As filed with the Securities and Exchange Commission on September 19, 2000
Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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RECKSON ASSOCIATES REALTY CORP.
(Exact name of each registrant as specified in its charter)
Maryland
(State or other jurisdiction 11-3233650
of incorporation or organization) (I.R.S. employer identification number)
225 Broadhollow Road
Melville, New York 11747
(631) 694-6900
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive office)
Scott H. Rechler
President and Co-Chief Executive Officer
Reckson Associates Realty Corp.
225 Broadhollow Road
Melville, New York 11747
(631) 694-6900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
Edward F. Petrosky, Esq.
J. Gerard Cummins, Esq.
Brown & Wood LLP
One World Trade Center, 58th Floor
New York, N.Y. 10048
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Approximate date of commencement of proposed sale to public:
From time to time after this Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box.|_|
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended (the "Securities Act"), other than securities offered only
in connection with dividend or interest reinvestment plans, please check the
following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.|_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================= ================ ======================= ========================= ======================
Proposed Maximum
Title of Class of Securities to be Amount to Aggregate Price per Proposed Maximum Amount of
Registered be Registered Share (1) Aggregate Offering Price Registration Fee(2)
---------------------------------- ------------- --------- ------------------------ -------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par value $.01 4,181,818 $24.97 $104,419,995 $29,029
per share
======================================= ================ ======================= ========================= ======================
(1) Estimated solely for purposes of calculating the registration fee.
(2) Pursuant to Rule 457(c) of the rules and regulations under the Securities Act of 1933, as amended, the registration
fee is calculated based on the average of the high and low sale prices of the Company's Class A common stock on the
New York Stock Exchange for September 15, 2000.
</TABLE>
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The Registrant hereby amends this registration statement on the date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on the date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
The information contained in this prospectus is not complete and may be
changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective This prospectus
is not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 19, 2000
PROSPECTUS
----------
4,181,818 Shares
RECKSON ASSOCIATES REALTY CORP.
Class A Common Stock
(Par Value $0.01 Per Share)
-----------------
This prospectus relates to the offer and sale from time to time by the
selling stockholder referred to in this prospectus of up to 4,181,818 shares
of our Class A common stock, $.01 par value per share, which may be offered in
transactions on any national securities exchange or quotation service on which
the common stock may be listed at the time of sale, in negotiated transactions
or otherwise, at fixed prices, at market prices prevailing at the time of
sale, at prices related to prevailing market prices, at negotiated prices,
without consideration, or by any other legally available means. The selling
stockholder received the Class A common stock in exchange for shares of our
Series B preferred stock in June 2000. We are registering the common stock as
required under the terms of a registration rights agreement entered into at
the time of the exchange with the selling stockholder. The registration of the
common stock does not necessarily mean that any of the common stock will be
offered or sold by the selling stockholder.
The selling stockholder will receive all of the net proceeds from the
sale of the common stock and will pay all underwriting discounts and selling
commissions, if any, applicable to any such sale. We will not receive any of
the proceeds of sales by the selling stockholder. We are paying the costs of
preparing and filing the registration statement of which this prospectus is a
part.
Our Class A common stock is listed on the New York Stock Exchange under
the symbol "RA." On September 18, 2000, the last reported sale price of the
Class A common stock was $24-1/8 per share.
The common stock may be sold by the selling stockholder from time to time
directly to purchasers or through agents, underwriters or dealers. See "Plan
of Distribution" and "Selling Stockholder." The selling stockholder and any
dealers, agents or underwriters which participate in the distribution of the
common stock may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933 and any commission received by them and any profit on
the resale of the common stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. See "Plan of
Distribution" for a description of indemnification arrangements.
See "Risk Factors" beginning on page 3 of this prospectus for a
description of risks that should be considered by purchasers of the
securities.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
The date of this prospectus is ___________ __, 2000.
<PAGE>
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, we file reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). These reports, proxy
statements and other information may be inspected and copied at the Public
Reference Room maintained by the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, as well as the regional offices of the
Commission at 7 World Trade Center (13th Floor), New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such information can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. The public may obtain information on the
operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. The Commission maintains a web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. You may access the Commission's
web site at http://www.sec.gov. These materials can also be inspected at the
office of the New York Stock Exchange, 20 Broad Street, New York, New York,
the exchange on which our common stock is listed.
We have filed with the Commission a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), of which this prospectus constitutes a part. This
prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. For further information,
reference is made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents that we previously filed with the Commission
pursuant to the Exchange Act are incorporated by reference in this prospectus:
<TABLE>
<CAPTION>
SEC Filings (File No. 1-13762) Period
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<S> <C>
Annual Report on Form 10-K Year ended December 31, 1999
Quarterly Reports on Form 10-Q Quarters ended March 31, 2000 and June 30, 2000
Current Reports on Form 8-K Filed January 14, 2000 and February 8, 2000
(including Form 8-K/A)
Registration Statement on Form 8-A Filed May 9, 1995 (as amended)
</TABLE>
We also incorporate by reference each of the following documents that we
will file with the Commission after the date of this prospectus until the
particular offering is completed or after the date of the initial registration
statement and prior to effectiveness of the registration statement:
o Reports filed under Section 13(a) and (c) of the Exchange Act;
o Definitive proxy or information statements filed under Section 14 of
the Exchange Act in connection with any subsequent stockholders'
meeting; and
o Any reports filed under Section 15(d) of the Exchange Act.
Any statement contained herein or in a document all or any portion of
which is incorporated or deemed to be incorporated by reference herein will be
deemed to be modified or superceded for purposes of this prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supercedes such earlier statement. Any statement so modified or
superseded will not be deemed, except as so modified or superceded, to
constitute a part of this prospectus.
We will provide a copy of any or all of these documents (exclusive of
exhibits unless the exhibits are specifically incorporated by reference
therein), without charge, to each person to whom this prospectus is delivered,
upon written or oral request to Reckson Associates Realty Corp., 225
Broadhollow Road, Melville, New York 11747, Attn: Susan McGuire, Investor
Relations, telephone number (631) 694-6900.
CAUTIONARY STATEMENTS CONCERNING
FORWARD-LOOKING INFORMATION
Certain information both included and incorporated by reference in this
prospectus may contain forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act, and as
such may involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of our company
to be materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. Forward-looking
statements, which are based on certain assumptions and describe our future
plans, strategies and expectations are generally identifiable by use of the
words "may," "will," "should," "expect," "anticipate," "estimate," "believe,"
"intend" or "project" or the negative thereof or other variations thereon or
comparable terminology. Factors which could have a material adverse effect on
the operations and future prospects of our company are described below under
"Risk Factors." These risks and uncertainties should be considered in
evaluating any forward-looking statements contained or incorporated by
reference herein. Our actual results may differ significantly from the results
discussed in the forward-looking statements.
RISK FACTORS
An investment in our common stock involves various risks. Prospective
investors should carefully consider the following information in conjunction
with the other information contained in this prospectus before purchasing the
securities offered hereby. This prospectus contains forward-looking statements
which involve risks and uncertainties. Factors that might cause a difference
include, but are not limited to, those discussed below. You should refer to
the explanation of the qualifications and limitations of such forward-looking
statements discussed above.
o We are dependent on the New York Tri-State area market due to limited
geographic diversification and our financial results may suffer as a result
of a decline in economic conditions in such area
A decline in the economic conditions in the New York Tri-State area and
for commercial real estate could adversely affect our business, financial
condition and results of operations. All of our properties, except one office
property located in Orlando, Florida, are located in the New York Tri-State
area, although our organizational documents do not restrict us from owning
properties outside of this area. Each of our five markets are located in New
York City and the suburbs of New York City and may be similarly affected by
economic changes in this area. A significant downturn in the financial
services industry and related industries would likely have a negative effect
on these markets and on the performance of our properties.
The following is a breakdown of our office and industrial properties for
each of our five markets at June 30, 2000:
<TABLE>
<CAPTION>
Number of Annual Base
Properties(1) Square Footage Rent(2)
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<S> <C> <C> <C>
Long Island
o Office 24 3,748,025 $79,330,631
o Industrial 95 5,853,445 $33,591,837
Westchester
o Office 24 3,291,373 $59,832,376
o Industrial 3 163,000 $1,308,374
New Jersey
o Office 17 2,003,698 $48,816,195
o Industrial 6 452,254 $2,363,903
Connecticut
o Office 8 1,123,188 $23,218,247
o Industrial 1 452,414 $2,928,245
New York City
o Office 5 3,508,761 $86,089,603
(1) We also own one 357,000 square foot office building located in Orlando,
FL and two 10,000 square foot retail properties on Long Island.
(2) Represents base rents from leases in place as of July 1, 2000, for the
period July 1, 2000 through June 30, 2001, excluding the reimbursement by
tenants of electrical costs.
</TABLE>
o Debt servicing and refinancing, increases in interest rates and
financial covenants could adversely affect our economic performance
Dependence upon debt financing; risk of inability to service or refinance
debt. In order to qualify as a real estate investment trust, or REIT, for
federal income tax purposes, we are required to distribute at least 95% of our
taxable income. As a result, we are more reliant on debt or equity financings
than many other non-REIT companies that are able to retain more of their
income.
