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 March 31, 1999
                                
                Commission file number: 1-13762



                 RECKSON ASSOCIATES REALTY CORP.
     (Exact name of registrant as specified in its charter) 


Maryland                                             11-3233650
(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) 694-6900
      (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 40,264,273 shares outstanding as of May 12, 1999.
                                
<PAGE>
                      RECKSON ASSOCIATES REALTY CORP.
                             QUARTERLY REPORT
               FOR THE THREE MONTHS ENDED MARCH 31, 1999
                             TABLE OF CONTENTS
                                
                                
                                
INDEX

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

          Consolidated Balance Sheets as of March 31, 1999 and December
          31, 1998 .....................................................    2

          Consolidated Statements of Income for the three months ended
          March 31, 1999 and 1998 ......................................    3
         
          Consolidated Statements of Cash Flows for the three months
          ended March 31, 1999 and 1998 ................................    4

          Notes to the Consolidated Financial Statements ...............    5

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations ........................................   13 

Item 3.   Quantitative and Qualitative Disclosures abour Market Risk ...   24


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


Item 1.   Legal Proceedings                                                25
Item 2.   Changes in Securities and Use of Proceeds                        25
Item 3.   Defaults Upon Senior Securities                                  25
Item 4.   Submission of Matters to a Vote of Securities Holders            25
Item 5.   Other Information                                                25
Item 6.   Exhibits and Reports on Form 8-K                                 25

SIGNATURES                                                                 25
<PAGE>
PART I. FINANCIAL INFORMATION                                      
Item 1. Financial Statements
<TABLE>
                                  Reckson Associates Realty Corp.
                                    Consolidated Balance Sheets
                         (Dollars in thousands, except for share amounts)
<CAPTION>
                                                               March 31,     December 31,
                                                                 1999            1998
                                                            --------------  --------------
                                                              (Unaudited)
<S>                                                         <C>             <C>
Assets:
Commercial real estate properties, at cost:
     Land                                                   $     213,410   $     212,540
     Building and improvements                                  1,391,893       1,372,549
Developments in progress:
     Land                                                          74,889          69,143
     Development costs                                             81,497          82,901
Furniture, fixtures and equipment                                   6,250           6,090
                                                            --------------  --------------
                                                                1,767,939       1,743,223
Less accumulated depreciation                                    (172,649)       (159,049)
                                                            --------------  --------------
                                                                1,595,290       1,584,174

Investment in real estate joint ventures                           18,492          15,104
Investment in mortgage notes and notes receivable                 106,288          99,268
Cash and cash equivalents                                          13,650           2,349
Tenants receivables                                                 2,254           5,159
Investments in and advances to affiliates                          61,269          53,329
Deferred rent receivable                                           24,309          22,526
Prepaid expenses and other assets                                  55,451          46,372
Contract and land deposits and pre-acquisition costs                1,620           2,253
Deferred leasing and loan costs                                    30,454          24,282
                                                            --------------  --------------
Total Assets                                                $   1,909,077   $   1,854,816
                                                            ==============  ==============

Liabilities:
Mortgage notes payable                                      $     254,246   $     253,463
Unsecured credit facility                                         180,100         465,850
Unsecured term loan                                                75,000          20,000
Senior unsecured notes                                            449,262         150,000
Accrued expenses and other liabilities                             37,130          48,565
Affiliate payables                                                  1,127           2,395
Dividends and distributions payable                                19,482          19,663
                                                            --------------  --------------
Total Liabilities                                               1,016,347         959,936
                                                            --------------  --------------

Commitments and other comments                                        ---             ---

Minority interests' in consolidated partnerships                   52,657          52,173
Preferred unit interest in the operating partnership               42,518          42,518
Limited partners' minority interest in the
operating partnership                                              93,113          94,125
                                                            --------------  --------------
                                                                  188,288         188,816
                                                            --------------  --------------
Stockholders' Equity:


Preferred Stock, $.01 par value, 25,000,000 shares
  authorized, 9,192,000 and 9,192,000 issued and
  outstanding, respectively                                            92              92
Common Stock, $.01 par value, 100,000,000 shares
  authorized, 40,066,964 and 40,035,419 shares  issued
  and outstanding, respectively                                       401             400
Additional paid in capital                                        703,949         705,572

                                                           --------------  --------------
Total Stockholders' Equity                                        704,442         706,064
                                                           --------------  --------------
Total Liabilities and Stockholders' Equity                  $   1,909,077   $   1,854,816
                                                            ==============  ==============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
                                  Reckson Associates Realty Corp.
                                 Consolidated Statements of Income
                  (Unaudited and in thousands, except per share and share amounts)
<CAPTION>
                                                                  Three Months Ended
                                                                        March 31,
                                                            --------------------------------
                                                                  1999             1998
                                                            ---------------  ---------------
<S>                                                         <C>              <C>
Revenues:
Base rents                                                  $       62,093   $$      47,034
Tenant escalations and reimbursements                                8,542            6,052
Equity in earnings of real estate joint ventures                       211              100
Equity (loss) in earnings of service companies                         166             (259)
Interest income on mortgage notes and notes
  receivable                                                         2,808            1,681
Other                                                                2,288              455
                                                            ---------------  ---------------
Total Revenues                                                      76,108           55,063
                                                            ---------------  ---------------
Expenses:
Property operating expenses                                         12,398            9,620
Real estate taxes                                                   10,101            8,003
Ground rents                                                           409              413
Marketing, general and administrative                                4,392            3,597
Interest                                                            13,943           10,527
Depreciation and amortization                                       15,091           10,806
                                                            ---------------  ---------------
Total Expenses                                                      56,334           42,966
                                                            ---------------  ---------------

Income before preferred dividends and
  distributions and minority interests'                             19,774           12,097

Minority partners' interests in consolidated
  partnerships                                                      (1,168)            (533)
Distributions to preferred unitholders                                (660)             ---
Limited partners' interest in the operating
  partnership                                                       (2,241)          (1,991)
                                                            ---------------  ---------------
Income before dividends to preferred shareholders                   15,705            9,573
Dividends to preferred shareholders                                 (4,381)             ---
                                                            ---------------  ---------------
Net income available to common shareholders                 $       11,324   $        9,573
                                                            ===============  ===============
Basic net income per weighted average common
  share                                                     $         0.28   $         0.25
                                                            ===============  ===============
Weighted average common shares outstanding                      40,049,079       38,182,577
Diluted net income per weighted average common              ===============  ===============
  share                                                     $         0.28   $         0.25
Diluted weighted average common shares                      ===============  ===============
  outstanding                                                   40,450,296       38,767,454
                                                            ===============  ===============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
                                   Reckson Associates Realty Corp.
                                 Consolidated Statement of Cash Flows
                                    (Unaudited and in thousands)
<CAPTION>
                                                                    Three Months Ended
                                                                         March 31,
                                                              ------------------------------
                                                                   1999             1998
                                                              -------------     ------------
<S>                                                           <C>               <C>
Cash flows from Operating Activities:
Net Income available to common shareholders                   $     11,324      $      9,573
Adjustments to reconcile net income to net cash
 provided by operating activities:
   Depreciation and amortization                                    15,091            10,806
   Minority partners' interests in consolidated    
     partnerships                                                    1,168               533
   Limited partners' interest in the operating
     partnership                                                     2,241             1,991
   Gain on sale of securities                                          ---               (43)
   Equity (loss) in earnings of service companies                     (166)              259
   Equity in earnings of real estate joint ventures                   (211)             (100)
   Distributions from a real estate joint venture                      ---               126
Changes in operating assets and liabilities:
  Tenant receivables                                                 2,905               993
   Escrow reserves                                                    (901)              ---
   Prepaid expenses and other assets                                (7,706)           (3,141)
   Deferred rents receivable                                        (1,783)           (1,526)
   Accrued expenses and other liabilities                           (8,278)           14,053
                                                              -------------     -------------
   Net cash provided by operating activities                        13,684            33,524
                                                              -------------     -------------
Cash Flows from Investing Activities:
   (Increase) decrease in contract deposits and
     pre-acquisition costs                                             520            (7,590)
   Purchase of commercial real estate properties                    (6,610)         (251,028)
   Interest receivables                                               (850)            1,246
   Investment in mortgage notes and notes
     receivable                                                     (6,170)            7,495
   Investment in real estate joint ventures                         (3,177)             (201)
   Investment in service companies                                     ---               565
   Additions to commercial real estate properties                  (17,610)           (5,743)
   Purchase of furniture, fixtures and equipment                       (85)             (328)
   Payment of leasing costs                                         (4,226)             (948)
   Proceeds  from sales of property and
     securities                                                        ---               809
                                                              -------------     -------------
   Net cash used in investing activities                           (38,208)         (255,723)
                                                              -------------     -------------
Cash Flows from Financing Activities:
   Proceeds from issuance of common stock
     net of issuance costs                                             471            37,472
   Principal payments on secured borrowings                           (867)             (566)
   Payment of loan costs                                            (2,606)              (10)
   Investments in and advances to affiliates                        (7,828)            7,106
   Proceeds from issuance of senior unsecured
     notes net of issuance costs                                   299,262               ---
   Proceeds from unsecured credit facilities                           ---           173,524
   Repayment of unsecured credit facilities                       (285,750)              ---
   Proceeds from unsecured term loan                                55,000               ---
   Distributions to minority partners' in
     consolidated partnerships                                        (684)             (449)
   Distributions to limited partners' in the
     operating partnership                                          (2,620)           (2,368)
   Distributions to preferred unit holders                            (660)              ---
   Dividends to common shareholders                                (13,512)          (12,147)
   Dividends of preferred shareholders                              (4,381)              ---
                                                              -------------     -------------
   Net cash provided by financing activities                        35,825           202,562
                                                              -------------     -------------
   Net (decrease) increase in cash and
     cash equivalents                                               11,301           (19,637)
  Cash and cash equivalents at beginning of period                   2,349            21,828
                                                              -------------     -------------
  Cash and cash equivalents at end of period                  $     13,650      $      2,191
                                                              =============     =============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
                          Reckson Associates Realty Corp.
                 Notes to the Consolidated Financial Statements
                                  March 31, 1999
                                   (Unaudited)

1.     Organization and Formation of the Company

  Reckson Associates Realty Corp. (the "Company") was incorporated in Maryland
in September 1994 and is the successor to the operations of the Reckson Group.
In June, 1995 the Company completed an initial public offering of 7,038,000 
shares (pre-split)of $.01 par value common stock (the "IPO").  The IPO price of
$24.25 per common share (pre-split) resulted in gross offering proceeds of 
approximately $170,671,500.  The Company also issued 400,000 shares (pre-split)
in a concurrent offering to the Rechler family resulting in $9,700,000 in 
additional proceeds.  The aggregate proceeds to the Company, net of underwriting
discount, advisory fee and other offering expenses, were approximately
$162,000,000.
       
