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 September 30, 1999

                         Commission file number: 1-13762



                       RECKSON OPERATING PARTNERSHIP, L.P.
             (Exact name of registrant as specified in its charter)


Delaware                                                             11-3233647
--------                                                             ----------
(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


<PAGE>
                      RECKSON OPERATING PARTNERSHIP, L. P.
                                QUARTERLY REPORT
                 FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999

                               TABLE OF CONTENTS


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

Item 1.  Financial Statements

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

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

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

         Notes   to   the   Consolidated    Financial
         Statements (unaudited)

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 Operating Partnership, L.P.
                                Consolidated Balance Sheets
                      (Dollars in thousands, except for share amounts)
<CAPTION>
                                                             September 30,    December 31,
                                                                 1999            1998
                                                            --------------  --------------
                                                                   (Unaudited)
<S>                                                         <C>             <C>
Assets
Commercial real estate properties, at cost
    Land                                                    $     264,326   $     212,540
    Buildings and improvements                                  1,764,826       1,372,549
Developments in progress:
    Land                                                           61,487          69,143
    Development costs                                              78,955          82,901
Furniture, fixtures and equipment                                   6,378           6,090
                                                            --------------  --------------
                                                                2,175,972       1,743,223
Less accumulated depreciation                                    (202,212)       (159,049)
                                                            --------------  --------------
                                                                1,973,760       1,584,174
Investments in real estate joint ventures                          27,774          15,104
Investment in mortgage notes and notes receivable                 349,690          99,268
Cash and cash equivalents                                          38,928           2,228
Tenant receivables                                                  3,260           5,159
Investments in and advances to affiliates                         161,602          53,154
Deferred rent receivable                                           23,804          22,526
Prepaid expenses and other assets                                  62,493          46,372
Contract and land deposits and pre-acquisition costs                2,847           2,253
Deferred lease and loan costs                                      36,866          24,282
                                                            --------------  --------------
Total Assets                                                $   2,681,024   $   1,854,520
                                                            ==============  ==============
Liabilities
Mortgage notes payable                                      $     460,725   $     253,463
Unsecured credit facilities                                       253,600         465,850
Unsecured term loan                                                75,000          20,000
Senior unsecured notes                                            449,296         150,000
Accrued expenses and other liabilities                             53,758          50,779
Distributions payable                                              27,241          19,663
                                                            --------------  --------------
Total Liabilities                                               1,319,620         959,755
                                                            --------------  --------------
Commitments and other comments                                        ---             ---

Minority interests' in consolidated partnerships                   92,718          52,173
                                                            --------------  --------------
PARTNERS' CAPITAL

Preferred Capital, 15,234,518 and 9,234,518 units
    outstanding, respectively                                     413,065         263,126
General Partner's Capital:
Common units, 40,369,506 and 40,035,419 units
    outstanding, respectively                                     480,627         485,341
Class B Common Units, 10,913,763 and 0 units
    outstanding , respectively                                    283,477             ---
Limited Partners' Capital, 7,701,542 and 7,764,630
    units outstanding, respectively                                91,517          94,125
                                                            --------------  --------------
Total Partners' Capital                                         1,268,686         842,592
                                                            --------------  --------------
Total Liabilities and Partners' Capital                     $   2,681,024   $   1,854,520
                                                            ==============  ==============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
                                              Reckson Operating Partnership, L.P.
                                               Consolidated Statements of Income
                                (Unaudited and in thousands, except per share and share amounts)
<CAPTION>
                                                                  Three Months Ended                Nine Months Ended
                                                                     September 30,                     September 30,
                                                            --------------------------------  --------------------------------
                                                                  1999             1998             1999             1998
                                                            ---------------  ---------------  ---------------  ---------------
<S>                                                         <C>              <C>              <C>              <C>
Revenues:
Base rents                                                  $       95,474   $       60,275   $      234,759   $      162,846
Tenant escalations and reimbursements                               15,395            7,663           32,524           20,776
Equity in earnings of real estate joint ventures
    and service companies                                              483              536            1,372            1,201
Interest income on mortgage notes and notes
    receivable                                                         909            2,083            5,627            5,536
Gain on sales of real estate                                        10,052              ---           10,052              ---
Other                                                                3,418            1,038            8,350            2,565
                                                            ---------------  ---------------  ---------------  ---------------
Total Revenues                                                     125,731           71,595          292,684          192,924
                                                            ---------------  ---------------  ---------------  ---------------
Expenses:
Property operating expenses                                         40,679           22,202           91,125           61,774
Marketing, general and administrative                                6,312            4,170           14,936           11,116
Interest                                                            21,163           13,040           54,009           34,537
Depreciation and amortization                                       21,868           14,835           56,086           38,098
                                                            ---------------  ---------------  ---------------  ---------------
    Total Expenses                                                  90,022           54,247          216,156          145,525
                                                            ---------------  ---------------  ---------------  ---------------
Income before distributions to preferred unit holders,
    minority interests' and extraordinary items                     35,709           17,348           76,528           47,399
Preferred unit distributions                                        (7,985)          (5,034)         (19,016)          (9,202)
Minority partners' interest in consolidated
    partnerships income                                             (2,150)            (665)          (4,933)          (1,938)
                                                            ---------------  ---------------  ---------------  ---------------
Income before extraordinary items                                   25,574           11,649           52,579           36,259

