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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
-------------
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: November 6, 2002
RECKSON ASSOCIATES REALTY CORP.
and
RECKSON OPERATING PARTNERSHIP, L.P.
(Exact name of each Registrant as specified in its Charter)
EXHIBIT 99.1
Slide 1
The New York Tri-State Area's Leading Real Estate Company
Reckson Associates Realty Corp.
THIRD QUARTER 2002 PRESENTATION
Earnings Results and Overview
November 5, 2002
Slide 2
SUMMARY OF HIGHLIGHTS
Reported diluted FFO of $.59 per share for the third quarter of 2002 as compared
to $.66 per share for the comparable 2001 period, representing a per share
decrease of 10.6%.
Generated same property NOI performance before termination fees of 7.2% (cash)
and (0.4%) (GAAP) for the third quarter of 2002.
Generated same space rent growth on space leased during the period of 7.9%
(cash) and 11.1% (GAAP) for Office and 4.8% (cash) and 16.6% (GAAP) for
Industrial/R&D for the third quarter of 2002.
Occupancy: Sept. 30, 2002 June 30, 2002 Sept. 30, 2001
-------------- ------------- --------------
Total:
Overall 94.2% 94.2% 96.8%
Office 95.1% 95.2% 96.7%
Industrial 92.4% 92.0% 97.5%
Same Property:
Overall 94.2% 94.6% 95.0%
Office 95.6% 95.9% 96.4%
Industrial 91.6% 91.9% 92.3%
Renewed 65% of expiring square footage during the third quarter of 2002.
Completed 745,000 square feet of leasing transactions, including 612,000 square
feet of office space, during the third quarter of 2002.
Completed 239,000 square feet of leasing in Westchester related to Fuji and
associated transactions.
Repurchased 842,200 Class A Common shares at a weighted average stock price of
$20.77 per share and 357,500 Series A Preferred shares at a weighted average
stock price of $22.29 per share, subsequent to September 30, 2002.
Total year to date purchases of Class A Common, Class B Common and Series A
Preferred shares amounts to approximately $75 million.
The New York Tri-State Area's Leading Real Estate Company
Slide 3
PORTFOLIO COMPOSITION
NET OPERATING INCOME (a)
[GRAPHIC OMITTED]
Long Island 32%
New York City 29%
Westchester/Connecticut 27%
New Jersey 12%
Pro Forma Portfolio Stats
- -------------------------
20.4 Million Square Feet
Office 13.7 million Sq. Ft.
Industial 6.7 million Sq. Ft.
178 Properties
1,170 Tenants Representing a Diverse Industry Base
Five Integrated Operating Divisions
NOI:
Office 85%
Industrial 15%
Occupancy:
Office 95.1%
Industrial 92.4%
(a) PRO FORMA FOR PRO RATA SHARE OF CONSOLIDATED AND UNCONSOLIDATED JOINT
VENTURES
The New York Tri-State Area's Leading Real Estate Company
Slide 4
TENANT DIVERSIFICATION
Total Portfolio
Tenant Diversification (a)
- ----------------------
[Graphic Omitted]
Accounting 2%
Advertising 1%
Commercial Banking 5%
Consumer Products 13%
Defense/Electronics 2%
Financial Services 12%
Government 2%
Healthcare 4%
Hospitality 1%
Insurance 8%
Legal Services 11%
Manufacturing 3%
Media/Entertainment 6%
Other Professional Services 8%
Pharmaceuticals 3%
Real Estate 3%
Retail/Wholesale 2%
Technology 4%
Telecom 9%
Transportation 1%
Top 25 Tenants (b)
- --------------