We are subject to the risks associated with debt financing. Our cash flow
could be insufficient to meet required payments of principal and interest. We
may not be able to refinance existing indebtedness, which in virtually all
cases requires substantial principal payments at maturity, or the terms of
such refinancing might not be as favorable as the terms of the existing
indebtedness. As of June 30, 2000, the weighted average maturity of our
existing indebtedness was approximately 6.4 years and our total existing
indebtedness was approximately $1.4 billion. We also may not be able to
refinance any indebtedness we incur in the future. Finally, we may not be able
to obtain funds by selling assets or raising equity to make required payments
on maturing indebtedness.
Rising interest rates could adversely affect cash flow. We conduct all of
our operations through, and serve as the sole general partner of, Reckson
Operating Partnership, L.P. (the "Operating Partnership"). Increases in
interest rates could increase the Operating Partnership's interest expense,
which could adversely affect the ability to service its indebtedness or to pay
dividends to our stockholders. As noted above, as of June 30, 2000,
approximately 36% of our debt was variable rate debt and our total debt was
approximately $1.4 billion. Outstanding advances under the credit facility of
the Operating Partnership bear interest at variable rates. In addition, we may
incur indebtedness in the future that also bears interest at a variable rate.
Requirements of credit facility could adversely affect our financial
condition and our ability to make distributions. The ability of the Operating
Partnership to borrow under our credit facility is subject to certain
financial covenants, including covenants relating to limitations on unsecured
and secured borrowings, minimum interest and fixed charge coverage ratios, a
minimum equity value and a maximum dividend payout ratio. The Operating
Partnership relies on borrowings under its credit facility to finance
acquisition and development activities and for working capital purposes and,
if the Operating Partnership is unable to borrow under its credit facility, it
could adversely affect our financial condition. The Operating Partnership has
obtained a three-year unsecured credit facility from The Chase Manhattan Bank,
as Administrative Agent, which provides for a maximum borrowing amount of up
to $575 million. The credit facility also contains a financial covenant
limiting the amount of distributions that we may pay to holders of our common
stock during any fiscal quarter if they exceed, when added to all
distributions paid during the three immediately preceding quarters, the
greater of:
o 90% of our funds from operations or 100% of our funds available
for dividend; and
o the amounts required in order for us to continue to qualify as
a REIT.
Although the Operating Partnership presently is in compliance with the
covenants under the credit facility, there is no assurance that the Operating
Partnership will continue to be in compliance or that we will be able to
service our indebtedness or pay dividends to our stockholders.
No limitation on debt. Currently, we have a policy of incurring debt only
if our Debt Ratio is then 50% or less. As of June 30, 2000, our Debt Ratio was
42.3%. For these purposes, Debt Ratio is defined as the total debt of the
Operating Partnership as a percentage of the market value of outstanding
shares of common stock, including the conversion of outstanding partnership
units in the Operating Partnership, the liquidation preference of our
preferred stock, the contributed value of Metropolitan's preferred interest
and the liquidation preference of the preferred units of the Operating
Partnership, excluding all units of general partnership owned by the Company,
plus total debt (including our share of joint venture debt and net of minority
partners' interests). Under this policy, we could incur additional debt if our
stock price increases, even if we may not have a corresponding increase in our
ability to repay the debt. In addition, as of June 30, 2000, our
debt-to-equity ratio was 1:1.36. We calculated our debt-to-equity ratio by
comparing the total debt of the Operating Partnership to the value of our
outstanding common stock and the common units of limited partnership interest
of the Operating Partnership (including its share of joint venture debt and
net of minority partners' interests), each based upon the market value of the
common stock, and the liquidation preference of our preferred stock, the
contributed value of Metropolitan's preferred interest and the preferred units
of limited partnership interest in the Operating Partnership, excluding all
units of general partnership interest owned by us. As described above, our
credit facility contains financial covenants which limit the ability of the
Operating Partnership to incur additional indebtedness. However, our
organizational documents do not contain any limitation on the amount of
indebtedness we may incur. Accordingly, the Board of Directors could alter or
eliminate this policy and would do so, for example, if it were necessary in
order for us to continue to qualify as a REIT. If this policy were changed, we
could become more highly leveraged, resulting in higher interest payments that
could adversely affect the ability to pay dividends to our stockholders and
could increase the risk of default on the Operating Partnership's existing
indebtedness.
o Our acquisition, development and construction activities could result in
losses
We intend to acquire existing office and industrial properties to the
extent that suitable acquisitions can be made on advantageous terms.
Acquisitions of commercial properties entail risks, such as the risks that we
may not be in a position or have the opportunity in the future to make
suitable property acquisitions on advantageous terms and that our investments
will fail to perform as expected. Some of the properties that we acquire may
require significant additional investment and upgrades and are subject to the
risk that estimates of the cost of improvements to bring such properties up to
standards established for the intended market position may prove inaccurate.
Since our IPO in June 1995, we have acquired or have contracted to acquire 68
office properties (excluding the office property located in Orlando, Florida
and other properties located outside of New York that were acquired and
subsequently disposed of in our acquisition of Tower Realty Trust, Inc.) with
aggregate square footage of approximately 12.1 million and 43 industrial
properties (excluding properties which we acquired and subsequently disposed
of) with aggregate square footage of approximately 3.7 million. In addition,
we have developed three industrial buildings encompassing approximately
277,000 square feet.
We also intend to continue the selective development and construction of
office and industrial properties in accordance with our development and
underwriting policies as opportunities arise. We are currently developing or
re-developing seven properties comprising approximately 1.1 million square
feet. Our development and construction activities include the risks that:
o we may abandon development opportunities after expending
resources to determine feasibility
o construction costs of a project may exceed our original
estimates
o occupancy rates and rents at a newly completed property may not
be sufficient to make the property profitable
o financing may not be available to us on favorable terms for
development of a property
o we may not complete construction and lease-up on schedule,
resulting in increased carrying costs to complete construction,
construction costs and, in some instances, penalties owed to
tenants with executed leases
Our development activities are also subject to risks relating to the
inability to obtain, or delays in obtaining, all necessary zoning, land-use,
building, occupancy and other required governmental permits and
authorizations. If any of the above events occur, the ability to pay dividends
to our stockholders and service the Operating Partnership's indebtedness could
be adversely affected. In addition, new development activities, regardless of
whether or not they are ultimately successful, typically require a substantial
portion of management's time and attention.
In June 1999 we acquired a first mortgage note for approximately $278
million on a 1.4 million square foot, 47-story Class A office tower located at
919 Third Avenue, New York, New York, that is in default. On July 28, 2000,
the Company consented to the filing of a consensual, pre-packaged bankruptcy
plan with the current fee owner and expects to take title to this property by
November 30, 2000. In addition, we have commenced a significant capital
improvement project with respect to this property that we anticipate will
bring our total investment in this property to approximately $367 million. As
of September 2000 the property is 96% leased. In addition, as of September
2000, 51% of the property is still under renovation and the tenants that will
occupy such space will not commence paying rent until they take possession of
their space. It is anticipated that the renovation program will be
substantially completed by the first quarter of 2002. There can be no
assurance that the cost incurred to complete the renovation program will not
exceed our estimates or that the program will be completed in the anticipated
timeframe. In addition, although we anticipate obtaining title to the property
in the fourth quarter of 2000, there can be no assurance that there will not
be delays in obtaining title or that we will be able to obtain title.
o Adverse real estate market conditions, increases in operating expenses
or capital expenditures, tenant defaults and uninsured losses could adversely
affect our financial results
Our properties' revenues and value may be adversely affected by a number
of factors, including:
o the national, state and local economic climate and real estate
conditions, such as oversupply of or reduced demand for space
and changes in market rental rates
o the need to periodically renovate, repair and relet our space
o increasing operating costs, including real estate taxes and
utilities, which may not be passed through to tenants
o defaults by our tenants or their failure to pay rent on a
timely basis
o uninsured losses
A significant portion of our expenses of real estate investments, such as
mortgage payments, real estate taxes, insurance and maintenance costs, are
generally not reduced when circumstances cause a decrease in income from our
properties. In addition, our real estate values and income from properties are
also affected by our compliance with laws, including tax laws, interest rate
levels and the availability of financing.
Because real estate investments are illiquid, we may not be able to sell
properties when appropriate. Real estate investments generally cannot be sold
quickly. We may not be able to vary our portfolio promptly in response to
economic or other conditions. In addition, provisions of the Internal Revenue
Code limit a REIT's ability to sell properties in some situations when it may
be economically advantageous to do so, thereby adversely affecting returns to
our stockholders.
Competition in our markets is significant. The competition for tenants in
the office and industrial markets in the New York Tri-State area is
significant and includes properties owned by other REITs, local privately-held
companies, institutional investors and other owners. There is also significant
competition for acquisitions in our markets from the same types of
competitors. In addition, many users of industrial space in our markets own
the buildings that they occupy.
Increasing operating costs could adversely affect cash flow. Our
properties are subject to operating risks common to commercial real estate,
any and all of which may adversely affect occupancy or rental rates. Our
properties are subject to increases in our operating expenses such as
cleaning, electricity, heating, ventilation and air conditioning; elevator
repair and maintenance; insurance and administrative costs; and other costs
associated with security, landscaping, repairs and maintenance of our
properties. While our tenants generally are currently obligated to pay a
portion of these costs, there is no assurance that tenants will agree to pay
these costs upon renewal or that new tenants will agree to pay these costs
initially. If operating expenses increase, the local rental market may limit
the extent to which rents may be increased to meet increased expenses without
at the same time decreasing occupancy rates. While we have cost saving
measures at each of our properties, if any of the above occurs, our ability to
pay dividends to our stockholders and service our indebtedness could be
adversely affected.