Extraordinary items - (loss) on extinguishment
    of debts                                                          (629)          (1,993)            (629)          (1,993)
                                                            ---------------  ---------------  ---------------  ---------------
Net income available to common unit holders                 $       24,945   $        9,656   $       51,950   $       34,266
                                                            ===============  ===============  ===============  ===============
Net Income available to:
    General Partner - common units                          $       15,409   $        8,770   $       36,599   $       28,627
    General Partner - Class B Common Units                           6,596              ---            8,343              ---
    Limited Partners'                                                2,940              886            7,008            5,639
                                                            ---------------  ---------------  ---------------  ---------------
Total                                                       $       24,945   $        9,656   $       51,950   $       34,266
                                                            ===============  ===============  ===============  ===============
Net income per weighted average units:
General Partner - per common unit before
    extraordinary items                                     $         0.39   $         0.26   $         0.92   $         0.77
Extraordinary loss per general partnership common
    unit                                                             (0.01)           (0.04)           (0.01)           (0.04)
                                                            ---------------  ---------------  ---------------  ---------------
Net income per weighted average general partnership
    common unit                                             $         0.38   $         0.22   $         0.91   $         0.73
                                                            ===============  ===============  ===============  ===============
General Partner - per Class B Common Unit before
    extraordinary items                                     $         0.59   $          ---   $         1.55   $          ---
Extraordinary loss per Class B general partnership
    unit                                                             (0.01)             ---            (0.03)             ---
                                                            ---------------  ---------------  ---------------  ---------------
Net income per weighted average Class B general
    partnership unit                                        $         0.58   $          ---   $         1.52   $          ---
                                                            ===============  ===============  ===============  ===============
Limited Partners' -  per common unit before
    extraordinary items                                     $         0.39   $         0.16   $         0.92   $         0.77
Extraordinary loss per limited partnership unit                      (0.01)           (0.05)           (0.01)           (0.04)
                                                            ---------------  ---------------  ---------------  ---------------
Net income per weighted average limited partnership
    unit                                                    $         0.38   $         0.11   $         0.91   $         0.73
                                                            ===============  ===============  ===============  ===============
Weighted average common units outstanding:
    General Partner - common units                              40,367,000       40,012,000       40,235,000       39,284,000
    General Partner - Class B Common Units                      11,457,000              ---        5,489,000              ---
    Limited Partners'                                            7,702,000        7,741,000        7,706,000        7,715,000
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
                         Reckson Operating Partnership, L.P.
                        Consolidated Statements of Cash Flows)
                             (Unaudited and in thousands)
<CAPTION>
                                                                 Nine Months Ended
                                                                   September 30,
                                                            --------------------------
                                                                 1999          1998
                                                            ------------  ------------
<S>                                                         <C>           <C>
Cash Flows From Operating Activities:
 Net Income available to common unitholders                 $    51,950   $    34,266
Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization                                56,086        38,098
    Extraordinary loss on extinguishment of debt                    629         1,993
    Minority partners' interests in consolidated
        partnerships                                              4,933         1,938
    Gain of sale of interest in Reckson Executive
        Centers, LLC                                                ---            (9)
    Gain on sales of real estate, securities and
        mortgage redemption                                     (10,052)          (43)
    Distribution from a real estate joint venture                   337           379
    Equity in earnings of real estate joint ventures
        and service companies                                    (1,372)       (1,201)
Changes in operating assets and liabilities:
    Prepaid expenses and other assets                           (13,453)        4,984
    Tenant receivables                                            1,899           249
    Deferred rents receivable                                    (3,473)       (6,950)
    Real estate tax escrow                                       (2,405)          236
    Accrued expenses and other liabilities                       21,099        12,970
                                                            ------------  ------------
    Net cash provided by operating activities                   106,178        86,910
                                                            ------------  ------------
Cash Flows from Investing Activities:
    Purchases of commercial real estate properties             (265,400)     (466,959)
    Increase in deposits and pre-acquisition costs               (3,485)         (245)
    Investment in mortgage notes and notes
        receivable                                             (295,048)       12,257
    Additions to commercial real estate properties              (21,612)      (15,507)
    Increase in developments in progress                         (8,198)      (89,648)
    Payment of leasing costs                                    (11,851)       (6,254)
    Additions to furniture, fixtures and equipment                 (396)       (1,649)
    Investments in real estate joint ventures                   (11,875)       (7,760)
    Proceeds from sales of real estate, securities
        and mortgage redemption                                 269,324           809
                                                            ------------  ------------
    Net cash used in investing activities                      (348,541)     (574,956)
                                                            ------------  ------------
Cash Flows from Financing Activities:
    Principal payments on secured borrowings                     (3,163)       (4,006)
    Proceeds from issuance of senior unsecured
        notes net of issuance costs                             299,262           ---
    Payment of loan costs                                        (7,113)       (3,557)
    Investments in and advances to affiliates                  (108,476)      (32,218)
    Proceeds from secured borrowings                            125,547           ---
    Proceeds from unsecured credit facilities                   353,500       345,000
    Principal payments on unsecured credit
        facilities                                             (510,750)     (112,000)
    Repurchase of Class B Common Units                          (17,389)          ---
    Contributions of minority partners' in
        consolidated partnerships                                75,000           ---
    Contributions                                               149,397       314,430
    Distributions                                               (72,179)      (36,484)
    Distributions to minority partners' in
        consolidated partnerships                                (4,573)       (1,847)
                                                            ------------  ------------
Net cash provided by  financing activities                      279,063       469,318
                                                            ------------  ------------
Net increase (decrease) in cash and cash equivalents             36,700       (18,728)
Cash and cash equivalents at beginning of period                  2,228        21,676
                                                            ------------  ------------
Cash and cash equivalents at end of period                  $    38,928   $     2,948
                                                            ============  ============
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
                      RECKSON OPERATING PARTNERSHIP, L. P.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1999
                                  (unaudited)

1.   Organization and Formation of the Operating Partnership

     Reckson  Operating  Partnership,   L.  P.  (The  "Operating   Partnership")
commenced  operations on June 2, 1995. The sole general partner in the Operating
Partnership,   Reckson  Associates  Realty  Corp.  (the  "Company")  is  a  self
administered and self managed Real Estate Investment Trust ("REIT").

     The Operating  Partnership  executed various option and purchase agreements
whereby it issued units in the Operating Partnership ("Units") to the continuing
investors and assumed certain  indebtedness in exchange for interests in certain
property  partnerships,  fee simple and leasehold  interests in  properties  and
development  land,  certain business assets of the executive center entities and
100% of the  non-voting  preferred  stock  of the  management  and  construction
companies.

     As of September 30, 1999, the Operating  Partnership  owned and operated 77
office  properties  comprising  approximately  13.1  million  square  feet,  109
industrial properties  comprising  approximately 8.0 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").  The Operating  Partnership also
owns and  operates a 357,000  square  foot  office  building  located in Orlando
Florida.  In addition,  the  Operating  Partnership  owned or had  contracted to
acquire  approximately  377 acres of land in 16  separate  parcels  of which the
Operating  Partnership  can develop  approximately  2.8  million  square feet of
industrial  and  office  space.  The  Operating  Partnership  also has  invested
approximately  $312.9 million in mortgage notes encumbering three Class A office
properties encompassing approximately 1.6 million square feet, approximately 472
acres 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 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 September 30, 1999, the
Operating  Partnership  had advanced $83.6 million under the RSI Facility all of
which is  outstanding.  In  addition,  the  Operating  Partnership  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 September
30,  1999,  approximately  $54.8  million  had been  invested  through  the RSVP
Commitment,  of which $21.8 million  represents  RSVP  controlled  joint venture
REIT-qualified  investments and $33.0 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 the RSI
customer base which includes the tenants of RSI's  executive  suite business and
to  properties  owned by the  Operating  Partnership  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 Operating  Partnership 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  Operating  Partnership  has agreed to invest up to $150 million in
RMI. On September 27, 1999, the Operating  Partnership  sold its interest in RMI
to Keystone  Property Trust ("KTR")  (formerly  American Real Estate  Investment
Corporation) (see note 6).

     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 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. All of the assets  acquired in
the merger, other than a 357,000 square foot office property located in Orlando,
Florida, have been sold (see note 6).

Basis of Presentation

     The accompanying consolidated financial statements include the consolidated
financial  position  of  the  Operating  Partnership  and  its  subsidiaries  at
September 30, 1999 and December 31, 1998 and the results of its  operations  for
the three and nine months ended September 30, 1999 and 1998, respectively,  and,
its  cash  flows  for the  nine  months  ended  September  30,  1999  and  1998,
respectively.  The Operating Partnership's  investments in Metropolitan and Omni
Partners, L. P. ("Omni"), are reflected in the accompanying financial statements
on a consolidated  basis with a reduction for minority partners'  interest.  The
Operating  Partnership's  investment  in RMI was  reflected in the  accompanying
financial  statements  on a  consolidated  basis with a reduction  for  minority
partner's  interest  through  September  26, 1999.  On September  27, 1999,  the
Operating  Partnership  sold  its  interest  in RMI to KTR  (see  note  6).  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  Operating  Partnership,  in
accordance with generally accepted accounting  principles ("GAAP"),  was used as
the valuation basis for the merger. The assets acquired and liabilities  assumed
by the Operating  Partnership  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  operating  real
estate properties and real estate properties which have been sold.

     The minority  interests at September 30, 1999 represent an approximate  28%
interest in certain industrial joint venture properties formerly owned by RMI, a
convertible preferred interest in Metropolitan and a 40% interest in Omni.

     The accompanying  interim unaudited financial statements have been prepared
by the Operating Partnership's  management pursuant to the rules and regulations
of the Securities  and Exchange  Commission  ("SEC").  Certain  information  and
footnote  disclosure  normally included in the financial  statements prepared in
accordance  with 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  September  30,  1999 and for the  nine  month  periods  ended
September  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 Operating Partnership's audited financial
statements  and notes  thereto for the year ended  December 31, 1998 included in
the Operating Partnership's Form S-3 filed on March 11, 1999 with the SEC.

     In June 1999, the Financial Accounting Standards Board issued Statement No.
137,  amending  Statement No. 133,  "Accounting  for Derivative  Instruments and
Hedging  Activities",  which extended the required date of adoption to the years
beginning  after June 15, 2000.  The Statement  permits early adoption as of the
beginning of any fiscal  quarter after its issuance.  The Operating  Partnership
expects to adopt the new  Statement  effective  January 1, 2001.  The  Operating
Partnership  does not  anticipate  that the adoption of this Statement will have
any effect on its results of operations or financial position.

