UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549


                           FORM 10-K


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

           For the fiscal year ended December 31, 1998
                                
                Commission file number: 1-13762


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


Maryland                                             11-3233650
(State other jurisdiction of incorporation         (IRS. Employer
of organization)                                   Identification Number)

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

                         (516) 694-6900
      (Registrant's telephone number including area code)


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

                           Yes  X   No     

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of the Registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K, or any 
amendment to this Form 10-K. ____


     The aggregate market value of the shares of common stock held by 
non-affiliates was approximately $826 million based on the closing price on the
New York Stock Exchange for such shares on March 15,1999. 

     The number of the Registrant's shares of common stock outstanding was
40,053,358 as of March 15,1999.

                                
                                
                DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement for the Annual Shareholder's 
Meeting to be held May 20, 1999 are incorporated by reference into Part III.
<PAGE>
                            TABLE OF CONTENTS

Item No.
--------
                                Part I

  1.  Business . . . . . . . . ... . . . . . . . . . . . . . . . . .   I-1
  2.  Properties . . . . . . . . . . . . . . . . . . . . . . . . . .   I-9
  3.  Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . .  I-21
  4.  Submission of Matters to a Vote of Security Holders. . . . . .  I-21

                                Part II

  5.  Market for Registrant's Common Equity and Related Stockholder
      Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . .  II-1
  6.  Selected Financial Data. . . . . . . . . . . . . . . . . . . .  II-2 
  7.  Management's Discussion and Analysis of Financial Condition and
      Results of Operations. ... . . . . . . . . . . . . . . . . . .  II-3 
  7(a)Quantitative and Qualitative Disclosures about Market Risk . . II-13
  8.  Financial Statements and Supplementary Data .. . . . . . . . . II-13
  9.  Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure . . . . . . . . . . . . . . . . . . . II-13

                                Part III

  10. Directors and Executive Officers of the Registrant . . . . .   III-1
  11. Executive Compensation . . . . . . . . . . . . . . . . . . .   III-1 
  12. Security Ownership of Certain Beneficial Owners and Management III-1
  13. Certain Relationships and Related Transactions . . . . . . . . III-1

                                Part IV

  14. Exhibits, Financial Statement Schedules, and Reports on Form
      8-K  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  IV-1
<PAGE>
                              Part I

Item 1.        Business

General
     Reckson Associates Realty Corp. was incorporated in September 1994 and
commenced operations effective with the completion of its initial public 
offering (the "IPO") on June 2, 1995. Reckson Associates Realty Corp.,
together with Reckson Operating Partnership, L.P. (the "Operating 
Partnership"), and their affiliates (collectively, the "Company") was formed
for the purpose of continuing the commercial real estate business of Reckson 
Associates, its affiliated partnerships and other entities ("Reckson"). For
more than 40 years, Reckson has been engaged in the business of owning,
developing, acquiring, constructing, managing and leasing suburban office
and industrial properties in the New York metropolitan area. Based on 
industry surveys, management believes that the Company is one of the largest
owners and operators of Class A suburban office properties and industrial
properties in the New York tri-state area (the "Tri-State Area"). The Company
operates as a fully-integrated, self-administered and self-managed Real Estate
Investment Trust ("REIT").  As of December 31, 1998, the Company owned 204
properties (the "Properties") (including two joint venture properties)
encompassing approximately 21.0 million rentable square feet, all of which
are managed by the Company. The Properties consist of 73 Class A suburban
office properties (the "Office Properties")encompassing approximately 10.1
million square feet, 129 industrial properties (the "Industrial Properties")
encompassing approximately 10.8 million square feet and two 10,000 square
foot retail properties. In addition, as of December 31, 1998 the Company 
had $61.3 million invested in certain mortgage indebtedness encumbering four
Class A Office Properties encompassing approximately 577,000 square feet, a
825,000 square foot Industrial Property,  a 400 acre parcel of land and
approximately $17 million invested 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 (the 
"Mortgage Note Investments").  As of December 31, 1998, the Company also 
owned or had contracted to acquire approximately 980 acres of land in 18
separate parcels that may present future development opportunities.  During
1998, the Company made investments in joint ventures with Reckson Strategic 
Venture Partners, LLC ("RSVP"), a venture capital fund created as a research
and development vehicle for the Company to invest in alternative real estate
sectors (see Corporate Strategies and Growth Opportunities).  RSVP is 
managed by an affiliate of Reckson Service Industries, Inc., ("RSI").  The
Company has committed up to $100 million for investments in the form of 
either (i) joint ventures with RSVP or (ii) loans to RSI for RSI's 
investment in RSVP.  To date, the Company has invested $10.1 million in
RSVP joint venture investments. During 1998, the Company also spun off RSI,
its commercial service business, to its shareholders and has provided RSI
with a $100 million line of credit.  As of December 31, 1998 $33.7 million
had been drawn and is outstanding on this line.

     The Office Properties are Class A suburban office buildings and are 
well-located, well-maintained and professionally managed. In addition, these
properties are modern with high finishes or have been modernized to 
successfully compete with newer buildings and achieve among the highest rent,
occupancy and tenant retention rates within their markets. The majority of the
Office Properties are located in 12 planned office parks and are tenanted  by 
a diverse industry group of national firms which include, consumer products,
pharmaceutical, telecommunication, health care, insurance and professional 
service firms such as accounting firms and securities brokerage houses.   
The Industrial Properties are utilized for distribution, warehousing, research
and development and light manufacturing / assembly activities and are located 
primarily in three planned industrial parks developed by Reckson and 23 
buildings acquired in connection with the Morris Companies acquisition (see 
External Growth below).

     All of the Company's interests in the Properties, the Mortgage Note 
Investments and land are held directly or indirectly by, and all of its
operations are conducted through, the Operating Partnership.  Reckson 
Associates Realty Corp. controls the Operating Partnership as the sole
general partner and as of December 31, 1998, owned approximately 84% of the
Operating Partnership's outstanding common units of limited partnership
("Units").

     The Company seeks to maintain cash reserves for normal repairs, 
replacements, improvements, working capital and other contingencies. The 
Operating Partnership has established an unsecured credit facility with a
maximum borrowing amount of $500 million scheduled to mature on July 23,
2001 and, an unsecured term loan with a maximum borrowing capacity of $75
million scheduled to mature on December 3, 1999. The credit facility and
the term loan require the Company to comply with a number of financial and
other covenants on an ongoing basis. 

     In February 1998, the Company completed a public stock offering and sold
791,152 common shares at a price of $25.44 per share (the "February 1998 
Offering").  On April 29, 1998, the Company completed a public stock offering
and sold 1,093,744 common shares at a price of $24.38 per share (the "April 
1998 Offering").  Additionally, during April 1998 the Company completed a 
preferred stock offering and sold 9,200,000 shares (including 1,200,000 
shares related to the exercise of the underwriters over allotment option)
of 7.625% Series A Convertible Cumulative Preferred Stock at a price of $25.00
per share (the "April 1998 Preferred Offering").  Net proceeds of 
approximately $19.1 million from the February 1998 Offering, $25.3 million from
the April 1998 Offering and $221 million from the April 1998 Preferred Offering
were used to make acquisitions of Properties and to repay borrowings.

     In March 1997, the Company completed a public offering and sold 4,945,000 
common shares (pre-split) at a price of $45.25 (pre-split) (including 645,000 
common shares related to the exercise of the underwriter over allotment option)
(the "March 1997 Offering").  In December 1997, the Company completed a public
offering and sold 3,081,777 common shares at a price of $26.00 per share (the 
"December 1997 Offering").  Net proceeds to the Company of approximately $212
million from the March 1997 Offering and $80 million from the December 1997 
Offering were used to make acquisitions of Properties and to repay borrowings.

     There are numerous commercial properties that compete with the Company in
attracting tenants and numerous companies that compete in selecting land for 
development and properties for acquisition. 

     The Company's executive offices are located at 225 Broadhollow Road, 
Melville, New York 11747 and its telephone number at that location is (516)
694-6900. At December 31, 1998, the Company had approximately 250 employees. 

Recent Developments

Acquisition Activity. 

     Set forth below is a brief description of the Company's major acquisition
activity during 1998.  All of these Properties are located in the Tri-State
Area.

     During 1998, the Company acquired or contracted to acquire approximately 
$434 million of Class A suburban Office and Industrial Properties encompassing
approximately  3.7 million square feet.  In addition, the Company acquired 
approximately 192.1 acres of land for an aggregate purchase price of 
approximately $20.6 million.

     In that regard, during 1998, the Company acquired three Class A suburban 
Office Properties and two Industrial Properties encompassing approximately 
674,000 and 200,000 square feet respectively, located on Long Island for an
aggregate purchase price of approximately $ 67.8 million.  In addition, the 
Company acquired approximately 79.9 acres of land for an aggregate purchase 
price of approximately $15.0 million. 

     During 1998, the Company acquired six Office Properties encompassing 
approximately 980,000 square feet in Westchester from Cappelli Enterprises
and affiliated entities (see below) for an aggregate purchase price of 
approximately $173 million.   

     During 1998, the Company acquired two Office Properties encompassing
approximately 325,000 square feet in Connecticut for an aggregate purchase
price of approximately $61.3 million 

     During 1998, the Company acquired four Office Properties encompassing
approximately 522,000 square feet and six Industrial Properties encompassing
approximately 985,000 square feet in New Jersey for an aggregate purchase 
price of approximately $132.5 million (excluding the Company's investment
Reckson Morris Operating Partnership, L.P.; see below).   In addition, the
Company acquired approximately 112.2 acres of land for an aggregate purchase
price of approximately $5.6 million.

     On January 6, 1998, the Company made an initial investment in the Morris
Companies, a New Jersey developer and owner of "Big Box" warehouse facilities.
In connection with the transaction the Morris Companies contributed 100% of 
their interests in certain industrial properties to  Reckson Morris Operating
Partnership, L.P. ("RMI") in exchange for operating partnership units in RMI.
The Company has agreed to invest up to $150 million in RMI.  As of December
31, 1998, the Company has invested approximately $ 93.8 million for an 
approximate 71.8% controlling interest in RMI.

     During 1998, the Company acquired a portfolio of six office properties 
encompassing approximately 980,000 square feet in Westchester County, New York
from Cappelli Enterprises and affiliated entities ("Cappelli") for a purchase
price of approximately $173 million.  The Cappelli acquisition includes a five
building, 850,000 square foot Class A office park in Valhalla and Court House 
Square, a 130,000 square foot Class A office building located in White Plains.
The Company also obtained from Cappelli the remaining 50% interest in 360 
Hamilton Avenue, a 365,000 square foot vacant office tower in downtown White
Plains for $10 million plus the return of his capital contributions of 
approximately $1.5 million.   In addition, the Company received an option
from Cappelli to acquire the remaining development parcels within the Valhalla
office park on which up to 875,000 square feet of office space can be 
developed.   These acquisitions were financed in part through proceeds from a
draw under the credit facilities, the issuance of 42,518 (approximately $42.5
million)  preferred operating partnership units (the "Cappelli Preferred 
Units"), and the assumption of approximately $47.1 million of mortgage debt.
Additionally, during 1998, the Company issued and advanced to Cappelli $19 
million under two liquidity loans (the "Cappelli Liquidity Loans").  The 
Cappelli Liquidity Loans bear interest at rates ranging from 10% to 10.5% per
annum and are secured by Cappelli's right, title and interest in the Cappelli
Preferred Units.  Such amounts have been included in investments in mortgage
notes and notes receivable on the Company's balance sheet.  On February 3,
1999, the Company made an additional $5 million advance under the Cappelli
Liquidity Loans.

     In addition, the Company has invested approximately $61.3 million in 
certain mortgage indebtedness encumbering four Class A Office Properties 
located on Long Island encompassing approximately 577,000 square feet, a 
825,000 square foot Industrial Property located in New Jersey and a 400 acre
parcel of land located in New Jersey.  In addition, the Company has loaned 
approximately $17 million to its minority partner in Omni, its flagship Long
Island Office Property, and effectively increased its economic interest in 
the property owning partnership.

     Set forth below is a brief description of the Company's major acquisition
activity during 1997.  All of these Properties are located in the Tri-State
Area.

     During 1997, the Company acquired or contracted to acquire approximately
$431 million of Class A suburban Office and Industrial Properties encompassing
approximately 4.9 million square feet.  In addition, the Company acquired 
approximately 335 acres of land for an aggregate purchase price of 
approximately $24.2 million.  

     In that regard, during 1997, the Company acquired five Class A suburban
Office Properties and 15 Industrial Properties encompassing approximately 
881,000 and 968,000 square feet respectively, located on Long Island. 

