) after preferred
distributions and minority partners' interest in consolidated partnerships
income to the general and limited partners based on their weighted average
distribution per common partnership units outstanding during the respective
periods presented.

IV-11

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

Distributions to Preferred Unit Holders

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

Recent Pronouncements

FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which became effective January 1, 2001 requires the Operating
Partnership to recognize all derivatives on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value through income.
If a derivative is a hedge, depending on the nature of the hedge, changes in the
fair value of the derivative will either be offset against the change in fair
value of the hedged asset, liability, or firm commitment through earnings, or
recognized in accumulated other comprehensive income ("OCI") until the hedged
item is recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately recognized in earnings. As of January 1, 2001,
the carrying value of the Operating Partnership's derivatives equaled their fair
value and as a result no cumulative effect changes were recorded. Additionally,
as of June 30, 2001, the fair value of the Operating Partnership's derivatives
equaled approximately $3.7 million and was reflected in other assets and OCI on
the Operating Partnership's balance sheet. On July 18, 2001, the mortgage note
payable to which these derivatives relate to was funded (see Note 2) and their
fair value at that time was approximately $676,000 less than their carrying
value. This amount is being amortized to interest expense over the term of the
mortgage note to which it relates. Because of the Operating Partnership's
minimal use of derivatives, the adoption of this Statement did not have a
significant effect on earnings or the financial position of the Operating
Partnership.

In October 2001, the FASB issued Statement No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" which supersedes FASB Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of"; however it retains the fundamental provisions of that
statement related to the recognition and measurement of the impairment of
long-lived assets to be "held and used". In addition, the Statement provides
more guidance on estimating cash flows when performing a recoverability test,
requires that a long-lived asset or asset group to be disposed of other than by
sale (e.g. abandoned) be classified as "held and used" until it is disposed of,
and establishes more restrictive criteria to classify an asset or asset group as
"held for sale". The Operating Partnership's management does not anticipate that
the adoption of this statement will have an effect on the earnings or the
financial position of the Operating Partnership.

Reclassifications

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

2. MORTGAGE NOTES PAYABLE

On June 1, 2001, the Operating Partnership refinanced a $70 million
short-term variable rate mortgage note with a five year $75 million fixed rate
mortgage note, which bears interest at 6.52% per annum. In addition, on July 18,
2001, the perating Partnership refinanced a $200 million short-term variable
rate mortgage note with a ten year $250 million fixed rate mortgage note, which
bears interest at 6.867% per annum. As a result of these refinancings, certain
unamortized loan costs were written-off and accounted for as an extraordinary
loss on the accompanying statement of operations. The net proceeds of
approximately $50.4 million received by the Operating Partnership as a result of
these refinancings was used to repay maturing fixed rate debt, the Operating
Partnership's unsecured credit facility and for working capital purposes.

IV-12

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)

2. MORTGAGE NOTES PAYABLE - (CONTINUED)

At December 31, 2001, there were 16 fixed rate mortgage notes payable with
an aggregate outstanding principal amount of approximately $751.1 million.
Properties with an aggregate carrying value at December 31, 2001 of
approximately $1.5 billion are pledged as collateral against the mortgage notes
payable. In addition, approximately $46.1 million of the $751.1 million is
recourse to the Operating Partnership. The mortgage notes bear interest at rates
ranging from 6.45% to 10.10%, and mature between 2004 and 2027. The weighted
average interest rates on the outstanding mortgage notes payable at December 31,
2001, 2000 and 1999 were approximately 7.3%, 7.8% and 7.6%, respectively.
Certain of the mortgage notes payable are guaranteed by certain limited partners
in the Operating Partnership and/or the Company.

Scheduled principal repayments to be made during the next five years and
thereafter, for mortgage notes payable outstanding at December 31, 2001, are as
follows (in thousands):

SCHEDULED PRINCIPAL DUE AT MATURITY TOTAL
--------------------- ----------------- -----------
2002 ................ $ 11,356 $ -- $ 11,356
2003 ................ 12,559 -- 12,559
2004 ................ 13,493 2,616 16,109
2005 ................ 14,462 18,553 33,015
2006 ................ 14,097 129,920 144,017
Thereafter .......... 130,347 403,674 534,021
--------- --------- ---------
$ 196,314 $ 554,763 $ 751,077
========= ========= =========

3. UNSECURED CREDIT FACILITY

As of December 31, 2001, the Operating Partnership had a three year $575
million unsecured revolving credit facility (the "Credit Facility") from The
Chase Manhattan Bank, as administrative agent, UBS Warburg LLC as syndication
agent and Deutsche Bank as documentation agent. The Credit Facility matures in
September, 2003 and borrowings under the Credit Facility are currently priced
off LIBOR plus 105 basis points.

The Operating Partnership utilizes the Credit Facility primarily to finance
real estate investments, fund its real estate development activities and for
working capital purposes. At December 31, 2001, the Operating Partnership had
availability under the Credit Facility to borrow an additional $303.4 million
(of which, $37.4 million has been allocated for outstanding undrawn letters of
credit). Subsequent to December 31, 2001, the Operating Partnership paid down
the Credit Facility by $84.6 million which was received from the sale of a 49%
interest in the property located at 919 Third Avenue, New York, NY (see Note 6)
and thereby increased its availability under the Credit Facility to $388
million.

The Operating Partnership capitalized interest incurred on borrowings to
fund certain development costs in the amount of $10.2 million, $11.5 million and
$9.8 million for the years ended December 31, 2001, 2000 and 1999, respectively.

IV-13

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)

4. SENIOR UNSECURED NOTES

As of December 31, 2001, the Operating Partnership had outstanding
approximately $449.5 million (net of issuance discounts) of senior unsecured
notes (the "Senior Unsecured Notes"). The following table sets forth the
Operating Partnership's Senior Unsecured Notes and other related disclosures
(dollars in thousands):

FACE COUPON
ISSUANCE AMOUNT RATE TERM MATURITY
- ------------------------------- ------------ ---------- ---------- ----------------

August 27, 1997 ......... $ 150,000 7.20% 10 years August 28, 2007
March 26, 1999 .......... $ 100,000 7.40% 5 years March 15, 2004
March 26, 1999 .......... $ 200,000 7.75% 10 years March 15, 2009

Interest on the Senior Unsecured Notes is payable semiannually with
principal and unpaid interest due on the scheduled maturity dates. In addition,
the Senior Unsecured Notes issued on March 26, 1999 were issued at an aggregate
discount of $738,000. Such discount is being amortized over the term of the
Senior Unsecured Notes to which they relate.

5. LAND LEASES AND AIR RIGHTS

The Operating Partnership leases, pursuant to noncancellable operating
leases, the land on which twelve of its buildings were constructed. The leases,
which contain renewal options, expire between 2009 and 2084. The leases either
contain provisions for scheduled increases in the minimum rent at specified
intervals or for adjustments to rent based upon the fair market value of the
underlying land or other indexes at specified intervals. Minimum ground rent is
recognized on a straight-line basis over the terms of the leases. The excess of
amounts recognized over amounts contractually due is approximately $3.0 million
and $2.7 million at December 31, 2001 and 2000, respectively. These amounts are
included in accrued expenses and other liabilities on the accompanying balance
sheets.

In addition, the Operating Partnership, through the acquisition of certain
properties, is subject to two air rights lease agreements. These lease
agreements have terms expiring between 2048 and 2073, including renewal options.

Future minimum lease commitments relating to the land leases and air rights
lease agreements during the next five years and thereafter are as follows (in
thousands):

YEAR ENDED DECEMBER 31, LAND LEASES AIR RIGHTS
-------------------------------- ------------- -----------
2002 ......................... $ 2,688 $ 366
2003 ......................... 2,687 369
2004 ......................... 2,811 379
2005 ......................... 2,814 379
2006 ......................... 2,795 379
Thereafter ................... 49,921 4,658
------- ------
$63,716 $6,530
======= ======

During 2001, the Operating Partnership, at its option, acquired the
lessor's rights to the air rights lease agreement for the property located at
120 West 45th Street, New York, NY for approximately $7.7 million. As a result,
the Operating Partnership's obligation to pay rent under this lease agreement
was eliminated.

6. COMMERCIAL REAL ESTATE INVESTMENTS

As of December 31, 2001, the Operating Partnership owned and operated 77
office properties (inclusive of eleven office properties owned through joint
ventures) comprising approximately 13.8

IV-14

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)
6. COMMERCIAL REAL ESTATE INVESTMENTS - (CONTINUED)

million square feet, 103 industrial properties comprising approximately 6.8
million square feet and two retail properties comprising approximately 20,000
square feet located in the Tri-State Area.