Some potential losses are not covered by insurance. We carry
comprehensive liability, fire, extended coverage and rental loss insurance on
all of our properties. However, losses arising from acts of war or relating to
pollution are not generally insured because they are either uninsurable or not
economically insurable. If an uninsured loss or a loss in excess of insured
limits should occur, we could lose our capital invested in a property, as well
as any future revenue from the property. We would remain obligated on any
mortgage indebtedness or other obligations related to the property.
Investments in mortgage debt could lead to losses. We may invest in
mortgages secured by office or industrial properties. We may acquire the
mortgaged properties through foreclosure proceedings or negotiated
settlements. In addition to the risks associated with investments in
commercial properties, investments in mortgage indebtedness present additional
risks, including the risk that the fee owners of such properties may not make
payments of interest on a current basis and we may not realize our anticipated
return or sustain losses relating to the investments. Although we currently
have no intention to originate mortgage loans as a significant part of our
business, we may make loans to a seller in connection with our purchase of
real estate. The underwriting criteria we would use for these loans would be
based upon the credit and value of the underlying real estate.
o Property ownership through partnerships and joint ventures could limit our
control of those investments
Partnership or joint venture investments may involve risks not otherwise
present for investments made solely by us, including the possibility that our
partners or co-venturer might become bankrupt, that our partners or
co-venturer might at any time have different interests or goals than we do,
and that our partners or co-venturer may take action contrary to our
instructions, requests, policies or objectives, including our policy with
respect to maintaining our qualification as a REIT. Other risks of joint
venture investments include impasse on decisions, such as a sale, because
neither our partner or co-venturer nor us would have full control over the
partnership or joint venture. There is no limitation under our organizational
documents as to the amount of funds that may be invested in partnerships or
joint ventures.
The following is a description of the significant joint ventures in which
we are involved:
Our investment in the Omni includes the risks that we cannot refinance or
dispose of the property in our sole discretion and we could have our general
partnership interest converted into a limited partnership interest. The
Operating Partnership owns a 60% general partner interest in Omni Partners,
L.P. (the "Omni Partnership"), the partnership that owns the Omni, a 575,000
square foot office building located in our Nassau West Corporate Center office
park. Odyssey Partners, L.P. and an affiliate of Odyssey own the remaining 40%
interest. Through our partnership interest, we act as managing partner and
have the sole authority to conduct the business and affairs of the Omni
Partnership subject to the limitations set forth in the amended and restated
agreement of limited partnership of Omni Partners, L.P. (the "Omni Partnership
Agreement"). These limitations include Odyssey's right to negotiate under
certain circumstances a refinancing of the mortgage debt encumbering the Omni
and the right to approve any sale of the Omni made on or before March 13, 2007
(the "Acquisition Date"). The Operating Partnership will continue to act as
the sole managing partner of the Omni Partnership unless certain conditions
specified in the Omni Partnership Agreement shall occur. Upon the occurrence
of any of these conditions, the Operating Partnership's general partnership
interest shall convert to a limited partnership interest and an affiliate of
Odyssey shall be the sole managing partner, or, at the option of Odyssey, the
Operating Partnership shall be a co-managing partner with an affiliate of
Odyssey. In addition, on the Acquisition Date, the Operating Partnership will
have the right to purchase Odyssey's interest in the Omni Partnership at a
price (the "Option Price") based on 90% of its fair market value. If the
Operating Partnership fails to exercise this option, Odyssey has the right to
require the Operating Partnership to purchase Odyssey's interest in the Omni
Partnership on the Acquisition Date at the Option Price. The Operating
Partnership has the right to extend the Acquisition Date until March 13, 2012.
The Option Price shall apply to the payment of all sums due under a loan made
by the Operating Partnership in March 1997 to Odyssey in the amount of
approximately $17 million. The Odyssey loan matures on the Acquisition Date,
subject to the Operating Partnership's right to extend the Acquisition Date as
set forth above, and is secured by a pledge of Odyssey's interest in the Omni
Partnership.
Our joint venture in an office building in Tarrytown, New York includes
the risks that we cannot enter into large leases or refinance or dispose of
the building in our discretion. The Operating Partnership owns a 60% managing
member interest in a limited liability company that owns 520 White Plains
Road, a 171,761 square foot office building located in Tarrytown, New York.
The remaining 40% member interest is held by Tarrytown Corporate Center III,
L.P. ("TCC"), a partnership affiliated with the Halpern organization, the
organization from which we acquired eight Class A office properties for
approximately $86 million in February 1996. The member agreement governing the
joint venture arrangement requires us to obtain the consent of TCC prior to
engaging in activities such as entering into or modifying a lease for more
than 25,000 rentable square feet, financing or refinancing indebtedness
encumbering the property and selling or otherwise transferring the property.
Our joint ventures in privatization of government office buildings and
correctional facilities are dependent upon continued outsourcing by
governments and competitive bidding. From time to time, the Operating
Partnership may make joint venture investments in real estate assets with
Reckson Strategic Venture Partners, LLC ("Reckson Strategic Venture
Partners"). FrontLine Capital Group ("FrontLine") (formerly known as Reckson
Service Industries, Inc.), an entity that we spun-off to our stockholders in
1998, owns 100% of the common ownership interests of Reckson Strategic Venture
Partners and, accordingly, controls Reckson Strategic Venture Partners. The
strategy of Reckson Strategic Venture Partners is to 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
circumstances for attractive investments as well as opportunities for future
growth. Joint venture investments with Reckson Strategic Venture Partners may
involve various types of real estate assets and involve different risks than
those in our office and industrial sectors, as to which we have no prior
experience or expertise. No assurance can be given as to the success of these
investments. As of June 30, 2000, the Operating Partnership had made joint
venture investments with Reckson Strategic Venture Partners of approximately $
29.4 million.
o Environmental problems are possible and may be costly
Federal, state and local laws and regulations relating to the protection
of the environment may require a current or previous owner or operator of real
estate to investigate and clean up hazardous or toxic substances or petroleum
product releases at a property. An owner of real estate is liable for the
costs of removal or remediation of certain hazardous or toxic substances on or
in the property. These laws often impose such liability without regard to
whether the owner knew of, or caused, the presence of the contaminants.
Clean-up costs and the owner's liability generally are not limited under the
enactments and could exceed the value of the property and/or the aggregate
assets of the owner. The presence of, or the failure to properly remediate,
the substances may adversely affect the owner's ability to sell or rent the
property or to borrow using the property as collateral. Persons who arrange
for the disposal or treatment of hazardous or toxic substances may also be
liable for the clean-up costs of the substances at a disposal or treatment
facility, whether or not such facility is owned or operated by the person.
Even if more than one person was responsible for the contamination, each
person covered by the environmental laws may be held responsible for the
clean-up costs incurred. In addition, third parties may sue the owner or
operator of a site for damages and costs resulting from environmental
contamination emanating from that site.
Environmental laws also govern the presence, maintenance and removal of
asbestos-containing materials ("ACMs"). These laws impose liability for
release of ACMs into the air and third parties may seek recovery from owners
or operators of real properties for personal injury associated with ACMs. In
connection with the ownership (direct or indirect), operation, management and
development of real properties, we may be considered an owner or operator of
properties containing ACMs. Having arranged for the disposal or treatment of
contaminants we may be potentially liable for removal, remediation and other
costs, including governmental fines and injuries to persons and property.
All of our office properties and all of our industrial properties have
been subjected to a Phase I or similar environmental site assessment after
April 1, 1994 that were completed by independent environmental consultant
companies, except for the property located at 35 Pinelawn Road which was
originally developed by us and subjected to a Phase I in April 1992. These
Phase I or similar environmental site assessments involved general inspections
without soil sampling, ground water analysis or radon testing and, for our
properties constructed in 1978 or earlier, survey inspections to ascertain the
existence of ACMs. These environmental site assessments have not revealed any
environmental liability that we believe would have a material adverse effect
on our business.
o Failure to qualify as a REIT would be costly
We have operated (and intend to operate) so as to qualify as a REIT under
the Internal Revenue Code beginning with our taxable year ended December 31,
1995. Although our management believes that we are organized and operated in a
manner to so qualify, no assurance can be given that we will qualify or remain
qualified as a REIT.
If we fail to qualify as a REIT in any taxable year, we will be subject
to federal income tax (including any applicable alternative minimum tax) on
our taxable income at regular corporate rates. Moreover, unless entitled to
relief under certain statutory provisions, we also will be disqualified from
treatment as a REIT for the four taxable years following the year during which
qualification was lost. This treatment would significantly reduce net earnings
available to service indebtedness, make investments or pay dividends to
stockholders because of the additional tax liability to us for the years
involved. Also, we would not then be required to pay dividends to our
stockholders.
o Tax consequences upon a sale or refinancing of properties may result in
conflicts of interest for our directors and officers
Holders of units of limited partnership of the Operating Partnership or
co-owners of properties not owned entirely by us may suffer different and more
adverse tax consequences than we will upon the sale or refinancing of our
properties. We may have different objectives from these co-owners and holders
of limited partnership units regarding the appropriate pricing and timing of
any sale or refinancing of these properties. While we, as the sole general
partner of the Operating Partnership, have the exclusive authority as to
whether and on what terms to sell or refinance each property owned solely by
the Operating Partnership, our directors and officers who hold limited
partnership units may seek to influence us not to sell or refinance the
properties, even though such a sale might otherwise be financially
advantageous to us, or may seek to influence us to refinance a property with a
higher level of debt.
o We may have conflicts of interest with FrontLine
Conflicts as a result of overlapping management. Certain members of our
executive management, including our president and chief executive officer,
serve in similar capacities for FrontLine. In addition, three members of our
Board of Directors (including our President and Chief Executive Officer) also
serve as directors of FrontLine. Although each of the individuals referred to
above is committed to our success, they are also committed to the success of
FrontLine. On June 30, 2000 our senior management and directors beneficially
owned approximately 12.25% of our outstanding common stock and approximately
18.28% of the outstanding common stock of FrontLine. In calculating the
ownership of our common stock, we have included our Class A common stock and
our Class B exchangeable common stock; and we have assumed the exchange of all
limited partnership units in the Operating Partnership for shares of Class A
common stock and the exercise of all vested stock options. There is a risk
that the common membership of management, members of the Boards of Directors
and ownership of common stock will lead to conflicts of interest in the
fiduciary duties owed to stockholders by common directors and officers in
connection with transactions between the two companies, as well as a conflict
in allocating management time.
