Scott Rechler, CEO and president of the Melville, NY-based REIT says he saw the asset's potential as it "offers the potential for significant upside with 40% of the leases expiring through 2011 at rents that we believe to be approximately 58% below market." Rechler points out that 1185 is going through a state of transition with one of its largest tenants in bankruptcy, the rent on the ground lease scheduled to be re-set in 2005 and the building requiring certain infrastructure upgrades.

These transactions are consistent with Reckson's strategy to focus on class A office product in region, restructure management, eliminate approximately $9.5 million of current annual overhead and enhance the company's corporate governance.

The property was encumbered by a $202-million mortgage and $48-million mezzanine debt that Reckson assumed upon closing. The floating rate mortgage and mezzanine debt both mature in August 2004 and presently have a weighted average interest rate of 4.95%. The property is also encumbered by a ground lease which has a remaining term of approximately 40 years with rent scheduled to be re-set to market at the end of 2005 and then remain flat for the balance of the term. Space at the site is advertised for $59 per sf.