RECKSON ASSOCIATES REALTY CORP, DEF 14A, 1998-04-02

RECKSON ASSOCIATES REALTY CORP
DEF 14A, 1998-04-02
REAL ESTATE INVESTMENT TRUSTS

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As filed with the Securities and Exchange Commission on April __, 1998

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /x/
Filed by a party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of
the Commission Only
/x/ Definitive Proxy Statement (as permitted by Rule
14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

RECKSON ASSOCIATES REALTY CORP.

225 Broadhollow Road
Melville, NY 11747

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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):
/x/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------
(2)Aggregate number of securities to which transaction applies:

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(3)Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined.):

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(4)Proposed maximum aggregate value of transaction:

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(5)Total fee paid:

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/ / Fee paid previously with preliminary materials:

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/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration state-
ment number, or the form or schedule and the date of its filing.

(1)Amount previously paid:

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(2)Form, Schedule or Registration Statement No.:

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(3)Filing Party:

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(4)Date Filed:

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RECKSON ASSOCIATES REALTY CORP
225 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 1998

------------------------

NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders (the
"Annual Meeting") of Reckson Associates Realty Corp. (the "Company") will be
held on Thursday, May 21, 1998 at 9:30 a.m. at the Omni, 333 Earl Ovington
Boulevard, Mitchel Field, New York, for the following purposes:

1. To elect three Class III directors of the Company to serve until the
2001 Annual Meeting of Stockholders and until their respective successors
are duly elected and qualified;

2. To ratify the selection of Ernst & Young LLP as the independent auditors
of the Company for the fiscal year ending December 31, 1998;

3. To approve the Company's 1998 Stock Option Plan; and

4. To consider and act upon any other matters that may properly be brought
before the Annual Meeting and at any adjournments or postponements
thereof.

Any action may be taken on the foregoing matters at the Annual Meeting on
the date specified above, or on any date or dates to which, by original or later
adjournment, the Annual Meeting may be adjourned or to which the Annual Meeting
may be postponed.

The Board of Directors has fixed the close of business on March 18, 1998 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting and at any adjournments or postponements thereof.
Only stockholders of record of the Company's common stock, $.01 par value per
share, at the close of business on that date will be entitled to notice of and
to vote at the Annual Meeting and at any adjournments or postponements thereof.

You are requested to fill in and sign the enclosed form of proxy, which is
being solicited by the Board of Directors, and to mail it promptly in the
enclosed postage-prepaid envelope. Any proxy may be revoked by delivery of a
later dated proxy. Stockholders of record who attend the Annual Meeting may vote
in person, even if they have previously delivered a signed proxy.

BY ORDER OF THE BOARD OF DIRECTORS

GREGG M. RECHLER
SECRETARY

Melville, New York
March 31, 1998

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE-PREPAID ENVELOPE
PROVIDED. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH,
EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
RECKSON ASSOCIATES REALTY CORP
225 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747

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PROXY STATEMENT

---------------------

FOR 1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 21, 1998

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Reckson Associates Realty Corp. (the
"Company") for use at the 1998 Annual Meeting of Stockholders of the Company to
be held on May 21, 1998, and at any adjournments or postponements thereof (the
"Annual Meeting"). At the Annual Meeting, stockholders will be asked to vote
upon (1) the election of three Class III directors of the Company, (2) to ratify
the selection of Ernst & Young LLP as the independent auditors of the Company
for the fiscal year ending December 31, 1998, (3) to approve the Company's 1998
Stock Option Plan, and (4) to act upon any other matters that may properly be
brought before the Annual Meeting and at any adjournments or postponements
thereof.

This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are first being sent to stockholders on or about April 7, 1998. The Board
of Directors has fixed the close of business on March 18, 1998 as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting (the "Record Date"). Only stockholders of record of the
Company's common stock, par value $.01 per share (the "Common Stock"), at the
close of business on the Record Date will be entitled to notice of and to vote
at the Annual Meeting. As of the Record Date, there were 38,632,335 shares of
Common Stock outstanding and entitled to vote at the Annual Meeting. Holders of
Common Stock outstanding as of the close of business on the Record Date will be
entitled to one vote for each share held by them on the Record Date.

The presence, in person or by proxy, of holders of at least a majority of
the total number of outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum for the transaction of business at the Annual
Meeting. The affirmative vote of the holders of a plurality of the shares of
Common Stock cast on the matter at the Annual Meeting (assuming a quorum is
present) is required for the election of Class III directors, and the
affirmative vote of the Holders of a majority of the shares of Common Stock cast
on the matter at the Annual Meeting (assuming a quorum is present) for each of
the ratification of the Company's auditors, the approval of the Company's 1998
Stock Option Plan, and the approval of any other matters properly presented at
the Annual Meeting for stockholder approval. Under Maryland law, abstentions and
broker "non-votes", or proxies from brokers or nominees indicating that such
person has not received instructions from the beneficial owner or other person
entitled to vote such shares on a particular matter with respect to which the
broker or nominee does not have discretionary voting power, will not be counted
as votes cast and will have no effect on the results of the votes.

STOCKHOLDERS OF THE COMPANY ARE REQUESTED TO COMPLETE, SIGN, DATE AND
PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY RECEIVED PRIOR TO THE
VOTE AT THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AT THE ANNUAL MEETING
AS DIRECTED ON THE PROXY. IF A PROPERLY EXECUTED PROXY IS SUBMITTED AND NO
INSTRUCTIONS ARE GIVEN, THE PROXY WILL BE VOTED FOR THE ELECTION OF THE THREE
NOMINEES FOR CLASS III DIRECTORS OF THE COMPANY NAMED IN THIS PROXY STATEMENT,
FOR RATIFICATION OF THE BOARD OF DIRECTOR'S SELECTION OF ERNST & YOUNG LLP AS
THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998
AND FOR THE APPROVAL OF THE COMPANY'S 1998 STOCK OPTION PLAN. IT IS NOT
ANTICIPATED THAT ANY MATTERS OTHER THAN THOSE SET FORTH IN THE PROXY STATEMENT
WILL BE PRESENTED AT THE ANNUAL MEETING. IF OTHER MATTERS ARE PRESENTED, PROXIES
WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION OF THE PROXY HOLDERS.

A stockholder of record may revoke a proxy at any time before it has been
exercised by filing a written revocation with the Secretary of the Company at
the address of the Company set forth above, by filing a
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duly executed proxy bearing a later date, or by appearing in person and voting
by ballot at the Annual Meeting. Any stockholder of record as of the Record Date
attending the Annual Meeting may vote in person whether or not a proxy has been
previously given, but the presence (without further action) of a stockholder at
the Annual Meeting will not constitute revocation of a previously given proxy.

The Company's 1997 Annual Report, including financial statements for the
fiscal year ended December 31, 1997, has been previously mailed to stockholders.
The Annual Report, however, is not part of the proxy solicitation material.

PROPOSAL 1: ELECTION OF DIRECTORS

The Board of Directors of the Company consists of eleven members and is
divided into three classes, with the directors in each class serving for a term
of three years and until their successors are duly elected and qualified. The
term of one class expires at each annual meeting of stockholders.

At the Annual Meeting, three directors will be elected to serve until the
2001 Annual Meeting and until their successors are duly elected and qualified.
The Board of Directors has nominated Mr. Roger Rechler, Mr. Harvey R. Blau and
Mr. John V.N. Klein to serve as Class III directors (the "Nominees"). Each of
the Nominees is currently serving as a Class III director of the Company. The
Board of Directors anticipates that each of the Nominees will serve, if elected,
as a director. However, if any person nominated by the Board of Directors is
unable to accept election, the proxies will be voted for the election of such
other person or persons as the Board of Directors may recommend.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES.

INFORMATION REGARDING NOMINEES AND DIRECTORS

The following table and biographical descriptions set forth certain
information with respect to the three Nominees for election as Class III
directors at the Annual Meeting, the continuing directors whose terms expire at
the annual meetings of stockholders in 1999 and 2000 and the executive officers
who are not directors, based upon information furnished to the Company by each
director and executive officer.

