Reckson Set to Sell Six Buildings

The pending sale is part of the play-out of Reckson's pending acquisition by SL Green for $6 billion, as reported by GlobeSt.com. As part of that acquisition, the latter will flip more than $2 billion of suburban properties back to an investor group put together by Reckson chairman Scott Rechler and backed by Marathon Asset Management. The Rechler group has hired Cushman & Wakefield to find a buyer for the half-dozen properties that the group has apparently decided to sell.

"It's a standard portfolio trimming or culling that a lot of REITs do," Andrew Merin, vice chairman of Cushman & Wakefield and head of its Metropolitan Area Capital Markets Group, tells GlobeSt.com. "And I think, for Reckson, it's a course of action whether or not the SL Green transaction had happened. One of the assets we're selling, we had on the market three years ago but pulled it back. Before this whole SL Green thing happened, we were about to go into the market with that asset again anyhow."

Bids were due yesterday, according to Merin, "and I would suspect that we'll probably have a second or third round of bids. I would say that within the next two or three weeks we will have selected a winner. The offering has gotten a lot of interest and attention, particularly with the overtones of what's going on with Reckson in general."

The six assets are said to include Three University Plaza, a 20-year-old, six-story, 219,800-sf building in Hackensack. The asset's major tenant is Sequa Corp. and it has about 50,000 sf currently available. Also in the package is 1255 Broad St. in Clifton, a seven-year-old, two-story building fully occupied by Hoffman La Roche.

Also on the market is 99-119 Cherry Hill Rd., a two-building, 24-year-old, 189,000-sf office complex in Parsippany. The complex has approximately 88,000 sf available and its major tenants include the American Medical Association, CH2M Hill and York Insurance. And 72 Eagle Rock Ave. is a 144,500-sf building in East Hanover that includes the adjacent development parcel.

In South Plainfield, 40 Cragwood Rd. is a 135,000-sf, one-story office/flex building whose tenants include Fiserve and Norton Lily International. Finally, 100-400 Forge Way in Rockaway is a 190,000-sf, four-building R&D/industrial complex. Built in the late 1980s, it's currently 90% occupied.

Industry sources say the offering could bring in upwards of $180 million, or about $180 per sf. Merin declined to comment on that number.

The Rechler group apparently plans to hold onto some of its other New Jersey properties. Among them are the 564,000-sf Reckson Office Center in Short Hills, the one-million-sf Giralda Farms in Madison and four buildings totaling nearly a half-million sf in the Princeton market. The latter includes Reckson University Square, a new 313,000-sf speculative building.

A spokesman for the Uniondale, NY-based Reckson, which has its New Jersey offices here, declined to comment.