UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-Q


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

                  For the quarterly period ended June 30, 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                                      (IRS. Employer
incorporation 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 two class' of common  stock,  issued at $.01 par value per share
with  40,366,172 and 11,694,567  shares of common stock and Class B Common Stock
outstanding, respectively
                             as of August 11, 1999


<PAGE>

                        RECKSON ASSOCIATES REALTY CORP.
                                QUARTERLY REPORT
                    FOR THE THREE MONTHS ENDED JUNE 30, 1999

                               TABLE OF CONTENTS

INDEX                                                            PAGE
--------------------------------------------------------------------------------
PART I.  FINANCIAL INFORMATION
--------------------------------------------------------------------------------

Item 1.  Financial Statements

         Consolidated  Balance  Sheets as of June 30,
         1999 (unaudited) and December 31, 1998                    2

         Consolidated  Statements  of Income  for the
         three and six months ended June 30, 1999 and
         1998 (unaudited)                                          3

         Consolidated  Statements  of Cash  Flows for
         the six  months  ended  June  30,  1999  and
         1998 (unaudited)                                          4

         Notes   to   the   Consolidated    Financial
         Statements (unaudited)                                    5

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

Item 3.  Quantitative  and  Qualitative   Disclosures
         about Market Risk

--------------------------------------------------------------------------------
PART II. OTHER INFORMATION
--------------------------------------------------------------------------------
Item 1.  Legal Proceedings
Item 2.  Changes in Securities and use of proceeds
Item 3.  Defaults Upon Senior Securities
Item 4.  Submission of Matters to a Vote of Securities
         Holders
Item 5.  Other Information
Item 6.  Exhibits and Reports on form 8-K
--------------------------------------------------------------------------------
SIGNATURES
--------------------------------------------------------------------------------
<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>
                                                 June 30,     December 31,
                                                   1999           1998
                                                -----------    -----------
                                                (Unaudited)
<S>                                             <C>            <C>
Commercial real estate properties, at cost:
     Land                                       $   289,191    $   212,540
     Building and improvements                    1,835,625      1,372,549
Developments in progress:
     Land                                            75,354         69,143
     Development costs                               71,613         82,901
Real estate held for sale                           221,703            ---
Furniture, fixtures and equipment                     6,486          6,090
                                                -----------    -----------
                                                  2,499,972      1,743,223
Less accumulated depreciation                      (189,482)      (159,049)
                                                -----------    -----------
                                                  2,310,490      1,584,174

Investment  in real  estate  joint  ventures         21,803         15,104
Investment  in  mortgage   notes  and  notes
receivable                                          341,666         99,268
Cash and cash equivalents                            42,029          2,349
Tenants receivables                                   2,978          5,159
Investments in and advances to affiliates            94,113         53,329
Deferred rent receivable                             24,955         22,526
Prepaid expenses and other assets                    20,392         46,372
Contract and land deposits and pre-acquisition
costs                                                 2,118          2,253
Deferred leasing and loan costs                      33,324         24,282
                                                -----------    -----------
Total Assets                                      2,893,868      1,854,816
                                                ===========    ===========

Liabilities:
Mortgage notes payable                          $   387,014    $   253,463
Unsecured credit facilities                         479,100        465,850
Unsecured term loan                                  75,000         20,000
Senior unsecured notes                              449,279        150,000
Accrued expenses and other liabilities.              65,270         48,565
Affiliate payables.                                   1,157          2,395
Dividends and distributions payable                  24,915         19,663
                                                -----------    -----------
Total Liabilities                                 1,481,735        959,936
                                                -----------    -----------

Commitments and other comments                          ---            ---

Minority and  interests' in consolidated
partnerships                                        127,506         52,173
Preferred  unit  interest  in the  operating
partnership                                          42,518         42,518
Limited  partners'  minority interest in the
operating partnership                                91,440         94,125
                                                -----------    -----------
                                                    261,464        188,816
                                                -----------    -----------
Stockholders' Equity:

Preferred Stock, $.01 par value,  25,000,000
shares  authorized
  Series A preferred  stock,  9,192,000 shares
  issued and outstanding, respectively                   92             92
  Perpetual   convertible   preferred   stock,
  6,000,000  and  0  shares issued  and
  outstanding, respectively                              60            ---
Common  Stock,  $01 par  value,  100,000,000
shares authorized
  Common  stock,   40,364,588  and  40,035,419
  shares issued and outstanding,  respectively          404            400
  Class  B  Common  Stock,  11,694,567  and  0
  shares issued and outstanding,  respectively          117            ---
Additional paid in capital                        1,149,996        705,572
                                                -----------    -----------
Total Stockholders' Equity                        1,150,669        706,064
                                                -----------    -----------
Total Liabilities and Stockholders' Equity      $ 2,893,868    $ 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                   Six Months Ended
                                                                        June 30,                           June 30,
                                                           -------------------------------     ---------------------------------
                                                                 1999            1998               1999               1998
                                                           --------------    -------------     --------------     --------------
<S>                                                        <C>               <C>               <C>                <C>
Revenues:
Base rents                                                 $       77,192    $      55,536     $      139,285     $      102,571
Tenant escalations and reimbursements                               8,586            7,061             17,129             13,113
Equity in earnings of real estate joint ventures                      438              173                649                273
Equity  in earnings of service companies                               74              651                240                392
Interest income on mortgage notes and notes
  receivable                                                        2,299            1,773              5,107              3,453
Other                                                               2,650            1,125              4,938              1,581
                                                           --------------    -------------     --------------     --------------
Total Revenues                                                     91,239           66,319            167,348            121,383
                                                           --------------    -------------     --------------     --------------
Expenses:
Property operating expenses                                        15,038           12,073             27,436             21,693
Real estate taxes                                                  12,011            9,032             22,112             17,036
Ground rents                                                          490              432                898                845
Marketing, general and administrative                               5,045            3,831              9,437              7,427
Interest                                                           18,902           10,970             32,846             21,497
Depreciation and amortization                                      19,127           12,457             34,218             23,264
                                                           --------------    -------------     --------------     --------------
Total Expenses                                                     70,613           48,795            126,947             91,762
                                                           --------------    -------------     --------------     --------------
Income   before   preferred   dividends  and
  distributions  and minority  interests'                          20,626           17,524             40,401             29,621

Minority partners' and  interests  in
  consolidated partnerships                                        (1,615)            (683)            (2,783)            (1,216)
Distributions to preferred unit holders                              (660)            (435)            (1,321)              (435)
Limited partners' interest in the operating
  partnership                                                      (1,827)          (2,762)            (4,068)            (4,753)
                                                           --------------    -------------     --------------     --------------
Income before dividends to preferred
  shareholders                                                     16,524           13,644             32,229             23,217
Dividends to preferred shareholders                                (5,329)          (3,733)            (9,710)            (3,733)
                                                           --------------    -------------     --------------     --------------
Net income available to common shareholders                $       11,195    $       9,911     $       22,519     $       19,484
                                                           ==============    =============     ==============     ==============
Net Income:

  Common shareholders                                      $        9,464    $       9,911     $       20,788     $       19,484
  Class B common shareholders                                       1,731              ---              1,731                ---
                                                           --------------    -------------     --------------     --------------
Total                                                      $       11,195    $       9,911     $       22,519     $       19,484
                                                           ==============    =============     ==============     ==============
Basic net income per weighted average common share:
  Common shareholders                                      $         0.23    $        0.25     $         0.52     $         0.50
  Class B common shareholders                              $         0.35    $         ---     $         0.71     $          ---
Weighted average common shares outstanding:
  Common shareholders                                          40,284,511       39,636,815         40,167,445         38,913,713
  Class B common shareholders                                   4,883,446              ---          2,455,213                ---
Diluted net income per weighted average common share:
  Common shareholders                                      $         0.23    $        0.25     $         0.51     $         0.49
  Class B common shareholders                              $         0.24    $         ---     $         0.52     $          ---
Diluted weighted average common shares outstanding:
  Common shareholders                                          40,704,147       40,178,083         40,577,871         39,476,786
  Class B common shareholders                                   4,883,446              ---          2,455,213                ---
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<TABLE>
                                        Reckson Associates Realty Corp.
                                      Consolidated Statement of Cash Flows
                                          (Unaudited and in thousands)
<CAPTION>
                                                                                    Six Months Ended June 30,
                                                                                   ----------------------------
                                                                                        1999            1998
                                                                                   ------------    ------------
<S>                                                                                <C>             <C>
Cash flows from Operating Activities:
Net Income available to common shareholders                                        $     22,519    $     19,484
Adjustments to reconcile net income to net cash provided by operating
activities:
     Depreciation and amortization                                                       34,218          23,264
     Minority partners' interests in consolidated partnerships                            2,783           1,216
     Loss reserve on real estate held for sale                                            4,450             ---
     Gain on sale of interest in Reckson Executive Centers, LLC                             ---              (9)
     Limited partners' interest in the operating partnership                              4,068           4,753
     Gain on sale of securities and mortgage redemption                                  (4,492)            (43)
     Equity in earnings of service companies                                               (240)           (392)
     Equity in earnings of real estate joint ventures                                      (649)           (273)
     Distributions from a real estate joint venture                                         173             217
Changes in operating assets and liabilities:
     Tenant receivables                                                                   2,181             913
     Real estate tax escrow                                                                (618)            115
     Prepaid expenses and other assets                                                  (15,593)        (10,728)
     Deferred rents receivable                                                           (2,429)         (3,614)
     Accrued expenses and other liabilities                                              22,848           8,961
                                                                                   ------------    ------------
     Net cash provided by operating activities                                           69,219          43,864
                                                                                   ------------    ------------
Cash Flows from Investing Activities:
     (Increase) decrease in deposits pre-acquisitions                                    (1,889)          4,187
     Increase in developments in progress                                                (8,073)        (43,330)
     Purchase of commercial real estate properties                                     (194,871)       (383,366)
     Increase in real estate held for sale                                              (57,095)            ---
     Investment in mortgage notes and notes receivable                                 (262,643)         20,097
     Investment in real estate joint ventures                                            (6,223)         (2,970)
     Additions to commercial real estate properties                                     (16,389)         (9,754)
     Purchase of furniture, fixtures and equipment                                         (447)           (776)
     Payment of leasing costs                                                            (7,377)         (3,768)
     Proceeds  from sales of property, securities
        and mortgage redemption                                                          25,929             809
                                                                                   ------------    ------------
     Net cash used in investing activities                                             (529,078)       (418,871)
                                                                                   ------------    ------------
Cash Flows from Financing Activities:
     Proceeds from issuance of common stock net of issuance costs                         1,300          93,515
     Proceeds from issuance of preferred stock net of issuance costs                    148,000         220,800
     Principal payments on secured borrowings                                            (1,495)         (3,118)
     Payment of loan and equity issuance costs                                           (5,368)            (69)
     Investments in and advances to affiliates                                          (40,544)        (25,712)
     Proceeds from issuance of senior unsecured notes net of issuance costs             299,262             ---
     Proceeds from unsecured credit facilities                                          299,000         180,996
     Repayment of unsecured credit facilities                                          (230,750)        (94,000)
     Contributions of minority partners' in consolidated partnerships                    75,000             ---
     Distributions to minority partners' in consolidated partnerships                    (2,450)         (1,289)
     Distributions to limited partners' in the operating partnership                     (5,222)         (2,352)
     Distributions to preferred unit holders                                             (1,321)            ---
     Dividends to common shareholders                                                   (27,111)        (12,146)
     Dividends to preferred shareholders                                                 (8,762)            ---
                                                                                   ------------    ------------
     Net cash provided by financing activities                                          499,539         356,625
                                                                                   ------------    ------------
     Net (decrease) increase in cash and cash equivalents                                39,680         (18,382)
     Cash and cash equivalents at beginning of period                                     2,349          21,828
                                                                                   ------------    ------------
     Cash and cash equivalents at end of period                                    $     42,029    $      3,446
                                                                                   ============    ============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
                        RECKSON ASSOCIATES REALTY CORP.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                 JUNE 30, 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 June 30, 1999,  the Company  owned and operated 92 office  properties
comprising  approximately  14.9 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  1,013 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  $306.1  million  in  mortgage  notes
encumbering  three  Class A office  properties  encompassing  approximately  1.6
million  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").  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 June 30, 1999 the Company had advanced  $46.4 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 June 30, 1999,  approximately  $36.9  million had been
invested  through  the  RSVP  Commitment,  of  which  $16.3  million  represents
RSVP-controlled  joint  venture  REIT-qualified  investments  and $20.6  million
represents advances to RSI under the RSVP Commitment. 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  nationwide.  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 June 30, 1999,
the Company has invested  approximately  $95.5  million for an  approximate  72%
controlling  interest.  In addition,  at June 30, 1999, the Company had advanced
approximately  $34 million to RMI to acquire a 846,000  square  foot  industrial
property (see note 10).

     During  July  1998,  the  Company   formed   Metropolitan   Partners,   LLC
("Metropolitan")   for  the  purpose  of  acquiring  Tower  Realty  Trust,  Inc.
("Tower"). On May 24, 1999 the Company completed the merger with Tower (see note
6) and  acquired  three  Class A office  properties  located  in New  York  City
totaling 1.6 million square feet and one office property  located on Long Island
totaling approximately 101,000 square feet. In addition, pursuant to the merger,
the  Company  also  acquired  certain  office   properties,   a  property  under
development  and land located  outside of the  Tri-State  Area which have either
been sold,  are under  contract  to sell or are being held for sale.  The assets
currently being held for sale have been included in real estate held for sale on
the accompanying consolidated balance sheet.

2.  BASIS OF PRESENTATION

     The accompanying consolidated financial statements include the consolidated
financial position of the Company and the Operating Partnership at June 30, 1999
and December 31, 1998 and the results of their  operations for the three and six
months ended June 30, 1999 and 1998 respectively,  and, their cash flows for the
six  months  ended  June  30,  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  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  merger  with  Tower (see note 6) was  accounted  for as a purchase  in
accordance with Accounting  Principles  Board Opinion No. 16.  Accordingly,  the
fair value of the consideration  given by the Company,  in accordance with GAAP,
was  used as the  valuation  basis  for the  merger.  The  assets  acquired  and
liabilities  assumed by the  Company  were  recorded at the fair value as of the
closing  date of the  merger  and the  excess  of the  purchase  price  over the
historical  basis  of  the  net  assets  acquired  was  allocated  primarily  to
commercial real estate properties and real estate held for sale.

     The  minority  interests  at June 30, 1999  represent  an  approximate  16%
limited partnership  interest in the Operating  Partnership,  an approximate 28%
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  ("GAAP") 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 June 30, 1999 and for the
six month  periods  ended  June 30,  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 periods 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 June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative  Instruments and Hedging  activities",  which is
required to be adopted in years  beginning  after June 15, 1999.  The  Statement
permits  early  adoption as of the  beginning  of any fiscal  quarter  after its
issuance.  The Company expects to adopt the new Statement  effective  January 1,
2001.  The Company does not  anticipate  that the adoption of ths Statement will
have any effect on its results of operations or financial position.