<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
DIRECTOR OWNERSHIP(1) OF PERCENT OF
NAME AGE SINCE COMMON STOCK CLASS(2)
- --------------------------------------------------------------- --- ----------- ------------------ -------------
<S> <C> <C> <C> <C>
CLASS III NOMINEES FOR ELECTION AT 1998 ANNUAL MEETING (TERM TO
EXPIRE IN 2001)
Roger Rechler.................................................. 56 1994 1,981,993(3) 4.25%
Harvey R. Blau................................................. 62 1995 9,000(4) *
John V.N. Klein................................................ 66 1995 11,800(4) *
CLASS I CONTINUING DIRECTORS (TERM EXPIRES IN 1999)
Scott H. Rechler............................................... 30 1994 761,167(5) 1.63%
Herve A. Kevenides............................................. 59 1995 9,000(4) *
Conrad D. Stephenson........................................... 70 1995 9,000(4) *
Lewis A. Ranieri............................................... 51 1997 3,000(6) *
CLASS II CONTINUING DIRECTORS (TERM EXPIRES IN 2000)
Donald J. Rechler.............................................. 63 1994 2,104,025(7) 4.51%
Mitchell D. Rechler............................................ 38 1994 756,093(8) 1.62%
Leonard Feinstein.............................................. 60 1995 30,000(4) *
Jon L. Halpern(9).............................................. 35 1997 415,730(10) *
</TABLE>

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* Less than one percent.

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redemption of units (the "Units") of limited partnership interests in
Reckson Operating Partnership, L.P., a Delaware limited partnership (the
"Operating Partnership") (assuming the Company elects to issue Common Stock
rather than pay cash upon such redemption). See "Executive Compensation" for
a discussion of the vesting of stock options granted to directors and
officers. Pursuant to the terms of the Amended and Restated Agreement of
Limited Partnership of the Operating Partnership, dated as of June 2, 1995,
and as amended, the Operating Partnership is obligated to redeem Units for
cash, or, at the option of the Company, shares of Common Stock.

(2) For purposes of computing the percentage of outstanding shares of Common
Stock held by each person, any shares of Common Stock which such person has
the right to acquire pursuant to the exercise of a stock option exercisable
within 60 days is deemed to be outstanding, but is not deemed to be
outstanding for the purpose of computing the percent ownership of any other
person.

(3) Includes (a) 423,027 shares of Common Stock, including 402,267 shares owned
directly, 14,000 shares as the trustee of a trust for the benefit of a son
of Mr. Roger Rechler and 6,760 shares owned by his wife, (b) 295,000
exercisable options, and (c) 1,263,966 Units, including 40,576 Units owned
directly, 259,632 Units as the trustee of trusts for the benefit of Mr.
Roger Rechler's sons and 963,758 Units owned through corporations and
partnerships.

(4) Includes options to purchase 9,000 shares of Common Stock.

(5) Includes (a) 63,338 shares of Common Stock, including 2,338 shares owned in
trust for Mr. Scott H. Rechler's child, (b) 376,000 exercisable options and
(c) 321,829 Units, including 194,352 Units owned directly and 127,477 Units
owned through corporations and partnerships.

(6) Includes options to purchase 3,000 shares of Common Stock.

(7) Includes (a) 438,767 shares of Common Stock, including 424,767 shares owned
directly, and 14,000 shares as the trustee of a trust for the benefit of a
son of Mr. Donald J. Rechler, (b) 395,000 exercisable options and (c)
1,270,258 Units, including 45,826 Units owned directly, 259,632 Units as the
trustee of trusts for the benefit of Mr. Donald J. Rechler's sons, and
964,800 Units owned through corporations and partnerships.

(8) Includes (a) 77,652 shares of Common Stock, including 4,652 shares owned in
trust for Mr. Mitchell D. Rechler's children, (b) 351,000 exercisable
options and (c) 327,441 Units, including 202,576 Units owned directly, and
124,865 Units owned through corporations and partnerships.

(9) Mr. Halpern has agreed that he will discontinue serving as a member of the
Board of Directors of Reckson at the request of the Board of Directors of
Reckson at any time after July 1998.

(10) Includes (a) 25,230 shares of Common Stock, (b) 56,000 exercisable options
and (c) 334,500 Units, including 2,000 Units owned directly and 332,500
Units owned through corporations and partnerships and of which Mr. Halpern
disclaims beneficial ownership.

CLASS III NOMINEES FOR ELECTION AT 1998 ANNUAL MEETING--TERM TO EXPIRE IN 2001

ROGER RECHLER has served as Vice Chairman of the Board and a director of the
Company since its formation and as an Executive Vice President of Development
since February 1997. Prior to the initial public offering of Common Stock of the
Company in June 1995 (the "IPO"), Mr. Rechler was a co-founder and general
partner of Reckson Associates, a predecessor to the Company ("Reckson"). Mr.
Rechler is responsible for the supervision of property development and
construction, architectural and design-services, interior construction and
property management. Mr. Rechler attended the University of Miami. Mr. Rechler
is the father of Scott H. Rechler and Gregg M. Rechler and the brother of Donald
J. Rechler.

HARVEY A. BLAU has served as a director of the Company since 1995. Mr. Blau
is a senior partner of the law firm of Blau, Kramer, Wachtler & Lieberman, P.C.
and has been associated with such firm (including its predecessors) since 1966.
Mr. Blau has served as the Chairman of the Board of Aeroflex, Incorporated since
1991, the Chairman of the Board of the Griffon Corporation and a Director of Nu
Horizons Electronics Corp. since 1984. Mr. Blau serves as a Trustee of Benjamin
N. Cardozo School of Law and as a Trustee of the Incorporated Village of Old
Westbury, New York. Mr. Blau holds a bachelor's degree from New York University,
a law degree from Columbia University School of Law and an advanced law degree
from New York University Graduate School of Law.

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JOHN V.N. KLEIN has served as a director of the Company since 1995. Mr.
Klein was the Managing Attorney of the law firm of Meyer, Suozzi, English &
Klein, P.C. between 1984 and 1997. Mr. Klein served as a Director of Fleet Bank
from 1980 to 1994 and is currently on the Advisory Board of Fleet Bank. Mr.
Klein has also been a member of the advisory board of St. Joseph's College,
Patchogue, New York since 1980. For more than five years Mr. Klein has served as
Director of Pocono Hotels Corporation, a hotel owner and operator. Mr. Klein has
served in various government positions on Long Island, including County
Executive of Suffolk County, New York from 1972 to 1979. Mr. Klein holds a
bachelor's degree and a law degree from the University of Virginia.

CLASS I CONTINUING DIRECTORS--TERM TO EXPIRE IN 1999

SCOTT H. RECHLER has served as Chief Operating Officer and a director of the
Company since its formation and has served as President of the Company since
February 1997. In addition, until February 1997 Mr. Rechler served as Executive
Vice President of the Company since its formation. Mr. Rechler has been employed
at Reckson since 1989. Prior to the IPO, he directed the financing of
approximately $200 million of mortgage debt and the acquisition of property
having a value in excess of $100 million for Reckson. He is a member of the
Board of Directors of the Long Island Childrens Museum. Mr. Rechler is a
graduate of Clark University and received a Masters Degree in Finance with a
specialization in real estate from New York University. He is the son of Roger
Rechler and the brother of Gregg M. Rechler.

HERVE A. KEVENIDES has served as a director of the Company since 1995. Since
1997, Mr. Kevenides has served as the Managing Director, Research Group for
Landauer Associates, a real estate consulting and valuation firm. Mr. Kevenides
served from 1995 to 1996 as the director of the Real Estate Products Group for
Ceres Financial Concepts, N.A. Mr. Kevenides is the president and director of
research of Metropolitan Analysis & Forecasting Corporation, an international
real estate economics and market research firm. Mr. Kevenides has served in this
position since 1988. Mr. Kevenides has served as an Adjunct Associates Professor
of the Masters in Real Estate Program of New York University since 1989. Mr.
Kevenides was a vice president and director of real estate economics and market
research for Chemical Bank from 1981 to 1988, and a vice president and manager
of real estate market research for Chase Manhattan Bank from 1972 to 1981. Mr.
Kevenides holds a Masters of Business Administration from New York University.