Conflicts in transactions with FrontLine under the intercompany
agreement. The Operating Partnership and FrontLine have entered into an
intercompany agreement to formalize their relationship at the outset and to
limit conflicts of interest. The intercompany agreement was not negotiated at
arms' length as it was negotiated while 95% of the common stock of FrontLine
was owned by the Operating Partnership. Under the intercompany agreement,
FrontLine granted the Operating Partnership a right of first opportunity to
make any REIT-qualified investment that becomes available to FrontLine. In
addition, if a REIT-qualified investment opportunity becomes available to an
affiliate of FrontLine, including Reckson Strategic Venture Partners, 100% of
the common ownership interest of which is indirectly owned by FrontLine, the
intercompany agreement requires FrontLine's affiliate to allow the Operating
Partnership to participate in the opportunity to the extent of FrontLine's
interest in the affiliate.
Under the intercompany agreement, the Operating Partnership granted
FrontLine a right of first opportunity to provide to the Operating Partnership
and our tenants any type of non-customary commercial services for occupants of
office, industrial and other property types, which we may not be permitted to
provide because they may generate REIT non-qualifying income under Federal tax
laws. FrontLine will provide services to the Operating Partnership at rates
and on terms as attractive as either the best available for comparable
services in the market or those offered by FrontLine to third parties. In
addition, the Operating Partnership will give FrontLine access to its tenants
with respect to commercial services that may be provided to tenants.
Under the intercompany agreement, subject to certain conditions, the
Operating Partnership granted FrontLine a right of first refusal to become the
lessee of any real property acquired by the Operating Partnership if the
Operating Partnership determines that, because the operation of the property
may involve the performance of non-customary services that under the Internal
Revenue Code a REIT may not generally provide, it is required to enter into a
"master" lease arrangement. Pursuant to a "master" lease arrangement, the
Operating Partnership would own the property, but lease it entirely to a
single lessee that would operate the property.
With respect to services that FrontLine will provide to the Operating
Partnership, management will have a conflict of interest in determining the
market rates to charge the Operating Partnership for these services. In
addition, management will have a conflict of interest in determining whether
the Operating Partnership or FrontLine would pursue a REIT-qualified
investment opportunity outside of our core business strategy of investing in
office and industrial properties in the New York Tri-State area. Furthermore,
the Operating Partnership and FrontLine may structure investments so that
Reckson Strategic Venture Partners - Reckson Operating Partnership joint
ventures may pursue the portion of investments generating REIT-qualified
income and Reckson Strategic Venture Partners will pursue directly the other
portion of these investments. Accordingly, Reckson Strategic Venture Partners
and Reckson Strategic Venture Partners-Reckson Operating Partnership joint
ventures may have conflicts of interest in the structuring, valuation,
management and disposition of these investments.
Conflicts in our loans to FrontLine. In June 1998, the Operating
Partnership established a credit facility with FrontLine (the "FrontLine
Facility") in the amount of $100 million for our service sector operations and
other general corporate purposes. In addition, in June 1998, the Operating
Partnership authorized the investment of $100 million with respect to the
funding of the investment of Reckson Strategic Venture Partners (the "Reckson
Strategic Venture Partners Commitment"). Amounts available under the Reckson
Strategic Venture Partners Commitment are funded through investments by the
Operating Partnership into joint ventures with Reckson Strategic Venture
Partners or through loans directly to FrontLine under a credit agreement with
terms substantially identical to those under the FrontLine Facility. Although
the credit agreement provides for the borrowing of up to $100 million from the
Operating Partnership, the amount available is reduced by the amount of any
joint venture investments between the Operating Partnership and Reckson
Strategic Venture Partners. Loans under the Reckson Strategic Venture Partners
Commitment in excess of $25 million in any single investment are subject to
approval by the Board of Directors of the Company, while advances under the
FrontLine Facility in excess of $10 million in respect of any single
investment are subject to approval by the Board of Directors of the Company,
or a committee thereof. The FrontLine Facility has a term of five years and
advances thereunder are recourse obligations of the Company. Interest accrues
on advances made under the FrontLine Facility at a rate equal to the greater
of (1) the prime rate plus 2% and (2) 12% per annum, with the rate on amounts
that are outstanding for more than one year increasing annually at a rate of
4% of the prior year's rate. Prior to maturity, interest is payable quarterly
but only to the extent of net cash flow and principal is prepayable without
penalty only at our option.
Subject to the amendments described below, as long as there are
outstanding advances under the FrontLine Facility or borrowings by FrontLine
under the credit agreement with respect to the Reckson Strategic Venture
Partners Commitment, FrontLine is prohibited from paying dividends on any
shares of FrontLine's capital stock or incurring additional debt. The
FrontLine Facility and the credit agreement with respect to the Reckson
Strategic Venture Partners Commitment are subject to certain other covenants
and prohibit advances thereunder to the extent the advances could, in the
Company's determination, endanger our status as a REIT. The terms of the
FrontLine Facility and the credit agreement with respect to the Reckson
Strategic Venture Partners Commitment were not negotiated at arms' length and
thus may not reflect terms that could have been obtained from independent
third parties. Additional indebtedness may be incurred by our subsidiaries. As
of June 30, 2000, borrowings under the FrontLine Facility aggregated
approximately $92.7 million and, pursuant to the Reckson Strategic Venture
Partners Commitment, the Operating Partnership had made approximately $29.4
million in joint venture investments with Reckson Strategic Venture Partners
and had loaned approximately $38.5 million under the credit agreement.
In November 1999, the credit facilities were amended to allow FrontLine
to incur up to $135 million in debt secured by FrontLine's assets and to pay
interest thereon and to allow the payment of dividends on up to $200 million
of preferred stock which may be issued by FrontLine. As consideration for the
amendments, which were approved by FrontLine's Board of Directors and that of
ours, FrontLine paid a fee to the Operating Partnership of approximately $3.6
million in the form of approximately 176,000 shares of FrontLine's common
stock. As of September 11, 2000, FrontLine had obtained a $25 million
revolving line of credit from a commercial lender and it had issued $26
million of preferred stock.
Policies with respect to conflicts of interest may not be successful. We
have adopted policies designed to eliminate or minimize conflicts of interest.
These policies include the approval of all transactions in which our directors
or officers have a conflicting interest by a majority of the directors who are
neither officers nor affiliated with us. These policies do not prohibit sales
of assets to or from affiliates, but would require the sales to be approved by
our independent directors. However, there is no assurance that these policies
will be successful and, if they are not successful, decisions could be made
that might fail to reflect fully the interests of all of our stockholders.
o The Tower transaction involves our entry into a new market; the Tower
properties may not perform as we anticipate
On May 24, 1999, through Metropolitan Partners LLC, we closed on the
purchase of 100% of the outstanding common stock of Tower Realty Trust, Inc.
for a combination of cash and securities, including our Class B exchangeable
common stock. We control Metropolitan and own 100% of the common member
interests therein. The acquisition of Tower subjects us to the following
risks:
o the Tower portfolio may not perform as we anticipate
o we may not be able to effectively integrate Tower's operations,
which involve the operation and leasing of buildings in New
York City, a market in which we have not previously owned and
operated properties
o Limits on ownership and changes in control may deter changes in management
and third party acquisition proposals
Ownership limit. To maintain our qualification as a REIT, five or fewer
individuals (as defined in the Internal Revenue Code of 1986, as amended, to
include certain entities) may not own, directly or indirectly, more than 50%
in value of our outstanding capital stock during the last half of a taxable
year (other than the first year). In order to protect against the risk of
losing REIT status, our charter limits ownership of our issued and outstanding
common stock by any single stockholder to 9% of the lesser of the number or
value of the outstanding shares of common stock. It also limits ownership of
our Class B exchangeable common stock by any single stockholder to 9% in value
of the outstanding shares of all of our common stock and limits ownership of
our issued and outstanding 7-5/8% Series A Convertible Cumulative Preferred
Stock and Series B Convertible Cumulative Preferred Stock to 9% in value of
the outstanding shares of all of our capital stock. In addition, a stockholder
may not acquire shares of our Series A preferred stock that would result in
the stockholder's owning in excess of 20% of the lesser of the number or value
of outstanding shares of the Series A preferred stock. See "Description of
Preferred Stock--Restrictions on Ownership." These provisions may delay, defer
or prevent a change of control in the Company or other transaction by a third
party without the consent of the Board of Directors even if a change in
control were in the best interests of our stockholders.