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

2.   Mortgage Notes Payable

     As of September  30, 1999,  the  Operating  Partnership  had  approximately
$460.7  million of fixed  rate  mortgage  notes  which  mature at various  times
between June 2000 and November  2027. The notes are secured by 23 properties and
have a weighted average interest rate of approximately 7.6%.

3.   Senior Unsecured Notes

     As of  September  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 Operating Partnership's unsecured credit facility.


4.   Unsecured Credit Facilities and Unsecured Term Loan

     As of September 30, 1999, the Operating  Partnership  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 Operating Partnership's  investment grade
rating  on  its  senior  unsecured  debt.  On  March  16,  1999,  the  Operating
Partnership  received its 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 Operating Partnership 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 September 30, 1999,
the Operating  Partnership had availability  under the Credit Facility to borrow
an  additional  $196.2  million  (net of $50.2  million of  outstanding  undrawn
letters of credit).

     As of September  30, 1999,  the  Operating  Partnership  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  currently  priced off of
LIBOR plus 175 basis  points.  The Term Loan matures on December 3, 1999 and the
Operating Partnership is currently in negotiations with the Chase Manhattan Bank
to extend and  refinance  the Term Loan.  At September  30, 1999,  the Operating
Partnership had $75 million outstanding under the Term Loan.

     On May 24, 1999, in conjunction with the acquisition of Tower (see Note 6),
the Operating Partnership 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.  As a result, certain deferred loan costs incurred in connection with
the  Bridge   Facility  were  written  off.  Such  amount  is  reflected  as  an
extraordinary loss in the accompanying consolidated statements of income.

5.       Partners' Capital

     On May 24, 1999, in conjunction with the Tower  acquisition,  the Operating
Partnership  issued  11,694,567  Class B  Common  Units of  general  partnership
interest to the Company  which were valued for GAAP purposes at $26 per unit for
total  consideration of approximately  $304.1 million.  The Class B Common Units
are entitled to receive an initial annual  distribution  of $2.24 per unit which
distribution  is subject to  adjustment  annually.  The Class B Common Units are
exchangeable  at any time, at the option of the holder,  into an equal number of
common  units  subject to  customary  antidilution  adjustments.  The  Operating
Partnership, at its option, may redeem any or all of the Class B Common Units in
exchange  for an equal  number of common  units at any time  following  the four
year, six-month anniversary of the issuance of the Class B Common Units.

     On June 2, 1999,  the  Operating  Partnership  issued six million  Series B
preferred units of general partnership  interests to the Company in exchange for
approximately  $150  million.  The Series B preferred  units have a  liquidation
preference of $25 per unit, and an initial  distribution 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.  The  Series  B  preferred  units  are
convertible to common units at a conversion  rate of .9597 common units for each
preferred unit and are redeemable by the Operating Partnership on or after March
2, 2002. Proceeds from the issuance of the Series B preferred units were used as
partial  consideration  in the acquisition of the first mortgage note secured by
919 Third Avenue located in New York City.

     On September 22, 1999, the Operating Partnership declared a distribution of
$.37125  per  common  partnership  unit  payable  on  October  19,  1999  to its
unitholders of record as of October 7, 1999. The  distribution  declared,  which
related to the three months ended  September  30, 1999,  is based upon an annual
distribution of $1.485 per unit.

     On September 22, 1999, the Operating Partnership declared a distribution on
the general  partner's  Series A preferred  units of $.4766 per unit  payable on
November 1, 1999. The distribution  declared,  which relates to the three months
ended October 31, 1999, is based on an annual distribution of $1.906 per unit.

     On September 22, 1999, the Operating Partnership declared a distribution on
the general  partner's  Series B preferred  units of $.49063 per unit payable on
November 1, 1999. The distribution  declared,  which relates to the three months
ended October 31, 1999, is based upon an annual distribution of $1.96 per unit.

     On September 22, 1999, the Operating Partnership declared a distribution of
$.56 per Class B common  partnership  unit  payable on  November  1, 1999 to the
general partner.  The distribution  declared,  which related to the three months
ended October 31, 1999, is based upon an annual distribution of $2.24 per unit.

     The Board of Directors of the Company has  authorized the purchase of up to
three million  shares of the Company's  Class B Common Stock.  In addition,  the
Board of Directors has also authorized the purchase of up to an additional three
million shares of the Company's Class B Common Stock and/or its common stock. As
of September 30, 1999, in conjunction  with the Company's buy back program,  the
Operating  Partnership  purchased  and  retired  780,804  Class B Common  Units,
previously held by the Company, for approximately $17.4 million.

     Net income per common  partnership unit and Class B Common partnership unit
is  determined  by  allocating  net income  after  preferred  distributions  and
minority partners' interest in consolidated  partnerships  income to the general
and limited  partners' based on their weighted  average  distribution per common
partnership units outstanding during the respective periods presented.

     Holders of preferred units of limited and general partnership  interest are
entitled  to  distributions  based on the  stated  rates of return  (subject  to
adjustment) for those units.


6.   Commercial Real Estate Investments

     During the three  months ended March 31, 1999,  the  Operating  Partnership
purchased  approximately  68.1 acres of vacant land in  Northern  New Jersey for
approximately $2.6 million. In addition, RMI purchased 74.6 acres of vacant land
for  approximately  $3.7 million and an 846,000 square foot industrial  property
located in Cranbury, New Jersey for approximately $34 million.  During the three
months  ended  September  30,  1999,  these  were  sold to KTR  and  the  Matrix
Development Group ("Matrix").

     On April 13, 1999, the Operating  Partnership 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  Operating  Partnership
recognized a gain of approximately $4.3 million.  Such gain has been included in
gain on sales of real  estate on the  accompanying  consolidated  statements  of
income.

     On June 7, 1999 the Operating  Partnership 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 Operating  Partnership  obtained a $1.2
million, three year purchase money mortgage.

     On June 15, 1999,  the Operating  Partnership  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 Operating  Partnership to all the net cash
flow of the property and to substantial  rights  regarding the operations of the
property, with the Operating Partnership anticipating to ultimately obtain title
to the property.  This  acquisition was financed with proceeds from the issuance
of six million  Series B preferred  units of general  partnership  interest (see
note  5)  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
Operating Partnership 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 acquisition..

     On August 9, 1999,  the Operating  Partnership  executed a contract for the
sale,  which  will take  place in three  stages,  of its  interest  in RMI which
consisted of 28 properties, comprising approximately 6.1 million square feet and
three other big box  industrial  properties  to KTR. In addition,  the Operating
Partnership  also entered into a sale agreement with Matrix  relating to a first
mortgage note and certain  industrial  land holdings  (the "Matrix  Sale").  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 KTR,  preferred
units of KTR's  operating  partnership,  relief  of debt  and a  purchase  money
mortgage note secured by certain land that is being sold to Matrix.

     During  September  1999,  the  Matrix  Sale and the first  stage of the RMI
closing occurred  whereby the Operating  Partnership sold its interest in RMI to
KTR for a combined sales price of approximately  $164.7 million (net of minority
partner's interest). The combined consideration consisted of approximately $86.3
million in cash,  $40 million of preferred  stock of KTR, $1.5 million in common
stock of KTR, approximately $26.7 million of debt relief and approximately $10.2
million in purchase  money  mortgages.  As a result,  the Operating  Partnership
incurred a gain of  approximately  $10.1  million.  Cash proceeds from the sales
were used primarily to repay borrowings under the Credit Facility.

     The  second  and  third  stages  of the RMI  closing  are  scheduled  to be
completed in December 1999 and April 2000,  respectively.  Both of the remaining
stages each consist of three  industrial  buildings and are being sold for total
consideration of $50 million and $48 million, respectively.

     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 Board of  Directors  of the Company has  authorized a purchase buy back
program for the Company's Class B Common Stock (see Note 5).

