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Metro Business; 2 Trust Companies To Buy Tower Realty

By John Holusha

Copyright 1998 The New York Times Company

The New York Times

July 10, 1998, Friday, Late Edition - Final

Reckson Associates Realty Corporation, a real estate investment trust, announced yesterday that it was joining with a partner to acquire Tower Realty Trust, which owns 2.3 million square feet of office space in New York City and properties in the Orlando and Phoenix areas.

Reckson said it has a partnership with Crescent Real Estate Equities Company of Fort Worth, Tex., to acquire Tower in a transaction valued at $733 million.

Reckson and Crescent have agreed to pay $24 a share for Tower stock. The price includes the assumption of $285 million in Tower debt.

In addition to cash, the acquiring companies are offering Tower stockholders up to 40 percent of the value of their shares in Reckson and Crescent stock, a move intended to help owners who sold property to Tower to shelter their capital gains.

Reckson and Crescent plan to form a joint venture called Metropolitan Partners that will operate as a private real estate investment trust and will seek to make further acquisitions in New York City, said Reckson's president, Scott Rechler. He said the companies have a combined capital of about $8 billion, $2.2 billion of which is from Reckson.

Mr. Rechler said Tower's properties in Phoenix and Orlando would be sold to allow the partnership to focus on New York.

Tower, formerly Feldman Equities, went public last October, raising about $300 million.

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