CONRAD D. STEPHENSON has served as a director of the Company since 1995. Mr.
Stephenson served as the chief executive officer of Pan Am Equities Inc., a
property ownership and management company from 1993 to 1997, and currently
serves as a consultant thereof. Mr. Stephenson was employed by The Comras
Company, a real estate company, from 1990 to 1993, and served as the vice
president in the tri-state and northeast real estate lending division of the
First National Bank of Chicago from 1987 to 1990. Mr. Stephenson was the vice
president in charge of all commercial real estate lending activities of The
Bowery Savings Bank from 1985 to 1987, and was a vice president of The Chase
Manhattan Bank from 1975 to 1985. Mr. Stephenson has served as a governor, vice
president and a member of the executive committee of the Real Estate Board of
New York. Mr. Stephenson holds a bachelor's degree from Fordham University and a
Masters of Business Administration from New York University. Mr. Stephenson is a
retired colonel of the U.S. Army Reserves, with which he served for 35 years.

JON L. HALPERN has served as a director of the Company since 1997. Prior to
his joining the Board, Mr. Halpern served as an Executive Vice President and
President of the Westchester Division. In such capacity, Mr. Halpern was
responsible for the general business operations of the Company in the
Westchester Area. Prior to joining the Company in February 1996, Mr. Halpern
served as the President and Chief Operating Officer of Halpern Enterprises,
Inc., which owned, operated, leased and managed in excess of 1.7 million square
feet of office and mixed-use properties and has developed and constructed
(through affiliates) in excess of 3.8 million square feet of construction. Mr.
Halpern serves as a Board Member and Executive Committee Member of the
Westchester County Medical Center. Mr. Halpern is the Founding Member and
current Executive Committee Member of the Westchester Partnership for Economic
Development, a public/private partnership working to promote and encourage
business within

4
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Westchester County. Mr. Halpern is actively involved in affordable housing and
environmental organizations in Westchester County having chaired a congressional
task force and government committees focused on these issues. Mr. Halpern is a
graduate of University of Colorado School of Business where he earned a Bachelor
of Science degree.

CLASS II CONTINUING DIRECTORS--TERM TO EXPIRE IN 2000

DONALD J. RECHLER has served as Chairman of the Board, Chief Executive
Officer and a director of the Company since its formation. Mr. Rechler also
served as President of the Company from its formation until February 1997. Prior
to the IPO in June 1995, Mr. Rechler was a co-founder and general partner of
Reckson Associates. He is a founder and former President and Chairman of the
Association For A Better Long Island, a founder of the Long Island Commercial &
Industrial Development Association, a member of the Board of Directors of the
Development Division of North Shore Hospital, a member of the Board of Directors
of the Long Island Philharmonic and a member of the Council of Overseers of Long
Island University, C.W. Post College. Mr. Rechler is a graduate of the
University of Miami. Mr. Rechler is the father of Mitchell D. Rechler and the
brother of Roger Rechler.

MITCHELL D. RECHLER has served as Executive Vice President and a director of
the Company since its formation. Mitchell D. Rechler also serves as the
President of Reckson Management Group, Inc. (the "Management Company"). From
1981 to 1985, he was employed by Reckson in various non-supervisory roles
including positions in property management, construction, acquisitions and
leasing. Since 1986, Mr. Rechler has served as an executive vice president of
Reckson, responsible for all leasing activities including the coordination of
leasing and marketing strategies and overseeing tenant relations. Mr. Rechler
has served as President of the Management Company since its organization in
1991. Mr. Rechler serves on the executive committee of the Children's Medical
Fund of Schneider Children's Hospital of Long Island Jewish Medical Center and
as a member of the board of directors of the Long Island Friends of the Arts. He
is a graduate of Emory University. He is the son of Donald J. Rechler.

LEONARD FEINSTEIN has served as a director of the Company since 1995. Mr.
Feinstein is the co-founder and the president and co-chief executive officer of
Bed Bath & Beyond Inc., a New York Stock Exchange listed company. Mr. Feinstein
has served in such capacity since 1992. Mr. Feinstein served as co-chief
executive officer, treasurer and secretary of Bed Bath & Beyond Inc. from 1971
to 1992.

LEWIS S. RANIERI has served as a director of the Company since 1997. Mr.
Ranieri is the chairman of Bank United Corp., a position he has held since 1988.
He is also the chairman and chief executive officer of Ranieri & Co., Inc.,
positions he has held since founding Ranieri & Co. in 1988. Mr. Ranieri is the
founder of Hyperion Partners L.P. and Hyperion Partners II L.P. He is also
Chairman of Hyperion Capital Management, Inc. and The Hyperion Total Return
Fund, Inc. He is director of Transworld HealthCare, Inc., the Hyperion 1999 Term
Trust, Inc., the Hyperion 2002 Term Trust, Inc. and Hyperion 2005 Investment
Grade Opportunity Trust, Inc. Mr. Ranieri is also chairman and president of
various other indirect subsidiaries of Hyperion. He is a director of Delphi
Financial Group, Inc. and Delphi International Ltd. Prior to forming Hyperion,
Mr. Ranieri had been vice chairman of Salomon Brothers, Inc. Mr. Ranieri helped
develop the capital markets as a source of funds for housing and commercial real
estate, established Salomon's leadership position in the mortgage-backed
securities area, and also led the effort to obtain Federal legislation to
support and build the market. Mr. Ranieri has served on the National Association
of Home Builders Mortgage Roundtable continuously since 1986. He was inducted
into the National Housing Hall of Fame in 1997. Mr. Ranieri also acts as a
trustee or director of various environmental and religious institutions such as
the Environmental Defense Fund and Shrine of Elizabeth Ann Seton/Our Lady of the
Rosary Church.

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EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

MICHAEL MATURO has served as an Executive Vice President, Chief Financial
Officer and Treasurer of the Company since 1995. Prior to joining the Company,
Mr. Maturo was a senior manager at E&Y Kenneth Leventhal Real Estate Group
(formerly Kenneth Leventhal & Company), a public accounting and consulting firm.
He specialized in diverse phases of real estate finance including corporate and
property debt financings and recapitalization transactions. Mr. Maturo is a
graduate of Seton Hall University with a degree in accounting and finance and is
a certified public accountant. Mr. Maturo is 36 years old.

GREGG M. RECHLER has served as an Executive Vice President and Secretary of
the Company since its formation. Mr. Rechler also serves as President of Reckson
Construction Group, Inc. From 1985 to 1988, Mr. Rechler held non-supervisory
roles at Reckson in the construction and property management areas. Beginning in
1989, as an executive vice president of Reckson, he served as the person
responsible for the construction of the Omni (a 575,000 square foot office
building) and supervised all construction aspects of this project. Mr. Rechler
is a member of the Board of Directors of the Long Island chapter of the Building
Owners and Managers Association. Mr. Rechler attended the New York Institute of
Technology. He is the son of Roger Rechler and the brother of Scott H. Rechler.
Mr. Rechler is 31 years old.

CHAIRMAN OF THE BOARD EMERITUS

WALTER GROSS has served as Chairman of the Board Emeritus of the Company
since its formation. For over 40 years, Mr. Gross has been actively involved in
the development and operation of industrial and office properties on Long
Island. Together with the late William Rechler, Mr. Gross conceived of and
developed Vanderbilt Industrial Park, the first planned industrial park built on
Long Island. He also owned and operated Walter J. Gross Construction Corp., a
general contracting firm, that has constructed in excess of 3,000,000 square
feet on behalf of clients including B.F. Goodrich, Sears and The Prudential
since 1970. Mr. Gross is 78 years old.

THE BOARD OF DIRECTORS AND ITS COMMITTEES

The Company is managed by an eleven member Board of Directors, a majority of
whom are independent of the Company's management. The Board of Directors held
fourteen meetings during fiscal year 1997. Each of the directors attended at
least 75% of the total number of meetings of the Board of Directors and of the
committees of the Company of which he was a member during 1997, except for
Messrs. Halpern and Ranieri who became members of the Board of Directors in July
1997.

AUDIT COMMITTEE. The Audit Committee, which consists of Messrs. Feinstein
and Klein, makes recommendations concerning the engagement of independent public
accountants, reviews with the independent public accountants the plans and
results of the audit engagements, approves professional services provided by the
independent public accountants, reviews the independence of the independent
public accountants, considers the range of audit and non-audit fees and reviews
the adequacy of the Company's internal accounting controls. The Audit Committee
held two meetings during fiscal year 1997.

