Rechler Calls Frontline 'Maxed Out,' Calls a Halt to Investing

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.”