Reckson announces closing of $202M Australian PO.

Reckson Associates Realty Corp. announced the closing of certain transactions relating to the public offering in Australia of approximately A$263 million (approximately US$202 million) of units in Reckson New York Property Trust, a newly-formed Reckson-sponsored property trust (the LPT).

The LPT is scheduled to begin trading on the Australian Stock Exchange (ASX) on September 26, 2005 under the symbol RNY.

Upon completion of all the related transactions, the LPT will own a 75% indirect interest in 25 suburban core plus office properties acquired from Reckson, containing approximately 3.4 million square feet, for a total purchase price of approximately US$563 million.

Reckson will retain a 25% indirect interest in these properties. The transaction has been structured to be completed in three tranches.

In the tranche I closing, the LPT purchased a 75% indirect interest in 17 suburban core plus office properties, containing approximately 2.0 million square feet, for a purchase price of approximately US$367 million. In the tranche II and tranche III closings, the LPT will purchase a 75% indirect interest in an additional three and five properties, respectively, which are expected to close in the first and fourth quarters of 2006, respectively.

Reckson intends to use the proceeds from the tranche I closing of approximately US$128 million, net of debt assumed by the LPT, to fund a portion of the Company's recently announced acquisitions and for the repayment of outstanding indebtedness.

Scott Rechler, Reckson's President and Chief Executive Officer, stated, "The formation of the Australian LPT will further our goal of operating locally while financing globally. We believe our markets offer significant opportunities to acquire attractive core plus investments and having global financing options such as the Australian vehicle will better enable us to be more competitive in pursuing these investment opportunities throughout all real estate cycles."

The LPT has a two-year option to purchase an additional ten suburban core plus office properties Reckson, comprising approximately 1.2 million square feet, to be priced at fair market value at the time the option is exercised. Reckson anticipates that it will continue to maintain a 25% indirect interest in future core plus investments with the LPT.

Core plus assets present attractive investment opportunities for Reckson to increase its market presence and franchise value and leverage its operating infrastructure to produce increased margins. Generally, Reckson will continue to wholly own strategic assets, which are Class A trophy office properties in key markets that define Reckson's franchise and enhance its competitive advantage, as well as value creation opportunities, which include repositioning, development and redevelopment projects.

Properties were contributed by Reckson to the LPT based upon an estimated 2005 net operating income (NOI) yield of 7.15% and a 2006 NOI yield of 7.91%, excluding 225 High Ridge Road which Reckson recently acquired and contributed to the LPT at cost. Reckson anticipates a 2006 annualized after-tax cash yield on its LPT interest of approximately 18% including the one-time fees, and of approximately 15% excluding the onetime fees but including the ongoing recurring fees.

The LPT is managed by Reckson Australia Management Limited (RAML), an Australian licensed Responsible Entity which is wholly owned by Reckson Operating Partnership, L.P. Other affiliates of Reckson serve as property manager, leasing agent, asset manager, and construction manager and provide other services to the properties in the LPT portfolio.