UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549


                           FORM 10-Q


      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
              THE SECURITIES EXCHANGE ACT OF 1934

          For the quarterly period ended June 30, 1998

              Commission file number: 001-14183


                 RECKSON SERVICE INDUSTRIES, INC.
     (Exact name of registrant as specified in its charter) 


Delaware                                             11-3383642
(State other jurisdiction of incorporation         (IRS. Employer
of organization)                                   Identification Number)

225 Broadhollow Road, Melville, NY                                 11747
(Address of principal executive office)                         (zip code)

                           (516) 719-7400
         (Registrant's telephone number including area code)


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.

                           Yes  X   No     

The company has only one class of common stock, issued at $.01 par value
per share with 24,685,514 shares outstanding as of August 11, 1998.
                                
<PAGE>
                RECKSON SERVICE INDUSTRIES, INC.
                        QUARTERLY REPORT
            FOR THE THREE MONTHS ENDED JUNE 30, 1998
                        TABLE OF CONTENTS
                                
                                
                                
INDEX

PART I. FINANCIAL INFORMATION                                      
                                                                  
Item 1.   Financial Statements (Unaudited)

          Balance Sheets of Reckson Service Industries, Inc. as of June
          30, 1998 and December 31, 1997 ...............................

          Statement of Operations of Reckson Service Industries, Inc. for
          the three and six months ended June 30, 1998 .................
         
          Statement of Cash Flows of Reckson Service Industries, Inc. for
          the six months ended June 30, 1998 ...........................

          Notes to the Financial Statements of Reckson Service Industries,
          Inc. .........................................................

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations ........................................

PART II   OTHER INFORMATION ............................................


Item 1.   Legal Proceedings
Item 2.   Changes in Securities
Item 3.   Defaults Upon Senior Securities
Item 4.   Submission of Matters to a Vote of Securities Holders
Item 5.   Other Information

SIGNATURES
<PAGE>
PART I. FINANCIAL INFORMATION                                      
Item 1. Financial Statements
<TABLE>
                                Reckson Service Industries, Inc.
                                         Balance Sheets

<CAPTION>
                                                              June 30,       December 31,
                                                                1998            1997
                                                            --------------  --------------
                                                              (Unaudited)
<S>                                                         <C>             <C>
Assets:
Cash                                                        $      48,398   $     129,704
Investment in RO Partners Management, LLC (Note 3)                    ---       3,868,093
Investment in ACC (Note 3)                                            ---       1,652,165
Investment in and advances to RSVP Holdings, LLC
  (Notes 3 and 5)                                              14,941,828             ---
Investment in and advances to Reckson Executive
  Centers, LLC (Note 3)                                         1,066,816             ---
Equipment (net of depreciation of $2,150)                          35,281             ---
Affiliate receivables (Note 5)                                  1,616,283         832,854
Investment in and advances to On-Site Ventures, LLC
  (Note 3)                                                      3,429,599         325,000
Receivable from Transfer Agent                                 13,828,244             ---
Organization and pre-acquisition costs (net of
  amortization of $27,056 and $8,214, respectively)               996,620         681,694
Other assets                                                      284,687          30,185
                                                            --------------  --------------
Total Assets                                                   36,247,756       7,519,695
                                                            ==============  ==============
Liabilities and Shareholders' Equity:
Accounts payable and accrued expenses                             558,900         119,384
Loans payable to affiliates (Note 5)                           19,464,889       3,177,857
                                                            --------------  --------------
Total Liabilities                                              20,023,789       3,297,241

Commitments (Note 6)                                                  ---             ---

Shareholders' Equity: (Note 1 and 4)
Common stock, $.01 par value, 24,685,514 shares
  issued and  outstanding                                         246,855              10
Additional paid in capital                                     24,685,843       4,480,331
Common stock subscription                                      (7,325,159)            ---

Retained earnings                                              (1,383,572)       (257,887)
                                                            --------------  --------------
Total Shareholders' Equity                                     16,223,967       4,222,454
                                                            --------------  --------------
Total Liabilities and Shareholders' Equity                  $  36,247,756   $   7,519,695
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
                             Reckson Service Industries, Inc.
                                 Statement of Operations
                                       (Unaudited)
<CAPTION>
                                                            Three            Six
                                                        Months Ended     Months Ended
                                                           June 30,        June 30,
                                                             1998            1998
                                                       ---------------  ---------------
<S>                                                    <C>              <C>
Revenues:
Equity in (loss) of ACC                                $          ---   $      (51,508)
Equity in earnings of RO Partners, Management, LLC                ---          170,567
Equity in (loss) of RSVP Holdings, LLC                        (75,062)        (618,474)
Equity in (loss) of Reckson Executive Centers, LLC             (2,511)          (2,511)
Equity in (loss) of On-site Ventures, LLC                      (4,733)          (4,733)
Other income                                                  166,666          166,666
Interest income                                                94,271          140,932
                                                       ---------------  ---------------
Total Revenues                                                178,631         (199,061)
                                                       ---------------  ---------------
Expenses:
General and administrative expenses                           276,820          464,706
                                                       ---------------  ---------------
Total Administrative                                          276,820          464,706
                                                       ---------------  ---------------
Net Operating Loss                                            (98,189)        (663,767)