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

3.     MORTGAGE NOTES PAYABLE

     As of June 30, 1999,  the Company had  approximately  $387 million of fixed
rate  mortgage  notes  which  mature at various  times  between  August 1999 and
November  2027.  The notes are secured by 25 properties  and two parcels of land
and have a weighted average interest rate of approximately 7.5%. In addition, as
of June 30,  1999,  the Company had a  construction  loan  payable  secured by a
development  property held for sale in the amount of approximately  $5.4 million
which was satisfied during July 1999.

4.       SENIOR UNSECURED NOTES

     As  of  June  30,  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    March 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 FACILITIES AND UNSECURED TERM LOAN

     As of June 30, 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 65 basis  points to 90 basis
points based on the Company's  investment  grade rating on its senior  unsecured
debt. 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 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 June 30,  1999,  the  Company  had  availability  under the Credit
Facility to borrow an additional $123 million (net of $28 million of outstanding
undrawn letters of credit).

     As of June 30, 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
June 30, 1999, the Company had $75 million outstanding under the Term Loan.

     On May 24, 1999, in conjunction with the acquisition of Tower (see Note 6),
the Company  obtained a $130  million  unsecured  bridge  facility  (The "Bridge
Facility") from UBS AG.  Interest rates on borrowings  under the Bridge Facility
were priced off of LIBOR plus  approximately 214 basis points. On July 23, 1999,
the Bridge Facility was repaid through a long term fixed rate secured borrowing.

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  and a 846,000 square foot industrial
property located in Cranbury, New Jersey for approximately $34 million which was
advanced by the Company.

     On April 13, 1999, the Company  received  approximately  $25.8 million from
the  redemption  of a  mortgage  note  receivable  which  secured  three  office
properties  located in Garden  City,  Long  Island,  encompassing  approximately
400,000 square feet. As a result, the Company recognized a gain of approximately
$4.5 million.  Such gain has been  included in other income on the  accompanying
consolidated statement of income.

     On June 7, 1999 the  Company  sold a 24,000  square  foot  office  property
located  in  Ossining,  New York for  approximately  $1.5  million.  As  partial
consideration  for the sale,  the Company  obtained a $1.2  million,  three year
purchase money mortgage.

     On June 15, 1999, the Company acquired the first mortgage note secured by a
42 story,  1.4 million square foot Class A office property  located at 919 third
Avenue in New York City for  approximately  $277.5  million.  The first mortgage
note  entitles  the  Company  to all the net cash  flow of the  property  and to
substantial  rights  regarding the operations of the property,  with the Company
anticipating  ultimately  obtaining title to the property.  This acquisition was
financed  with  proceeds  from the  issuance of six  million  shares of Series B
Convertible  Cumulative Preferred Stock (see note 7) and through draws under the
Credit Facility.  Current financial  accounting  guidelines provide that where a
lender has  virtually  the same risks and  potential  rewards as those of a real
estate  owner  it  should  recognize  the  full  economics  associated  with the
operations of the property.  As such, the Company has recognized the real estate
operations of the 919 Third Avenue in the accompanying consolidated statement of
income for the period from the date of acquisitions through June 30, 1999.

     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").

     On December 8, 1998, the Company, Metropolitan and Tower Realty Trust, Inc.
("Tower")  executed a merger agreement and on May 24, 1999 Tower was merged (the
"Merger")   into   Metropolitan,   with   Metropolitan   surviving  the  Merger.
Concurrently with the Merger, Tower Realty Operating  Partnership,  L.P. ("Tower
OP") was merged with and into a subsidiary of  Metropolitan.  The  consideration
issued  in the  mergers  was  comprised  of (i) 25% cash  (approximately  $107.2
million) and (ii) 75% of shares of Class B Exchangeable  Common Stock, par value
$.01 per share,  of the Company  (the "Class B Common  Stock")  (valued for GAAP
purposes at approximately $304.1 million).

     Under the terms of the transaction,  Metropolitan effectively paid 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,  which  dividend  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  controls  Metropolitan  and owns 100% of the  common  equity;
Crescent  owns  a $85  million  preferred  equity  investment  in  Metropolitan.
Crescent's  investment  accrues  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 $85  million
preferred 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 per
share.

     The  Tower  portfolio  acquired  in the  Merger  consists  of three  office
properties comprising  approximately 1.6 million square feet located in New York
City, one office property  located on Long Island and certain office  properties
and other real estate assets located outside the Tri-State Area.

     Prior to the closing of the Merger,  the Company  arranged  for the sale of
four of  Tower's  Class B New York  City  properties,  comprising  approximately
701,000 square feet for approximately  $84.5 million.  Subsequent to the closing
of the Merger,  the Company has sold a real estate joint venture  interest,  one
office property and one  development  property all located outside the Tri State
Area for  approximately  $58 million.  In  addition,  the  remaining  properties
located  outside of the Tri-State  Area are under  contract to sell or are being
held for sale.  The Company  currently  anticipates  that it will incur  certain
sales and  closing  costs in  connection  with the sale of several of the assets
located outside the Tri State Area. As a result, the Company has recorded a loss
reserve of approximately $4.4 million which has been included in other income on
the Company's consolidated statement of income.

7.       STOCKHOLDERS' EQUITY

     On May 24, 1999, in  conjunction  with the Tower  acquisition,  the Company
issued  11,694,567  shares of Class B Common  Stock  which were  valued for GAAP
purposes  at $26 per share  for  total  consideration  of  approximately  $304.1
million.  The shares of Class B Common  Stock are entitled to receive an initial
annual  dividend of $2.24 per share,  which  dividend  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.

     On May 26, 1999 the Board of  Directors  declared a dividend of $.37125 per
share of common stock payable on July 16, 1999 to its  shareholders of record as
of July 8, 1999. The dividend declared,  which related to the three months ended
June 30, 1999, is based upon an annual dividend of $1.485 per share.

     On May 26, 1999 the Board of Directors  declared a dividend on its Series A
Convertible  Cumulative Preferred Stock of $.4766 per share payable on August 2,
1999 to  shareholders of record on July 15, 1999. The dividend  declared,  which
relates to the three months  ended July 31, 1999 is based on an annual  dividend
of $1.906 per share.

     On June 2,  1999,  the  Company  issued  six  million  shares  of  Series B
Convertible  Cumulative  Preferred  Stock (the  "Series B Preferred  Stock") for
aggregate  proceeds of $150 million.  The Series B Preferred Stock is redeemable
by the Company on or after March 2, 2002 and is  convertible  into the Company's
common  stock at a price of $26.05  per  share.  The  Series B  Preferred  Stock
accumulate  dividends  at an  initial  rate of 7.85%  per  annum  with such rate
increasing  to 8.35% per annum on April 30, 2000 and to 8.85% per annum from and
after April 30, 2001.  Proceeds from the Series B Preferred  Stock offering were
used as  partial  consideration  in the  acquisition  of the 1st  mortgage  note
secured by 919 Third Avenue located in New York City.

     On July 9, 1999 the Board of  Directors  declared a dividend  of $.4231 per
share of Class B Common Stock payable on August 2, 1999 to its  shareholders  of
record as of July 21, 1999. The dividend  declared,  which related to the period
from May 24, 1999  through July 31,  1999,  is based upon an annual  dividend of
$2.24 per share.

     Basic net income per share on the  Company's  common  stock was  calculated
using the  weighted  average  number of shares  outstanding  of  40,284,511  and
39,636,815 for the three months ended June 30, 1999 and 1998,  respectively  and
40,167,445  and  38,913,713  for the six months  ended  June 30,  1999 and 1998,
respectively.

