Business center firms merge.

Alliance National Incorporated, operator of Alliance Business Centers, has signed an agreement with Interoffice Holdings Corp. (Interoffice) and Reckson Executive Centers (REC), to form the largest executive suite company in the United States.

The merger of these three entities represents a significant event in the highly fragmented multi-billion dollar executive suite industry. The combined companies are expected to generate $170 million in 1998 proforma revenues, and will have more than 150 Centers nationwide. In addition, the new company has letters of intent on 75 additional locations domestically and internationally.

"This new company gives us unmatched critical mass, momentum and management strength as we continue to consolidate the industry," said Alliance President and CEO David Beale, who will be president and CEO of the combined company. "Our plan is to create a powerful brand that will be recognized worldwide. This will enable us to distinguish ourselves as the industry leader in a very competitive marketplace."

"Our continued expansion will serve the needs of our corporate clients who have growing requirements for alternative office space in multiple cities worldwide," said Beale. "We provide complete, work-ready environments that are comparable to the executive offices of top corporations. Then, we manage everything in that setting, so our clients don't have to worry about day-to-day operations and can focus on expanding their business."

Scott Rechler, chairman of the Board for the combined company and president and CEO of Reckson Service Industries - the majority shareholder of InterOffice and REC before the merger - commented on the benefits of the merger. "Our vision of the future of this industry has been virtually identical to that of Alliance. This merger will enable us to achieve our vision more quickly and efficiently than either company could have done on its own, which will ultimately translate into significant enhanced benefits and services for our clients," said Rechler.

"The new company will continue to provide clients with furnished, staffed and equipped offices with flexible contract terms in premier locations," added Jon Halpern, a member of the Board and Executive Committee of the combined company. "In addition to the services we've always provided everything from faxing, copying and desktop publishing to video conferencing, Internet access and technical support for computers and telecommunications - we'll be aggressively expanding our technology and communications services, enabling customers to work wherever and whenever they want. Corporate America is changing the way it works and we plan to be there to satisfy its new requirements."

Executive suites are a central component in the outsourcing and alternative office trends that have dominated corporate real estate in the last decade. The use of executive suites by corporations is a trend fueling the growth of the industry. Large organizations want the security, efficiency and other advantages of "one-stop" shopping from a global vendor.