Staggered board. Our Board of Directors is divided into three classes.
The terms of the Class I, Class II and Class III directors expire in 2002,
2003, and 2001, respectively. Directors are chosen for a three-year term.
These provisions may deter changes in control because of the increased time
period necessary for a third party to acquire control of management through
positions on the Board of Directors.
Supermajority Vote for Removal of Directors. In our charter, we have
opted into a provision of the Maryland General Corporation law (the "MGCL")
requiring a vote of two-thirds of the common stock to remove one or more
directors.
Majority of Votes Required to Call Special Meetings of Stockholders. Our
bylaws provide that a special meeting of stockholders need only be called if
requested by holders of the majority of votes eligible to be cast at such
meeting.
Future issuances of common stock. Our charter authorizes the
Board of Directors to issue additional shares of common stock without
stockholder approval. We also may issue shares of common stock in
exchange for limited partnership units pursuant to the Operating Partnership's
partnership agreement. The Board of Directors also has authorized the issuance
of up to 11.7 million shares of Class B exchangeable common stock in
connection with the Tower transaction. These shares are exchangeable on a
one-for-one basis for shares of Reckson common stock and are entitled
currently to an annual dividend of $2.40 per share, subject to adjustment
annually. Issuance of common stock or Class B exchangeable common stock could
have the effect of diluting existing common stockholders' interests.
Our charter permits the issuance of preferred stock which could delay,
defer or prevent a change in control. Our charter authorizes the Board of
Directors to issue up to 25 million shares of preferred stock, of which
9,192,000 shares of Series A Preferred Stock and 2,000,000 shares of Series B
preferred stock are issued and outstanding, to reclassify unissued shares of
capital stock, and to establish the preferences, conversion and other rights,
voting powers, restrictions, limitations and restrictions on ownership,
limitations as to dividends or other distributions, qualifications, and terms
and conditions of redemption for each class or series of any capital stock
issued. The Board of Directors could establish a series of preferred stock
that could, depending on the terms of the preferred stock, delay, defer or
prevent a change in control of the Company, that might involve a premium price
for the common stock or otherwise be in the best interest of the stockholders.
Limitations on acquisition of and changes in control pursuant to Maryland
law. The MGCL contains provisions, referred to as the "control share
acquisition statute," which eliminate the voting rights of shares acquired in
a Maryland corporation in quantities so as to constitute "control shares," as
defined under the MGCL. The MGCL also contains provisions, referred to as the
"business combination statute," which generally limit business combinations
between a Maryland corporation and any 10% owners of the company's stock or
any affiliate thereof. These provisions may have the effect of inhibiting a
third party from making an acquisition proposal for the Company or of
delaying, deferring or preventing a change in control of the Company under
circumstances that otherwise could provide the holders of shares of common
stock with the opportunity to realize a premium over the then-prevailing
market price. As permitted by the MGCL, our bylaws contain a provision
exempting any and all acquisitions by any person of shares of our capital
stock from the control share acquisition statute. Our board of directors,
however, has approved the Company's opting into the "business combination
statute."
o The market value of securities could decrease based on our performance and
market perception and conditions
Effect of earnings and cash dividends. The market value of the equity
securities of a REIT may be based primarily upon the market's perception of
the REIT's growth potential and its current and future cash dividends, and may
be secondarily based upon the real estate market value of the underlying
assets. For the year ended December 31, 1999, we distributed approximately
76.5% of our cash available for distribution to our common stockholders.
Adverse impact of rising interest rates. One factor which influences the
price of securities is the dividend or interest rate on the securities
relative to market interest rates. Rising interest rates may lead potential
buyers of our equity securities to expect a higher dividend rate, which would
adversely affect the market price of the securities. In addition, rising
interest rates would result in increased expense, thereby adversely affecting
cash flow and the ability of the Operating Partnership to service its
indebtedness.
THE COMPANY
We were incorporated in September 1994 and commenced operations effective
with the completion of our initial public offering (the "IPO") on June 2,
1995.
We were formed for the purpose of continuing the commercial real estate
business of our predecessors, affiliated partnerships and other entities. For
more than 40 years, we have been engaged in the business of owning,
developing, acquiring, constructing, managing and leasing suburban office and
industrial properties in the New York metropolitan area. Based on industry
surveys, we believe that we are one of the largest owners and managers of
Class A suburban office and industrial properties in the New York City
Metropolitan Tri-State area of New York, New Jersey and Connecticut (the "New
York Tri-State area"). When we refer to Class A office buildings in this
prospectus, we mean well maintained, high quality buildings that achieve
rental rates that are at the higher end of the range of rental rates for
office properties in the particular market. We operate as a self-managed REIT
with in-house capabilities in property management, development, construction
and acquisitions. As of June 30, 2000, we owned and controlled, directly or
indirectly, 185 properties located in the New York Tri-State area (the
"Properties") encompassing approximately 20.6 million rentable square feet,
all of which we manage. We also own one 357,000 square foot Class A office
facility located in Orlando, Florida. The Properties consist of 78 Class A
office properties encompassing approximately 13.7 million rentable square
feet, 105 industrial properties encompassing approximately 6.9 million
rentable square feet and two 10,000 square foot retail properties. In
addition, as of June 30, 2000, we owned or had contracted to acquire
approximately 346 acres of land that may present future development
opportunities. We also have invested approximately $301.5 million in certain
mortgage notes encumbering two Class A office properties encompassing
approximately 1.6 million square feet (one property is included in the 78
office properties), approximately 403 acres of land located in New Jersey and
approximately $17.1 million in a note receivable secured by a partnership
interest in Omni Partners, L.P., owner of the Omni, a 575,000 square foot
Class A office property located in Uniondale, New York.
The office properties are Class A office buildings that are well-located,
well-maintained and professionally managed. In addition, these properties are
modern or have been modernized to compete with newer buildings in their
markets. We believe that these properties achieve among the highest rent and
occupancy rates within their markets. A significant portion of the office
properties are located in twelve planned office parks and are tenanted by,
among others, national service firms, such as telecommunications firms, "big
five" accounting firms, securities brokerage houses, insurance companies and
health care providers. The industrial properties are utilized for
distribution, warehousing, research and development, and light
manufacturing/assembly activities and are located primarily in three planned
industrial parks.
Our executive offices are located at 225 Broadhollow Road, Melville, New
York 11747 and our telephone number at that location is (631) 694-6900. At
June 30, 2000, we had approximately 300 employees.
USE OF PROCEEDS
We will not receive any of the proceeds of sales of the common stock by
the selling stockholder.
DESCRIPTION OF COMMON STOCK
General
The charter of the Company (the "Charter") provides that the Company may
issue up to 100 million shares of common stock, $.01 par value per share. In
addition, units of limited partnership interest in the Operating Partnership
may be redeemed for cash or, at the option of the Company, exchanged for
common stock of the Company on a one-for-one basis. On September 15, 2000,
there were 45,290,722 shares of Class A common stock outstanding and
10,283,513 shares of Class B exchangeable common stock outstanding.
The Company issued Class B exchangeable common stock in connection with
the acquisition of Tower Realty Trust, Inc. The shares of Class B common stock
currently are entitled to receive an annual dividend of $2.40 per share,
subject to adjustment annually by a percentage equal to 70% of the cumulative
percentage change in the Company's FFO per share above the FFO per share
during the year prior to issuance. The shares of Class B common stock are
convertible at any time, at the option of the holder, into an equal number of
shares of Class A common stock of the Company, subject to customary
antidilution adjustments as well as certain other adjustments. The Company, at
its option, may redeem any or all of the Class B common stock in exchange for
an equal number of shares of its Class A common stock (subject to customary
antidilution adjustments as well as certain other adjustments) at any time
following November 23, 2003. The Class B common stock ranks pari passu with
the Company's Class A common stock.
All shares of Class A common stock have been duly authorized and will be
fully paid and nonassessable. Subject to the preferential rights of any other
shares or series of stock and to the provisions of the Charter regarding
Excess Stock (as defined under "Restrictions on Ownership of Capital Stock"),
holders of shares of Class A common stock offered hereby will be entitled to
receive distributions on the stock if, as and when authorized and declared by
the Board of Directors of the Company out of assets legally available therefor
and to share ratably in the assets of the Company legally available for
distribution to its common stockholders in the event of its liquidation,
dissolution or winding up after payment of or adequate provision for all known
debts and liabilities of the Company.
Subject to the provisions of the Charter regarding Excess Stock, each
outstanding share of the Company's Class A common stock and Class B common
stock entitles the holder to one vote on all matters submitted to a vote of
stockholders, including the election of directors, and, except as provided
with respect to any other class or series of stock, the holders of these
shares will possess the exclusive voting power. There is no cumulative voting
in the election of directors, which means that the holders of a majority of
the outstanding shares of the Company's Class A common stock and Class B
common stock can elect all of the directors then standing for election and the
holders of the remaining shares will not be able to elect any directors.
Holders of shares of Class A common stock have no preference, conversion,
exchange, sinking fund, redemption or appraisal rights and have no preemptive
rights to subscribe for any other securities. Subject to the provisions of the
Charter regarding Excess Stock, shares of common stock will have equal
dividend, liquidation and other rights.