Non Operating Expenses:
Amortization and Depreciation                                   6,043           20,992
Interest Expense                                              312,244          440,926
                                                       ---------------  ---------------
Net Loss                                               $     (416,476)  $   (1,125,685)
                                                       ===============  ===============
Basic net loss per weighted average common share       $        (0.09)  $        (0.27)
                                                       ===============  ===============
Weighted average common shares outstanding                  4,513,975        4,191,068
                                                       ===============  ===============
Diluted net loss per weighted average common share     $        (0.07)  $        (0.23)
                                                       ===============  ===============
Diluted weighted average common shares outstanding          5,800,318        4,834,240
                                                       ===============  ===============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
                        Reckson Service Industries, Inc.
                            Statement of Cash Flows
                                  (Unaudited)
<CAPTION>
                                                                Six
                                                            Months Ended
                                                              June 30,
                                                                1998
                                                            --------------
<S>                                                         <C>
Cash  Flows from Operating Activities:
Net Loss                                                    $  (1,125,685)
Adjustments to reconcile net loss to net cash used by
operating activities:
   Depreciation and amortization                                   20,992
   Equity in loss of RSVP Holdings, LLC                           618,474
   Equity in loss of ACC                                           51,508
   Equity in (earnings) of RO Partners Management, LLC           (170,567)
   Equity in loss of Reckson Executive Centers, LLC                 2,511
   Equity in loss of On-Site Ventures, LLC                          4,733
Changes in operating assets and liabilities:
   Other assets                                                  (254,502)
   Accounts payable and accrued expenses                          439,516
                                                            --------------
   Net cash (used in) operating activities                       (413,020)
Cash Flows From Investing Activities:
   Purchase of equipment                                          (37,431)
   Pre-acquisition costs                                         (333,768)
   Investment in Reckson Executive Centers, LLC                  (200,000)
                                                            --------------
   Net cash (used in) investing activities                       (571,199)
Cash Flows From Financing Activities:
   Advances to On-Site Ventures, LLC                           (3,109,332)
   Costs of preferred equity issuance                          (5,701,050)
   Proceeds from preferred equity contribution                  5,000,000
   Proceeds from affiliate loans                               16,287,032
   Loan to RSVP Holdings, LLC                                  (9,642,000)
   Due from affiliates                                           (783,426)
   Loans to Reckson Executive Centers, LLC                       (869,326)
   Contributions to ACC investment                               (278,985)
                                                            --------------
   Net cash provided by financing activities                      902,913

Net decrease in cash and cash equivalents                         (81,306)
Cash and cash equivalents at beginning of period                  129,704
Cash and cash equivalents at end of period                  $      48,398
                                                            ==============
Supplemental Disclosure of Cash Flow Information:
   Cash paid during the period for interest                           ---
                                                            ==============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
                     Reckson Service Industries
                    Notes to Financial Statements
                           June 30, 1998
                            (unaudited)


1.	ORGANIZATION AND FORMATION OF THE COMPANY

Reckson Service Industries, Inc. ( "RSI" or the "Company") was formed on 
July 15, 1997 to engage in the business of providing commercial services to 
properties owned by Reckson Operating Partnership, L.P. ("ROP"), whose 
general partner is Reckson Associates Realty Corp. ("Reckson"), and its 
tenants and third parties and to invest in Reckson Strategic Venture 
Partners, LLC and related entities ("RSVP") a real estate venture capital 
fund.  The Company will operate under an agreement between the Company and 
ROP (the "Intercompany Agreement"). Under the Intercompany Agreement, the 
Company and ROP agree, subject to certain terms, to provide each other with 
first refusal rights to participate in certain transactions.

In connection with the initial capitalization of RSI, ROP contributed 
$4,256,324 for a 95% nonvoting equity interest and certain members of 
Reckson management contributed notes of $224,017 to the Company in exchange 
for a 5% voting ownership interest. On October 29, 1997 the notes were 
satisfied. 

On June 11, 1998, ROP distributed its 95% of the common stock of RSI to its 
unit holders of record on May 26, 1998. Immediately prior to the 
Distribution, the shares of non-voting common stock held by ROP were 
exchanged by RSI for RSI common shares.  Each share of the Company's common 
stock issued in the Distribution was accompanied by one preferred share 
purchase right.  Simultaneously, Reckson distributed 100% of the RSI common 
shares received from the distribution to its common shareholders of the 
same record date.  In addition, simultaneously with the Distribution, the 
Company issued rights to its stockholders to subscribe for the purchase of 
additional shares of common stock of the Company.

