Reckson expands Fairfield portfolio.

Reckson Associates Realty Corp. has acquired 710 Bridgeport Avenue, a 452,000 square-foot office and research & development complex located in Shelton, CT, within the eastern sub-market of Fairfield County, for $26.9 million. The Company anticipates an initial return on investment of 10.5 percent, increasing to 11 percent during the term of the existing leases.

The complex, which is currently 100 percent occupied by Timex and Philips Medical Systems under long-term leases, is comprised of a three-story office building and 320,000 square feet of back office and flex space. The opportunity was closed in less than 60 days from its initial offering.

The eastern portion of Fairfield County and the Shelton market in particular is continuing to benefit from an economic resurgence illustrated by steadily declining commercial vacancy rates, which have dropped to 10.3 percent overall, with Shelton's industrial vacancy rate at 6.7 percent and office vacancy rate at 10.2 percent.

"We see this acquisition as an entree into a strengthening market from which we intend to source additional opportunities," said F.D. Rich III, managing director of Reckson's Southern Connecticut Division. "We are acquiring the property at a discount to replacement cost in a particularly attractive sub-market which boasts a business-friendly tax structure."

Reckson established its Southern Connecticut Division in September, 1996, with the acquisition of Landmark Square, a six-building office park encompassing approximately 800,000 square feet in downtown Stamford.

Reckson's growth strategy is focused on the suburban markets within the 50 mile radius surrounding New York City. Since the completion of its initial public offering in May 1995, Reckson has acquired or contracted to acquire approximately $500 million of properties comprising approximately 7.1 million square feet of space.

The company is one of the largest publicly-traded owners and managers of Class A suburban office and industrial properties in the New York tri-state area, with 138 properties comprised of approximately 12.3 million square feet either owned or under contract.

Jeffrey Dunne, senior vice president, with CB Commercial, was the sole broker in this transaction, which closed 53 days after the initial offer, an exceptional quick wrap-up for a deal of this magnitude.

The 452,000 square-foot office/warehouse building was built in 1978 and is located off Exit 11 and Route 8 in Shelton. The complex features three stories of office space in 132,000 square feet and 320,000 square feet of warehouse space. The building is 100 percent leased to two tenants, Phillips North America and Timex.

"This is a significant sale of an office-warehouse complex in the Connecticut market and should serve notice to other institutional investors of the excellent investment value in office buildings in Shelton and throughout Connecticut," said Dunne. "Once a well kept secret, more and more investors are seriously considering the excellent investment opportunities available in the state, especially eastern Fairfield County."

The property at 710 Bridgeport Avenue is an excellent example of a high quality, suburban building that's fully leased and provides the purchaser with an excellent return on their investment. Other buildings Dunne has sold in Shelton include One Research Drive (155,000 square feet), Shelton Pointe (162,000 square feet), 875 Bridgeport Avenue (110,000 square feet), 33 Platt Street (120,000 square feet) and the Wal-Mart site.