Reckson pays $255M for Westchester portfolio.Reckson Associates Realty Corp. has contracted to acquire a 1.6 million square foot office portfolio, consisting of 14 buildings, concentrated within five business parks, located on the Platinum Mile in Westchester County, for approximately $255 million or $163 per square foot. The office portfolio, known as the Eastridge portfolio, is exceptionally well located on Interstate-287, at the intersection of Interstate-684 and the Hutchinson River Parkway The Hutchinson River Parkway (also known as The Hutch) is an 18.78 mile (0 km) long parkway in downstate New York. . The properties are located in the heart of the Westchester County office market that historically has been the choice location for the county's most prestigious companies. This transaction continues a robust period of investment activity by Reckson. With this acquisition, the Company has completed investments totaling approximately $1.3 billion during 2005, successfully acquiring office properties in several of Reckson's targeted submarkets located in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , Westchester, Connecticut, Northern New Jersey and Long Island. Commenting on the transaction, Scott Rechler, Reckson's president and chief executive officer, said, "This investment represents a quintessential value creation opportunity for Reckson. The extremely well located, institutionally owned portfolio provides us with the opportunity to reposition and redevelop the underperforming properties into Class A properties at significant discounts to replacement cost and attractive stabilized NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics yields." Reckson is purchasing the portfolio at an attractive price of approximately $163 per square foot, representing a discount to replacement cost in excess of 35%. The portfolio is approximately 70% occupied, compared to an approximate 91% occupancy rate Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) for Reckson's current Westchester office portfolio. This acquisition reflects Reckson's focus on acquiring properties that offer the opportunity to apply the Company's expertise to create value. Reckson is uniquely equipped to increase the portfolio's value by effectively addressing its vacancies, increasing rents, leveraging the Company's scale to generate significant operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. efficiencies and to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the value-added nature of the transaction based on its mix of properties in need of redevelopment and repositioning. Reckson anticipates that these operating initiatives will increase the portfolio's initial GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (NOI) yield of approximately 5% to approximately 9% upon stabilization. Michael Maturo, Reckson's Executive Vice President and Chief Financial Officer, noted, "I am pleased that our disciplined investment approach has enabled us to acquire this portfolio at an attractive valuation. I believe it is an indication that the market is starting to rationalize pricing for value-added investments of this nature." Mr. Maturo continued, "We will continue to seek capital recycling opportunities within our portfolio and anticipate that we may sell all or a portion of these core plus properties to our recently formed Australian LPT LPT - /L-P-T/ or /lip'it/ or /lip-it'/ Line printer. Rare under Unix, more common among hackers who grew up with ITS, MS-DOS, CP/M and other operating systems that were strongly influenced by early DEC conventions. or to certain other strategic purchasers at fair market value." Reckson currently owns and operates approximately 3.2 million square feet in Westchester. |
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