The Company owned a 33 1/3% interest in RO Partners Management, LLC ("RO"), 
the remaining interest in RO is held 33 1/3% by Jon L. Halpern, a former 
director of Reckson, and 33 1/3% by an independent third party investor.  
RO is the general partner of Reckson Opportunity Partners, L.P. 
("Opportunity Partners") predecessor to RSVP.  RSVP was formed on January 
23, 1998 to succeed to the operating activities of Opportunity Partners.  
The Company is the 100% common equity owner and a managing member of RSVP 
and Paine Webber Real Estate Securities, Inc. ("PWRES") is a non-managing 
member and preferred equity owner who has committed $200 million in capital 
and shares 66 2/3% in profits and losses of RSVP with the Company subject 
to a maximum internal rate of return of 16% on invested capital. It is 
anticipated that future investments by the Company in real estate venture 
capital fund activities will be conducted through RSVP.  On April 1, 1998, 
the Company transferred its equity interest in RO to RSVP.

Through RSVP Holdings, LLC the Company is a managing member and 100% owner 
of the common equity of RSVP.  New World Realty LLC ("New World"), an 
entity owned by two individuals retained by RSVP Holdings, LLC as Managing 
Directors, acts as a managing member of RSVP Holdings, LLC and owns a 
carried interest which provides for the Managing Directors to receive a 
share in the profits of RSVP after the Company and Paine Webber Real Estate 
Securities has received certain minimum returns and a return of capital.  
In addition, it is anticipated that New World will receive transaction fees 
of up to $1 million a year related to identifying RSVP investment 
opportunities.

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements of RSI include the Company's equity 
interests in RO, American Campus Communities, L.L.C. ("ACC") through March 
31, 1998, RSVP Holdings, LLC, Reckson Executive Centers, LLC and On-Site 
Ventures, LLC.

Use of Estimates

The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.

Cash Equivalents

The Company considers highly liquid investments with a maturity of three 
months or less when purchased to be cash equivalents.

Long-Lived Assets

At inception, the Company adopted SFAS No. 121, "Accounting for the 
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed 
Of," which establishes methods of valuation for the impairment of long-
lived assets, certain identifiable intangibles, and goodwill related to 
those assets to be held and used. The adoption of this statement had no 
material impact on the accompanying financial statements.

Stock Options

The Company has elected to follow Accounting Principles Board Opinion No. 
25, "Accounting for Stock Issued to Employees" ("APB 25") and related 
Interpretations in accounting for its employee stock options because the 
alternative fair value accounting provided for under FASB Statement No. 
123, "Accounting for Stock-Based Compensation," ("FAS No. 123") requires 
the use of option valuation models that were not developed for use in 
valuing employee stock options. Under APB 25, no compensation expense was 
recognized because the exercise price of the Company's employee stock 
options equals the market price of the underlying stock on the date of 
grant(See Note 4).

Equity Investments

The Company accounts for its investment of less than 50% in other entities 
using the equity method.

Income Taxes

At inception, the Company adopted SFAS No. 109, "Accounting for Income 
Taxes" ("SFAS No. 109"), which prescribes an asset and liability method of 
accounting for income taxes. Under SFAS No. 109, deferred tax assets 
are to be recognized unless it is more likely than not that some portion or
all of the deferred tax assets will not be realized.

Earnings Per Share

In 1997, the Financial Accounting Standards Board issued Statement No. 128, 
Earnings per Share.  Statement 128 replaced the calculation of primary and 
fully diluted earnings per share with basic and diluted earnings per share.  
Unlike primary earnings per share, basic earnings per share excludes any 
dilutive effects of options, warrants and convertible securities.  Diluted 
earnings per share is very similar to the previously reported fully diluted 
earnings per share.  All earnings per share amounts for all periods have 
been presented to conform to the Statement 128 requirements.

3.	INVESTMENTS

As of June 1998, the Company advanced approximately $9,642,000 to RSVP 
Holdings, LLC.

Summarized financial information and a summary of the Company's investment 
in, advances and share of loss from RSVP Holdings, LLC is as follows:

Balance Sheet

                                                          June 30,
                                                            1998
                                                       --------------
Investment in RO                                       $   4,049,957
Investment in ACC                                          1,751,197
Deferred compensation expense                              5,527,239
Other assets                                               5,217,371
                                                       --------------
Total Assets                                              16,545,764
                                                       ==============
Due to affiliates                                          1,549,297
Other liabilities                                          1,291,590
                                                       --------------
Total Liabilities                                          2,840,887
                                                       --------------
Other member's deficit                                    (1,236,951)
                                                       --------------

Net investment in and advances to RSVP Holdings, LLC   $  14,941,828
                                                       ==============

Statements of Operations

                                                          For the
                                                          period from
                                         Three            January 23,
                                         Months Ended     1998 to
                                         June 30,         June 30,
                                         1998             1998
                                        ---------------  ---------------
Revenues:
Equity in (loss) of ACC                 $     (128,445)  $     (128,445)
Equity in earnings of RO                        11,297           11,297
Other income                                   254,746          254,746
Interest income                                 52,114           52,547
                                        ---------------  ---------------
     Total Income                              189,712          190,145
                                        ---------------  ---------------
Expenses:
Operating expenses                             219,848          400,196
General and administrative expenses          1,019,233        1,292,649
Interest expense                               229,694          278,524
Depreciation and amortization                   32,950           74,201
                                        ---------------  ---------------
      Total Expenses                         1,501,725        2,045,570
                                        ---------------  ---------------
Net Loss                                    (1,312,013)      (1,855,425)
Less: Others member's share                 (1,236,951)      (1,236,951)
                                        ---------------  ---------------
Company's Share                         $      (75,062)  $     (618,474)
                                        ===============  ===============

In 1997, the Company invested $3.62 million in RO, which contributed such 
amount to Opportunity Partners.  Opportunity Partners invested 
approximately $10.8 million to acquire a 70% interest in Dobie Center, 
L.P., which owns 100% in Dobie Center, a mixed use student housing and 
retail property located in Austin, Texas.  On April 1, the Company 
transferred its interest in RO to RSVP.