Debevoise & Plimpton 3.3%
WorldCom/MCI 3.2%
American Express 2.0%
Bell Atlantic 1.5%
Schulte Roth & Zabel 1.4%
HQ Global 1.2%
United Distillers 1.1%
T.D. Waterhouse Securities 1.1%
Banque Nationale De Paris 0.9%
Kramer Levin Nessen Kamin 0.9%
Vytra Healthcare 0.8%
D.E. Shaw 0.7%
P.R. Newswire Associates 0.7%
Hoffmann-La Roche Inc. 0.7%
EMI Entertainment World 0.7%
State Farm 0.7%
Heller Ehrman White 0.7%
Laboratory Corp. of America 0.7%
Estee Lauder 0.7%
Draft Worldwide Inc. 0.7%
Practicing Law Institute 0.7%
Lockheed Martin Corp. 0.7%
Radianz U.S. (Reuters) 0.6%
Towers Perrin Foster 0.6%
Merrill Lynch 0.6%
(a) ANNUALIZED BASE RENTAL REVENUE ADJUSTED FOR PRO RATA SHARE OF JOINT VENTURE
INTERESTS
(b) RANKED BY PRO RATA SHARE OF ANNUALIZED BASE RENTAL REVENUE
The New York Tri-State Area's Leading Real Estate Company
Slide 5
MARKET TRENDS
o Markets continue to be competitive
o This is not like the early nineties - there is reasonable activity
o Deals are still getting done
o Large strategic deals are active throughout region
o Early renewals are being pursued by larger tenants
o Reasonable activity of the smaller size tenants
o Tenant stability remains a concern
o Leasing costs increasing
o Tenants are more capital sensitive than rent sensitive
o Costing more to keep tenants
o Brokerage costs are increasing
o While sublet space remains a factor, high quality buildings with
quality landlords are competing more effectively
o Geographic concentration provides significant advantage
o Flexibility to relocate tenants throughout sub-markets
o Regional relationships provide edge
o Focus on gaining market share and maintaining occupancies
The New York Tri-State Area's Leading Real Estate Company
Slide 6
OFFICE MARKET OVERVIEW
Suburban - Continue to Outperform Market
[Graphics omitted]
LONG ISLAND 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 5.0% 6.0% 7.7% 6.5% 6.4% 5.8%
Overall Vacancy 8.8% 5.9% 9.5% 10.3% 11.4% 12.5%
Direct Vacancy 7.4% 4.4% 7.6% 7.2% 7.1% 8.6%
WESTCHESTER 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 8.8% 5.7% 4.7% 6.6% 4.0% 5.9%
Overall Vacany 16.3% 15.1% 14.1% 17.8% 19.2% 19.5%
Direct Vacancy 14.2% 13.9% 12.5% 13.8% 15.1% 15.0%
S. CONNECTICUT 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 7.1% 4.6% 4.2% 4.6% 6.1% 5.2%
Overall Vacancy 5.1% 2.5% 10.9% 11.8% 13.7% 16.6%
Direct Vacancy 4.3% 2.1% 8.6% 7.8% 8.2% 7.3%
N. NEW JERSEY 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 5.6% 2.5% 1.1% 8.1% 4.0% 7.1%
Overall Vacancy 9.1% 6.5% 11.3% 11.6% 13.9% 16.7%
Direct Vacancy 6.9% 4.8% 7.3% 7.5% 8.0% 10.1%
SOURCE: CUSHMAN & WAKEFIELD CLASS A OFFICE STATISTICS
The New York Tri-State Area's Leading Real Estate Company
Slide 7
OFFICE MARKET OVERVIEW
New York City - Continue to Outperform Market
[Graphics omitted]
FINANCIAL EAST 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 16.0% 0.7% 1.3% 1.4% 3.8% 0.8%
Overall Vacancy 4.4% 2.1% 3.2% 5.0% 12.4% 15.1%
Direct Vacancy 3.2% 1.4% 2.5% 1.4% 8.5% 9.3%
MIDTOWN EAST 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 3.8% 3.4% 2.1% 1.9% 0.0% 0.0%
Overall Vacancy 4.4% 2.7% 2.4% 6.3% 10.5% 11.2%
Direct Vacancy 3.4% 2.2% 1.5% 3.1% 4.3% 5.3%