  The Company became the sole general partner of Reckson Operating Partnership 
L.P. (the "Operating Partnership") by contributing substantially all of the net
proceeds of the IPO, in exchange for an approximately 73% interest in the 
Operating Partnership. All properties acquired by the Company are held by or
through the Operating Partnership.  The Operating Partnership executed various
option and purchase agreements whereby it issued 2,758,960 common units 
pre-split) of limited partnership interest in the Operating Partnership 
("OP Units") to certain continuing investors and assumed approximately 
$163,438,000 of indebtedness (net of a minority interest mortgage)in exchange
for interests in certain property partnerships, fee simple and leasehold 
interests in properties and development land, certain business assets of 
executive center entities and 100% of the non-voting preferred stock of the 
management and construction companies. 
    
  As of March 31, 1999, the Company owned and operated 73 office properties
comprising approximately 10.1 million square feet, 130 industrial properties
comprising approximately 11.1  million square feet and two retail properties
comprising approximately 20,000 square feet, located in the New York Tri-State
area (the "Tri-State Area").  In addition, the Company owned or had contracted
to acquire approximately 1,012 acres of land (including approximately 306 acres
under option) in 20 separate parcels of which the Company can develop 
approximately 9.8 million square feet of industrial and office space.  The
Company also has invested approximately $46.8 million in certain mortgage notes
encumbering four Class A office properties encompassing approximately 577,000
square feet, a 306 acre parcel of land located in New Jersey and in a note 
receivable secured by a partnership interest in Omni Partner's, L.P., owner of
the Omni, a 575,000 square foot Class A office property located in Uniondale, 
New York.

  During 1997, the Company formed Reckson Service Industries, Inc. ("RSI") and 
Reckson Strategic Venture Partners, LLC ("RSVP").  The Operating Partnership 
owned a 95% non voting common stock interest in RSI through June 10, 1998.  On
June 11, 1998, the Operating Partnership distributed its 95% common stock 
interest in RSI of approximately $3 million to its owners, including the Company
which, in turn, distributed the common stock of RSI received from the Operating
Partnership to its stockholders.  Additionally, during June 1998, the Operating
Partnership established a credit facility with RSI (the "RSI Facility") in the 
amount of $100 million for RSI's service sector operations and other general 
corporate purposes.  As of March 31, 1999 the Company had advanced $34.7 million
under the RSI Facility.  In addition, the Operating Partnership has approved the
funding of investments of up to $100 million with or in RSVP (the "RSVP 
Commitment"), through RSVP-controlled joint venture Real Estate Investment Trust
("REIT")-qualified investments or advances made to RSI under terms similar to 
the RSI Facility.  As of March 31, 1999, approximately $24 million had been
invested through the RSVP Commitment, of which $13.3 million represents 
RSVP-controlled joint venture REIT-qualified investments and $10.7 million
represents advances to RSI under the RSVP Commitment.   Such amounts have been
included in investment in real estate joint ventures  and investments in and 
advances to affiliates,  respectively, on the accompanying balance sheets.  RSI
serves as the managing member of RSVP.  RSI invests in operating companies that
generally  provide commercial services to properties owned by the Company and 
its tenants and third parties.  RSVP was formed to provide the Company with a 
research and development vehicle to invest in alternative real estate sectors.
RSVP invests primarily in real estate and real estate related operating 
companies generally outside of the Company's core office and industrial focus.
RSVP's strategy is to identify and acquire interests in established 
entrepreneurial enterprises with experienced management teams in market sectors
which are in the early stages of their growth cycle or offer unique 
circumstances for attractive investments as well as a platform for future 
growth. 
       
    On January 6, 1998, the Company made its initial investment in the Morris 
Companies, a New Jersey developer and owner of "Big Box" warehouse facilities.
In connection with the transaction the Morris Companies contributed 100% of 
their interests in certain industrial properties to Reckson Morris Operating
Partnership, L. P. ("RMI") in exchange for operating partnership units in RMI.
The Company has agreed to invest up to $150 million in RMI.  As of March 31,
1999, the Company has invested approximately $95.5 million for an approximate
72.2% controlling interest.  In addition, at March 31, 1999, the Company had 
advanced approximately $32.8 million to the Morris Companies primarily to fund
certain construction costs related to development properties to be contributed
to RMI. Such amounts have been included in investment in mortgage notes and 
notes receivable on the accompanying balance sheets. 
  
  During July 1998, the Company formed Metropolitan Partners, LLC
("Metropolitan") for the purpose of acquiring Tower Realty Trust, Inc.
("Tower").  Tower owns and operates office properties located in New York City,
Florida and Arizona. (See Note 10) 

2.     Basis of Presentation
  
  The accompanying consolidated financial statements include the consolidated 
financial position of the Company and the Operating Partnership at March 31,
1999 and December 31, 1998  and the results of their operations and cash flows
for the three months ended March 31, 1999 and 1998 respectively.  The Operating
Partnership's investments in Metropolitan, RMI and Omni Partner's, L.P. ("Omni")
are reflected in the accompanying financial statements on a consolidated basis
with a reduction for minority partners' interest. The operating results of the
service businesses currently conducted by Reckson Management Group, Inc., and 
Reckson Construction Group, Inc., are reflected in the accompanying financial 
statements on the equity method of accounting.  The operating results of Reckson
Executive Centers, L.L.C., ("REC"), a service business of the Operating 
Partnership were reflected in the accompanying financial statements on the 
equity method of accounting through March 31, 1998.  On April 1, 1998, the 
Operating Partnership sold its 9.9% interest in REC to RSI for $200,000.  
Additionally, the operating results of RSI , were reflected in the 
accompanying financial statements on the equity method of accounting through
June 10, 1998.  On June 11, 1998 the Operating Partnership distributed its 95%
common stock interest in RSI to its owners, including the Company which, in 
turn, distributed the common stock of RSI to its stockholders.  The Operating
Partnership also invests in real estate joint ventures where it may own less
than a controlling interest, such investments are also reflected in the 
accompanying financial statements on the equity method of accounting.  All
significant intercompany balances and transactions have been eliminated in the
consolidated financial statements.

  The minority interests at March 31, 1999 represent an approximate 16.1% 
limited partnership interest in the Operating Partnership, an approximate 27.8%
interest in RMI, a convertible preferred interest in Metropolitan and a 40%
interest in Omni.

  The accompanying interim unaudited financial statements have been prepared by
the Company's management pursuant to the rules and regulations of the Securities
and Exchange Commission.  Certain information and footnote disclosure normally
included in the financial statements prepared in accordance with generally 
accepted accounting principles may have been condensed or omitted pursuant to
such rules and regulations, although management believes that the disclosures
are adequate to make the information presented not misleading.  The unaudited
financial statements as of March 31, 1999 and for the three month periods ended
March 31, 1999 and 1998 include, in the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary to present fairly the 
financial information set forth herein.  The results of operations for the 
interim period are not necessarily indicative of the results that may be 
expected for the year ending December 31, 1999.    These financial statements
should be read in conjunction with the Company's audited financial statements
and the notes thereto included in the Company's Form 10K for the year ended 
December 31, 1998.

  The Company intends to qualify as a REIT  under Section 856 through 869 of the
Internal Revenue Code of 1986, as amended (the "Code").  As a REIT, the Company
will not generally be subject to corporate Federal income taxes as long as it 
satisfies certain technical requirements of the Code relating to composition of
its income and assets and requirements relating to distributions of taxable
income to shareholders.

  In 1997, the Financial Accounting Standards Board ("FASB") issued the 
following Statements (i) Statement No. 128, "Earnings per Share("SFAS 128").
SFAS 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, and where appropriate, 
restated to conform to the SFAS 128 requirements.  The conversion of OP Units
into common stock would not have a significant effect on per share amounts as
the OP Units share proportionately with the common stock in the results of the
Operating Partnership's operations.  (ii) Statement No. 130, "Reporting 
Comprehensive Income" ("SFAS 130") which is effective for fiscal years beginning
after December 15, 1997.  SFAS 130 established standards for reporting 
comprehensive income and its components in a full set of general-purpose
financial statements.  SFAS 130 requires that all components of comprehensive
income be reported in a financial statement that is displayed with the same 
prominence as other financial statements.  The adoption of this standard had no
impact on the Company's financial position or results of operations.  (iii) 
Statement No. 131 "Disclosures about segments of an Enterprise and Related 
Information" ("SFAS 131") which is effective for fiscal years beginning after
December 15, 1997. SFAS 131 establishes standards for reporting information 
about operating segments in annual financial statements and in interim financial
reports.  It also establishes standards for related disclosures about products 
and services, geographic areas and major customers.  The adoption of this 
standard had no impact on the Company's financial position or results of 
operations but did effect the disclosure of segment information. See Note 9.

  Certain prior period amounts have been reclassified to conform to the current
period presentation.

3.     Mortgage Notes Payable

  As of March 31, 1999, the Company had approximately $254.2  million of fixed
rate mortgage notes which mature at various times between 1999 and 2012.  The 
notes are secured by 22 properties and one parcel of land and have a weighted
average interest rate of approximately 7.8%.

4.     Senior Unsecured Notes

  As of March 31, 1999, the Operating Partnership had outstanding approximately
$449.3  million (net of issuance discounts)of senior unsecured notes (the 
"Senior Unsecured Notes").     The following table sets forth the Operating
Partnership's Senior Unsecured Notes and other related disclosures (dollars in
thousands):

     Issuance      Face Amount    Coupon Rate      Term         Maturity
  --------------  -------------   ------------  ----------   ---------------
  August 27, 1997 $    150,000      7.20%        10 years    August 28, 2007 
  March 26, 1999  $    100,000      7.40%         5 years    August 15, 2004
  March 26, 1999  $    200,000      7.75%        10 years    March 15, 2009

     Interest on the Senior Unsecured Notes is payable semiannually with 
principal and unpaid interest due on the scheduled maturity dates.  In addition,
the five year and 10 year Senior Unsecured Notes issued on March 26, 1999 were 
issued at a discount of $172,000 and $566,000, respectively.

