NEW YORK CITY-Scott Rechler, co-chief executive officer and president of Reckson Associates and chief executive officer and president of FrontLine Capital, spoke to investors recently on a conference call about the company’s plans. Rechler told listeners that the goal of FrontLine Capital, a publicly traded spin-off of Reckson Service Industries, Inc., is to create two separate operating units.

The first would “hold the assets of HQ Global Workplaces,” and the second would “hold that of our other assets,” Rechler explained. “We’re seeking to capitalize each entity separately over time,” in an effort to prove to stockholders that HQ is valuable. Also, he said, “Frontline is going to cease all new investing.”

The company has reduced its staff by 75%, Rechler stated. He also said FrontLine had $15 million in cash and debt of $125 million, making the company “maxed out” in terms of available debt. HQ currently has $250 million in debt, but the hope is to make it self-financing, something Rechler asserted is attainable for a company he said will “be at the leading edge of change for the next 10 years.”

FrontLine will own 57% of HQ, but will not have access to its cash flow. Rechler said an IPO could be in its future, something its “only competitor” has done. Rechler noted that the IPO status of its competition “validates the business.”

Reference was made to Reckson stockholders and how the shift in FrontLine’s plans would ultimately impact the parent company. Rechler said that on Nov. 7 there would be a quarterly call for FrontLine. In the meantime, Rechler announced the third quarter earnings for Reckson will be released tomorrow, Nov. 1 and there will be a conference call on the subject on Nov. 2 at 3 p.m.

Rechler noted that FrontLine’s burn rate is $500,000 a month. The company is also obligated to pay $600,000 or so a quarter on its debt. Rechler said the timeframe for the separation of HQ and FrontLine is three to six months.

FrontLine currently holds interests in several privately held partner companies, including: OnSite Access; employeematters; PIPE9; Confidant;;;; and

Donald Rechler, Reckson’s chairman and co-CEO, wrote in a recent statement, “In view of current stock market conditions, we decided it was in the best interest of our shareholders that we join the significant number of REITs that have adopted Shareholder Rights Plans.” The distribution began at close of business last Friday and will be discussed on Nov. 2.

The conference call will be replayed from Nov. 2 at 7 p.m. through Nov. 11 at noon at 800-475-6701.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join now!

  • Free unlimited access to's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.