MIDTOWN WEST 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 0.4% 1.7% 1.8% 3.7% 4.7% 4.3%
Overall Vacancy 5.1% 2.3% 1.9% 6.0% 6.7% 6.3%
Direct Vacancy 3.8% 2.1% 1.5% 3.8% 4.2% 3.9%
6TH AVE./ROCKEFELLER CENTER 1Q00 3Q00 1Q01 3Q01 1Q02 3Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 7.4% 5.0% 7.8% 4.5% 2.6% 0.7%
Overall Vacancy 2.2% 0.9% 1.5% 3.9% 6.1% 8.4%
Direct Vacancy 1.5% 0.4% 0.7% 1.8% 2.8% 3.1%
SOURCE: CUSHMAN & WAKEFIELD CLASS A OFFICE STATISTICS
The New York Tri-State Area's Leading Real Estate Company
Slide 8
MAINTAIN HIGH OCCUPANCY RATES
[Graphics omitted]
1997 1998 1999 2000 2001 1Q02 2Q02 3Q02
---- ---- ---- ---- ---- ----- ---- ----
OFFICE 95.8% 96.4% 96.0% 97.2% 96.1% 96.2% 95.2% 95.1%
- ------
1997 1998 1999 2000 2001 1Q02 2Q02 3Q02
---- ---- ---- ---- ---- ---- ---- ----
INDUSTRIAL (a) 95.3% 96.8% 98.2% 97.5% 91.7% 92.9% 92.0% 92.4%
- ----------
(a) DECREASE IN INDUSTRIAL OCCUPANCY REFLECTS A 206,710 SQUARE FOOT LEASE THAT
EXPIRED IN NOVEMBER 2001, DECREASING OCCUPANCY 300 BASIS POINTS
The New York Tri-State Area's Leading Real Estate Company
Slide 9
PORTFOLIO PERFORMANCE
Same Property NOI Performance
THREE MONTHS (a)
Total Portfolio (b)(e) [Graphic omitted]
- ----------------
Cash NOI 7.2%
GAAP NOI (0.4%)
Cash Reconciliation
- -------------------
Revenue (in thousands)
- -------
Free Rent Burn Off 4.8% $5,100
Built-in Rent Increases 2.0% 2,100
Same Space Rent Increases 0.9% 1,000
Escalation Decrease (0.3%) (325)
NYC Incremental Revenue 0.6% 682
Suburban Occupancy Decrease (0.6%) (700)
Bad Debt Decrease (0.3%) (350)
----- ------
Total 7.1% $7,507
===== ======
Expenses
- --------
Operating Expenses (c) 4.2% $1,767
Real Estate Taxes (d) 2.6% 1,061
--- ------
Total 6.8% $2,828
=== ======
NOI 7.2% $4,679
=== ======
(a) BASED ON COMPARISON FOR THE PERIOD ENDED SEPTEMBER 30, 2002 VERSUS THE
PERIOD ENDED SEPTEMBER 30, 2001
(b) INCLUDING ONE ORLANDO CENTRE, FLORIDA, SAME PROPERTY NOI PERFORMANCE WOULD
BE 6.5% (CASH) AND (0.9%) (GAAP)
(c) OPERATING EXPENSES INCREASED 7.3% WHICH REPRESENTED 62% OF THE TOTAL 6.8%
EXPENSE INCREASE
(d) REAL ESTATE TAXES INCREASED 6.2% WHICH REPRESENTED 38% OF THE TOTAL 6.8%
EXPENSE INCREASE
(e) EXCLUDES TERMINATION FEES
The New York Tri-State Area's Leading Real Estate Company
Slide 10
PORTFOLIO PERFORMANCE
THIRD QUARTER 2002 SAME SPACE AVERAGE RENT GROWTH (a)
[Graphics omitted]
Office Rent Growth
Expiring Leases $25.11
New Leases $27.89
Growth 11.1%
Industrial/R&D Growth
Expiring Leases $5.78
New Leases $6.74
Growth 16.6%
o Renewed 65% of Expiring Square Footage
o 66 Total Leases Executed Encompassing 745,000 Square Feet
o Same Space Third Quarter Cash Increase of 7.9% for Office
and 4.8% for Industrial/R&D
(a) REPRESENTS LEASES EXECUTED DURING THE THIRD QUARTER
The New York Tri-State Area's Leading Real Estate Company
Slide 11
DISTRIBUTION OF LEASING ACTIVITY
For the Third Quarter of 2002
PERCENT OF
SQUARE FEET LEASING ACTIVITY
----------- ----------------
New Leases 459,602 62%
Renewals at Expiration 170,897 23%
Early Renewals 70,287 9%
Expansions 44,206 6%
----------- ----------------
Total 744,992 100%
=========== ================