     Net proceeds of approximately $297.4 million received from the issuance of 
the March 26, 1999 Senior Unsecured Notes were used to repay outstanding 
borrowings under the Company's unsecured credit facility.

5.   Unsecured Credit Facility and Unsecured Term Loan

     As of March 31, 1999, the Company had a three year $500 million unsecured 
revolving credit facility (the "Credit Facility") from Chase Manhattan Bank, 
Union Bank of Switzerland and PNC Bank as co-managers of the credit facility 
bank group.  Interest rates on borrowings under the Credit Facility are priced
off of LIBOR plus a sliding scale ranging from 112.5 basis points to 137.5 basis
points based on the leverage ratio of the Company.  Upon the Company receiving 
an investment grade rating on its senior unsecured debt by two rating agencies,
the pricing is adjusted to LIBOR plus a scale ranging from 65 basis points to 90
basis points depending upon the rating.  On March 16, 1999 the Company received 
its second investment grade rating on its senior unsecured debt.  As a result,
the pricing under the Credit Facility was adjusted to LIBOR plus 90 basis
points.  

     The Credit Facility replaced and restructured the Company's existing $250 
million unsecured credit facility  and $200 million unsecured bridge facility.
The Company utilizes the Credit Facility primarily to finance the acquisitions
of properties and other real estate investments, fund its development activities
and for working capital purposes.  At March 31, 1999, the Company had 
availability under the Credit Facility to borrow an additional $293.8  million
(net of $26.1 million of outstanding undrawn letters of credit). 

     As of March 31, 1999, the Company had a one year $75 million unsecured term
loan (the "Term Loan") from Chase Manhattan Bank.  Interest rates on borrowings
under the Term Loan are priced off of LIBOR plus 150 basis points for the first
nine months and 175 basis points for the remaining three months.  At March 31,
1999, the Company had $75 million outstanding under the Term Loan.  

6.   Commercial Real Estate Investments 

     During the three months ended March 31, 1999, the Company purchased 
approximately 68.1 acres of vacant land in Northern New Jersey for approximately
$2.6 million which allows for approximately 1.1 million square feet of future 
development opportunities. In addition, RMI  purchased 74.6 acres of vacant land
for approximately $3.7 million which allows for approximately 1,000,000 square
feet of future development opportunities.  

7.   Stockholders' Equity

     On March 30, 1999 the Board of Directors declared a dividend of $.3375 per
share of common stock payable on April 28, 1999 to its shareholders of record as
of April 12, 1999.  The dividend declared, which related to the three months 
ended March 31, 1999, is based upon an annual distribution of $1.35 per share.

     On March 30, 1999 the Board of Directors declared a dividend on its Series
A Convertible Cumulative Preferred Stock of $.4766 per share payable on April
30, 1999 to stockholders of record on April 15, 1999.  The dividend declared,
which relates to the three months ended April 30, 1999 is based on an annual 
distribution of $1.906 per share.  

  Basic net income per share was calculated using the weighted average number
of shares outstanding of 40,049,079 and 38,182,577 for the three months ended
March 31, 1999 and 1998, respectively. 

  The following table sets forth the Company's reconciliation of numerators and
denominators of the basic and diluted earnings per weighted average common share
and the computation of basic and diluted earnings per share as required by SFAS 
128 (in thousands except for earnings per share data):

<TABLE>
<CAPTION>
                                                                        Three Months Ended
                                                                              March 31,
                                                                 --------------------------------
                                                                       1999             1998
                                                                 ---------------  ---------------
<S>                                                              <C>              <C>
Numerator:
     Income before dividends to preferred shareholders           $       15,705   $        9,573
     Dividends to preferred shareholders                                  4,381             ----
                                                                 ---------------  ---------------
     Numerator for basic and diluted earnings per share          $       11,324   $        9,573
                                                                 ===============  ===============

Denminator:
     Denominator for basic earnings per share-
         weighted-average shares                                         40,049           38,183
    Effect of dilutive securities:
        Employee stock options                                              401              584
                                                                 ---------------  ---------------

    Denominator for diluted earnings per share- adjusted
       weighted-average  shares and assumed conversion                   40,450           38,767
                                                                 ===============  ===============
Basic earnings per common share:
     Net income per common share                                 $         0.28   $         0.25
                                                                 ===============  ===============
Diluted earnings per common share:
    Diluted net income per common share                          $         0.28   $         0.25
                                                                 ===============  ===============
</TABLE>



<TABLE>
8.  Supplemental Disclosure of Cash Flow Information (in thousands)
<CAPTION>
                                                                        Three Months Ended
                                                                              March 31,
                                                                 --------------------------------
                                                                        1999             1998
                                                                 ---------------  ---------------
<S>                                                              <C>              <C>
Cash paid during the period for interest                         $       13,329   $        7,957
                                                                 ===============  ===============
Interest capitalized during the period                           $        2,311   $        1,524
                                                                 ===============  ===============
</TABLE>

9.   Segment Disclosure

     The Company owns all of the interests in its real estate properties by or
through the Operating Partnership.  The Company's portfolio consists of Class A
suburban office and industrial properties located and operated in four divisions
within the Tri-State Area.  In addition, the Company's portfolio also includes 
23 industrial properties owned by RMI.  Each of the divisions and RMI have a 
managing director who reports directly to the Chief Operating Officer and Chief
Financial Officer who have been identified as the Chief Operating Decision 
Makers ("CODM") because of their final authority over resource allocation, 
decisions and performance assessment.

     The CODM  evaluate the Company's operating performance based on geographic
area. In addition, as the Company expects to meet its short term liquidity 
requirements in part through the Credit Facility and Term Loan, interest 
incurred on borrowings under the Credit Facility and Term Loan is not considered
as part of property operating performance. The accounting policies of the 
reportable segments are the same as those described in the summary of
significant accounting policies.

     The following table sets forth the components of the Company's revenues and
expenses and other related disclosures as required by SFAS 131 for the three 
months ended March 31, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>
                                                                            March 31, 1999
                                          --------------------------------------------------------------------------------------
                                           Long        West-       New         Southern                              Consolidated
                                           Island      chester     Jersey      Conn.         RMI           Other        Total
                                          ----------  ----------  ----------  ------------  ------------  ----------  -----------
<S>                                       <C>         <C>         <C>         <C>           <C>           <C>         <C>
Revenues:
  Base rents                              $  26,812   $  14,255   $  10,772   $     6,397   $     3,857   $     ---   $   62,093
  Tenant escalations and
    reimbursements                            3,203       2,303       1,387           893           756         ---        8,542
  Equity in earnings of real
    estate joint ventures                       ---         ---         ---           ---           ---         211          211
  Equity in earnings of service
    companies                                   ---         ---         ---           ---           ---         166          166
  Interest income on mortgage
    notes and notes receivable                  ---         ---         ---           ---           ---       2,808        2,808
  Other income                                   53           3           7             6             2       2,217        2,288
                                          ----------  ----------  ----------  ------------  ------------  ----------  -----------
Total Revenues                               30,068      16,561      12,166         7,296         4,615       5,402       76,108
                                          ----------  ----------  ----------  ------------  ------------  ----------  -----------
Expenses:
  Property operating expenses                 5,003       3,823       1,864         1,570           138         ---       12,398
  Real estate taxes                           5,406       2,107       1,388           587           613         ---       10,101
  Ground rents                                  396         ---          13           ---           ---         ---          409
  Marketing, general and
    administrative                            1,799         981         665           497           131         319        4,392
  Interest                                    2,435       1,146           4           974           277       9,107       13,943
  Depreciation and amortization               6,245       3,004       2,141         1,391         1,080       1,230       15,091
                                          ----------  ----------  ----------  ------------  ------------  ----------  -----------
Total Expenses                               21,284      11,061       6,075         5,019         2,239      10,656       56,334
                                          ----------  ----------  ----------  ------------  ------------  ----------  -----------
Income before preferred
  dividends and distributions
  and minority interests's                $   8,784   $   5,500   $   6,091   $     2,277   $     2,376   $  (5,254)  $   19,774
                                          ==========  ==========  ==========  ============  ============  ==========  ===========
Total Assets                              $ 523,486   $ 404,988   $ 335,651   $   170,961   $   159,873   $ 314,118   $1,909,077
                                          ==========  ==========  ==========  ============  ============  ==========  ===========
</TABLE>
<TABLE>
<CAPTION>
                                                                           March 31, 1998
                                          --------------------------------------------------------------------------------------
                                           Long        West-       New         Southern                             Consolidated
                                           Island      chester     Jersey      Conn.         RMI           Other        Total
                                          ----------  ----------  ----------  ------------  ------------  ----------  ----------
<S>                                       <C>         <C>         <C>         <C>           <C>           <C>         <C>
Revenues:
  Base rents                              $  24,257   $   8,923   $   6,709   $     4,451   $     2,694   $     ---   $  47,034
  Tenant escalations and
    reimbursements                            3,046         964         751           760           531         ---       6,052
  Equity in earnings of real
    estate joint ventures                       ---         ---         ---           ---           ---         100         100
  Equity in loss of service
    companies                                   ---         ---         ---           ---           ---        (259)       (259)
  Interest income on mortgage
    notes and notes receivable                  ---         ---         ---           ---           ---       1,681       1,681
  Other income                                   28           1           4           ---           ---         422         455
                                          ----------  ----------  ----------  ------------  ------------  ----------  ----------
Total Revenues                               27,331       9,888       7,464         5,211         3,225       1,944      55,063
                                          ----------  ----------  ----------  ------------  ------------  ----------  ----------
Expenses:
  Property operating expenses                 5,134       2,395         780         1,234            77         ---       9,620
  Real estate taxes                           4,894       1,351         808           485           465         ---       8,003
  Ground rents                                  413         ---         ---           ---           ---         ---         413
  Marketing, general and
    administrative                            1,775         359         288           309           100         766       3,597
  Interest                                    2,324         162         ---           986           255       6,800      10,527
  Depreciation and amortization               5,254       1,796       1,463           832           757         704      10,806
                                          ----------  ----------  ----------  ------------  ------------  ----------  ----------
Total Expenses                               19,794       6,063       3,339         3,846         1,654       8,270      42,966
                                          ----------  ----------  ----------  ------------  ------------  ----------  ----------
Income before preferred
  dividends and distributions
  and minority interests's                $   7,537   $   3,825   $   4,125   $     1,365   $     1,571   $  (6,326)  $  12,097
                                          ==========  ==========  ==========  ============  ============  ==========  ==========
</TABLE>

10.  Commitments and other comments

     In July 1998, the Company formed a joint venture, Metropolitan Partners 
LLC, a Delaware limited liability company ("Metropolitan"), with Crescent Real
Estate Equities Company, a Texas real estate investment trust ("Crescent").  
Pursuant to a merger agreement executed on July 9, 1998 and amended and restated
on August 11, 1998 (the "Initial Merger Agreement") between Metropolitan, the
Company, Crescent and Tower Realty Trust, Inc., a Maryland corporation
("Tower"), Metropolitan agreed, subject to the terms and conditions of the
Merger Agreement, to purchase the common stock of Tower.

