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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                               ----------------

                                    FORM 10-Q

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


                 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000


                        COMMISSION FILE NUMBER: 1-13762

                               ----------------

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

<TABLE>
<S>                                               <C>
                    DELAWARE                                    11-3233647
   (State other jurisdiction of incorporation     (IRS. Employer Identification Number)
                of organization)
</TABLE>

<TABLE>
<S>                                            <C>
      225 BROADHOLLOW ROAD, MELVILLE, NY                          11747
   (Address of principal executive office)                      (zip code)
</TABLE>

                                (631) 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)  Yes X No__,  and (2) has been
subject to such filing requirements for the past 90 days. Yes X No__.

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<PAGE>

                      RECKSON OPERATING PARTNERSHIP, L.P.
                               QUARTERLY REPORT
                   FOR THE THREE MONTHS ENDED JUNE 30, 2000

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
INDEX                                                                                           PAGE
-------                                                                                        -----
<S>     <C>                                                                                    <C>
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements .................................................................   2
        Consolidated Balance Sheets as of June 30, 2000 (unaudited) and December 31, 1999 ....   2
        Consolidated Statements of Income for the three and six months ended June 30, 2000 and
        1999 (unaudited) .....................................................................   3
        Consolidated Statements of Cash Flows for the six months ended June 30, 2000 and 1999
        (unaudited) ..........................................................................   4
        Notes to the Consolidated Financial Statements (unaudited) ...........................   5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.  11
Item 3. Quantitative and Qualitative Disclosures about Market Risk ...........................  21

PART II. OTHER INFORMATION

Item 1. Legal Proceedings ....................................................................  22
Item 2. Changes in Securities and Use of Proceeds ............................................  22
Item 3. Defaults Upon Senior Securities ......................................................  22
Item 4. Submission of Matters to a Vote of Securities Holders ................................  22
Item 5. Other Information ....................................................................  22
Item 6. Exhibits and Reports on Form 8-K .....................................................  22
SIGNATURES .................................................................................    22
</TABLE>








                                        1

<PAGE>

                         PART I -- FINANCIAL INFORMATION

ITEM 1 -- FINANCIAL STATEMENTS

                     RECKSON OPERATING PARTNERSHIP, L. P.
                          CONSOLIDATED BALANCE SHEETS
                  (DOLLARS IN THOUSANDS EXCEPT UNIT AMOUNTS)

<TABLE>
<CAPTION>
                                                                                 JUNE 30, 2000     DECEMBER 31,
                                                                                  (UNAUDITED)          1999
                                                                                ---------------   -------------
<S>                                                                             <C>               <C>
ASSETS:
Commercial real estate properties, at cost:
 Land .......................................................................     $  291,510       $  276,204
 Buildings and improvements .................................................      1,916,027        1,802,611
Developments in progress:
 Land .......................................................................         61,013           60,894
 Development costs ..........................................................         93,719           68,690
Furniture, fixtures and equipment ...........................................          7,157            6,473
                                                                                  ----------       ----------
                                                                                   2,369,426        2,214,872
Less accumulated depreciation ...............................................       (254,595)        (218,385)
                                                                                  ----------       ----------
                                                                                   2,114,831        1,996,487
Investments in real estate joint ventures ...................................         37,548           31,531
Investment in mortgage notes and notes receivable ...........................        356,642          352,466
Cash and cash equivalents ...................................................         26,514           21,122
Tenant receivables ..........................................................          3,340            5,117
Investments in and advances to affiliates ...................................        176,567          179,762
Deferred rent receivable ....................................................         44,666           32,132
Prepaid expenses and other assets ...........................................         70,800           66,855
Contract and land deposits and pre-acquisition costs ........................          7,727            9,585
Deferred lease and loan costs ...............................................         47,137           39,520
                                                                                  ----------       ----------
TOTAL ASSETS ................................................................     $2,885,772       $2,734,577
                                                                                  ==========       ==========
LIABILITIES:
Mortgage notes payable ......................................................     $  527,466       $  459,174
Unsecured credit facility ...................................................        373,600          297,600
Unsecured term loan .........................................................         75,000           75,000
Senior unsecured notes ......................................................        449,348          449,313
Accrued expenses and other liabilities ......................................         89,536           81,265
Distributions payable .......................................................         28,356           27,166
                                                                                  ----------       ----------
TOTAL LIABILITIES ...........................................................      1,543,306        1,389,518
                                                                                  ----------       ----------
Commitments and other comments ..............................................             --               --
Minority interests' in consolidated partnerships ............................         92,071           93,086
                                                                                  ----------       ----------
PARTNERS' CAPITAL
Preferred Capital, 11,234,518 and 15,234,518 units outstanding, respectively         313,126          413,126
General Partner's Capital:
 Class A common units, 45,045,573 and 40,375,506 units outstanding,
   respectively .............................................................        570,203          477,172
 Class B common units, 10,283,513 and 10,283,763 units outstanding,
   respectively .............................................................        269,762          270,689
Limited Partners' Capital, 7,695,142 and 7,701,142 units outstanding,
 respectively ...............................................................         97,304           90,986
                                                                                  ----------       ----------
Total Partners' Capital .....................................................      1,250,395        1,251,973
                                                                                  ----------       ----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL .....................................     $2,885,772       $2,734,577
                                                                                  ==========       ==========
</TABLE>

                (see accompanying notes to financial statements)


                                        2

<PAGE>

                     RECKSON OPERATING PARTNERSHIP, L. P.
                       CONSOLIDATED STATEMENTS OF INCOME
                (UNAUDITED AND IN THOUSANDS, EXCEPT UNIT DATA)

<TABLE>
<CAPTION>

                                                                THREE MONTHS ENDED             SIX MONTHS ENDED
                                                                     JUNE 30,                      JUNE 30,
                                                           ----------------------------- -----------------------------
                                                                2000           1999           2000           1999
                                                           -------------- -------------- -------------- --------------
<S>                                                        <C>            <C>            <C>            <C>
REVENUES:
Base rents ...............................................  $    96,099    $    77,192    $   190,499    $   139,285
Tenant escalations and reimbursements ....................       12,984          8,586         25,830         17,129
Equity in earnings of real estate joint ventures and
 service companies .......................................        1,775            512          3,187            889
Interest income on mortgage notes and notes
 receivable ..............................................        2,190          1,910          4,476          4,718
Gain on sales of real estate .............................        6,662             --          6,662             --
Other ....................................................        5,738          2,646         12,451          4,932
                                                            -----------    -----------    -----------    -----------
 Total Revenues ..........................................      125,448         90,846        243,105        166,953
                                                            -----------    -----------    -----------    -----------
EXPENSES:
Property operating expenses ..............................       36,368         27,539         74,523         50,446
Marketing, general and administrative ....................        6,769          4,550         12,649          8,624
Interest .................................................       24,176         18,902         48,016         32,846
Depreciation and amortization ............................       22,426         19,127         43,437         34,218
                                                            -----------    -----------    -----------    -----------
 Total Expenses ..........................................       89,739         70,118        178,625        126,134
                                                            -----------    -----------    -----------    -----------
Income before distributions to preferred unit holders
 and minority interestsinterests .........................       35,709         20,728         64,480         40,819
Minority partners' interests in consolidated
 partnerships ............................................       (1,925)        (1,615)        (3,899)        (2,783)
                                                            -----------    -----------    -----------    -----------
Income before distributions to preferred unitholders .....       33,784         19,113         60,581         38,036
Preferred unit distributions .............................       (7,857)        (5,989)       (15,842)       (11,031)
                                                            -----------    -----------    -----------    -----------
Net income available to common unit holders ..............  $    25,927    $    13,124    $    44,739    $    27,005
                                                            ===========    ===========    ===========    ===========
Net Income available to:
 General Partner -- Class A common units .................  $    16,563    $     9,550    $    28,508    $    21,190
 General Partner -- Class B common units .................        6,281          1,747         10,870          1,747
 Limited Partners' .......................................        3,083          1,827          5,361          4,068
                                                            -----------    -----------    -----------    -----------
Total ....................................................  $    25,927    $    13,124    $    44,739    $    27,005
                                                            ===========    ===========    ===========    ===========
Net income per weighted average units:
 Net income per weighted average Class A general
   partnership unit ......................................  $       .40    $       .24    $       .70    $       .53
                                                            ===========    ===========    ===========    ===========
 Net income per weighted average Class B general
   partnership unit ......................................  $       .61    $       .36    $      1.06    $       .71
                                                            ===========    ===========    ===========    ===========
 Net income per weighted average limited
   partnership unit ......................................  $       .40    $       .24    $       .70    $       .53
                                                            ===========    ===========    ===========    ===========
Weighted average common units outstanding:
 General Partner -- Class A common units .................   41,343,000     40,285,000     40,863,000     40,167,000
 General Partner -- Class B common units .................   10,284,000      4,883,000     10,284,000      2,455,000
 Limited Partners ........................................    7,695,000      7,705,000      7,697,000      7,708,000
</TABLE>