The New York Tri-State Area's Leading Real Estate Company
Slide 12
OFFICE LEASING TRENDS
[Graphics Omitted]
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02
---- ---- ---- ---- ---- ---- ----
SAME SPACE
AVERAGE RENT GROWTH 22.9% 23.2% 21.7% 16.3% 22.8% 19.4% 11.1%
- -------------------
15.6%(a)
NET EFFECTIVE
RENT SPREAD 6.6% 8.3% 7.3% 6.0% 8.2% 7.9% 13.6%
- -------------
8.8%(a)
OFFICE LEASING
ACTIVITY 361 403 497 410 472 287 612(b)
- --------------
(SF in thousands)
AVERAGE LEASE TERM 5.9 6.0 4.1 5.7 6.3 6.1 8.4
- ------------------
(Years) 8.2(a)
(a) EXCLUDES FUJI AND RELATED TRANSACTIONS
(b) INCLUDES 239,000 SQUARE FEET OF FUJI AND RELATED TRANSACTIONS
The New York Tri-State Area's Leading Real Estate Company
Slide 13
LEASING COST TRENDS
Average YTD
1998-2001 2001 2002
----------- ---------- ----------
Long Island Office $9.42 $12.96 $10.33
Connecticut Office $7.55 $2.89 $10.37
New Jersey Office $7.57 $7.00 $11.91
New York City Office $25.42 $37.55 $30.24
Westchester Office $7.84 $8.80 $20.54 (a)
Industrial $1.42 $2.08 $2.02
(a) EXCLUDES TI/LC COSTS RELATED TO THE LEASING TRANSACTION WITH FUJI
The New York Tri-State Area's Leading Real Estate Company
Slide 14
NORMALIZED COVERAGE ANALYSIS(a)
AVERAGE YTD HIGHEST CONSERVATIVE
1998-2001 2001 2002 HISTORICAL FORECAST
--------- ---- ---- ---------- --------
Market
- ------
Suburban $8.38 $9.82 $17.17 $17.17 $20.00
New York City $25.42 $37.55 $30.24 $37.55 $40.00
Long Island Industrial $1.42 $2.08 $2.02 $2.08 $2.00
CAD $1.89 $1.84 $1.76 $1.75 $1.71
Dividend Payout at $2.40:
Class A Common 90% 92% 96% 97% 99%
Wgtd. Avg. Class
A & B Common 97% 99% 103% 104% 107%
Assuming $100 million of
sales of non-income producing
assets in share repurchases:
Class A Common 84% 86% 90% 91% 93%
Wgtd. Avg. Class
A & B Common 91% 93% 97% 98% 100%
(a) FORWARD-LOOKING STATEMENTS BASED UPON MANAGEMENT'S ESTIMATES.
ACTUAL RESULTS MAY DIFFER MATERIALLY
The New York Tri-State Area's Leading Real Estate Company
Slide 15
LEASE EXPIRATIONS (a)
1.1% of Total Portfolio Expiring in 2002 and 8.6% in 2003
[Graphic omitted]
Office 2002 2003 2004 2005 2006 2007
- ------ ---- ---- ---- ---- ---- ----
(in thousands)
Square Feet Expiring 197 1,154 1,159 1,764 1,623 1,198
% of Total Portfolio 1.5% 8.5% 8.5% 13.0% 11.9% 8.8%
[Graphic omitted]
Industrial 2002 2003 2004 2005 2006 2007
- ---------- ---- ---- ---- ---- ---- ----
Square Feet Expiring 25 588 661 682 970 338
(in thousands)
% of Total Portfolio 0.4% 8.7% 9.8% 10.1% 14.4% 5.0%
(a) 2002 EXPIRATIONS ARE FOR THE PERIOD 10/1/02-12/31/02
The New York Tri-State Area's Leading Real Estate Company
Slide 16
PRO FORMA OFFICE LEASE EXPIRATIONS
1.5% in 2002 and 8.5% in 2003 of Total Office Portfolio
FOR THE PERIOD 10/1/02-12/31/03
- -------------------------------
BY DIVISION [Graphic Omitted]
- -----------
Long Island 433,746 sf (11% of Division)
New York City 198,378 sf (6% of Division)
Connecticut 168,582 sf (15% of Division)
Westchester 227,018 sf (7% of Division)
New Jersey 324,159 sf (17% of Division)
BY QUARTER [Graphic Omitted]
- ----------
4Q02 1Q03 2Q03 3Q03 4Q03
---- ---- ---- ---- ----
197,457 282,034 195,568 387,167 289,657