The Operating Partnership also owns approximately 254 acres of land in 12
separate parcels of which the Operating Partnership can develop approximately
two million square feet of office space and approximately 450,000 square feet of
industrial space. The Operating Partnership is obligated to purchase, during the
first quarter of 2002, 52.7 acres of land located in Valhalla, NY on which the
Operating Partnership can develop approximately 875,000 square feet of office
space. In addition, the Operating Partnership owns a 32 acre land parcel in Rye
Brook, NY which is under contract for sale for approximately $22.3 million. The
closing is scheduled to occur during 2002.

The Operating Partnership also owns a 357,000 square foot office building
in Orlando, Florida and has invested approximately $17.0 million in a note
receivable secured by a partnership interest in Omni Partner's, L.P., owner of
the Omni, a 575,000 square foot Class A office property located in Uniondale, NY
and $36.5 million under three notes which bear interest at rates ranging from
10.5% to 12% per annum and are secured by a minority partner's preferred unit
interest in the Operating Partnership and certain real property.

On December 21, 2001, the Operating Partnership formed a joint venture with
the New York State Teachers' Retirement System ("NYSTRS") whereby NYSTRS
acquired a 49% indirect interest in the property located at 919 Third Avenue,
New York, NY for $220.5 million which included $122.1 million of its
proportionate share of secured mortgage debt and approximately $98.4 million of
cash which was then distributed to the Operating Partnership. As a result, the
Operating Partnership realized a gain of approximately $18.9 million. Subsequent
to December 31, 2001, net proceeds from this sale were used primarily to repay
borrowings under the Credit Facility and for working capital purposes.

During the year ended December 31, 2001, the Operating Partnership sold
five office properties aggregating approximately 678,000 square feet for $82.1
million, a 26,000 square foot industrial property for $2.8 million and its
remaining preferred interest in Keystone Property Trust for $35.7 million. As a
result of these sales the Operating Partnership realized a net gain of
approximately $1.3 million. Net proceeds from these sales were used primarily to
repay borrowings under the Credit Facility and to establish an escrow account
with a qualified intermediary for a future exchange of real property pursuant to
Section 1031 of the Internal Revenue Code of 1986. The Operating Partnership has
identified approximately 52.7 acres of land located in Valhalla, NY for the
purposes of this exchange (see Note 13).

7. PARTNERS CAPITAL

The Operating Partnership currently has issued and outstanding 10,283,513
Class B common units. The Class B common units currently receive an annual
distribution of $2.5968 per unit, which is subject to adjustment annually based
on a formula which measures increases or decreases in the Company's Fund From
Operations, as defined, over a base year. The Class B common units are
exchangeable at any time, at the option of the holder, into an equal number of
Class A common units subject to customary antidilution adjustments. The Class B
common units will be exchanged for an equal number of Class A common units upon
the exchange, if any, by the Company of Class A common stock for Class B common
stock at any time following November 23, 2003.

IV-15

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)

7. PARTNERS CAPITAL - (CONTINUED)

During the year ended December 31, 2001, approximately 11,553 preferred
units of limited partnership interest, with a liquidation preference value of
approximately $11.6 million, were exchanged for 456,351 Units at an average
price of $25.32 per Unit. In addition, the Company increased its general
partnership interest in the Operating Partnership by acquiring 660,370
outstanding Units from certain limited partners in exchange for an equal number
of shares of its Class A common stock.

On October 16, 2000, the Company's Board of Directors announced that it
adopted a Shareholder Rights Plan designed to protect its shareholders from
various abusive takeover tactics, including attempts to acquire control of the
Company at an inadequate price, depriving its shareholders of the full value of
their investment. The Operating Partnership has adopted a similar rights plan
(the "Rights Plan") which would be triggered in the event the Company's
Shareholders Rights Plan is triggered. The Rights Plan was not adopted in
response to any known effort to acquire control of the Operating Partnership or
the Company.

Under the Rights Plan, each Class A common unitholder will receive a
dividend of one Right for each Class A common unit owned. The Rights will be
exercisable only if a person or group acquires, or announces their intent to
acquire, 15% or more of the Company's Class A common stock, or announces a
tender offer the consummation of which would result in beneficial ownership by a
person or group of 15% or more of the Company's Class A common stock. Each Right
will entitle the holder to purchase one one-thousandth of a unit of a new series
of junior participating preferred units of the Operating Partnership at an
initial exercise price of $84.44.

If any person acquires beneficial ownership of 15% or more of the
outstanding shares of Class A common stock of the Company, then all Rights
holders (except the acquiring person if such person is a holder of Rights) will
be entitled to purchase the Operating Partnership's Class A common units at a
discounted price. If the Company is acquired in a merger after such an
acquisition, all Rights holders (except the acquiring person if such person is a
holder of Rights) will also be entitled to purchase stock in the buyer at a
discount in accordance with the Rights Plan.

The distribution of Rights was made to Class A common unitholders of record
at the close of business on October 27, 2000 and Class A common units that are
newly-issued after that date (including Class A common units issued upon
conversion of the outstanding Class B common units) will also carry Rights until
the Rights become detached from the Class A common units. The Rights will expire
at the close of business on October 13, 2010, unless earlier redeemed by the
Operating Partnership. The Rights distribution is not taxable to unitholders.

During July 1998, the Operating Partnership formed Metropolitan Partners,
LLC ("Metropolitan") for the purpose of acquiring Class A office properties in
New York City. Metropolitan is controlled by the Operating Partnership. A
minority partner owned an $85 million preferred equity investment in
Metropolitan which accrued distributions at a rate of 7.5% per annum for a
two-year period (May 24, 1999 through May 30, 2001). On May 31, 2001, the
minority partner, at its election, converted its preferred equity investment
into 3,453,881 shares of the Company's Class A common stock based on a
conversion price of $24.61 per share and the Operating Partnership issued
3,453,881 Class A common units to the Company. As a result of the minority
partner's conversion of their preferred equity investment, the Operating
Partnership owns 100% of Metropolitan.

8. RELATED PARTY TRANSACTIONS

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

IV-16

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)

8. RELATED PARTY TRANSACTIONS - (CONTINUED)

The Operating Partnership, in connection with its formation, was granted a
ten year option period to acquire ten properties which are either owned by the
Reckson Group, the predecessor to the Company, or in which the Reckson Group
owns a non-controlling minority interest. As of December 31, 2001, one of these
properties was sold by the Reckson Group to a third party and four of these
properties were acquired by the Operating Partnership for a aggregate purchase
price of approximately $35 million, which included the issuance of approximately
475,000 Units valued at approximately $8.8 million.

During July 1999, the Operating Partnership sold its interest in a 852,000
square foot development property to RCG in exchange for a $12.3 million note.
The note accrues interest annually at the rate of 12%, has a five year maturity
and is prepayable in whole or in part. During October 1999, RCG made a payment
to the Operating Partnership, in the form of 97 shares of its preferred stock,
valued at approximately $4.0 million, towards accrued interest and principal due
under the note. During August 2001, RCG made a cash payment to the Operating
Partnership for the remaining balance due under the note plus accrued interest.

During 1997, the Company formed FrontLine Capital Group, formerly Reckson
Service Industries, Inc., ("FrontLine") and Reckson Strategic Venture Partners,
LLC ("RSVP"). RSVP is a real estate venture capital fund which invests primarily
in real estate and real estate operating companies outside the Operating
Partnership's core office and industrial focus and whose common equity is held
indirectly by FrontLine. In connection with the formation and spin-off of
FrontLine, the Operating Partnership established an unsecured credit facility
with FrontLine (the "FrontLine Facility") in the amount of $100 million for
FrontLine to use in its investment activities, operations and other general
corporate purposes. The Operating Partnership has advanced approximately $93.4
million under the FrontLine Facility. The Operating Partnership also approved
the funding of investments of up to $100 million relating to RSVP (the "RSVP
Commitment"), through RSVP-controlled joint ventures (for REIT-qualified
investments) or advances made to FrontLine under an unsecured loan facility (the
"RSVP Facility") having terms similar to the FrontLine Facility (advances made
under the RSVP Facility and the FrontLine Facility hereafter, the "FrontLine
Loans"). During March 2001, the Operating Partnership increased the RSVP
Commitment to $110 million and as of December 31, 2001, approximately $109.1
million had been funded through the RSVP Commitment, of which $59.8 million
represents investments by the Operating Partnership in RSVP-controlled
(REIT-qualified) joint ventures and $49.3 million represents loans made to
FrontLine under the RSVP Facility. As of December 31, 2001, interest accrued
(net of reserves) under the FrontLine Facility and the RSVP Facility was
approximately $ 19.6 million.

IV-17

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)

8. RELATED PARTY TRANSACTIONS - (CONTINUED)

accrued interest. Subsequent to December 31, 2001, the Operating Partnership
charged off an additional $38 million of the reserve directly related to the
FrontLine Facility, including accrued interest and $47 million of the reserve
directly related to the RSVP Facility, including accrued interest.