     During 1997, the Company acquired eight Office Properties encompassing
approximately 830,000 square feet and three  Industrial Properties encompassing
approximately 163,000 square feet in Westchester for an aggregate purchase price
of approximately $117 million.  In addition, the Company acquired approximately
32 acres of land for a purchase price of approximately $8 million.

     During 1997, the Company acquired one Industrial Property encompassing
approximately 452,000 square feet in Connecticut for a purchase price of 
approximately $27 million.

     During 1997, the Company acquired 13 Office Properties encompassing 
approximately 1.5 million square feet and one Industrial Property encompassing
approximately 128,000 square feet in New Jersey for an aggregate purchase price
of approximately $156 million.  In addition, the Company acquired approximately
303 acres of land for an aggregate purchase price of approximately $16.2 
million.

     In October 1997, the Company sold 671 Old Willets Path in Hauppauge, New
York for approximately $725,000 and recorded a gain on the sale of $672,000.

     In addition, during 1997, the Company invested approximately $29 million
in certain mortgage indebtedness encumbering one Class A Office Property on Long
Island encompassing approximately 177,000 square feet, a 400 acre parcel of land
located in New Jersey and a 586,000 square foot Industrial Property located in
New Jersey.  In addition, on March 13, 1997 the Company loaned approximately $17
million to its minority partner in Omni, its flagship Long Island Office 
Property, and effectively increased its economic interest in the property owning
partnership.

Leasing Activity

     During the year ended December 31, 1998, the Company leased 1,519,166
square feet at the Office Properties at an average effective rent (i.e.,base
rent adjusted on a straight-line basis for free rent periods, tenant improve-
ments and leasing commissions) of $22.01 per square foot and 944,212 square 
feet at the Industrial Properties at an average effective rent of $7.25 per
square foot.  Included in this leasing data is 822,405 square feet at the Long
Island Office Properties at an average effective rent of $22.89; 221,822 square
feet at the Westchester Office Properties at an average effective rent of 
$19.29; 52,976 square feet at the Connecticut Office Properties at an average
effective rent of $24.17; and 421,963, square feet at the New Jersey Office 
Properties at an average effective rent of $21.45.  Also included in this 
leasing data is 705,871 square feet at the Long Island Industrial Properties
at an average effective rent of $7.41 and 238,341 square feet at the New Jersey
Industrial Properties at an average effective rent of $6.78.

Financing Activities

     On July 23, 1998, the Company obtained a three year $500 million unsecured
revolving credit facility (the "Credit Facility") from Chase Manhattan Bank, 
Union Bank of Switzerland and PNC Bank as co-managers of the credit facility 
bank group.  Interest rates on borrowings under the Credit Facility are priced
off of LIBOR plus a sliding scale ranging from 112.5 basis points to 137.5
basis points based on the leverage ratio of the Company.  Upon the Company
receiving an investment grade rating on its senior unsecured debt by two rating
agencies, the pricing is adjusted based off of LIBOR plus a scale ranging from 
65 basis points to 90 basis points depending upon the rating.  The Credit 
Facility replaced and restructured the Company's existing $250 million 
unsecured credit facility  and $200 million unsecured bridge facility.  As a
result, certain deferred loan costs incurred in connection with those 
facilities were written off.  Such amount has been reflected as an 
extraordinary loss on the Company's statement of operations.  The Company 
utilizes the Credit Facility primarily to finance the acquisitions of 
Properties and other real estate investments, fund its development activities
and for working capital purposes.  At December 31, 1998, the Company had 
availability under the Credit Facility to borrow an additional $8.1 million
(net of $26.1 million of outstanding undrawn letters of credit). 

     On December 4, 1998, the Company obtained a one year $50 million unsecured
term loan (the "Term Loan") from Chase Manhattan Bank.  On January 13, 1999,
the Company and Chase Manhattan Bank increased the total availability under the
Term Loan to $75 million.   Interest rates on borrowings under the Term Loan
are priced off LIBOR plus 150 basis points for the first nine months and 175
basis points for the remaining three months.   At  December 31, 1998, the 
Company had availability under the Term Loan to borrow an additional $30
million which was increased to $55 million on January 13, 1999.

Other Financing Activities  

     On May 21, 1998, the Company satisfied the mortgage note encumbering one
Property in the amount of approximately $1.9 million.  Additionally, on October
27, 1998, the Company refinanced a $10.0 million mortgage note encumbering one
Property with a new $21.4 million mortgage loan from a third party financial
institution.  The new mortgage note bears a fixed rate of interest of 6.45% and
matures on October 26, 2005.  Excess proceeds were used to repay borrowings
under the Credit Facility. 

     During August 1997, the Company refinanced approximately $43 million of
mortgage debt on its Omni Office Property with a $58 million fixed rate
mortgage loan.  The loan which matures on September 1, 2007 has a fixed rate of
7.72%.  Additionally, during August, 1997, the Company sold $150 million of
7.2% senior unsecured notes due in August 2007.  The net proceeds of these
financings were used to repay borrowings and for acquisitions of properties.

Stock Split

     On February 12, 1997, the Board of Directors of the Company declared a 
two-for-one stock split, effected as a stock dividend distributable on April
15, 1997 to stockholders of record on April 4, 1997.

Stock Offerings

     On February 18, 1998, the Company sold 791,152 shares of the Company's
common stock at $25.44 per share for an aggregate consideration of
approximately $20.1 million before deducting offering expenses.

     During April 1998, the Company completed a preferred stock offering and
sold 9,200,000 shares (including 1,200,000 shares related to the exercise of
the underwriters over allotment option) of 7.625% Series A Convertible
Cumulative Preferred Stock at a price of $25.00 per share for an aggregate
consideration of $230 million before deducting offering expenses.  The
preferred stock is convertible to the Company's common stock at a conversion
rate of .8769 shares of common stock for each share of preferred stock.  

     On April 29, 1998, the Company completed a common stock offering and sold
1,093,744 common shares at a price of $24.38 per share for an aggregate
consideration of approximately $26.7 million before deducting offering
expenses.  

Corporate Strategies and Growth Opportunities

     The Company's primary business objectives are to maximize current return
to stockholders through increases in distributable cash flow per share and to
increase stockholders' long-term total return through the appreciation in value
of its Common Stock. The Company plans to achieve these objectives by 
continuing Reckson's corporate strategies and capitalizing on the internal and
external growth opportunities described below. 

     Corporate Strategies.  Management believes that throughout its 40-year
operating history, Reckson has created value in its properties through a
variety of market cycles by implementing the operating strategies described
below. These operating strategies include the implementation of (i) a
multidisciplinary leasing approach that involves architectural design and
construction personnel as well as leasing professionals, (ii) innovative
property marketing programs such as the broker frequent leasing points program
which was established by the Company to enhance relationships with the
brokerage community.  The program allows brokers to accumulate points for
leasing space in the Company's portfolio which can be redeemed for luxurious
prizes, (iii) a comprehensive tenant service program and property amenities
designed to maximize tenant satisfaction and retention, (iv) cost control 
management and systems that take advantage of economies of scale that arise
from the Company's market position and efficiencies attributable to the 
state-of-the-art energy control system at many of the Office Properties and
(v) an acquisition and development strategy that is continuously adjusted in
light of anticipated changes in market conditions and that seeks to capitalize
on management's multidisciplinary expertise and market knowledge to modify, 
upgrade and reposition a property in its marketplace in order to maximize
value. 

     The Company also intends to adhere to a policy of maintaining a Debt Ratio
(defined as the total debt of the Company as a percentage of the market value
of outstanding shares of common stock, Units and, the stated values of the
Company's preferred equity) of less than 50%. As of December 31, 1998, the
Company's Debt Ratio was approximately 39.4%. This calculation is net of
minority partners' proportionate share of debt and including the Company's
share of unconsolidated joint venture debt.  This Debt Ratio is intended to
provide the Company with financial flexibility to select the optimal source of
capital (whether debt or equity) with which to finance external growth. 

     Growth Opportunities.  The Company intends to achieve its primary business
objectives by applying its corporate strategies to the internal and external
growth opportunities described below. 

     Internal Growth.  To the extent Long Island, Westchester, New Jersey and
Southern Connecticut  suburban office and industrial markets continue to 
improve, management believes the Company is well positioned to benefit from
rental revenue growth through: (i) contractual annual compounding 4% Base Rent
increases (defined  as fixed gross rental amounts that excludes payments on
account of real estate tax, operating expense escalations and base electrical
charges) on approximately 85% of existing leases at the Long Island Properties;
(ii) periodic contractual increases in Base Rent on existing leases at the 
Westchester Properties, the New Jersey Properties and the Southern Connecticut
Properties; and (iii) the potential for increases to Base Rents as leases 
expire as a result of continued tightening of the office and industrial 
markets with limited new supply.

     In connection with the Company's acquisition and merger transaction with
Tower Realty Trust, Inc. (see External Growth below) the company entered the
New York City office market. The Manhattan office market is currently
experiencing favorable supply and demand characteristics similar to those
currently in the Company's Tri-State Area suburban markets and also is
characterized by its similar lack of available land supply and other barriers
to entry that limit our competition.  The Tower portfolio includes Manhattan
office buildings that offer similar potential for increase in Base Rents as
described in (iii) above.

     External Growth.  The Company seeks to acquire multi-tenant suburban Class
A office and industrial properties located in the Tri-State Area. Management
believes that the Tri-State Area  presents opportunities to acquire or invest
in properties at attractive yields. The Company believes that its (i) capital
structure, in particular its Credit Facility providing for a maximum borrowing
amount of up to $500 million, (ii) ability to acquire a property for Units of
the Operating Partnership and thereby defer the seller's income tax on gain,
(iii) operating economies of scale, (iv) relationships with financial
institutions and private real estate owners, (v) fully integrated operations
in its four existing suburban divisions and (vi) its dominant position and 
franchise in the submarkets in which it owns properties will enhance the 
Company's ability to identify and capitalize on acquisition opportunities.
The Company also intends to selectively develop new Class A suburban office
and industrial properties and to continue to redevelop existing Office and 
Industrial Properties as these opportunities arise. In the near future the 
Company will concentrate its development activities on industrial and Class
A suburban office properties within its Tri-State Area markets.  The 
Company's expansion into the Manhattan office market and the opening of its
New York City division will provide it with additional opportunities to 
acquire an interest in properties at attractive yields.  The Company also
believes that the addition of its New York City division will provide 
additional leasing and operational facilities and enhance its overall 
franchise value by being the only real estate operating company in the Tri-
State Area with significant presence in both Manhattan and each of the 
surrounding sub-markets.

     On January 6, 1998, the Company made an initial investment in the Morris
Companies, a New Jersey developer and owner of "Big Box" warehouse facilities.
In connection with the transaction the Morris Companies contributed 100% of 
their interests in certain industrial properties to RMI in exchange for 
operating partnership units in RMI.  As of December 31, 1998, the Company has
invested approximately $93.8 million for an approximate 71.8% controlling 
interest in RMI.

     During 1997, the Company formed  RSI and RSVP.  The Operating Partnership
owned a 95% non voting common stock interest in RSI through June 10, 1998.  On
June 11, 1998, the Operating Partnership distributed its 95% common stock
interest in RSI of approximately $3 million to its owners, including the
Company which, in turn, distributed the common stock of RSI to its 
stockholders.  Additionally, during June 1998, the Operating Partnership
established a credit facility with RSI (the"RSI Facility") in the amount of
$100 million for RSI's service sector operations and other general corporate
purposes.  As of December 31, 1998, the Company had advanced $33.7 million
under the RSI facility all of which is outstanding.  In addition, the
Operating Partnership approved the funding of investments of up to $100
million with or in RSVP (the "RSVP Commitment"), through RSVP-controlled
joint venture REIT-qualified investments or advances made to RSI under terms
similar to the RSI Facility.  As of December 31, 1998, approximately $17.3 
million had been invested through the RSVP Commitment, of which $10.1 million
represents RSVP controlled joint venture investments and $7.2 million
represents advances to RSI under the RSVP Commitment.   Such amounts have been
included in investment in real estate joint ventures  and investments in and 
advances to affiliates, respectively, on the Company's balance sheet.  RSI 
serves as the managing member of RSVP.  RSI invests in operating companies that
generally  provide commercial services to the RSI customer base which includes
the tenants of RSI's executive suite business and to properties owned by the
Company and its tenants and third parties.  RSVP was formed to provide the 
Company with a research and development vehicle to invest in alternative real
estate sectors.  RSVP invests primarily in real estate and real estate related
operating companies generally outside of the Company's core office and
industrial focus.  RSVP's strategy is to identify and acquire interests in
established entrepreneurial enterprises with experienced management teams in
market sectors which are in the early stages of their growth cycle or offer
unique circumstances for attractive investments as well as a platform for
future growth. 