     Prior to the execution of the Initial Merger Agreement, Metropolitan 
identified certain potential tax issues regarding Tower's operations.  
Metropolitan entered into the Initial Merger Agreement only after Tower made
detailed representations and warranties purporting to address these issues.  In
the course of due diligence, however, Metropolitan, the Company and Crescent 
discovered that these representations and warranties may not be correct and 
discussed these concerns with Tower, specifically advising Tower that they were
not terminating the Initial Merger Agreement at that time.  Metropolitan, the 
Company and Crescent invited Tower to respond to these concerns.  However, on 
November 2, 1998, Tower filed a complaint in the Supreme Court of the State of
New York alleging Metropolitan, the Company and Crescent willfully breached the
Initial Merger Agreement.  Tower, in the complaint, was seeking declaratory and
other relief, including damages of not less than $75 million and specific 
performance by Metropolitan, the Company and Crescent of their obligations under
the Initial Merger Agreement.  

     On December 8, 1998, the Company, Metropolitan and Tower executed a revised
merger agreement (the "Revised Merger Agreement"), pursuant to which Tower will
be merged (the "Merger") into Metropolitan, with Metropolitan surviving the 
Merger.  Concurrently with the Merger, Tower Realty Operating Partnership, L.P.
("Tower OP") will be merged with and into a subsidiary of Metropolitan.  The 
consideration to be issued in the mergers will be comprised of (i) 25% cash and
(ii) 75% of shares of Class B Exchangeable Common Stock, par value $.01 per 
share, of the Company (the "Class B Common Stock"), or in certain circumstances
described below, shares of Class B Common Stock and unsecured notes of the 
Operating Partnership.  The Company controls Metropolitan and owns 100% of the
common equity; Crescent owns a preferred equity investment in Metropolitan.  
The Revised Merger Agreement replaces the Initial Merger Agreement (which at 
that time was a 50/50 joint venture between the Company and Crescent) relating
to the acquisition by Metropolitan of Tower for $24 per share. 

     Pursuant to the terms of the Revised Merger Agreement, holders of shares of
outstanding common stock of Tower ("Tower Common Stock"), and outstanding units
of limited partnership interest of Tower OP will have the option to elect to 
receive cash or shares of Class B Common Stock, subject to proration.  Under the
terms of the transaction, Metropolitan will effectively pay for each share of 
Tower Common Stock and each unit of limited partnership interest of Tower OP the
sum of (i) $5.75 in cash, and (ii) 0.6273 of a share of Class B Common Stock.  
The shares of Class B Common Stock are entitled to receive an initial annual 
dividend of $2.24 per share and is subject to adjustment annually. The shares of
Class B Common Stock are exchangeable at any time, at the option of the holder, 
into an equal number of shares of common stock, par value $.01 per share, of the
Company subject to customary antidilution adjustments.  The Company, at its 
option, may redeem any or all of the Class B Common Stock in exchange for an
equal number of shares of the Company's common stock at any time following the
four year, six-month anniversary of the issuance of the Class B Common Stock. 
The Company's Board of Directors have recommended to the Company's stockholders
the approval of a proposal to issue a number of shares of Class B Common Stock
equal to 75% of the sum of (i) the number of outstanding shares of the Tower 
Common Stock and (ii) the number of Tower OP limited partnership units, in each
case, at the effective time of the mergers.  If the stockholders of the Company
do not approve the issuance of the Class B Common Stock as proposed, the Revised
Merger Agreement provides that approximately one-third of the consideration that
was to be paid in the form of Class B Common Stock will be replaced by senior
unsecured notes of the Operating Partnership, which notes will bear interest at
the rate of 7% per annum and have a term of ten years.  In addition, if the 
stockholders of the Company do not approve the issuance of Class B Common Stock
as proposed and the Board of Directors of the Company  withdraws or amends or 
modifies in any material respect its recommendation for, approval of such 
proposal, then the total principal amount of notes to be issued and distributed
in the Merger will be increased by $15 million.

     Simultaneously with the execution of the Revised Merger Agreement, 
Metropolitan and Tower executed and consummated a stock purchase agreement (the
"Series A Stock Purchase Agreement") pursuant to which Metropolitan purchased
from Tower approximately 2.2 million shares of Series A Convertible Preferred
Stock, par value $.01 per share, of Tower (the "Tower Preferred Stock"), for an
aggregate purchase price of $40 million, $30 million of which was funded through
a capital contribution by the Company to Metropolitan and which is included in 
prepaid expenses and other assets on the accompanying balance sheet.  The Tower
Preferred Stock has a stated value of $18.44 per share and is convertible by
Metropolitan into an equal number of shares of Tower Common Stock at anytime 
after the termination, if any, of the Revised Merger Agreement, subject to 
customary antidilution adjustments.   The Tower Preferred Stock is entitled to
receive dividends equivalent to those paid on the Tower Common Stock.  If the 
Revised Merger Agreement is not consummated and a court of competent 
jurisdiction issues a final, non-appealable judgment determining that the
Company and Metropolitan are obligated to consummate the Merger but have failed
to do so, or determining that the Company and Metropolitan failed to use their
reasonable best efforts to take all actions necessary to cause certain closing
conditions to be satisfied, Metropolitan is obligated to return to Tower $30
million of the Series A Preferred Stock.

     Immediately prior to the execution of the Revised Merger Agreement and 
consummation of the Series A Stock Purchase Agreement, the Company and Crescent
executed the amended and restated operating agreement of Metropolitan (the 
"Metropolitan Operating Agreement") pursuant to which Crescent agreed to 
purchase a convertible preferred membership interest (the "Preferred Interest")
in Metropolitan for an aggregate purchase price of $85 million.  Ten million 
dollars of the purchase price was paid by Crescent to Metropolitan upon
execution of the Metropolitan Operating Agreement to acquire the Tower 
Preferred Stock and the remaining portion is payable prior to the closing of
the Merger and is expected to be used to fund a portion of the cash merger 
consideration.  Upon closing of the Merger, Crescent's investment will accrue
distributions at a rate of 7.5% per annum for a two-year period and may be 
redeemed by Metropolitan at any time during that period for $85 million, plus
an amount sufficient to provide a 9.5% internal rate of return.  If 
Metropolitan does not redeem the preferred interest, upon the expiration of the
two-year period, Crescent must convert its interest into either (i) a common
membership interest in Metropolitan or (ii) shares of the Company's common 
stock at a conversion price of $24.61.

     In connection with the revised transaction, Tower, the Company and Crescent
have exchanged mutual releases for any claims relating to the Initial Merger 
Agreement.          

     The Company has engaged brokers to, and anticipates that it will dispose of
the Tower properties located outside the New York City metropolitan area.  In
addition, the Company has entered into an agreement to sell four of Tower's
non-Class A New York City properties, comprising approximately 701,000 square
feet, for approximately $84.5 million.  The sale of the four properties is 
expected to be completed immediately prior to the completion of the merger.

     The Company and Tower have each scheduled special meetings of their 
stockholders for May 24, 1999 to consider approvals for the proposed merger.
In addition, the Company anticipates that to the extent the necessary approvals
are attained at Tower's meeting of stockholders, the acquisition of Tower will
close on or about such date.  There can be no assurance that such approval will
be obtained.

11.  Subsequent Events

     On May 10, 1999, the Company announced that it had entered an agreement to
acquire a first mortgage note secured by a 1.4 million square foot Class A 
office building located at 919 Third Avenue in New York City for a purchase
price of approximately $277.5 million.  In addition, the Company also announced
that it had agreed to sell $150 million of convertible preferred stock.  Both
transactions are expected to close in early June 1999. 

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 Consolidated Financial Statements of Reckson Associates Realty 
Corp. (the "Company") and related notes thereto.

     The Company considers certain statements set forth herein to be forward-
looking statements within the meaning of Section 27A or the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as 
amended, with respect to the Company's expectations for future periods.  Certain
forward-looking statements, including, without limitation, statements relating 
to the timing and success of acquisitions, the financing of the Company's 
operations, the ability to lease vacant space and the ability to renew or relet
space under expiring leases, involve certain risks and uncertainties.  Although
the Company believes that the expectations reflected in such forward-looking 
statements are based on reasonable assumptions, the actual results may differ
materially from those set forth in the forward-looking statements and the 
Company can give no assurance that its expectation will be achieved.  Certain
factors that might cause the results of the Company to differ materially from
those indicated by such forward-looking statements include, among other factors,
general economic conditions, general real estate industry risks, tenant default
and bankruptcies, loss of major tenants, the impact of competition and 
acquisition, redevelopment and development risks, the ability to finance
business opportunities and local real estate risks such as an oversupply of
space or a reduction in demand for real estate in the Company's real estate
markets.  Consequently, such forward-looking statements should be regarded 
solely as reflections of the Company's current operating and development plans
and estimates.  These plans and estimates are subject to revisions from time to
time as additional information becomes available, and actual results may differ
from those indicated in the referenced statements.

Overview and Background

     The Company is a self-administered and self managed real estate investment
trust ("REIT") specializing in the acquisition, leasing, financing, management 
and development of office and industrial properties.  The Company's growth 
strategy is focused on the suburban markets surrounding New York City.  Since
completion of its initial public offering in May 1995, the Company has acquired
approximately $1.14 billion of properties comprising approximately 12.8 million
square feet of space.