The New York Tri-State Area's Leading Real Estate Company
Slide 17
LEASE EXPIRATION COMPARISON
2002 and 2003 Office Portfolio
As of September 30, 2002
Expiring Rents vs. Reckson Forecast Rents
[Graphics omitted]
Total Portfolio - 1.4 million sq. ft. expiring
Cash GAAP
---- ----
Expiring $20.99 $20.60
Forecasted $22.31 $22.57
Increase 6.3% 9.6%
CBD Portfolio - 367,000 sq. ft. expiring
Cash GAAP
---- ----
Expiring $31.18 $32.10
Forecasted $38.32 $38.60
Increase 22.9% 20.3%
Suburban Portfolio - 1.0 million sq. ft. expiring
Cash GAAP
---- ----
Expiring $26.06 $25.05
Forecasted $25.95 $26.21
Increase (0.4%) 4.6%
(a) FORWARD-LOOKING STATEMENTS BASED UPON MANAGEMENT'S
ESTIMATES. ACTUAL RESULTS MAY DIFFER MATERIALLY.
The New York Tri-State Area's Leading Real Estate Company
Slide 18
CORE REAL ESTATE OPERATIONS
Analysis of Third Quarter 2002 vs. Third Quarter 2001 Results
- -------------------------------------------------------------
Third Quarter 2001 Diluted FFO $.66
Income on RSVP JVs ($.01)
Same Property NOI Performance ($.00)
Decreased Termination Fees ($.01)
Other Income ($.03)
Disposition Dilution ($.04)
Excess Bad Debt ($.01)
Share Repurchase Accretion and Reduction
in Debt Service $.03
----
Third Quarter 2002 Diluted FFO $.59
====
The New York Tri-State Area's Leading Real Estate Company
Slide 19
OPERATING DATA
(in thousands)
THREE MONTHS ENDED THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2002 JUNE 30, 2002 SEPTEMBER 30, 2001
------------------ ------------- ------------------
Property Operating Revenues $127,031 $123,627 $126,722
Property Operating Expenses 46,112 41,739 44,231
-------- -------- --------
Property Operating Margin $80,919 $81,888 $82,491
Margin Percentage 63.7% 66.2% 65.1%
Marketing, General
& Administrative $7,995 $7,693 $7,679
Other Income $2,335 $2,008 $5,333
(excluding gain on sales
of real estate)
Tenant Receivable Reserves $1,060 $2,500 $470
The New York Tri-State Area's Leading Real Estate Company
Slide 20
PAYOUT RATIO ANALYSIS
DILUTED CAD PAYOUT RATIOS
Class A Class A&B
Common Stock Common Stock
Three Months Ended Three Months Ended
------------------ ------------------
Diluted CAD Payout Ratios 9/30/02 6/30/02 9/30/02 6/30/02
- ------------------------- ------- ------- ------- -------
Actual paid or accrued for 133.6% 99.2% 144.0% 106.9%
non-incremental TI/LC and actual
non-incremental capital
improvements
Committed non-incremental TI/LC on 257.0% 93.9% 277.1% 101.2%
signed leases and actual
non-incremental capital improvements
Excluding Fuji and related 127.8% -- 137.8% --
transactions
Committed non-incremental TI/LC 243.1% 90.7% 262.1% 97.7%
on signed leases, excluding leases
scheduled to expire in future periods
and actual non-incremental capital
improvements
Excluding Fuji and related 124.3% -- 134.0% --
transactions
The New York Tri-State Area's Leading Real Estate Company
Slide 21
CREDIT RISK
Significant Tenant Watch List
WORLDCOM/MCI
- Voluntarily filed for Chapter 11 in July 2002
- Leases approximately 527,000 square feet at 13 of the Company's
properties
- Rent paid current on all space through November
- 50% of deferred rent receivable has been reserved
HQ GLOBAL WORKPLACES, INC.
