Reckson, SL Green: Done Deal

NEW YORK CITY-The SL Green Realty Corp. and Reckson Associates Realty Corp. merger, which set a precedent of competing bids and unhappy shareholders for Equity Office Properties Trust to follow, closed today. But unlike Blackstone, which overbid a competing offer for EOP, SL Green stuck to its guns refusing to match or exceed other bids.

With the close of the merger SL Green now owns six new office buildings in New York City, which totals 5.6 million sf, and an additional 3.6 million sf in Westchester and Connecticut.

SL Green paid $31.68 for each of Reckson’s shares. The company also assumed $238.6 million of Reckson mortgage debt, $287.5 million of convertible debt and $987.8 million of unsecured Reckson notes, according to a release. At the close of business on Thursday, Reckson was delisted from the New York Stock Exchange.

As the merger closed, SL Green sold non-core assets to RexCorp Realty, a group of former Reckson executives including former Reckson CEO Scott Rechler. The new firm paid an estimate $2 billion for the properties, bringing its current portfolio to more than 11 million sf of class A properties. According to RexCorp’s website, the firm owns $3 billion worth of properties and has an additional $1 billion of projects under construction. Rechler is now the chairman and CEO of the Uniondale-based firm and Michael Maturo is president and CFO.

At the beginning of December Reckson shareholders voted in favor of the merger with SL Green, as reported by GlobeSt.com. The vote of approval came after months of public debate about the value of Reckson that was jumpstarted by an unsatisfied shareholder and carried through by higher priced bids. In the end SL Green agreed to pay an additional $25 million to the $6-billion deal the companies entered into last August.

Before the merger closed, SL Green’s portfolio totaled 28 office buildings equaling almost 19 million sf. It also holds about 300,000 sf of retail.