     Basic  net  income  per  share on the  Company's  Class B common  Stock was
calculated using the weighted average number of shares  outstanding of 4,883,446
and 2,455,213 for the three and six months ended June 30, 1999, 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 for the
Company's common stock (in thousands except for earnings per share data):

<TABLE>
<CAPTION>
                                                                   Three Months Ended June 30,   Six Months Ended June 30,
                                                                    -------------------------     ------------------------
                                                                        1999          1998          1999           1998
                                                                    -----------    ----------     ---------     ----------
<S>                                                                 <C>            <C>            <C>           <C>
Numerator:
    Income before dividends to preferred shareholders and
        income allocated to Class B  shareholders                   $    16,524    $   13,644     $  32,229     $   23,217
    Dividends to preferred shareholders                                  (5,329)       (3,733)       (9,710)        (3,733)
    Income allocated to Class B shareholders                             (1,731)          ---        (1,731)           ---
                                                                    -----------    ----------     ---------     ----------
    Numerator for basic and diluted earnings per share              $     9,464    $    9,911     $  20,788     $   19,484
                                                                    ===========    ==========     =========     ==========

Denominator:
    Denominator for basic earnings per share-weighted-average
        common shares                                                    40,285        39,637        40,167         38,914
    Effect of dilutive securities:
        Employee stock options                                              419           541           411            563
                                                                    -----------    ----------     ---------     ----------
    Denominator for diluted earnings per common share-
        adjusted weighted-average shares and assumed conversions         40,704        40,178        40,578         39,477
                                                                    ===========    ==========     =========     ==========
Basic earnings per common share:
    Net income per Class B common share                             $      0.23    $     0.25     $    0.52     $     0.50
                                                                    ===========    ==========     =========     ==========
Diluted earnings per common share:
    Diluted net income per Class B common share                     $      0.23    $     0.25     $    0.51     $     0.49
                                                                    ===========    ==========     =========     ==========
</TABLE>

     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 for the
Company's  Class B Common  Stock (in  thousands  except for  earnings  per share
data):

<TABLE>
<CAPTION>
                                                              Three Months Ended  Six Months Ended
                                                                 June 30, 1999     June 30, 1999
                                                                    ---------         ---------
<S>                                                                 <C>               <C>
Numerator:
    Income before dividends to preferred shareholders and
       income allocated to common  shareholders                     $  16,524         $  32,229
    Dividends to preferred shareholders                                (5,329)           (9,710)
    Income allocated to common shareholders                            (9,464)          (20,788)
                                                                    ---------         ---------
    Numerator for basic earnings per share                              1,731             1,731
Add back:
    Income allocated to common shareholders                             9,464            20,788
    Limited partners' interest in the operating partnership             1,827             4,068
                                                                    ---------         ---------
Numerator for diluted earnings per share                            $  13,022         $  26,587
                                                                    =========         =========

Denominator:
    Denominator for basic earnings per share- weighted-average
       Class B common shares                                            4,883             2,455
    Effect of dilutive securities:
    Weighted average common shares outstanding                         40,285            40,167
    Weighted average OP Units outstanding                               7,705             7,708
    Employee stock options                                                419               411
                                                                    ---------         ---------
    Denominator for diluted earnings per common share- adjusted
        weighted-average shares and assumed conversions                53,292            50,741
                                                                    =========         =========
Basic earnings per common share:
    Net income per Class B commonn share                            $    0.35         $    0.71
                                                                    =========         =========
Diluted earnings per common share:
    Diluted net income per Class B common share                     $    0.24         $    0.52
                                                                    =========         =========
</TABLE>

8.  SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (in thousands)


                                              Six Months Ended June 30,
                                              ------------------------
                                                  1999        1998
                                              -----------  -----------
Cash paid during the period for interest       $  24,662    $  17,869
                                               =========    =========
Interest capitalized during the period         $   4,400    $   3,263
                                               =========    =========

     On May 24, 1999, in  conjunction  with the Tower  acquisition,  the Company
issued  11,694,567  shares of Class B Common  Stock  which were valued  for GAAP
purposes  at  approximately  $304.1  million and  assumed  approximately  $133.4
million of indebtedness for a total non cash investment of approximately  $437.5
million.

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
office properties located within the New York City metropolitan area and Class A
suburban  office and  industrial  properties  located  and  operated  within the
Tri-State Area (the "Core Portfolio"). In addition, the Company's portfolio also
includes  22  industrial  properties  owned  by RMI.  The  Company  and RMI have
managing  directors who report directly to the Chief Operating Officer and Chief
Financial  Officer  who have been  identified  as the Chief  Operating  Decision
Makers because of their final authority over resource allocation,  decisions and
performance assessment.

     In  addition,  as the  Company  expects  to meet its short  term  liquidity
requirements  in part through the  unsecured  credit  facilities  and Term Loan,
interest  incurred on borrowings under the unsecured credit  facilities and Term
Loan is not considered as part of property operating  performance.  Further, the
Company does not consider the property operating performance of real estate held
for sale as a reportable segment.

     The accounting  policies of the  reportable  segments are the same as those
described in the summary of significant accounting policies.

     The following tables set forth the components of the Company's revenues and
expenses and other related  disclosures for the three months ended June 30, 1999
and 1998 (in thousands):

9.   Segment Disclosure
<TABLE>
<CAPTION>

                                                                              Three months ended June 30, 1999
                                                              ----------------------------------------------------------------
                                                                   Core                                          Consolidated
                                                                 Portfolio           RMI            Other            Totals
                                                              -------------     -----------     -------------    -------------
<S>                                                           <C>               <C>             <C>              <C>
Revenues:
     Base rents, tenant escalations and reimbursements        $      76,943     $     5,287     $       3,548    $      85,778
     Equity in earnings of real estate joint ventures
        and service  companies                                         ----            ----               512              512
     Other income                                                       144            ----             4,805            4,949
                                                              -------------     -----------     -------------    -------------
Total Revenues                                                       77,087           5,287             8,865           91,239
                                                              -------------     -----------     -------------    -------------
Expenses:
     Property expenses                                               25,554             816             1,169           27,539
     Marketing, general and administrative                            3,858             167             1,020            5,045
     Interest                                                         5,191             940            12,771           18,902
     Depreciation and amortization                                   16,212           1,287             1,628           19,127
                                                              -------------     -----------     -------------    -------------
Total Expenses                                                       50,815           3,210            16,588           70,613
                                                              -------------     -----------     -------------    -------------
Income before preferred dividends and distributions
     and minority interests'                                  $      26,272     $     2,077     $      (7,723)   $      20,626
                                                              =============     ===========     =============    =============
Total Assets                                                  $   2,082,784     $   194,898     $     616,186    $   2,893,868
                                                              =============     ===========     =============    =============
</TABLE>
<TABLE>
<CAPTION>

                                                                              Three months ended June 30, 1998
                                                              ----------------------------------------------------------------
                                                                   Core                                          Consolidated
                                                                 Portfolio           RMI            Other            Totals
                                                              -------------     -----------     -------------    -------------
<S>                                                           <C>               <C>             <C>              <C>
Revenues:
     Base rents, tenant escalations  and reimbursements       $      59,186     $     3,411     $        ----    $      62,597
     Equity in earnings of real estate joint ventures
        and service  companies                                         ----            ----               824              824
     Other income                                                       189            ----             2,709            2,898
                                                              -------------     -----------     -------------    -------------
Total Revenues                                                       59,375           3,411             3,533           66,319
                                                              -------------     -----------     -------------    -------------
Expenses:
     Property expenses                                               20,963             574              ----           21,537
     Marketing, general and administrative                            2,508             106             1,217            3,831
     Interest                                                         4,211             281             6,478           10,970
     Depreciation and amortization                                   10,899             778               780           12,457
                                                              -------------     -----------     -------------    -------------
Total Expenses                                                       38,581           1,739             8,475           48,795
                                                              -------------     -----------     -------------    -------------
Income before preferred dividends and distributions
     and minority interests'                                  $      20,794     $     1,672     $      (4,942)   $      17,524
                                                              =============     ===========     =============    =============
Total Assets                                                  $   1,425,924     $   113,937     $      85,106    $   1,624,967
                                                              =============     ===========     =============    =============
</TABLE>
     The following tables set forth the components of the Company's revenues and
expenses and other  related  disclosures  for the six months ended June 30, 1999
and 1998 (in thousands):

