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MELVILLE, NY-”You need to take a value-added approach to the marketplace,” said Scott Rechler, Reckson’s president and chief executive officer, during the REIT’s second-quarter conference call, adding that it’s a “good time to be seller or a buyer.” He noted that there’s “a pretty vibrant pipeline of opportunities.” In the second quarter, the locally based firm completed approximately $400 million of new investments to year-to-date investment activity total to nearly $1 billion.

In what Rechler labeled a “classic Reckson investment,” the company purchased EAB Plaza, a 1.1-million-sf, trophy office in Uniondale, for approximately $240 million. He said the asset, which is approximately 90% leased, was “undermanaged for a number of years.” The firm also acquired 225 High Ridge Rd. in Stamford, CT for $76.3 million.

On the leasing front, Reckson executed 69 transactions totaling 374,120 sf and saw rent performance on renewal and replacement increased 10.3% on a straight-line rent basis and 1.3% on a cash basis in the office portfolio. “There are 700,000 sf of leases under negotiation and a large pipeline behind that,” Rechler said.

“Operating locally and financing globally,” Rechler noted that the REIT is marketing an Australian limited property trust through Citigroup Global Markets Australia Pty Limited and UBS AG, Australia Branch in Australia. The firm anticipates raising $203 million from the endeavor. Going this route instead of establishing a joint venture partnership in the country allows the company to have ongoing access to capital, enjoy greater discretionary control and move more quickly, Rechler said. “We want to become effective financial recyclers.”

The company kicked off the ground-up development of University Square, a 316,000-sf, five-story, class A office building located in Princeton, NJ, and of 7 Landmark Square in Stamford, CT, a 36,900-sf, two-story retail building. The locally based REIT reported diluted funds from operations of $49.8 million as compared to diluted FFO of $37.1 million or $0.52 per share for the second quarter of 2004. Reckson completed the arbitration proceedings relating to the re-setting of the rent under the ground lease at 1185 Ave. of the Americas to approximately $6.50 per sf fixed for the next 37 years at the 1.1-million-sf building. “We’re happy with the outcome,” Rechler said.

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