In November 1999, the Company received 176,186 shares of the common stock
of FrontLine as fees in connection with the FrontLine Loan. As a result of
certain tax rule provisions included in the REIT Modernization Act, it was
determined that the Company could no longer maintain any equity position in
FrontLine. As part of a compensation program, the Company distributed these
shares to certain non-executive employees subject to recourse loans. The loans
were scheduled to be forgiven over time based on continued employment with the
Company. Based on the current value of FrontLine's common stock the Operating
Partnership has established a valuation reserve charge relating to the
outstanding balance of these loans in the amount of $2.4 million.

9. FAIR VALUE OF FINANCIAL INSTRUMENTS

In accordance with FASB Statement No. 107, "Disclosures About Fair Value of
Financial Instruments", management has made the following disclosures of
estimated fair value at December 31, 2001 as required by FASB Statement No. 107.

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

IV-18

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)

9. FAIR VALUE OF FINANCIAL INSTRUMENTS - (CONTINUED)

The fair value of the Operating Partnership's long-term debt, mortgage
notes, accounts payable and accrued expenses and accounts and notes receivable
is estimated based on discounting future cash flows at interest rates that
management believes reflects the risks associated with long-term debt, mortgage
notes, accounts payable and accrued expenses and accounts and notes receivable
of similar risk and duration. At December 31, 2001, the estimated aggregate fair
value of the Operating Partnership's mortgage notes and notes receivable
exceeded their carrying value by approximately $1.2 million and the aggregate
fair value of the Operating Partnership's long term debt exceeded its carrying
value by approximately $20.0 million.

Considerable judgment is necessary to interpret market data and develop
estimated fair value. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.

10. RENTAL INCOME

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

Expected future minimum rents to be received over the next five years and
thereafter from leases in effect at December 31, 2001 are as follows (in
thousands):

2002 ......................... $ 403,421
2003 ......................... 379,005
2004 ......................... 350,930
2005 ......................... 307,900
2006 ......................... 258,663
Thereafter ................... 1,315,340
-----------
$ 3,015,259
===========

11. SEGMENT DISCLOSURE

The Operating Partnership's portfolio consists of Class A office properties
located within the New York City metropolitan area and Class A suburban office
and industrial properties located and operated within the Tri-State Area (the
"Core Portfolio"). The Operating Partnership's portfolio also includes one
office property located in Orlando, Florida. The Operating Partnership has
managing directors who report directly to the Chief Operating Officer and Chief
Financial Officer who have been identified as the Chief Operating Decision
Makers because of their final authority over resource allocation, decisions and
performance assessment.

The Operating Partnership does not consider (i) interest incurred on its
Credit Facility and Senior Unsecured Notes and (ii) the operating performance of
the office property located in Orlando, Florida as part of its Core Portfolio's
property operating performance.

The accounting policies of the reportable segments are the same as those
described in the summary of significant accounting policies.

IV-19

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)

11. SEGMENT DISCLOSURE - (CONTINUED)

The following tables set forth the components of the Operating
Partnership's revenues and expenses and other related disclosures, as required
by Statement 131, for the years ended December 31 (in thousands):

2001
-----------------------------------------------
CORE CONSOLIDATED
PORTFOLIO OTHER TOTALS
-------------- -------------- -------------
REVENUES:

Base rents, tenant escalations and reimbursements $ 488,515 $ 9,256 $ 497,771
Equity in earnings of real estate joint ventures
and service companies .......................... -- 2,087 2,087
Other income .................................... 28,772 11,824 40,596
----------- ---------- -----------
Total Revenues .................................. 517,287 23,167 540,454
----------- ---------- -----------
EXPENSES:
Property expenses ............................... 165,730 2,934 168,664
Marketing, general and administrative ........... 20,660 6,134 26,794
Interest ........................................ 51,378 41,679 93,057
Depreciation and amortization ................... 95,303 7,628 102,931
----------- ---------- -----------
Total Expenses .................................. 333,071 58,375 391,446
----------- ---------- -----------
Income (loss) before preferred distributions,
minority interests, valuation reserves and
extraordinary loss ............................. $ 184,216 $ (35,208) $ 149,008
=========== ========== ===========
Total assets .................................... $ 2,763,771 $ 235,011 $ 2,998,782
=========== ========== ===========

2000
----------------------------------------------
CORE CONSOLIDATED
PORTFOLIO OTHER TOTALS
-------------- ------------- -------------
REVENUES:

Base rents, tenant escalations and
reimbursements .................................... $ 442,326 $ 9,751 $ 452,077
Equity in earnings of real estate joint ventures
and service companies ............................. -- 4,383 4,383
Other income ....................................... 1,212 52,245 53,457
----------- --------- -----------
Total Revenues ..................................... 443,538 66,379 509,917
----------- --------- -----------
EXPENSES:
Property expenses .................................. 154,930 2,526 157,456
Marketing, general and administrative .............. 20,606 4,615 25,221
Interest ........................................... 40,465 55,872 96,337
Depreciation and amortization ...................... 84,401 8,146 92,547
----------- --------- -----------
Total Expenses ..................................... 300,402 71,159 371,561
----------- --------- -----------
Income (loss) before preferred distributions,
minority interests and extraordinary loss ......... $ 143,136 $ (4,780) $ 138,356
=========== ========= ===========
Total assets ....................................... $ 2,604,494 $ 395,300 $ 2,999,794
=========== ========= ===========

IV-20

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)

11. SEGMENT DISCLOSURE - (CONTINUED)

1999
---------------------------------------------
CORE CONSOLIDATED
PORTFOLIO OTHER TOTALS
-------------- ------------ -------------

REVENUES:
Base rents, tenant escalations and
reimbursements ......................... $ 340,293 $ 28,842 $ 369,135
Equity in earnings of real estate joint
ventures and service companies ......... -- 2,148 2,148
Other income ............................ 448 31,411 31,859
----------- --------- -----------
Total Revenues .......................... 340,741 62,401 403,142
----------- --------- -----------
EXPENSES:
Property expenses ....................... 119,270 6,724 125,994
Marketing, general and administrative . 16,981 5,288 22,269
Interest ................................ 25,167 49,542 74,709
Depreciation and amortization ........... 64,097 10,407 74,504
----------- --------- -----------
Total Expenses .......................... 225,515 71,961 297,476
----------- --------- -----------
Income (loss) before preferred
distributions, minority interests and
extraordinary loss ..................... $ 115,226 $ (9,560) $ 105,666
=========== ========= ===========
Total assets ............................ $ 2,317,195 $ 417,382 $ 2,734,577
=========== ========= ===========

12. NON-CASH INVESTING AND FINANCING ACTIVITIES

Additional supplement disclosures of non-cash inveseting and financing
activities are as follows:

On May 31, 2001, Metropolitan's minority partner, at its election,
converted its preferred equity investment into 3,453,881 shares of the Company's
Class A common stock based on a conversion price of $24.61 per share. As a
result, the Operating Partnership issued 3,453,881 Class A common units to the
Company.

On December 21, 2001, in connection with the sale of a 49% indirect
interest in the property located at 919 Third Avenue, New York, NY, the
Operating Partnership's share of secured mortgage debt was reduced by
approximately $122.1 million.

During the year ended December 31, 2001, approximately 11,553 preferred
units of limited partnership interest, with a liquidation preference value of
approximately $11.6 million, were exchanged for 456,351 Units at an average
price of $25.32 per Unit. In addition, the Company increased its general
partnership interest in the Operating Partnership by acquiring 660,370
outstanding Units from certain limited partners in exchange for an equal number
of shares of its Class A common stock.

On June 20, 2000, in conjunction with the Company's exchange of 4,181,818
shares of its Class A Common Stock for four million shares of its Series B
preferred stock, the Operating Partnership issued 4,181,818 Class A common units
in exchange for four million shares of Series E preferred units with a
liquidation preference value of $100 million.

13. COMMITMENTS AND CONTINGENCIES

The Operating Partnership is obligated to purchase, for approximately $23.8
million, 52.7 acres of land located in Valhalla, NY on which the Operating
Partnership can develop approximately 875,000 square feet of office space. This
acquisition will be financed in part from the proceeds of the sale of an

IV-21

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)

13. COMMITMENTS AND CONTINGENCIES - (CONTINUED)

office property currently being held by a qualified intermediary for the
purposes of an exchange of real property pursuant to Section 1031 of the
Internal Revenue Code of 1986 and is scheduled to close in the first quarter of
2002.

During 2001, based on the Company's value assessment of its investment in
Captivate Network, Inc., an unrelated technology based service company, the
Operating Partnership recorded a valuation reserve charge of approximately
$700,000 in its consolidated statements of operations.

The Operating Partnership had outstanding undrawn letters of credit against
its Credit Facility of approximately $37.4 million and $51.3 million at December
31, 2001 and 2000, respectively.