     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  consisted  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 and all
of the  property  located  outside  the Tri State  Area  other  than one  office
property  located in Orlando,  Florida for  approximately  $171.1  million.  The
combined  consideration  consisted of  approximately  $143.8 million in cash and
approximately  $27.3  million of debt relief.  Net cash  proceeds from the sales
were used primarily to repay borrowings  under the Credit Facility.  As a result
of incurring  certain sales and closing costs in connection with the sale of the
assets  located  outside the Tri State Area,  the Company has incurred a loss of
approximately  $4.4  million  which has been  included  in gain on sales of real
estate on the accompanying consolidated statements of income.

7.   Segment Disclosure

     The Operating Partnership'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  Operating  Partnership's  portfolio  also
includes  one office  property  located in  Orlando,  Florida and for the period
commencing January 6, 1998 and ending September 26, 1999,  industrial properties
which were owned by RMI. The Operating  Partnership  has 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 Operating  Partnership  expects to meet its short term
liquidity  requirements  in part  through  the  Credit  Facility  and Term Loan,
interest  incurred on borrowings  under the Credit Facility and Term Loan is not
considered as part of property  operating  performance.  Further,  the Operating
Partnership does not consider the property  operating  performance of the office
property located in Orlando, Florida as a part of its Core Portfolio.

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

     The   following   table  sets  forth  the   components   of  the  Operating
Partnership's  revenues and expenses and other related disclosures for the three
months ended September 30, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>
                                                                     Three months ended September 30, 1999
                                                            -----------------------------------------------------
                                                             Core                                   Consolidated
                                                             Portfolio       RMI         Other      Totals
                                                            -----------  -----------  -----------  --------------
<S>                                                         <C>          <C>          <C>          <C>
Revenues:
    Base rents, tenant escalations and
        reimbursements                                      $   97,787   $    5,480   $    7,602   $     110,869
    Equity in earnings of real estate joint ventures
        and service companies                                      ---          ---          483             483
    Other income                                                   209          ---       14,170          14,379
                                                            -----------  -----------  -----------  --------------
Total Revenues                                                  97,996        5,480       22,255         125,731
                                                            -----------  -----------  -----------  --------------
Expenses:
    Property expenses                                           37,202          823        2,654          40,679
    Marketing, general and administrative                        4,384          158        1,770           6,312
    Interest                                                     7,817          128       13,218          21,163
    Depreciation and amortization                               18,684        1,343        1,841          21,868
                                                            -----------  -----------  -----------  --------------
Total Expenses                                                  68,087        2,452       19,483          90,022
                                                            -----------  -----------  -----------  --------------
Income before distributions to preferred unitholders,
    minority interests' and extraordinary items             $   29,909   $    3,028   $    2,772   $      35,709
                                                            ===========  ===========  ===========  ==============
Total Assets                                                $2,104,169   $        0   $  576,855   $   2,681,024
                                                            ===========  ===========  ===========  ==============
</TABLE>

<TABLE>
<CAPTION>
                                                                     Three months ended September 30, 1998
                                                            -----------------------------------------------------
                                                             Core                                   Consolidated
                                                             Portfolio       RMI         Other      Totals
                                                            -----------  -----------  -----------  --------------
<S>                                                         <C>          <C>          <C>          <C>
Revenues:
    Base rents, tenant escalations and
        reimbursements                                      $   63,820   $    3,967   $      151   $      67,938
    Equity in earnings of real estate joint ventures
        and service companies                                      ---          ---          536             536
    Other income                                                   107          ---        3,014           3,121
                                                            -----------  -----------  -----------  --------------
Total Revenues                                                  63,927        3,967        3,701          71,595
                                                            -----------  -----------  -----------  --------------
Expenses:
    Property expenses                                           21,032          677          493          22,202
    Marketing, general and administrative                        3,349          158          663           4,170
    Interest                                                     4,427          278        8,335          13,040
    Depreciation and amortization                               12,560          934        1,341          14,835
                                                            -----------  -----------  -----------  --------------
Total Expenses                                                  41,368        2,047       10,832          54,247
                                                            -----------  -----------  -----------  --------------
Income before distributions to preferred unitholders,
    minority interests' and extraordinary items             $   22,559   $    1,920   $   (7,131)  $      17,348
                                                            ===========  ===========  ===========  ==============
Total Assets                                                $1,557,066   $  142,863   $   72,308   $   1,772,237
                                                            ===========  ===========  ===========  ==============
</TABLE>


     The   following   table  sets  forth  the   components   of  the  Operating
Partnership's  revenues and expenses and other related  disclosures for the nine
months ended September 30, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>
                                                                   Nine months ended September 30, 1999
                                                            ------------------------------------------------
                                                             Core                              Consolidated
                                                             Portfolio     RMI       Other     Totals
                                                            ---------  ----------  ---------  --------------
<S>                                                         <C>        <C>         <C>        <C>
Revenues:
    Base rents, tenant escalations and
        reimbursements                                      $240,753   $  15,380   $ 11,150   $     267,283
    Equity in earnings of real estate joint ventures
        and service companies                                    ---         ---      1,372           1,372
    Other income                                                 422           2     23,605          24,029
                                                            ---------  ----------  ---------  --------------
Total Revenues                                               241,175      15,382     36,127         292,684
                                                            ---------  ----------  ---------  --------------
Expenses:
    Property expenses                                         84,912       2,390      3,823          91,125
    Marketing, general and administrative                     12,184         456      2,296          14,936
    Interest                                                  17,179         671     36,159          54,009
    Depreciation and amortization                             47,677       3,710      4,699          56,086
                                                            ---------  ----------  ---------  --------------
Total Expenses                                               161,952       7,227     46,977         216,156
                                                            ---------  ----------  ---------  --------------
Income before distributions to preferred unitholders,
    minority interests' and extraordinary items             $ 79,223   $   8,155   $(10,850)  $      76,528
                                                            =========  ==========  =========  ==============
</TABLE>
<TABLE>
<CAPTION>
                                                                   Nine months ended September 30, 1998
                                                            ------------------------------------------------
                                                             Core                              Consolidated
                                                             Portfolio     RMI       Other     Totals
                                                            ---------  ----------  ---------  --------------
<S>                                                         <C>        <C>         <C>        <C>
Revenues:
    Base rents, tenant escalations and
        reimbursements                                      $172,868   $  10,603   $    151   $     183,622
    Equity in earnings of real estate joint ventures
        and service companies                                    ---         ---      1,201           1,201
    Other income                                                 329         ---      7,772           8,101
                                                            ---------  ----------  ---------  --------------
Total Revenues                                               173,197      10,603      9,124         192,924
                                                            ---------  ----------  ---------  --------------
Expenses:
    Property expenses                                         59,488       1,793        493          61,774
    Marketing, general and administrative                      8,587         364      2,165          11,116
    Interest                                                  12,110         814     21,613          34,537
    Depreciation and amortization                             32,804       2,469      2,825          38,098
                                                            ---------  ----------  ---------  --------------
Total Expenses                                               112,989       5,440     27,096         145,525
                                                            ---------  ----------  ---------  --------------
Income before distributions to preferred unitholders,
    minority interests' and extraordinary items             $ 60,208   $   5,163   $(17,972)  $      47,399
                                                            =========  ==========  =========  ==============
</TABLE>

8.   Non-Cash Investing and Financing Activities (in thousands)

                                              Nine Months Ended September 30,
                                              ------------------------------
                                                      1999        1998
                                                  ----------  -----------
Cash paid during the period for interest          $  40,341   $   29,411
                                                  ==========  ===========
Interest capitalized during the period            $   7,281   $    5,140
                                                  ==========  ===========

     On May 24, 1999, in conjunction with the Tower  acquisition,  the Operating
Partnership  issued  11,694,567  Class B Common Units 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.   Subsequent Events

     On October 15, 1999 the  Operating  Partnership  entered into a contract to
purchase  1350 Avenue of the  Americas,  a 540,000  square foot,  Class A office
property located in New York City for approximately  $126.5 million. The closing
is anticipated to occur in December,1999.

        As of October 25,  1999,  in  conjunction  with the  Company's  buy back
program,  the  Operating  Partnership  has  purchased  and retired an additional
430,000 Class B Common Units,  previously held by the Company, for approximately
$8.6 million.