                (see accompanying notes to financial statements)


                                        3

<PAGE>

                     RECKSON OPERATING PARTNERSHIP, L. P.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (UNAUDITED AND IN THOUSANDS)

<TABLE>
<CAPTION>

                                                                                      SIX MONTHS ENDED
                                                                                          JUNE 30,
                                                                                ----------------------------
                                                                                     2000           1999
                                                                                -------------   ------------
<S>                                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income before distributions to preferred unitholders ........................    $   60,581      $   38,036
Adjustments to reconcile income before distributions to preferred
 unitholders to net cash provided by operating activities:
 Depreciation and amortization ..............................................        43,437          34,218
 Gain on sales of real estate ...............................................        (6,662)             --
 Minority partners' interests in consolidated partnerships ..................         3,899           2,783
 Loss reserve on real estate held for sale ..................................            --           4,450
 Gain on mortgage redemption ................................................            --          (4,492)
 Equity in earnings of real estate joint ventures and service companies .....        (3,187)           (889)
Changes in operating assets and liabilities:

 Prepaid expenses and other assets ..........................................        (3,872)        (15,254)
 Tenant receivables .........................................................         1,777           2,181
 Deferred rents receivable ..................................................       (12,534)         (2,429)
 Real estate tax escrows ....................................................         3,387            (618)
 Accrued expenses and other liabilities .....................................         7,073          11,201
                                                                                 ----------      ----------
 Net cash provided by operating activities ..................................        93,899          69,187
                                                                                 ----------      ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchases of commercial real estate properties .............................      (154,573)       (194,871)
 Increase in real estate held for sale ......................................            --         (57,095)
 Increase in deposits and pre-acquisition costs .............................        (6,079)         (1,889)
 Investment in mortgage notes and notes receivable ..........................            --        (262,643)
 Proceeds from mortgage note repayments .....................................         2,157              --
 Proceeds from sales of property and mortgage redemption ....................        42,595          25,929
 Additions to commercial real estate properties .............................       (22,108)        (16,389)
 Increase in developments in progress .......................................       (15,923)         (8,073)
 Payment of leasing costs ...................................................        (9,379)         (7,377)
 Purchase of furniture, fixtures and equipment ..............................          (676)           (447)
 Distribution from a real estate joint venture ..............................           226             173
 Investments in real estate joint ventures ..................................        (4,770)         (6,223)
                                                                                 ----------      ----------
 Net cash used in investing activities ......................................      (168,530)       (528,905)
                                                                                 ----------      ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Principal payments on secured borrowings ...................................       (23,708)         (1,495)
 Proceeds from issuance of senior unsecured notes net of issuance costs .....            --         299,262
 Payment of loan costs ......................................................        (2,399)         (5,368)
 (Increase) decrease in investments in and advances to affiliates ...........         4,880         (41,304)
 Proceeds from secured borrowings ...........................................        92,000              --
 Proceeds from unsecured credit facility ....................................       125,000         299,000
 Principal payments on unsecured credit facility ............................       (49,000)       (230,750)
 Contributions of minority partner in consolidated partnership ..............            --          75,000
 Contributions ..............................................................         1,486         149,300
 Distributions ..............................................................       (63,322)        (42,416)
 Distributions to minority partners' in consolidated partnerships ...........        (4,914)         (2,450)
                                                                                 ----------      ----------
Net cash provided by financing activities ...................................        80,023         498,779
                                                                                 ----------      ----------
Net increase in cash and cash equivalents ...................................         5,392          39,061
Cash and cash equivalents at beginning of period ............................        21,122           2,228
                                                                                 ----------      ----------
Cash and cash equivalents at end of period ..................................    $   26,514      $   41,289
                                                                                 ==========      ==========
</TABLE>

                (see accompanying notes to financial statements)

                                        4

<PAGE>

                     RECKSON OPERATING PARTNERSHIP, L. P.
                NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000
                                   (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").

     During June 1995,  the Company  contributed  approximately  $162 million in
cash to the Operating  Partnership  in exchange for an  approximate  73% general
partnership  interest.  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 June 30, 2000, the Operating Partnership owned and operated 78 office
properties  comprising  approximately  13.7 million  square feet, 105 industrial
properties  comprising  approximately  6.9  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 a
357,000   square  foot  office   building   located  in  Orlando,   Florida  and
approximately  346 acres of land in 16 separate  parcels of which the  Operating
Partnership  can develop  approximately  1.9 million square feet of office space
and  approximately  350,000  square  feet of  industrial  space.  The  Operating
Partnership  also has invested  approximately  $301.5  million in mortgage notes
encumbering two Class A office properties encompassing approximately 1.6 million
square  feet,  approximately  403  acres  of  land  located  in New  Jersey  and
approximately  $17.1  million  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  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 located  outside of the Tri-State  Area,  other than a 357,000 square
foot office property located in Orlando, Florida, have been sold.

2.  BASIS OF PRESENTATION

     The accompanying consolidated financial statements include the consolidated
financial position of the Operating Partnership and its subsidiaries at June 30,
2000 and December 31, 1999 and the results of their operations for the three and
six months ended June 30, 2000 and 1999, respectively, and, their cash flows for
the six  months  ended  June 30,  2000 and  1999,  respectively.  The  Operating
Partnership's  investments in  Metropolitan,  Omni Partners,  L. P. ("Omni") and
certain  industrial  joint venture  properties  formerly owned by Reckson Morris
Operating Partnership, L. P. ("RMI") 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 Keystone  Property Trust
("KTR").  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

                                        5

<PAGE>

estate joint  ventures where it may own less than a controlling  interest,  such
investments are also reflected in the accompanying  financial  statements on the
equity  method  of  accounting.   All  significant   intercompany  balances  and
transactions have been eliminated in the consolidated financial statements.

     The minority  interests at June 30, 2000 represent 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 generally accepted accounting  principles ("GAAP") may have been
condensed or omitted pursuant to such rules and regulations, although management
believes that the disclosures are adequate to make the information presented not
misleading.  The unaudited financial  statements as of June 30, 2000 and for the
three and six month periods ended June 30, 2000 and 1999 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, 2000.  These
financial   statements   should  be  read  in  conjunction  with  the  Operating
Partnership's  audited  financial  statements and notes thereto  included in the
Operating Partnership's Form 10-K for the year ended December 31, 1999.

     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.

3.  MORTGAGE NOTES PAYABLE

     As of June 30, 2000, the Operating  Partnership  had  approximately  $457.5
million of fixed rate mortgage  notes which mature at various times between 2000
and 2027.  The notes are secured by 22  properties  and have a weighted  average
interest rate of approximately 7.6%. In addition,  the Operating Partnership had
a $70 million variable rate mortgage note which matures in August 2001. The note
is secured by one property and bears interest at LIBOR plus 165 basis points.

4.  SENIOR UNSECURED NOTES

     As  of  June  30,  2000,   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):

<TABLE>
<CAPTION>
                          FACE
      ISSUANCE           AMOUNT      COUPON RATE       TERM          MATURITY
-------------------   -----------   -------------   ----------   ----------------
<S>                   <C>           <C>             <C>          <C>
  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
</TABLE>

     Interest  on the  Senior  Unsecured  Notes  is  payable  semiannually  with
principal and unpaid interest due on the scheduled  maturity dates. In addition,
the Senior  Unsecured Notes issued on March 26, 1999 were issued at an aggregate
discount of $738,000.

5.  UNSECURED CREDIT FACILITIES AND UNSECURED TERM LOAN

     As of June 30,  2000,  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  which  matures in July,  2001.  Interest  rates on
borrowings  under the  Credit  Facility  are  priced  off of LIBOR plus 90 basis
points.

                                        6

<PAGE>

     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 June 30, 2000, the
Operating  Partnership had  availability  under the Credit Facility to borrow an
additional  $126.4  million  (of which,  $49.1  million  has been  reserved  for
outstanding undrawn letters of credit).

     As of June 30, 2000, the Operating Partnership had an 18-month, $75 million
unsecured term loan (the "Term Loan") from Chase Manhattan Bank which matures in
June,  2001.  Interest rates on borrowings under the Term Loan are priced off of
LIBOR plus 150 basis points.