     On August 27, 1998 the Company announced the formation of a joint venture
with RSVP and the Dominion Group, an Oklahoma-based, privately-owned group of 
companies that focuses on the development, acquisition and ownership of
government occupied office buildings and correctional facilities.  The new
venture, Dominion Properties LLC (the "Dominion Venture"), is owned by Dominion
Venture Group LLC, and by a subsidiary of the Company.  The Dominion Venture
will engage primarily in acquiring, developing and/or owning 
government-occupied office buildings and privately operated correctional
facilities.  Under the Dominion Venture's operating agreement, RSVP is to
invest up to $100 million, some of which may be invested by the Company 
(the "RSVP Capital"). The initial contribution of RSVP Capital was 
approximately $39 million of which approximately $10.1 million was invested by
a subsidiary of the Company.  The Company's subsidiary funded its capital
contribution through  the RSVP Commitment.  In addition, the Company advanced
approximately $2.9 million to RSI through the RSVP Commitment for an investment
in RSVP which was then invested on a joint venture basis with the Dominion 
Group in certain service business activities related to the real estate
activities.  As of December 31, 1998, the Dominion Venture had investments in
11 government office buildings and two correctional facilities.  

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

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

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

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

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

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

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

      The Company has engaged brokers to, and anticipates that it will, 
dispose of the Tower properties located outside of the New York City
metropolitan area.  In addition, the Company, Tower and a third party have
reached an agreement for the third party to purchase four of Tower's New York
City properties for approximately $85 million shortly prior to the completion
of the merger.

Environmental Matters

      Under various Federal, state and local laws, ordinances and regulations,
an owner of real estate is liable for the costs of removal or remediation of 
certain hazardous or toxic substances on or in such property.  These laws often
impose such liability without regard to whether the owner knew of, or was
responsible for, the presence of such hazardous or toxic substances.  The cost
of any required remediation and the owner's liability therefore as to any
property is generally not limited under such enactments and could exceed the
value of the property and/or the aggregate assets of the owner.  The presence
of such substances, or the failure to properly remediate such substances, may
adversely affect the owner's ability to sell or rent such property or to
borrow using such property as collateral.  Persons who arrange for the
disposal or treatment of hazardous or toxic substances may also be liable for
the costs of removal or remediation of such substances at a disposal or
treatment facility, whether or not such facility is owned or operated by such
person.  Certain environmental laws govern the removal, encapsulation or 
disturbance of asbestos-containing materials ("ACMs") when such materials are
in poor condition, or in the event of renovation or demolition.  Such laws 
impose liability for release of ACMs into the air and third parties may seek
recovery from owners or operators of real properties for personal injury 
associated with ACMs.  In connection with the ownership (direct or indirect),
operation, management and development of real properties, the Company may be
considered an owner or operator of such properties or as having arranged for
the disposal or treatment of hazardous or toxic substances and, therefore,
potentially liable for removal or remediation costs, as well as certain other
related costs, including governmental fines and injuries to persons and 
property.

      All of the Office Properties and all of the Industrial Properties have
been subjected to a Phase I or similar environmental audit after April 1, 1994
(which involved general inspections without soil sampling, ground water 
analysis or radon testing and, for the Properties constructed in 1978 or
earlier, survey inspections to ascertain  the existence of ACMs were 
conducted) completed by independent environmental consultant companies
(except for 35 Pinelawn Road which was originally developed by Reckson and
subjected to a Phase 1 in April 1992).  These environmental audits have not
revealed any environmental liability that would have a material adverse effect
on the Company's business.


Item 2.         Properties

General

      As of December 31, 1998, the Company owned 204 Properties (including two
joint venture office properties but excluding the Dominion Venture properties)
encompassing approximately 21.0 million square feet. These properties consist
of 73 Class A suburban Office Properties encompassing approximately 10.1
million square feet, 129 Industrial Properties encompassing approximately
10.8 million rentable square feet and two free-standing 10,000 square foot
retail properties. The rentable square feet of each property has been 
determined for these purposes based on the aggregate leased square footage
specified in currently effective leases and, with respect to vacant space,
management's estimate. In addition, as of December 31, 1998, the Company 
owned or had contracted to acquire approximately  980 acres of land in 18
separate parcels that may present future development opportunities. 

      Reckson has historically emphasized the development and acquisition of
properties that are part of large scale office and industrial parks and
approximately 70% of the Office Properties and approximately 49% of the
Industrial Properties (excluding the RMI properties) are located in such
parks (measured by rentable square footage).  The Company believes that owning
properties in planned office and industrial parks provides certain strategic
advantages, including the following: (i) certain tenants prefer being located
in a park with other high quality companies to enhance their corporate image,
(ii) parks afford tenants certain aesthetic amenities such as a common
landscaping plan, standardization of signage and common dining and 
recreational facilities, (iii) tenants may expand (or contract) their business
within a park, enabling them to centralize business functions and (iv) a park
provides tenants with access to other tenants and may facilitate business
relationships between tenants. 

      Also, as of December 31, 1998, the Company had invested approximately
$61.3 million in certain mortgage indebtedness encumbering four Class A Office
Properties on Long Island, a 825,000 square foot Industrial Property located
in New Jersey and a 400 acre parcel of land located in New Jersey.  In 
addition, the Company has loaned approximately $17 million to its minority
partner in Omni, its flagship Long Island Office Property, and effectively
increased its economic interest in the property owning partnership.

      Set forth below is a summary of certain information relating to the
Properties, categorized by office and industrial parks, as of December 31,
1998.

Office Properties

General.  As of December 31, 1998, the Company owned or had an interest in 73
Class A suburban Office Properties that encompass approximately 10.1 million
rentable square feet. As of December 31, 1998, these Office Properties were
approximately 93.8% leased to 858 tenants. 

      The Office Properties are Class A suburban office buildings and are
well-located, well-maintained and professionally managed. In addition, these
properties are modern with high finishes and achieve among the highest rent,
occupancy and tenant retention rates within their sub-markets.  Forty nine of
the 73 Office Properties are located in the following 12 planned office parks:
the 23 acre North Shore Atrium, the 32 acre Huntington Melville Corporate
Center, the 50 acre Nassau West Corporate Center, the 29 acre Tarrytown
Corporate Center, the 7 acre Landmark Square Office Complex, the 32 acre
Executive Hill Office Park, the 76 acre Reckson Executive Park, the 11 acre
University Square Office Complex, the 58 acre Summit at Valhalla, the 5 acre
Mt. Pleasant Corporate Center, the 3.7 acre Stamford Towers Office Center,
and the 26 acre Short Hills Office Complex.  The buildings in these office
parks offer a full array of amenities including health clubs, racquetball
courts, sun decks, restaurants, computer controlled HVAC access systems and
conference centers. Management believes that the location, quality of
construction and amenities as well as the Company's reputation for providing
a high level of tenant service have enabled the Company to attract and retain
a national tenant base. The office tenants include national service companies,
such as telecommunications firms, "Big Five" accounting firms, securities
brokerage houses, insurance companies and health care providers. 

      The Long Island Office Properties are leased to national tenants, as
well as to local tenants. Leases on the Office Properties are typically
written for terms ranging from five to ten years and require (i) payment of a
fixed gross rental amount that excludes payments on account of real estate
tax, operating expense escalations and base electrical charges ("Base Rent"),
(ii) payment of a base electrical charge, (iii) payment of real estate tax
escalations over a base year, (iv) payment of compounded annual increases to
Base Rent in lieu of operating expense escalations (which the Company 
believes have historically exceeded the annual increase in actual operating
expenses), (v) payment of overtime HVAC and electric and (vi) payment of 
electric escalations over a base year. In virtually all leases, the landlord
is responsible for structural repairs. Renewal provisions typically provide
for renewal rates at market rates or a percentage thereof, provided that such
rates are not less than the most recent renewal rates. 

      The Westchester Properties, the Southern Connecticut Properties and the
New Jersey Properties are also leased to national tenants, as well as to local
tenants. Leases are typically for terms ranging from five to ten years and
require (i) payment of Base Rent, (ii) payment of a base electrical charge,
(iii) payment of real estate tax escalations over a base year, (iv) payment of
periodic fixed increases in Base Rent, (v) payment of operating expense
escalations over a base year, and (vi) payment of electric escalations over a
base year. In virtually all leases, the landlord is responsible for
structural repairs. Renewal provisions typically provide for renewal rates
at market rate or a percentage thereof, provided that such rates are not less
than the most recent renewal rates. 

      The following table sets forth certain information as of December 31,
1998 for each of the Office Properties.
<TABLE>
<CAPTION>
                                                   Ownership
                                                   Interest
                                                   (Ground
                                       Company's   Lease                   Land      Number
                                       Percentage  Expiration  Year        Area      of
Property                               Ownership   Date) <F1>  Constructed (Acres)   Floors
                                      ----------- ----------- ----------- --------- ----------
<S>                                   <C>         <C>         <C>         <C>       <C>
Office Properties:
Huntington Melville Corporate Center,
  Melville, NY

395 North Service Rd                        100%   Leasehold        1988       7.5          4
                                                      (2081)
200 Broadhollow Rd.                         100%         Fee        1981       4.6          4
48 South Service Rd.                        100%         Fee        1986       7.3          4
35 Pinelawn Rd                              100%         Fee        1980       6.0          2
275 Broadhollow Rd                          100%         Fee        1970       5.8          4
1305 Old Walt Whitman Rd <F3>               100%         Fee    1998<F5>      18.1          3
                                                                          ---------
Total-Huntington Melville
Corporate Center <F4>                                                         49.3
                                                                          ---------

North Shore Atrium,
  Syosset, NY

6800 Jericho Turnpike
  (North Shore Atrium I)                    100%         Fee        1977      13.0          2
6900 Jericho Turnpike
  (North Shore Atrium II)                   100%         Fee        1982       5.0          4
                                                                          ---------
 Total-North Shore Atrium                                                     18.0
                                                                          ---------

Nassau West Corporate Center,
  Mitchel Field, NY

50 Charles Lindbergh Blvd.                         Leasehold
  (Nassau West Corporate Center II)         100%      (2082)        1984       9.1          6
60 Charles Lindbergh Blvd.                         Leasehold
  (Nassau West Corporate Center I)          100%      (2082)        1989       7.8          2
51 Charles Lindbergh Blvd..                        Leasehold
                                            100%      (2084)        1989       6.6          1
55 Charles Lindbergh Blvd.                         Leasehold
                                            100%      (2082)        1982      10.0          2
333 Earl Ovington Blvd. (The Omni)                 Leasehold
                                             60%      (2088)        1991      30.6         10
90 Merrick Ave                                     Leasehold
                                            100%      (2084)        1985      13.2          9

                                                                          ---------
Total-Nassau West Corporate Center                                            77.3
                                                                          ---------

Tarrytown Corp. Center
  Tarrytown, NY

505 White Plains Road                       100%         Fee        1974       1.4          2
520 White Plains Road                        60%     Fee<F6>        1981       6.8          6
555 White Plains Road                       100%         Fee        1972       4.2          5
560 White Plains Road                       100%         Fee        1980       4.0          6
580 White Plains Road                       100%         Fee        1977       6.1          6
660 White Plains Road                       100%         Fee        1983      10.9          6
                                                                          ---------
Total-Tarrytown Corporate Center                                              33.4
                                                                          ---------

Royal Executive Park,
  Rye Brook, NY

1 International Dr.                         100%         Fee        1983       N/A          3
2 International Dr.                         100%         Fee        1983       N/A          3
3 International Dr.                         100%         Fee        1983       N/A          3
4 International Dr.                         100%         Fee        1986       N/A          3
5 International Dr.                         100%         Fee        1986       N/A          3
6 International Dr.                         100%         Fee        1986       N/A          3
                                                                          ---------
 Total-Reckson Executive Park                                                 44.4
                                                                          ---------

Summit at Valhalla
  Valhalla, NY

  100 Summit Dr.                            100%         Fee        1988      11.3          4
  200 Summit Dr.                            100%         Fee        1990      18.0          4
  500 Summit Dr.                            100%         Fee        1986      29.1          4
                                                                          ---------
Total - Summit at Valhalla                                                    58.4
                                                                          ---------

Mt. Pleasant Corporate Center

  115/117 Stevens Ave.                      100%         Fee        1984       5.0          3
                                                                          ---------
Total - Mt Pleasant Corporate Center                                           5.0
                                                                          ---------