Substantially all of RO's assets, liabilities, revenues and expenses relate 
to its investment in Dobie Center.  Summarized financial information and a 
summary of the Company's investment in and share of income from RO is 
as follows:

Balance Sheet

                                                   June 30,      December 31,
                                                   1998          1997
                                                --------------  --------------
Property and equipment, less accumulated
depreciation                                       35,727,283   $  35,345,013
Other assets                                        4,461,250       6,700,605
                                                --------------  --------------
Total Assets                                       40,188,533      42,045,618
                                                --------------  --------------
Mortgage payable                                   19,880,500      20,280,500
Other liabilities                                   2,959,121       5,195,624
                                                --------------  --------------
Total Liabilities                                  22,839,621      25,476,124
                                                --------------  --------------
Minority interest                                   5,149,287       4,915,462
RO Partners equity                                 12,199,625      11,654,032
Less:  Non-RSVP equity                             (8,149,668)     (7,785,939)
                                                --------------  --------------
Net RSVP investment in RO                       $   4,049,957   $   3,868,093
                                                ==============  ==============

Statement of Income
                                           For the three    For the six
                                           months ended     months ended
                                           June 30,         June 30,
                                           1998             1998
                                          ---------------  ---------------
Rental income                             $    2,083,144   $    4,265,289
Interest income                                   95,626          159,133
Other income                                       7,665           11,891
                                          ---------------  ---------------
Total Income                                   2,186,435        4,827,313
                                          ---------------  ---------------
Property operating expenses                      776,295        1,745,902
General and administrative expenses              768,278        1,061,683
Interest expense                                 380,695          742,638
Depreciation and amortization                    212,749          423,175
Non-recurring expense                               ----           74,495
                                          ---------------  ---------------
Total Expenses                                 2,138,017        4,047,893
                                          ---------------  ---------------
Minority interest                                 14,525          233,827
Net income                                        33,893          545,593
Less:  Non-RSVP share                            (22,596)        (363,729)
Less:  Company's share                              ----         (170,567)
                                          ---------------  ---------------
RSVP's share                              $       11,297   $       11,297
                                          ===============  ===============

The Company contributed $1.51 million to and acquired a 33 1/3% interest in 
RFG Capital Management Partners ("RFG Capital") whose sole net investment 
is a 76.09% interest in ACC, a student housing enterprise which owns, 
develops, constructs, manages and acquires, on-and off campus student 
housing projects.  As of December 31, 1997, the excess of the Company's 
investment over its share of the equity in the underlying net assets of ACC 
("Excess Investment") was $190,920.  This Excess Investment is being 
amortized over the life of the investment estimated at 25 years.  On April 
1, 1998, the Company transferred its equity interest in ACC to RSVP.

Summarized financial information and a summary of the Company's investment 
in and share of loss from ACC is as follows:

Balance Sheet

                                               June 30,        December 31,
                                               1998            1997
                                             ---------------  ---------------
Investment in leasehold estates, less
accumulated depreciation                     $   39,174,335   $   30,042,101
Other assets                                      3,224,413        4,035,570
                                             ---------------  ---------------
Total Assets                                     42,398,748       34,077,671
                                             ---------------  ---------------
Note payable                                     33,798,527       25,635,208
Other liabilities                                 3,393,217        3,633,473
                                             ---------------  ---------------
Total Liabilities                                37,191,744       29,268,681
                                             ---------------  ---------------
Minority interest                                   520,422          425,254
RFG Capital equity                                4,686,582        4,383,736
Less:  Non-RSVP equity                           (3,124,396)      (2,922,491)
                                             ---------------  ---------------
Company's share of the equity in underlying
net assets of ACLC                                1,562,186        1,461,245
Excess investment                                   189,011          190,920
                                             ---------------  ---------------
Net investment in ACLC                       $    1,751,197   $    1,652,165
                                             ===============  ===============