Certain Provisions of the Charter
Under the MGCL, a Maryland corporation generally cannot dissolve, amend
its charter, merge, sell all or substantially all of its assets, engage in a
share exchange or engage in similar transactions outside the ordinary course
of business unless approved by the affirmative vote of stockholders holding at
least two-thirds of the shares entitled to vote on the matter unless a lesser
percentage (but not less than a majority of all of the votes entitled to be
cast on the matter) is set forth in the corporation's charter. The Charter
does not provide for a lesser percentage in these situations.
The Charter authorizes the Board of Directors of the Company to
reclassify any unissued shares of common stock into other classes or series of
classes of capital stock and to establish the number of shares in each class
or series and to set the preferences, conversion and other rights, voting
powers, restrictions, limitations and restrictions on ownership, limitations
as to dividends or other distributions, qualifications and terms or conditions
of redemption for each class or series.
Prospective investors should review the section captioned "Risk
Factors--Limits on Ownership and Changes in Control May Delay Changes in
Management and Third Party Acquisition Proposals."
Restrictions on Ownership
In order to qualify as a REIT under the Code, not more than 50% in value
of our outstanding capital stock may be owned, directly or indirectly, by five
or fewer individuals (as defined in the Code) during the last half of a
taxable year and the stock must be beneficially owned by 100 or more persons
during at least 335 days of a taxable year of 12 months (or during a
proportionate part of a shorter taxable year). To satisfy the above ownership
requirements and certain other requirements for qualification as a REIT, the
Board of Directors has adopted, and the stockholders prior to the IPO
approved, a provision in the Charter restricting the ownership or acquisition
of shares of common stock and preferred stock.
Transfer Agent and Registrar
The transfer agent and registrar for the common stock is American Stock
Transfer & Trust Company.
SELLING STOCKHOLDER
The Class A common stock was originally issued in exchange for shares of
our Series B preferred stock in a transaction exempt from the registration
requirements of the Securities Act. The selling stockholder (which term
includes its pledgees, transferees or other successors in interest) may from
time to time offer and sell any or all of the shares of common stock offered
under this prospectus.
The following table sets forth certain information with respect to shares
of common stock covered by this prospectus. To our knowledge and based on
certain representations made by the selling stockholder, the selling
stockholder has had no material relationship with us or any of our affiliates
within the past three years.
<TABLE>
<CAPTION>
Shares of Common Stock Shares of Common Stock Shares of Common Stock
Owned Before the Covered by this to be Owned After the
Name of Selling Stockholder Offering(1) Prospectus Offering(2)
--------------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C>
Stichting Pensioenfonds ABP 4,571,358 4,181,818 389,540
--------------
(1) As of September 15, 2000, the selling stockholder owned 4,181,818 shares of Class A common stock and
389,540 shares of Class B common stock.
(2) Assumes the sale of all shares of common stock registered hereunder, although the selling stockholder
is under no obligation known to the Company to sell any shares of common stock registered hereunder.
</TABLE>
PLAN OF DISTRIBUTION
We have been advised that the selling stockholder (a term that includes
pledgees, transferees and other successors in interest, as described above)
may offer shares of common stock from time to time depending on market
conditions and other factors, in one or more transactions on the national
securities exchanges or over-the-counter markets on which the shares are
traded, in negotiated transactions or otherwise, at fixed prices, at market
prices prevailing at the time of sale, at prices related to prevailing market
prices, at negotiated prices, without consideration, or by any other legally
available means.
Sales of shares of common stock by the selling stockholder may involve
(i) block transactions in which the broker or dealer so engaged will attempt
to sell the shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction, (ii) purchases by a broker-dealer
as principal and resale by such broker-dealer for its own account pursuant to
this prospectus, (iii) ordinary brokerage transactions and transactions in
which a broker solicits purchasers and (iv) privately negotiated transactions.
To the extent required, this prospectus may be amended and supplemented from
time to time to describe a specific plan of distribution. In connection with
the distribution of the shares of common stock or otherwise, the selling
stockholder may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the common stock in the course of hedging the position they assume with the
selling stockholder. The selling stockholder may also sell the common stock
short and redeliver the shares to close out such short positions.
The selling stockholder may also enter into option transactions
(including call or put option transactions) or other transactions with
broker-dealers which require delivery to such broker-dealer of shares offered
hereby, which shares such broker-dealer may resell pursuant to this prospectus
(as supplemented or amended to reflect such transaction, if necessary). The
selling stockholder may also pledge shares to a broker-dealer and, upon a
default, such broker-dealer may effect sales of the pledged shares pursuant to
this prospectus (as supplemented or amended to reflect such transaction, if
necessary). The selling stockholder may also sell the common stock through one
or more underwriters on a firm commitment or best-efforts basis (with a
supplement or amendment to this prospectus, if necessary). In addition, any
shares that qualify for sale pursuant to Rule 144 may be sold under Rule 144
rather than pursuant to this prospectus.
Brokers and dealers may receive compensation in the form of concessions
or commissions from the selling stockholder and/or purchasers of shares for
whom they may act as agent and/or to whom they may sell as principal (which
compensation may be in excess of customary commissions). The selling
stockholder and any broker or dealer that participates in the distribution of
shares may be deemed to be underwriters and any commissions received by them
and any profit on the resale of shares positioned by a broker or dealer may be
deemed to be underwriting discounts and commissions under the Securities Act.
We have agreed to indemnify the selling stockholder, each underwriter who
participates in an offering of the shares of common stock, each person, if
any, who controls any of such parties within the meaning of the Securities Act
and the Exchange Act, and each of their respective directors, officers,
employees and agents against certain liabilities, including liabilities
arising under the Securities Act. The selling stockholder may agree to
indemnify any agent or broker-dealer that participates in transactions
involving sales of the shares of common stock against certain liabilities,
including liabilities arising under the Securities Act.
We have advised the selling stockholder that Regulation M under the
Exchange Act may apply to sales of shares and to the activities of the selling
stockholder or broker-dealers in connection therewith. Regulation M and other
rules and regulations under the Exchange Act, including anti-fraud provisions,
may limit when the selling stockholder or broker-dealers may sell or purchase
the Common Stock. We will bear all costs, expenses and fees in connection with
the registration of the shares of common stock covered by this prospectus. The
selling stockholder will bear any brokerage commissions and similar selling
expenses, if any, attributable to the sale of the shares.
RESTRICTIONS ON OWNERSHIP OF CAPITAL STOCK
Excess Stock
The Charter provides that we may issue up to 75 million shares of Excess
Stock, par value $.01 per share. For a description of our Excess Stock, see
"--Restrictions on Ownership" below.
Restrictions on Ownership
In order for us to qualify as a REIT under the Code, among other things,
not more than 50% in value of our outstanding capital stock may be owned,
directly or indirectly, by five or fewer individuals (defined in the Code to
include certain entities) during the last half of a taxable year (other than
the first year) (the "Five or Fewer Requirement"), and the shares of capital
stock must be beneficially owned by 100 or more persons during at least 335
days of a taxable year of 12 months (other than the first year) or during a
proportionate part of a shorter taxable year. Pursuant to the Code, stock held
by certain types of entities, the as pension trusts qualifying under Section
401(a) of the Code, United States investment companies registered under the
Investment Company Act of 1940, partnerships, trusts and corporations, will be
attributed to the beneficial owners of the entities for purposes of the Five
or Fewer Requirement (i.e., the beneficial owners of the entities will be
counted as our stockholders).
In order to protect us against the risk of losing our status as a REIT
due to a concentration of ownership among stockholders, our Charter, subject
to certain exceptions, provides that no stockholder may own, or be deemed to
own by virtue of certain attribution provisions of the Code, more than 9.0%
(the "Ownership Limit") of the aggregate number or value of the outstanding
shares of Class A common stock. The Charter also imposes limitations on the
ownership of Class B common stock and preferred stock. Any transfer of shares
of stock that would result in a violation of the Ownership Limit or that would
result in disqualification as a REIT, including any transfer that results in
shares of capital stock being owned by fewer than 100 persons or results in
the Company being "closely held" within the meaning of Section 856(h) of the
Code, shall be null and void, and the intended transferee will acquire no
rights to the shares of capital stock. The foregoing restrictions on
transferability and ownership will not apply if the Board of Directors
determines that it is no longer in our best interests to attempt to qualify,
or to continue to qualify, as a REIT. The Board of Directors may, in its sole
discretion, waive the Ownership Limit if evidence satisfactory to the Board of
Directors and tax counsel is presented that the changes in ownership will not
then or in the future jeopardize REIT status and the Board of Directors
otherwise decides that waiving the Ownership Limit is in our best interests.
