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NEW YORK CITY-Scott Rechler, president and CEO of FrontLine Capital Group, held a conference call broadcast on the company’s Web site yesterday to outline its ownership of HQ Global Workplaces and highlight its financial reporting for the third quarter. CEO Gary Kushin of HQ presented a report on the company’s business economics, summarizing the status and plans of the company. Rechler called HQ’s performance, “better than expected.”

Rechler announced last month HQ would be pushed forward as an individual company, standing out of the shadow, so to speak, of FrontLine. In breaking down FrontLine’s ownership of the company yesterday, Rechler explained control amounted to 59.8% or 8,607,076 shares. While FrontLine actually still owns 100% of the company, it is by shifting the way it focuses on control that Rechler hopes to strengthen HQ’s position in the marketplace.

HQ, as of Sept. 30, has $571 million in debt. FrontLine had $157 million in debt for the same period, $106 million of which is listed as debt to parent company, Reckson Strategic Venture Partners. It is in HQ’s $35 million in EBITDA in the third quarter that Rechler wished to focus the most attention during the call. There was approximately $160 million in total revenue and $81 million in gross profit.

Rechler and Kushin identified three mega trends: outsourcing, globalization and business use of technology. Its new center prototype is expected to meet the demands of the market. With 40,000 sf with 250 workstations, $2.2 million initial investment required, HQ expects it will break even in eight months with 14 months for stabilization. They expect revenues in excess of $4 million following the first 14 months and EBITDA yields in excess of 60% from then through year five.

Rechler stated early in the conference call, and again in response to a listener question, FrontLine adopted a shareholders’ rights plan “to protect from takeover while trading at a substantial discount to net asset value.” FrontLine expects to reduce its own monthly overhead by 80%, but the overwhelming majority are in payroll and benefits. These are followed by cuts in professional fees, rent and office expenses, with the slimmest change in corporate costs.

The total pie of FrontLine’s holdings are: 59% HQ, 13% others, 12% OnSite, 9% Realty IQ and 7% Employee Matters. Rechler said that step one was completed in its role with HQ as a holding company and now it is in step two, separating HQ into a separate operating unit. Step three will be to create possible spin offs of other FrontLine Holdings.

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