<TABLE>
<CAPTION>

                                                                                Six months ended June 30, 1999
                                                              ----------------------------------------------------------------
                                                                   Core                                          Consolidated
                                                                 Portfolio           RMI            Other            Totals
                                                              -------------     -----------     -------------    -------------
<S>                                                           <C>               <C>             <C>              <C>
Revenues:Revenues:
     Base rents, tenant  escalations and  reimbursements      $     142,966     $     9,900     $       3,548    $     156,414
     Equity in earnings of real estate joint ventures
        and service companies                                           ---             ---               889              889
     Other income                                                       213               2             9,830           10,045
                                                              -------------     -----------     -------------    -------------
Total Revenues                                                      143,179           9,902            14,267          167,348
                                                              -------------     -----------     -------------    -------------
Expenses:
     Property expenses                                               47,710           1,567             1,169           50,446
     Marketing, general and administrative                            7,800             298             1,339            9,437
     Interest                                                         9,751           1,217            21,878           32,846
     Depreciation and amortization                                   28,993           2,367             2,858           34,218
                                                              -------------     -----------     -------------    -------------
Total Expenses                                                       94,254           5,449            27,244          126,947
                                                              -------------     -----------     -------------    -------------
Income before preferred dividends and distributions
     and minority interests'                                  $      48,925     $     4,453     $     (12,977)   $      40,401
                                                              =============     ===========     =============    =============
</TABLE>
<TABLE>
<CAPTION>

                                                                                Six months ended June 30, 1998
                                                              ----------------------------------------------------------------
                                                                   Core                                          Consolidated
                                                                 Portfolio           RMI            Other            Totals
                                                              -------------     -----------     -------------    -------------
<S>                                                           <C>               <C>             <C>              <C>
Revenues:
     Base rents, tenant  escalations and  reimbursements      $     109,048     $     6,636     $         ---    $     115,684
     Equity in earnings of real estate joint ventures
        and service companies                                           ---             ---               665              665
     Other income                                                       222             ---             4,812            5,034
                                                              -------------     -----------     -------------    -------------
Total Revenues                                                      109,270           6,636             5,477          121,383
                                                              -------------     -----------     -------------    -------------
Expenses:
     Property expenses                                               38,458           1,116               ---           39,574
     Marketing, general and administrative                            5,238             206             1,983            7,427
     Interest                                                        7,683             536            13,278           21,497
     Depreciation and amortization                                   20,245           1,535             1,484           23,264
                                                              -------------     -----------     -------------    -------------
Total Expenses                                                       71,624           3,393            16,745           91,762
                                                              -------------     -----------     -------------    -------------
Income before preferred dividends and distributions
     and minority interests'                                  $      37,646     $     3,243     $     (11,268)   $      29,621
                                                              =============     ===========     =============    =============
</TABLE>

10. Subsequent Event

     On August 9, 1999, the Company  executed a contract for the sale of RMI and
three other big box  industrial  properties to American  Real Estate  Investment
Corporation ("REA"). In addition, the Company also entered into a sale agreement
with Matrix  Development Group ("Matrix")  relating to a first mortgage note and
certain industrial land holdings.  The combined total sale price is $310 million
(approximately  $42 million of which is payable to the Morris  Companies and its
affiliates) and will consist of a combination of cash, convertible preferred and
common stock of REA, preferred units of REA's operating  partnership,  relief of
debt and a purchase  money  mortgage  note secured by certain land that is being
sold to  Matrix.  The  closing  will  take  place  in  three  stages  which  are
anticipated to be completed during August 1999, December 1999, and April 2000.

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 real  estate  markets in and around the New York City
metropolitan area (the "Tri-State Area").

     The  Company  owns  all of the  interests  in its real  properties  through
Reckson Operating Partnership,  L. P. (the "Operating Partnership").  As of June
30,  1999,  the  Company  owned and  operated  92 office  properties  comprising
approximately  14.9 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 Tri-State  Area. In addition,
the Company owned or had contracted to acquire approximately 1,013 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  $306.1  million in
mortgage  notes  encumbering  three  Class  A  office  properties   encompassing
approximately  1.6 million 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").  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 June 30, 1999, the Company had advanced $46.4 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 June 30,  1999,
approximately  $36.9 million had been invested through the RSVP  Commitment,  of
which $16.3 million  represents  RSVP-controlled  joint  venture  REIT-qualified
investments  and  $20.6  million  represents  advances  to RSI  under  the  RSVP
Commitment.  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 nationwide. 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 June 30, 1999,
the Company has invested  approximately  $95.5  million for an  approximate  72%
controlling  interest.  In addition,  at June 30, 1999, the Company had advanced
approximately  $34 million to RMI to acquire a 846,000  square  foot  industrial
property.

     On August 9, 1999, the Company  executed a contract for the sale of RMI and
three other big box  industrial  properties to American  Real Estate  Investment
Corporation ("REA"). In addition, the Company also entered into a sale agreement
with Matrix  Development Group ("Matrix")  relating to a first mortgage note and
certain industrial land holdings.  The combined total sale price is $310 million
(approximately  $42 million of which is payable to the Morris  Companies and its
affiliates) and will consist of a combination of cash, convertible preferred and
common stock of REA, preferred units of REA's operating  partnership,  relief of
debt and a purchase  money  mortgage  note secured by certain land that is being
sold to  Matrix.  The  closing  will  take  place  in  three  stages  which  are
anticipated to be completed during August 1999, December 1999, and April 2000.

     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").

     On December 8, 1998, the Company, Metropolitan and Tower Realty Trust, Inc.
("Tower")  executed a merger agreement and on May 24, 1999 Tower was merged (the
"Merger")   into   Metropolitan,   with   Metropolitan   surviving  the  Merger.
Concurrently with the Merger, Tower Realty Operating  Partnership,  L.P. ("Tower
OP") was merged with and into a subsidiary of  Metropolitan.  The  consideration
issued  in the  mergers  was  comprised  of (i) 25% cash  (approximately  $107.2
million) and (ii) 75% of shares of Class B Exchangeable  Common Stock, par value
$.01 per share,  of the Company  (the "Class B Common  Stock")  (valued for GAAP
purposes at approximately $304.1 million).

     Under the terms of the transaction,  Metropolitan effectively paid 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,  which  dividend  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  controls  Metropolitan  and owns 100% of the  common  equity;
Crescent  owns  a $85  million  preferred  equity  investment  in  Metropolitan.
Crescent's  investment  accrues  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 $85  million
preferred 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 per
share.

     The  Tower  portfolio  acquired  in the  Merger  consists  of three  office
properties comprising  approximately 1.6 million square feet located in New York
City, one office property  located on Long Island and certain office  properties
and other real estate assets located outside the Tri-State Area.

     Prior to the closing of the Merger,  the Company  arranged  for the sale of
four of  Tower's  Class B New York  City  properties,  comprising  approximately
701,000 square feet for approximately  $84.5 million.  Subsequent to the closing
of the Merger,  the Company has sold a real estate joint venture  interest,  one
office property and one  development  property all located outside the Tri State
Area for  approximately  $58 million.  In  addition,  the  remaining  properties
located  outside of the Tri-State  Area are under  contract to sell or are being
held for sale.  The Company  currently  anticipates  that it will incur  certain
sales and  closing  costs in  connection  with the sale of several of the assets
located outside the Tri State Area. As a result, the Company has recorded a loss
reserve of approximately $4.4 million which has been included in other income on
the Company's consolidated statement of income.