Shares of capital stock owned, or deemed to be owned, or transferred to a
stockholder in excess of the Ownership Limit will automatically be converted
into shares of Excess Stock that will be transferred, by operation of law, to
the trustee of a trust for the exclusive benefit of one or more charitable
organizations described in Section 170(b)(1)(A) and 170(c) of the Code (the
"Charitable Beneficiary"). The trustee of the trust will be deemed to own the
Excess Stock for the benefit of the Charitable Beneficiary on the date of the
violative transfer to the original transferee-stockholder. Any dividend or
distribution paid to the original transferee-stockholder of Excess Stock prior
to our discovery that capital stock has been transferred in violation of the
provisions of the Charter shall be repaid to the trustee upon demand. Any
dividend or distribution authorized and declared but unpaid shall be rescinded
as void ab initio with respect to the original transferee-stockholder and
shall instead be paid to the trustee of the trust for the benefit of the
Charitable Beneficiary. Any vote cast by an original transferee-stockholder of
shares of capital stock constituting Excess Stock prior to the discovery by us
that shares of capital stock have been transferred in violation of the
provisions of the Charter shall be rescinded as void ab initio. While the
Excess Stock is held in trust, the original transferee-stockholder will be
deemed to have given an irrevocable proxy to the trustee to vote the capital
stock for the benefit of the Charitable Beneficiary. The trustee of the trust
may transfer the interest in the trust representing the Excess Stock to any
person whose ownership of the shares of capital stock converted into Excess
Stock would be permitted under the Ownership Limit. If the transfer is made,
the interest of the Charitable Beneficiary shall terminate and the proceeds of
the sale shall be payable to the original transferee-stockholder and to the
Charitable Beneficiary as described herein. The original
transferee-stockholder shall receive the lesser of (1) the price paid by the
original transferee-stockholder for the shares of capital stock that were
converted into Excess Stock or, if the original transferee-stockholder did not
give value for the shares (e.g., the stock was received through a gift, devise
or other transaction), the average closing price for the class of shares from
which the shares of capital stock were converted for the ten trading days
immediately preceding the sale or gift, and (2) the price received by the
trustee from the sale or other disposition of the Excess Stock held in trust.
The trustee may reduce the amount payable to the original
transferee-stockholder by the amount of dividends and distributions relating
to the shares of Excess Stock which have been paid to the original
transferee-stockholder and are owed by the original transferee-stockholder to
the trustee. Any proceeds in excess of the amount payable to the original
transferee-stockholder shall be paid by the trustee to the Charitable
Beneficiary. Any liquidation distributions relating to Excess Stock shall be
distributed in the same manner as proceeds of a sale of Excess Stock. If the
foregoing transfer restrictions are determined to be void or invalid by virtue
of any legal decision, statute, rule or regulations, then the original
transferee-stockholder of any shares of Excess Stock may be deemed, at our
option, to have acted as our agent in acquiring the shares of Excess Stock and
to hold the shares of Excess Stock for us.
In addition, we will have the right, for a period of 90 days during the
time any shares of Excess Stock are held in trust, to purchase all or any
portion of the shares of Excess Stock at the lesser of (i) the price initially
paid for the shares by the original transferee-stockholder, or if the original
transferee-stockholder did not give value for the shares (e.g., the shares
were received through a gift, devise or other transaction), the average
closing price for the class of stock from which the shares of Excess Stock
were converted for the ten trading days immediately preceding the sale or
gift, and (ii) the average closing price for the class of stock from which the
shares of Excess Stock were converted for the ten trading days immediately
preceding the date we elect to purchase the shares. We may reduce the amount
payable to the original transferee-stockholder by the amount of dividends and
distributions relating to the shares of Excess Stock which have been paid to
the original transferee-stockholder and are owed by the original
transferee-stockholder to the trustee. We may pay the amount of the reductions
to the trustee for the benefit of the Charitable Beneficiary. The 90-day
period begins on the later date of which notice is received of the violative
transfer if the original transferee-stockholder gives notice to us of the
transfer or, if no notice is given, the date the Board of Directors determines
that a violative transfer has been made.
These restrictions will not preclude settlement of transactions through
the New York Stock Exchange.
All certificates representing shares of stock will bear a legend
referring to the restrictions described above.
Each stockholder shall upon demand be required to disclose to us in
writing any information with respect to the direct, indirect and constructive
ownership of our capital stock as the Board of Directors deems necessary to
comply with the provisions of the Code applicable to REITs, to comply with the
requirements of any taxing authority or governmental agency or to determine
any compliance.
The Ownership Limit may have the effect of delaying, deferring or
preventing a change in control of the Company unless the Board of Directors
determines that maintenance of REIT status is no longer in our best interests.
FEDERAL INCOME TAX CONSIDERATIONS
Based on various assumptions and factual representations made by the
Company regarding its operations, in the opinion of Brown & Wood LLP, counsel
to the Company, commencing with the Company's taxable year ended December 31,
1995, the Company has been organized in conformity with the requirements for
qualification as a REIT under the Code, and the proposed method of operating
the Company will enable it to meet the requirements for qualification and
taxation as a REIT. The qualification of the Company depends upon its ability
to meet the various requirements imposed under the Code through actual
operations, as discussed below. Brown & Wood LLP will not review the Company's
operations and no assurance can be given that actual operations will meet
these requirements. The opinion of Brown & Wood LLP is not binding on the IRS
or any court. The opinion of Brown & Wood LLP is based upon existing law, IRS
regulations and currently published administrative positions of the IRS and
judicial decisions, which are subject to change either prospectively or
retroactively.
The provisions of the Code pertaining to REITs are highly technical and
complex. The following is a brief and general summary of certain provisions
that currently govern the Company and its stockholders' federal income tax
treatment. For the particular provisions that govern the Company and its
stockholders' federal income tax treatment, reference is made to Sections 856
through 860 of the Code and the regulations thereunder. The following summary
is qualified in its entirety by reference.
Under the Code, if certain requirements are met in a taxable year, a REIT
generally will not be subject to federal income tax with respect to income
that it distributes to its stockholders. If the Company fails to qualify
during any taxable year as a REIT, unless certain relief provisions are
available, it will be subject to tax (including any applicable alternative
minimum tax) on its taxable income at regular corporate rates, which could
have a material adverse effect upon its stockholders. See "Risk Factors-Risks
of Failure to Qualify as a REIT."
In any year in which the Company qualifies to be taxed as a REIT,
distributions made to its stockholders out of current or accumulated earnings
and profits will be taxed to stockholders as ordinary income except that
distributions of net capital gains designated by the Company as capital gain
dividends will be taxed as long-term capital gain income to the stockholders.
To the extent that distributions exceed current and accumulated earnings and
profits, they will constitute a return of capital, rather than dividend or
capital gain income, and will reduce the basis for the stockholder's common
stock or preferred stock with respect to which the distribution is paid. To
the extent that distributions exceed the stockholder's basis, the excess will
be taxed in the same manner as gain from the sale of that common stock or
preferred stock. For purposes of determining whether a distribution on common
stock or preferred stock is out of current or accumulated earnings and
profits, the earnings and profits of the Company will be allocated first to
preferred stock and then to common stock. Beginning in 1998, the Company may
elect to retain long-term capital gains and pay corporate-level income tax on
them and treat the retained gains as if they had been distributed to
stockholders. In this case, each stockholder would include in income, as
long-term capital gain, its proportionate share of the undistributed gains and
would be deemed to have paid its proportionate share of the tax paid by the
Company with respect thereto. In addition, the basis for a stockholder's
common stock or preferred stock would be increased by the amount of the
undistributed long-term capital gain included in its income, less the amount
of the tax it is deemed to have paid with respect thereto.
Legislation enacted in 1999 contains several tax provisions regarding
REITs, including a reduction of the annual distribution requirement for REIT
taxable income from 95% to 90%. The legislation also changed the 10% voting
securities test under current law to a 10% vote or value test. Thus, subject
to certain exceptions, after the legislation becomes effective a REIT will not
be allowed to own more than 10% of the vote or value of the outstanding
securities of any issuer (other than a qualified REIT subsidiary or another
REIT). The new 10% value test will not apply to certain straight-debt
securities. An exception to both the 10% vote and 10% value tests, which will
also be an exception to the 5% asset test under current law, will allow a REIT
to own any or all of the securities of a "taxable REIT subsidiary." A taxable
REIT subsidiary will be able to perform non-customary services for tenants of
a REIT without disqualifying rents received from such tenants for purposes of
the REIT's gross income tests and will also be able to undertake third-party
management and development activities as well as non-real-estate-related
activities. A taxable REIT subsidiary will be taxed as a regular C corporation
but will be subject to "earnings stripping" limitations on the deductibility
of interest paid to its REIT. In addition, a REIT will be subject to a 100%
excise tax on certain excess amounts to ensure an arm's-length relationship
between the REIT and its taxable REIT subsidiaries. No more than 20% of a
REIT's total assets will be allowed to consist of securities of taxable REIT
subsidiaries.
The foregoing provisions will become applicable to the Company on January
1, 2001, subject to grandfather rules with respect to the 10% value test as
well as a transition period for the tax-free conversion of existing corporate
subsidiaries into taxable REIT subsidiaries. We have made no decision at this
time with regard to any actions we might take when the legislation becomes
effective and there can be no assurance as to how the enactment of these
changes may affect our business in the future.
Investors are urged to consult their own tax advisors with respect to the
appropriateness of an investment in the securities offered hereby and with
respect to the tax consequences arising under federal law and the laws of any
state, municipality or other taxing jurisdiction, including tax consequences
resulting from the investor's own tax characteristics. In particular, foreign
investors should consult their own tax advisors concerning the tax
consequences of an investment in the Company, including the possibility of
United States income tax withholding on our distributions.
LEGAL MATTERS
The validity of the issuance of the common stock covered by this
prospectus (and certain legal matters described under "Federal Income Tax
Considerations") will be passed upon for us by Brown & Wood LLP, New York, New
York.