EXECUTIVE COMMITTEE. Subject to the supervision and oversight of the Board
of Directors, the Executive Committee, which consists of Donald J. Rechler,
Scott H. Rechler, Herve Kevenides, Conrad D. Stephenson and Jon Halpern, has the
authority to approve the acquisition, financing and disposition of investments
by the Company and to authorize the execution of certain contracts and
agreements, including those relating to the borrowing of money by the Company
and to exercise generally all other powers of the Board of Directors, except for
those which require action by all Directors or the Independent Directors under
the Articles of Incorporation or By-Laws of the Company or under applicable law.
The Executive Committee held eight meetings during fiscal year 1997.

COMPENSATION COMMITTEE. The Compensation Committee, which consists of
Harvey R. Blau and Leonard Feinstein, makes recommendations and exercises all
powers of the Board of Directors in connection with compensation matters,
including incentive compensation and benefit plans. The Compensation Committee
also has authority to grant awards under the Company's stock option plans. The
Compensation Committee held four meetings during fiscal year 1997.

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The Board of Directors does not have a standing nominating committee. The
full Board of Directors performs the functions of such a committee.

DIRECTOR COMPENSATION

Each of the non-employee directors of the Company receives an annual
director's fee of $15,000. Each non-employee director also receives $500 for
each regular quarterly meeting of the Board of Directors attended, $500 for each
special meeting of the Board of Directors attended, $250 for each special
telephonic meeting of the Board of Directors participated in and $500 for each
committee meeting attended. Each non-employee director appointed or elected for
the first time after the IPO will receive an initial option to purchase 3,000
shares of Common Stock at the market price of the Common Stock on the date of
grant. In addition, following each annual meeting of stockholders each of the
Company's non-employee directors will receive an option to purchase 1,000 shares
of Common Stock at the market price of the Common Stock on the date of grant.
All options granted to non-employee directors vest on the date of grant. On May
30, 1997, each non-employee director was granted an option to purchase 1,000
shares of Common Stock at $22.50 per share.

PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

The Board of the Company, upon the recommendation of the Audit Committee,
has selected the accounting firm of Ernst & Young LLP to serve as independent
auditors of the Company for the fiscal year ending December 31, 1998, subject to
ratification of this appointment by the stockholders of the Company. Ernst &
Young LLP has served as the Company's independent auditors since the Company's
formation in September 1994 and is considered by management of the Company to be
well qualified. The Company has been advised by that firm that neither it nor
any member thereof has any financial interest, direct or indirect, in the
Company or any of its subsidiaries in any capacity. A representative of Ernst &
Young LLP will be present at the Annual Meeting, will be given the opportunity
to make a statement if he or she so desires and will be available to respond to
appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF THE INDEPENDENT AUDITORS.

EXECUTIVE COMPENSATION

The following table sets forth information regarding the base compensation
awarded for the past three fiscal years to each of the five most highly
compensated executive officers of the Company (collectively, the "Named
Executive Officers") whose base salary, on an annualized basis exceeded $100,000
during the fiscal year ended December 31, 1997.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
SALARY(1) BONUSES LONG TERM ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS(2) ($)
- -------------------------------------------------------------- --------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Donald J. Rechler............................................. 1997 $ 325,000 $ 390,000 150,000 --
Chief Executive Officer 1996 $ 200,000 $ 200,000 -- --
1995 $ 200,000 -- 20,000 --

Scott H. Rechler.............................................. 1997 $ 250,000 $ 300,000 150,000 --
President and Chief Operating Officer 1996 $ 150,000 $ 150,000 -- --
1995 $ 150,000 -- 104,000 --

Michael Maturo................................................ 1997 $ 200,000 $ 240,000 150,000 --
Executive Vice President, Chief Financial Officer 1996 $ 162,500(3) $ 162,500 -- --
and Treasurer 1995 $ 150,000 $ 25,000 80,000 --

Mitchell D. Rechler........................................... 1997 $ 200,000 $ 240,000 150,000 --
Executive Vice President and President of Reckson Management 1996 $ 150,000 $ 150,000 -- --
Group, Inc. 1995 $ 150,000 -- 104,000 --
</TABLE>

7
<PAGE>
<TABLE>
<CAPTION>
SALARY(1) BONUSES LONG TERM ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS(2) ($)
- -------------------------------------------------------------- --------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Gregg M. Rechler.............................................. 1997 $ 200,000 $ 240,000 150,000 --
Executive Vice President and Secretary and President of 1996 $ 150,000 $ 150,000 -- --
Reckson Construction Group, Inc. 1995 $ 150,000 -- 104,000 --
</TABLE>

- ------------------------

(1) The base salaries of Donald J. Rechler, Scott H. Rechler, Michael Maturo and
Mitchell D. Rechler are paid by the Management Company and the base salary
of Gregg M. Rechler is paid by the Construction Company. The Company and the
Operating Partnership reimburse the appropriate subsidiary corporation for
time spent by the Named Executive Officer on the business of the Company or
the Operating Partnership, respectively.

(2) As of March 9, 1998, options to purchase 1,912,000 shares of Common Stock
have been granted to the Named Executive Officers.

(3) Excludes loan forgiveness in the amount of $100,000 pursuant to the terms of
Mr. Maturo's employment and noncompetition agreement with the Company.

OPTION GRANTS FOR FISCAL YEAR 1997

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
PERCENT OF EXERCISE COMMON STOCK PRICE
TOTAL OPTIONS PRICE PER APPRECIATION FOR
GRANTED TO SHARE OF OPTION TERM(1)
OPTIONS EMPLOYEES FOR COMMON --------------------------
NAME GRANTED(2) FISCAL YEAR STOCK(3) EXPIRATION DATE 5%(4) 10%(5)
- ------------------------------ ----------- ------------- ------------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Donald J. Rechler............. 150,000 14.70% $ 27.125 Nov. 4, 2007 $ 2,558,815/ $6,484,540
225,000 $ 25.750 Jan. 9, 2008 $ 3,643,650/ $9,233,753

Scott H. Rechler.............. 150,000 11.76% $ 27.125 Nov. 4, 2007 $ 2,558,815/ $6,484,540
150,000 $ 25.750 Jan. 9, 2008 $ 2,429,100/ $6,155,835

Michael Maturo................ 150,000 10.78% $ 27.125 Nov. 4, 2007 $ 2,558,815/ $6,484,540
125,000 $ 25.750 Jan. 9, 2008 $ 2,024,250/ $5,129,863

Mitchell D. Rechler........... 150,000 10.78% $ 27.125 Nov. 4, 2007 $ 2,558,815/ $6,484,540
125,000 $ 25.750 Jan. 9, 2008 $ 2,024,250/ $5,129,863

Gregg M. Rechler.............. 150,000 10.78% $ 27.125 Nov. 4, 2007 $ 2,558,815/ $6,484,540
125,000 $ 25.750 Jan. 9, 2008 $ 2,024,250/ $5,129,863
</TABLE>

- ------------------------

(1) In accordance with the rules of the Securities and Exchange Commission,
these amounts are the hypothetical gains of "option spreads" that would
exist for the respective options based on assumed rates of annual compound
share price appreciation of 5% and 10% from the date the options were
granted over the full option term. No gain to the optionee is possible
without an increase in the price of Common Stock, which would benefit all
shareholders.

(2) All options are granted with an exercise price equal to the fair market
value of the Common Stock on the date of grant and have a term of not more
than ten years from the date of grant. The options granted for fiscal year
1997 were vested on the date of grant.

(3) Based on the fair market value of the Common Stock, $27.125 and $25.750 per
share, on November 4, 1997 and January 9, 2008, respectively, the date of
grant.

(4) An annual compound share price appreciation of 5% from $27.125and
$25.750,the fair market value of the Common Stock on November 4, 1997, and
January 9, 1998, yields a price of $44.183 and $41.944 per share of Common
Stock.

8
<PAGE>
(5) An annual compound share price appreciation of 10% from $27.125and $25.750,
the fair market value of the Common Stock on November 4, 1997 and January 9,
1998, yields a price of $70.355 and $66.789 per share of Common Stock.

No options were exercised by the Named Executive Officers in 1997. The
following table sets forth the value of options at the end of 1997 (including
the options granted on January 9, 1998 in respect of 1997) by the Company's
Named Executive Officers.