Landmark Square,
  Stamford, CT

One Landmark Square                         100%         Fee        1973       N/A         22
Two Landmark Square                         100%         Fee        1976       N/A          3
Three Landmark Square                       100%         Fee        1978       N/A          6
Four Landmark Square                        100%         Fee        1977       N/A          5
Five Landmark Square                        100%         Fee        1976       N/A          3
Six Landmark Square                         100%         Fee        1984       N/A         10
                                                                          ---------
 Total - Landmark Square                                                       7.2
                                                                          ---------

Stamford Towers
  Stamford, CT

  680 Washington Blvd.                      100%         Fee        1989       1.3         11
  750 Washington Blvd.                      100%         Fee        1989       2.4         11
                                                                          ---------
   Total-Stamford Towers                                                       3.7
                                                                          ---------

Stand-alone Long Island
Office Properties

400 Garden City Plaza
  Garden City, NY                           100%         Fee        1989       5.7          5
88 Duryea Rd.
  Melville, NY                              100%         Fee        1986       1.5          2
310 East Shore Rd.
  Great Neck, NY                            100%         Fee        1981       1.5          4
333 East Shore Rd.                                 Leasehold
  Great Neck, NY                            100%      (2030)        1976       1.5          2
520 Broadhollow Rd.
  Melville, NY                              100%         Fee        1978       7.0          1
1660 Walt Whitman Rd.
  Melville, NY                              100%         Fee        1980       6.5          1
125 Baylis Rd.
  Melville, NY                              100%         Fee        1980       8.2          2
150 Motor Parkway,
  Hauppauge, NY                             100%         Fee        1984      11.3          4
1979 Marcus Ave.
  Lake Success, NY                          100%         Fee        1987       8.6          4
                                                                          ---------
Total-Stand-alone Long Island
Office Properties                                                             51.8
                                                                          ---------

 Stand-alone Westchester Properties

155 White Plains Road,
  Tarrytown, NY                             100%         Fee        1963      13.2          2
235 Main Street,
  White Plains, NY                          100%         Fee   1974 <F5>       0.4          6
245 Main Street,
  White Plains, NY                          100%         Fee        1983       0.4          6
2 Church Street,
  Ossining, NY                              100%         Fee        1979       1.1          2
120 White Plains Rd.,
  Tarrytown, NY                             100%         Fee        1984       9.7          6
80 Grasslands
  Elmsford, NY                              100%         Fee        1989       4.9          3
360 Hamilton Avenue,
  White Plains, NY <F3>                     100%         Fee        1977       1.5         12
140 Grand Street
   White Plains, NY                         100%         Fee        1991       2.2          9
                                                                          ---------
Total Stand-alone Westchester
Office Properties<F4>                                                         33.4
                                                                          ---------

Executive Hill Office Park
   West Orange, NJ

100 Executive Dr                            100%         Fee        1978      10.1          3
200 Executive Dr                            100%         Fee        1980       8.2          4
300 Executive Dr                            100%         Fee        1984       8.7          4
10 Rooney Circle                            100%         Fee        1971       5.2          3
                                                                          ---------
 Total-Executive Hill Office Park                                             32.2
                                                                          ---------

University Square,
  Princeton, NJ

100 Campus Dr.                              100%         Fee        1987       N/A          1
104 Campus Dr.                              100%         Fee        1987       N/A          1
115 Campus Dr.                              100%         Fee        1987       N/A          1
                                                                          ---------
 Total University Square                                                      11.0
                                                                          ---------

Short Hills Office Complex
  Short Hills, NJ

101 West John F. Kennedy Parkway            100%         Fee        1981       9.0          6
101 East John F. Kennedy  Parkway           100%         Fee        1981       6.0          4
51 John F Kennedy Parkway                   100%         Fee        1988      11.0          5
                                                                          ---------
Total - Short Hills Office Complex                                            26.0
                                                                          ---------

 Stand-alone New Jersey Properties

1 Paragon Drive
  Montvale, NJ                              100%         Fee        1980      11.0          2
99 Cherry Hill Road
  Parsippany, NJ                            100%         Fee        1982       8.8          3
119 Cherry Hill Road
  Parsippany, NJ                            100%         Fee        1982       9.3          3
One Eagle Rock
  Hanover, NJ                               100%         Fee        1986      10.4          3
155 Passaic Ave.
  Fairfield, NJ                             100%         Fee        1984       3.6          4
3 University Plaza
  Hackensack, NJ                            100%         Fee        1985      10.6          6
1255 Broad Street
  Clifton, NJ <F3>                          100%         Fee        1968      11.1          2
                                                                          ---------
Total Stand-alone New Jersey
Properties <F4>                                                               64.8
                                                                          ---------
 Total-Office Properties <F4>                                                515.9
                                                                          =========
<FN>
<F1>
Ground lease expirations assume exercise of renewal options by the lessee.
<F2>
Represents Base Rent of signed leases at December 31, 1998 adjusted for 
scheduled contractual increases during the 12 months ending December 31, 1999.  
Total Base Rent for these purposes reflects the effect of any lease expirations 
that occur during the 12-month period ending December 31, 1999. Amounts 
included in rental revenue for financial reporting purposes have been 
determined on a straight-line basis rather than on the basis of contractual 
rent as set forth in the foregoing table.
<F3>
Property is currently under redevelopment.
<F4>
Percent leases excludes properties under development.
<F5>
Year renovated.
<F6>
The actual fee interest in 520 White Plains Road is held by the County of 
Westchester Industrial Development Agency.  The fee interest in 520 White 
Plains Road may be acquired if the outstanding principal under certain loan 
agreements and annual basic installments are prepaid in full.
</FN>
</TABLE>
<TABLE>
<CAPTION>


                                                                                Annual      Number
                                        Rentable                  Annual        Base Rent   of
                                        Square         Percent    Base Rent     Per Leased  Tenant
Property                                Feet           Leased     <F2>          Sq. Ft.     Leases
                                       -------------- ---------- ------------- ----------- ----------
<S>                                    <C>            <C>        <C>           <C>         <C>
Office Properties:
Huntington Melville Corporate Center,
  Melville, NY

395 North Service Rd                         187,393     100.0%    $4,473,934      $23.87          6

200 Broadhollow Rd.                           67,432      80.9%    $1,171,091      $21.48         10
48 South Service Rd.                         125,372      95.1%    $2,774,294      $23.26          7
35 Pinelawn Rd                               105,241      96.4%    $2,087,240      $20.58         25
275 Broadhollow Rd                           124,441      97.9%    $2,527,812      $20.74         20
1305 Old Walt Whitman Rd <F3>                167,400      54.0%    $1,057,370      $11.69          2
                                       --------------            -------------             ----------
Total-Huntington Melville
Corporate Center <F4>                        777,279      95.8%   $14,091,741      $20.88         70
                                       --------------            -------------             ----------

North Shore Atrium,
  Syosset, NY

6800 Jericho Turnpike
  (North Shore Atrium I)                     209,028      78.1%    $2,931,343      $17.96         37
6900 Jericho Turnpike
  (North Shore Atrium II)                    101,036      81.5%    $1,518,383      $18.44         12
                                       --------------            -------------             ----------
 Total-North Shore Atrium                    310,064      79.2%    $4,449,726      $18.12         49
                                       --------------            -------------             ----------

Nassau West Corporate Center,
  Mitchel Field, NY

50 Charles Lindbergh Blvd.
  (Nassau West Corporate Center II)          211,845     100.0%    $4,939,446      $23.15         22
60 Charles Lindbergh Blvd.
  (Nassau West Corporate Center I)           186,889     100.0%    $3,892,949      $20.79          7
51 Charles Lindbergh Blvd..                  108,000     100.0%    $2,064,081      $19.11          1

55 Charles Lindbergh Blvd.                   214,581     100.0%    $2,483,483      $11.57          2

333 Earl Ovington Blvd. (The Omni)           575,000      96.8%   $15,623,699      $28.07         27

90 Merrick Ave.                              221,839     100.0%    $5,083,788      $22.54         22

                                       --------------            -------------             ----------
Total-Nassau West Corporate Center         1,518,154      99.2%   $34,087,446      $22.64         81
                                       --------------            -------------             ----------

Tarrytown Corp. Center
  Tarrytown, NY

505 White Plains Road                         26,468      96.3%      $434,549      $17.05         20
520 White Plains Road                        171,761     100.0%    $3,192,362      $18.59          1
555 White Plains Road                        121,585      56.7%    $1,035,561      $15.01          6
560 White Plains Road                        126,741      99.0%    $2,304,411      $18.40         15
580 White Plains Road                        170,726      78.6%    $2,533,944      $18.89         19
660 White Plains Road                        258,715      92.9%    $4,878,054      $20.30         46
                                       --------------            -------------             ----------
 Total-Tarrytown   Corporate Center          875,726      87.5%   $14,378,881      $18.77        107
                                       --------------            -------------             ----------

Royal Executive Park,
  Rye Brook, NY

1 International Dr.                           90,000     100.0%    $1,170,000      $13.00          1
2 International Dr.                           90,000     100.0%    $1,170,000      $13.00          1
3 International Dr.                           91,174     100.0%    $1,822,063      $19.98          5
4 International Dr.                           86,694     100.0%    $1,578,818      $18.20         10
5 International Dr.                           90,000     100.0%    $2,416,482      $26.85          1
6 International Dr.                           94,016     100.0%    $1,567,129      $16.67          8
                                       --------------            -------------             ----------
 Total-Reckson Executive Park                541,884     100.0%    $9,724,492      $17.94         26
                                       --------------            -------------             ----------

Summit at Valhalla
  Valhalla, NY

  100 Summit Dr.                             249,551      99.0%    $5,975,322      $24.19          7
  200 Summit Dr.                             240,834      85.9%    $4,975,008      $24.05         12
  500 Summit Dr.                             208,660     100.0%    $5,633,820      $27.00          1
                                       --------------            -------------             ----------
Total - Summit at Valhalla                   699,045      94.8%   $16,584,150      $25.03         20
                                       --------------            -------------             ----------

Mt. Pleasant Corporate Center

  115/117 Stevens Ave.                       162,004      96.5%    $3,028,227      $19.36         17
                                       --------------            -------------             ----------
Total - Mt Pleasant Corporate Center         162,004      96.5%    $3,028,227      $19.36         17
                                       --------------            -------------             ----------

Landmark Square,
  Stamford, CT

One Landmark Square                          296,716      86.6%    $5,720,613      $22.26         59
Two Landmark Square                           39,701      81.8%      $692,342      $21.31          9
Three Landmark Square                        128,286      89.5%    $2,630,895      $22.91         21
Four Landmark Square                         104,446      89.9%    $2,141,460      $22.81         16
Five Landmark Square                          57,273      87.7%      $175,000       $3.48          1
Six Landmark Square                          171,899      96.5%    $3,819,304      $23.03          7
                                       --------------            -------------             ----------
 Total - Landmark Square                     798,321      89.5%   $15,179,614      $21.25        113
                                       --------------            -------------             ----------

Stamford Towers
  Stamford, CT

  680 Washington Blvd.                       132,759      85.7%    $2,477,251      $21.78          5
  750 Washington Blvd.                       192,108      95.8%    $4,363,747      $23.70         10
                                       --------------            -------------             ----------
   Total-Stamford Towers                     324,867      91.7%    $6,840,998      $22.97         15
                                       --------------            -------------             ----------

Stand-alone Long Island
Office Properties

400 Garden City Plaza
  Garden City, NY                            176,073      87.4%    $3,557,257      $23.10         23
88 Duryea Rd.
  Melville, NY                                25,061      79.6%      $354,022      $17.75          3
310 East Shore Rd.
  Great Neck, NY                              50,000     100.0%    $1,207,228      $24.09         21
333 East Shore Rd.
  Great Neck, NY                              17,715      99.6%      $483,726      $27.41          9
520 Broadhollow Rd.
  Melville, NY                                83,176     100.0%    $1,520,471      $18.28          5
1660 Walt Whitman Rd.
  Melville, NY                                73,115      91.2%    $1,234,445      $18.52          4
125 Baylis Rd.
  Melville, NY                                98,329      64.4%    $1,106,006      $17.48         12
150 Motor Parkway,
  Hauppauge, NY                              191,447      94.2%    $3,730,513      $20.69         24
1979 Marcus Ave.
  Lake Success, NY                           351,000      78.8%    $5,330,079      $19.26         25
                                       --------------            -------------             ----------
Total-Stand-alone Long Island
Office Properties                          1,065,916      85.5%   $18,523,747      $20.32        126
                                       --------------            -------------             ----------

