Published 11 December 2005
New York-based Reckson Associates Realty Corp has contracted to acquire a 150,000mÂ² office portfolio consisting of 14 buildings, concentrated within 5 business parks on the Platinum Mile in Westchester County, for about $US255 million or $US163/ftÂ² ($NZ2492/mÂ²).
Buying the Eastridge office portfolio takes Reckon’s purchases for 2005 to $US1.3 billion in 5 submarkets around New York, Connecticut & New Jersey. Reckons president & chief executive Scott Rechler said: “This investment represents a quintessential value-creation opportunity for Reckson. The extremely well located, institutionally owned portfolio provides us with the opportunity to reposition & redevelop the underperforming properties into class A properties at significant discounts to replacement cost and attractive stabilised net operating income yields.”
The purchase price is at better than a 35% discount to replacement cost. Mr Rechler said the portfolio was only 70% occupied, compared to a 91% occupancy rate for Reckson’s current Westchester office portfolio. He anticipated that Reckson could increase the portfolio’s initial GAAP net operating income yield of about 5% to about 9% upon stabilisation.