     During  November  1999,  the Board of  Directors  of RSI and the  Operating
Partnership have approved amendments to the RSI Facility and the RSVP Commitment
which  are  necessary  for RSI to  proceed  with  certain  proposed  acquisition
financing.  As  consideration  for  such  approvals,  RSI  will pay a fee to the
Operating  Partnership in the form of approximately 176,000 shares of RSI common
stock.

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

     The following  discussion should be read in conjunction with the historical
financial  statements of Reckson  Operating  Partnership,  L. P. (the "Operating
Partnership") and related notes.

     The Operating  Partnership considers certain statements set forth herein to
be  forward-looking  statements  within  the  meaning  of  Section  27A  of  the
Securities Act of 1933, as amended,  and Section 21E of the Securities  Exchange
Act  of  1934,  as  amended,   with  respect  to  the  Operating   Partnership'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  Operating  Partnership'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 Operating
Partnership  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
Operating  Partnership  can  give no  assurance  that  its  expectation  will be
achieved.  Certain  factors  that  might  cause  the  results  of the  Operating
Partnership 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 Operating  Partnership's real estate markets.  Consequently,  such
forward-looking  statements  should be  regarded  solely as  reflections  of the
Operating  Partnership'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 Operating  Partnership,  which commenced  operations on June 2 1995, is
engaged in the  ownership,  management,  operation,  leasing and  development of
commercial real estate properties,  principally office and industrial buildings,
and also owns certain  undeveloped  land located in the New York  Tri-State area
(the "Tri-State Area").  Reckson  Associates Realty Corp. (the "Company"),  is a
self  administered and self managed Real Estate  Investment Trust ("REIT"),  and
serves as the sole general partner in the Operating Partnership.

     As of September 30, 1999, the Operating  Partnership  owned and operated 77
office  properties  comprising  approximately  13.1  million  square  feet,  109
industrial properties  comprising  approximately 8.0 million square feet and two
retail properties  comprising  approximately  20,000 square feet, located in the
Tri-State  Area.  The  Operating  Partnership  also owns and  operates a 357,000
square foot  office  building  located in Orlando,  Florida.  In  addition,  the
Operating Partnership owned or had contracted to acquire approximately 377 acres
of land in 16 separate  parcels of which the Operating  Partnership  can develop
approximately  2.8  million  square feet of  industrial  and office  space.  The
Operating Partnership also has invested approximately $312.9 million in mortgage
notes encumbering three Class A office properties encompassing approximately 1.6
million square feet,  approximately  472 acres 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 September 30, 1999, the Operating Partnership had advanced $83.6
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 September 30, 1999, approximately $54.8 million had been invested through the
RSVP Commitment, of which $21.8 million represents RSVP-controlled joint venture
REIT- qualified  investments and $33.0 million represents  advances to RSI under
the RSVP  Commitment.

     During  November  1999,  the Board of  Directors  of RSI and the  Operating
Partnership have approved amendments to the RSI Facility and the RSVP Commitment
which  are  necessary  for RSI to  proceed  with  certain  proposed  acquisition
financing.  As  consideration  for  such  approvals,  RSI  will pay a fee to the
Operating  Partnership in the form of approximately 176,000 shares of RSI common
stock.

     RSI  serves  as the  managing  member of RSVP.  RSI  invests  in  operating
companies that generally provide commercial  services to properties owned by the
Operating  Partnership  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 Operating  Partnership 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  Operating  Partnership  has agreed to invest up to $150 million in
RMI.

     On August 9, 1999,  the Operating  Partnership  executed a contract for the
sale,  which  will take  place in three  stages,  of its  interest  in RMI which
consisted of 28 properties, comprising approximately 6.1 million square feet and
three other big box  industrial  properties  to KTR. In addition,  the Operating
Partnership  also entered into a sale agreement with Matrix  relating to a first
mortgage note and certain  industrial  land holdings  (the "Matrix  Sale").  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 KTR,  preferred
units of KTR's  operating  partnership,  relief  of debt  and a  purchase  money
mortgage note secured by certain land that is being sold to Matrix.

     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 Board of  Directors  of the Company has  authorized a purchase buy back
program  for the  Company's  Class B Common  Stock (see  Liquidity  and  Capital
Resources).

     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  consisted  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 and all
of the  property  located  outside  the Tri State  Area  other  than one  office
property  located in Orlando,  Florida for  approximately  $171.1  million.  The
combined  consideration  consisted of  approximately  $143.8 million in cash and
approximately  $27.3  million of debt relief.  Net cash  proceeds from the sales
were used primarily to repay borrowings  under the Credit Facility.  As a result
of incurring  certain sales and closing costs in connection with the sale of the
assets  located  outside the Tri State Area,  the Company has incurred a loss of
approximately  $4.4  million  which has been  included  in gain on sales of real
estate on the Company's consolidated statements of income.

     The market  capitalization  of the Operating  Partnership  at September 30,
1999  was  approximately  $2.9  billion.  The  Operating   Partnership's  market
capitalization  is calculated based on the value of the Operating  Partnership's
common units and Class B Common Units (which, for this purpose, is assumed to be
the same per unit as the market value of a share of the  Company's  common stock
and Class B Common Stock),  the liquidation  preference  values of the Operating
Partnership's preferred units and the $1.2 billion (including its share of joint
venture  debt and net of minority  partners'  interest) of debt  outstanding  at
September 30, 1999. As a result, the Operating Partnership's total debt to total
market capitalization ratio at September 30, 1999 equaled approximately 42.4%.

Result of Operations

     The Operating  Partnership's  total revenues  increased by $54.1 million or
75.6% for the three  months  ended  September  30,  1999 as compared to the 1998
period.  The growth in total revenues is primarily  attributable  to the gain on
sales of real  estate  ($10.1  million or 18.6%),  the  Operating  Partnership's
acquisition  of the Tower  portfolio  on May 24, 1999  (including  $4.8  million
attributable  to properties  sold during the quarter) and the acquisition of the
first mortgage note secured by 919 Third Avenue.  Property  operating  revenues,
which include base rents and tenant  escalations and  reimbursements  ("Property
Operating  Revenues")  increased by $42.9  million or 63.2% for the three months
ended  September  30, 1999 as compared to the 1998 period.  The 1999 increase in
Property   Operating   Revenues  is  comprised  of  approximately  $3.9  million
attributable  to  increases  in rental  rates and  changes  in  occupancies  and
approximately $39.0 million  attributable to the acquisitions and development of
properties.  The  Company's  base  rent  was  increased  by  the  impact  of the
straight-line  rent  adjustment  by $2.1  million  for the  three  months  ended
September 30, 1999 as compared to $2.0 million for the 1998 period.

     Property operating expenses,  real estate taxes and ground rents ("Property
Expenses")  increased  by $18.5  million  or 83.2%  for the three  months  ended
September 30, 1999 as compared to the 1998 period. These increases are primarily
due to the  acquisition of the Tower  portfolio on May 24, 1999  (including $2.2
million  attributable to properties sold during the quarter) and the acquisition
of the first mortgage note secured by 919 Third Avenue,  which  operations  were
reflected in Property  Expenses.  Gross operating  margins  (defined as Property
Operating  Revenues  less Property  Expenses,  taken as a percentage of Property
Operating  Revenues) for the three months ended September 30, 1999 and 1998 were
63.3% and  67.3%  respectively.  The  decrease  in gross  operating  margins  is
primarily  attributable  to the  Operating  Partnership's  acquisitions  of full
service  office  buildings  which  generally  operate on lower  gross  operating
margins.

     Marketing,  general and  administrative  expenses increased by $2.1 for the
three  months  ended  September  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 5.02% for the three  months  ended  September  30, 1999 as
compared to 5.82% for the 1998 period.