 Stand-alone Westchester Properties

155 White Plains Road,
  Tarrytown, NY                               60,909      95.6%    $1,114,080      $19.13          6
235 Main Street,
  White Plains, NY                            83,237      94.4%    $1,404,396      $17.87         29
245 Main Street,
  White Plains, NY                            73,543      92.0%    $1,340,432      $19.81         17
2 Church Street,
  Ossining, NY                                24,250      60.6%      $218,745      $14.89          4
120 White Plains Rd.,
  Tarrytown, NY                              203,000     100.0%    $4,445,022      $21.86         12
80 Grasslands
  Elmsford, NY                                85,104      99.3%    $1,609,730      $19.04          6
360 Hamilton Avenue,
  White Plains, NY <F3>                      365,000       0.0%            $0       $0.00          0
140 Grand Street
   White Plains, NY                          130,136      93.0%    $2,673,200      $22.10         17
                                       --------------            -------------             ----------
Total Stand-alone Westchester
Office Properties<F4>                      1,025,179      95.9%   $12,805,605      $20.39         91
                                       --------------            -------------             ----------

Executive Hill Office Park
   West Orange, NJ

100 Executive Dr                              92,872     100.0%    $1,778,542      $19.15         12
200 Executive Dr                             102,630      96.5%    $2,029,480      $20.50         18
300 Executive Dr                             126,196     100.0%    $2,568,559      $20.32         11
10 Rooney Circle                              69,684     100.0%    $1,406,904      $20.19          2
                                       --------------            -------------             ----------
 Total-Executive Hill Office Park            391,382      99.1%    $7,783,485      $20.06         43
                                       --------------            -------------             ----------

University Square,
  Princeton, NJ

100 Campus Dr.                                27,350      99.7%      $428,715      $15.73          2
104 Campus Dr.                                70,155     100.0%    $1,140,019      $16.25          1
115 Campus Dr.                                33,600     100.0%      $602,144      $17.92          2
                                       --------------            -------------             ----------
 Total University Square                     131,105      99.9%    $2,170,878      $16.57          5
                                       --------------            -------------             ----------

Short Hills Office Complex
  Short Hills, NJ

101 West John F. Kennedy Parkway             185,233     100.0%    $2,963,728      $16.00          1
101 East John F. Kennedy  Parkway            122,841     100.0%    $1,965,456      $16.00          1
51 John F Kennedy Parkway                    248,962      97.1%    $7,911,179      $32.72         15
                                       --------------            -------------             ----------
Total - Short Hills Office Complex           557,036      98.7%   $12,840,363      $23.35         17
                                       --------------            -------------             ----------

 Stand-alone New Jersey Properties

1 Paragon Drive
  Montvale, NJ                               104,599      88.3%    $1,963,502      $21.25         14
99 Cherry Hill Road
  Parsippany, NJ                              93,250      97.5%    $1,202,632      $13.23         16
119 Cherry Hill Road
  Parsippany, NJ                              95,724      97.1%    $1,393,181      $14.99         16
One Eagle Rock
  Hanover, NJ                                140,000      98.1%    $1,879,371      $13.68          6
155 Passaic Ave.
  Fairfield, NJ                               84,500      99.0%      $872,602      $10.43          3
3 University Plaza
  Hackensack, NJ                             216,403      98.3%    $3,889,398      $18.28         22
1255 Broad Street
  Clifton, NJ <F3>                           180,000      34.5%      $951,096      $15.33          1
                                       --------------            -------------             ----------
Total Stand-alone New Jersey
Properties <F4>                              914,476      96.7%   $12,151,782      $15.74         78
                                       --------------            -------------             ----------
 Total-Office Properties <F4>             10,092,438      93.8%   $184,641,135     $20.64        858
                                       ==============            =============             ==========
<FN>
<F1>
Ground lease expirations assume exercise of renewal options by the lessee.
<F2>
Represents Base Rent of signed leases at December 31, 1998 adjusted for 
scheduled contractual increases during the 12 months ending December 31, 1999.  
Total Base Rent for these purposes reflects the effect of any lease expirations 
that occur during the 12-month period ending December 31, 1999. Amounts 
included in rental revenue for financial reporting purposes have been 
determined on a straight-line basis rather than on the basis of contractual 
rent as set forth in the foregoing table.
<F3>
Property is currently under redevelopment.
<F4>
Percent leases excludes properties under development.
<F5>
Year renovated.
<F6>
The actual fee interest in 520 White Plains Road is held by the County of 
Westchester Industrial Development Agency.  The fee interest in 520 White 
Plains Road may be acquired if the outstanding principal under certain loan 
agreements and annual basic installments are prepaid in full.
</FN>
</TABLE>
Industrial Properties

     General.  As of December 31, 1998, the Company owned or had an interest 
in 129 Industrial Properties that encompass approximately 10.8 million rentable
square feet. As of December 31, 1998, the Industrial Properties were
approximately 96.9% leased to 281 tenants. Many of the Industrial Properties
have been constructed with high ceiling heights (i.e., above 18 feet), upscale
office building facades, parking in excess of zoning requirements, drive-in
and/or loading dock facilities and other features which permit them to be 
leased for industrial and/or office purposes.

     The Industrial Properties are leased to national tenants as well as to
local companies. These tenants utilize the Industrial Properties for
distribution, warehousing, research and development and light
manufacturing/assembly activities. Leases on the Industrial Properties are
typically written for terms ranging from three to seven years and require (i)
payment of a Base Rent, (ii) payments of real estate tax escalations over a
base year, (iii) payments of compounded annual increases to Base Rent and (iv)
reimbursement of all operating expenses. Electric costs are borne and paid
directly by the tenant. Certain leases are "triple net" (i.e., the tenant is
required to pay in addition to annual Base Rent, all operating expenses and 
real estate taxes). In virtually all leases, the landlord is responsible for
structural repairs. Renewal provisions typically provide for renewal rents at
market rates, provided that such rates are not less than the most recent 
rental rates.

     Approximately 49% of the Industrial Properties (excluding the Morris
Companies) measured by square footage, are located in three large scale planned
industrial parks that were developed by Reckson. They are (i) Vanderbilt
Industrial Park, a 400-acre industrial park containing 50 buildings with
approximately 3.6 million square feet.(ii) Airport International Plaza a
200-acre industrial park containing 32 buildings with approximately 1.4 million
square feet, and (iii) County Line Industrial Center, a 28-acre industrial park
containing six buildings and approximately one million square feet.

     In addition to its industrial parks, as of December 31, 1998, the Company
owned 36 standalone Industrial Properties.  As of December 31, 1998, these 
Properties were approximately 98% leased (excluding properties under 
development) to 68 tenants.  Included in the 36 standalone Industrial
Properties are 24 Properties located on Long Island encompassing approximately
2.0 million square feet, of which 35% are located in Farmingdale, 13% are 
located in Melville, 11% are located in Islip/Islandia and 10% are located in
Hauppauge.

     The following table sets forth certain information as of December 31, 1998
for each of the Industrial Properties. 

<TABLE>
<CAPTION>
                                            Ownership                                         Percentage
                                            Interest                                          Office/
                                            (Ground                                           Research
                                Company's   Lease                        Land    Clearance    and
                                Percentage  Expiration      Year         Area    Height       Development
Property                        Ownership   Date)           Constructed  (Acres) (Feet)<F1>   Finish
                               ----------- --------------- ------------ ------- ------------ -------------
<S>                            <C>         <C>             <C>          <C>     <C>          <C>
 Industrial Properties:                             

Vanderbilt Industrial  Park,
  Hauppauge, NY

360 Vanderbilt Motor Parkway         100%        Fee              1967     4.2           16           62%
410 Vanderbilt Motor Parkway         100%        Fee              1965     3.0           15            7%
595 Old Willets Path                 100%        Fee              1968     3.5           14           14%
611 Old Willets Path                 100%        Fee              1963     3.0           14           11%
631/641 Old Willets Path             100%        Fee              1965     1.9           14           31%
651/661 Old Willets Path             100%        Fee              1966     2.0           14           45%
681 Old Willets Path                 100%        Fee              1961     1.3           14           10%
740 Old Willets Path                 100%        Fee              1965     3.5           14            5%
325 Rabro Dr.                        100%        Fee              1967     2.7           14           10%
250 Kennedy Dr.                      100%        Fee              1979     7.0           16            9%
90 Plant Ave.                        100%        Fee              1972     4.3           16           13%
110 Plant Ave.                       100%        Fee              1974     6.8           18            8%
55 Engineers Rd.                     100%        Fee              1968     3.0           18            8%
65 Engineers Rd.                     100%        Fee              1969     1.8           22           10%
85 Engineers Rd.                     100%        Fee              1968     2.3           18            5%
100 Engineers Rd.                    100%        Fee              1968     5.0           14           11%
150 Engineers Rd.                    100%        Fee              1969     6.8           22           11%
20 Oser Ave.                         100%        Fee              1979     5.0           16           18%
30 Oser Ave.                         100%        Fee              1978     4.4           16           21%
40 Oser Ave.                         100%        Fee              1974     3.1           16           33%
50 Oser Ave.                         100%        Fee              1975     4.1           21           15%
60 Oser Ave.                         100%        Fee              1975     3.3           21           19%
63 Oser Ave.                         100%        Fee              1974     1.2           20            9%
65 Oser Ave.                         100%        Fee              1975     1.2           18           10%
73 Oser Ave.                         100%        Fee              1974     1.2           20           15%
80 Oser Ave.                         100%        Fee              1974     1.1           18           25%
85 Nicon Ct.                         100%        Fee              1978     6.1           30           10%
90 Oser Ave.                         100%        Fee              1973     1.1           16           26%
104 Parkway Dr.                      100%        Fee              1985     1.8           15           50%
110 Ricefield Ln.                    100%        Fee              1980     2.0           15           25%
120 Ricefield Ln.                    100%        Fee              1983     2.0           15           24%
125 Ricefield Ln.                    100%        Fee              1973     2.0           14           20%
135 Ricefield Ln.                    100%        Fee              1981     2.1           15           10%
85 Adams Dr.                         100%        Fee              1980     1.8           15           90%
395 Oser Ave                         100%        Fee              1980     6.1           14          100%
185 Oser Ave                         100%        Fee              1974     2.0           18           40%
25 Davids Dr.                        100%        Fee              1975     3.2           20           90%
45 Adams Ave                         100%        Fee              1979     2.1           18           90%
225 Oser Ave                         100%        Fee              1977     1.2           14           80%
180 Oser Ave                         100%        Fee              1978     3.4           16           35%
360 Oser Ave                         100%        Fee              1981     1.3           18           35%
400 Oser Ave                         100%        Fee              1982     9.5           16           30%
375 Oser Ave                         100%        Fee              1981     1.2           18           40%
425 Rabro Drive                      100%        Fee              1980     4.0           16           25%
390 Motor Parkway                    100%        Fee              1980    10.0           14            4%
600 Old Willets Path                 100%        Fee              1965     4.5           14           25%
400 Moreland Road <F3>               100%        Fee              1967     6.3           17           10%
                                                                        -------
 Total Vanderbilt
 Industrial Park <F4>                                                    160.4
                                                                        -------

Airport International Plaza,
  Islip, NY

20 Orville Dr.                       100%        Fee              1978     1.0           16           50%
25 Orville Dr.                       100%        Fee              1970     2.2           16          100%
50 Orville Dr.                       100%        Fee              1976     1.6           15           20%
65 Orville Dr.                       100%        Fee              1971     2.2           14           13%
70 Orville Dr.                       100%        Fee              1975     2.3           22            7%
80 Orville Dr.                       100%        Fee              1988     6.5           16           21%
85 Orville Dr.                       100%        Fee              1974     1.9           14           20%
95 Orville Dr.                       100%        Fee              1974     1.8           14           10%
110 Orville Dr.                      100%        Fee              1979     6.4           24           15%
180 Orville Dr.                      100%        Fee              1982     2.3           16           18%
1101 Lakeland Ave.                   100%        Fee              1983     4.9           20            8%
1385 Lakeland Ave.                   100%        Fee              1973     2.4           16           18%
125 Wilbur Place                     100%        Fee              1977     4.0           16           31%
140 Wilbur Place                     100%        Fee              1973     3.1           20           37%
160 Wilbur Place                     100%        Fee              1978     3.9           16           30%
170 Wilbur Place                     100%        Fee              1979     4.9           16           28%
4040 Veterans Highway                100%        Fee              1972     1.0           14          100%
120 Wilbur Place                     100%        Fee              1972     2.8           16           15%
2004 Orville Dr                      100%        Fee              1998     7.4           24           20%
                                                                        -------
Total Airport International Plaza                                         62.6
                                                                        -------
County Line Industrial Center,
  Melville, NY