AGGREGATED FISCAL YEAR-END 1997 OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END(#)(1) YEAR-END($)(2)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------------------------------------------- ----------------------- -----------------------
<S> <C> <C>
Donald J. Rechler.............................................. 395,000/0 $208,750/$0
Scott H. Rechler............................................... 376,000/28,000 $950,750/371,000
Michael Maturo................................................. 328,333/26,667 $706,662/353,338
Mitchell D. Rechler............................................ 351,000/28,000 $950,750/371,000
Gregg M. Rechler............................................... 351,000/28,000 $950,750/371,000
</TABLE>

- ------------------------

(1) Includes options granted on January 9, 1998, in respect of 1997, to purchase
shares of common stock at a price of $25.750 per share.

(2) The value of unexercised in-the-money options at fiscal year-end based on
the fair market value for Common Stock of $25.375 per share, as of December
31, 1997.

EMPLOYMENT AND NONCOMPETITION AGREEMENTS

Each of the Named Executive Officers has entered into an employment and
noncompetition agreement and a severance agreement with the Company.

The agreements with each of Donald J. Rechler, Scott H. Rechler, Mitchell D.
Rechler and Gregg Rechler will expire on the third anniversary of the closing of
the IPO (i.e., June 2, 1998) and the agreement with Michael Maturo will expire
on June 15, 1998, unless in each case otherwise extended. The term of each of
the severance agreements is identical to the Named Executive Officer's
employment agreement, including any extension thereof. Each agreement provides
for certain benefits in the event of termination of the Named Executive Officer
by the Company without "Good Reason" (as such term is defined in the applicable
agreement), resignation by the Named Executive Officer upon a material breach of
the agreement by the Company or a "Change in Control" of the Company (as such
term is defined in the applicable agreement). These benefits include the
continued payment of the Named Executive Officer's base salary during the
remaining term of the employment period as well as continued entitlement to
receive other benefits conferred under the applicable agreement for such
remaining term which, in the case of a Change in Control, is at least thirty-six
months. Under the agreements, each Named Executive Officer is also entitled to
certain specified benefits in the event of his death or disability.

In addition, such employment and noncompetition agreements, subject to
certain exceptions, prohibit each such Named Executive Officer from engaging,
directly or indirectly, during the term of his employment, in any business which
engages or attempts to engage in, directly or indirectly, the acquisition,
development, construction, operation, management or leasing of any industrial
office real estate property anywhere within the Tri-State metropolitan area
("Competitive Activities"). These employment and noncompetition agreements also
prohibit such persons from engaging, directly or indirectly, during the
Noncompetition Period in any Competitive Activities, subject to certain limited
exceptions. The Noncompetition Period for each such employee is the period
beginning on the date of the termination of employment and ending on the latest
of (i) three years from the closing of the IPO (in the case of Donald

9
<PAGE>
J. Rechler, Scott H. Rechler, Mitchell D. Rechler and Gregg Rechler) and June
15, 1998 (in the case of Michael Maturo), (ii) one year from the termination of
his employment with the Company and (iii) the date on which the severance
payments provided to him under his employment agreement cease. It is presently
contemplated that the employment and non-competition agreement will be extended
by the Company prior to their expiration.

Pursuant to the employment and noncompetition agreement with Mr. Maturo,
upon execution of such agreement, the Company loaned to Mr. Maturo the amount of
$399,980 (the "Loan") in order to finance his purchase of an equity interest in
the Company. In that regard, Mr. Maturo has purchased and currently owns 32,988
Units, as adjusted for the Company's 2-for-1 stock dividend payable to
stockholders of record on April 4, 1997 ("split-adjusted") (the "Restricted
Units") (effectively purchased at a price per Unit of $12.125, the closing price
per share of Common Stock on the New York Stock Exchange on the date the
employment and noncompetition agreement was executed). The Loan will mature on
the fourth anniversary of its issuance and accrues interest at the rate of
8 1/2%. Subject to the limitations set forth below, on each of the first four
anniversaries of the Loan, $100,000 of the outstanding principal amount is
forgiven by the Company and the Company loans to Mr. Maturo a cash amount
equivalent to his resulting tax liability (a "Tax Loan") which in turn is
forgiven (together with accrued interest thereon and on the Loan) over the fifth
through eighth anniversaries of the date the Loan was made. Both the Loan and
the Tax Loans are recourse solely to the Restricted Units. In April 1997, a Tax
Loan in the amount of $52,000 was made to Mr. Maturo. Under the employment and
noncompetition agreement, if Mr. Maturo is terminated by the Company for "Good
Reason" (as defined in such agreement) or Mr. Maturo voluntarily terminates his
employment for reasons other than those expressly permitted under such
agreement, the maturity date of the Loan will accelerate to the date of
termination.

REPORT ON EXECUTIVE COMPENSATION

The following is a report by the Company's Compensation Committee regarding
the Company's executive compensation objectives, executive compensation program
and the compensation of the Company's chief executive officer:

EXECUTIVE COMPENSATION OBJECTIVES. The objective of the Company's executive
compensation program is to attract, retain and motivate talented executives that
will maximize stockholder value. In order to achieve this objective, in addition
to annual base salaries, the executive compensation program utilizes a
combination of long-term incentives through equity-based compensation and annual
incentives through cash bonuses. The program is intended to align the interests
of executives with those of the Company's stockholders by linking a portion of
executive compensation directly to increases in stockholder value. The Company
seeks to provide total compensation to its executive officers which is
competitive with total compensation paid by REITs similar to the Company.

PROCEEDINGS OF THE COMPENSATION COMMITTEE. The Compensation Committee
determines compensation for the Company's executive officers and is comprised of
two nonemployee directors, Mr. Blau and Mr. Feinstein. Final compensation
determinations for each fiscal year will generally be made after the end of the
fiscal year. At that time, base salaries for the following fiscal year will be
set, cash bonuses, if any, will be determined for the past year's performance,
and option grants, if any, will generally be made. At a meeting in February
1998, the Compensation Committee fixed the base salaries for the Named Executive
Officers for the fiscal year ending December 31, 1998 and determined incentive
compensation awards for such officers in respect of the fiscal year ended
December 31, 1997.

The Compensation Committee engaged FPL Associates, a consultant, to advise
the Compensation Committee regarding executive officer compensation matters,
including annual base salary, annual incentives and long-term incentives. The
Compensation Committee considered FPL's analysis in determining base salaries
and incentives.

In determining compensation for the Named Executive Officers, the
Compensation Committee noted several factors, including the Company's strong
performance for the 1997 fiscal year, both in terms of total

10
<PAGE>
shareholder return (28.0%) as well as growth in Funds From Operations per share
(12.2 %). Further, during the period June 2, 1995 (commencement of operations as
a public company) through December 31, 1997, the total return to shareholders
(assuming the reinvestment of dividends) amounted to 143.5%.

The Compensation Committee exercises independent discretion in respect of
executive compensation matters. With respect to the compensation of the Named
Executive Officers other than Donald J. Rechler, the Compensation Committee
reviews the recommendations of Donald J. Rechler.

The following is a discussion of each element of the Company's executive
compensation:

ANNUAL BASE SALARY. Base salaries for each of the Named Executive Officers
are the subject of the employment and noncompetition agreement between the
Company and each such executive as indicated above. Each such agreement provides
that the base salary provided for under the respective agreement will be
reviewed no less frequently than annually. For 1997, base salaries for the Named
Executive Officers were determined by the Compensation Committee based upon a
review of the performance of each Named Executive Officer and the report
prepared by FPL for the fiscal year ended December 31, 1997. For the fiscal year
ending December 31, 1998, base salaries for the Named Executive Officers were
determined by the Compensation Committee based upon a review of the performance
of each Named Executive Officer and the report prepared by FPL. In that regard,
base salaries for the 1998 fiscal year for each of the Named Executive Officers
are as follows: Donald Rechler-$500,000, Scott Rechler-$400,000, Michael
Maturo-$300,000, Mitchell Rechler-$300,000 and Gregg Rechler-$300,000.

ANNUAL INCENTIVES. Annual incentives are provided in the form of cash
bonuses to be paid if certain performance objectives are achieved. Cash bonuses
will also be subject to adjustment based upon the Compensation Committee's
evaluation of an executive's personal performance. Mr. Maturo's employment and
noncompetition agreement provides for an annual cash bonus based upon annual
increases in adjusted Funds From Operations per share of Common Stock.

