SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
-------------
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 5, 2003
RECKSON ASSOCIATES REALTY CORP.
and
RECKSON OPERATING PARTNERSHIP, L.P.
(Exact name of each Registrant as specified in its Charter)
Reckson Associates Realty Corp. - Reckson Associates Realty Corp. -
Maryland 11-3233650
Reckson Operating Partnership, L.P. -
Delaware Reckson Operating Partnership, L.P. -
(State or other jurisdiction of 11-3233647
incorporation or organization) (IRS Employer ID Number)
225 Broadhollow Road 11747
Melville, New York (Zip Code)
(Address of principal executive offices)
1-13762
(Commission File Number)
(631) 694-6900
(Registrant's telephone number, including area code)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Reckson Associates Realty Corp. 4th Quarter Presentation, dated
March 5, 2003
ITEM 9. REGULATION FD DISCLOSURE
The Registrants are attaching the Fourth Quarter Presentation as
Exhibit 99.1 to this Current Report on Form 8-K.
Note: the information in this report (including the exhibit) is
furnished pursuant to Item 9 and shall not be deemed to be "filed" for the
purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise
subject to the liabilities of that section. This report will not be deemed an
admission as to the materiality of any information in the report that is
required to be disclosed solely by Regulation FD.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Michael Maturo
--------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.,
its General Partner
By: /s/ Michael Maturo
--------------------------------
Michael Maturo
Executive Vice President
and Chief Financial Officer
Date: March 5, 2003
EXHIBIT 99.1
Slide 1
THE NEW YORK TRI-STATE AREA'S LEADING REAL ESTATE COMPANY
RECKSON ASSOCIATES REALTY CORP.
FOURTH QUARTER 2002 PRESENTATION
EARNINGS RESULTS AND OVERVIEW
MARCH 5, 2003
Slide 2
SUMMARY OF HIGHLIGHTS
o Reported diluted FFO of $.59 per share for the fourth quarter of 2002 as
compared to $.57 per share for the comparable 2001 period, representing a per
share increase of 3.5%.
o Reported diluted FFO of $2.36 per share for the year ended December 31, 2002
as compared to $2.61 per share for the comparable 2001 period, representing a
per share decrease of (9.6%).
o Occupancy as of: 12/31/02 9/30/02 12/31/01
-------- ------- --------
Total:
Overall Portfolio 95.4% 94.2% 94.6%
Office 95.7% 95.1% 96.1%
Industrial/R&D 94.7% 92.4% 91.7%
Same Property:
Overall Portfolio 95.6% 94.2% 94.6%
Office 96.1% 95.6% 96.2%
Industrial/R&D 94.6% 91.6% 91.6%
The New York Tri-State Area's Leading Real Estate Company
Slide 3
SUMMARY OF HIGHLIGHTS (continued)
o Core Same Property NOI (before termination fees):
Net of Minority Interests
Consolidated in Joint Ventures
---------------- -------------------------
4Q02 2002 4Q02 2002
---- ---- ---- ----
Cash 8.3% 7.7% 3.9% 3.9%
GAAP 3.0% 0.7% 2.0% (0.3%)
o Rent performance on renewal and replacement space:
Office Industrial/R&D
---------------- ------------------
4Q02 2002 4Q02 2002
---- ---- ---- ----
Cash 5.8% 9.2% (8.3%) 1.1%
GAAP 9.5% 13.8% 11.9% 14.4%
o Executed 255 leases encompassing 2.8 million square feet during 2002 and 63
leases encompassing 699,328 square feet during the fourth quarter of 2002.
o Subsequent to year end, WorldCom/MCI announced the rejection of 191,972
square feet of leases totaling approximately $5.3 million of annual GAAP
revenues.
o Closed on the refinancing of the Company's unsecured revolving credit
facility, scheduled to mature in September of 2003, with a group of 14 banks.
The facility bears interest at LIBOR plus a spread of 90 basis points,
representing a reduction of 15 basis points from the previous facility.
The New York Tri-State Area's Leading Real Estate Company
SUMMARY OF HIGHLIGHTS (continued)
o Reached an agreement with an affiliate of First Data Corp. that provides for:
- The sale of a 19.3 acre parcel of land in Melville, Long Island
- The build-to-suit construction of a 195,000 square foot office building
- Aggregate consideration of approximately $47 million
- Ground breaking scheduled for Spring of 2003
Slide 4
PORTFOLIO COMPOSITION
Net Operating Income (a)
[GRAPHIC OMITTED]
Long Island 33%
New York City 31%
Westchester/Connecticut 23%
New Jersey 13%
Portfolio Stats
- ---------------
o 20.3 Million Square Feet
Office 13.6 million Sq. Ft.