     The market capitalization of the Company at June 30, 1999 was approximately
$3.2 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 $23.56 per
share/unit (based on the closing price of the Company's common stock on June 30,
1999),  the market  value of the  Company's  Class B Common  Stock of $23.88 per
share (based on the closing price of the Company's  Class B Common Stock on June
30,  1999)  ,the  Company's  preferred  stock of $25 per  share,  the  Operating
Partnership's preferred units of $1,000 per unit and the $1.4 billion (including
its share of joint venture debt and net of minority partners' interests) of debt
outstanding  at June 30, 1999. As a result,  the  Company's  total debt to total
market capitalization ratio at June 30, 1999 equaled approximately 42.7%.

RESULTS  OF OPERATIONS

     The Company's  total  revenues  increased by $24.9 million or 37.6% for the
three months  ended June 30, 1999 as compared to the 1998 period.  The growth in
total revenues is substantially  attributable to the Company's acquisition of 42
properties comprising  approximately 8.0 million square feet and the development
of three  properties  comprising  approximately  412,000  square feet.  Property
operating  revenues,  which  include  base  rents  and  tenant  escalations  and
reimbursements ("Property Operating Revenues") increased by $23.2 million or 37%
for the three  months  ended June 30, 1999 as compared to the 1998  period.  The
1999 increase in Property  Operating Revenues is comprised of approximately $2.4
million attributable to increases in rental rates and changes in occupancies and
approximately $20.8 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 $3.2 million for the three
months ended June 30, 1999 as compared to $2.1 million for the 1998 period.

     Property operating expenses,  real estate taxes and ground rents ("Property
Expenses")  increased by $6 million or 27.9% for the three months ended June 30,
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 the three months ended June 30, 1999 and 1998 were 67.9%
and  65.6%  respectively.  The  increase  in gross  operating  margins  reflects
increases  realized in rental rates and 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.

     Marketing,  general and  administrative  expenses increased by $1.2 million
for the three  months  ended June 30, 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  including  the  opening  of its New York City
division.  Marketing,  general and  administrative  expenses as a percentage  of
total  revenues  were 5.53% for the three months ended June 30, 1999 as compared
to 5.78% for the 1998 period.

     Interest expense  increased by $7.9 million for the three months ended June
30, 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  facilities  and Term Loan,  interest on the Company's  senior  unsecured
notes issued on March 26, 1999 and an increase in secured  borrowings  primarily
attributable   to  the  assumption  of  debt  in  conjunction   with  the  Tower
acquisition.  The weighted  average balance  outstanding on the Company's credit
facilities  and Term Loan was $352.1 million for the three months ended June 30,
1999 as compared to $306.9 million for the 1998 period.

     The Company's total revenues  increased by $46 million or 37.9% for the six
months  ended June 30 1999 as compared to the 1998  period.  The growth in total
revenues  is  substantially  attributable  to the  Company's  acquisition  of 70
properties comprising approximately 12.4 million square feet. Property Operating
Revenues  increased by $40.7  million or 35.2% for the six months ended June 30,
1999. As compared to the 1998 period.  The 1999  increase in Property  Operating
Revenues is comprised of $5.5 million  attributable to increases in rental rates
and changes in occupancies and $35.2 million  attributable  to 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 $4.6 million for
the six  months  ended June 30 1999 as  compared  to $3.6  million  for the 1998
period.

     Property Expenses  increased by $10.9 million for the six months ended June
30, 1999 as compared to the 1998 period.  These  increases  are primarily due to
the acquisition of properties.  Gross operating margins for the six months ended
June 30, 1999 and 1998 were 67.8% and 65.8%, respectively. The increase in gross
operating margins reflects  increases realized in rental rates and the Company's
ability to realize  certain  operating  efficiencies  as a result of operating a
larger  portfolio of properties with  concentration  of properties in office and
industrial parks or in its established sub-markets.

     Marketing,  general and administrative  increased by $2 million for the six
months ended June 30, 1999 as comparable to the 1998 period. The increase is due
to increased  costs of managing the  acquisition  properties and the increase in
corporate  management and administrative costs associated with the growth of the
Company including the opening of its New York City division.  Marketing, general
and administrative expenses as a percentage of total revenues were 5.64% for the
six months ended June 30, 1999 as compared to 6.12% for the 1999 period.

     Interest  expense  increased by $11.3 million for the six months ended June
30, 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  facilities  and Term Loan,  interest on the Company's  senior  unsecured
notes issued on March 26, 1999 and an increase in secured  borrowings  primarily
attributable   to  the  assumption  of  debt  in  conjunction   with  the  Tower
acquisition.  The weighted  average balance  outstanding on the Company's credit
facilities  was $429  million for the six months ended June 30, 1999 as compared
to $311.5 million for the 1998 period.

LIQUIDITY AND CAPITAL RESOURCES

     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.

     On May 24, 1999, in  conjunction  with the Tower  acquisition,  the Company
issued  11,694,567  shares of Class B Common  Stock  which were  valued for GAAP
purposes  at $26 per share  for  total  consideration  of  approximately  $304.1
million.  The shares of Class B Common  Stock are entitled to receive an initial
annual  dividend of $2.24 per share,  which  dividend  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.

     On June 2,  1999,  the  Company  issued  six  million  shares  of  Series B
Convertible  Cumulative  Preferred  Stock (the  "Series B Preferred  Stock") for
aggregate  proceeds of $150 million.  The Series B Preferred Stock is redeemable
by the Company on or after March 2, 2002 and is  convertible  into the Company's
common  stock at a price of $26.05  per  share.  The  Series B  Preferred  Stock
accumulate  dividends  at an  initial  rate of 7.85%  per  annum  with such rate
increasing  to 8.35% per annum on April 30, 2000 and to 8.85% per annum from and
after April 30, 2001.  Proceeds from the Series B Preferred  Stock offering were
used as partial  consideration  in the  acquisition  of the first  mortgage note
secured by 919 Third Avenue located in New York City.

     As of June 30,  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 65 basis  points to 90 basis
points based on the Company's  investment  grade rating on its senior  unsecured
debt. 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  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 June 30, 1999, the
Company had availability  under the Credit Facility to borrow an additional $123
million (net of $28 million of outstanding undrawn letters of credit).

     As of June 30, 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 June 30,
1999, the Company had $75 million outstanding under the Term Loan.

     On May 24, 1999, in conjunction  with the acquisition of Tower, the Company
obtained a $130 million  unsecured bridge facility (The "Bridge  Facility") from
UBS AG.  Interest rates on borrowings  under the Bridge Facility were priced off
of LIBOR plus  approximately  214 basis  points.  On July 23,  1999,  the Bridge
Facility was repaid through a long term fixed rate secured borrowing.

