Reckson heads Down Under.

Long Island REIT, Reckson Associates, is selling a three quarters ownership stake in a portfolio of stabilized suburban properties to a spin off Australian property trust the firm has launched.

Called Reckson NYPT, the new trust will purchase from Reckson a roughly 3.4 million s/f group of 25 office properties for approximately $563 million.

Despite the deluge of investment the REIT sector has experienced in recent years, Reckson's new trust is a move to tap significant sources of capital Down Under. Australian public markets have long been interested in REITs and other real estate investment vehicles, a fact that made it a particularly attractive place in which to launch the venture.

"[The new trust] will enable us ... to enhance our competitive advantage, while sourcing capital globally." Rechler said in a statement released by the company. "Our successful launching of Reckson NYPT is a significant achievement because it is the first Australian listed property trust to focus on US suburban office properties. I am excited about the growth potential of this vehicle."

According to a person familiar with the transaction, the portfolio Reckson is offering consists almost exclusively of stabilized, low risk assets; properties in line with the conservative tastes of Australian investors. The disposition will allow Reckson to focus on higher yielding, but riskier acquisitions and development as well as investment in trophy assets that would help define the company's position in the marketplace.

Reckson has purchased two such properties this year, the $470 million acquisition of One Court Square in Long Island City and $240 million buy of EAB Plaza in Nassau County, Long Island.

Reckson may wind up unloading more than just 25 office properties.

As part of the deal, the Australian trust will also have a two-year option to buy an additional ten properties, comprising approximately 1.2 million square feet, to be priced, according to a statement issued by Reckson "at fair market value at the time the option is exercised."

The additional capital, which will pay off debt for most of Reckson's stabilized properties, may give the REIT an added boost in tight bids for highly contested properties.

Reckson lost high profile bids on the 1095 Avenue of the Americas and 200 Park Avenue in recent months.

A board of directors that includes three Reckson executives, president and CEO Scott Rechler, CFO Michael Maturo, and executive vice president Jason Barnett, as well as three Australian directors will helm the new trust.

The properties in its portfolio will continue to be managed essentially by Reckson generating a fee income stream that Rechler estimated will contribute to generating 15%-18% for Reckson's stake.