Industial 6.7 million Sq. Ft.
o 178 Properties
o 1,200 Leases with an Average Lease Size of:
Office 13,000 Sq. Ft.
Industrial 27,000 Sq. Ft.
o Five Integrated Operating Divisions
o NOI:
Office 85%
Industrial 15%
o Occupancy:
Office 95.7%
Industrial 94.7%
(a) PRO FORMA FOR PRO RATA SHARE OF CONSOLIDATED AND UNCONSOLIDATED JOINT
VENTURES AND EXCLUDES ONE ORLANDO CENTRE, FL
The New York Tri-State Area's Leading Real Estate Company
Slide 5
TENANT DIVERSIFICATION
TOTAL PORTFOLIO(A)
1,023 Tenants Representing a Diverse Industry Base
- --------------------------------------------------
[GRAPHIC OMITTED]
Accounting 1%
Advertising 1%
Commercial Banking 5%
Consumer Products 14%
Defense/Electronics 2%
Financial Services 13%
Government 2%
Healthcare 4%
Hospitality 1%
Insurance 8%
Legal Services 11%
Manufacturing 3%
Media/Entertainment 6%
Other Professional Services 4%
Pharmaceuticals 4%
Real Estate 4%
Research/Consulting 3%
Retail/Wholesale 2%
Technology 4%
Telecom 7%
Transportation 1%
TOP 25 TENANTS
- --------------
Debevoise & Plimpton 3.3%
American Express 2.0%
WorldCom/MCI 1.8%
Bell Atlantic 1.6%
Schulte Roth & Zabel 1.4%
HQ Global 1.2%
T.D. Waterhouse 1.1%
United Distillers 1.1%
Banque Nationale De Paris 0.9%
Kramer Levin Nessen Kamin 0.9%
Prudential 0.9%
P.R. Newswire Associates 0.8%
Vytra Healthcare 0.8%
D.E. Shaw 0.7%
Draft Worldwide Inc. 0.7%
EMI Entertainment World 0.7%
Estee Lauder 0.7%
Heller Ehrman White 0.7%
Hoffmann-La Roche Inc. 0.7%
Laboratory Corp of America 0.7%
Lockheed Martin Corp. 0.7%
Practicing Law Institute 0.7%
State Farm 0.7%
Radianz (Reuters) 0.6%
Towers Perrin Foster 0.6%
(a) ANNUALIZED BASE RENTAL REVENUE ADJUSTED FOR PRO RATA SHARE OF JOINT VENTURE
INTERESTS AND TO REFLECT WORLDCOM/MCI LEASES REJECTED TO DATE. TOP 25
TENANTS RANKED BY PRO RATA SHARE OF ANNUALIZED BASE RENTAL REVENUE.