The Compensation Committee awarded the following cash bonuses to the
following Named Executive Officers in February 1998 in respect of the fiscal
year ended December 31, 1997: Scott Rechler-$300,000, Mitchell Rechler-$240,000,
Gregg Rechler-$240,000 and Michael Maturo-$240,000. The cash bonus award to
Donald J. Rechler is discussed separately below. In determining incentive
compensation for 1997, the Compensation Committee considered the factors
described above regarding annual base salaries.

LONG-TERM INCENTIVES. Long-term incentives may be provided through a
variety of means, including the grant of stock options, restricted stock awards
and stock loans. These awards are intended to align the executive's long-term
objectives with those of the Company's stockholders. The grant of stock options,
restricted stock awards and stock loans are made under the Company's stock
option plans which are administered by the Compensation Committee. The
Compensation Committee has the discretion to determine those individuals to whom
awards are made and the terms and conditions of the awards.

In accordance with the Board's approval of recommendations made by the
Compensation Committee and the Company's 1997 Stock Option Plan, as a long-term
incentive award for the fiscal year ended December 31, 1997, each of the
Company's Named Executive Officers received loans from the Company on December
10, 1997 to purchase shares of Common Stock (the "1997 Stock Loans"). The
aggregate principal amount of the 1997 Stock Loans is $1,356,250 in the case of
Donald J. Rechler; $1,017,188 in the case of Scott Rechler; and $678,125 in the
case of each Mitchell Rechler, Gregg Rechler and Michael Maturo. Each Stock Loan
has a term of five years, accrues interest at the mid-term "Applicable Federal
Rate" ("AFR") as in effect from time to time, is secured by the Common Stock
purchased and is otherwise non-recourse. Ten percent (10%) of each Named
Executive Officer's Stock Loan (together with accrued interest on the Stock
Loan) is forgiven each year during the term of the Stock Loan, provided that the
Named Executive Officer is then employed by the Company and the remaining
outstanding principal balance of the Stock Loan will be due and payable at
maturity. The Company will also loan to the Named Executive Officer an amount
equal to his aggregate tax liability resulting from such forgiveness (the "Tax
Loans"). The Tax Loans will have a one year maturity, bear interest at the AFR
and be forgiven upon

11
<PAGE>
maturity (together with the interest thereon), provided that the officer is then
employed by the Company. In the event of a Change of Control of the Company, a
Named Executive Officer's death or permanent disability, termination of his
employment by the Company without cause or a reduction in the nature or scope of
such Named Executive Officer's duties, the outstanding principal amounts of the
applicable Stock Loan and Tax Loan will be forgiven in full. In the event a
Named Executive Officer leaves the employ of the Company or is terminated with
cause, the outstanding amount of the applicable loans will be immediately due
and payable. In approving these loans the Compensation Committee considered the
same factors it considered in determining the annual incentives, including the
retention of the Named Executive Officers.

1997 CHIEF EXECUTIVE OFFICER COMPENSATION. Donald J. Rechler's base salary
for the fiscal year ended December 31, 1997 was $325,000, as determined by the
Compensation Committee.

For the fiscal year ended December 31, 1997, the Compensation Committee
awarded to Donald J. Rechler a cash bonus of $390,000. The amount of this bonus
was determined by the Compensation Committee substantially in accordance with
the policies described above relating to all Named Executive Officers of the
Company. In making such determination the Compensation Committee noted several
factors, including the Company's achievement of a 12.2% increase of Funds From
Operations per share in 1997 over levels achieved in 1996 and that the Company
provided total shareholder returns (assuming the reinvestment of dividends) of
28.0% and 143.5% for the year ended December 31, 1997 and the period June 2,
1995 (commencement of operations of the Company) through December 31, 1997,
respectively. The Compensation Committee also considered the fact that the
Company increased the square footage of its portfolio of properties by over
55.0% through acquisitions during 1997. In addition, the Compensation Committee
also considered the successful completion of two public offerings of the
Company's Common Stock resulting in net proceeds of approximately $292 million
and one private placement of the Company's debt securities resulting in net
proceeds of approximately $150 million.

The Compensation Committee determined Donald J. Rechler's Stock Loan for the
year ended December 31, 1997 substantially in accordance with the policies
described above relating to all Named Executive Officers of the Company. The
terms of such Stock Loan are described above under "--Long Term Incentives."

TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), limits the deductibility on the
Company's tax return of compensation over $1 million to any of the Named
Executive Officers of the Company unless, in general, the compensation is paid
pursuant to a plan which is performance-related, non-discretionary and has been
approved by the Company's stockholders. The Compensation Committee's policy with
respect to section 162(m) is to make every reasonable effort to ensure that
compensation is deductible to the extent permitted while simultaneously
providing Company executives with appropriate compensation for their
performance. The Company did not pay any compensation during 1997 that would be
subject to the limitations set forth in section 162(m).

Submitted by the Compensation
Committee
of the Board of Directors:

Harvey R. Blau
Leonard Feinstein

12
<PAGE>
STOCK PERFORMANCE GRAPH

The following graph provides a comparison of the cumulative total
stockholder return on the Common Stock for the period from May 26, 1995 (the
date upon which the Company's Common Stock commenced trading on the New York
Stock Exchange) to December 31, 1997 with the cumulative total return on the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") and the NAREIT
Equity REIT Total Return Index. Total return values were calculated based on
cumulative total return assuming (i) the investment of $100 in the Common Stock
on May 26, 1995 and in the S&P 500 and the NAREIT Equity REIT Total Return Index
on May 31, 1995 and (ii) reinvestment of dividends.
<TABLE>
<CAPTION>
5/95 6/30/95 9/30/95 12/31/95 3/31/96 6/30/96 9/30/96 12/31/96
------- -------- -------- --------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Reckson Associates Realty Corp............... 100 100 110 127 133 146 187 193
S&P 500...................................... 100 104 112 118 123 128 131 141
NAREIT Equity REIT Total Return Index........ 100 102 106 111 113 116 126 150

<CAPTION>
3/31/97 6/30/97 9/30/97 12/31/97
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Reckson Associates Realty Corp............... 214 216 253 247
S&P 500...................................... 145 189 181 185
NAREIT Equity REIT Total Return Index........ 151 158 177 180
</TABLE>

13
<PAGE>
PRINCIPAL AND MANAGEMENT STOCKHOLDERS

The following table sets forth the beneficial ownership of Common Stock for
(i) each stockholder of the Company holding more than a 5% beneficial interest
in the Company, (ii) each executive officer of the Company who is not a director
of the Company and (iii) the directors and executive officers of the Company as
a group. Stock ownership of the Directors of the Company appears under the
heading "Information Regarding Nominees and Directors" in this Proxy Statement.

<TABLE>
<CAPTION>
SHARES OF COMMON
STOCK AND UNITS
BENEFICIALLY OWNED
AS OF MARCH 9, 1998(1)
----------------------------
PERCENT OF
NAME OF BENEFICIAL OWNERS NUMBER TOTAL(2)
- ---------------------------------------------------------------- --------- -----------------
<S> <C> <C>
Michael Maturo.................................................. 414,321(3) *
Gregg M. Rechler................................................ 736,896(4) 1.58%
Cohen & Steers Capital Management Inc.(5)....................... 5,595,100 12.08%
Fidelity Management & Research Corp.(6)......................... 4,448,300 9.61%
All directors and executive officers as a group (13 persons).... 7,242,025 14.93%
</TABLE>

- ------------------------

* Less than one percent.

(1) All information has been determined as of March 9, 1998. For purposes of
this table a person is deemed to have "beneficial ownership" of the number
of shares of Common Stock that person has the right to acquire pursuant to
the exercise of stock options within 60 days or upon the redemption of Units
(assuming the Company elects to issue Common Stock rather than pay cash upon
such redemption). See "Executive Compensation" for a discussion of the
vesting of stock options granted to directors and officers. Units are
exchangeable for cash or, at the option of the Company, on a one-for-one
basis for shares of common stock, subject to certain limitations.

(2) For purposes of computing the percentage of outstanding shares of Common
Stock held by each person, any shares of Common Stock which such person has
the right to acquire pursuant to the exercise of a stock option exercisable
within 60 days is deemed to be outstanding, but is not deemed to be
outstanding for the purposes of computing the percent ownership of any other
person.