Statement of Operations



                                              For the three    For the six
                                              months ended     months ended
                                              June 30,         June 30,
                                              1998             1998
                                             ---------------  ---------------
Rental income                                $      750,897   $    1,970,237
Other income                                        248,345          445,710
                                             ---------------  ---------------
Total Income                                        999,242        2,415,947
                                             ---------------  ---------------
General and administrative expenses                 525,612        1,128,762
Property operating expenses                         276,658          587,015
Interest expense                                    533,176        1,075,775
Depreciation                                        162,683          325,369
                                             ---------------  ---------------
Total Expense                                     1,498,129        3,117,921
                                             ---------------  ---------------
Minority interest                                  (119,284)        (167,848)
Net loss                                           (379,603)        (534,126)
Less:  Other non-RSVP share                        (251,158)        (354,173)
Less:  Company's share                                  ---          (51,508)
                                             ---------------  ---------------
RSVP's share                                 $     (128,445)  $     (128,445)
                                             ===============  ===============

RSI has contracted to acquire a 58.69% equity interest in On-Site Ventures, 
LLC ("On-Site"), a company that provides advanced telecommunications 
systems and services within commercial and residential buildings and/or 
building complexes.  Under the terms of the contract, the Company has also 
committed to contribute $6.5 million to On-Site to fund certain capital 
costs of installing telecommunication systems and for working capital.  Jon 
L. Halpern, a former director of Reckson, beneficially owns substantially 
all of the On-Site business prior to RSI's acquisition of an interest 
therein (and will own beneficially a 25.97% interest in On-Site assuming 
the Company acquires its 58.69% interest).  The Company has advanced On-
Site $3,125,000 through June 30, 1998 to fund certain operating costs.  
The advances are evidenced by loans convertible into equity interests in 
On-Site which bear interest at a rate of 12% per annum and mature on March 
1, 1999.  On May 18, 1998, the Company purchased a membership interest in 
On-Site equal to 1% of the aggregate membership interests and recognized an 
equity loss of ($4,733).

On April 1, 1998 the Company purchased Reckson's 9.9% equity interest in 
Reckson Executive Centers, LLC ("REC") for $200,000 and assumed debt of 
approximately $322,000.  REC owns and operates executive office suite 
business in the New York tri-state area.  All of REC's centers are located 
within buildings owned and operated by ROP.  For the period from April 1, 
1998 to June 30, 1998, the Company recognized an equity loss of ($2,511). 
The Company has also loaned REC approximately $538,000 to fund purchases of 
certain business assets in connection with the operation of the executive 
centers.  The loans accrue interest at 12%.

4.	SHAREHOLDERS' EQUITY

The Company has established the 1998 stock option plan (the "Plan") for the 
purpose of attracting and retaining executive officers, directors and other 
key employees.  Pursuant to the Plan 3,700,376 of the Company's authorized 
shares have been reserved for issuance under the Plan.  On January 10, 1998 
and March 30, 1998, the Company granted options to purchase 542,890 and 
2,755,468, respectively of the Company's common shares at an exercise 
price of $1.10 and $1.04 respectively per share based on the fair value on 
each date of grant, which the board of directors of the Company has 
concluded to be book value on each date of grant.

In connection with the PWRES preferred equity financing, the Company paid a 
commitment fee of 2.5% of the total preferred equity commitment of which 
$1,400,000 was paid to an entity owned by a former employee of PWRES who 
is one of RSVP's managing directors.

The following is the Company's reconciliation of the numerators and 
denominators of the basic and diluted net loss per weighted average common 
share computations and other related disclosures required be FAS Statement 
128:

The following table set forth the computation of basic and diluted earnings 
per share:

                                                        Three         Six
                                                        Months        Months
                                                        Ended         Ended
                                                        June 30,      June 30,
                                                        1998          1998
                                                      ------------  ------------
Numerator:
Net loss                                              $  (416,476)   (1,125,685)
                                                      ------------  ------------
Numerator for basic and diluted
earnings per share                                    $  (416,476)   (1,125,685)
                                                      ------------  ------------
Denominator:
Denominator for basic earnings per
share - weighted average shares                         4,513,975     4,191,068

Effect of dilutive securities:
Employee stock options                                  1,286,343       643,172
                                                      ------------  ------------
Denominator for diluted earnings per
share - adjusted weighted average shares
and assumed conversions                                 5,800,318     4,834,240
                                                      ------------  ------------
Basic earnings per common share:
Net loss per common share                             $     (0.09)        (0.27)
                                                      ------------  ------------
Diluted earnings per common share:
Diluted net loss per common share                     $     (0.07)        (0.23)
                                                      ------------  ------------

5. 	TRANSACTIONS WITH RELATED PARTIES

Included in affiliate receivables on the accompanying balance sheet is an 
unsecured loan of $666,666 to RFG Capital, an entity which is owned evenly 
at 33 1/3% by  the Company, Jon L. Halpern, and an independent third party 
investor.  The note bears interest at 12% per annum.

RSI established a credit facility (the "RSI Facility") with ROP in the 
amount of $100 million for RSI's service sector operations and other 
general corporate purposes.  ROP has advanced the Company $10,697,889 and 
$2,943,210 at June 30, 1998 and December 31, 1997, respectively.  These 
advances bear interest at 12% per annum.  The Company repaid ROP 
approximately $13 million in July, 1998.

RSI has obtained an option from Reckson Management Group, Inc., a company 
in which ROP owns a 97% non-voting equity interest to acquire a majority 
equity interest in a privately held national executive office suites 
business.  The Company's option to acquire this equity interest has a five 
year term.