EXPERTS
The consolidated financial statements and schedule of the Company
appearing in the Company's Annual Report (Form 10-K) for the year ended
December 31, 1999, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements and
schedule are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following sets forth the estimated expenses in connection with the
issuance and distribution of the Registrant's securities being registered
hereby, other than underwriting discounts and commissions, all of which will
be borne by the Company:
Securities and Exchange Commission registration fee.............. $ 29,029
Printing and engraving expenses.................................. 5,000
Legal fees and expenses.......................................... 25,000
Accounting fees and expenses..................................... 12,000
Miscellaneous.................................................... 5,000
Total............................................................ $ 76,029
Item 15. Indemnification of Directors and Officers.
The Maryland General Corporation Law, as amended from time to time (the
"MGCL"), permits a Maryland corporation to include in its Charter a provision
limiting the liability of its directors and officers to the company and its
stockholders for money damages except for liability resulting from (a) actual
receipt of an improper benefit or profit in money, property or services or (b)
active and deliberate dishonesty established by a final judgment as being
material to the cause of action. Our Charter contains such a provision which
eliminates such liability to the maximum extent permitted by Maryland law.
Our Charter authorizes us, to the maximum extent permitted by Maryland
law, to obligate ourselves to indemnify and to pay or reimburse reasonable
expenses in advance of final disposition of a proceeding to (a) any present or
former director or officer or (b) any individual who, while a director and at
our request, serves or has served another company, real estate investment
trust, partnership, joint venture, trust, employee benefit plan or any other
enterprise as a director, officer, partner or trustee of such company, real
estate investment trust, partnership, joint venture, trust, employee benefit
plan or other enterprise and who is made a party to the proceeding by reason
of his or her service in that capacity. Our Bylaws obligate us, to the maximum
extent permitted by Maryland law, to indemnify and to pay or reimburse
reasonable expenses in advance of final disposition of a proceeding to (a) any
present or former director or officer who is made a party to the proceeding by
reason of his service in that capacity or (b) any individual who, while a
director and at our request, serves or has served another company, real estate
investment trust, partnership, joint venture, trust, employee benefit plan or
any other enterprise as a director, officer, partner or trustee of such
company, real estate investment trust, partnership, joint venture, trust,
employee benefit plan or other enterprise and who is made a party to the
proceeding by reason of his service in that capacity. Our Charter and Bylaws
also permit us to indemnify and advance expenses to any person who served our
predecessor in any of the capacities described above and to any employee or
agent of us or our predecessor.
The MGCL requires a company (unless its charter provides otherwise, which
our Charter does not) to indemnify a director or officer who has been
successful, on the merits or otherwise, in the defense of any proceeding to
which he is made a party by reason of his service in that capacity. The MGCL
permits a company to indemnify its present and former directors and officers,
among others, against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by them in connection with any proceeding to which
they may be made a party by reason of their service in those or other
capacities unless it is established that (a) the act or omission of the
director or officer was material to the matter giving rise to the proceeding
and (i) was committed in bad faith or (ii) was the result of active and
deliberate dishonesty, (b) the director or officer actually received an
improper personal benefit in money, property or services or (c) in the case of
any criminal proceeding, the director or officer had reasonable cause to
believe that the act or omission was unlawful. However, under the MGCL, a
Maryland corporation may not indemnify for an adverse judgment in a suit by or
in the right of the company or for a judgment of liability on the basis that
personal benefit was improperly received, unless in either case a court orders
indemnification and then only for expenses. In addition, the MGCL permits a
company to advance reasonable expenses, upon the company's receipt of (a) a
written affirmation by the director or officer of his good faith belief that
he has met the standard of conduct necessary for indemnification by us and (b)
a written statement by or on his behalf to repay the amount paid or reimbursed
by us if it shall ultimately be determined that the standard of conduct was
not met.
We have entered into indemnification agreements with each of our
executive officers and directors. The indemnification agreements require,
among other matters, that we indemnify our executive officers and directors to
the fullest extent permitted by law and advance to the executive officers and
directors all related expenses, subject to reimbursement if it is subsequently
determined that indemnification is not permitted. Under these agreements, we
must also indemnify and advance all expenses incurred by executive officers
and directors seeking to enforce their rights under the indemnification
agreements and may cover executive officers and directors under our directors'
and officers' liability insurance. Although indemnification agreements offer
substantially the same scope of coverage afforded the Bylaws, they provide
greater assurance to directors and executive officers that indemnification
will be available, because, as contracts, they cannot be modified unilaterally
in the future by the Board of Directors or the stockholders to eliminate the
rights they provide.
The Partnership Agreement of the Operating Partnership contains
provisions indemnifying its partners and their officers and directors to the
fullest extent permitted by the Delaware Limited Partnership Act.
Item 16. Exhibits.
4.1 -- Amended and Restated Articles of Incorporation(1)
4.2 -- Amended and Restated Articles of Incorporation(1)
4.3 -- Amended and Restated By-laws of Registrant(2)
4.4 -- Articles Supplementary of the Registrant Establishing and
Fixing the Rights and Preferences of a Series of Shares of
Preferred Stock filed with the Maryland State Department of
Assessments and Taxation on April 9, 1998(3)
4.5 -- Articles Supplementary of the Registrant Establishing and
Fixing the Rights and Preferences of a Class of Shares of
Common Stock filed with the Maryland State Department of
Assessments and Taxation on May 24, 1999(2)
4.6 -- Articles Supplementary of the Registrant Establishing and
Fixing the Rights and Preferences of a Series of Shares of
Preferred Stock filed with the Maryland State Department of
Assessments and Taxation on May 28, 1999(4)
4.7 -- Articles of Amendment of the Registrant filed with the
Maryland State Department of Assessments and Taxation on
January 4, 2000(2)
4.8 -- Articles Supplementary of the Registrant filed with the
Maryland State Department of Assessments and Taxation on
January 11, 2000(2)
4.9 -- Form of Common Stock Certificate(5)
5 -- Opinion of Brown & Wood LLP as to the legality of the common
stock
8 -- Opinion of Brown & Wood LLP as to tax matters
23.1 -- Consent of Brown & Wood LLP (included in Exhibits 5 and 8)
23.2 -- Consent of Ernst & Young LLP
24 -- Power of attorney (included on the signature page of this
Registration Statement)
_______________
(1) Previously filed as an exhibit to the Company's Registration Statement on
Form S-11 (No. 333-1280) and incorporated herein by reference.
(2) Previously filed as an exhibit to the Company's Form 10-K filed with the
SEC on March 17, 2000 and incorporated herein by reference.
(3) Previously filed as an exhibit to the Company's Form 8-K report filed
with the SEC on March 1, 1999 and incorporated herein by reference.
(4) Previously filed as an exhibit to the Company's Form 8-K report filed
with the SEC on June 7, 1999 and incorporated herein by reference.
(5) Previously filed as an exhibit to the Company's Registration Statement on
Form S-3 (No. 33-84324) and incorporated herein by reference.
Item 17. Undertakings.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or 15(d) of the Exchange
Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) (a) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, partners and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer, partner or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer, partner or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Reckson
Associates Realty Corp. certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Huntington, State
of New York, on September 19, 2000.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Scott H. Rechler
----------------------------------
Scott H. Rechler
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Scott H. Rechler, Mitchell D. Rechler
and Michael Maturo or any one of them, his or her attorneys-in-fact and
agents, each with full power of substitution and resubstitution for him or her
in any and all capacities, to sign any or all amendments or post-effective
amendments to this registration statement or a registration statement prepared
in accordance with Rule 462 of the Securities Act of 1933, as amended, and to
file the same, with exhibits thereto and other documents in connection
herewith or in connection with the registration of the offered securities
under the Securities Exchange Act of 1934, as amended, with the Securities and
Exchange Commission, granting unto each of such attorneys-in-fact and agents
full power to do and perform each and every act and thing requisite and
necessary in connection with such matters and hereby ratifying and confirming
all that each of such attorneys-in-fact and agents or his or her substitutes
may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman of the Board, Co-Chief Executive
------------------------ Officer and Director (Principal Executive September , 2000
Donald J. Rechler Officer)
/s/ Scott H. Rechler President, Co-Chief Executive Officer and September 19, 2000
------------------------ Director
Scott H. Rechler
/s/ Michael Maturo Executive Vice President, Treasurer and
------------------------ Chief Financial Officer (Principal September 19, 2000
Michael Maturo Financial Officer and Principal Accounting
Officer)
/s/ Roger M. Rechler
------------------------ Vice-Chairman of the Board and Director September 19, 2000
Roger M. Rechler
/s/ Mitchell D. Rechler Co-Chief Operating Officer and Director September 19, 2000
------------------------
Mitchell D. Rechler
/s/ Harvey R. Blau Director September 19, 2000
------------------------
Harvey R. Blau
/s/ Leonard Feinstein
------------------------ Director September 19, 2000
Leonard Feinstein
/s/ Herve A. Kevenides Director September 19, 2000
------------------------
Herve A. Kevenides
/s/ John V.N. Klein Director September 19, 2000
------------------------
John V.N. Klein
/s/ Lewis S. Ranieri Director September 19, 2000
------------------------
Lewis S. Ranieri
/s/ Conrad D. Stephenson Director September 19, 2000
------------------------
Conrad D. Stephenson
</TABLE>
<PAGE>
Exhibit Index
Exhibits Description Page
-------- ----------- ----
5 -- Opinion of Brown & Wood LLP as to the legality of the
common stock
8 -- Opinion of Brown & Wood LLP as to tax matters
23.1 -- Consent of Brown & Wood LLP (included in Exhibits 5 and 8)
23.2 -- Consent of Ernst & Young LLP
24 -- Power of attorney (included on the signature page of
this Registration Statement)