The New York Tri-State Area's Leading Real Estate Company
Slide 6
MARKET TRENDS
o Markets continue to be extremely competitive - "Tenants' Market"
- Fighting to gain market share and maintain occupancy
- Shadow space continues to cloud the market particularly as it relates
to the financial services sector
o Leasing costs remain elevated
- Generally tenants do not want to outlay capital dollars - landlords are
being forced to bear costs
- Brokers actively soliciting tenants - reducing chance of
tenant renewals
o Leasing velocity remains erratic and varies market to market
- Tenants are cautious about making leasing decisions in this uncertain
environment
- Tenants in market with larger requirements for '04 and '05
o Tenant stability remains a concern
o Tri-State strategy provides significant advantages
- Regional decentralization activity strong
- Lack of new supply keeps markets in check
o Reckson markets continue to be some of the best performing markets in the
country and Reckson continues to outperform in its markets
The New York Tri-State Area's Leading Real Estate Company
Slide 7
OFFICE MARKET OVERVIEW
At 95.0% Occupied Continue to Outperform Market
[Graphics omitted]
LONG ISLAND 2Q00 4Q00 2Q01 4Q01 2Q02 4Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 4.8% 6.3% 7.7% 7.7% 5.6% 5.6%
Overall Vacancy 5.8% 8.4% 10.4% 11.9% 13.0% 12.5%
Direct Vacancy 3.6% 8.2% 6.5% 8.2% 8.5% 8.1%
WESTCHESTER 2Q00 4Q00 2Q01 4Q01 2Q02 4Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 7.6% 4.0% 4.7% 4.9% 6.5% 5.7%
Overall Vacancy 15.1% 12.0% 13.7% 20.5% 19.7% 18.9%
Direct Vacancy 13.8% 10.7% 11.6% 16.3% 14.2% 15.3%
S. CONNECTICUT 2Q00 4Q00 2Q01 4Q01 2Q02 4Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 1.9% 7.2% 9.4% 8.8% 5.1% 2.3%
Overall Vacancy 2.6% 8.1% 12.4% 13.6% 19.0% 17.3%
Direct Vacancy 6.3% 4.4% 3.9% 5.6% 10.9% 8.8%
N. NEW JERSEY 2Q00 4Q00 2Q01 4Q01 2Q02 4Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 8.4% 6.5% 6.2% 8.1% 5.2% 4.2%
Overall Vacancy 9.4% 9.9% 11.1% 13.4% 13.7% 17.8%
Direct Vacancy 3.4% 1.3% 7.3% 9.6% 7.7% 10.2%
SOURCE: CUSHMAN & WAKEFIELD CLASS A OFFICE STATISTICS
The New York Tri-State Area's Leading Real Estate Company
Slide 8
OFFICE MARKET OVERVIEW
At 97.8% Occupied Continue to Outperform Market
[Graphics omitted]
FINANCIAL EAST 2Q00 4Q00 2Q01 4Q01 2Q02 4Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 8.3% 0.7% 1.0% 3.8% 3.2% 0.0%
Overall Vacancy 2.3% 2.1% 6.6% 7.0% 14.1% 16.1%
Direct Vacancy 1.6% 1.4% 3.4% 2.3% 9.1% 9.3%
MIDTOWN EAST 2Q00 4Q00 2Q01 4Q01 2Q02 4Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 5.5% 2.1% 2.6% 0.5% 0.0% 0.0%
Overall Vacancy 3.9% 2.6% 4.5% 8.9% 10.3% 12.5%
Direct Vacancy 3.1% 1.9% 2.5% 3.1% 4.7% 5.7%
MIDTOWN WEST 2Q00 4Q00 2Q01 4Q01 2Q02 4Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 0.0% 3.0% 2.1% 5.6% 4.0% 3.0%
Overall vacancy 2.7% 2.7% 4.4% 6.2% 6.3% 8.3%
Direct Vacancy 2.4% 2.4% 2.7% 4.0% 3.5% 5.8%
6TH AVE./ROCK. CNTR. 2Q00 4Q00 2Q01 4Q01 2Q02 4Q02
---- ---- ---- ---- ---- ----
RA Portfolio Vacancy 5.6% 7.2% 6.5% 3.7% 3.5% 8.1%
Overall Vacancy 1.2% 1.2% 3.3% 4.3% 7.0% 9.0%
Direct Vacancy 0.6% 0.9% 1.5% 2.7% 3.5% 3.3%
SOURCE: CUSHMAN & WAKEFIELD CLASS A OFFICE STATISTICS
The New York Tri-State Area's Leading Real Estate Company
Slide 9
PORTFOLIO PERFORMANCE
Core Same Property NOI Performance
TOTAL PORTFOLIO (a)(b)(c)
- -------------------------
[Graphic omitted]
Three Months Twelve Months
------------ -------------
Cash NOI 8.3% 7.7%
GAAP NOI 3.0% 0.7%
CASH RECONCILIATION
-------------------
(in thousands) (in thousands)
THREE MONTHS TWELVE MONTHS