- Voluntarily filed for Chapter 11 in March 2002
- Leases approximately 202,000 square feet at nine of the Company's
properties
- 2002 total annualized base rent is approximately $6.7 million
- Three leases to be restructured
- Six leases were unadjusted
- Reckson expects HQ to affirm most or all of the leases
METROMEDIA FIBER NETWORK SERVICES, INC.
- Voluntarily filed for Chapter 11 in May 2002
- Leased 112,075 square feet at Reckson Metro Center, 360 Hamilton Avenue,
White Plains, NY
- Reckson has restructured the lease with MetroMedia
- MetroMedia kept 31,718 square feet of space at an annual base rent of
$25 per square foot
- Skadden, Arps, Slate, Meagher & Flom LLP has signed a lease for 48,842
square feet of the 80,357 square feet given up by MetroMedia
ARTHUR ANDERSEN
- Leases 37,636 square feet at 1350 Avenue of the Americas, NYC
- Lease was to expire in April 2004
- Agreement reached
- Arthur Andersen has paid off all rent through September and a final
payment equal to rent due through December 31, 2002
The New York Tri-State Area's Leading Real Estate Company
Slide 22
STOCK BUYBACK PROGRAM
2002 Stock Repurchase Activity
DURING SUBSEQUENT TO TOTAL
CLASS A COMMON STOCK PURCHASES 3Q02 SEPTEMBER 30, 2002 YEAR-TO-DATE
- ------------------------------ ------ ------------------ ------------
Shares Purchased 1,856,200 842,200 2,698,400
Weighted Average Price
Per Share $21.98 $20.77 $21.60
CLASS B COMMON STOCK PURCHASES
- ------------------------------
Shares Purchased 368,200 -- 368,200
Weighted Average Price
Per Share $22.90 -- $22.90
----------- ----------- -----------
Total Common Shares Purchased 2,224,400 842,200 3,066,600
=========== =========== ===========
SERIES A PREFERRED STOCK PURCHASES
- ----------------------------------
Shares Purchased -- 357,500 357,500
Weighted Average Price
Per Share -- $22.29 $22.29
----------- ----------- -----------
Total Stock Purchases $49,230,000 $25,460,000 $74,690,000
=========== =========== ===========
Total Annualized Dividend Savings $4,106,000 $2,112,000 $6,218,000
=========== =========== ===========
Remaining shares authorized under common stock buyback program - 1,933,400
The New York Tri-State Area's Leading Real Estate Company
Slide 23
FINANCIAL RATIOS
Ratios (in millions except ratios)
- ------ Pro Forma
September 30, 2002 September 30, 2002 (b)
------------------ ------------------
Total Debt (a) $1,331 $1,357
Total Equity $1,820 $1,792
Total Market Cap $3,151 $3,149
Interest Coverage Ratio 3.32x 3.29x
Fixed Charge Coverage Ratio 2.58x 2.58x
Debt to Total Market Cap 42.2% 43.1%
(a) INCLUDING PRO-RATA SHARE OF JOINT VENTURE DEBT AND NET OF MINORITY
PARTNERS' INTERESTS SHARE OF JOINT VENTURE DEBT
(b) PRO FORMA FOR OCTOBER 2002 STOCK REPURCHASES
The New York Tri-State Area's Leading Real Estate Company
Slide 24
DEBT SCHEDULE
(in millions)
PRINCIPAL AMOUNT WEIGHTED AVERAGE AVERAGE TERM
DEBT SCHEDULE OUTSTANDING INTEREST RATE TO MATURITY
- ------------- ----------- ------------- -----------
FIXED RATE
Mortgage Notes Payable $743.0 (a) 7.3% 9.2 yrs.
Senior Unsecured Notes $500.0 7.4% 4.8 yrs.
--------
Subtotal/Weighted Average $1,243.0 7.3% 7.5 yrs.