     The Company owns all of the interests in its real properties through
Reckson Operating Partnership, L.P. (the "Operating Parntership"). As of March
31, 1999, the Company owned and operated 73 office properties comprising
approximately 10.1 million square feet, 130 industrial properties comprising
approximately 11.1  million square feet and two retail properties comprising
approximately 20,000 square feet, located in the New York Tri-State area.  In
addition, the Company owned or had contracted to acquire approximately 1,012
acres of land (including approximately 306 acres under option) in 20 separate
parcels of which the Company can develop approximately 9.8 million square feet
of industrial and office space.  The Company also has invested approximately
$46.8 million in certain mortgage notes encumbering four Class A office 
properties encompassing approximately 577,000 square feet, a 306 acre parcel
of land located in New Jersey and in a note receivable secured by a 
partnership interest in Omni Partner's, L.P., owner of the Omni, a 575,000
square foot Class A office property located in Uniondale, New York.

     During 1997, the Company formed Reckson Service Industries, Inc. ("RSI") 
and Reckson Strategic Venture Partners, LLC ("RSVP").  The Operating Partnership
owned a 95% non voting common stock interest in RSI through June 10, 1998.  On 
June 11, 1998, the Operating Partnership distributed its 95% common stock 
interest in RSI of approximately $3 million to its owners, including the Company
which, in turn, distributed the common stock of RSI received from the Operating
Partnership to its stockholders.  Additionally, during June 1998, the Operating
Partnership established a credit facility with RSI (the"RSI Facility") in the 
amount of $100 million for RSI's service sector operations and other general 
corporate purposes.   As of March 31, 1999, the Company had advanced $34.7 
million under the RSI Facility.  In addition, the Operating Partnership has
approved the funding of investments of up to $100 million with or in RSVP (the
"RSVP Commitment"), through RSVP-controlled joint venture REIT-qualified 
investments or advances made to RSI under terms similar to the RSI Facility.
As of March 31, 1999, approximately $24 million had been invested through the
RSVP Commitment, of which $13.3 million represents RSVP-controlled joint venture
REIT-qualified investments and $10.7 million represents advances to RSI under 
the RSVP Commitment.   Such amounts have been included in investment in real
estate joint ventures  and investments in and advances to affiliates,
respectively, on the Company's balance sheets.  RSI serves as the managing
member of RSVP.  RSI invests in operating companies that generally  provide
commercial services to properties owned by the Company and its tenants and 
third parties. RSVP was formed to provide the Company with a research and 
development vehicle to invest in alternative real estate sectors.  RSVP invests
primarily in real estate and real estate related operating companies generally
outside of the Company's core office and industrial focus.  RSVP's strategy is
to identify and acquire interests in established entrepreneurial enterprises
with experienced management teams in market sectors which are in the early 
stages of their growth cycle or offer unique circumstances for attractive 
investments as well as a platform for future growth. 

     The Operating Partnership and RSI have entered into an intercompany 
agreement (the "Reckson Intercompany Agreement") to formalize their relationship
and to limit conflicts of interest.  Under the Reckson Intercompany Agreement,
RSI granted the Operating Partnership a right of first opportunity to make any
REIT -qualified investment that becomes available to RSI. In addition, if a REIT
-qualified investment opportunity becomes available to an affiliate of RSI, 
including RSVP, the Reckson Intercompany Agreement requires such affiliate to
allow the Operating Partnership to participate in such opportunity to the extent
of RSI's interest.

     Under the Reckson Intercompany Agreement, the Operating Partnership granted
RSI a right of first opportunity to provide commercial services to the Operating
Partnership and its tenants.  RSI will provide services to the Operating
Partnership at rates and on terms as attractive as either the best available for
comparable services in the market or those offered by RSI to third parties. In
addition, the Operating Partnership will give RSI access to its tenants with
respect to commercial services that may be provided to such tenants and, under
the Reckson Intercompany Agreement, subject to certain conditions, the Operating
Partnership granted RSI a right of first refusal to become the lessee of any 
real property acquired by the Operating Partnership if the Operating Partnership
determines that, consistent with Reckson's status as a REIT, it is required to
enter into a "master" lease agreement.  

     On January 6, 1998, the Company made its initial investment in the Morris
Companies, a New Jersey developer and owner of "Big Box" warehouse facilities.
In connection with the transaction the Morris Companies contributed 100% of 
their interests in certain industrial properties to Reckson Morris Operating
Partnership, L. P. ("RMI") in exchange for operating partnership units in
RMI. The Company has agreed to invest up to $150 million in RMI.  As of March
31, 1999, the Company has invested approximately $95.5 million for an 
approximate 72.2% controlling interest.  In addition, at March 31, 1999, the
Company had advanced approximately $32.8 million to the Morris Companies 
primarily to fund certain construction costs related to development properties
to be contributed to RMI.
 
     In July 1998, the Company formed a joint venture, Metropolitan Partners 
LLC, a Delaware limited liability company ("Metropolitan"), with Crescent Real
Estate Equities Company, a Texas real estate investment trust ("Crescent").
Pursuant to a merger agreement executed on July 9, 1998 and amended and restated
on August 11, 1998 (the "Initial Merger Agreement") between Metropolitan, the
Company, Crescent and Tower Realty Trust, Inc., a Maryland corporation
("Tower"), Metropolitan agreed, subject to the terms and conditions of the
Merger Agreement, to purchase the common stock of Tower.

     Prior to the execution of the Initial Merger Agreement, Metropolitan 
identified certain potential tax issues regarding Tower's operations.  
Metropolitan entered into the Initial Merger Agreement only after Tower made
detailed representations and warranties purporting to address these issues.  In
the course of due diligence, however, Metropolitan, the Company and Crescent 
discovered that these representations and warranties may not be correct and
discussed these concerns with Tower, specifically advising Tower that they were
not terminating the Initial Merger Agreement at that time.  Metropolitan, the 
Company and Crescent invited Tower to respond to these concerns.  However, on
November 2, 1998, Tower filed a complaint in the Supreme Court of the State of
New York alleging Metropolitan, the Company and Crescent willfully breached the
Initial Merger Agreement.  Tower, in the complaint, was seeking declaratory and
other relief, including damages of not less than $75 million and specific 
performance by Metropolitan, the Company and Crescent of their obligations under
the Initial Merger Agreement.
  
     On December 8, 1998, the Company, Metropolitan and Tower executed a revised
merger agreement (the "Revised Merger Agreement"), pursuant to which Tower will
be merged (the "Merger") into Metropolitan, with Metropolitan surviving the 
Merger. Concurrently with the Merger, Tower Realty Operating Partnership, L.P.
("Tower OP") will be merged with and into a subsidiary of Metropolitan.  The
consideration to be issued in the mergers will be comprised of (i) 25% cash and
(ii) 75% of shares of Class B Exchangeable Common Stock, par value $.01 per 
share, of the Company (the "Class B Common Stock"), or in certain circumstances
described below, shares of Class B Common Stock and unsecured notes of the 
Operating Partnership.  The Company controls Metropolitan and owns 100% of the
common equity; Crescent owns a preferred equity investment in Metropolitan.  
The Revised Merger Agreement replaces the Initial Merger Agreement (which at 
that time was a 50/50 joint venture between the Company and Crescent) relating
to the acquisition by Metropolitan of Tower for $24 per share. 

     Pursuant to the terms of the Revised Merger Agreement, holders of shares of
outstanding common stock of Tower ("Tower Common Stock"), and outstanding units
of limited partnership interest of Tower OP will have the option to elect to 
receive cash or shares of Class B Common Stock, subject to proration.  Under the
terms of the transaction, Metropolitan will effectively pay for each share of 
Tower Common Stock and each unit of limited partnership interest of Tower OP the
sum of (i) $5.75 in cash, and (ii) 0.6273 of a share of Class B Common Stock.
The shares of Class B Common Stock are entitled to receive an initial annual 
dividend of $2.24 per share and is subject to adjustment annually. The shares
of Class B Common Stock are exchangeable at any time, at the option of the 
holder, into an equal number of shares of common stock, par value $.01 per
share, of the Company subject to customary antidilution adjustments.  The 
Company, at its option, may redeem any or all of the Class B Common Stock in
exchange for an equal number of shares of the Company's common stock at any 
time following the four year, six-month anniversary of the issuance of the 
Class B Common Stock.  The Company's Board of Directors have recommended to the
Company's stockholders the approval of a proposal to issue a number of shares 
of Class B Common Stock equal to 75% of the sum of (i) the number of 
outstanding shares of the Tower Common Stock and (ii) the number of Tower OP
limited partnership units, in each case, at the effective time of the mergers.
If the stockholders of the Company do not approve the issuance of the Class B 
Common Stock as proposed, the Revised Merger Agreement provides that 
approximately one-third of the consideration that was to be paid in the form
of Class B Common Stock will be replaced by senior unsecured notes of the 
Operating Partnership, which notes will bear interest at the rate of 7% per
annum and have a term of ten years.  In addition, if the stockholders of the
Company do not approve the issuance of Class B Common Stock as proposed and 
the Board of Directors of the Company  withdraws or amends or modifies in any
material respect its recommendation for, approval of such proposal, then the
total principal amount of notes to be issued and distributed in the Merger 
will be increased by $15 million.

     Simultaneously with the execution of the Revised Merger Agreement, 
Metropolitan and Tower executed and consummated a stock purchase agreement (the
"Series A Stock Purchase Agreement") pursuant to which Metropolitan purchased 
from Tower approximately 2.2 million shares of Series A Convertible Preferred 
Stock, par value $.01 per share, of Tower (the "Tower Preferred Stock"), for an
aggregate purchase price of $40 million, $30 million of which was funded through
a capital contribution by the Company to Metropolitan and which is included in 
prepaid expenses and other assets on the Company's balance sheet.  The Tower 
Preferred Stock has a stated value of $18.44 per share and is convertible by 
Metropolitan into an equal number of shares of Tower Common Stock at anytime 
after the termination, if any, of the Revised Merger Agreement, subject to 
customary antidilution adjustments.   The Tower Preferred Stock is entitled to
receive dividends equivalent to those paid on the Tower Common Stock.  If the 
Revised Merger Agreement is not consummated and a court of competent 
jurisdiction issues a final, non-appealable judgment determining that the 
Company and Metropolitan are obligated to consummate the Merger but have failed
to do so, or determining that the Company and Metropolitan failed to use their
reasonable best efforts to take all actions necessary to cause certain closing
conditions to be satisfied, Metropolitan is obligated to return to Tower $30
million of the Series A Preferred Stock.