REVENUE ------------ -------------
- -------
Free Rent Burn Off $5,200 $17,700
Built-in Rent Increase 2,200 9,500
Same Space Rent Increase 800 3,400
Escalation Increase 800 3,300
NYC Incremental Revenue -- 4,200
Weighted Average Occupancy Decrease (100) (2,500)
Bad Debt (Increase)/Decrease 200 (2,900)
------ -------
Total $9,100 8.5% $32,700 7.7%
====== =======
EXPENSES
- --------
Operating Expenses $1,000 $ 6,000
Real Estate Taxes 2,500 6,000
------ -------
Total $3,500 8.7% $12,000 7.7%
====== =======
------ -------
NOI $5,600 8.3% $20,700 7.7%
====== =======
(a) EXCLUDES TERMINATION FEES
(b) INCLUDING ONE ORLANDO CENTRE, FL, THREE MONTH SAME PROPERTY NOI PERFORMANCE
WOULD BE 7.7% (CASH) AND 2.6% (GAAP) AND TWELVE MONTH SAME PROPERTY NOI
PERFORMANCE WOULD BE 7.2% (CASH) AND 0.4% (GAAP)
(c) NET OF MINORITY INTERESTS IN JOINT VENTURES, THREE MONTH CORE SAME PROPERTY
NOI PERFORMANCE WOULD BE 3.9% (CASH) AND 2.0% (GAAP) AND TWELVE MONTH CORE
SAME PROPERTY NOI PERFORMANCE WOULD BE 3.9% (CASH) AND (.3%) (GAAP)
The New York Tri-State Area's Leading Real Estate Company
Slide 10
PORTFOLIO PERFORMANCE
Fourth Quarter 2002
[Graphics omitted]
AVERAGE RENT PERFORMANCE ON RENEWAL & REPLACEMENT SPACE(a)
Office Rent Growth
Prior Leases $25.90
New Leases $28.37
Growth 9.5%
Industrial/R&D Rent Growth
Prior Leases $5.99
New Leases $6.70
Growth 11.9%
o Fourth Quarter Cash Increase of 5.8% for Office and a decrease of
(8.3%) for Industrial/R&D
o Year End Cash Increase of 9.2% for Office and 1.1% for Industrial/R&D
o Year End GAAP Increase of 13.8% for Office and 14.4% for Industrial/R&D
o Renewed 45% of Expiring Square Footage During the Fourth Quarter and 60%
During the Year
(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
Fourth Quarter 2002 Annual 2002
-------------------------- ---------------------------
Percent of Percent of
Sq. Ft. Leasing Activity Sq. Ft. Leasing Activity
------- ---------------- ------- ----------------
New Leases 440,456 63% 1,589,004 57%
Renewals at Expiration 145,602 21% 781,961 28%
Early Renewals 74,342 11% 235,919 9%
Net Expansions 38,928 5% 172,399 6%
------- ---- --------- ----
Total 699,328 100% 2,779,283 100%
======= ==== ========= ====
% of Total Portfolio 3.4% 13.7%
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 4Q02
---- ---- ---- ---- ---- ---- ---- ----
Average Rent
Performance on
Renewal & Replacement 22.9% 23.2% 21.7% 16.3% 22.8% 19.4% 11.1% 9.5%
Space
- ---------------------
Effective Rent Spread 6.6% 8.3% 7.3% 6.0% 8.2% 7.9% 13.6% 9.2%
- ---------------------
Office Leasing
Activity 361 403 497 410 472 287 612 369
- --------------
(SF in thousands)
Average Lease Term 5.9 6.0 4.1 5.7 6.3 6.1 8.4 5.1
- ------------------
(Years)
NOTE: 3Q02 NUMBERS INCLUDE FUJI AND RELATED TRANSACTIONS ENCOMPASSING 239,000
SQUARE FEET
The New York Tri-State Area's Leading Real Estate Company
Slide 13
LEASE EXPIRATIONS
8.1% of Total Portfolio GAAP Revenue Expiring 2003 (a)
Pro Forma for Anticipated WorldCom/MCI Lease Terminations
[Graphic omitted]
OFFICE 2003 2004 2005 2006 2007
- ------ ---- ---- ---- ---- ----
(in thousands)
Square Feet Expiring 1,065 1,013 1,805 1,647 1,255
1,361 (a)
% of Total Office Portfolio 7.9% 7.5% 13.3% 12.2% 9.3%
10.0%(a)
[Graphic omitted]
INDUSTRIAL/R&D 2003 2004 2005 2006 2007
- -------------- ---- ---- ---- ---- ----
(in thousands)
Square Feet Expiring 469 610 655 1,002 364
% of Total Industrial/R&D Portfolio 7.0% 9.1% 9.7% 14.9% 5.4%
(a) Includes 191,972 square feet rejected by WorldCom/MCI to date plus an
additional 104,000 square feet anticipated to be rejected.
