SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
_____________
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 20, 1997
RECKSON ASSOCIATES REALTY CORP.
(Exact name of Registrant as specified in its Charter)
Maryland
(State of Incorporation)
1-13762 11-3233650
(Commission File Number) (IRS Employer Id. Number)
225 Broadhollow Road 11747
Melville, New York (Zip Code)
(Address of principal executive offices)
(516) 694-6900
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
On October 7, 1997, Reckson Associates Realty Corp. announced that it
has entered into a contract to invest $150 million and acquire a controlling
interest in The Morris Companies, one of New Jersey's largest developers of
"big box" industrial space.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Exhibits
99 Press Release, dated October 7, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RECKSON ASSOCIATES REALTY CORP.
/s/ J. Michael Maturo
-------------------------------
J. Michael Maturo
Executive Vice President
and Chief Financial Officer
Date: October 20, 1997
EXHIBIT 99
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RECKSON ASSOCIATES REALTY CORP. (NYSE: RA) announced that it has entered
into a contract to invest $150 million and acquire a controlling interest in
the Morris Companies, one of New Jersey's largest developers of "big box"
industrial space. This investment marks Reckson's entrance into the area of
"big box" distribution facilities.
Reckson will initially invest approximately $87 million for a 68% interest in
the Morris Companies, which will be reorganized and renamed Reckson/Morris
Industrial ("Reckson/Morris"). Additional investments will be made as
required to finance Reckson/Morris's future growth. Substantially all of the
proceeds from Reckson's initial investment will be utilized to repay
outstanding mortgage debt encumbering the portfolio. Closing of the
transaction is anticipated to occur by the end of the year. Reckson
anticipates an initial net operating income yield of 10%.
The Morris Companies' portfolio consists of 23 industrial properties,
including two projects under development comprising approximately four
million square feet, and contracts or options to acquire approximately 365
acres of developable land. The portfolio is located throughout Northern and
Central New Jersey and has a weighted average age of less than 10 years and
average ceiling heights of approximately 30 feet.
Reckson/Morris will be formed as a private real estate investment trust,
utilizing the "downreit" structure, with Reckson controlling a majority of
the board of directors. For accounting purposes Reckson will consolidate the
portfolio of properties into its financial statements.
The Morris Companies, headquartered in Secaucus, New Jersey, is currently
owned by Robert Morris, Chief Executive Officer and Joseph Morris, President,
who together founded the company over 25 years ago. The Morris Companies
have earned a reputation as one of New Jersey's largest and most respected
developers and operators of "big box" industrial space, having developed over
15 million square feet since the company's inception for such national and
regional tenants as Coca Cola, Barnes & Noble and Canon.
Commenting on the transaction, Donald Rechler, the Chairman of Reckson,
stated, "After many years of admiring the success of the Morris's approach to
the business, we feel very fortunate to join with them in taking their
company to the next level. We have tremendous confidence that the
combination of the Morris and Reckson management teams will successfully
source and capitalize on many unique opportunities to create value."
Reckson/Morris will be formed with a conservative capital structure having an
initial debt ratio of less than 12%, positioning it to pursue an aggressive
growth strategy. In New Jersey, Reckson/Morris will target consolidation
opportunities within the (one billion) square foot industrial market, develop
"big box" build to suits and source, redevelop and reposition underperforming
industrial properties. In addition, Reckson/Morris will also seek to
establish a platform for growth by acquiring and integrating "big box"
developers with entrepreneurial management teams in selected markets.
Reckson/Morris plans to capitalize on the Morris Companies' reputations and
existing relationships with regional and national tenants in order to grow
the company. "Our vision is to create an infrastructure where local
developers who share similar reputations and operating philosophies merge to
capitalize on each other's tenant relationships in each of their respective
markets, increasing the company's national tenant base while offering tenants
the benefits of local expertise," commented Scott Rechler, Reckson's
President.
Mr. Rechler continued, "We believe that the private REIT structure will
provide us with a competitive advantage in connection with prospective
acquisitions as it offers the same tax advantages as publicly-traded REITs.
Furthermore, this structure offers local developers the opportunity to
diversify their property holdings, take advantage of the Reckson/Morris
management and infrastructure and participate during the early stages of
growing a well capitalized industrial REIT."
Joseph Morris, President of the Morris Companies, stated, "We are extremely
excited about the opportunity to align ourselves with a partner that has the
proven expertise and vision of Reckson." "In particular," added Robert
Morris, Chief Executive Officer of the Morris Companies, "Reckson has proven
its ability to identify, integrate and align entrepreneurial management teams
toward executing a unified business plan."
Reckson Associates Realty Corp. is a self-administered and self-managed real
estate investment trust (REIT) specializing in acquisition, leasing,
financing, management and development of office and industrial properties.
Reckson's core growth strategy is focused on the suburban market 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 $730 million of properties comprising approximately
13.0 million square feet of space.
Reckson 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 172 properties comprised of approximately 17.5 million square feet
either owned, directly or indirectly, or under contract.