HQ Global Workplaces, Inc., ("HQ") one of the largest providers of flexible
officing solutions in the world and which is controlled by FrontLine, currently
operates eleven executive office centers in the Operating Partnership's
properties, three of which are held through joint ventures. The leases under
which these office centers operate expire between 2008 and 2011, encompass
approximately 225,000 square feet and have current contractual annual base rents
of approximately $6.7 million. Currently, three of these office centers
(including one joint venture location) aggregating 55,000 square feet with
current contractual annual base rents of $1.4 million are in default under their
lease terms. In addition, HQ has been experiencing financial difficulties and on
March 13, 2002, voluntarily filed a petition for relief under Chapter 11 of the
U.S. Bankruptcy Code. There can be no assurances as to whether HQ will affirm or
reject its existing leases with the Operating Partnership. At this time it
cannot be determined what impact their financial difficulties and bankruptcy
filing will have on their ability to meet their future lease obligations with
the Operating Partnership.

IV-22

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED )

14. QUARTERLY FINANCIAL DATA (UNAUDITED)

The following summary represents the Operating Partnership's results of
operations for each fiscal quarter during 2001 and 2000 (in thousands, except
unit data):

2001
----------------------------------------------------------------------
FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER
--------------- ---------------- --------------- ---------------

Total revenues ....................... $ 130,875 $ 132,383 $ 133,027 $ 144,169
=========== =========== =========== ===========
Income before distributions to
preferred unit holders, minority
interests, valuation reserves and
extraordinary loss .................. $ 36,245 $ 33,427 $ 32,060 $ 47,276
Preferred unit distributions ......... (6,085) (5,928) (5,996) (5,968)
Minority partners' interest in
consolidated partnerships ........... (5,755) (4,065) (3,065) (3,090)
Valuation reserves on investments in
affiliate loans and joint ventures
and other investments ............... -- -- (163,000) (3,101)
Extraordinary loss ................... -- -- (2,898) --
----------- ----------- ----------- -----------
Net income (loss) allocable to
common unit holders ................. $ 24,405 $ 23,434 $ (142,899) $ 35,117
=========== =========== =========== ===========
Net income (loss) allocable to:
Class A common units .............. $ 18,765 $ 18,535 $ (112,159) $ 27,576
Class B common units .............. 5,640 4,899 (30,740) 7,541
----------- ----------- ----------- -----------
Total ................................ $ 24,405 $ 23,434 $ (142,899) $ 35,117
=========== =========== =========== ===========
Net income (loss) per common unit:
Class A common unit ............... $ .35 $ .34 $ (1.96) $ .48
Class B common unit ............... $ .55 $ .48 $ (2.99) $ .73
Weighted average common units outstanding:
Class A common units .............. 53,177,000 54,984,000 57,368,000 57,499,000
Class B common units .............. 10,284,000 10,284,000 10,284,000 10,284,000

IV-23

RECKSON OPERATING PARTNERSHIP, L. P.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001 - (CONTINUED)

14. QUARTERLY FINANCIAL DATA (UNAUDITED) - (CONTINUED)

2000
----------------------------------------------------------------------
FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER
--------------- ---------------- --------------- ---------------

Total revenues ............................ $ 117,658 $ 125,448 $ 140,294 $ 126,517
=========== =========== =========== ===========
Income before distributions to preferred
unit holders, minority interests and
extraordinary loss ....................... $ 28,772 $ 35,709 $ 44,208 $ 29,667
Preferred unit distributions .............. (7,985) (7,857) (6,085) (6,085)
Minority partners' interest in consolidated
partnerships ............................. (1,975) (1,925) (1,874) (3,346)
Extraordinary loss ........................ -- -- (1,571) --
----------- ----------- ----------- -----------
Net income available to common unit
holders .................................. $ 18,812 $ 25,927 $ 34,678 $ 20,236
=========== =========== =========== ===========
Net income available to:
Class A common units ................... $ 14,223 $ 19,646 $ 26,628 $ 15,549
Class B common units ................... 4,589 6,281 8,050 4,687
----------- ----------- ----------- -----------
Total ..................................... $ 18,812 $ 25,927 $ 34,678 $ 20,236
=========== =========== =========== ===========
Net income per common unit:
Class A common unit .................... $ .30 $ .40 $ .50 $ .29
Class B common unit .................... $ .45 $ .61 $ .78 $ .46
Weighted average common units outstanding:
Class A common units ................... 48,082,000 49,038,000 52,873,000 53,021,000
Class B common units ................... 10,284,000 10,284,000 10,284,000 10,284,000

IV-24

RECKSON OPERATING PARTNERSHIP, L.P.
SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2001
(IN THOUSANDS)

COLUMN A COLUMN B COLUMN C
- --------------------------------------------------------- ---------------- ------------------------------
INITIAL COST
------------------------------
BUILDINGS AND
DESCRIPTION ENCUMBRANCE LAND IMPROVEMENTS
- --------------------------------------------------------- ---------------- -------------- ---------------

Vanderbilt Industrial Park, Hauppauge, New York
(27 buildings in an industrial park) ................... -- $ 1,940 $ 9,955
85 Nicon Court, Hauppauge, New York .................... -- 797 2,818
104 Parkway Drive So., Hauppauge, New York ............. -- 54 804
125 Ricefield Lane, Hauppauge, New York ................ -- 13 852
110 Ricefield Lane, Hauppauge, New York ................ -- 33 1,043
120 Ricefield Lane, Hauppauge, New York ................ -- 16 1,051
135 Ricefield Lane, Hauppauge, New York ................ -- 24 906
1997 Portfolio Acquisition, Hauppauge, New York
(10 additional buildings in Vanderbilt Industrial
Park) .................................................. -- 930 (B) 20,619
425 Rabro Drive, Hauppauge, New York ................... -- 665 3,489
600 Old Willets Path, Hauppauge, New York .............. -- 295 3,521
Airport International Plaza, Islip, New York
(17 buildings in an industrial park) ................... 2,616 (C) 1,263 13,608
120 Wilbur Place, Islip, New York ...................... -- 202 1,154
2004 Orville Drive North, Islip, New York .............. -- 633 4,226
2005 Orville Drive North, Islip, New York .............. -- 984 5,410
County Line Industrial Center, Melville, New York
(3 buildings in an industrial park) .................... -- 628 3,686
30 Hub Drive, Melville, New York ....................... -- 469 1,571
32 Windsor Place, Islip, New York ....................... -- 32 321
42 Windsor Place, Islip, New York ....................... -- 48 327
505 Walt Whitman Rd., Huntington, New York .............. -- 140 42
1170 Northern Blvd., N. Great Neck, New York ............ -- 30 99
50 Charles Lindbergh Blvd., Mitchel Field, New York ..... -- (A) 12,089
200 Broadhollow Road, Melville, New York ................ -- 338 3,354
48 South Service Road, Melville, New York ............... -- 1,652 10,245
395 North Service Road, Melville, New York .............. 20,117 (A) 15,551
6800 Jericho Turnpike, Syosset, New York ................ 14,131 582 6,566
6900 Jericho Turnpike, Syosset, New York ................ 7,458 385 4,228

COLUMN A COLUMN D COLUMN E COLUMN F
- --------------------------------------------------------- ---------------------- -------------------------------- --------------
COST CAPITALIZED,
SUBSEQUENT TO GROSS AMOUNT AT WHICH
ACQUISITION CARRIED AT CLOSE OF PERIOD
---------------------- --------------------------------
BUILDINGS AND BUILDINGS AND ACCUMULATED
DESCRIPTION LAND IMPROVEMENTS LAND IMPROVEMENTS TOTAL DEPRECIATION
- --------------------------------------------------------- ------ --------------- ------- --------------- -------- --------------

Vanderbilt Industrial Park, Hauppauge, New York
(27 buildings in an industrial park) ................... -- 11,434 1,940 21,389 23,329 15,509
85 Nicon Court, Hauppauge, New York .................... -- 64 797 2,882 3,679 577
104 Parkway Drive So., Hauppauge, New York ............. -- 200 54 1,004 1,058 198
125 Ricefield Lane, Hauppauge, New York ................ -- 330 13 1,182 1,195 362
110 Ricefield Lane, Hauppauge, New York ................ 1 57 34 1,100 1,134 230
120 Ricefield Lane, Hauppauge, New York ................ -- 422 16 1,473 1,489 243
135 Ricefield Lane, Hauppauge, New York ................ -- 473 24 1,379 1,403 450
1997 Portfolio Acquisition, Hauppauge, New York
(10 additional buildings in Vanderbilt Industrial
Park) .................................................. -- 3,451 930 24,070 25,000 4,477
425 Rabro Drive, Hauppauge, New York ................... -- 398 665 3,887 4,552 573
600 Old Willets Path, Hauppauge, New York .............. -- 727 295 4,248 4,543 573
Airport International Plaza, Islip, New York
(17 buildings in an industrial park) ................... -- 11,346 1,263 24,954 26,217 16,785
120 Wilbur Place, Islip, New York ...................... 8 232 210 1,386 1,596 169
2004 Orville Drive North, Islip, New York .............. -- 1,431 633 5,657 6,290 1,305
2005 Orville Drive North, Islip, New York .............. -- 1,176 984 6,586 7,570 717
County Line Industrial Center, Melville, New York
(3 buildings in an industrial park) .................... -- 2,843 628 6,529 7,157 4,948
30 Hub Drive, Melville, New York ....................... -- 322 469 1,893 2,362 444
32 Windsor Place, Islip, New York ....................... -- 46 32 367 399 367
42 Windsor Place, Islip, New York ....................... -- 548 48 875 923 819
505 Walt Whitman Rd., Huntington, New York .............. -- 59 140 101 241 87
1170 Northern Blvd., N. Great Neck, New York ............ -- 34 30 133 163 130
50 Charles Lindbergh Blvd., Mitchel Field, New York ..... -- 5,564 0 17,653 17,653 10,768
200 Broadhollow Road, Melville, New York ................ -- 3,538 338 6,892 7,230 4,405
48 South Service Road, Melville, New York ............... -- 5,382 1,652 15,627 17,279 8,605
395 North Service Road, Melville, New York .............. -- 7,474 0 23,025 23,025 12,697
6800 Jericho Turnpike, Syosset, New York ................ -- 10,230 582 16,796 17,378 10,377
6900 Jericho Turnpike, Syosset, New York ................ -- 3,743 385 7,971 8,356 4,622