The New York Tri-State Area's Leading Real Estate Company
Slide 14
Pro Forma Office Lease Expirations (a)
1.4 Million Square Feet of Office Space to Lease in 2003
By Division: [Graphic omitted]
Long Island
Total Expirations - 525,527 sf
WorldCom/MCI - 141,742 sf
Other Expirations - 383,785 sf
New York City
Total Expirations - 198,954 sf
WorldCom/MCI - 34,230 sf
Other Expirations - 164,724 sf
Connecticut
Total Expirations - 93,783
Westchester
Total Expirations - 258,339 sf
WorldCom/MCI - 120,000 sf
Other Expirations - 138,339 sf
New Jersey (b)
Total Expirations - 284,221 sf
American Express - 195,000 sf
Other Expirations - 89,221 sf
By Quarter: [Graphic omitted]
1Q03 - 487,052 sf
2Q03 - 294,991 sf
3Q03 - 366,062 sf
4Q03 - 212,719 sf
(a) Includes 191,972 square feet rejected by WorldCom/MCI to date plus an
additional 104,000 square feet anticipated to be rejected
(b) 101 JFK Parkway expected to commence redevelopment in 3Q03
The New York Tri-State Area's Leading Real Estate Company
Slide 15
LEASE EXPIRATION COMPARISON
2003 and 2004 Office Portfolio
As of December 31, 2002
Expiring Rents vs. Reckson Forecast Rents
[Graphics omitted]
Total Office Portfolio - 2.1 million sq. ft. expiring
Cash GAAP
---- ----
Expiring $27.46 $26.31
Forecasted (a) $30.10 $30.66
Increase 9.6% 16.5%
CBD Office Portfolio - 636,282 sq. ft. expiring
Cash GAAP
---- ----
Expiring $29.84 $29.25
Forecasted (a) $37.94 $38.62
Increase 27.1% 32.0%
Suburban Office Portfolio - 1.4 million sq. ft. expiring
Cash GAAP
---- ----
Expiring $26.41 $25.01
Forecasted (a) $26.64 $27.15
Increase 0.9% 8.6%
(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 16
OPERATING DATA
(IN THOUSANDS)
THREE MONTHS ENDED
--------------------------------------------
DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
2002 2002 2001
------------ ------------- ------------
Property Operating Revenues (a) $127,002 $126,447 $121,314
Property Operating Expenses 45,580 46,135 42,244
-------- -------- --------
Property Operating Margin $ 81,422 $ 80,312 $ 79,070
Margin Percentage 64.1% 63.5% 65.2%
Marketing, General
& Administrative $ 8,868 $ 7,965 $ 7,115
Other Income $ 2,356 $ 2,335 $ 2,706
(excluding gain on sales
of real estate)
Tenant Receivable Reserves $ 1,740 $ 1,060 $ 1,097
Termination Fees $ 2,276 $ 3,227 $ 2,712
The New York Tri-State Area's Leading Real Estate Company
Slide 17
PAYOUT RATIO ANALYSIS
CLASS A CLASS A & B
COMMON STOCK COMMON STOCK
THREE MONTHS ENDED THREE MONTHS ENDED
------------------ ------------------
DILUTED CAD PAYOUT RATIOS 12/31/02 9/30/02 12/31/02 9/30/02
- ------------------------- -------- ------- -------- -------
Committed non-incremental TI/LC on 118.4% 257.0% 127.7% 277.1%
signed leases and actual non-
incremental capital improvements
Committed non-incremental TI/LC on 113.2% 243.1% 122.2% 262.1%
signed leases, excluding early
renewals and including actual non-
incremental capital improvements
Actual paid or accrued for non- 142.5% 133.6% 153.8% 144.0%
incremental TI/LC and actual non-
incremental capital improvements
The New York Tri-State Area's Leading Real Estate Company
Slide 18
NORMALIZED PAYMENT COVERAGE
o Expect coverage shortfall for 2003 based on market conditions.
