In an exclusive report published in July on GlobeSt.com, which first reported C&W as the exclusive sales agent for the portfolio, Cushman & Wakefield executive vice president Andrew Merin said a buyer could possibly be identified by September. At the time the property was put on the market for sale it had an occupancy rate of about 78%.
"This investment represents a quintessential value creation opportunity for Reckson," says Scott Rechler, Reckson's president and chief executive officer. "The extremely well located, institutionally owned portfolio provides us with the opportunity to reposition and redevelop the underperforming properties into class A properties at significant discounts to replacement cost and attractive stabilized NOI yields."
The purchase price represents a discount to replacement cost in excess of 35%. The portfolio is now approximately 70% occupied. With the acquisition of this office portfolio, Reckson will increase the company's Westchester portfolio to approximately 4.8 million sf. To date, the REIT has completed investments totaling approximately $1.3 billion during 2005.
"We will continue to seek capital recycling opportunities within our portfolio and anticipate that we may sell all or a portion of these core plus properties to our recently formed Australian LPT or to certain other strategic purchasers at fair market value," adds Michael Maturo, Reckson's executive vice president and chief financial officer.The properties, once part of the Schulman Realty portfolio, was acquired in a deed in lieu of foreclosure transaction by the General Motors Pension Fund in May 1992. Including in the sale are 103 Corporate Park Dr. and 709 Westchester Ave., here as well as 2500 Westchester Ave. in Harrison. Reckson anticipates closing on the acquisition in the fourth quarter of 2005.
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