6.  COMMERCIAL REAL ESTATE INVESTMENTS

     On January 13, 2000, the Operating  Partnership acquired 1350 Avenue of the
Americas,  a 540,000 square foot, 35 story, Class A office property,  located in
New York City,  for a  purchase  price of  approximately  $126.5  million.  This
acquisition was financed through a $70 million secured debt financing and a draw
under the Credit Facility.

     On June 15, 1999,  the Operating  Partnership  acquired the first  mortgage
note  secured by a 47 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 E preferred  units of general  partnership  interest  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 July 28, 2000, the Operating  Partnership  consented to the
filing of a consensual,  pre-packaged bankruptcy plan with the current fee owner
and expects to take title to this property by November 30, 2000.

     On August 9, 1999,  the Operating  Partnership  executed a contract for the
sale 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  ($41.6  million of which is payable to, and of which $10.4 million
of debt relief is attributable  to the Morris  Companies and its affiliates) and
will consist of a combination of (i) cash, (ii) convertible preferred and common
stock of KTR, (iii) preferred units of KTR's operating partnership,  (iv) relief
of debt and (v) a purchase  money  mortgage note secured by certain land that is
being sold to Matrix.

     As of  June  30,  2000,  the  Matrix  Sale  and the  sale of the  Operating
Partnership's  interest  in RMI was  completed  for a  combined  sales  price of
approximately  $258 million (net of minority partner's  interest).  The combined
consideration  consisted of  approximately  (i) $159.7 million in cash, (ii) $60
million of preferred  stock and operating  partnership  units of KTR, (iii) $1.5
million in common stock of KTR, (iv) approximately  $26.7 million of debt relief
and (v)  approximately  $10.1 million in purchase money mortgages.  As a result,
the  Operating  Partnership  incurred a gain of  approximately  $16.7 million of
which  approximately  $6.7 million was recognized  during the three months ended
June 30,  2000.  Cash  proceeds  from the  sales  were used  primarily  to repay
borrowings  under  the  Credit   Facility.   During  July  2000,  the  Operating
Partnership redeemed approximately $20 million of the preferred stock of KTR.

     In July 1998, the Company formed a joint venture, Metropolitan Partners LLC
("Metropolitan"),  with  Crescent  Real Estate  Equities  Company,  a Texas REIT
("Crescent") 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,

                                        7

<PAGE>

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  located  outside of the  Tri-State  Area,
other than a 357,000 square foot office  property  located in Orlando,  Florida,
have been sold.

     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  (May 24,  1999  through  May 24,  2001) 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 Class
A common stock at a conversion price of $24.61 per share.

7.  PARTNERS' CAPITAL

     On May 24, 1999, 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 were  entitled to receive an initial  annual
distribution  of $2.24 per unit which  distribution  is  subject  to  adjustment
annually.  On July 1, 2000, the annual  distribution on the Class B common units
was increased to $2.40 per unit.

     The Class B common units are exchangeable at any time, at the option of the
holder,  into an equal  number  of Class A 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 Class
A common units at any time following the four year, six-month anniversary of the
issuance of the Class B common units.

     On  June  14,  2000,  the  Operating  Partnership  declared  the  following
distributions:

<TABLE>
<CAPTION>
                                                      RECORD           PAYMENT         THREE MONTHS        ANNUALIZED
         SECURITY              DISTRIBUTION            DATE              DATE             ENDED           DISTRIBUTION
-------------------------   ------------------   ---------------   ---------------   ---------------   -----------------
<S>                         <C>                  <C>               <C>               <C>               <C>
Class A common unit          $ .38600            July 10, 2000     July 21, 2000     June 30, 2000      $ 1.544
Class B common unit          $ .59400 (a)        July 14, 2000     July 31, 2000     July 31, 2000      $ 2.377 (a)
Series A preferred unit      $ .47660            July 14, 2000     July 31, 2000     July 31, 2000      $ 1.906
Series E preferred unit      $ .52188            July 14, 2000     July 31, 2000     July 31, 2000      $ 2.088
</TABLE>

----------------
(a)  adjusted to $.60 per unit  quarterly and $2.40 per unit annually on July 1,
     2000.

     On June 20, 2000, the Operating Partnership issued 4,181,818 Class A common
units  in  exchange  for  four  million  Series E  preferred  units  of  general
partnership interest with a liquidation preference value of $100 million.

     As of June 30, 2000, in conjunction with the Company's Class B common stock
buy back program, the Operating  Partnership had purchased and retired 1,410,804
Class B common units for approximately $30.3 million.

     Net income per 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.

                                        8

<PAGE>

8.  SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                        SIX MONTHS ENDED
                                                            JUNE 30,
                                                     -----------------------
                                                        2000         1999
                                                     ----------   ----------
<S>                                                  <C>          <C>
Cash paid during the period for interest .........    $52,135      $30,062
                                                      =======      =======
Interest capitalized during the period ...........    $ 5,173      $ 4,440
                                                      =======      =======
</TABLE>

     On June 20, 2000, the Operating Partnership issued 4,181,818 Class A common
units  in  exchange  for  four  million  Series E  preferred  units  of  general
partnership interest with a liquidation preference value of $100 million.

9.  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 certain industrial
joint venture  properties  formerly  owned by RMI and for the period  commencing
January 6, 1998 and ending September 26, 1999,  industrial properties which were
owned  by RMI and  subsequently  sold  to KTR.  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.
Additionally,  commencing  January 1, 2000, the Operating  Partnership  does not
consider the operating  performance of the industrial  joint venture  properties
formerly owned by RMI as part of its Core Portfolio.

     The   following   table  sets  forth  the   components   of  the  Operating
Partnership's  revenues and expenses and other related disclosures for the three
months ended June 30, 2000 and 1999 (in thousands):

<TABLE>
<CAPTION>

                                                     THREE MONTHS ENDED
                                         -------------------------------------------
                                                        JUNE 30, 2000
                                         -------------------------------------------
                                              CORE                     CONSOLIDATED
                                            PORTFOLIO       OTHER         TOTALS
                                         -------------- ------------- --------------
<S>                                      <C>            <C>           <C>
REVENUES:
Base rents, tenant escalations and
 reimbursements ........................  $   106,852     $   2,231    $   109,083
Equity in earnings of real estate joint
 ventures and service companies ........           --         1,775          1,775
Interest and other income ..............          257        14,333         14,590
                                          -----------     ---------    -----------
Total Revenues .........................      107,109        18,339        125,448
                                          -----------     ---------    -----------
EXPENSES:
Property operating expenses ............       35,810           558         36,368
Marketing, general and administrative ..        4,928         1,841          6,769
Interest ...............................        9,403        14,773         24,176
Depreciation and amortization ..........       20,055         2,371         22,426
                                          -----------     ---------    -----------
Total Expenses .........................       70,196        19,543         89,739
                                          -----------     ---------    -----------
Income (loss) before distributions to
 preferred unitholders and minority
 interests' ............................  $    36,913     $  (1,204)   $    35,709
                                          ===========     =========    ===========
Total Assets ...........................  $ 2,054,183     $ 831,589    $ 2,885,772
                                          ===========     =========    ===========

<CAPTION>
                                                          THREE MONTHS ENDED
                                         -----------------------------------------------------
                                                             JUNE 30, 1999
                                         -----------------------------------------------------
                                              CORE                                CONSOLIDATED
                                            PORTFOLIO       RMI        OTHER         TOTALS
                                         -------------- ---------- ------------- -------------
<S>                                      <C>            <C>        <C>           <C>
REVENUES:
Base rents, tenant escalations and
 reimbursements ........................  $    76,943    $  5,287    $   3,548    $    85,778
Equity in earnings of real estate joint
 ventures and service companies ........           --          --          512            512
Interest and other income ..............          144          --        4,412          4,556
                                          -----------    --------    ---------    -----------
Total Revenues .........................       77,087       5,287        8,472         90,846
                                          -----------    --------    ---------    -----------
EXPENSES:
Property operating expenses ............       25,554         816        1,169         27,539
Marketing, general and administrative ..        3,858         167          525          4,550
Interest ...............................        5,191         940       12,771         18,902
Depreciation and amortization ..........       16,212       1,287        1,628         19,127
                                          -----------    --------    ---------    -----------
Total Expenses .........................       50,815       3,210       16,093         70,118
                                          -----------    --------    ---------    -----------
Income (loss) before distributions to
 preferred unitholders and minority
 interests' ............................  $    26,272    $  2,077    $  (7,621)   $    20,728
                                          ===========    ========    =========    ===========
Total Assets ...........................  $ 2,082,784    $194,898    $ 615,692    $ 2,893,374
                                          ===========    ========    =========    ===========
</TABLE>