In February 1998, RSVP Holdings, LLC, entered into employment agreements 
with the two managing directors of RSVP.  The agreements provide for a base 
salary of $500,000 and have a seven-year term. In addition to the base 
salary each managing director has received from the Company a $3.0 million 
grant of common stock of Reckson (the "Reckson Stock") which will vest 
equally over five years.  The Reckson Stock was purchased by the Company 
and advanced to RSVP Holdings, LLC.

In addition, in April 1998, the Company advanced each managing director a 
tax loan of $1.44 million in connection with the grant of Reckson stock.  
These loans bear interest at 8% per annum and are due in April, 2003.

RSI and Reckson Standby, LLC (the "Standby Purchaser") (an entity owned by 
several members of management), entered into a Standby Agreement pursuant 
to which the Standby Purchaser agreed to purchase, and RSI agreed to sell, 
any and all shares of RSI common stock that are the subject of Subscription 
Rights in the Rights Offering but are not subscribed for by the Holders on 
the Expiration Date at the Exercise Price.  The proceeds from the stand-by 
purchaser were approximately $7,325,000.

The Company is entitled to an annual asset management fee of $2 million 
with respect to RSVP, of which $1.5 million is subordinate to PWRES 
receiving a minimum rate of return of 16% and a return of its capital.  The 
unsubordinated amount for the period March 5, 1998 to June 30, 1998 of 
$166,666 is included in affiliate receivables on the accompanying balance 
sheet.

6.     FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosures About 
Fair Value of Financial Instruments," requires RSI to disclose the 
estimated fair values of its financial instrument assets and liabilities.  
The carrying amounts approximate fair value for cash and cash equivalents 
because of the short maturity of those instruments.  For the loans payable 
to affiliates the estimated fair value approximates the recorded balance.

7.     SUBSEQUENT EVENTS

On August 4, 1998, Dobie Center Properties, Ltd. issued $46,560,000 
principal amount of AAA series 1998 taxable insured notes in connection 
with the property's refinancing.  The net proceeds of $45.1 million were 
utilized to repay $20.4 million of secured debt and for reserves related to 
renovations to the project.  In connection with this transaction, RSVP 
received approximately $4.79 million, net of reserves.

ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS.

The following discussion should be read in conjunction with the 
accompanying Financial Statements of Reckson Service Industries, Inc. (the 
"Company" or "RSI") and related notes thereto.

OVERVIEW AND BACKGROUND

The Company's primary business is to create and manage a system of 
interrelated services to be offered to Reckson Operating Partnership, L.P. 
("ROP"), ROP's tenants (the "Reckson Customer Base") and third parties in 
the general marketplace through a centralized infrastructure.  The 
Company's growth strategy is to acquire primarily established 
businesses within each of its targeted service sectors, and, where 
appropriate, to retain the existing management of such businesses ("Service 
Platforms"). Specifically, the Company will seek opportunities for which 
there is broad demand in the Reckson Customer Base, strong entrepreneurial 
management, a reputation for high quality services and growth potential.  
Such Service Platform investment will serve as a basis for future 
acquisitions in such sectors.  The Company will establish Service Platforms 
that present significant opportunities to provide commercial services to 
the Reckson Customer Base and other third parties. Currently, the Reckson 
Customer Base retains third parties to provide many services for their day-
to-day operations.  Of these services, the Company may seek to provide the 
Reckson Customer Base with telecommunications, document storage, document 
reproduction and logistics services (i.e., inventory services, messenger 
services and delivery services), as well as with other services that the 
Company determines may be utilized by the Reckson Customer Base.  The 
Company will seek growth in each Service Platform by (i) accessing the 
Reckson Customer Base as an anchor for growth opportunities in ROP's 
markets, (ii) integrating each Service Platform into RSI's centralized 
infrastructure and (iii) acquiring similar businesses or making additional 
investments within such Service Platform.

In February 1998, RSVP Holdings, LLC, the managing member of Reckson 
Strategic Venture Partners ("RSVP") entered into employment agreements with 
two highly experienced real estate professionals (the "Managing 
Directors").  The agreements provide for a base salary of $500,000 and have 
a seven-year term. In addition to the base salary each Managing Director 
has received from the Company a $3.0 million grant of common stock of 
Reckson Associates Realty Corp. ("Reckson"), (the "Reckson Stock") which 
will vest equally over five years.  The Reckson Stock was purchased by the 
Company and advanced to RSVP Holdings, LLC.  In addition, in April 1998, 
the Company advanced each Managing Director a tax loan of $1.44 million in 
connection with the grant of Reckson stock.  These loans bear interest at 
8% per annum and are due in April, 2003.  The Company is a managing member 
and 100% owner of the common equity of RSVP Holdings, LLC.  New World 
Realty LLC ("New World"), an entity owned by the Managing Directors, acts 
as a managing member of RSVP Holdings, LLC and owns a carried interest 
which provides for the Managing Directors to receive a share in the profits 
of RSVP after the Company and Paine Webber Real Estate Securities 
("PWRES"), the preferred equity investor, have received certain minimum 
returns and a return of capital.  In addition, it is anticipated that New 
World will receive transaction fees of up to $1 million a year 
related to identifying RSVP investment opportunities. 