     Immediately prior to the execution of the Revised Merger Agreement and 
consummation of the Series A Stock Purchase Agreement, the Company and Crescent
executed the amended and restated operating agreement of Metropolitan (the 
"Metropolitan Operating Agreement") pursuant to which Crescent agreed to 
purchase a convertible preferred membership interest (the "Preferred Interest")
in Metropolitan for an aggregate purchase price of $85 million.  Ten million 
dollars of the purchase price was paid by Crescent to Metropolitan upon
execution of the Metropolitan Operating Agreement to acquire the Tower 
Preferred Stock and the remaining portion is payable prior to the closing of 
the Merger and is expected to be used to fund a portion of the cash merger 
consideration.  Upon closing of the Merger, Crescent's investment will accrue
distributions at a rate of 7.5% per annum for a two-year period and may be 
redeemed by Metropolitan at any time during that period for $85 million, plus
an amount sufficient to provide a 9.5% internal rate of return.  If Metropolitan
does not redeem the preferred interest, upon the expiration of the two-year 
period, Crescent must convert its interest into either (i) a common membership
interest in Metropolitan or (ii) shares of the Company's common stock at a 
conversion price of $24.61.

     In connection with the revised transaction, Tower, the Company and Crescent
have exchanged mutual releases for any claims relating to the Initial Merger 
Agreement.

     The Company has engaged brokers to, and anticipates that it will dispose 
of the Tower properties located outside the New York City metropolitan area.
In addition, the Company has entered into an agreement to sell four of Tower's
non-Class A New York City properties, comprising approximately 701,000 square 
feet, for approximately $84.5 million.   The sale of the four properties is
expected to be completed immediately prior to the completion of the merger.

     The Company and Tower have each scheduled special meetings of their 
stockholders for May 24, 1999 to consider approvals for the proposed merger.
In addition, the Company anticipates that to the extent the necessary approval
are attained at Tower's meeting of stockholders, the acquisition of Tower will
close on or about such date.  There can be no assurance that such approval will
be obtained.
 
     On August 27, 1998 the Company announced the formation of a joint venture 
with RSVP and the Dominion Group, an Oklahoma-based, privately-owned group of 
companies that focuses on the development, acquisition and ownership of 
government occupied office buildings and correctional facilities.  The new
venture, Dominion Properties LLC (the "Venture"), is owned by Dominion Venture
Group LLC, and by a subsidiary of the Company.  The Venture will engage 
primarily in acquiring, developing and/or owning government-occupied office
buildings and privately operated correctional facilities.  Under the Venture's
operating agreement, RSVP is to invest up to $100 million, some of which may be
invested by a subsidiary of the Company ( the "RSVP Capital"). The initial 
contribution of RSVP Capital was approximately $39 million of which 
approximately $10.1 million was invested by a subsidiary of the Company.
During the three months ended March 31, 1999, the Company's subsidiary made
additional capital contributions totaling approximately $3.2 million for a 
total investment of approximately $13.3 million.  The Company's subsidiary 
funded its capital contributions through  the RSVP Commitment.  In addition,
during 1998, the Company advanced approximately $2.9 million to RSI through
the RSVP Commitment for an investment in RSVP which was then invested on a 
joint venture basis with the Dominion Group in certain service business 
activities related to the real estate activities.    

     On May 10, 1999, the Company announced that it had entered an agreement to
acquire a first mortgage note secured by a 1.4 million square foot Class A 
office building located at 919 Third Avenue in New York City for a purchase 
price of approximately $277.5 million which the Company anticipates will be 
drawn, in part, from an advance under the Company's unsecured credit facility.
In addition, the Company also announced that it had agreed to sell $150 million
of convertible preferred stock.  Both transactions are expected to close in 
early June 1999. 

     The market capitalization of the Company at March 31, 1999 was 
approximately $2.2 billion.  The Company's market capitalization is based on the
market value of the Company's common stock and common units of limited 
partnership interest in the Operating Partnership ("OP Units")(assuming
conversion) of $20.56 per share/unit (based on the closing price of the 
Company's common stock on March 31, 1999, the Company's preferred stock of $25
per share, the Operating Partnership's preferred units of $1,000 per unit and 
the $934.2 million (including its share of joint venture debt and net of 
minority partners' interests) of debt outstanding at March 31, 1999.  As a
result, the Company's total debt to total market capitalization ratio at March
31, 1999 equaled approximately 42.7%.

Results  of Operations

     The Company's total revenues increased by $21  million or 38.2 % for the 
three months ended March 31, 1999 as compared to the 1998 period.  The growth in
total revenues is substantially attributable to the Company's acquisition of 45
properties comprising approximately 7.0 million square feet and the development
of two properties comprising approximately 147,000 square feet.  Property 
operating revenues, which include base rents and tenant escalations and 
reimbursements ("Property Operating Revenues") increased by $17.5  million or
33.1% for the three months ended March 31, 1999 as compared to the 1998 period.
The 1999 increase in Property Operating Revenues is comprised of approximately 
$1.7 million attributable to increases in rental rates and changes in 
occupancies and approximately $15.8 million attributable to the acquisitions 
and development of properties. The remaining balance of the increase in total
revenues in 1999 is primarily attributable to interest income on the Company's
investments in mortgage notes and notes receivable.  The Company's base rent 
was increased by the impact of the straight-line rent adjustment by $1.4 
million for the three months ended March 31, 1999 as compared to $1.5 million
for the 1998 period.

     Property operating expenses, real estate taxes and ground rents ("Property
Expenses") increased by $4.9 million or 27.0% for the three months ended March
31, 1999 as compared to the 1998 period.  These increases are primarily due to
the acquisition of properties.  Gross operating margins (defined as Property 
Operating Revenues less Property Expenses, taken as a percentage of Property
Operating Revenues) for 1999 and 1998 were 67.6% and 66%, respectively.  The
increase in gross operating margins reflects increases realized in rental rates,
the Company's ability to realize certain operating efficiencies as a result of
operating a larger portfolio of properties with concentrations of properties in
office and industrial parks or in its established sub-markets, and increased 
ownership of net leased properties.

     Marketing, general and administrative expenses increased by $795,000 for 
the three months ended March 31, 1999 as compared to the 1998 period.  The 
increase is due to the increased costs of managing the acquisition properties
and the increase in corporate management and administrative costs associated 
with the growth of the Company.  Marketing, general and administrative expenses
as a percentage of total revenues were  5.8 % for the three months ended March
31, 1999 as compared to 6.5% for the 1998 period.

     Interest expense increased by $3.4 million for the three months ended March
31, 1999 as compared to the 1998 period.  The increase is attributable to an 
increased cost attributable to an increased average balance on the Company's 
Credit Facility and Term Loan.  The weighted average balance outstanding on the
Company's Credit Facility and Term Loan was $506.8 million for the three months
ended March 31, 1999 as compared to $316 million for the 1998 period.

Liquidity and Capital Resources

     In June 1995, the Company completed an initial public offering of 7,438,000
shares (pre-split) of its common stock at $24.25 per share (pre-split).  Net 
proceeds to the Company were approximately $162 million.  During the three year
period ended December 31, 1998, the Company completed six add-on offerings 
aggregating approximately 24,306,000 shares (split-adjusted) of its common stock
(the "Add-on Offerings") resulting in net proceeds to the Company of 
approximately $481.4 million.  Proceeds from the Add-on Offerings were primarily
used to repay borrowings under the credit facilities and to fund the purchase of
commercial real estate properties.

     During April 1998, the Company completed a preferred stock offering and 
sold 9,200,000 shares  of 7.625%  Series A Convertible Cumulative Preferred 
Stock at a price of $25.00 per share.  Net proceeds from the offering were 
approximately $220.8 million and were used to repay borrowings under the credit
facilities. The preferred stock is convertible to the Company's common stock at
a conversion rate of .8769 shares of common stock for each share of preferred 
stock.  Additionally, in connection with the acquisition of six office 
properties and the remaining 50% interest in a 365,000 square foot vacant
office building located in the Westchester County, the Company issued series B,
C and D preferred operating units in the amount of approximately $42.5 million. 
The series B, C and D preferred units have a current distribution rate of 6.25%
and are convertible to common units at conversion prices of approximately 
$32.51, $29.39 and $29.12, respectively for each preferred unit.
 
     On March 26, 1999, the Operating Partnership issued $100 million of 7.4%
senior unsecured notes due March 15, 2004 and $200 million of 7.75% senior 
unsecured notes due March 15, 2009.  Net proceeds of approximately $297.4
million were used to repay outstanding borrowings under the Company's unsecured
credit facility.

     As of March 31, 1999 the Company had a three year $500 million unsecured 
revolving credit facility (the "Credit Facility") with Chase Manhattan Bank,
Union Bank of Switzerland and PNC Bank as co-managers of the credit facility
bank group.  Interest rates on borrowings under the Credit Facility are priced
off of LIBOR plus a sliding scale ranging from 112.5 basis points to 137.5 basis
points based on the leverage ratio of the Company.  Upon the Company receiving
an investment grade rating on its senior unsecured debt by two rating agencies,
the pricing is adjusted to LIBOR plus a scale ranging from 65 basis points to 90
basis points depending upon the rating.  On March 16, 1999 the Company received
its second investment grade rating on its senior unsecured debt.  As a result,
the pricing under the Credit Facility was adjusted to LIBOR plus 90 basis 
points.  

     The Credit Facility replaced the Company's existing $250 million unsecured
credit facility  and $200 million unsecured bridge facility.  The Company 
utilizes the Credit Facility primarily to finance the acquisitions of properties
and other real estate investments, fund its development activities and for 
working capital purposes.  At March 31, 1999, the Company had availability under
the Credit Facility to borrow an additional $293.8  million (net of $26.1
million of outstanding undrawn letters of credit). 

     In addition, as of March 31, 1999, the Company had a one year $75 million
unsecured term loan (the "Term Loan") from Chase Manhattan Bank.  Interest rates
on borrowings under the Term Loan are priced off of LIBOR plus 150 basis points
for the first nine months and 175 basis points for the remaining three months.
At March 31, 1999, the Company had $75 million outstanding under the Term Loan.

     The Company's indebtedness at March 31, 1999 totaled $934.2 million
(including its share of joint venture debt and net of minority partners'
interests) and was comprised of $176.4 million outstanding under the Credit
Facility, $75 million outstanding under the Term Loan, $449.3 million of senior
unsecured notes and approximately $233.5 million of mortgage indebtedness.
Based on the Company's total market capitalization of approximately $2.2 billion
at March 31, 1999 (calculated based on the market value of the Company's common
stock and OP Units, assuming conversion, the stated value of the Company's 
preferred stock and the stated value of the Operating Partnership's preferred
units), the Company's debt represented approximately 42.7 % of its total market
capitalization.