COLUMN A COLUMN G COLUMN H COLUMN I
- --------------------------------------------------------- -------------- ----------- --------------
LIFE ON WHICH
DATE OF DATE DEPRECIATION
DESCRIPTION CONSTRUCTION ACQUIRED IS COMPUTED
- --------------------------------------------------------- -------------- ----------- --------------

Vanderbilt Industrial Park, Hauppauge, New York
(27 buildings in an industrial park) ................... 1961-1979 1961-1979 10-30 Years
85 Nicon Court, Hauppauge, New York .................... 1984 1995 10-30 Years
104 Parkway Drive So., Hauppauge, New York ............. 1985 1996 10-30 Years
125 Ricefield Lane, Hauppauge, New York ................ 1973 1996 10-30 Years
110 Ricefield Lane, Hauppauge, New York ................ 1980 1996 10-30 Years
120 Ricefield Lane, Hauppauge, New York ................ 1983 1996 10-30 Years
135 Ricefield Lane, Hauppauge, New York ................ 1981 1996 10-30 Years
1997 Portfolio Acquisition, Hauppauge, New York
(10 additional buildings in Vanderbilt Industrial
Park) .................................................. 1974-1982 1997 10-30 Years
425 Rabro Drive, Hauppauge, New York ................... 1980 1997 10-30 Years
600 Old Willets Path, Hauppauge, New York .............. 1999 1999 10-30 Years
Airport International Plaza, Islip, New York
(17 buildings in an industrial park) ................... 1970-1988 1970-1988 10-30 Years
120 Wilbur Place, Islip, New York ...................... 1972 1998 10-30 Years
2004 Orville Drive North, Islip, New York .............. 1998 1996 10-30 Years
2005 Orville Drive North, Islip, New York .............. 1999 1996 10-30 Years
County Line Industrial Center, Melville, New York
(3 buildings in an industrial park) .................... 1975-1979 1975-1979 10-30 Years
30 Hub Drive, Melville, New York ....................... 1976 1996 10-30 Years
32 Windsor Place, Islip, New York ....................... 1971 1971 10-30 Years
42 Windsor Place, Islip, New York ....................... 1972 1972 10-30 Years
505 Walt Whitman Rd., Huntington, New York .............. 1950 1968 10-30 Years
1170 Northern Blvd., N. Great Neck, New York ............ 1947 1962 10-30 Years
50 Charles Lindbergh Blvd., Mitchel Field, New York ..... 1984 1984 10-30 Years
200 Broadhollow Road, Melville, New York ................ 1981 1981 10-30 Years
48 South Service Road, Melville, New York ............... 1986 1986 10-30 Years
395 North Service Road, Melville, New York .............. 1988 1988 10-30 Years
6800 Jericho Turnpike, Syosset, New York ................ 1977 1978 10-30 Years
6900 Jericho Turnpike, Syosset, New York ................ 1982 1982 10-30 Years

Continued

IV-25

RECKSON OPERATING PARTNERSHIP, L.P.
SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2001 (CONTINUED)
(IN THOUSANDS)

COLUMN A COLUMN B COLUMN C
- -------------------------------------------------------- ------------- ------------------------------
INITIAL COST
------------------------------
BUILDINGS AND
DESCRIPTION ENCUMBRANCE LAND IMPROVEMENTS
- -------------------------------------------------------- ------------- -------------- ---------------

300 Motor Parkway, Hauppauge, New York ................. -- 276 1,136
88 Duryea Road Melville, New York ...................... -- 200 1,565
210 Blydenburgh Road, Islandia, New York ............... -- 11 158
208 Blydenburgh Road, Islandia, New York ............... -- 12 192
71 Hoffman Lane, Islandia, New York .................... -- 19 260
933 Motor Parkway, Hauppauge, New York ................. -- 106 375
65 and 85 South Service Road, Plainview, New York . -- 40 218
333 Earl Ovington Blvd., (Omni), Mitchel Field,
New York .............................................. 54,785 (A) 67,221
135 Fell Court, Islip, New York ........................ -- 462 1,265
40 Cragwood Road, South Plainfield, New Jersey ......... -- 725 7,131
110 Marcus Drive, Huntington, New York ................. -- 390 1,499
333 East Shore Road, Great Neck, New York .............. -- (A) 564
310 East Shore Road, Great Neck, New York .............. -- 485 2,009
70 Schmitt Blvd., Farmingdale, New York ................ -- 727 3,408
19 Nicholas Drive, Yaphank, New York ................... -- 160 7,399
1516 Motor Parkway, Hauppauge, New York ................ -- 603 6,722
35 Pinelawn Road, Melville, New York ................... -- 999 7,073
520 Broadhollow Road, Melville, New York ............... -- 457 5,572
1660 Walt Whitman Road, Melville, New York ............. -- 370 5,072
70 Maxess Road, Melville, New York ..................... -- 367 1,859
20 Melville Park Rd., Melville, New York ............... -- 391 2,650
105 Price Parkway, Farmingdale, New York ............... -- 2,030 6,327
48 Harbor Park Drive, Port Washington, New York ........ -- 1,304 2,247
60 Charles Lindbergh, Mitchel Field, New York .......... -- (A) 20,800
235 Main Street, White Plains, New York ................ -- 933 5,375
245 Main Street, White Plains, New York ................ -- 1,235 7,284
505 White Plains Road, Tarrytown, New York ............. -- 210 1,332
555 White Plains Road, Tarrytown, New York ............. -- 712 4,133
560 White Plains Road, Tarrytown, New York ............. -- 1,521 8,756
580 White Plains Road, Tarrytown, New York ............. 12,879 2,414 14,595

COLUMN A COLUMN D COLUMN E
- -------------------------------------------------------- -------------------------- ----------------------------------
COST CAPITALIZED,
SUBSEQUENT TO GROSS AMOUNT AT WHICH
ACQUISITION CARRIED AT CLOSE OF PERIOD
-------------------------- ----------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION LAND IMPROVEMENTS LAND IMPROVEMENTS TOTAL
- -------------------------------------------------------- ---------- --------------- -------- --------------- ---------

300 Motor Parkway, Hauppauge, New York ................. -- 1,695 276 2,831 3,107
88 Duryea Road Melville, New York ...................... -- 843 200 2,408 2,608
210 Blydenburgh Road, Islandia, New York ............... -- 167 11 325 336
208 Blydenburgh Road, Islandia, New York ............... -- 188 12 380 392
71 Hoffman Lane, Islandia, New York .................... -- 172 19 432 451
933 Motor Parkway, Hauppauge, New York ................. -- 396 106 771 877
65 and 85 South Service Road, Plainview, New York . -- 17 40 235 275
333 Earl Ovington Blvd., (Omni), Mitchel Field,
New York .............................................. -- 20,517 0 87,738 87,738
135 Fell Court, Islip, New York ........................ -- 273 462 1,538 2,000
40 Cragwood Road, South Plainfield, New Jersey ......... -- 6,217 725 13,348 14,073
110 Marcus Drive, Huntington, New York ................. -- 107 390 1,606 1,996
333 East Shore Road, Great Neck, New York .............. -- 357 0 921 921
310 East Shore Road, Great Neck, New York .............. -- 1,852 485 3,861 4,346
70 Schmitt Blvd., Farmingdale, New York ................ -- 33 727 3,441 4,168
19 Nicholas Drive, Yaphank, New York ................... -- 6,136 160 13,535 13,695
1516 Motor Parkway, Hauppauge, New York ................ -- 379 603 7,101 7,704
35 Pinelawn Road, Melville, New York ................... -- 2,500 999 9,573 10,572
520 Broadhollow Road, Melville, New York ............... (1) 2,633 456 8,205 8,661
1660 Walt Whitman Road, Melville, New York ............. -- 718 370 5,790 6,160
70 Maxess Road, Melville, New York ..................... 95 2,957 462 4,816 5,278
20 Melville Park Rd., Melville, New York ............... -- 101 391 2,751 3,142
105 Price Parkway, Farmingdale, New York ............... -- 469 2,030 6,796 8,826
48 Harbor Park Drive, Port Washington, New York ........ -- 106 1,304 2,353 3,657
60 Charles Lindbergh, Mitchel Field, New York .......... -- 4,004 0 24,804 24,804
235 Main Street, White Plains, New York ................ -- 1,332 933 6,707 7,640
245 Main Street, White Plains, New York ................ 1 869 1,236 8,153 9,389
505 White Plains Road, Tarrytown, New York ............. -- 321 210 1,653 1,863
555 White Plains Road, Tarrytown, New York ............. 51 4,590 763 8,723 9,486
560 White Plains Road, Tarrytown, New York ............. (1) 3,047 1,520 11,803 13,323
580 White Plains Road, Tarrytown, New York ............. -- 3,503 2,414 18,098 20,512