                                        9

<PAGE>

     The   following   table  sets  forth  the   components   of  the  Operating
Partnership's  revenues and expenses and other related  disclosures  for the six
months ended June 30, 2000 and 1999 (in thousands):

<TABLE>
<CAPTION>

                                                            SIX MONTHS ENDED
                                                ----------------------------------------
                                                             JUNE 30, 2000
                                                ----------------------------------------
                                                    CORE                   CONSOLIDATED
                                                 PORTFOLIO      OTHER         TOTALS
                                                ----------- ------------- --------------
<S>                                             <C>         <C>           <C>
REVENUES:
Base rents, tenant escalations and
 reimbursements ...............................  $ 211,672    $   4,657      $ 216,329
Equity in earnings of real estate joint
 ventures and service companies ...............         --        3,187          3,187
Interest and other income .....................        664       22,925         23,589
                                                 ---------    ---------      ---------
Total Revenues ................................    212,336       30,769        243,105
                                                 ---------    ---------      ---------
EXPENSES:
Property operating expenses ...................     73,297        1,226         74,523
Marketing, general and administrative .........     10,029        2,620         12,649
Interest ......................................     18,595       29,421         48,016
Depreciation and amortization .................     39,388        4,049         43,437
                                                 ---------    ---------      ---------
Total Expenses ................................    141,309       37,316        178,625
                                                 ---------    ---------      ---------
Income (loss) before distributions to
 preferred unitholders and minority
 interests' ...................................  $  71,027    $  (6,547)     $  64,480
                                                 =========    =========      =========

<CAPTION>
                                                                 SIX MONTHS ENDED
                                                ---------------------------------------------------
                                                                   JUNE 30, 1999
                                                ---------------------------------------------------
                                                    CORE                               CONSOLIDATED
                                                 PORTFOLIO      RMI         OTHER         TOTALS
                                                ----------- ---------- -------------- -------------
<S>                                             <C>         <C>        <C>            <C>
REVENUES:
Base rents, tenant escalations and
 reimbursements ...............................  $ 142,966   $ 9,900     $    3,548     $ 156,414
Equity in earnings of real estate joint
 ventures and service companies ...............         --        --            889           889
Interest and other income .....................        213         2          9,435         9,650
                                                 ---------   -------     ----------     ---------
Total Revenues ................................    143,179     9,902         13,872       166,953
                                                 ---------   -------     ----------     ---------
EXPENSES:
Property operating expenses ...................     47,710     1,567          1,169        50,446
Marketing, general and administrative .........      7,800       298            526         8,624
Interest ......................................      9,751     1,217         21,878        32,846
Depreciation and amortization .................     28,993     2,367          2,858        34,218
                                                 ---------   -------     ----------     ---------
Total Expenses ................................     94,254     5,449         26,431       126,134
                                                 ---------   -------     ----------     ---------
Income (loss) before distributions to
 preferred unitholders and minority
 interests' ...................................  $  48,925   $ 4,453     $  (12,559)    $  40,819
                                                 =========   =======     ==========     =========
</TABLE>

10. OTHER INVESTMENTS AND ADVANCES

     During 1997,  the Company  formed  FrontLine  Capital  Group  ("FrontLine")
(formerly  Reckson  Service  Industries,  Inc.) and  Reckson  Strategic  Venture
Partners,  LLC  ("RSVP").  In connection  with the  formation of FrontLine,  the
Operating  Partnership   established  a  credit  facility  with  FrontLine  (the
"FrontLine  Facility") in the amount of $100 million for FrontLine's  e-commerce
and e-services  operations and other general corporate purposes.  As of June 30,
2000, the Company had advanced  approximately  $92.7 million under the FrontLine
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 FrontLine under terms similar to the FrontLine Facility.  As of June 30,
2000, approximately $67.9 million had been invested through the RSVP Commitment,
of which $29.4 million represents  RSVP-controlled joint venture  REIT-qualified
investments  and $38.5 million  represents  advances to FrontLine under the RSVP
Commitment.  Both the FrontLine  Facility and the RSVP Commitment have a term of
five  years and  advances  under each are  recourse  obligations  of  FrontLine.
Interest accrues on advances made under the credit facilities at a rate equal to
the greater of (a) the prime rate plus two  percent and (b) 12% per annum,  with
the rate on  amounts  that are  outstanding  for more  than one year  increasing
annually at a rate of four percent of the prior year's rate.  Prior to maturity,
interest is payable  quarterly but only to the extent of net cash flow and on an
interest-only basis.

     During  November  1999,  the Board of Directors of the Company  approved an
amendment to the FrontLine  Facility and the RSVP Commitment to permit FrontLine
to incur secured debt and to pay interest  thereon and to issue  preferred stock
and to pay dividends thereon. In consideration of the amendments, FrontLine paid
the  Operating  Partnership a fee of  approximately  $3.6 million in the form of
shares of FrontLine common stock. Such fee is being recognized in income over an
estimated nine month benefit period.

     FrontLine  identifies,  acquires  interests  in and  develops  a network of
e-commerce  and  e-services   companies  that  service  small  to  medium  sized
enterprises,   independent   professionals  and  entrepreneurs  and  the  mobile
workforce of larger companies.  FrontLine serves as the managing member of RSVP.
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.

                                       10

<PAGE>

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 June 30, 2000, the Operating Partnership owned and operated 78 office
properties  comprising  approximately  13.7 million  square feet, 105 industrial
properties  comprising  approximately  6.9  million  square  feet and two retail
properties comprising approximately 20,000 square feet, located in the Tri-State
Area. The Operating  Partnership also owns a 357,000 square foot office building
located in Orlando,  Florida and  approximately 346 acres of land in 16 separate
parcels of which the Operating Partnership can develop approximately 1.9 million
square feet of office space and approximately  350,000 square feet of industrial
space. The Operating Partnership also has invested  approximately $301.5 million
in  mortgage  notes  encumbering  two  Class A  office  properties  encompassing
approximately  1.6 million square feet,  approximately 403 acres of land located
in New Jersey and approximately  $17.1 million 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  FrontLine  Capital  Group  ("FrontLine")
(formerly  Reckson  Service  Industries,  Inc.) and  Reckson  Strategic  Venture
Partners,  LLC  ("RSVP").  In connection  with the  formation of FrontLine,  the
Operating  Partnership   established  a  credit  facility  with  FrontLine  (the
"FrontLine  Facility") in the amount of $100 million for FrontLine's  e-commerce
and e-services  operations and other general corporate purposes.  As of June 30,
2000, the Company had advanced  approximately  $92.7 million under the FrontLine
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 FrontLine under terms similar to the FrontLine Facility.  As of June 30,
2000, approximately $67.9 million had been invested through the RSVP Commitment,
of which $29.4 million represents RSVP-controlled joint

                                       11

<PAGE>

venture  REIT-qualified  investments  and $38.5 million  represents  advances to
FrontLine under the RSVP  Commitment.  Both the FrontLine  Facility and the RSVP
Commitment  have a term of five  years  and  advances  under  each are  recourse
obligations  of  FrontLine.  Interest  accrues on advances made under the credit
facilities at a rate equal to the greater of (a) the prime rate plus two percent
and (b) 12% per annum,  with the rate on amounts that are  outstanding  for more
than one year increasing  annually at a rate of four percent of the prior year's
rate. Prior to maturity, interest is payable quarterly but only to the extent of
net cash flow and on an interest-only basis.

     During  November  1999,  the Board of Directors of the Company  approved an
amendment to the FrontLine  Facility and the RSVP Commitment to permit FrontLine
to incur secured debt and to pay interest  thereon and to issue  preferred stock
and to pay dividends thereon. In consideration of the amendments, FrontLine paid
the  Operating  Partnership a fee of  approximately  $3.6 million in the form of
shares of FrontLine common stock. Such fee is being recognized in income over an
estimated nine month benefit period.