o Factors impacting coverage recovery:
- Reinvestment of asset sales proceeds
- Sales of non-income producing assets for share repurchases -- land & RSVP
- Adjustment to normalized tenant costs -- currently 20% over 5 year average
- Normalized NOI growth
o Expect normalization 85% - 90% CAD Payment Ratio
The New York Tri-State Area's Leading Real Estate Company
Slide 19
CREDIT RISK
Significant Tenant Watch List
WORLDCOM/MCI
- Voluntarily filed for Chapter 11 in July 2002
- Previously leased approximately 527,000 square feet at 13 of the
Company's properties
- Base rent paid current on all non-rejected leases through March 2003
- Rejected 191,972 square feet, subsequent to year end, in three
locations (base rent paid current through January 2003)
- Wrote off approximately $1.1 million of deferred rent receivable
attributable to the rejected leases which had previously been
reserved
- Reserved an additional $475,000 of remaining deferred rents
receivable
- Active discussions pending - outcome remains uncertain
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 $6.1 million
- Four leases to be restructured
- Reserved $200,000 of deferred rents receivable
- Five leases remain unadjusted
- Hopeful to finalize this quarter
The New York Tri-State Area's Leading Real Estate Company
Slide 20
FINANCIAL RATIOS
(in millions except ratios)
Ratios December 31, 2002 December 31, 2001
- ------ ----------------- -----------------
Total Debt (a) $1,371 $1,336
Total Equity $1,681 $1,916
Total Market Cap $3,052 $3,252
Interest Coverage Ratio (b) 3.26x 3.11x
Fixed Charge Coverage Ratio (b) 2.55x 2.44x
Debt to Total Market Cap 44.9% 41.1%
(a) INCLUDING PRO-RATA SHARE OF JOINT VENTURE DEBT AND NET OF MINORITY PARTNERS'
INTERESTS SHARE OF JOINT VENTURE DEBT
(B) FOR THE THREE MONTH PERIOD ENDED DECEMBER 31
The New York Tri-State Area's Leading Real Estate Company
Slide 21
DEBT SCHEDULE
(IN MILLIONS)
PRINCIPAL AMOUNT WEIGHTED AVERAGE AVERAGE TERM
DEBT SCHEDULE OUTSTANDING INTEREST RATE TO MATURITY
- ------------- ----------- ------------- -----------
Fixed Rate
Mortgage Notes Payable $ 740.0 (a) 7.3% 9.0 yrs.
Senior Unsecured Notes $ 500.0 7.4% 4.6 yrs.
--------
Subtotal/Weighted Average $1,240.0 7.3% 7.2 yrs.
========
Floating Rate
Corporate Unsecured --------
Credit Facility $ 267.0 (b) LIBOR+90 bps
========
- --------------------------------------------------------------------------------
LOW FLOATING RATE DEBT LEVELS [graphic omitted]
Floating Rate 18%
Fixed Rate 82%
LONG-TERM STAGGERED DEBT MATURITY SCHEDULE
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Mortgage Debt $0 $ 3 $19 $130 $ 60 $0 $100 $28 $218 $4
Unsecured Notes $100 $200 $200
(a) INCLUDES $300.5 MILLION OF DEBT RELATED TO CONSOLIDATED JOINT VENTURE
PROPERTIES - THE COMPANY'S PRO RATA SHARE IS APPROXIMATELY $158.1 MILLION.
THE COMPANY ALSO HAS A 60% INTEREST IN AN UNCONSOLIDATED JOINT VENTURE
PROPERTY - THE COMPANY'S PRO RATA SHARE IS APPROXIMATELY $7.5 MILLION.
(b) CORPORATE UNSECURED CREDIT FACILITY MATURES IN DECEMBER 2005.
The New York Tri-State Area's Leading Real Estate Company
Slide 22
2003 OUTLOOK
o Remain Uncertain about the Markets
- Geopolitical and economic uncertainty remain an issue
- Impact of WorldCom/MCI exposure
- Shadow space may become more visible if financial services sector
remains weak
- Do not anticipate significant office market recovery until some point in
2004
o Investment Markets Remain Competitive
- Hopeful that pricing will rationalize
- Will maintain investment discipline
- Will seek to sell non-core assets and pursue selective joint ventures to
capitalize on investor appetite
o Will Harvest Non-Income Producing Assets
- 14 land sites encompassing 338 acres
- Re-zonings
- Build to Suits
- RSVP
o Continue to Opportunistically Repurchase Reckson Equity
- Will do this in conjunction with dispositions so that they are leverage
neutral to ensure that we maintain financial flexibility
The New York Tri-State Area's Leading Real Estate Company
Slide 23
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 24
RECKSON ASSOCIATES REALTY CORP.
225 BROADHOLLOW ROAD
MELVILLE, NY 11747
888.RECKSON
www.reckson.com