COLUMN A COLUMN F COLUMN G COLUMN H COLUMN I
- -------------------------------------------------------- -------------- -------------- ---------- --------------
LIFE ON WHICH
ACCUMULATED DATE OF DATE DEPRECIATION
DESCRIPTION DEPRECIATION CONSTRUCTION ACQUIRED IS COMPUTED
- -------------------------------------------------------- -------------- -------------- ---------- --------------

300 Motor Parkway, Hauppauge, New York ................. 1,661 1979 1979 10-30 Years
88 Duryea Road Melville, New York ...................... 1,429 1980 1980 10-30 Years
210 Blydenburgh Road, Islandia, New York ............... 308 1969 1969 10-30 Years
208 Blydenburgh Road, Islandia, New York ............... 340 1969 1969 10-30 Years
71 Hoffman Lane, Islandia, New York .................... 431 1970 1970 10-30 Years
933 Motor Parkway, Hauppauge, New York ................. 662 1973 1973 10-30 Years
65 and 85 South Service Road, Plainview, New York . 227 1961 1961 10-30 Years
333 Earl Ovington Blvd., (Omni), Mitchel Field,
New York .............................................. 27,134 1990 1995 10-30 Years
135 Fell Court, Islip, New York ........................ 445 1965 1992 10-30 Years
40 Cragwood Road, South Plainfield, New Jersey ......... 7,934 1970 1983 10-30 Years
110 Marcus Drive, Huntington, New York ................. 1,270 1980 1980 10-30 Years
333 East Shore Road, Great Neck, New York .............. 641 1976 1976 10-30 Years
310 East Shore Road, Great Neck, New York .............. 2,019 1981 1981 10-30 Years
70 Schmitt Blvd., Farmingdale, New York ................ 729 1965 1995 10-30 Years
19 Nicholas Drive, Yaphank, New York ................... 2,080 1989 1995 10-30 Years
1516 Motor Parkway, Hauppauge, New York ................ 1,482 1981 1995 10-30 Years
35 Pinelawn Road, Melville, New York ................... 2,386 1980 1995 10-30 Years
520 Broadhollow Road, Melville, New York ............... 2,242 1978 1995 10-30 Years
1660 Walt Whitman Road, Melville, New York ............. 1,187 1980 1995 10-30 Years
70 Maxess Road, Melville, New York ..................... 1,019 1967 1995 10-30 Years
20 Melville Park Rd., Melville, New York ............... 519 1965 1996 10-30 Years
105 Price Parkway, Farmingdale, New York ............... 1,400 1969 1996 10-30 Years
48 Harbor Park Drive, Port Washington, New York ........ 479 1976 1996 10-30 Years
60 Charles Lindbergh, Mitchel Field, New York .......... 4,985 1989 1996 10-30 Years
235 Main Street, White Plains, New York ................ 1,472 1974 1996 10-30 Years
245 Main Street, White Plains, New York ................ 1,891 1983 1996 10-30 Years
505 White Plains Road, Tarrytown, New York ............. 422 1974 1996 10-30 Years
555 White Plains Road, Tarrytown, New York ............. 3,086 1972 1996 10-30 Years
560 White Plains Road, Tarrytown, New York ............. 3,072 1980 1996 10-30 Years
580 White Plains Road, Tarrytown, New York ............. 4,463 1997 1996 10-30 Years

Continued

IV-26

RECKSON OPERATING PARTNERSHIP, L.P.
SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2001 (CONTINUED)
(IN THOUSANDS)

COLUMN A COLUMN B COLUMN C
- ----------------------------------------------------------- ------------- ----------------------------
INITIAL COST
----------------------------
BUILDINGS AND
DESCRIPTION ENCUMBRANCE LAND IMPROVEMENTS
- ----------------------------------------------------------- ------------- ------------ ---------------

660 White Plains Road, Tarrytown, New York ................ -- 3,929 22,640
Landmark Square, Stamford, Connecticut .................... 46,069 11,603 64,466
110 Bi-County Blvd., Farmingdale, New York ................ 3,849 2,342 6,665
One Eagle Rock, East Hanover, New Jersey .................. -- 803 7,563
710 Bridgeport Avenue, Shelton, Connecticut ............... -- 5,405 21,620
101 JFK Expressway, Short Hills, New Jersey ............... -- 7,745 43,889
10 Rooney Circle, West Orange, New Jersey ................. -- 1,302 4,615
Executive Hill Office Park, West Orange, New Jersey . -- 7,629 31,288
3 University Plaza, Hackensack, New Jersey ................ -- 7,894 11,846
150 Motor Parkway, Hauppauge, New York .................... -- 1,114 20,430
Reckson Executive Park, Ryebrook, New York ................ -- 18,343 55,028
University Square, Princeton, New Jersey .................. -- 3,288 8,888
100 Andrews Road, Hicksville, New York .................... -- 2,337 1,711
80 Grasslands, Elmsford, New York ......................... -- 1,208 6,728
65 Marcus Drive, Melville, New York ....................... -- 295 1,966
100 Forge Way, Rockaway, New Jersey ....................... -- 315 902
200 Forge Way, Rockaway, New Jersey ....................... -- 1,128 3,228
300 Forge Way, Rockaway, New Jersey ....................... -- 376 1,075
400 Forge Way, Rockaway, New Jersey ....................... -- 1,142 3,267
51-55 Charles Lindbergh Blvd., Mitchel Field, New York -- (A) 27,975
100 Summit Drive, Valhalla, New York ...................... 20,373 3,007 41,351
115/117 Stevens Avenue, Valhalla, New York ................ -- 1,094 22,490
200 Summit Lake Drive, Valhalla, New York ................. 19,770 4,343 37,305
140 Grand Street, White Plains, New York .................. -- 1,932 18,744
500 Summit Lake Drive, Valhalla, New York ................. -- 7,052 37,309
99 Cherry Hill Road, Parsippany, New Jersey ............... -- 2,360 7,508
119 Cherry Hill Road, Parsippany, New Jersey .............. -- 2,512 7,622
45 Melville Park Road, Melville, New York ................. -- 355 1,487
500 Saw Mill River Road, Elmsford, New York ............... -- 1,542 3,796
120 W. 45th Street, New York, New York .................... 65,214 28,757 162,809

COLUMN A COLUMN D COLUMN E
- ----------------------------------------------------------- -------------------------------- ----------------------------------
COST CAPITALIZED,
SUBSEQUENT TO GROSS AMOUNT AT WHICH
ACQUISITION CARRIED AT CLOSE OF PERIOD
-------------------------------- ----------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION LAND IMPROVEMENTS LAND IMPROVEMENTS TOTAL
- ----------------------------------------------------------- ---------------- --------------- -------- --------------- ---------