========
FLOATING RATE
Corporate Unsecured Credit --------
Facility $224.0 (b) LIBOR+105 bps
========
- --------------------------------------------------------------------------------
Low Floating Rate Debt Levels [graphic omitted]
Floating Rate 15%
Fixed Rate 85%
No Significant Near-Term Refinancing Needs
Long-Term Staggered Debt Maturity Schedule
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Mortgage Debt $0 $0 $3 $19 $130 $60 $0 $100 $28 $218
Unsecured Notes $100 $200 $200
(a) INCLUDES $301.6 MILLION OF DEBT RELATED TO CONSOLIDATED JOINT VENTURE
PROPERTIES - THE COMPANY'S PRO RATA SHARE IS APPROXIMATELY $158.7. THE
COMPANY ALSO HAS A 60% INTEREST IN AN UNCONSOLIDATED JOINT VENTURE
PROPERTY - THE COMPANY'S PRO RATA SHARE IS APPROXIMATELY $7.6 MILLION.
(b) UNSECURED CORPORATE CREDIT FACILITY MATURES IN SEPTEMBER 2003
The New York Tri-State Area's Leading Real Estate Company
Slide 25
STRATEGIC DIRECTIVES
o Continue to maintain investment discipline in competitive market
- Activity has remained brisk but priced too high
- Current recognition of weaker fundamentals may create opportunities
o Monetize non-income producing assets
- RSVP
- Certain land holdings
o Pursue leverage neutral share repurchase program
o Focus on early renewals where mark to market opportunity is not available
o Leverage tenant relationships to capitalize on build to suit and sale lease
back opportunities
The New York Tri-State Area's Leading Real Estate Company
Slide 26
GUIDANCE - 2002 & 2003(a)
FFO Estimates
Current 2002 Guidance $2.37 - $2.39
- --------------------------------------------------------------------------------
Current 2003 Guidance $2.35 - $2.45
OPERATING ASSUMPTIONS
Same Property NOI Performance 0%
WorldCom/MCI Assumption Rejects 30%-50% of its leases during `03
Stabilize Development Properties $2.5 million of incremental leasing
Termination Fees $2 million
Other Income $2 million
Revenue Lost to Non-Performing
Tenants .05% - 1% of Revenue
INVESTMENT/DISPOSITION ASSUMPTIONS
Real Estate Investments $0
Exercise Option Properties $0 - $28 million
Leverage Neutral Share Repurchase $0 - $80 million
RSVP Liquidity $0 - $30 million
Dispositions $0 - $50 million
(a) FORWARD-LOOKING STATEMENTS BASED UPON MANAGEMENT'S ESTIMATES.
ACTUAL RESULTS MAY DIFFER MATERIALLY.
The New York Tri-State Area's Leading Real Estate Company
Slide 27
FORWARD-LOOKING STATEMENTS
Certain matters discussed herein are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Although the
Company believes the expectations reflected in such forward-looking statements
are based on reasonable assumptions, forward-looking statements are not
guarantees of results and no assurance can be given that the expected results
will be delivered. Such forward-looking statements are subject to certain risks,
trends and uncertainties that could cause actual results to differ materially
from those expected. Among those risks, trends and uncertainties are the general
economic climate, including the conditions affecting industries in which our
principal tenants compete; credit of our tenants; changes in the supply of and
demand for office and industrial properties in the New York Tri-State area;
changes in interest rate levels; downturns in rental rate levels in our markets
and our ability to lease or re-lease space in a timely manner at current or
anticipated rental rate levels; the availability of financing to us or our
tenants; changes in operating costs, including utility and insurance costs;
repayment of debt owed to the Company by third parties (including FrontLine
Capital Group); risks associated with joint ventures; and other risks associated
with the development and acquisition of properties, including risks that
development may not be completed on schedule, that the tenants will not take
occupancy or pay rent, or that development or operating costs may be greater
than anticipated. For further information on factors that could impact Reckson,
reference is made to Reckson's filings with the Securities and Exchange
Commission. Reckson undertakes no responsibility to update or supplement
information contained in this presentation.
The New York Tri-State Area's Leading Real Estate Company
Slide 28
RECKSON ASSOCIATES REALTY CORP.
225 BROADHOLLOW ROAD
MELVILLE, NY 11747
888.RECKSON
WWW.RECKSON.COM