     FrontLine  identifies,  acquires  interests  in and  develops  a network of
e-commerce  and  e-services   companies  that  service  small  to  medium  sized
enterprises,   independent   professionals  and  entrepreneurs  and  the  mobile
workforce of larger companies.  FrontLine serves as the managing member of RSVP.
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 August 9, 1999,  the Operating  Partnership  executed a contract for the
sale of its interest in Reckson  Morris  Operating  Partnership,  L. P., ("RMI")
which consisted of 28 properties,  comprising  approximately  6.1 million square
feet and three other big box  industrial  properties to Keystone  Property Trust
("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
($41.6 million of which is payable to, and of which $10.4 million of debt relief
is attributable to the Morris  Companies and its affiliates) and will consist of
a combination of (i) cash, (ii)  convertible  preferred and common stock of KTR,
(iii) preferred units of KTR's  operating  partnership,  (iv) relief of debt and
(v) a purchase money mortgage note secured by certain land that is being sold to
Matrix.

     As of  June  30,  2000,  the  Matrix  Sale  and the  sale of the  Operating
Partnership's  interest  in RMI was  completed  for a  combined  sales  price of
approximately  $258 million (net of minority partner's  interest).  The combined
consideration  consisted of  approximately  (i) 159.7  million in cash,  (ii) 60
million of preferred  stock and operating  partnership  units of KTR, (iii) $1.5
million in comon stock of KTR, (iv)  approximately  $26.7 million of debt relief
and (v)  approximately  $10.1 million in purchase money mortgages.  As a result,
the  Operating  Partnership  incurred a gain of  approximately  $16.7 million of
which  approximately  $6.7 million was recognized  during the three months ended
June 30,  2000.  Cash  proceeds  from the  sales  were used  primarily  to repay
borrowings  under  the  Credit   Facility.   During  July  2000,  the  Operating
Partnership redeemed approximately $20 million of the preferred stock of KTR.

     In July 1998, the Company formed a joint venture, Metropolitan Partners LLC
("Metropolitan"),  with  Crescent  Real Estate  Equities  Company,  a Texas REIT
("Crescent") 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,

                                       12

<PAGE>

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  located  outside of the  Tri-State  Area,
other than a 357,000 square foot office  property  located in Orlando,  Florida,
have been sold.

     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  (May  24,  1999  - May  24,  2001)  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 Class
A common stock at a conversion price of $24.61 per share.

     The market capitalization of the Operating Partnership at June 30, 2000 was
approximately $3.33 billion. The Operating  Partnership's market  capitalization
is calculated  based on the sum of (i) the value of the Operating  Partnership's
Class A 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
Class A common stock and Class B common stock), (ii) the liquidation  preference
values of the Operating  Partnership's  preferred  units,  (iii) the contributed
value of  Metropolitan's  preferred  interest and (iv) the  approximately  $1.41
billion (including its share of joint venture debt and net of minority partners'
interest) of debt  outstanding  at June 30,  2000.  As a result,  the  Operating
Partnership's total debt to total market  capitalization  ratio at June 30, 2000
equaled approximately 42.3%.

RESULT OF OPERATIONS

     The Operating  Partnership's  total revenues  increased by $34.6 million or
38.1% for the three  months  ended June 30, 2000 as compared to the 1999 period.
Property operating revenues, which include base rents and tenant escalations and
reimbursements  ("Property  Operating  Revenues")  increased by $23.3 million or
27.2% for the three  months  ended June 30, 2000 as compared to the 1999 period.
The increase in Property Operating Revenues is substantially attributable to the
Tower  portfolio  acquisition in May 1999, the acquisition of the first mortgage
note  secured by 919 Third  Avenue  (which  revenue  was  reflected  in Property
Operating  Revenues)  in June  1999 and the  acquisition  of 1350  Avenue of the
Americas in January 2000.  In addition,  Property  Operating  Revenues were also
positively  impacted by approximately $3.6 million from increases in occupancies
and rental rates in our "same store"  properties.  The  Operating  Partnership's
base rent reflects the positive impact of the  straight-line  rent adjustment of
$8.3  million  for the three  months  ended June 30,  2000 as  compared  to $3.2
million for the 1999  period.  The  remaining  balance of the  increase in total
revenues is  attributable  to the gain on sales of real estate,  interest income
and fees relating to the FrontLine Facility and the RSVP Commitment and earnings
generated by RSVP-controlled joint venture REIT-qualified investments.

     Property operating expenses,  real estate taxes and ground rents ("Property
Expenses")  increased  by $8.8  million or 32.1% for the three months ended June
30, 2000 as compared to the 1999 period.  These  increases  are primarily due to
the acquisition of the Tower portfolio in May 1999, the acquisition of the first
mortgage note secured by 919 Third Avenue in June 1999,  (which  operations were
reflected  in  Property  Expenses)  and the  acquisition  of 1350  Avenue of the
Americas in January 2000. Gross operating margins (defined as Property Operating
Revenues less  Property  Expenses,  taken as a percentage of Property  Operating
Revenues)  for the three  months  ended  June 30 , 2000 and 1999 were  66.7% and
67.9%  respectively.  The  decrease  in gross  operating  margins  is  primarily
attributable to a larger  proportionate  share of gross operating margin derived
from office  properties,  which has a lower  gross  margin  percentage,  in 2000
compared to 1999. The higher  proportionate share of the gross operating margins
is  attributable  to the office  properties  acquired during the period May 1999
through January 2000 and the disposition of net leased industrial  properties in
September  1999 and April 2000.  This shift in the  composition of the portfolio
was offset by increases in rental rates and operating efficiencies realized.

     Marketing,  general and  administrative  expenses increased by $2.2 million
for the three  months  ended June 30, 2000 as compared to the 1999  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

                                       13

<PAGE>

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 5.4% for the three months ended June 30, 2000 as compared to
5.0% for the 1999 period.

     Interest expense  increased by $5.3 million for the three months ended June
30,  2000 as  compared  to the  1999  period.  The  increase  is due to  secured
borrowings  assumed in the Tower  acquisition  as well as new debt incurred with
the  Tower and 1350  Avenue  of the  Americas  acquisitions.  Additionally,  the
increase is due to an increase cost  attributable to an increased balance on the
Operating  Partnership's  credit  facility and term loan.  The weighted  average
balance outstanding on the Operating Partnership's credit facility and term loan
was $464.1  million  for the three  months  ended June 30,  2000 as  compared to
$352.1 million for the three months ended June 30, 1999.

     The Operating  Partnership's  total revenues  increased by $76.2 million or
45.6% for the six months  ended June 30, 2000 as  compared  to the 1999  period.
Property Operating Revenues, which include base rents and tenant escalations and
reimbursements increased by $59.9 million or 38.3% for the six months ended June
30, 2000 as  compared to the 1999  period.  The  increase in Property  Operating
Revenues is substantially attributable to the Tower portfolio acquisition in May
1999,  the  acquisition  of the first  mortgage note secured by 919 Third Avenue
(which  revenue was reflected in Property  Operating  Revenues) in June 1999 and
the  acquisition  of 1350 Avenue of the Americas in January  2000.  In addition,
Property Operating Revenues were also positively  impacted by approximately $5.4
million  from  increases  in  occupancies  and rental  rates in our "same store"
properties.  The Operating  Partnership's base rent reflects the positive impact
of the  straight-line  rent adjustment of $12.8 million for the six months ended
June 30, 2000 as compared to $4.6  million for the 1999  period.  The  remaining
balance of the increase in total revenues is  attributable  to the gain on sales
of real estate,  interest income and fees relating to the FrontLine Facility and
the RSVP  Commitment  and earnings  generated by  RSVP-controlled  joint venture
REIT-qualified investments.

     Property  Expenses  increased by $24.1  million or 47.7% for the six months
ended  June  30,  2000 as  compared  to the 1999  period.  These  increases  are
primarily  due to the  acquisition  of the  Tower  portfolio  in May  1999,  the
acquisition of the first mortgage note secured by 919 Third Avenue in June 1999,
(which  operations  were reflected in Property  Expenses) and the acquisition of
1350 Avenue of the Americas in January 2000. Gross Operating Margins for the six
months  ended  June 30 , 2000 and 1999 were  65.6% and 67.8%  respectively.  The
decrease  in gross  operating  margins  is  primarily  attributable  to a larger
proportionate  share of gross operating  margin derived from office  properties,
which has a lower gross margin percentage,  in 2000 compared to 1999. The higher
proportionate share of the gross operating margins is attributable to the office
properties  acquired  during the period May 1999  through  January  2000 and the
disposition of net leased industrial properties in September 1999. This shift in
the  composition  of the  portfolio  was offset by increases in rental rates and
operating efficiencies realized.

     Marketing,  general and  administrative  expenses increased by $4.0 million
for the six months  ended June 30,  2000 as  compared  to the 1999  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  Operating  Partnership  including the opening of its New
York  City  division.  Marketing,  general  and  administrative  expenses  as  a
percentage of total  revenues were 5.2% for the six month periods ended June 30,
2000 and June 30, 1999.