660 White Plains Road, Tarrytown, New York ................ 45 5,662 3,974 28,302 32,276
Landmark Square, Stamford, Connecticut .................... 832 29,831 12,435 94,297 106,732
110 Bi-County Blvd., Farmingdale, New York ................ -- 308 2,342 6,973 9,315
One Eagle Rock, East Hanover, New Jersey .................. -- 3,151 803 10,714 11,517
710 Bridgeport Avenue, Shelton, Connecticut ............... 7 824 5,412 22,444 27,856
101 JFK Expressway, Short Hills, New Jersey ............... (3,098) (16,382) 4,647 27,507 32,154
10 Rooney Circle, West Orange, New Jersey ................. 1 584 1,303 5,199 6,502
Executive Hill Office Park, West Orange, New Jersey . 4 1,649 7,633 32,937 40,570
3 University Plaza, Hackensack, New Jersey ................ -- 2,885 7,894 14,731 22,625
150 Motor Parkway, Hauppauge, New York .................... -- 3,055 1,114 23,485 24,599
Reckson Executive Park, Ryebrook, New York ................ -- 3,202 18,343 58,230 76,573
University Square, Princeton, New Jersey .................. (1) 968 3,287 9,856 13,143
100 Andrews Road, Hicksville, New York .................... 151 5,742 2,488 7,453 9,941
80 Grasslands, Elmsford, New York ......................... -- 576 1,208 7,304 8,512
65 Marcus Drive, Melville, New York ....................... 56 883 351 2,849 3,200
100 Forge Way, Rockaway, New Jersey ....................... -- 98 315 1,000 1,315
200 Forge Way, Rockaway, New Jersey ....................... -- 370 1,128 3,598 4,726
300 Forge Way, Rockaway, New Jersey ....................... -- 254 376 1,329 1,705
400 Forge Way, Rockaway, New Jersey ....................... -- 254 1,142 3,521 4,663
51-55 Charles Lindbergh Blvd., Mitchel Field, New York -- 4,292 0 32,267 32,267
100 Summit Drive, Valhalla, New York ...................... -- 4,569 3,007 45,920 48,927
115/117 Stevens Avenue, Valhalla, New York ................ -- 1,787 1,094 24,277 25,371
200 Summit Lake Drive, Valhalla, New York ................. -- 2,875 4,343 40,180 44,523
140 Grand Street, White Plains, New York .................. (1) 709 1,931 19,453 21,384
500 Summit Lake Drive, Valhalla, New York ................. -- 7,845 7,052 45,154 52,206
99 Cherry Hill Road, Parsippany, New Jersey ............... (1) 627 2,359 8,135 10,494
119 Cherry Hill Road, Parsippany, New Jersey .............. -- 1,054 2,512 8,676 11,188
45 Melville Park Road, Melville, New York ................. (1) 1,822 354 3,309 3,663
500 Saw Mill River Road, Elmsford, New York ............... -- 205 1,542 4,001 5,543
120 W. 45th Street, New York, New York .................... 7,732 (E) 1,635 36,489 164,444 200,933

COLUMN A COLUMN F COLUMN G COLUMN H COLUMN I
- ----------------------------------------------------------- -------------- -------------- ---------- --------------
LIFE ON WHICH
ACCUMULATED DATE OF DATE DEPRECIATION
DESCRIPTION DEPRECIATION CONSTRUCTION ACQUIRED IS COMPUTED
- ----------------------------------------------------------- -------------- -------------- ---------- --------------

660 White Plains Road, Tarrytown, New York ................ 6,787 1983 1996 10-30 Years
Landmark Square, Stamford, Connecticut .................... 15,820 1973-1984 1996 10-30 Years
110 Bi-County Blvd., Farmingdale, New York ................ 1,235 1984 1997 10-30 Years
One Eagle Rock, East Hanover, New Jersey .................. 2,383 1986 1997 10-30 Years
710 Bridgeport Avenue, Shelton, Connecticut ............... 3,704 1971-1979 1997 10-30 Years
101 JFK Expressway, Short Hills, New Jersey ............... 4,197 1981 1997 10-30 Years
10 Rooney Circle, West Orange, New Jersey ................. 894 1971 1997 10-30 Years
Executive Hill Office Park, West Orange, New Jersey . 5,178 1978-1984 1997 10-30 Years
3 University Plaza, Hackensack, New Jersey ................ 2,534 1985 1997 10-30 Years
150 Motor Parkway, Hauppauge, New York .................... 3,996 1984 1997 10-30 Years
Reckson Executive Park, Ryebrook, New York ................ 8,293 1983-1986 1997 10-30 Years
University Square, Princeton, New Jersey .................. 1,317 1987 1997 10-30 Years
100 Andrews Road, Hicksville, New York .................... 1,555 1954 1996 10-30 Years
80 Grasslands, Elmsford, New York ......................... 1,083 1989/1964 1997 10-30 Years
65 Marcus Drive, Melville, New York ....................... 594 1968 1996 10-30 Years
100 Forge Way, Rockaway, New Jersey ....................... 148 1986 1998 10-30 Years
200 Forge Way, Rockaway, New Jersey ....................... 460 1989 1998 10-30 Years
300 Forge Way, Rockaway, New Jersey ....................... 252 1989 1998 10-30 Years
400 Forge Way, Rockaway, New Jersey ....................... 470 1989 1998 10-30 Years
51-55 Charles Lindbergh Blvd., Mitchel Field, New York 5,760 1981 1998 10-30 Years
100 Summit Drive, Valhalla, New York ...................... 6,329 1988 1998 10-30 Years
115/117 Stevens Avenue, Valhalla, New York ................ 2,989 1984 1998 10-30 Years
200 Summit Lake Drive, Valhalla, New York ................. 5,053 1990 1998 10-30 Years
140 Grand Street, White Plains, New York .................. 2,475 1991 1998 10-30 Years
500 Summit Lake Drive, Valhalla, New York ................. 5,363 1986 1998 10-30 Years
99 Cherry Hill Road, Parsippany, New Jersey ............... 983 1982 1998 10-30 Years
119 Cherry Hill Road, Parsippany, New Jersey .............. 1,083 1982 1998 10-30 Years
45 Melville Park Road, Melville, New York ................. 585 1998 1998 10-30 Years
500 Saw Mill River Road, Elmsford, New York ............... 534 1968 1998 10-30 Years
120 W. 45th Street, New York, New York .................... 14,544 1998 1999 10-30 Years

Continued

IV-27

RECKSON OPERATING PARTNERSHIP, L.P.
SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2001 (CONTINUED)
(IN THOUSANDS)

COLUMN A COLUMN B COLUMN C
- ------------------------------------------------------- ------------- ---------------------------------
INITIAL COST
---------------------------------
BUILDINGS AND
DESCRIPTION ENCUMBRANCE LAND IMPROVEMENTS
- ------------------------------------------------------- ------------- ----------------- ---------------

1255 Broad Street, Clifton, New Jersey ................ -- 1,329 15,869
810 7th Avenue, New York, New York .................... 84,280 26,984 (A) 152,767
120 Mineola Blvd., Mineola, New York .................. -- 1,869 10,603
100 Wall Street, New York, New York ................... 36,522 11,749 66,517
One Orlando, Orlando, Florida ......................... 38,934 9,386 51,136
1350 Avenue of the Americas, New York, New York . 75,000 19,222 109,168
919 3rd Avenue, New York, New York .................... 249,080 101,644 (A) 205,736
538 Broadhollow Road, Melville, New York .............. -- 3,900 21,413
360 Hamilton Avenue, White Plains, New York ........... -- 2,838 34,606
492 River Road, Nutley, New Jersey .................... -- 2,615 5,102
275 Broadhollow Road, Melville, New York .............. -- 3,850 12,958
400 Garden City Plaza, Garden City, New York .......... -- 9,081 17,004
90 Merrick Avenue, East Meadow, New York .............. -- (A) 23,804
120 White Plains Road, Tarrytown, New York ............ -- 3,852 24,861
100 White Plains Road, Tarrytown, New York ............ -- 79 472
51 JFK Parkway, Short Hills, New Jersey ............... -- 10,053 62,504
680 Washington Blvd, Stamford, Connecticut ............ -- 4,561 23,698
750 Washington Blvd, Stamford, Connecticut ............ -- 7,527 31,940
1305 Walt Whitman Road, Melville, New York ............ -- 3,934 24,040
50 Marcus Drive, Melville, New York ................... -- 930 13,600
100 Grasslands Road, Elmsford, New York ............... -- 289 3,382
2002 Orville Drive North, Bohemia, New York ........... -- 1,950 9,959
390 Motor Parkway, Hauppauge, New York ................ -- 240 5,787
58 South Service Road (D), Melville, New York ......... -- 1,061 --
Land held for development ............................. -- 69,365 --
Developments in progress .............................. -- -- 74,303
Other property ........................................ -- -- --
------- ------- -------
Total ................................................. $751,077 $ 458,772 $2,009,172
======== =========== ==========

COLUMN A COLUMN D COLUMN E
- ------------------------------------------------------- ------------------------- ------------------------------------------
COST CAPITALIZED,
SUBSEQUENT TO GROSS AMOUNT AT WHICH
ACQUISITION CARRIED AT CLOSE OF PERIOD
------------------------- ------------------------------------------
BUILDINGS AND BUILDINGS AND
DESCRIPTION LAND IMPROVEMENTS LAND IMPROVEMENTS TOTAL
- ------------------------------------------------------- --------- --------------- ---------- ----------------- -------------