     Interest  expense  increased  by $8.1  million for the three  months  ended
September 30, 1999 as compared to the 1998 period.  The increase is attributable
to an  increased  cost  attributable  to an  increased  average  balance  on the
Operating  Partnership's  credit  facilities  and  Term  Loan,  interest  on the
Operating  Partnership's  senior unsecured notes issued on March 26, 1999 and an
increase in secured borrowings primarily  attributable to the assumption of debt
(including  $26.9 million  relating to  properties  sold during the quarter) and
incurrence of new debt in conjunction with the Tower  acquisition.  The weighted
average balance outstanding on the Company's credit facilities and Term Loan was
$479.7  million for the three  months  ended  September  30, 1999 as compared to
$419.8 million for the 1998 period.

     The Operating  Partnership's  total revenues  increased by $99.8 million or
51.7 % for the nine  months  ended  September  30,  1999 as compared to the 1998
period.  The growth in total revenues is primarily  attributable  to the gain on
sales of real  estate  ($10.1  million or 10.1%),  the  Operating  Partnership's
acquisition  of the Tower  portfolio  on May 24, 1999  (including  $7.3  million
attributable  to  properties  that were sold) and the  acquisition  of the first
mortgage note secured by 919 Third Avenue. Property Operating Revenues increased
by $83.7  million  or 45.6% for the nine  months  ended  September  30,  1999 as
compared to the 1998 period. The 1999 increase in Property Operating Revenues is
comprised of $7.9 million  attributable to increases in rental rates and changes
in occupancies and $75.8 million attributable to acquisitions and development of
properties. The Operating Partnership's base rent was increased by the impact of
the  straight-line  rent  adjustment  by $6.8  million for the nine months ended
September 30, 1999 as compared to $5.7 million for the 1998 period.

     Property  Expenses  increased by $29.4 million or 47.5% for the nine months
ended  September  30, 1999 as compared to the 1998 period.  These  increases are
primarily due to the acquisition of the Tower portfolio  (including $3.1 million
attributable to properties sold during the third quarter) and the acquisition of
the first  mortgage  note  secured by 919 Third  Avenue,  which  operations  are
reflected  in Property  Expenses.  Gross  operating  margins for the nine months
ended  September  30,  1999 and 1998 were  65.9% and  66.4%,  respectively.  The
decrease  in  gross  operating  margins  reflects  The  Operating  Partnership's
acquisition of full service office  buildings which  generally  operate on lower
gross operating margins.

     Marketing,  general and  administrative  expenses increased by $3.8 million
for the nine months ended September 30, 1999 as compared 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  Operating  Partnership  including the opening of its New York
City division. Marketing, general and administrative expenses as a percentage of
total  revenues  were  5.1% for the nine  months  ended  September  30,  1999 as
compared to 5.8% for the 1998 period.

     Interest  expense  increased  by $19.5  million for the nine  months  ended
September 30, 1999 as compared to the 1998 period.  The increase is attributable
to an  increased  cost  attributable  to an  increased  average  balance  on the
Operating  Partnership's  credit  facilities  and  Term  Loan,  interest  on the
Operating  Partnership's  senior unsecured notes issued on March 26, 1999 and an
increase in secured borrowings primarily  attributable to the assumption of debt
(including  $26.9 million  relating to properties sold during the third quarter)
and  incurrence  of new debt in  conjunction  with the  Tower  acquisition.  The
weighted  average  balance  outstanding  on the Operating  Partnership's  credit
facilities  was $446.1  million for the nine months ended  September 30, 1999 as
compared to $348.0 million for the 1998 period.

Liquidity and Capital Resources

     During April 1998, the Company  contributed  approximately  $221 million to
the Operating  Partnership in exchange for 9,200,000  Series A preferred  units.
The Series A preferred  units have a  liquidation  preference of $25 per unit, a
distribution rate of 7.625 % and are convertible to the Operating  Partnership's
common units at a conversion rate of .8769 common units for each preferred unit.
Additionally,  with the  acquisition of six office  properties and the remaining
50%  interest  in a 365,000  square  foot  vacant  office  building  located  in
Westchester County, the Operating Partnership 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  Operating  Partnership's
unsecured credit facility.

     As of September 30, 1999, the Operating  Partnership  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 Operating Partnership's  investment grade
rating  on  its  senior  unsecured  debt.  On  March  16,  1999,  the  Operating
Partnership  received its 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 Operating Partnership 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 September 30, 1999,
the Operating  Partnership had availability  under the Credit Facility to borrow
an  additional  $196.2  million  (net of $50.2  million of  outstanding  undrawn
letters of credit).

     As of September  30, 1999,  the  Operating  Partnership  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  currently  priced off of
LIBOR plus 175 basis  points.  The Term Loan matures on December 3, 1999 and the
Operating Partnership is currently in negotiations with the Chase Manhattan Bank
to extend and  refinance  the Term Loan.  At September  30, 1999,  the Operating
Partnership had $75 million outstanding under the Term Loan.

     On May 24,  1999,  in  conjunction  with  the  acquisition  of  Tower,  the
Operating  Partnership  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.  As a result, certain deferred loan costs incurred in connection with
the Bridge  Facility  were  written  off.  Such amount has been  reflected as an
extraordinary  loss in the Operating  Partnership's  consolidated  statements of
income.

     On May 24, 1999, in conjunction with the Tower  acquisition,  the Operating
Partnership  issued  11,694,567  Class B  Common  Units of  general  partnership
interest to the Company  which were valued for GAAP purposes at $26 per unit for
total  consideration of approximately  $304.1 million.  The Class B Common Units
are entitled to receive an initial annual  distribution of $2.24 per unit, which
distribution  is subject to  adjustment  annually.  The Class B Common Units are
exchangeable  at any time, at the option of the holder,  into an equal number of
common  units  subject to  customary  antidilution  adjustments.  The  Operating
Partnership, at its option, may redeem any or all of the Class B Common Units in
exchange  for an equal  number of common  units at any time  following  the four
year, six-month anniversary of the issuance of the Class B Common Units.

     The Board of Directors of the Company has  authorized the purchase of up to
three million  shares of the Company's  Class B Common Stock.  In addition,  the
Board of Directors has also authorized the purchase of up to an additional three
million shares of the Company's Class B Common Stock and/or its common stock. As
of September 30, 1999, in conjunction  with the Company's buy back program,  the
Operating  Partnership  purchased  and  retired  780,804  Class B Common  Units,
previously held by the Company, for approximately $17.4 million.

     On June 2, 1999,  the  Operating  Partnership  issued six million  Series B
preferred units of general partnership  interests to the Company in exchange for
approximately  $150  million.  The Series B preferred  units have a  liquidation
preference of $25 per unit, and an initial  distribution 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.  The  Series  B  preferred  units  are
convertible to common units at a conversion  rate of .9597 common units for each
preferred unit and are redeemable by the Operating Partnership on or after March
2, 2002. Proceeds from the issuance of the Series B preferred units were used as
partial  consideration  in the acquisition of the first mortgage note secured by
919 Third Avenue located in New York City.

     The Operating Partnership's indebtedness at September 30, 1999 totaled $1.2
billion  (including  its  share of joint  venture  debt and net of the  minority
partners'  interests) and was comprised of $253.6 million  outstanding under the
credit facilities,  $75 million  outstanding under the Term Loan, $449.3 million
of  senior  unsecured  notes  and  approximately   $460.7  million  of  mortgage
indebtedness.  Based on the Operating  Partnership's total market capitalization
of  approximately  $2.9 billion at September 30, 1999  (calculated  based on the
value of the  Operating  Partnership's  common  units and  Class B Common  Units
(which, for this purpose, is assumed to be the same per unit as the market value
of a share of the Company's  common stock and Class B Common Stock),  the stated
value  of  the  Operating   Partnership's   preferred   units),   the  Operating
Partnership's  debt  represented   approximately   42.4%  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 Operating  Partnership.  The Operating
Partnership  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 Operating Partnership 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
Operating  Partnership.   The  Operating  Partnership  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 Operating  Partnership  anticipates that the
current  balance of cash and cash  equivalents  and cash  flows  from  operating
activities,  together with cash  available  from  borrowings and debt and equity
offerings,  will be adequate to meet the capital and liquidity  requirements  of
the Operating Partnership in both the short and long-term.