     The Company's indebtedness at June 30, 1999 totaled $1.4 billion (including
its share of joint venture debt and net of minority partners' interests) and was
comprised of $473.3 million  outstanding  under the credit  facilities (of which
$125  million  has been  subsequently  refinanced  with a long term  fixed  rate
secured borrowing),  $75 million outstanding under the Term Loan, $449.3 million
of  senior  unsecured  notes  and  approximately   $366.3  million  of  mortgage
indebtedness.   Based  on  the   Company's   total  market   capitalization   of
approximately  $3.2  billion at June 30,  1999  (calculated  based on the market
value of the  Company's  common  stock and OP Units,  assuming  conversion,  the
market  value of the  Company's  Class B Common  Stock,  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 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 six
month  period  ended   June  30,  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 Tenant Improvements and Leasing Commissions
<CAPTION>
                                                                                                     Six
                                                                                                     Months
                                                                                                     Ended
                                                                                       1995 -1998    June 30,
                                         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     $141,292
    Per Square Foot Improved           4.44         4.28          7.00          3.98        4.92         2.33
    Leasing Commissions            $144,925     $119,047      $415,822      $418,191    $274,496      $90,216
    Per Square Foot Leased             1.42         0.97          4.83          1.46        2.17         1.18
                                  ---------    ---------    ----------   -----------   ---------    ---------
     Total Per Square Foot            $5.86        $5.25        $11.83         $5.44       $7.09        $3.51
                                  =========    =========    ==========   ===========   =========    =========

  Westchester Office Properties
    Tenant Improvements           N/A           $834,764    $1,211,665      $711,160    $961,413     $376,574
    Per Square Foot Improved      N/A               6.33          8.90          4.45        6.67         4.12
    Leasing Commissions           N/A           $264,388      $366,257      $286,150    $326,204     $165,254
    Per Square Foot Leased        N/A               2.00          2.69          1.79        2.24         1.81
                                  ---------    ---------    ----------   -----------   ---------    ---------
     Total Per Square Foot        N/A              $8.33        $11.59         $6.24       $8.91        $5.93
                                  =========    =========    ==========   ===========   =========    =========

  Connecticut Office Properties<F1>
    Tenant Improvements           N/A            $58,000    $1,022,421      $202,880    $570,356      $45,445
    Per Square Foot Improved      N/A              12.45         13.39          5.92        9.66         6.47
    Leasing Commissions           N/A              $0.00      $256,615      $151,063    $181,190      $14,550
    Per Square Foot Leased        N/A               0.00          3.36          4.41        3.89         2.07
                                  ---------    ---------    ----------   -----------   ---------    ---------
     Total Per Square Foot        N/A             $12.45        $16.75        $10.33      $13.55        $8.54
                                  =========    =========    ==========   ===========   =========    =========
  New Jersey Office Properties
    Tenant Improvements           N/A          N/A           N/A            $654,877    $654,877     $119,323
    Per Square Foot Improved      N/A          N/A           N/A                3.78        3.78         2.20
    Leasing Commissions           N/A          N/A           N/A            $396,127    $396,127     $193,570
    Per Square Foot Leased        N/A          N/A           N/A                2.08        2.08         3.18
                                  ---------    ---------    ----------   -----------   ---------    ---------
     Total Per Square Foot        N/A          N/A           N/A               $5.86       $5.86        $5.38
                                  =========    =========    ==========   ===========   =========    =========
  Industrial Properties
    Tenant Improvements            $210,496     $380,334      $230,466      $283,842    $276,285     $150,222
    Per Square Foot Improved           0.90         0.72          0.55          0.76        0.73         0.15
    Leasing Commissions            $107,351     $436,213       $81,013      $200,154    $206,183     $681,474
    Per Square Foot Leased             0.46         0.82          0.19          0.44        0.48         0.67
                                  ---------    ---------    ----------   -----------   ---------    ---------
     Total Per Square Foot            $1.36        $1.54         $0.75         $1.20       $1.21        $0.82
                                  =========    =========    ==========   ===========   =========    =========
<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 June 30, 1999:

<TABLE>
Long Island Office Properties (excluding Omni):
<CAPTION>
                                            Percent
                                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                     19      79,657       2.7%       $21.31       $21.54
2000                     45     268,683       9.1%       $21.71       $23.29
2001                     40     187,022       6.3%       $22.15       $24.02
2002                     33     255,550       8.6%       $22.30       $23.71
2003                     52     342,577      11.6%       $21.81       $23.10
2004                     38     246,753       8.4%       $22.69       $25.17
2005 and thereafter      89   1,576,056      53.3%          ---          ---
                     ------  ----------   --------
Total                   316   2,956,298     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>
                                            Percent
                                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      10.2%       $31.71       $36.63
2001                      4      32,680       5.6%       $27.36       $33.63
2002                      4     129,351      22.0%       $24.78       $27.14
2003                      5      72,530      12.3%       $29.56       $29.71
2004                      4     112,414      19.1%       $25.98       $33.12
2005 and thereafter       8     181,502      30.8%          ---          ---
                     ------  ----------   --------
Total                    29     588,793     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>
                                            Percent
                                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                     22     296,298       5.2%       $5.12        $5.68
2000                     30   1,105,940      19.3%       $4.84        $5.19
2001                     28     676,925      11.8%       $5.70        $7.16
2002                     26     207,544       3.6%       $6.42        $7.09
2003                     30     724,434      12.7%       $5.26        $6.06
2004                     24     509,372       8.9%       $6.59        $7.15
2005 and thereafter      42   2,207,616      38.5%         ---          ---
                     ------  ----------   --------
Total                   202   5,728,129     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>
                                            Percent
                                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                      4      26,891       2.1%        $8.68        $9.44
2000                      7     111,040       8.7%        $8.20        $8.58
2001                      8     150,120      11.8%       $10.75       $11.31
2002                      3      67,967       5.3%       $10.54       $12.51
2003                      4     271,042      21.3%        $5.38        $5.25
2004                      6     105,303       8.3%       $11.93       $13.20
2005 and thereafter      11     540,277      42.5%          ---          ---
                     ------  ----------   --------
Total                    43   1,272,640     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>
                                            Percent
                                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                     21      77,887       2.8%       $19.74       $20.18
2000                     53     502,045      18.1%       $22.63       $22.86
2001                     46     334,819      12.1%       $21.83       $21.89
2002                     46     441,072      15.9%       $20.16       $20.40
2003                     35     245,108       8.8%       $21.80       $22.94
2004                     19     106,700       3.9%       $20.10       $20.34
2005 and thereafter      34   1,063,628      38.4%          ---          ---
                     ------  ----------   --------
Total                   254   2,771,259     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>
                                            Percent
                                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                     10      24,916       2.4%       $23.61       $23.78
2000                     26     114,054      11.0%       $22.16       $22.54
2001                     23     102,583       9.9%       $24.10       $25.18
2002                     15      89,774       8.7%       $27.32       $28.51
2003                     16      99,052       9.6%       $31.71       $32.46
2004                     15     201,091      19.4%       $20.77       $21.29
2005 and thereafter      25     403,160      39.0%          ---          ---
                     ------  ----------   --------
Total                   130   1,034,630     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>
                                            Percent
                                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                      5      41,540       2.5%       $20.06       $20.28
2000                     34     329,989      19.7%       $22.66       $22.83
2001                     21     260,195      15.5%       $18.09       $18.10
2002                     20     166,699      10.0%       $19.96       $20.06
2003                     18     327,593      19.6%       $18.09       $18.14
2004                     25     200,994      12.0%       $21.98       $21.94
2005 and thereafter      17     346,494      20.7%          ---          ---
                     ------  ----------   --------
Total                   140   1,673,504     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 York Office Properties:
<CAPTION>
                                            Percent
                                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      34,158       1.3%       $34.19       $35.37
2000                     19     946,214      34.9%       $32.61       $32.72
2001                     19     136,453       5.0%       $36.25       $36.38
2002                     16     194,873       7.2%       $32.20       $33.92
2003                      7      93,752       3.4%       $31.34       $31.75
2004                      8     107,589       4.0%       $34.48       $34.59
2005 and thereafter      68   1,197,158      44.2%          ---          ---
                     ------  ----------   --------
Total                   145   2,710,197     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>
                                            Percent
                                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                      7     387,686      12.7%        $3.95        $3.98
2000                      6     173,768       5.7%        $5.14        $5.31
2001                      1     243,751       8.0%        $7.50        $7.69
2002                      1     610,949      20.0%        $3.75        $3.96
2003                      3     113,916       3.8%        $4.53        $4.72
2004                      5     308,057      10.1%        $4.52        $4.87
2005 and thereafter       8   1,211,594      39.7%          ---          ---
                     ------  ----------   --------
Total                    31   3,049,721     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 facilities 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 has been completed, 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  one million  dollars in
connection with upgrading building management,  mechanical and computer systems.
The costs and  completion  of the project on which the  Company  believes it has
completed 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 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 was 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.