1255 Broad Street, Clifton, New Jersey ................ -- 4,069 1,329 19,938 21,267
810 7th Avenue, New York, New York .................... 117 10,738 27,101 163,505 190,606
120 Mineola Blvd., Mineola, New York .................. 5 689 1,874 11,292 13,166
100 Wall Street, New York, New York ................... 93 8,280 11,842 74,797 86,639
One Orlando, Orlando, Florida ......................... 32 1,715 9,418 52,851 62,269
1350 Avenue of the Americas, New York, New York . -- 15,268 19,222 124,436 143,658
919 3rd Avenue, New York, New York .................... 12,795 84,386 114,439 290,122 404,561
538 Broadhollow Road, Melville, New York .............. -- 1,007 3,900 22,420 26,320
360 Hamilton Avenue, White Plains, New York ........... -- 20,897 2,838 55,503 58,341
492 River Road, Nutley, New Jersey .................... -- 4,145 2,615 9,247 11,862
275 Broadhollow Road, Melville, New York .............. -- 120 3,850 13,078 16,928
400 Garden City Plaza, Garden City, New York .......... -- 421 9,081 17,425 26,506
90 Merrick Avenue, East Meadow, New York .............. -- 956 0 24,760 24,760
120 White Plains Road, Tarrytown, New York ............ -- 141 3,852 25,002 28,854
100 White Plains Road, Tarrytown, New York ............ -- 72 79 544 623
51 JFK Parkway, Short Hills, New Jersey ............... 1 319 10,054 62,823 72,877
680 Washington Blvd, Stamford, Connecticut ............ -- 60 4,561 23,758 28,319
750 Washington Blvd, Stamford, Connecticut ............ -- 65 7,527 32,005 39,532
1305 Walt Whitman Road, Melville, New York ............ -- 10 3,934 24,050 27,984
50 Marcus Drive, Melville, New York ................... -- 4,670 930 18,270 19,200
100 Grasslands Road, Elmsford, New York ............... -- 1,192 289 4,574 4,863
2002 Orville Drive North, Bohemia, New York ........... -- 253 1,950 10,212 12,162
390 Motor Parkway, Hauppauge, New York ................ -- 817 240 6,604 6,844
58 South Service Road (D), Melville, New York ......... 507 9,807 1,568 9,807 11,375
Land held for development ............................. -- -- 69,365 -- 69,365
Developments in progress .............................. -- -- -- 74,303 74,303
Other property ........................................ -- 14,051 -- 14,051 (B) 14,051
------ ------ ------- ------- -------
Total ................................................. $19,430 $393,505 $478,202 $2,402,677 $2,880,879
======= ======== ======== ========== ==========

COLUMN A COLUMN F COLUMN G COLUMN H COLUMN I
- ------------------------------------------------------- -------------- -------------- ---------- --------------
LIFE ON WHICH
ACCUMULATED DATE OF DATE DEPRECIATION
DESCRIPTION DEPRECIATION CONSTRUCTION ACQUIRED IS COMPUTED
- ------------------------------------------------------- -------------- -------------- ---------- --------------

1255 Broad Street, Clifton, New Jersey ................ 1,964 1999 1999 10-30 Years
810 7th Avenue, New York, New York .................... 14,441 1970 1999 10-30 Years
120 Mineola Blvd., Mineola, New York .................. 1,016 1977 1999 10-30 Years
100 Wall Street, New York, New York ................... 6,542 1969 1999 10-30 Years
One Orlando, Orlando, Florida ......................... 4,607 1987 1999 10-30 Years
1350 Avenue of the Americas, New York, New York . 7,813 1966 2000 10-30 Years
919 3rd Avenue, New York, New York .................... 5,342 1970 2000 10-30 Years
538 Broadhollow Road, Melville, New York .............. 1,125 2000 2000 10-30 Years
360 Hamilton Avenue, White Plains, New York ........... 4,005 2000 2000 10-30 Years
492 River Road, Nutley, New Jersey .................... 448 2000 2000 10-30 Years
275 Broadhollow Road, Melville, New York .............. 1,355 1970 1997 10-30 Years
400 Garden City Plaza, Garden City, New York .......... 1,468 1989 1997 10-30 Years
90 Merrick Avenue, East Meadow, New York .............. 2,527 1985 1997 10-30 Years
120 White Plains Road, Tarrytown, New York ............ 2,241 1984 1997 10-30 Years
100 White Plains Road, Tarrytown, New York ............ 21 1984 1997 10-30 Years
51 JFK Parkway, Short Hills, New Jersey ............... 5,399 1988 1998 10-30 Years
680 Washington Blvd, Stamford, Connecticut ............ 2,011 1989 1998 10-30 Years
750 Washington Blvd, Stamford, Connecticut ............ 2,610 1989 1998 10-30 Years
1305 Walt Whitman Road, Melville, New York ............ 2,002 1999 1999 10-30 Years
50 Marcus Drive, Melville, New York ................... 419 2001 1998 10-30 Years
100 Grasslands Road, Elmsford, New York ............... 156 2001 1997 10-30 Years
2002 Orville Drive North, Bohemia, New York ........... 482 2001 1996 10-30 Years
390 Motor Parkway, Hauppauge, New York ................ 789 2001 1997 10-30 Years
58 South Service Road (D), Melville, New York ......... 32 2001 1998 10-30 Years
Land held for development ............................. -- N/A Various N/A
Developments in progress .............................. --
Other property ........................................ 3,847
------
Total ................................................. $357,112
========

- ------

A These land parcels, or a portion of the land parcels, on which the building
and improvements were constructed are subject to a ground lease.
B The land parcel on which the building and improvements were constructed for
one property is subject to a ground lease.
C The Encumbrance of $2,616 is related to one property.
D As of December 31, 2001 this asset was partially under development. As a
result, certain costs have been classified as development costs on the
company's balance sheet.
E Costs incurred to acquire the lessor's rights to an air rights lease
agreement.
The aggregate cost of Federal Income Tax purposes was approximately $2,115
million at December 31, 2001.

IV-28

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

The changes in real estate for each of the periods in the three years ended
December 31, 2001 are as follows:

2001 2000 1999
------------- ------------- -------------

Real estate balance at
beginning of period ................ $2,770,607 $2,208,399 $1,737,133
Improvements / revaluations ......... 193,492 166,260 57,571
Disposal, including write-off of
fully depreciated building
improvements ....................... (83,220) (52,092) (317,864)
Acquisitions ........................ -- 448,040 731,559
---------- ---------- ----------
Balance at end of period ............ $2,880,879 $2,770,607 $2,208,399
========== ========== ==========

The changes in accumulated depreciation, exclusive of amounts relating to
equipment, autos, furniture and fixtures, for each of the periods in the three
years ended December 31, 2001 are as follows:

2001 2000 1999
----------- ----------- -----------

Balance at beginning of period ...... $ 284,315 $215,112 $156,231
Depreciation for period ............. 83,316 71,478 65,471
Disposal, including write-off of
fully depreciated building
improvements ....................... (10,519) (2,275) (6,590)
--------- -------- --------
Balance at end of period ............ $ 357,112 $284,315 $215,112
========= ======== ========

IV-29

                                  EXHIBIT 12.1
                      RECKSON OPERATING PARTNERSHIP, L. P.
                       RATIOS OF EARNINGS TO FIXED CHARGES
                                       AND
         RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DISTRIBUTIONS


         The following table sets forth the Operating Partnership's consolidated
ratios of earnings to fixed charges for the years ended December 31:

               2001          2000          1999         1998           1997
           ------------  ------------  ------------  ------------  ------------
               2.26x         2.11x         2.07x        2.00x          2.69x


         The following table sets forth the Operating Partnership's consolidated
ratios of earnings to fixed charges and preferred distributions for the years
ended December 31:


               2001          2000          1999         1998
           ------------  ------------  ------------  ------------
               1.82x         1.62x         1.54x        1.60x



         The Operating Partnership had no preferred capital outstanding prior to
April 1998.


                                 EXHIBIT 21.1
                      RECKSON OPERATING PARTNERSHIP, L. P.
                            STATEMENT OF SUBSIDIARIES

Name                                      State of Organization
- --------------------------------------    -------------------------------------
Omni Partners, L. P.                      Delaware
Reckson FS Limited Partnership            Delaware
Metropolitan Partners, LLC                Delaware
Reckson Management Group, Inc.            New York
RANY Management Group, Inc.               New York
Reckson Construction Group, Inc.          New York
RT Tri-State LLC                          Delaware
Metropolitan 919 3rd Avenue LLC           Delaware
1350 LLC                                  Delaware
Magnolia Associates, LTD                  Florida
Metropolitan 810 7th Avenue LLC           Delaware
100 Wall Company LLC                      New York

                                  EXHIBIT 23.0
                      RECKSON OPERATING PARTNERSHIP, L. P.
                         CONSENT OF INDEPENDENT AUDITORS

     We consent to the incorporation by reference in the Registration Statement
Form S-3 (No. 333-67129) and in the related Prospectus of Reckson Operating
Partnership L.P., of our report dated February 20, 2002, except for Note 13, as
to which the date is March 13, 2002, with respect to the consolidated financial
statements and schedule of Reckson Operating Partnership L.P., included in this
Annual Report Form 10-K for the year ended December 31, 2001.





                                                             Ernst & Young, LLP




New York, New York
March 18, 2002