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 Operating Partnership's office and industrial properties for
the nine month period ended  September  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 Capital Expenditures
<CAPTION>
                                                                                                   Nine
                                                                                                   Months
                                                                                                   Ended
                                                                                       1995 -1998  Sept. 30,
                                         1995         1996         1997         1998    Average    1999
                                  ------------------------------------------------------------------------------
<S>                               <C>          <C>          <C>          <C>          <C>          <C>
Office Properties
     Total                           $364,545     $375,026   $1,108,675   $2,004,976     $963,305    $1,513,209
     Per Square Foot                     0.19         0.13         0.22         0.23         0.19          0.16

Industrial Properties
     Total                           $290,457     $670,751     $733,233   $1,205,266     $724,927      $791,704
     Per Square Foot                     0.08         0.18         0.15         0.12         0.13          0.09
</TABLE>

<TABLE>
Non-Incremental Revenue Generating Tenant Improvements and Leasing Commissions
<CAPTION>
                                                                                                   Nine
                                                                                                   Months
                                                                                                   Ended
                                                                                       1995 -1998  Sept. 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      $542,538
     Per Square Foot Improved            4.44         4.28         7.00         3.98         4.92          4.15
     Leasing Commissions             $144,925     $119,047     $415,822     $418,191     $274,496      $190,105
     Per Square Foot Leased              1.42         0.97         4.83         1.46         2.17          0.88
                                  ------------ ------------ ------------ ------------ ------------ -------------
     Total Per Square Foot              $5.86        $5.25       $11.83        $5.44        $7.09         $5.03
                                  ============ ============ ============ ============ ============ =============


Westchester Office Properties
     Tenant Improvements              N/A         $834,764   $1,211,665     $711,160     $961,413      $865,536
     Per Square Foot Improved         N/A             6.33         8.90         4.45         6.67          6.25
     Leasing Commissions              N/A         $264,388     $366,257     $286,150     $326,204      $334,783
     Per Square Foot Leased           N/A             2.00         2.69         1.79         2.24          2.42
                                  ------------ ------------ ------------ ------------ ------------ -------------
     Total Per Square Foot            N/A            $8.33       $11.59        $6.24        $8.91         $8.67
                                  ============ ============ ============ ============ ============ =============

Connecticut Office Properties <F1>
     Tenant Improvements              N/A          $58,000   $1,022,421     $202,880     $570,356      $108,881
     Per Square Foot Improved         N/A            12.45        13.39         5.92         9.66          4.89
     Leasing Commissions              N/A            $0.00     $256,615     $151,063     $181,190       $89,142
     Per Square Foot Leased           N/A             0.00         3.36         4.41         3.89          4.00
                                  ------------ ------------ ------------ ------------ ------------ -------------
     Total Per Square Foot            N/A           $12.45       $16.75       $10.33       $13.55         $8.89
                                  ============ ============ ============ ============ ============ =============

New Jersey Office Properties
     Tenant Improvements              N/A          N/A          N/A         $654,877     $654,877      $190,958
     Per Square Foot Improved         N/A          N/A          N/A             3.78         3.78          2.10
     Leasing Commissions              N/A          N/A          N/A         $396,127     $396,127      $346,831
     Per Square Foot Leased           N/A          N/A          N/A             2.08         2.08          3.81
                                  ------------ ------------ ------------ ------------ ------------ -------------
     Total Per Square Foot            N/A          N/A          N/A            $5.86        $5.86         $5.91
                                  ============ ============ ============ ============ ============ =============

Industrial Properties
     Tenant Improvements             $210,496     $380,334     $230,466     $283,842     $276,285      $249,807
     Per Square Foot Improved            0.90         0.72         0.55         0.76         0.73          0.20
     Leasing Commissions             $107,351     $436,213      $81,013     $200,154     $206,183      $753,855
     Per Square Foot Leased              0.46         0.82         0.19         0.44         0.48          0.61
                                  ------------ ------------ ------------ ------------ ------------ -------------
     Total Per Square Foot              $1.36        $1.54        $0.75        $1.20        $1.21         $0.81
                                  ============ ============ ============ ============ ============ =============
<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 September 30, 1999:

<TABLE>
Long Island Office Properties (excluding Omni):
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                     10       41,860          1.4%      $20.65       $21.28
2000                     43      254,282          8.6%      $21.86       $21.11
2001                     40      187,022          6.3%      $22.15       $24.16
2002                     32      253,748          8.6%      $22.31       $24.37
2003                     52      345,662         11.7%      $21.81       $24.60
2004                     43      259,947          8.8%      $22.83       $25.29
2005 and thereafter      94    1,623,174         54.7%         ---          ---
                     ------- ------------ ------------
Total                   314    2,965,695        100.0%
                     ======= ============ ============
<FN>
<F1>    Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>    Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
Omni:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                   ---
2000                      3       56,211          9.5%      $32.15       $36.99
2001                      4       32,680          5.6%      $27.36       $33.63
2002                      4      129,351         22.0%      $30.00       $33.26
2003                      5       72,530         12.3%      $29.56       $34.29
2004                      4      112,414         19.1%      $26.03       $33.16
2005 and thereafter       9      185,607         31.5%         ---          ---
                     ------- ------------ ------------
Total                    29      588,793       100.00%
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
Industrial Properties:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                     13      145,928          3.1%       $5.11        $5.98
2000                     32      491,504         10.6%       $4.97        $5.63
2001                     31      732,183         15.8%       $5.69        $7.02
2002                     26      221,744          4.8%       $6.25        $6.96
2003                     30      724,434         15.6%       $5.26        $5.98
2004                     27      522,242         11.3%       $6.65        $7.18
2005 and thereafter      44    1,799,267         38.8%         ---          ---
                     ------- ------------ ------------
Total                   203    4,637,302       100.00%
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
Research and Development Properties:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                      3       14,039          1.1%      $11.71       $12.87
2000                      6      101,419          8.0%       $7.77        $8.01
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        $6.41
2004                      7      107,344          8.4%      $11.87       $13.13
2005 and thereafter      13      560,554         44.1%         ---          ---
                     ------- ------------ ------------
Total                    44    1,272,485       100.00%
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
Westchester Office Properties:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                     13       30,593          1.1%      $22.77       $20.40
2000                     51      366,033         13.4%      $22.42       $22.74
2001                     44      322,090         11.8%      $22.03       $22.34
2002                     48      457,396         16.7%      $20.47       $20.70
2003                     35      246,705          9.0%      $21.75       $22.98
2004                     25      134,039          4.9%      $20.42       $21.41
2005 and thereafter      38    1,176,001         43.0%         ---          ---
                     ------- ------------ ------------
Total                   254    2,732,857        100.0%
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
Stamford Office Properties:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                      7       16,966          1.7%      $22.58       $21.84
2000                     26      106,290         10.4%      $22.41       $22.78
2001                     25      103,383         10.1%      $24.14       $25.22
2002                     16       91,088          8.9%      $27.20       $28.43
2003                     14       93,385          9.1%      $31.89       $32.69
2004                     19      213,768         20.9%      $21.23       $22.20
2005 and thereafter      23      399,020         39.0%         ---          ---
                     ------- ------------ ------------
Total                   130    1,023,900        100.0%
                     ======= ============ ============
<FN>
<F1>
Per square foot rental rate represents annualized straight line
rent as of the lease expiration date.
<F2>
Per square foot rental rate represents annualized base rent
as of the lease expiration date plus non-recoverable operating
expense pass-throughs.
</FN>
</TABLE>
<TABLE>
New Jersey Office Properties:
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                    ---          ---          0.0%         ---          ---
2000                     30      285,661         15.8%      $23.30       $23.72
2001                     22      261,036         14.5%      $18.09       $18.29
2002                     21      182,636         10.1%      $19.82       $20.02
2003                     18      327,593         18.1%      $17.90       $18.01
2004                     31      217,955         12.1%      $22.32       $22.87
2005 and thereafter      23      530,546         29.4%         ---          ---
                     ------- ------------ ------------
Total                   145    1,805,427       100.00%
                     ======= ============ ============
<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 City
<CAPTION>
                                               %
                                Total       of Total       Per
                               Rentable     Rentable      Square        Per
      Year of        Number     Square       Square        Foot        Square
       Lease           of        Feet         Feet         S/L          Foot
     Expiration      Leases    Expiring     Expiring    Rent <F1>    Rent <F2>
--------------------------------------------------------------------------------
<S>                  <C>     <C>          <C>          <C>          <C>
1999                      2        8,010          0.3%      $36.46       $36.47
2000                     10      267,904          9.3%      $28.53       $31.91
2001                     17      138,472          4.8%      $35.10       $32.75
2002                     14      176,539          6.1%      $32.37       $33.18
2003                      6       93,752          3.3%      $31.16       $31.64
2004                      8      108,110          3.8%      $34.31       $33.76
2005 and thereafter      76    2,081,702         72.4%         ---          ---
                     ------- ------------ ------------
Total                   133    2,874,489       100.00%
                     ======= ============ ============
<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  provide  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 also 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  Operating  Partnership  believes  that
inflationary  increases in expenses will generally 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 are sensitive to
inflation.