5 Hub Dr.                            100%        Fee              1979     6.9           20           20%
10 Hub Dr.                           100%        Fee              1975     6.6           20           15%
30 Hub Drive                         100%        Fee              1976     5.1           20           18%
265 Spagnoli Rd.                     100%        Fee              1978     6.0           20           28%
                                                                        -------
 Total County Line Industrial  Center                                     24.6
                                                                        -------

Standalone Long Island
  Industrial Properties

32 Windsor Pl.,
  Islip, NY                          100%        Fee              1971     2.5           18           10%
42 Windsor Pl.,
  Islip, NY                          100%        Fee              1972     2.4           18            8%
208 Blydenburgh Rd.,
  Islandia, NY                       100%        Fee              1969     2.4           14           17%
210 Blydenburgh Rd.,
  Islandia, NY                       100%        Fee              1969     1.2           14           16%
71 Hoffman Ln.,
  Islandia, NY                       100%        Fee              1970     5.8           16           10%
135 Fell Ct.,
  Islip, NY                          100%        Fee              1965     3.2           16           20%
                                                                        -------
Subtotal Islip/Islandia                                                   17.5
                                                                        -------

 70 Schmitt Boulevard,
  Farmingdale, NY                    100%        Fee              1975     4.4           18           10%
105 Price Parkway,
  Farmingdale, NY                    100%        Fee              1969    12.0           26          8.5%
110 BI County Blvd.,
  Farmingdale, NY                    100%        Fee              1984     9.5           19           45%
                                                                        -------
Subtotal Farmingdale                                                      25.9
                                                                        -------

 70 Maxess Rd,
  Melville, NY                       100%        Fee              1969     9.3           15           38%
20 Melville Park Rd,
  Melville, NY                       100%        Fee              1965     4.0           23           66%
45 Melville Park Drive,
  Melville, NY                       100%        Fee              1998     4.2           24           22%
65 Marcus Drive
  Melville, NY                       100%        Fee              1968     5.0           16           50%
333 Smith St <F3>
  Melville, NY                       100%        Fee              1967     7.1           22           95%
                                                                        -------
Subtotal Melville <F4>                                                    29.6
                                                                        -------

300 Motor Parkway,
  Hauppauge, NY                      100%        Fee              1979     4.2           14          100%
1516 Motor Parkway,
  Hauppauge, NY                      100%        Fee              1981     7.9           24            5%
                                                                        -------
Subtotal Hauppauge                                                        12.1
                                                                        -------

933 Motor Parkway,
  Smithtown, NY                      100%        Fee              1973     5.6           20           26%
65 S. Service Rd. ,
  Plainview, NY<F5>                  100%        Fee              1961     1.6           14           10%
85 S. Service Rd.,
  Plainview, NY                      100%        Fee              1961     1.6           14           60%
19 Nicholas Drive,
  Yaphank, NY <F6>                   100%        Fee              1989    29.6           24            5%
48 Harbor Park Dr.,
  Port Washington, NY                100%        Fee              1976     2.7           16          100%
110 Marcus Drive,
  Huntington, NY                     100%        Fee              1980     6.1           20           39%
35 Engle St., <F3>     
  Hicksville, NY                     100% Leasehold<F7>           1966     4.0           24            8%
100 Andrews,
  Hicksville, NY                     100%        Fee              1954    11.7           25           12%
                                                                        -------
Total Standalone Long Island
Industrial Properties <F4>                                                62.9
                                                                        -------

Standalone Westchester Industrial
  Properties

100 Grasslands Rd., <F3>             100%        Fee              1964     3.6           16          100%
  Elmsford, NY
2 Macy Rd.,                          100%        Fee              1962     5.7           16          100%
  Harrison, NY
500 Saw Mill Rd.,                    100%        Fee              1968     7.3           22           17%
  Elmsford, NY
                                                                        -------
Total Standalone Westchester
Industrial Properties                                                     16.6
                                                                        -------

Standalone New Jersey Industrial
Properties

40 Cragwood Rd,
  South Plainfield, NJ               100%        Fee              1965    13.5           16           49%
400 Cabot Dr.,
  Hamilton Township, NJ              100%        Fee              1989    44.8           30           10%
100 Forge Way,
  Rockaway, NJ                       100%        Fee              1986     3.5           24           12%
200 Forge Way,
  Rockaway, NJ                       100%        Fee              1989    12.7           28           23%
300 Forge Way,
  Rockaway, NJ                       100%        Fee              1989     4.2           24           37%
400 Forge Way,
  Rockaway, NJ                       100%        Fee              1989    12.8           28           20%
5 Henderson Dr.,
  West Caldwell, NJ                  100%        Fee              1967    15.2           14           10%
492 River Rd, <F3>
  Nutley, NJ                         100%        Fee              1952    17.3           13          100%
                                                                        -------
Total New Jersey Standalone
Industrial Properties <F4>                                               124.0
                                                                        -------
Standalone Connecticut Industrial
Property

710 Bridgeport,
  Shelton, CT                        100%        Fee         1971-1979    36.1           22           30%
                                                                        -------
Total Connecticut Standalone
Industrial Property                                                       36.1
                                                                        -------
Reckson Morris  Industrial Trust

200 Carter Dr.,
  Edison, NJ                        71.8%        Fee              1988     7.7           24           11%
118 Moonachie Ave,
  Carlstadt, NJ                     71.8%        Fee              1989    11.0           24            8%
24 Abeel Rd,
  Cranbury, NJ                      71.8%        Fee              1979     3.2           24            8%
275 / 285 Pierce St,
  Franklin, NJ                      71.8%        Fee              1988     6.9           24            7%
301 / 321 Herrod Blvd. So.
  Brunswick, NJ                     71.8%        Fee              1991    39.5           26            1%
1 Nixon Ln,
  Edison, NJ                        71.8%        Fee              1988    10.8           24            9%
18 Madison Rd.
  Fairfield, NJ                     71.8%        Fee              1979     1.2           22           28%
200 / 250 Kennedy Dr.,
  Sayerville, NJ                    71.8%        Fee              1988     7.9           24            9%
24 Madison Rd. Fairfield,
  Fairfield, NJ                     71.8%        Fee              1980     2.5           24           18%
243 St. Nicholas Ave, So.
  Plainfield, NJ                    71.8%        Fee              1974     1.0           20            8%
26 Madison Rd.,
  Fairfield, NJ                     71.8%        Fee              1980     2.1           24           11%
300 / 350 Kennedy Dr.,
  Sayerville, NJ                    71.8%        Fee              1988     9.7           24            3%
309 Kennedy Dr.,
  Sayerville, NJ                    71.8%        Fee              1996    11.6           30           20%
34 Englehard Dr.,
 Cranbury, NJ                       71.8%        Fee              1982    12.0           24            6%
409 Kennedy Dr.,
  Sayerville, NJ                    71.8%        Fee              1996    14.9           30           20%
535 Secaucus Rd.,
  Secaucus, NJ                      71.8%        Fee              1979     4.4           24           27%
55 Carter Dr.,
  Edison, NJ                        71.8%        Fee              1987     5.0           24           20%
22 Madison Rd.,
  Fairfield, NJ                     71.8%        Fee              1980     3.5           24           23%
135 Fieldcrest Dr.,
  Edison, NJ                        71.8%        Fee              1980     3.7           24            5%
Mount Ebo Corporate Park
 Brewster, NY                       71.8%        Fee              1978    11.4           18           10%
30 Stultz Rd., <F3>
  Brunswick, NJ                     71.8%        Fee              1978    12.6           18           10%
Industrial Ave.,
  Teterboro, NJ                     71.8%        Fee              1998    15.3           32           10%
6 Johanna Ct., <F3>
  East Brunswick, NJ                71.8%        Fee              1978    18.4           18           10%
                                                                        -------
Total Reckson Morris
Industrial Trust <F4>                                                    216.3
                                                                        -------
Total Industrial Properties <F4>                                         788.6
                                                                        =======
<FN>
<F1>
Calculated as the difference from the lowest beam to floor. 
<F2>
Represents Base Rent of signed leases at December 31, 1998 adjusted for 
scheduled contractual increases during the 12 months ending December 31, 1999.
Total Base Rent for these purposes reflects the effect of any lease expirations
that occur during the 12 month period ending December 31, 1999. Amounts 
included in rental revenue for financial reporting purposes have been 
determined on a straight-line basis rather than on the basis of contractual
rent as set forth in the foregoing table.
<F3>
Property under redevelopment.
<F4>
Percent leased excludes properties under redevelopment.
<F5>
A tenant has been granted an option exercisable after April 30, 1997 and prior
to October 31, 2002 to purchase this property for $600,000. 
<F6>
The actual fee interest in 19 Nicholas Drive is currently held by the Town of 
Brookhaven Industrial Development Agency. The Company may acquire such fee
interest by making a nominal payment to the Town of Brookhaven Industrial 
Development Agency. 
<F7>
The Company has entered into a 20 year lease agreement in which it has the 
right to sublease the premises. 
</FN>
</TABLE>
<TABLE>
<CAPTION>


                                                                   Annual       Number
                                Rentable               Annual      Base Rent    of
                                Square       Percent   Base        Per Leased   Tenant
Property                        Feet         Leased    Rent <F2>   Sq. Ft.     Leases
                               ------------ ---------- ----------- ------------ ---------
<S>                            <C>          <C>        <C>         <C>          <C>
 Industrial Properties:

Vanderbilt Industrial  Park,
  Hauppauge, NY

360 Vanderbilt Motor Parkway        54,000     100.0%    $232,200        $4.30         1
410 Vanderbilt Motor Parkway        41,784     100.0%    $203,113        $4.86         4
595 Old Willets Path                31,670      84.5%    $121,355        $4.53         3
611 Old Willets Path                20,000     100.0%    $142,809        $7.14         2
631/641 Old Willets Path            25,000     100.0%    $157,143        $6.29         4
651/661 Old Willets Path            25,000     100.0%    $165,278        $6.61         7
681 Old Willets Path                15,000     100.0%     $94,688        $6.31         1
740 Old Willets Path                30,000     100.0%     $29,670         $.99         1
325 Rabro Dr.                       35,000     100.0%    $206,909        $5.83         2
250 Kennedy Dr.                    127,980     100.0%    $455,298        $3.56         1
90 Plant Ave.                       75,000     100.0%    $384,836        $5.14         3
110 Plant Ave.                     125,000     100.0%    $540,000        $4.32         1
55 Engineers Rd.                    36,000     100.0%    $193,945        $5.39         1
65 Engineers Rd.                    23,000     100.0%    $131,474        $5.72         1
85 Engineers Rd.                    40,800     100.0%     $91,176        $2.23         2
100 Engineers Rd.                   88,000     100.0%    $366,279        $4.16         1
150 Engineers Rd.                  135,000     100.0%    $398,580        $2.95         1
20 Oser Ave.                        42,000      98.7%    $334,151        $8.06         2
30 Oser Ave.                        42,000     100.0%    $249,676        $5.94         5
40 Oser Ave.                        59,800     100.0%    $357,683        $5.96        13
50 Oser Ave.                        60,000     100.0%    $240,000        $4.00         1
60 Oser Ave.                        48,000     100.0%    $192,000        $4.00         1
63 Oser Ave.                        22,000     100.0%    $108,506        $4.93         1
65 Oser Ave.                        20,000     100.0%     $97,284        $4.86         1
73 Oser Ave.                        20,000     100.0%    $122,720        $6.14         1
80 Oser Ave.                        19,500     100.0%     $64,356        $3.30         1
85 Nicon Ct.                       104,000     100.0%    $485,621        $4.67         1
90 Oser Ave.                        37,500     100.0%    $123,756        $3.30         1
104 Parkway Dr.                     27,600     100.0%    $191,434        $6.94         1
110 Ricefield Ln.                   32,264     100.0%    $155,168        $4.81         1
120 Ricefield Ln.                   33,060     100.0%    $168,000        $5.08         1
125 Ricefield Ln.                   30,495     100.0%    $193,539        $6.35         1
135 Ricefield Ln.                   32,340     100.0%    $198,507        $6.14         1
85 Adams Dr.                        20,000      100.0%   $260,000       $13.00         1
395 Oser Ave                        50,000      100.0%   $417,285        $8.43         1
185 Oser Ave                        30,000      100.0%   $208,430        $6.95         1
25 Davids Dr.                       40,000      100.0%   $313,978        $7.85         1
45 Adams Ave                        28,000      100.0%   $136,461        $4.87         1
225 Oser Ave                        10,000      100.0%    $33,125        $3.31         2
180 Oser Ave                        61,868       88.0%   $341,070        $6.26         8
360 Oser Ave                        23,000      100.0%   $128,800        $5.60         1
400 Oser Ave                       164,936       76.4%   $746,201        $5.92        22
375 Oser Ave                        20,000      100.0%   $142,740        $7.14         1
425 Rabro Drive                     65,641      100.0%   $586,080        $9.00         1
390 Motor Parkway                  181,155      45.5%    $300,947        $3.65         2
600 Old Willets Path                69,627      100.0%   $255,398        $3.67         1
400 Moreland Road <F3>              56,875       0.00%         $0           $0         0
                               ------------            -----------              ---------
 Total Vanderbilt
 Industrial Park <F4>            2,379,895      93.5%   $11,067,669      $5.10       112
                               ------------            -----------              ---------