     Historically, rental revenue has been the principal source of funds to pay
operating expenses, debt service and capital expenditures, excluding 
non-recurring capital expenditures of the Company.  The Company expects to meet
its short term liquidity requirements generally through its net cash provided by
operating activities along with the Credit Facility and Term Loan previously
discussed.  The Company expects to meet certain of its financing requirements
through long-term secured and unsecured borrowings and the issuance of debt 
securities and additional equity securities of the Company.  The Company will
refinance existing mortgage indebtedness or indebtedness under the Credit 
Facility at maturity or retire such debt through the issuance of additional debt
securities or additional equity securities.  The Company anticipates that the
current balance of cash and cash equivalents and cash flows from operating 
activities, together with cash available from borrowings and equity offerings,
will be adequate to meet the capital and liquidity requirements of the Company
in both the short and long-term.

     In order to qualify as a REIT for federal income tax purposes, the Company
is required to make distributions to its stockholders of at least 95% of REIT
taxable income.  The Company expects to use its cash flow from operating 
activities for distributions to stockholders and for payment of recurring,
non-incremental revenue-generating expenditures.  The Company intends to invest
amounts accumulated for distribution in short-term investments.

SUPPLEMENTAL INFORMATION ON CAPITAL EXPENDITURES, TENANT IMPROVEMENT AND
LEASING COMMISSIONS

The following table summarizes the expenditures incurred for
non-incremental capital expenditures, tenant improvements and leasing
commissions  for the Company's office and industrial properties for the
three month period ended March 31, 1999 and the historical average of
such non-incremental capital expenditures, tenant improvements and
leasing commissions for the years 1995 through 1998. 

<TABLE>
Non-Incremental Revenue Generating Capital Expenditures
<CAPTION>
                                                                                                     Three
                                                                                                     Months
                                                                                                     Ended
                                                                                       1995 -1998    March 31,
                                       1995         1996         1997         1998      Average      1999
                                  ------------------------------------------------------------------------------
<S>                               <C>          <C>          <C>          <C>          <C>          <C>
Office Properties
     Total                           $364,545     $375,026   $1,108,675   $2,004,976     $963,305      $443,726
     Per Square Foot                     0.19         0.13         0.22         0.23         0.19          0.05
                                                             
Industrial Properties
     Total                           $290,457     $670,751     $733,233   $1,205,266     $724,927      $197,800
     Per Square Foot                     0.08         0.18         0.15         0.12         0.13          0.02
</TABLE>
<TABLE>
Non-Incremental Revenue Generating Tenant Improvements and Leasing Commissions
<CAPTION>
                                                                                                     Three
                                                                                                     Months
                                                                                                     Ended
                                                                                       1995 -1998    March 31,
                                         1995         1996         1997         1998    Average      1999
                                  ------------------------------------------------------------------------------
<S>                               <C>          <C>          <C>          <C>          <C>          <C>
Long Island Office Properties
     Tenant Improvements             $452,057     $523,574     $784,044   $1,140,251     $724,982      $117,592
     Per Square Foot Improved            4.44         4.28         7.00         3.98         4.92          2.77
     Leasing Commissions             $144,925     $119,047     $415,822     $418,191     $274,496       $24,956
     Per Square Foot Leased              1.42         0.97         4.83         1.46         2.17          0.59
                                  ------------ ------------ ------------ ------------ ------------ -------------
     Total Per Square Foot              $5.86        $5.25       $11.83        $5.44        $7.09         $3.36
                                  ============ ============ ============ ============ ============ =============


Westchester Office Properties
     Tenant Improvements              N/A         $834,764   $1,211,665     $711,160     $961,413      $257,006
     Per Square Foot Improved         N/A             6.33         8.90         4.45         6.67          4.48
     Leasing Commissions              N/A         $264,388     $366,257     $286,150     $326,204       $96,672
     Per Square Foot Leased           N/A             2.00         2.69         1.79         2.24          1.69
                                  ------------ ------------ ------------ ------------ ------------ -------------
     Total Per Square Foot            N/A            $8.33       $11.59        $6.24        $8.91         $6.17
                                  ============ ============ ============ ============ ============ =============

Connecticut Office Properties <F1>
     Tenant Improvements              N/A          $58,000   $1,022,421     $202,880     $570,356        $9,400
     Per Square Foot Improved         N/A            12.45        13.39         5.92         9.66          5.00
     Leasing Commissions              N/A               $0     $256,615     $151,063     $181,190       $10,810
     Per Square Foot Leased           N/A             0.00         3.36         4.41         3.89          5.75
                                  ------------ ------------ ------------ ------------ ------------ -------------
     Total Per Square Foot            N/A           $12.45       $16.75       $10.33       $13.55        $10.75
                                  ============ ============ ============ ============ ============ =============

New Jersey Office Properties
     Tenant Improvements              N/A          N/A          N/A         $654,877     $654,877       $35,661
     Per Square Foot Improved         N/A          N/A          N/A             3.78         3.78          2.24
     Leasing Commissions              N/A          N/A          N/A         $396,127     $396,127       $44,263
     Per Square Foot Leased           N/A          N/A          N/A             2.08         2.08          2.33
                                  ------------ ------------ ------------ ------------ ------------ -------------
     Total Per Square Foot            N/A          N/A          N/A            $5.86        $5.86         $4.57
                                  ============ ============ ============ ============ ============ =============

Industrial Properties
     Tenant Improvements             $210,496     $380,334     $230,466     $283,842     $276,285      $120,797
     Per Square Foot Improved            0.90         0.72         0.55         0.76         0.73          0.77
     Leasing Commissions             $107,351     $436,213      $81,013     $200,154     $206,183      $101,144
     Per Square Foot Leased              0.46         0.82         0.19         0.44         0.48          0.65
                                  ------------ ------------ ------------ ------------ ------------ -------------
     Total Per Square Foot              $1.36        $1.54        $0.74        $1.20        $1.21         $1.42
                                  ============ ============ ============ ============ ============ =============
<FN>
<F1>
1995 - 1998 average weighted to reflect October 1996 acquisition date
</FN>
</TABLE>

LEASE EXPIRATIONS

The following table sets forth scheduled lease expirations for executed leases
as of March 31, 1999:

<TABLE>
Long Island Office Properties (excluding Omni):
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                     29      100,940          3.6%      $20.97       $22.67
2000                     43      261,463          9.2%      $21.67       $23.36
2001                     38      182,621          6.4%      $22.14       $24.03
2002                     34      267,982          9.5%      $22.35       $24.04
2003                     52      328,196         11.6%      $21.81       $23.17
2004                     30      205,908          7.2%      $22.74       $25.52
2005 and thereafter      76    1,487,111         52.5%         ---          ---      
                     ------- ------------ ------------
Total                   302    2,834,221        100.0% 
                     ======= ============ ============
<FN>
<F1>    Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>    Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
Omni:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                   ---           ---          ---          ---          ---
2000                      4       60,316         10.3%      $31.71       $36.60
2001                      4       32,680          5.6%      $27.36       $33.51
2002                      4      129,351         22.2%      $24.78       $27.11
2003                      5       72,530         12.4%      $29.56       $29.59
2004                      4      112,414         19.3%      $25.96       $33.08
2005 and thereafter       7      176,358         30.2%         ---          ---             
                     ------- ------------ ------------
Total                    28      583,649        100.0% 
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
Industrial Properties:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                     31      384,916          7.1%       $7.78        $5.95
2000                     30    1,105,940         20.3%       $4.84        $5.19
2001                     33      916,798         16.8%       $5.86        $6.80
2002                     25      151,396          2.8%       $6.60        $7.36
2003                     31      726,459         13.3%       $5.26        $6.06
2004                     23      506,458          9.3%       $6.59        $7.15
2005 and thereafter      33    1,664,889         30.4%         ---          ---
                     ------- ------------ ------------
Total                   206    5,456,856        100.0% 
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
Research and Development Properties:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                      9       98,324          7.7%       $8.10        $8.90
2000                      7      111,040          8.7%       $8.20        $8.58
2001                      7       96,120          7.5%      $11.61       $12.43
2002                      3       67,967          5.3%      $10.54       $13.09
2003                      4      271,042         21.2%       $5.38        $5.25
2004                      6      105,303          8.2%      $11.94       $13.20
2005 and thereafter      10      530,321         41.4%         ---          ---
                     ------- ------------ ------------
Total                    46    1,280,117        100.0% 
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
Westchester Office Properties:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                     35      173,522          6.2%      $18.65       $19.00
2000                     47      478,385         17.1%      $23.14       $22.95
2001                     46      334,819         12.0%      $21.77       $21.82
2002                     45      434,562         15.5%      $20.79       $20.20
2003                     35      245,108          8.8%      $21.80       $22.93
2004                     18      104,457          3.7%      $20.00       $20.21
2005 and thereafter      36    1,024,317         36.7%         ---          ---
                     ------- ------------ ------------
Total                   262    2,795,170        100.0% 
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
Stamford Office Properties:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                     12       26,500          2.5%      $22.81       $22.99
2000                     27      114,569         11.1%      $22.14       $22.51
2001                     21      100,942          9.7%      $24.01       $25.05
2002                     16       93,788          9.1%      $26.96       $28.17
2003                     16       99,052          9.6%      $31.71       $32.46
2004                     15      201,091         19.4%      $20.77       $21.29
2005 and thereafter      23      399,020         38.6%         ---          ---
                     ------- ------------ ------------
Total                   130    1,034,962        100.0% 
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
New Jersey Office Properties:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                     13      195,326         11.2%      $18.43       $19.86
2000                     37      331,347         18.9%      $22.50       $22.63
2001                     24      272,182         15.6%      $18.02       $18.04
2002                     19      164,874          9.4%      $19.99       $20.11
2003                     18      327,593         18.7%      $18.11       $18.13
2004                     11      112,259          6.4%      $21.83       $21.67
2005 and thereafter      16      345,796         19.8%         ---          ---
                     ------- ------------ ------------
Total                   138    1,749,377        100.0% 
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
Reckson / Morris Industrial
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                      8      465,286         15.3%       $4.02        $4.10
2000                      6      173,768          5.7%       $5.14        $5.31
2001                      1      243,751          8.0%       $7.50        $7.69
2002                      1      610,949         20.1%       $3.75        $3.96
2003                      4      195,416          6.4%       $4.49        $4.78
2004                      4      143,790          4.7%       $4.58        $5.19
2005 and thereafter       8    1,211,594         39.8%         ---          ---
                     ------- ------------ ------------
Total                    32    3,044,554        100.0% 
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>

Inflation

     The office leases generally provided for fixed base rent increases or 
indexed escalations.  In addition, the office leases provide for separate 
escalations of real estate taxes and electric costs over a base amount.  The
industrial leases generally provide for fixed base rent increases, direct pass
through of certain operating expenses and separate real estate tax escalations
over a base amount.  The Company believes that inflationary increases in 
expenses will be offset by contractual rent increases and expense escalations
described above.  The Credit Facility and Term Loan bear interest at a variable
rate, which will be influenced by changes in short-term interest rates, and is
sensitive to inflation.

