In the deal brokered by Cushman & Wakefield, Reckson acquired the 10-story, 181,800-sf property in an UPREIT transaction that involved $21.6 million in cash and the issuance of 465,845 Class C common units of limited partnership interest, valued at $24 per unit (approximately $11.2 million). The Class C common unit holders will receive an annual distribution of $1.87 per unit, which amount will increase or decrease pro rata based upon changes in the dividend paid on Reckson's Class A common stock, Reckson officials note.

The property was acquired from Boston-based Ray Miller and Bob Elder of 1055 Stamford Associates. Cushman & Wakefield Senior Directors George Lambros III and Patrick R. Colwell and Executive Vice President Andrew J. Merin represented the seller in the transaction and also procured the buyer--Reckson Associates, a REIT based in Melville, NY.

With the deal, Reckson's Westchester/Connecticut portfolio now totals more than 4.3 million sf of office space.

Reckson co-CEO Scott Rechler comments on the deal by saying, "This acquisition demonstrates our ability to work with sellers to formulate creative structures to effectively execute transactions. Further, it exemplifies our capability to identify and opportunistically acquire properties going through a state of transition where we may apply our expertise to create value and enhance our returns."

The property, built in 1987, is 80 percent leased and occupied. Its largest tenants are the law firm Paul, Hastings, Janofsky & Walker LLP, which occupies approximately 55,000 sf and Watson, Wyatt & Company, an international consulting firm, which leases about 30,000 sf of space.

Salvatore Campofranco, managing director of Reckson's Westchester/Connecticut Division, notes, "The addition of this property complements our Landmark Square and Stamford Towers properties and further indicates the confidence that we have in the Stamford market."

He added the deal allows Reckson to offer a variety of floor plate options to its tenants in Stamford. For example, the average floor plate at the Landmark Square property is approximately 11,000 sf, while floors at 1055 Washington Blvd. go as high as 24,000 sf.

Despite a rather weak leasing environment, Campofranco says, "Stamford is a very good market. Its current problems we believe are short-term." He adds that leasing interest at the building since Reckson began marketing the available space earlier this year has been good, although he had no new lease deals to report.

C&W's Lambros says the deal structure met the requirements of the seller. "The UPREIT alternative investment vehicle successfully meets the objectives of owners facing substantial taxes that would otherwise be triggered by a conventional sale transaction," he says. "The method also serves as an excellent planning tool."

Reckson expects to generate an initial net operating income (NOI) yield of 7.2% from the 1055 Washington Blvd. property. The firm expects the NOI to increase to approximately 9.5% during 2004.