"Our family has dedicated three generations of leadership to Reckson Associates, and we are looking forward to growing Rechler Equity Partners in the private sector," says Donald Rechler. The acquisition of the portfolio will make Rechler Equity Partners the largest full-service industrial real estate company on Long Island.
Mitchell Rechler tells GlobeSt.com that the new entity will concentrate on Long Island's high-tech market and will be in the market for properties throughout the tri-state region."Our intent is to grow the portfolio and redevelop existing properties. We're still the dominant player in the market with 40 years of relationships with brokers and the real estate community," he says.
"I've learned the hard way how important it is to be focused," current co-CEO Scott Rechler said during a conference call on the sale and restructuring. He has committed to purchasing $2.5 million of the Reckson's Class A common stock in the open market. "This transaction will allow Reckson to focus on building the premier office company in the New York Tri-State area and better align the Company with its shareholders by maintaining the highest corporate governance standards."
Upon completion of the strategic plan, the REIT will be an owner and manager of 13.7 million sf of primarily Class A office real estate in the New York Tri-State area.
In connection with the transaction it is anticipated that approximately $164 million of the company's unsecured revolving credit facility will be repaid and $50 million of the Company's 8.85% Series B preferred stock will be redeemed. The transaction, which is subject to customary closing conditions, is expected to close in the fourth quarter. Reckson's independent directors were advised on the transaction by Citigroup and Wachtell, Lipton, Rosen & Katz LLP and the Rechler family was advised on the transaction by Fried, Frank, Harris, Shriver, & Jacobson.
Moody's Investors Service today affirmed its negative ratings of Reckson Operating Partnership LP and Reckson Associates Realty Corp. However, Moody's expects Reckson to take strong steps to improve its balance sheet and credit profile in the near term.
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