     Interest  expense  increased by $15.2 million for the six months ended June
30, 2000 as compared  to the 1999  period.  The  increase  is  primarily  due to
secured borrowings assumed in the Tower acquisition as well as new debt incurred
with the Tower and 1350 Avenue of the Americas acquisitions.  Additionally,  the
increase is also due to $300 million of Senior  Unsecured  Notes issued on March
26, 1999 and an increased cost  attributable to an increased  average balance on
the Operating  Partnership's credit facility and term loan. The weighted average
balance on the Operating  Partnership's credit facility and term loan was $464.8
million for the six months ended June 30, 2000 as compared to $429.0 million for
the six months ended June 30, 1999.

                                       14

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     As of June 30,  2000,  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  which  matures in July,  2001.  Interest  rates on
borrowings  under the  Credit  Facility  are  priced  off of 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 June 30, 2000, the
Operating  Partnership had  availability  under the Credit Facility to borrow an
additional  $126.4  million  (of which,  $49.1  million  has been  reserved  for
outstanding undrawn letters of credit).

     As of June 30, 2000, the Operating Partnership had an 18-month, $75 million
unsecured term loan (the "Term Loan") from Chase Manhattan Bank which matures in
June,  2001.  Interest rates on borrowings under the Term Loan are priced off of
LIBOR plus 150 basis points.

     On May 24, 1999, 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 were  entitled to receive an initial  annual
distribution  of $2.24 per unit,  which  distribution  is subject to  adjustment
annually.  On July 1, 2000, the annual  distribution on the Class B common units
was increased to $2.40 per unit.

     The Class B common units are exchangeable at any time, at the option of the
holder,  into an equal  number  of Class A 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 Class
A common units at any time following the four year, six-month anniversary of the
issuance of the Class B common units.

     On June 20, 2000, the Operating Partnership issued 4,181,818 Class A common
units  in  exchange  for  four  million  Series E  preferred  units  of  general
partnership interest with a liquidation preference value of $100 million.

     As of June 30, 2000, in conjunction with the Company's Class B common stock
buy back program, the Operating  Partnership had purchased and retired 1,410,804
Class B common units for approximately $30.3 million.

     The  Operating   Partnership's   indebtedness  at  June  30,  2000  totaled
approximately  $1.41 billion  (including its share of joint venture debt and net
of the  minority  partners'  interests)  and was  comprised  of  $373.6  million
outstanding  under the Credit Facility,  $75 million  outstanding under the Term
Loan,  approximately  $449.3 million of senior unsecured notes and approximately
$513.3 million of mortgage  indebtedness.  Based on the Operating  Partnership's
total market  capitalization  of  approximately  $3.33  billion at June 30, 2000
(calculated  based on the sum of (i) the  value of the  Operating  Partnership's
Class A 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
Class A common stock and Class B common stock), (ii) the liquidation  preference
value of the Operating  Partnership's  preferred  units,  (iii) the  contributed
value of Metropolitan's  preferred interest and (iv) the $1.41 billion of debt),
the Operating  Partnership's debt represented  approximately  42.3% 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 and equity securities of the Operating Partnership.  In
addition,  the Operating  Partnership  also believes that it will,  from time to
time,  generate funds from the sale of certain of its real estate  properties or
interests  therein.  The Operating  Partnership will refinance existing mortgage
indebtedness or indebtedness under the Credit Facility at maturity or

                                       15

<PAGE>

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.

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  Facility 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.

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 November 1999,  NAREIT issued a "White Paper" analysis to address
certain  interpretive  issues  under its  definition  of FFO.  The  White  Paper
provides  that FFO should  include both  recurring and  non-recurring  operating
results,  except those results defined as "extraordinary items" under GAAP. This
revised definition is effective for all periods beginning on or after January 1,
2000.

     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          SIX MONTHS ENDED
                                                                JUNE 30,                   JUNE 30,
                                                        ------------------------   ------------------------
                                                           2000          1999         2000          1999
                                                        ----------   -----------   ----------   -----------
<S>                                                     <C>          <C>           <C>          <C>
Net Income available to common unit holders .........    $25,927      $ 13,124      $44,739      $ 27,005
Adjustment for Funds From Operations:
Add:
 Real estate depreciation and amortization ..........     21,937        18,406       42,552        33,094
 Minority partners' interests in consolidated
   partnerships .....................................      1,925         1,615        3,899         2,783
Less:
 Gain on sales of real estate .......................      6,662            --        6,662            --
 Amount distributed to minority partners in
   consolidated partnerships ........................      2,136         1,980        4,517         3,424
                                                         -------      --------      -------      --------
Funds From Operations ...............................    $40,991      $ 31,165      $80,011      $ 59,458
                                                         =======      ========      =======      ========
Weighted average units outstanding ..................     59,322        52,873       58,843        50,330
                                                         =======      ========      =======      ========
</TABLE>

                                       16

<PAGE>
               SUPPLEMENTAL INFORMATION ON CAPITAL EXPENDITURES,
                  TENANT IMPROVEMENTS 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 six month  period  ended June 30,  2000 and the  historical  average of such
non-incremental   capital   expenditures,   tenant   improvements   and  leasing
commissions for the years 1996 through 1999.

            NON-INCREMENTAL REVENUE GENERATING CAPITAL EXPENDITURES
<TABLE>
<CAPTION>
                                                                                                           SIX MONTHS
                                                                                            1996-1999         ENDED
                                1996           1997            1998            1999          AVERAGE      JUNE 30, 2000
                           ------------- --------------- --------------- --------------- --------------- --------------
<S>                        <C>           <C>             <C>             <C>             <C>             <C>
SUBURBAN OFFICE PROPERTIES
 Total ...................   $ 375,026     $ 1,108,675     $ 2,004,976     $ 2,298,899     $ 1,446,894    $ 1,698,839
 Per Square Foot .........        0.13            0.22            0.23            0.23            0.20           0.17
CBD OFFICE PROPERTIES
 Total ...................      N/A            N/A             N/A             N/A             N/A        $   746,275
 Per Square Foot .........      N/A            N/A             N/A             N/A             N/A               0.35
INDUSTRIAL PROPERTIES
 Total ...................   $ 670,751     $   733,233     $ 1,205,266     $ 1,048,688     $   914,485    $   431,699
 Per Square Foot .........        0.18            0.15            0.12            0.11            0.14           0.05
</TABLE>