Impact of Year 2000

     Some of the Operating  Partnership'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 Operating  Partnership 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 Operating Partnership'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 Operating  Partnership has
received assurances from its contractors that all of the Operating Partnership'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
Operating  Partnership  cannot  guarantee that all contractors  will comply with
their  assurances and therefore,  the Operating  Partnership  may not be able to
determine year 2000 compliance of those contractors. At that time, the Operating
Partnership will determine the extent to which the Operating Partnership will be
able to replace non compliant  contractors.  The Operating  Partnership 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 Operating Partnership.

     To date, the Operating  Partnership 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 Operating
Partnership  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 Operating Partnership 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
Operating  Partnership  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 Operating  Partnership  would be
required  to  process  transactions,  such  as the  issuance  of  disbursements,
manually  until  an  alternative  system  was  implemented.   If  the  Operating
Partnership was not successful in implementing  their year 2000 compliance plan,
the  Operating  Partnership  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 operating partnership which is a general partner 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 restructurings 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 principles 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 Operating  Partnership'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  Operating  Partnership's  calculation  of FFO  presented  herein may not be
comparable to similarly titled measures as reported by other companies.

The following  table presents the Operating  Partnership's  FFO  calculation (in
thousands):

<TABLE>
<CAPTION>
                                                                   Three Months Ended                Nine Months Ended
                                                                      September 30,                     September 30,
                                                            --------------------------------  --------------------------------
                                                                  1999             1998             1999             1998
                                                            ---------------  ---------------  ---------------  ---------------
<S>                                                         <C>              <C>              <C>              <C>
Income before extraordinary items                           $       25,574   $       11,649   $       52,579   $       36,259
Less:
    Extraordinary loss                                                 629            1,993              629            1,993
                                                            ---------------  ---------------  ---------------  ---------------
Net Income                                                          24,945            9,656           51,950           34,266
Adjustment for Funds From Operations:
Add:
    Real Estate Depreciation and Amortization                       21,312           14,035           54,406           36,822
    Minority interests in consolidated partnerships                  2,150              665            4,933            1,938
    Extraordinary loss                                                 629            1,993              629            1,993
Less:
Gain on sales of real estate                                        10,052              ---           10,052              ---
Amount distributed to minority partners in
    consolidated partnerships                                        2,607            1,190            6,031            2,989
                                                            ---------------  ---------------  ---------------  ---------------
Funds From Operations                                       $       36,377   $       25,159   $       95,835   $       72,030
                                                            ===============  ===============  ===============  ===============
Weighted average units outstanding                                  59,526           47,753           53,430           46,999
                                                            ===============  ===============  ===============  ===============
</TABLE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

     The Operating Partnership 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 on terms that are
advantageous   to  the  Operating   Partnership  or  through   general   partner
contributions.

     The following table sets forth the Operating  Partnership's  long term debt
obligations  by  scheduled  principal  cash flow  payments  and  maturity  date,
weighted  average  interest  rates and  estimated  fair market value  ("FMV") at
September 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             $ 1,347   $33,883   $ 21,332   $ 14,980   $  6,724   $   832,459   $ 910,725   $ 910,725
  Weighted average
     interest rate         7.96%     7.40%      7.45%      7.89%      8.00%         7.52%       7.53%

  Variable rate          $75,000   $   ---   $253,600   $    ---   $    ---   $       ---   $ 328,600   $ 328,600
  Weighted average
     interest rate         7.13%       ---      6.28%        ---        ---           ---       6.47%
<FN>
<F1>
Includes  unamortized issuance discounts of $704,000 on the 5 and 10 year senior
unsecured notes issued on March 26, 1999 which are due at maturity.
</FN>
</TABLE>

     In addition, the Operating Partnership 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  $3.3  million  annual
increase in interest expense based on approximately  $328.6 million  outstanding
at September 30, 1999.

     The following table sets forth the Operating  Partnership's  mortgage notes
and note receivables by scheduled maturity date, weighted average interest rates
and estimated FMV at September 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        $   685   $282,727   $     15   $ 10,624   $    ---   $    53,490   $ 347,541   $ 347,541
  Weighted average
     interest rate   10.49%      9.42%      9.00%     10.34%        ---        10.68%       9.64%
</TABLE>

     The fair value of the  Operating  Partnership'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.

<PAGE>

PART II - OTHER INFORMATION

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

        The Board of Directors of the Company has approved certain amendments to
        the governance provisions of the Company.

        The Board of  Directors  has  approved  an  amendment  to the  Company's
        charter to opt into a provision of the Maryland General  Corporation Law
        (the  "MGCL")  requiring  a vote of  two-thirds  of the common  stock to
        remove one or more  directors.  Previously the entire board of directors
        could be removed, at any time, with or without cause, by the affirmative
        vote of a majority of the votes  entitled to be cast for the election of
        directors.

        Under Section 3-805 of the MGCL (a recent  amendment) a corporation  may
        raise the threshold  amount of shares that must be held by  stockholders
        calling a special  stockholder  meeting to a majority of all votes to be
        cast at such  meeting.  In  accordance  the  with  MGCL,  the  Board  of
        Directors has approved an amendment to the  Company's by laws  providing
        that a special meeting of stockholders  need only be called if requested
        by holders of the majority of votes eligible to be cast at such meeting.
        The  Company's   previous  bylaws  provided  that  special  meetings  of
        stockholders  could be called by the secretary upon the written  request
        of  holders  of shares  entitled  to cast not less than 25% of all votes
        entitled to be cast at such meeting.  Raising the  threshold  allows the
        Company to avoid  calling  special  meetings,  unless the purpose of the
        meeting has substantial support among stockholders.

        The Board of Directors has also  approved the Company's  opting into the
        Maryland Business  Combination  Statute.  A business  combination statue
        provides substantial defensive protection to a company, by preventing an
        unsolicited  acquiror  seeking a  post-offer  merger  from  acquiring  a
        substantial  stock  position  without  first  obtaining  approval of the
        Company's board.  Maryland's  business  combination law imposes a 5-year
        time limitation and supermajority  stockholder approval  requirements on
        business  combinations  with  persons  who  acquire  10%  or  more  of a
        company's  voting power  before the  company's  board of  directors  has
        approved the proposed business combination.


Item 6. Exhibits and Reports on Form 8-K
        a)      Exhibit 27 Financial Data Schedule
        b)      During the three months ended  September 30, 1999 the registrant
                filed the following reports:

                On August 25, 1999,  the  Operating  Partnership  filed Form 8-K
                announcing  its  entering  into  a  Contribution   and  Exchange
                agreement  with respect to the  disposition of RMI. In addition,
                the  Operating   Partnership  announced  its  entering  into  an
                agreement  with Matrix  relating to the  disposition  of certain
                industrial land holdings and a mortgage note.



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 OPERATING PARTNERSHIP, L.P.

                        BY: RECKSON ASSOCIATES REALTY CORP., its general partner


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

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