RESULTS OF OPERATIONS

For the three months ended June 30, 1998 the Company reported a net loss of 
($416,476).  Total revenues include (i) equity in loss of RSVP Holdings, 
LLC of ($75,062) and, (ii) equity in loss of On-Site of ($4,733), (iii) 
equity in loss of REC of ($2,511), (iv) management fee income of $166,666 
and (v) interest income of $94,271 relating to loans made to certain 
affiliates.  The Company also reported total expenses of $595,107 which 
substantially represents interest, payroll and office costs.

For the six months ended June 30, 1998 the Company reported a net loss of 
$(1,125,685).  Total revenues include (i) equity in earnings of RO of 
$170,567 and represent RO's 331/3 % interest in a joint venture that owns a 
70% interest in Dobie Center, L.P. an entity which owns the Dobie Center 
Student Housing Facility located in Austin, Texas, (ii) equity in loss of 
American Campus Communities, a student housing company ("ACC") of 
$(51,508), (iii) equity in loss of RSVP Holdings, LLC of ($618,474) and 
(iv) equity in loss of On-Site of ($4,733), (v) equity in loss of 
REC of ($2,511), (vi) management fee income of $166,666 and (vii) interest 
income of  $140,932 relating to loans made to certain affiliates. The 
Company also reported total expenses of $926,624 which substantially 
represents interest, payroll and office costs.

LIQUIDITY AND CAPITAL RESOURCES

In connection with the formation and capitalization of RSI, ROP contributed 
$4,256,324 to RSI for a 95% non-voting equity interest. Simultaneously, 
certain officers of Reckson contributed $224,017 of subscription notes to 
RSI in exchange for a 5% voting equity interest, which subscription notes 
were subsequently paid off. On June 11, 1998, ROP distributed its 95% of 
the common stock of RSI (the "Distribution") to its unit holders of record 
on May 26, 1998. Immediately prior to the Distribution, the shares of non-
voting common stock held by ROP were exchanged by RSI for RSI common 
shares.  Each share of the Company's Common Stock issued in the 
Distribution was accompanied by one Preferred Share Purchase Right.  
Simultaneously, Reckson distributed 100% of the RSI common shares 
received from the distribution to its common stockholders of the same 
record date.  In addition, simultaneously with the Distribution, the 
Company issued rights to its stockholders to subscribe for the purchase of 
20,557,130 additional shares of common stock of the Company at a purchase 
price of $1.03.

Immediately after the Distribution of RSI common stock, RSI granted to its 
stockholders (collectively, "Holders") one Subscription Right for each 
share of RSI common stock.  Each Subscription Right entitled the Holder to 
purchase one share of RSI common stock at a purchase price of $1.03 per 
share (the "Exercise Price") and, at the election of such Holder, four 
additional shares (but not less than four additional shares) at a purchase 
price of $1.03 per share.  Holders of Subscription Rights had the 
opportunity to acquire up to an aggregate of approximately 20,557,130 
shares of RSI common stock.  RSI and Reckson Standby, LLC (the "Standby 
Purchaser") (an entity owned by several members of management), entered 
into a Standby Agreement pursuant to which the Standby Purchaser agreed to 
purchase, and RSI agreed to sell, any and all shares of RSI common stock 
that are the subject of Subscription Rights in the Rights Offering but are 
not subscribed for by the Holders on the Expiration Date at the Exercise 
Price.  The proceeds from the stand-by purchaser were approximately 
$7,325,000. RSI received net proceeds from the rights offering of 
approximately $21,153,000.  RSI will utilize funds raised in the rights 
offering and borrowings under the Credit Facility from ROP for the 
financing of RSI's operations.

RSI established a credit facility (the "RSI Facility") with ROP in the 
amount of $100 million for RSI's service sector operations and other 
general corporate purposes.  In addition, ROP has approved the funding of 
investments of up to $100 million with or in RSVP, through (i) loans for 
the funding of RSVP investments prior to the Distribution, (ii) RSVP-
controlled joint venture REIT-Qualified Investments, or (iii) advances made 
to RSI subsequent to the Distribution under a credit facility similar to 
the RSI Facility (the "RSVP Facility").  Advances under the RSVP Facility 
in excess of $25 million in respect of any single platform are subject to 
approval by Reckson's board of directors, while advances under the RSI 
Facility in excess of $10 million in respect of any single investment in a 
Service Platform, as well as advances for investments in opportunities in 
non-commercial services, are subject to approval by Reckson's board of 
directors, or a committee thereof.  The RSI and RSVP Facilities (the 
"Credit Facilities") each have a term of five years and advances thereunder 

are recourse obligations of RSI.  Interest accrues on advances made 
under the Credit Facilities at a rate equal to the greater of (i) the prime 
rate plus 2% and (ii) 12% per annum, with the rate referred to in clause 
(iii) increasing annually at a rate of 4% of the prior year's rate.  Prior 
to maturity, interest is be payable quarterly but only to the extent of net 
cash flow and on an interest-only basis and is prepayable without 
penalty at the option of RSI.  As long as there are outstanding advances 
under the Credit Facilities, RSI is prohibited from paying dividends on any 
shares of its capital stock. The Credit Facilities are subject to certain 
other covenants and will prohibit advances thereunder to the extent such 
advances could, in the determination of Reckson, endanger Reckson's status 
as a REIT. Additional indebtedness may be incurred by subsidiaries of RSI.

