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MELVILLE, NY-Continuing its effort toward “operating locally and financing globally,” Reckson Associates Realty Corp. officials further detail plans for the REIT’s Australian limited property trust. Approximately $202 million worth of units in the Reckson-sponsored trust, which is named Reckson NYPT, will be traded on the Australian Stock Exchange starting Sept. 26.

The LPT will initially purchase a 75% indirect interest in a portfolio of 25 suburban core plus office properties, containing approximately 3.4 million sf, for $563 million with Reckson retaining a 25% indirect interest. The LPT will then have a two-year option to purchase an additional 10 properties totaling approximately 1.2 million sf. Reckson intends to use the net proceeds to fund recently announced acquisitions and for the repayment of outstanding indebtedness. Reckson’s vice president of investor relations, Susan McGuire says Australian investors were attracted for several reasons, in particular the unique supply and demand characteristics of the New York Tri-state area suburban markets and the strength of Reckson’s franchise.

During Reckson’s conference call last week, Scott Rechler, the REIT’s president and chief executive officer, said establishing an LPT as opposed to looking for joint venture partners would have some advantages. He said it will allow the company to have ongoing access to capital, enjoy greater discretionary control and move more quickly. “It is the first Australian listed property trust to focus on US suburban office properties,” he pointed out.

Rechler noted that the LPT will meet the company’s strategic objective of increasing scale without diluting existing Reckson shareholders. The REIT intends to wholly own its class A trophy office properties.

The LPT will be managed by Reckson Australia Management Limited, an Australian licensed Responsible Entity wholly owned by Reckson Operating Partnership. Affiliates of Reckson will serve as property manager, leasing agent, asset manager and construction manager and will provide other services to the properties in the portfolio. The first tranche is expected to close by the end of the third quarter, the second tranche in the first quarter of 2006, while the third tranche is expected to close in the fourth quarter of 2006. This offering is being made through Citigroup Global Markets Australia Pty Limited and UBS AG, Australia Branch in Australia.

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