(3) Represents (a) 40,988 Units, (b) 45,000 shares of common stock, and (c)
328,333 exercisable options.

(4) Includes (a) 65,108 shares of Common Stock, including 4,108 shares held in
trust for the child of Gregg M. Rechler and beneficial ownership of which is
disclaimed by Gregg M. Rechler, (b) 320,788 Units, including 194,352 Units
owned directly and 126,436 Units owned through corporations and
partnerships, and (c) 351,000 exercisable options.

(5) This information is based upon information reported by the stockholder in
filings made with the Securities and Exchange Commission ("SEC"). The
address of Cohen & Steers Capital Management Inc. is 757 Third Avenue, New
York, New York 10019.

(6) This information is based upon information reported by the stockholder in
filings made with the SEC. The address of Fidelity Management & Research
Corp. is 82 Devonshire Street, Boston, MA 02109.

Section 16(a) of the Exchange Act requires the Company's executive officers
and directors, and persons who own more than 10% of a registered class of the
Company's equity securities ("10% Holders"), to file reports of ownership and
changes in ownership with the SEC and the New York Stock Exchange. Officers,
directors and 10% Holders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms that they file. To the Company's
knowledge, based solely on review of the copies of such reports furnished to the
Company, all Section 16(a) filing requirements applicable to its executive
officers, directors and 10% Holders were satisfied during 1997, except that Mr.
Ranieri, who was appointed a director of the Company on July 30, 1997, did not
file such a report until August 18, 1997.

14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

LEASE OF CORPORATE OFFICES

The Company leases 12,146 square feet of office space at its corporate
offices located at 225 Broadhollow Road, at an annual base rent of $327,942 from
a partnership in which Donald Rechler, Roger Rechler, Mitchell Rechler and
trusts established for Rechler family members maintain an equity interest.

MISCELLANEOUS

During 1997, the Company made construction loan advances to fund certain
redevelopment and leasing costs relating to one of the four properties in which
a predecessor entity to the Company owns a non-controlling minority interest. At
December 31, 1997, the amount of the advance due the Company was approximately
$4.2 million. Such amount bears interest at the rate of 11% per annum and is due
on demand. In January 1998, the outstanding advance, including accrued and
unpaid interest, was repaid in full.

During 1997, the Company formed Reckson Service Industries, Inc. ("RSI") and
Reckson Strategic Venture Partners, LLC ("RSVP"). The Operating Partnership owns
a 95% non-voting interest in RSI and an entity owned by certain members of the
Company's management owns a 5% voting interest. A subsidiary of RSI will serve
as a managing member of RSVP. RSI will invest in operating companies that
generally will provide commercial services to properties owned by the Company
and its tenants and third parties. RSVP was formed as a "research and
development" vehicle for the Company to invest in alternative real estate
sectors. RSVP will invest primarily in real estate and real estate related
operating companies generally outside of the Company's core office and
industrial focus. RSVP's strategy is to identify and acquire interests in
established entrepreneurial enterprises with experienced management teams in
market sectors which are in the early stages of their growth cycle or offer
unique circumstances for attractive investments as well as a platform for future
growth. At December 31, 1997, the Operating Partnership had made investments in
or loans to RSI and RSVP aggregating approximately $4.3 million and $7.4
million, respectively, in connection with start-up costs and certain initial
investments.

During the year ended December 31, 1997, the Operating Partnership and one
of its affiliates paid an aggregate of $146,329 in commissions and advisory fees
to Ladenburg Thalman & Co. Inc., an investment banking firm. The son-in-law of
Mr. Harvey Blau, a director of the Company, is an executive officer of Ladenburg
Thalman & Co. Inc.

PROPOSAL 3: APPROVAL OF THE 1998 STOCK OPTION PLAN

In January 1998 the Board of Directors approved the adoption of the 1998
Stock Option Plan.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE 1998 STOCK
OPTION PLAN.

The 1995 Stock Option Plan was adopted at the time of the IPO in order to
provide a means for the Company to implement its long-term incentive program for
executive officers and directors, as well as to provide incentives for other
officers and employees. The Company's objective in providing these incentives is
to attract, retain and motivate talented persons that will maximize stockholder
value. In this regard, the Company has sought to provide incentives for a broad
range of persons employed by the Company in granting awards under the 1995 Stock
Option Plan. The 1995 Stock Option Plan provides for the grant of awards under
such plan (including the grant of stock options and restricted and unrestricted
shares of Common Stock) in respect of up to an aggregate of 1,500,000 shares
(split-adjusted) of Common Stock. As of March 9, 1998, awards had been granted
(and not relinquished) under the 1995 Stock Option Plan in respect of 1,340,382
shares (split-adjusted) of Common Stock. Of this amount, awards in respect of
928,382 shares (split-adjusted) of Common Stock were issued to persons other
than the Named Executive Officers.

The Company has since adopted the 1996 Employee Stock Option Plan and the
1997 Stock Option Plan. Options granted under the 1996 Employee Stock Option
Plan may only be granted (i) to employees

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<PAGE>
who are not officers or directors of the Company or (ii) as an inducement in
connection with the hiring of new employees. The 1996 Employee Stock Option Plan
provides for the grant of awards under such plan (including the grant of stock
options and restricted and unrestricted shares of Common Stock) in respect of up
to an aggregate of 400,000 shares (split-adjusted) of Common Stock. As of March
9, 1998, awards had been granted under the 1996 Employee Stock Option Plan in
respect to 71,300 shares (split-adjusted) of Common Stock.

The 1997 Stock Option Plan is substantially similar to the 1995 Stock Option
Plan and provides for awards under such plan (including stock options and
restricted and unrestricted shares of Common Stock) in respect of up to an
aggregate of 3,000,000 shares of Common Stock. As of March 9, 1998, awards had
been granted under the 1997 Stock Option Plan in respect of 2,802,299 shares of
Common Stock. Of this amount, awards in respect of 1,108,132 shares of Common
Stock were issued to persons other than the Named Executive Officers.

In order to continue the implementation of the Company's long-term incentive
program, the Board of Directors has approved the adoption of the 1998 Stock
Option Plan. The 1998 Stock Option Plan is being presented to stockholders for
approval in order to satisfy certain regulatory requirements regarding the Plan.
The 1998 Stock Option Plan provides for the grant of awards under such plan in
respect of up to an aggregate of 3,000,000 shares of Common Stock. The 1998
Stock Option Plan is substantially similar to the 1995 and 1997 Stock Option
Plans.

The following is a description of the 1998 Stock Option Plan:

The 1998 Stock Option Plan will be administered by the Compensation
Committee. Officers and key employees of the Company and its subsidiaries
generally will be eligible to participate in the 1998 Stock Option Plan.
Non-employee Directors of the Company are not eligible to receive stock options
under the 1998 Stock Option Plan.

The 1998 Stock Option Plan authorizes (i) the grant of stock options that
qualify as incentive stock options under Section 422 of the Code ("ISOs"), (ii)
the grant of stock options that do not so qualify ("NQSOs"), (iii) the grant of
shares of Common Stock subject to certain restrictions on transfer and certain
risks of forfeiture ("Restricted Stock"), (iv) the grant of stock options in
lieu of cash Directors' fees and employee bonuses, (v) grants of unrestricted
shares of Common Stock in lieu of cash compensation and (vi) the making of loans
to acquire shares of Common Stock in lieu of compensation. The exercise price of
stock options is determined by the Compensation Committee, but may not be less
than 100% of the fair market value of the shares of Common Stock on the date of
grant in the case of ISOs; provided that, in the case of grants of NQSOs granted
in lieu of cash Directors' fees and employee bonuses, the exercise price may not
be less than 50% of the fair market value of the shares of Common Stock on the
date of grant.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE 1998 STOCK OPTION PLAN. The
following is a brief summary of the principal Federal income tax consequences of
awards under the 1998 Stock Option Plan. The summary is based upon current
Federal income tax laws and interpretations thereof, all of which are subject to
change at any time, possibly with retroactive effect. This summary is not
intended to be exhaustive and, among other things, does not describe state,
local or foreign tax consequences.