Airport International Plaza,
  Islip, NY

20 Orville Dr.                      12,852     100.0%     $20,785        $1.62         1
25 Orville Dr.                      32,300     100.0%    $460,067       $13.67         2
50 Orville Dr.                      28,000      73.5%    $192,290        $9.35         2
65 Orville Dr.                      32,000     100.0%    $165,894        $5.18         2
70 Orville Dr.                      41,508     100.0%    $315,242        $7.59         2
80 Orville Dr.                      92,544     100.0%    $611,454        $6.61         9
85 Orville Dr.                      25,000     100.0%          $0           $0         0
95 Orville Dr.                      25,000     100.0%    $131,750        $5.27         1
110 Orville Dr.                    110,000     100.0%    $649,733        $5.91         1
180 Orville Dr.                     37,612     100.0%    $222,733        $5.92         2
1101 Lakeland Ave.                  90,411     100.0%    $534,205        $5.91         1
1385 Lakeland Ave.                  35,000     100.0%    $153,484        $4.39         3
125 Wilbur Place                    62,686      87.1%    $285,546        $5.23        12
140 Wilbur Place                    48,500     100.0%    $231,821        $4.78         2
160 Wilbur Place                    62,710     100.0%    $397,941        $6.35         6
170 Wilbur Place                    72,062      93.1%    $306,255        $4.57         7
4040 Veterans Highway                2,800     100.0%     $54,061       $19.31         1
120 Wilbur Place                    35,000      78.6%    $212,999        $7.75         3
2004 Orville Dr                    106,515     100.0%    $676,814        $6.35         1
                               ------------            -----------              ---------
Total Airport International
Plaza                              952,500      93.2%   $5,623,074       $6.24        58
                               ------------            -----------              ---------
County Line Industrial Center,
  Melville, NY

5 Hub Dr.                           88,001     100.0%    $495,704        $5.63         2
10 Hub Dr.                          95,546      68.8%    $348,394        $5.30         3
30 Hub Drive                        73,127     100.0%    $388,913        $5.32         2
265 Spagnoli Rd.                    85,500     100.0%    $608,774        $7.12         3
                               ------------            -----------              ---------
Total County Line Industrial
Center                             342,174     100.0%   $1,841,785       $5.89        10
                               ------------            -----------              ---------

Standalone Long Island
  Industrial Properties

32 Windsor Pl.,
  Islip, NY                         43,000     100.0%    $133,253        $3.10         1
42 Windsor Pl.,
  Islip, NY                         65,000     100.0%    $226,057        $3.48         1
208 Blydenburgh Rd.,
  Islandia, NY                      24,000     100.0%    $117,970        $4.92         4
210 Blydenburgh Rd.,
  Islandia, NY                      20,000     100.0%    $106,480        $5.32         2
71 Hoffman Ln.,
  Islandia, NY                      30,400     100.0%    $173,134        $5.70         1
135 Fell Ct.,
  Islip, NY                         30,000     100.0%    $222,750        $7.43         1
                               ------------            -----------              ---------
Subtotal Islip/Islandia            212,400     100.0%   $979,644         $4.61        10
                               ------------            -----------              ---------

 70 Schmitt Boulevard,
  Farmingdale, NY                   76,312     100.0%    $188,113        $2.47         1
105 Price Parkway,
  Farmingdale, NY                  297,000     100.0%   $1,348,072       $4.54         1
110 BI County Blvd.,
  Farmingdale, NY                  147,303      100.0%  $1,314,179       $8.93        12
                               ------------            -----------              ---------
Subtotal Farmingdale               520,615     100.0%   $2,850,364       $5.48        14
                               ------------            -----------              ---------

 70 Maxess Rd,
  Melville, NY                      78,000     100.0%    $640,590        $8.15         1
20 Melville Park Rd,
  Melville, NY                      67,922     100.0%    $378,063        $5.57         1
45 Melville Park Drive,
  Melville, NY                      40,247      100.0%   $519,656       $12.91         1
65 Marcus Drive
  Melville, NY                      60,000      100.0%   $570,648        $9.51         1
333 Smith St <F3>
  Melville, NY                     165,000       0.0%          $0           $0         0
                               ------------            -----------              ---------
Subtotal Melville <F4>             411,169     100.0%   $2,108,957       $8.55         4
                               ------------            -----------              ---------

300 Motor Parkway,
  Hauppauge, NY                     55,942      97.0%    $870,808       $16.05        10
1516 Motor Parkway,
  Hauppauge, NY                    140,000     100.0%    $861,583        $6.15         1
                               ------------            -----------              ---------
Subtotal Hauppauge                 195,942      95.0%   $1,732,391       $8.92        11
                               ------------            -----------              ---------

933 Motor Parkway,
  Smithtown, NY                     48,000     100.0%    $334,760        $6.97         1
65 S. Service Rd. ,
  Plainview, NY<F5>                 10,000     100.0%     $67,875        $6.79         1
85 S. Service Rd.,
  Plainview, NY                     20,000     100.0%    $132,547        $6.63         2
19 Nicholas Drive,
  Yaphank, NY <F6>                 145,000     100.0%    $302,575        $2.09         1
48 Harbor Park Dr.,
  Port Washington, NY               35,000     100.0%    $680,146       $19.43         1
110 Marcus Drive,
  Huntington, NY                    78,240     100.0%    $480,062        $6.14         1
35 Engle St., <F3> <F7>
  Hicksville, NY                   120,000        0.0%         $0           $0         0
100 Andrews,
  Hicksville, NY                   167,500       66.1%  $1,066,412       $6.36         2
                               ------------            -----------              ---------
Total Standalone Long Island
Industrial Properties <F4>         623,740      100.0%  $3,064,377       $6.08         9
                               ------------            -----------              ---------

Standalone Westchester Industrial
  Properties

100 Grasslands Rd., <F3>            45,000        0.0%         $0           $0         0
  Elmsford, NY
2 Macy Rd.,                         26,000      100.0%   $422,500       $16.25         1
  Harrison, NY
500 Saw Mill Rd.,                   92,000      100.0%   $828,000        $9.00         1
  Elmsford, NY
                               ------------            -----------              ---------
Total Standalone Westchester
Industrial Properties              163,000     100.0%   $1,250,500      $10.60         2
                               ------------            -----------              ---------

Standalone New Jersey Industrial
Properties

40 Cragwood Rd,
  South Plainfield, NJ             135,000      57.5%    $944,590       $12.16         3
400 Cabot Dr.,
  Hamilton Township, NJ            585,510     100.0%   $2,739,377       $4.68         1
100 Forge Way,
  Rockaway, NJ                      20,136     100.0%    $149,907        $7.44         6
200 Forge Way,
  Rockaway, NJ                      72,118     100.0%    $450,738        $6.25         2
300 Forge Way,
  Rockaway, NJ                      24,000     100.0%    $149,367        $6.17         2
400 Forge Way,
  Rockaway, NJ                      73,000     100.0%    $407,666        $5.58         2
5 Henderson Dr.,
  West Caldwell, NJ                210,000     100.0%    $453,750        $2.16         1
492 River Rd, <F3>
  Nutley, NJ                       128,000      0.00%          $0           $0         0
                               ------------            -----------              ---------
Total New Jersey Standalone
Industrial Properties <F4>       1,247,764      94.9%   $5,295,395       $4.98        17
                               ------------            -----------              ---------
Standalone Connecticut Industrial
Property

710 Bridgeport,
  Shelton, CT                      452,414     100.0%   $2,900,684       $6.41         2
                               ------------            -----------              ---------
Total Connecticut Standalone
Industrial Property                452,414     100.0%   $2,900,684       $6.41         2
                               ------------            -----------              ---------
Reckson Morris  Industrial Trust

200 Carter Dr.,
  Edison, NJ                       105,790     100.0%    $407,261        $3.85         2
118 Moonachie Ave,
  Carlstadt, NJ                    243,751     100.0%   $1,828,133       $7.50         1
24 Abeel Rd,
  Cranbury, NJ                      40,022     100.0%    $185,000        $4.62         1
275 / 285 Pierce St,
  Franklin, NJ                     103,075      99.7%    $258,492        $2.52         3
301 / 321 Herrod Blvd. So.
  Brunswick, NJ                    610,949     100.0%   $2,291,059       $3.75         1
1 Nixon Ln,
  Edison, NJ                       192,829     100.0%    $376,820        $1.95         1
18 Madison Rd.
  Fairfield, NJ                     14,000     100.0%     $95,492        $6.82         1
200 / 250 Kennedy Dr.,
  Sayerville, NJ                   161,751      98.4%    $534,565        $3.36         2
24 Madison Rd. Fairfield,
  Fairfield, NJ                     35,505     100.0%    $226,323        $6.38         2
243 St. Nicholas Ave, So.
  Plainfield, NJ                    15,000     100.0%     $78,750        $5.25         1
26 Madison Rd.,
  Fairfield, NJ                     30,300     100.0%    $169,842        $5.60         2
300 / 350 Kennedy Dr.,
  Sayerville, NJ                   164,267      98.4%    $467,337        $2.89         3
309 Kennedy Dr.,
  Sayerville, NJ                   202,000     100.0%    $909,000        $4.50         1
34 Englehard Dr.,
 Cranbury, NJ                      203,404     100.0%    $894,978        $4.40         1
409 Kennedy Dr.,
  Sayerville, NJ                   225,831     100.0%    $930,612        $4.12         1
535 Secaucus Rd.,
  Secaucus, NJ                      62,093      91.7%    $313,164        $5.50         1
55 Carter Dr.,
  Edison, NJ                       114,512      88.3%    $388,692        $3.84         3
22 Madison Rd.,
  Fairfield, NJ                     39,875     100.0%    $215,724        $5.41         1
135 Fieldcrest Dr.,
  Edison, NJ                        78,000      98.7%    $331,075        $4.30         2
Mount Ebo Corporate Park
 Brewster, NY                       93,948     100.0%    $879,519        $9.36         1
30 Stultz Rd., <F3>
  Brunswick, NJ                     60,617         0%          $0           $0         0
Industrial Ave.,
  Teterboro, NJ                    332,352     100.0%   $2,193,523       $6.60         1
6 Johanna Ct., <F3>
  East Brunswick, NJ               214,000         0%           0            0         0
                               ------------            -----------              ---------
Total Reckson Morris
Industrial Trust <F4>            3,343,871      99.2%   $13,975,361      $4.59        32
                               ------------            -----------              ---------
Total Industrial 
Properties <F4>                 10,845,484      96.9%   $52,690,201      $5.41       281
                               ============            ===========              =========
<FN>
<F1>
Calculated as the difference from the lowest beam to floor. 
<F2>
Represents Base Rent of signed leases at December 31, 1998 adjusted for 
scheduled contractual increases during the 12 months ending December 31, 1999.
Total Base Rent for these purposes reflects the effect of any lease expirations
that occur during the 12 month period ending December 31, 1999. Amounts 
included in rental revenue for financial reporting purposes have been 
determined on a straight-line basis rather than on the basis of contractual
rent as set forth in the foregoing table.
<F3>
Property under redevelopment.
<F4>
Percent leased excludes properties under redevelopment.
<F5>
A tenant has been granted an option exercisable after April 30, 1997 and prior
to October 31, 2002 to purchase this property for $600,000. 
<F6>
The actual fee interest in 19 Nicholas Drive is currently held by the Town of 
Brookhaven Industrial Development Agency. The Company may acquire such fee
interest by making a nominal payment to the Town of Brookhaven Industrial 
Development Agency. 
<F7>
The Company has entered into a 20 year lease agreement in which it has the 
right to sublease the premises. 
</FN>
</TABLE>

Retail Properties

     As of December 31, 1998, the Company owned two free-standing 10,000 square
foot retail properties.   The retail properties which are located in Great
Neck, New York and Huntington, New York were 100% leased as of December 31, 
1998.