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, 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 property 
management system is year 2000 compliant and has been thoroughly tested.  Since
the Company's accounting software is maintained and supported by an unaffiliated
third party, the total year 2000 project cost as it relates to the accounting 
software is estimated to be minimal.

     The year 2000 project is estimated to be completed not later than July 31,
1999, which is prior to any anticipated impact on its operating systems.  
Additionally, the Company has received assurances from its contractors that all
of the Company's building management and mechanical systems are currently year
2000 compliant or will be made compliant prior to any impact on those systems.
However, the Company cannot guarantee that all contractors will comply with 
their assurances and therefore, the Company may not be able to determine year
2000 compliance of those contractors.  At that time, the Company will determine
the extent to which the Company will be able to replace non compliant 
contractors.  The Company believes that with modifications to existing software
and conversions to new software, the year 2000 issue will not pose significant
operational problems for its computer systems.  However, if such modifications
and conversions are not made, or are not completed timely, the year 2000 issue
could have a material impact on the operations of the Company.

     To date, the Company has expended approximately $750,000 and expects to 
expend an additional $500,000 in connection with upgrading building management,
mechanical and computer systems. 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.

     In a "worst case scenario", the Company believes that failure of the
building management and mechanical systems to operate properly would result in
inconveniences to the building tenants which might include no elevator service,
lighting or entry and egress.  In this case, the management of the Company would
manually override such systems in order for normal operations to resume.  
Additionally, in a "worst case scenario" of the failure of the third party to
deliver, on a timely basis, the necessary upgrades to the accounting software,
the Company would be required to process transactions, such as the issuance of
disbursements, manually until an alternative system was implemented.

     If the Company is not successful in implementing their year 2000 compliance
plan, the Company may suffer a material adverse impact on their consolidated 
results of operations and financial condition.  Because of the importance of
addressing the year 2000 issue, the Company expects to develop contingency plans
if they determine that the compliance plans will not be implemented by July 31,
1999.

Funds from Operations

     Management believes that funds from operations ("FFO") is an appropriate 
measure of performance of an equity REIT. FFO is defined by the National 
Association of Real Estate Investment Trusts (NAREIT) as net income or loss,
excluding gains or losses from debt restructuring and sales of properties plus
depreciation and amortization, and after adjustments for unconsolidated 
partnerships and joint ventures.  FFO does not represent cash generated from
operating activities in accordance with generally accepted accounting principals
and is not indicative of cash available to fund cash needs.  FFO should not be 
considered as an alternative to net income as an indicator of the Company's 
operating performance or as an alternative to cash flow as a measure of 
liquidity.   In March, 1995, NAREIT issued a "White Paper" analysis to address
certain interpretive issues under its definition of FFO.  The White Paper 
provides that amortization of deferred financing costs and depreciation of
non-rental real estate assets are no longer to be added back to net income to
arrive at FFO.

     Since all companies and analysts do not calculate FFO in a similar fashion,
the Company's calculation of FFO presented herein may not be comparable to 
similarly titled measures as reported by other companies.

     The following table presents the Company's FFO calculation (unaudited and
in thousands, except per share/unit data): 
<TABLE>
<CAPTION>
                                                      Three  Months Ended
                                                            March 31,
                                                  -------------------------------
                                                       1999              1998
                                                  -------------     -------------
<S>                                               <C>               <C>
Net income available to common shareholders       $     11,324      $      9,573
Adjustments for Funds from Operations:
Add:
Real Estate depreciation and amortization               14,689            10,606
Minority partners' interests in consolidated
  partnerships                                           1,168               533
Limited partners' interest in the operating
  partnerships                                           2,241             1,991
Dividends and distributions on dilutive
  shares/units                                           5,041               ---
                                                  -------------     -------------
                                                        34,463            22,703
Subtract:
Amount distributable to minority partners in
  consolidated partnerships                              1,444               788
                                                  -------------     -------------
Funds From Operations (FFO) - diluted                   33,019            21,915

Subtract:
Straight line rents                                      1,336             1,464
Non-Incremental capitalized tenant improvements
  and leasing commissions                                  818             1,223
Non-Incremental capitalized improvements                   642               625
                                                  -------------     -------------
Cash available for distribution (CAD) - diluted   $     30,223      $     18,603
                                                  =============     =============
Diluted FFO and CAD calculations:
  Weighted average shares/units                         47,759            45,892
  Weighted average dilutive shares/units                 9,829               585
                                                  -------------     -------------
       Diluted weighted average shares/units            57,588            46,477
                                                  =============     =============
  FFO per weighted average share/unit             $       0.57      $       0.47
                                                  =============     =============
  CAD per weighted average share/unit             $       0.52      $       0.40
                                                  =============     =============
  Dividends per share/unit                        $       0.34      $       0.31
                                                  =============     =============
  FFO payout ratio                                       59.2%             66.5%
                                                  =============     =============
  CAD payout ratio                                       64.9%             78.1%
                                                  =============     =============
</TABLE>

Item 3.  Quantitative and Qualitative Disclosures about market risk.

     The primary market risk facing the Company is interest rate risk on its
long term debt, mortgage notes and notes receivable.  The Company does not hedge
interest rate risk using financial instruments nor is the Company subject to 
foreign currency risk.

     The Company manages its exposure to interest rate risk on its variable rate
indebtedness by borrowing on a short-term basis under its Credit Facility or 
Term Loan until such time as it is able to retire the short-term variable rate
debt with a long-term fixed rate debt offering or an equity offering through 
accessing the capital markets on terms that are advantageous to the Company.   

     The following table sets forth the Company's long term debt obligations, 
principal cash flows by scheduled maturity, weighted average interest rates and
estimated fair market value ("FMV") at March 31, 1999 (dollars in thousands):

<TABLE>
<CAPTION>
                                   For the Year Ended December 31,
                           -------------------------------------------------
                            1999      2000      2001       2002      2003      Thereafter     Total<F1>   F.M.V
                           --------  --------  ---------  --------  --------  -------------  ---------  ----------
<S>                        <C>       <C>       <C>        <C>       <C>       <C>            <C>        <C>
Long term debt:
     Fixed rate            $ 9,885   $32,131   $ 19,440   $14,587   $19,295   $    608,908   $704,246   $ 704,246
     Average interest rate   8.76%     7.38%      7.42%     7.81%     7.65%          7.61%      7.62%         ---

     Variable rate         $75,000   $   ---   $180,100   $   ---   $   ---   $        ---   $255,100   $ 255,100
     Average interest rate   7.06%       ---      6.98%       ---       ---            ---      7.00%         ---
<FN>
<F1>
Includes unamortized issuance discounts of $738,000 on the 5 and 10 year
senior unsecured notes issued on March 26, 1999 which are due at maturity. 
</FN>
</TABLE>

     In addition, the Company has assessed the market risk for its variable rate
debt, which is based upon LIBOR, and believes that a one percent increase in the
LIBOR rate would have an approximate $2.6 million annual increase in interest
expense based on approximately $255.1 million outstanding at March 31, 1999.

     The following table sets forth the Company's mortgage notes and note 
receivables by scheduled maturity date, weighted average interest rates and
estimated FMV at March 31, 1999 (dollars in thousands):
<TABLE>
<CAPTION>
                                     For the Year Ended December 31,
                             ------------------------------------------------
                              1999      2000      2001      2002      2003      Thereafter     Total      F.M.V
                             --------  --------  --------  --------  --------  -------------  ---------  ----------
<S>                          <C>       <C>       <C>       <C>       <C>       <C>            <C>        <C>
Mortgage notes and
notes receivable:
     Fixed rate              $81,720   $   ---   $   ---   $ 5,585   $   ---   $     16,990   $104,295   $ 104,295
     Average interest rate     9.56%       ---       ---    11.00%       ---         11.65%      9.98%         ---
</TABLE>

     The fair value of the Company's long term debt, mortgage notes and notes
receivable is estimated based on discounting future cash flows at interest rates
that management believes reflects the risks associated with long term debt,
mortgage notes and notes receivable of similar risk and duration.

Part II - Other Information

Item 1.  Legal Proceedings - Noe
Item 2.  Changes in Securities and Use of Proceeds - 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
Item 6.  Exhibits and Reports on Form 8-K
     a)  Exhibit 27 Financial Data Schedule
     b)  During the three months ended March 31, 1999, the registrant filed
         the following reports:

         Form 8 - K, dated February 5, 1999. Announcing that on January 12,
         1999, the Company entered into a $75 million unsecured credit 
         facility which is unconditionally guaranteed by both the Company
         and the Operating Partnership.
                  
         Form 8 - K, dated February 5,1999. Disclosing the financial 
         statements of Tower, including the consent of Tower's auditors,
         and pro forma financial statements for the Company and Metropolitan.
    
         Form 8 - K, dated March 1,1999. To file the December 31, 1998 
         financial statements of the Company as well as certain other material
         contracts and documents of the Company.

         Form 8 - K, dated March 26,1999. Announcing that the Operating 
         Partnership agreed to sell $300 million aggregate principal amount of
         its senior unsecured notes.

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 ASSOCIATES REALTY CORP.
                            Registrant

May 14, 1999                /s/   Scott H. Rechler
Date                        Scott H. Rechler, Chief Operating Officer
                            and Director

May 14, 1999                /s/   Michael Maturo
Date                        Michael Maturo, Executive Vice President,
                            Treasurer and Chief Financial Officer