A participant is not subject to Federal income tax either at the time of
grant or at the time of exercise of an ISO. However, upon exercise, the
difference between the fair market value of the Common Stock and the exercise
price is an item of tax preference subject to the possible application of the
alternative minimum tax. If a participant does not dispose of Common Stock
acquired through the exercise of an ISO in a "disqualifying disposition" (i.e.,
no disposition occurs within two years from the date of grant of the share
option nor within one year of the transfer of the Common Stock to the
participant), then the participant will be taxed only upon the gain, if any,
from the sale of such Common Stock, and such gain will be taxable as gain from
the sale of a capital asset.

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The Company will not receive any tax deduction on the exercise of an ISO or,
if the above holding period requirements are met, on the sale of the underlying
Common Stock. If there is a disqualifying disposition (i.e., one of the holding
period requirements is not met), the participant will be treated as receiving
compensation subject to ordinary income tax in the year of the disqualifying
disposition and the Company will be entitled to a deduction for compensation
expense in an amount equal to the amount included in income by the participant.
The participant generally will be required to include in income an amount equal
to the difference between the fair market value of the Common Stock at the time
of exercise and the exercise price. Any appreciation in value after the time of
exercise will be taxed as capital gain and will not result in any deduction by
the Company.

If NQSOs are granted to a participant, there are no Federal income tax
consequences at the time of grant. Upon exercise of the option, the participant
must report as ordinary income an amount equal to the difference between the
exercise price and the fair market value of the Common Stock on the date of
exercise. The Company will receive a tax deduction in like amount. Any
appreciation in value after the time of exercise will be taxed as capital gain
and will not result in any deduction by the Company.

If a participant is granted unrestricted shares of Common Stock, such
participant will have compensation income at the time of grant equal to the fair
market value of such shares. The company will receive a tax deduction in the
amount of the income recognized by the participant.

A participant who is awarded Restricted Stock that is subject to a
substantial risk of forfeiture (as defined in the Code) will not be taxed at the
time of the grant unless the participant makes a special election under section
83(b) of the Code. Assuming that no such election is made, the Company will
receive no tax deduction at the time of the grant. Upon the lapse of the
substantial risk of forfeiture associated with the Restricted Stock, a
participant will recognize ordinary income equal to the fair market value of the
Restricted Stock at the time of the lapse. At the same time, the Company will
receive a tax deduction in the amount of ordinary income recognized by a
participant.

If a participant makes an election under section 83(b) of the Code or if the
Restricted Stock is subject to restrictions that do not comprise a substantial
risk of forfeiture, he or she will recognize ordinary income in an amount equal
to the fair market value of the Restricted Stock at the time of the grant
(determined without regard to any restrictions which may lapse). The Company
will receive a tax deduction in the equal amount at the same time. No tax will
be payable by a participant (and no additional deduction will be taken by the
Company) upon lapse of the restrictions.

A participant who receives a Stock Loan generally will not be taxed at the
time of the grant of such a Loan. Similarly, the Company will receive no tax
deduction at the time of such Loan. Any portion of a Stock Loan that is forgiven
by the Company will be treated generally as ordinary compensation income in the
year of forgiveness.

OTHER MATTERS

SOLICITATION OF PROXIES

The cost of solicitation of proxies in the form enclosed herewith will be
paid by the Company. In addition to the solicitation of proxies by mail, the
directors, officers and employees of the Company may also solicit proxies
personally or by telephone without additional compensation for such activities.
The Company will also request persons, firms and corporations holding shares in
their names or in the names of their nominees, which are beneficially owned by
others, to send proxy materials to and obtain proxies from such beneficial
owners. The Company will reimburse such holders for their reasonable expenses.

STOCKHOLDER PROPOSALS

For a proposal of a stockholder to be presented to an annual meeting, other
than a stockholder proposal included in the Company's proxy statement pursuant
to Rule 14a-8 of the Securities Act of 1934, as amended ("Rule 14a-8"), the
Secretary of the Company must receive written notice thereof on or before

17
<PAGE>
the date specified in the Company's Bylaws, and the proponent or a
representative of the proponent must attend the annual meeting.

For a proposal of a stockholder to be presented to the Company's 1999 annual
meeting of stockholders, other than a stockholder proposal included in the
Company's proxy statement pursuant to Rule 14a-8, it must be received at the
principal executive offices of the Company after November 21, 1998 and on or
before February 26, 1999, unless the 1999 annual meeting of stockholders is
scheduled to take place before May 21, 1999. The Company's Bylaws provide that
any stockholder wishing to nominate a director or have a stockholder proposal
other than a stockholder proposal included in the Company's proxy statement
pursuant to Rule 14a-8, considered at an annual meeting must provide written
notice of such nomination or proposal and appropriate supporting documentation,
as set forth in the Bylaws, to the Company at its principal executive offices
not less than 75 days nor more than 180 days prior to the anniversary of the
immediately preceding annual meeting of stockholders (the "Anniversary Date");
provided, however, that in the event that the annual meeting is scheduled to be
held more than seven calendar days prior, or more than 60 days subsequent, to
the Anniversary Date, such nominations or proposals must be delivered to the
Company not earlier than the 180th day prior to such meeting and not later than
the later of the 75th day prior to such annual meeting or the twentieth day
following the earlier of the day on which public announcement of the meeting is
first made or notice of the meeting is mailed to stockholders. Any such proposal
should be mailed to: Reckson Associates Realty Corp., 225 Broadhollow Road,
Melville, New York 11747, Attn: Gregg M. Rechler, Secretary.

OTHER MATTERS

The Board of Directors does not know of any matters other than those
described in this Proxy Statement that will be presented for action at the
Annual Meeting. If other matters are presented, proxies will be voted in
accordance with the best judgment of the proxy holders.

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<PAGE>

RECKSON ASSOCIATES REALTY CORP.
225 BROADHOLLOW ROAD
MELVILLE, NEW YORK 11747

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 21, 1998

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

The undersigned hereby constitutes and appoints Donald Rechler and John
V.N. Klein, and either of them, as Proxies of the undersigned, with full power
of substitution, to vote all shares of Common Stock of Reckson Associates Realty
Corp. (the "Company") held of record by the undersigned as of the close of
business on March 18, 1998, on behalf of the undersigned at the Annual Meeting
of Stockholders (the "Annual Meeting") to be held at the Omni, 333 Earl Ovington
Boulevard, Mitchel Field, New York, 9:30 a.m., local time, on Thursday, May 21,
1998, and at any adjournments or postponements thereof.

When properly executed, this proxy will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is given, this proxy
will be voted FOR the three nominees of the Board of Directors listed in
Proposal 1 and FOR Proposal 2 and Proposal 3. In their discretion, the Proxies
are each authorized to vote upon such other business as may properly come before
the Annual Meeting and any adjournments or postponements thereof. A stockholder
wishing to vote in accordance with the Board of Directors' recommendations need
only sign and date this proxy and return it in the enclosed envelope.

Please vote and sign on other side and SEE REVERSE
return promptly in the enclosed envelope. SIDE

<PAGE>

<S> <C>
/X/ Please mark your votes as in this example.

1. To elect three Class III Directors of the Company to
serve until the 2001 Annual Meeting of Stockholders
and until their respective successors are duly elected
and qualified. FOR AGAINST ABSTAIN

Nominees: Roger Rechler, Harvey R. Blau 2. To ratify the selection of / / / / / /
and John V.N. Klein Ernst & Young LLP as the
FOR WITHHELD independent auditors of
/ / / / the Company for the fiscal
year ending December 31, 1998.
/ / ___________________________
For all nominees except as noted above
3. To approve the Company's 1998 / / / / / /
Stock Option Plan.

MARK HERE / / 4. To consider and act upon any other matters that
FOR ADDRESS may properly be brought before the Annual Meeting
CHANGE AND and at any adjournments or postponements thereof.
NOTE BELOW

The undersigned hereby acknowledge(s) receipt of a copy of the
accompanying Notice of Annual Meeting of Stockholders, the Proxy
Statement with respect thereto and the Company's 1998 Annual Report
to Stockholders and hereby revoke(s) any proxy or proxies
heretofore given. This proxy may be revoked at any time before it
is exercised.

NOTE: Please sign exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.

Signature:___________________________________Date:________

Signature:___________________________________Date:________
If Held Jointly

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