 NON-INCREMENTAL REVENUE GENERATING TENANT IMPROVEMENTS AND LEASING COMMISSIONS

<TABLE>
<CAPTION>
                                                                                                                  SIX MONTHS
                                                                                                    1996-1999        ENDED
                                         1996          1997            1998            1999          AVERAGE     JUNE 30, 2000
                                    ------------- -------------- --------------- --------------- -------------- --------------
<S>                                 <C>           <C>            <C>             <C>             <C>            <C>
LONG ISLAND OFFICE PROPERTIES
 Tenant Improvements ..............   $ 523,574     $  784,044     $ 1,140,251     $ 1,009,357     $  864,307     $ 778,333
 Per Square Foot Improved .........        4.28           7.00            3.98            4.73           5.00          5.06
 Leasing Commissions ..............   $ 119,047     $  415,822     $   418,191     $   551,762     $  376,206     $ 936,595
 Per Square Foot Leased ...........        0.97           4.83            1.46            2.59           2.46          4.92
                                      ---------     ----------     -----------     -----------     ----------     ---------
 Total Per Square Foot ............   $    5.25     $    11.83     $      5.44     $      7.32     $     7.46     $    9.98
                                      =========     ==========     ===========     ===========     ==========     =========
WESTCHESTER OFFICE PROPERTIES
 Tenant Improvements ..............   $ 834,764     $1,211,665     $   711,160     $ 1,316,611     $1,018,550     $ 712,852
 Per Square Foot Improved .........        6.33           8.90            4.45            5.62           6.33          7.33
 Leasing Commissions ..............   $ 264,388     $  366,257     $   286,150     $   457,730     $  343,631     $ 131,402
 Per Square Foot Leased ...........        2.00           2.69            1.79            1.96           2.11          3.00
                                      ---------     ----------     -----------     -----------     ----------     ---------
 Total Per Square Foot ............   $    8.33     $    11.59     $      6.24     $      7.58     $     8.44     $   10.33
                                      =========     ==========     ===========     ===========     ==========     =========
CONNECTICUT OFFICE PROPERTIES (A)
 Tenant Improvements ..............   $  58,000     $1,022,421     $   202,880     $   179,043     $  449,952     $ 230,365
 Per Square Foot Improved .........       12.45          13.39            5.92            4.88           9.16          5.44
 Leasing Commissions ..............   $       0     $  256,615     $   151,063     $   110,252     $  159,363     $ 113,263
 Per Square Foot Leased ...........        0.00           3.36            4.41            3.00           2.69          2.67
                                      ---------     ----------     -----------     -----------     ----------     ---------
 Total Per Square Foot ............   $   12.45     $    16.75     $     10.33     $      7.88     $    11.85     $    8.11
                                      =========     ==========     ===========     ===========     ==========     =========
NEW JERSEY OFFICE PROPERTIES
 Tenant Improvements ..............      N/A           N/A         $   654,877     $   454,054     $  554,466     $ 914,789
 Per Square Foot Improved .........      N/A           N/A                3.78            2.29           3.04          7.03
 Leasing Commissions ..............      N/A           N/A         $   396,127     $   787,065     $  591,596     $ 739,594
 Per Square Foot Leased ...........      N/A           N/A                2.08            3.96           3.02          5.83
                                      ---------     ----------     -----------     -----------     ----------     ---------
 Total Per Square Foot ............      N/A           N/A         $      5.86     $      6.25     $     6.06     $   12.86
                                      =========     ==========     ===========     ===========     ==========     =========
NEW YORK OFFICE PROPERTIES
 Tenant Improvements ..............      N/A           N/A             N/A             N/A            N/A         $  11,977
 Per Square Foot Improved .........      N/A           N/A             N/A             N/A            N/A              1.18
 Leasing Commissions ..............      N/A           N/A             N/A             N/A            N/A         $  21,031
 Per Square Foot Leased ...........      N/A           N/A             N/A             N/A            N/A              2.07
                                      ---------     ----------     -----------     -----------     ----------     ---------
 Total Per Square Foot ............      N/A           N/A             N/A             N/A            N/A         $    3.25
                                      =========     ==========     ===========     ===========     ==========     =========
INDUSTRIAL PROPERTIES
 Tenant Improvements ..............   $ 380,334     $  230,466     $   283,842     $   375,646     $  317,572     $ 263,746
 Per Square Foot Improved .........        0.72           0.55            0.76            0.25           0.57          0.50
 Leasing Commissions ..............   $ 436,213     $   81,013     $   200,154     $   835,108     $  388,122     $ 115,590
 Per Square Foot Leased ...........        0.82           0.19            0.44            0.56           0.50          0.22
                                      ---------     ----------     -----------     -----------     ----------     ---------
 Total Per Square Foot ............   $    1.54     $     0.74     $      1.20     $      0.81     $     1.07     $    0.72
                                      =========     ==========     ===========     ===========     ==========     =========
</TABLE>
----------
(A) 1996 -- 1999 average weighted to reflect October 1996 acquisition date

                                       17
<PAGE>

                                LEASE EXPIRATIONS

     The following  table sets forth  scheduled  lease  expirations for executed
leases as of June 30, 2000:

LONG ISLAND OFFICE PROPERTIES (EXCLUDING OMNI):

<TABLE>
<CAPTION>
           YEAR OF                             TOTAL RENTABLE        % OF TOTAL            PER             PER
            LEASE                  NUMBER        SQUARE FEET      RENTABLE SQUARE      SQUARE FOOT     SQUARE FOOT
          EXPIRATION             OF LEASES        EXPIRING         FEET EXPIRING      S/L RENT (1)      RENT (2)
-----------------------------   -----------   ----------------   -----------------   --------------   ------------
<S>                             <C>           <C>                <C>                 <C>              <C>
2000 ........................        21              57,738              1.9%           $ 20.43         $ 22.65
2001 ........................        42             193,716              6.3%           $ 22.44         $ 24.45
2002 ........................        35             287,016              9.3%           $ 21.86         $ 24.21
2003 ........................        50             310,620             10.1%           $ 22.17         $ 25.08
2004 ........................        45             275,654              9.0%           $ 23.04         $ 25.73
2005 ........................        56             557,431             18.2%           $ 22.87         $ 25.16
2006 AND THEREAFTER .........        78           1,389,520             45.2%                --              --
                                     --           ---------            -----
TOTAL .......................       327           3,071,695            100.0%
                                    ===           =========            =====
</TABLE>

OMNI:

<TABLE>
<CAPTION>
           YEAR OF                             TOTAL RENTABLE        % OF TOTAL            PER             PER
            LEASE                  NUMBER        SQUARE FEET      RENTABLE SQUARE      SQUARE FOOT     SQUARE FOOT
          EXPIRATION             OF LEASES        EXPIRING         FEET EXPIRING      S/L RENT (1)      RENT (2)
-----------------------------   -----------   ----------------   -----------------   --------------   ------------
<S>                             <C>           <C>                <C>                 <C>              <C>
2000 ........................        --                 --                --                 --              --
2001 ........................         4             32,680               5.8%           $ 27.39         $ 32.92
2002 ........................         4            129,351              22.8%           $ 30.00         $ 38.62
2003 ........................         6             81,809              14.4%           $ 29.60         $ 33.87
2004 ........................         4            112,414              19.8%           $ 26.05         $ 33.44
2005 ........................         6             59,115              10.4%           $ 27.91         $ 34.38
2006 AND THEREAFTER .........         6            152,411              26.8%                --              --
                                     --            -------             -----
TOTAL .......................        30            567,780             100.0%
                                     ==            =======             =====
</TABLE>

INDUSTRIAL PROPERTIES:

<TABLE>
<CAPTION>
           YEAR OF                             TOTAL RENTABLE        % OF TOTAL            PER             PER
            LEASE                  NUMBER        SQUARE FEET      RENTABLE SQUARE      SQUARE FOOT     SQUARE FOOT
          EXPIRATION             OF LEASES        EXPIRING         FEET EXPIRING      S/L RENT (1)      RENT (2)
-----------------------------   -----------   ----------------   -----------------   --------------   ------------
<S>                             <C>           <C>                <C>                 <C>              <C>
2000 ........................        18             276,554              5.6%            $ 5.43          $ 6.10
2001 ........................        30             624,759             12.6%            $ 5.79          $ 7.00
2002 ........................        26             240,344              4.8%            $ 6.43          $ 7.19
2003 ........................        29             728,234             14.6%            $ 5.29          $ 6.10
2004 ........................        34             634,085             12.8%            $ 6.40          $ 7.07
2005 ........................        15             368,464              7.4%            $ 5.65          $ 7.91
2006 AND THEREAFTER .........        44           2,097,360             42.2%                --              --
                                     --           ---------            -----
TOTAL .......................       196           4,969,800            100.0%
                                    ===           =========            =====
</TABLE>

                                       18

<PAGE>

                        LEASE EXPIRATIONS -- (CONTINUED)

RESEARCH AND DEVELOPMENT PROPERTIES:

<TABLE>
<CAPTION>
           YEAR OF                             TOTAL RENTABLE        % OF TOTAL            PER             PER
            LEASE                  NUMBER        SQUARE FEET      RENTABLE SQUARE      SQUARE FOOT     SQUARE FOOT
          EXPIRATION             OF LEASES        EXPIRING         FEET EXPIRING      S/L RENT (1)      RENT (2)
-----------------------------   -----------   ----------------   -----------------   --------------   ------------
<S>                             <C>           <C>                <C>                 <C>              <C>
2000 ........................         3              22,501              1.8%           $ 12.49         $ 11.06
2001 ........................         7              96,120              7.5%           $ 11.61         $ 13.21
2002 ........................         3             118,620              9.3%           $ 10.19         $ 11.80
2003 ........................         6             301,064             23.5%           $  5.72         $  6.71
2004 ........................        10             129,218             10.1%           $ 11.98         $ 13.43
2005 ........................         3             293,704             23.0%           $  8.08         $  8.86
2006 AND THEREAFTER .........        13             317,457             24.8%                --              --
                                     --             -------            -----
TOTAL .......................        45           1,278,684            100.0%
                                     ==           =========            =====
</TABLE>

WESTCHESTER OFFICE PROPERTIES:

<TABLE>
<CAPTION>

           YEAR OF                             TOTAL RENTABLE        % OF TOTAL            PER             PER
            LEASE                  NUMBER        SQUARE FEET      RENTABLE SQUARE      SQUARE FOOT     SQUARE FOOT
          EXPIRATION             OF LEASES        EXPIRING         FEET EXPIRING      S/L RENT (1)      RENT (2)
-----------------------------   -----------   ----------------   -----------------   --------------   ------------
<S>                             <C>           <C>                <C>                 <C>              <C>
2000 ........................        22             118,125              3.9%           $ 20.53         $ 21.07
2001 ........................        38             253,217              8.3%           $ 20.79         $ 21.07
2002 ........................        48             459,216             15.1%           $ 20.12         $ 20.37
2003 ........................        42             259,105              8.5%           $ 21.90         $ 23.14
2004 ........................        26             164,609              5.4%           $ 21.27         $ 22.01
2005 ........................        29             302,342              9.9%           $ 22.52         $ 23.57
2006 AND THEREAFTER .........        40           1,483,874             48.9%                --              --
                                     --           ---------            -----
TOTAL .......................       245           3,040,488            100.0%
                                    ===           =========            =====
</TABLE>

STAMFORD OFFICE PROPERTIES:

<TABLE>
<CAPTION>
           YEAR OF                             TOTAL RENTABLE        % OF TOTAL            PER             PER
            LEASE                  NUMBER        SQUARE FEET      RENTABLE SQUARE      SQUARE FOOT     SQUARE FOOT
          EXPIRATION             OF LEASES        EXPIRING         FEET EXPIRING      S/L RENT (1)      RENT (2)
-----------------------------   -----------   ----------------   -----------------   --------------   ------------
<S>                             <C>           <C>                <C>                 <C>              <C>
2000 ........................        18              83,909              8.0%           $ 21.52         $ 22.39
2001 ........................        23             112,738             10.7%           $ 24.46         $ 24.16
2002 ........................        19             100,029              9.5%           $ 27.15         $ 28.31
2003 ........................        13              94,448              9.0%           $ 31.61         $ 32.41
2004 ........................        21             224,424             21.3%           $ 22.85         $ 23.71
2005 ........................        12              80,132              7.6%           $ 26.79         $ 29.02
2006 AND THEREAFTER .........        19             357,199             33.9%                --              --
                                     --             -------            -----
TOTAL .......................       125           1,052,879            100.0%
                                    ===           =========            =====
</TABLE>

                                       19

<PAGE>

                        LEASE EXPIRATIONS -- (CONTINUED)

NEW JERSEY OFFICE PROPERTIES:

<TABLE>
<CAPTION>

           YEAR OF                             TOTAL RENTABLE        % OF TOTAL            PER             PER
            LEASE                  NUMBER        SQUARE FEET      RENTABLE SQUARE      SQUARE FOOT     SQUARE FOOT
          EXPIRATION             OF LEASES        EXPIRING         FEET EXPIRING      S/L RENT (1)      RENT (2)
-----------------------------   -----------   ----------------   -----------------   --------------   ------------
<S>                             <C>           <C>                <C>                 <C>              <C>
2000 ........................         7              29,478              1.5%           $ 17.20         $ 17.68
2001 ........................        21             247,144             12.8%           $ 17.68         $ 17.95
2002 ........................        21             180,187              9.4%           $ 19.92         $ 20.41
2003 ........................        21             337,598             17.5%           $ 20.02         $ 20.21
2004 ........................        35             248,891             12.9%           $ 22.69         $ 23.13
2005 ........................        28             343,777             17.9%           $ 22.47         $ 23.12
2006 AND THEREAFTER .........        17             539,228             28.0%                --              --
                                     --             -------            -----
TOTAL .......................       150           1,926,303            100.0%
                                    ===           =========            =====
</TABLE>

NEW YORK CITY OFFICE

<TABLE>
<CAPTION>
           YEAR OF                             TOTAL RENTABLE        % OF TOTAL            PER             PER
            LEASE                  NUMBER        SQUARE FEET      RENTABLE SQUARE      SQUARE FOOT     SQUARE FOOT
          EXPIRATION             OF LEASES        EXPIRING         FEET EXPIRING      S/L RENT (1)      RENT (2)
-----------------------------   -----------   ----------------   -----------------   --------------   ------------
<S>                             <C>           <C>                <C>                 <C>              <C>
2000 ........................         8              85,054              2.6%           $ 30.12         $ 31.68
2001 ........................        21             172,930              5.3%           $ 37.24         $ 35.12
2002 ........................        18             184,130              5.6%           $ 31.98         $ 32.83
2003 ........................         7             115,726              3.5%           $ 31.89         $ 32.34
2004 ........................        18             215,648              6.6%           $ 35.83         $ 36.97
2005 ........................        30             437,437             13.3%           $ 34.63         $ 35.94
2006 AND THEREAFTER .........       110           2,072,808             63.1%                --              --
                                    ---           ---------            -----
TOTAL .......................       212           3,283,733            100.0%
                                    ===           =========            =====
</TABLE>

(1) Per square foot rental rate represents  annualized  straight line rent as of
    the lease expiration date.

(2) Per square foot rental rate represents  annualized base rent as of the lease
    expiration date plus non-recoverable operating expense pass-throughs.

                                       20

<PAGE>

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 June
30, 2000 (dollars in thousands):

<TABLE>
<CAPTION>
                                                           FOR THE YEAR ENDED DECEMBER 31,
                                          ------------------------------------------------------------------
                                              2000          2001          2002         2003         2004
                                          ------------ ------------- ------------- ----------- -------------
<S>                                       <C>          <C>           <C>           <C>         <C>
Long term debt:
 Fixed rate .............................   $ 11,577     $  23,048     $  16,820     $ 8,698     $ 112,146
 Weighted average interest rate .........       7.49%         7.59%         7.80%       7.78%         7.50%
 Variable rate ..........................   $     --     $ 518,600     $      --     $    --     $      --
 Weighted average interest rate .........         --          7.62%           --          --            --

<CAPTION>
                                           THEREAFTER     TOTAL(1)       FMV
                                          ------------ ------------- -----------
<S>                                       <C>          <C>           <C>
Long term debt:
 Fixed rate .............................  $ 735,177     $ 907,466    $ 907,466
 Weighted average interest rate .........       7.56%         7.56%
 Variable rate ..........................  $      --     $ 518,600    $ 518,600
 Weighted average interest rate .........         --          7.62%
</TABLE>

------------------
(1) Includes  unamortized  issuance  discounts  of $652,000 on the 5 and 10-year
    senior unsecured notes issued on March 26, 1999, which are due at maturity.

     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  $5.2  million  annual
increase in interest expense based on approximately  $518.6 million  outstanding
at June 30, 2000.

     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 June 30, 2000 (dollars in thousands):

<TABLE>
<CAPTION>
                                                       FOR THE YEAR ENDED DECEMBER 31,
                                          ---------------------------------------------------------
                                               2000         2001        2002     2003      2004
                                          -------------- ---------- ----------- ------ ------------
<S>                                       <C>            <C>        <C>         <C>    <C>
Mortgage notes and notes receivable:
 Fixed rate .............................   $  283,116    $     15   $  9,361    $ --    $ 36,500
 Weighted average interest rate .........         9.42%       9.00%     10.31%     --       10.23%

<CAPTION>
                                           THEREAFTER     TOTAL (2)       FMV
                                          ------------ -------------- -----------
<S>                                       <C>          <C>            <C>
Mortgage notes and notes receivable:
 Fixed rate .............................   $ 16,990     $  345,982    $345,982
 Weighted average interest rate .........      11.65%          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.

------------------
(2) Excludes mortgage note receivable acquisition costs and interest receivables
    aggregating approximately $10.7 million.

                                       21
<PAGE>

                          PART II -- OTHER INFORMATION

Item 1. Legal Proceedings -- None
Item 2. Changes in Securities and use of proceeds

  On June 20, 2000, the Operating  Partnership  issued  4,181,818 Class A common
units  in  exchange  for  four  million  Series E  preferred  units  of  general
partnership interest with a liquidation  preference value of $100 million.  This
transaction  was  exempt  from  registration  pursuant  to  section  4(2) of the
Securities Act of 1933.

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


Item 5. Other information -- None

Item 6. Exhibits and Reports on Form 8-K

a) Exhibits:

<TABLE>
<CAPTION>

   NUMBER
-----------
<S>         <C>
  27.0      Financial Data Schedule
</TABLE>

b)   During the three months ended June 30, 2000 the Registrant did not file any
     reports on Form 8K.

                                   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

<TABLE>
<S>                                              <C>
By:    \s\ Scott H. Rechler                               \s\ Michael Maturo
   --------------------------------              -----------------------------------
Scott H. Rechler, Co-Chief Executive Officer     Michael Maturo, Executive Vice President,
and President                                    Treasurer and Chief Financial Officer
</TABLE>

DATE: August 10, 2000

                                       22