Additionally, RSVP has obtained the Paine Webber Equity Facility from PWRES 
which provides for the investment by PWRES of up to $200 million in RSVP in 
the form of preferred equity, subject to certain conditions.  Amounts 
available under the Paine Webber Equity Facility will be used by RSVP to 
make investments consistent with its business objectives and to fund 
working capital.  Under the terms of the Paine Webber Equity Facility, RSVP 
is subject to various covenants and events of default and related remedies.  
Such remedies include increased control rights of PWRES over the operation 
of RSVP under certain circumstances.  Advances under the Paine Webber 
Equity Facility will be partially funded by an investment fund that is 
jointly sponsored by financier George Soros and PWRES. In addition, PWRES 
and such investment fund will receive a priority or preferred distribution 
from RSVP prior to the distribution of cash to RSI.

The Company will use the remaining proceeds from the rights offering and 
advances under the RSI Facility primarily to make investments in operating 
companies that provide services directed towards occupants of office, 
industrial and other property types. The Company may make additional 
investments in these operating companies to accommodate their respective 
growth plans. The Company's investments in interests in operating companies 
are anticipated to produce net cash flow as a result of their operating 
activities although the level and timing of net cash flow for each 
investment in the short term and long term may vary based upon the stage of 
the respective operating companies growth cycle.  The Company will target 
investments in operating companies that will produce net cash flow in the 
long term.  Net cash flow produced by the Company's investments will be 
used for debt service under the RSI Facility and for the Company's 
operating costs.  The Company expects to meet its short term liquidity 
requirements generally through its net cash flow produced by its operations 
along with the remaining proceeds from the rights offering and advances 
under the RSI Facility.  The Company expects that it will refinance 
indebtedness under the RSI Facility at maturity or retire such debt through 
the issuance of debt securities or equity securities, although there can be 
no assurance that the Company will be able to refinance or retire such 
indebtedness.  The Company anticipates that cash on hand, from remaining 
proceeds of the rights offering and net cash flows from operating 
activities, together with cash available from borrowings under the RSI 
Facility, will be adequate to meet the capital and liquidity requirements 
of the Company in both the short and long term.

The Credit Facilities bear interest at the greater of the Prime Rate plus 
2% or 12% (increasing 4% per year, as described above).  The rate of 
interest on the Credit Facilities will be influenced by changes in short 
term rates and is sensitive to inflation and other economic factors.  A 
significant increase in interest rates may have a negative impact 
on the earnings of the Company due to the variable interest rate under the 
Credit Facilities.

IMPACT OF YEAR 2000

Some of the Company's older computer programs were written using two digits 
rather than four to define the applicable year.  As a result, those 
computer programs have time-sensitive software that recognizes a date using 
"00" as the year 1900 rather than the year 2000.  This could cause a system 
failure or miscalculation causing disruptions of operations, including, 
among other things, a temporary inability to process transactions, send 
invoices, or engage in similar normal business activities.

The Company has completed an assessment to modify or replace portions of 
its software so that its computer systems will function properly with 
respect to dates in the year 2000 and thereafter.  Currently, the entire 
accounting system is year 2000 compliant and has been thoroughly tested.  
Since the Company's accounting software is maintained and supported by a 
third party, the total year 2000 project cost is estimated to be minimal.

The costs of the project and the date on which the Company believes it will 
complete the year 2000 modifications are based on management's best 
estimates, which were derived utilizing numerous assumptions of future 
events, including the continued availability of certain resources and other 
factors.  However, there can be no guarantee that these estimates will be 
achieved and actual results could differ materially from those anticipated.  
Specific factors that might cause such material differences include, but 
are not limited to, the availability and costs of personnel trained in 
this area, the ability to locate and correct all relevant computer codes, 
and similar uncertainties.

INFLATION

Student housing is subject to incremental rent increases each year.  The 
Company believes that inflationary increases will be offset by these rent 
increases.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings - None
Item 2.  Changes in Securities - None
Item 3.  Defaults Upon Senior Securities - None
Item 4.  Submission of Matters to a Vote of Securities Holders - None
Item 5.  Other information - None

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                            RECKSON SERVICE INDUSTRIES, INC.
                            Registrant

August 12, 1998             /s/  Scott H. Rechler
Date                        Scott H. Rechler, President, 
                            Chief Operating Officer and Director
                            (Principal Executive Officer)

August 12, 1998             /s/  Michael Maturo
Date                        Michael Maturo, Executive Vice President
                            and Chief Financial Officer      
                            (Principal Financial and Accounting
                             Officer)