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 June 30,    Six Months Ended June 30,
                                                                 ------------------------     -------------------------
                                                                     1999         1998          1999            1998
                                                                 ----------     ---------     ----------     ----------
<S>                                                              <C>            <C>           <C>            <C>
Net income available to common shareholders                      $   11,195     $   9,911     $   22,519     $   19,484
Adjustments for Funds from Operations:
Add:
Real Estate depreciation and amortization                            18,406        12,181         33,094         22,787
Minority partners' interests in consolidated partnerships             1,615           683          2,783          1,216
Limited partners' interest in the operating partnership               1,827         2,762          4,068          4,753
Dividends and distributions on dilutive shares/units                  6,663           ---         11,704            ---
                                                                 ----------     ---------     ----------     ----------
                                                                     39,706        25,537         74,168         48,240
Subtract:
Amount distributable to minority partners in consolidated
    partnerships                                                      1,980           987          3,424          1,775
                                                                 ----------     ---------     ----------     ----------
Funds From Operations (FFO) - diluted                                37,726        24,550         70,744         46,465

Subtract:
Straight line rents                                                   3,178         2,024          4,514          3,488
Non-Incremental capitalized tenant improvements and leasing
    commissions                                                       1,236         1,592          2,055          2,815
Non-Incremental capitalized improvements                                838           848          1,479          1,473
                                                                 ----------     ---------     ----------     ----------
Cash available for distribution (CAD) - diluted                  $   32,474     $  20,086     $   62,696     $   38,689
                                                                 ==========     =========     ==========     ==========
Diluted FFO and CAD calculations:
    Weighted average shares/units                                    52,873        47,331         50,330         46,616
    Weighted average dilutive shares/units                           13,124           541         11,485            563
                                                                 ----------     ---------     ----------     ----------
        Diluted weighted average shares/units                        65,997        47,872         61,815         47,179
                                                                 ==========     =========     ==========     ==========
    FFO per weighted average share/unit                          $     0.57     $    0.51     $     1.14     $     0.98
                                                                 ==========     =========     ==========     ==========
    CAD per weighted average share/unit                          $     0.49     $    0.42     $     1.01     $     0.82
                                                                 ==========     =========     ==========     ==========
    Weighted average dividends per share/unit                    $     0.39     $    0.34     $     0.73     $     0.65
                                                                 ==========     =========     ==========     ==========
    FFO payout ratio                                                  68.0%         66.2%          63.7%          66.3%
                                                                 ==========     =========     ==========     ==========
    CAD payout ratio                                                  79.0%         80.4%          71.9%          79.3%
                                                                 ==========     =========     ==========     ==========
</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 June 30, 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               $    8,904   $  32,487   $  19,825   $ 15,002   $  19,742  $  735,681   $  831,641  $   831,641
   Average interest rate         8.85%       7.38%       7.43%      7.80%       7.65%       7.49%        7.51%

   Variable rate            $  205,000   $   5,373   $ 349,100   $    ---   $     ---  $      ---   $  559,473  $   559,473
   Average interest rate         6.93%       7.75%       5.93%        ---         ---         ---        6.39%
<FN>
<F1>
Includes  unamortized issuance discounts of $721,000 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  $5.6 million  annual  increase in interest
expense based on approximately $559.5 million outstanding at June 30, 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 June 30, 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            $    5,038   $ 277,548   $     ---   $  6,785   $     ---  $   50,990   $  340,361  $   340,361
      Average interest rate        10%       9.41%         ---     10.65%         ---      10.69%        9.63%
</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 - None
Item 2.  Changes in Securities and Use of Proceeds

          On June 2, 1999, the Company issued  6,000,000  shares of its Series B
          Convertible Cumulative Preferred Stock, for aggregate proceeds of $150
          million.  The  offering  was  made  pursuant  to  the  exemption  from
          registration  under  Section  4(2) of the  Securities  Act of 1933 and
          involved  only  institutional  accredited  investors.  Shares  of said
          Series B  Preferred  Stock are  redeemable  by the Company on or after
          March 2, 2002.  In  addition,  such  shares are  convertible  into the
          Company's common stock at a price of $26.05 per share (equivalent to a
          conversion  rate of .9597  shares  of common  stock for each  share of
          preferred stock).  The Series B Preferred Stock accumulates  dividends
          at an  initial  rate of 7.85% per annum with such rate  increasing  to
          8.35%  per annum on April  30,  2000 and to 8.85%  per annum  from and
          after April 30, 2001.

Item 3.  Defaults Upon Senior Securities - None
Item 4.  Submission of Matters to a Vote of Securities Holders - None

          On May 20, 1999 the Company held its annual  meeting of  stockholders.
          The matters on which the  stockholders  voted,  in person or by proxy,
          were (1) the  election of four  nominees as class I directors to serve
          until  the  2002  annual  meeting  of  stockholders  and  until  their
          respective successors are duly elected and qualified and (2) to ratify
          the  selection of the  independent  auditors of the Company.  The four
          nominees were elected and the auditors were  ratified.  The results of
          the voting are set forth below:

            Election of Directors        Votes Cast For      Votes Cast Against
            ---------------------        --------------      ------------------
               Scott H. Rechler             34,885,811               ----
               Herve A. Kevenides           34,885,711               ----
               Conrad D. Stephenson         34,885,711               ----
               Lewis Ranieri                34,885,711               ----

              Ratification of Auditors      34,880,930              21,980


          On May 24, 1999, the Company held a special meeting of stockholders at
          which the  stockholders  approved  the issuance by the Company of only
          shares  of its Class B Common  Stock as the  non-cash  portion  of the
          merger  consideration in the merger with Tower Realty Trust,  Inc. The
          results of the voting are set forth below:

                       Votes Cast For      Votes Cast Against
                       --------------      ------------------
                          14,277,014            4,357,113

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 June 30, 1999, the  registrant  filed the
         following reports:

          On May 11, 1999,  the Company  filed Form 8-K  announcing  that it had
          entered into an agreement to acquire the first  mortgage  note secured
          by 919 Third Avenue located in New York City.

          On June 7, 1999 the Company filed Form 8-K announcing  that on May 24,
          1999 (i) the  stockholders  of Tower Realty Trust,  Inc.  approved the
          merger of the two companies,  (ii) Metropolitan Operating Partnership,
          L. P. entered into a $130 million  unsecured credit  agreement,  (iii)
          that on May 26, 1999,  the Company  announced  Scott  Rechler had been
          named  Co-Chief  Executive  Officer  and  President  along  with other
          appointments,  (iv) that the Company had increased its dividend on its
          common stock to an  annualized  dividend  rate of $1.485 per share and
          (v) that on June 2, 1999,  the Company  issued six  million  shares of
          Preferred  Stock for  aggregate  proceeds  of $150  million.

          On June 25, 1999,  the Company filed Form 8-K  announcing  that it had
          closed on the  acquisition  of the first  mortgage note secured by 919
          Third Avenue located in New York City.


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 hereunto duly authorized.

                         RECKSON ASSOCIATES REALTY CORP.
                         Registrant

August 11, 1999          /s/   Scott H. Rechler
Date                     Scott H. Rechler, Co-Chief Executive Officer
                         and President

August 11, 1999          /s/   Michael Maturo
Date                     Michael Maturo, Executive Vice President,
                         Treasurer and Chief Financial Officer