Developments in Progress

     As of December 31, 1998, the Company owned or had under contract
approximately  980 acres of land in 18 separate parcels, ten of which are
located in Long Island, two of which are located in Westchester and six of
which are located in New Jersey.  The parcels have been zoned for potential
industrial and retail development.  The Company plans to seek development 
opportunities as market conditions permit.  The Company had invested 
approximately $48 million in land costs and approximately $14 million in
additional development costs at December 31, 1998. In addition, the Company
estimates that if these projects were to be completed, total additional 
development cost would be approximately $505 million. Additionally at December
31, 1998, the Company had invested approximately $36 million in seven 
properties that the Company plans to either redevelop or reposition.
The Company estimates that if it completes the redevelopment and 
repositioning it will spend an additional $24 million.

Historical Non-Incremental Revenue-Generating Capital Expenditures, Tenant
Improvement Costs and Leasing Commissions

     The following table sets forth annual and per square foot recurring, 
non-incremental revenue-generating capital expenditures and non-incremental
revenue-generating tenant improvement costs and leasing commissions incurred by
the Company to retain revenues attributable to existing leased space for the 
period 1994 through 1998 for the Office Properties and the Industrial 
Properties. As noted, incremental  revenue-generating tenant improvement costs
and leasing commissions are excluded from the table set forth immediately
below. The historical capital expenditures, tenant improvement costs and 
leasing commissions set forth below are not necessarily indicative of future
recurring, non-incremental revenue-generating capital expenditures or
non-incremental revenue-generating tenant improvement costs and leasing
commissions. 

<TABLE>
<CAPTION>
                                                  1994           1995           1996           1997           1998
                                            -------------- -------------- -------------- -------------- --------------
<S>                                         <C>            <C>            <C>            <C>            <C>
Capital Expenditures

    Office Properties
        Total                                    $158,340       $364,545       $379,026     $1,108,675     $2,004,976
        Per square foot                          $   0.10       $   0.19       $   0.13     $     0.22     $     0.23
    Industrial Properties
        Total                                    $524,369       $290,457       $670,751       $733,233     $1,205,266
        Per square foot                          $   0.18       $   0.08       $   0.18     $     0.15     $     0.12

Non-Incremental Revenue-Generating
Tenant Improvement Costs and Leasing
Commissions

    Long Island Office Properties
        Annual Tenant Improvement Costs          $902,312       $452,057       $523,574       $784,044     $1,140,251
        Per square foot improved                     5.13           4.44           4.28           7.00           3.98
        Annual Leasing Commissions                341,253        144,925        119,047        415,822        418,191
        Per square foot leased                       1.94           1.42           0.97           4.83           1.46
        Total per square foot                       $7.07          $5.86          $5.25         $11.83          $5.44
    Westchester Office Properties
        Annual Tenant Improvement Costs               N/A            N/A       $834,764     $1,211,665       $711,160
        Per square foot improved                      N/A            N/A           6.33           8.90           4.45
        Annual Leasing Commissions                    N/A            N/A        264,388        366,257        286,150
        Per square foot leased                        N/A            N/A           2.00           2.69           1.79
        Total per square foot                         N/A            N/A          $8.33         $11.59          $6.24
    Connecticut Office Properties
        Annual Tenant Improvement Costs               N/A            N/A        $58,000     $1,022,421       $202,880
        Per square foot improved                      N/A            N/A          12.45          13.39           5.92
        Annual Leasing Commissions                    N/A            N/A              0        256,615        151,063
        Per square foot leased                        N/A            N/A           0.00           3.36           4.41
        Total per square foot                         N/A            N/A         $12.45         $16.75         $10.33
    New Jersey Office Properties
        Annual Tenant Improvement Costs               N/A            N/A            N/A            N/A       $654,877
        Per square foot improved                      N/A            N/A            N/A            N/A           3.78
        Annual Leasing Commissions                    N/A            N/A            N/A            N/A        396,127
        Per square foot leased                        N/A            N/A            N/A            N/A           2.08
        Total per square foot                         N/A            N/A            N/A            N/A          $5.86
    Industrial Properties
        Annual Tenant Improvement Costs          $585,891       $210,496       $380,334       $230,466       $283,842
        Per square foot improved                     0.88           0.90           0.72           0.55           0.65
        Annual Leasing Commissions                176,040        107,351        436,213         81,013        218,749
        Per square foot leased                       0.27           0.46           0.82           0.19           0.50
        Total per square foot                       $1.15          $1.36          $1.54           $.74          $1.15
</TABLE>

The Option Properties

     Six properties owned by Reckson (the "Reckson Option Properties") and four
properties in which Reckson owns a non-controlling minority interest (the 
"Other Option Properties") and, together with the Reckson Option Properties,
the ("Option Properties") were not contributed to the Operating Partnership
upon completion of the IPO. However, the Operating Partnership was granted 10
year options to acquire interests in the Option Properties under the terms and
conditions described below. As of the date hereof, the Company had acquired or
contracted to acquire all but two of the Reckson Option Properties.

     The two remaining Reckson Option Properties are comprised of 225 
Broadhollow Road, Melville, New York, a 185,889 square foot suburban Class A
office property located in the Huntington Melville Corporate Center and 593 
Acorn Street, Babylon, New York, a 39,551 square foot stand alone industrial
property both of which are managed by an affiliate of the Company. 

     The Operating Partnership has been granted options, exercisable over a 
10 year period that commenced upon closing of the IPO, to acquire each of the
Reckson Option Properties and Reckson's ownership interest in the Other Option
Properties at a purchase price equal to the lesser of (i) a fixed price (the
"Fixed Price") and (ii) the Net Operating Income attributable to such Option
Property during the 12 month period preceding exercise of the option by the
Operating Partnership (multiplied by Reckson's percentage ownership interest
in the case of the Other Option Properties) divided by a capitalization rate
of 11.5%; provided that, in no event shall the purchase price be less than the
outstanding balance of the mortgage debt encumbering the Option Property
(multiplied by Reckson's percentage ownership interest in the case of the
Other Option Properties) on the acquisition date. Net Operating Income is
defined generally for these purposes as gross income minus annual operating
costs. The portion of the purchase price not required to repay mortgage debt
and other transaction costs incurred in connection with the sale of such 
Option Property shall be payable in Units. The fixed prices for 225 
Broadhollow Road and 593 Acorn Street are $21,242,000 and $878,100,
respectively.

     The Reckson partnerships that currently own the Reckson Option Properties
may sell any of these properties to a party other than the Operating
Partnership, provided that the selling entity provides the Company with 30-days
advance notice of such sale. Upon receiving such notice, the Company may then
elect to exercise the option to acquire the Reckson Option Property and, if it
so chooses, sell the property to such party. 

     In addition to the foregoing, in the event a sale of any Option Property
to a third party is consummated, the Operating Partnership will receive 
"Reckson's Net After Tax Profit" from such sale. Reckson's Net After Tax
Profit is defined generally for such purposes as the product of (i) Reckson's
percentage ownership interest in the Option Property (100% in the case of 
Reckson Option Properties) multiplied by (ii) the excess of the gross sales
price over the total of any outstanding mortgage or other encumbrance, the
federal income tax payable by the partners as a result of the sale, as well
as other transaction costs incurred in connection with the sale of such Option
Property, including transfer taxes, closing adjustments, brokerage commissions,
legal fees and accounting fees. 

     The terms of the options granted to the Operating Partnership with respect
to the Option Properties have not been based on appraisals and are not the
product of an arm's-length negotiation since members of the Rechler family
maintain an ownership interest in such Option Properties. However, management
believes that such terms are fair to the Company and a determination by the 
Operating Partnership to exercise an option to acquire an interest in any 
Option Property shall be subject to the approval of the Independent Directors
and, with respect to interests in the Other Option Properties, the approval of
Reckson's partners.

Mortgage Indebtedness

     The following table sets forth certain information regarding the mortgage
debt of the Company, as of December 31, 1998. 

<TABLE>
<CAPTION>
                                   Principal
                                   Amount
                                   Outstanding     Interest       Maturity      Amortization
Property                           (in thousands)    Rate           Date          Schedule
---------------------------------------------      ---------      ---------      -----------
<S>                                <C>             <C>            <C>            <C>
6800 Jericho Turnpike
    (NORTH SHORE ATRIUM I)           $15,001          7.25%       6/10/2000          ---
6900 Jericho Turnpike
    (North Shore Atrium II)            5,279          7.25%       6/10/2000          ---
200 Broadhollow Rd.                    6,621          7.75%       6/02/2002        30 year
395 North Service Road                21,375          6.45%       10/26/2005        <F5>
50 Charles Lindbergh Blvd.            15,479          7.25%       7/10/2001          ---
333 Earl Ovington Blvd.
    (The Omni) <F1>                   57,162         7.72 %       08/14/2007       25 year
310 East Shore Rd.                     2,322          8.00%       7/01/2002          ---
80 Orville Dr.                         2,616          7.50% <F2>  2/01/2004          ---
70 Schmitt Boulevard                     150          9.25%        8/01/99          <F3>
580 White Plains Road                  8,503         7.375%       9/01/2000        25 year
Landmark Square                       48,579          8.02%       10/07/2006       25 year
110 Bi-County Blvd.                    4,383         9.125%       11/13/2012       20 year
100 Summit Lake Drive                 23,600          8.50%       04/01/2007       14 year
200 Summit Lake Drive                 20,764          9.25%       01/01/2006       25 year
6 Johana Court <F4>                    6,850          7.00%       11/01/99           ---
309/409 Kennedy Drive <F4>            14,779          7.50%       03/15/2002         ---
                                   ----------
Total                               $253,463
                                   ==========
<FN>
<F1>
The Company has a 60% general partnership interest in the Omni Partnership. The
Company's proportionate share of the aggregate principal amount of the mortgage
debt on the Omni is $34.3 million.
<F2>
Interest rate increases to 10.1% after the first five years of the loan.
<F3>
Principal payments of $18,750 per month for the period September 1998 to
August 1999.
<F4>
The Company has an approximate 71.8%  general partnership interest in RMI.
The Company's proportionate share of the aggregate principal amount of  the
mortgage debt of RMI is approximately $15.5  million.
<F5>
Principal payments of $34,000 per month for the period November 1998 to
October 2005.
</FN>
</TABLE>

Item 3.        Legal Proceedings

     The Company is not presently subject to any material litigation nor, to
the Company's knowledge, is any litigation threatened against the Company, 
other than routine actions for negligence or other claims and administrative
proceedings arising in the ordinary course of business, some of which are
expected to be covered by liability insurance and all of which collectively
are not expected to have a material adverse effect on the liquidity, results
of operations or business or financial condition of the Company. 

Item 4.        Submission of Matters to a Vote of Security Holders 

     No matters were submitted to a vote of stockholders during the fourth
quarter of the year ended December 31, 1998. 

                              Part II


Item 5.        Market For Registrant's Common Equity and Related Stockholder
               matters 

     The Company's common stock began trading on the New York Stock Exchange 
("NYSE") on May 25, 1995, under the symbol "RA".  The following table sets
forth the quarterly high and low closing sales prices per share of the common
stock reported on the NYSE and the distributions paid by the Company for each
respective quarter ended. 

<TABLE>
<CAPTION>
                             High <F3>        Low <F3>      Distribution <F3>
                          ---------------  ---------------  ---------------
<S>                       <C>              <C>              <C>
March 31, 1997                   $23.563          $20.438          $0.3000
June 30, 1997                    $23.000          $20.875          $0.3125  <F1>
September 30, 1997               $27.000          $22.375          $0.3125
December 31, 1997                $28.750          $24.063          $0.3125

March 31, 1998                   $26.438          $24.125          $0.3125
June 30, 1998                    $26.375          $22.688          $0.4199  <F2>
September 30, 1998               $26.000          $19.000          $0.3375
December 31, 1998                $24.563          $20.188          $0.3375
<FN>
<F1>     
Commencing with the distribution for the quarter ended June 30, 1997, the Board
of Directors of the Company increased the quarterly distribution to $.3125 per
share, which is equivalent to an annual distribution of $1.25 per share.
<F2>
Commencing with the distribution for the quarter ended June 30, 1998, the 
Board of Directors of the Company increased the quarterly distribution to
$.3375 per share, which is equivalent to an annual distribution of $1.35 per
share. In addition, on June 11, 1998, the Company paid a stock dividend 
equivalent to $.0824 per share relating to the Operating Partnership's 
distribution of its common stock interest in RSI to the Company.
<F3>
Historical amounts adjusted to reflect a two-for-one stock split effective
April 15, 1997.
</FN>
</TABLE>

Item 6.        Selected Financial Data (in thousands except share and
               properties data)
<TABLE>
<CAPTION>
                                                             Reckson Associates Realty Corp.
                                             --------------------------------------------------------------
                                                                                            for the
                                                         For the Year Ended                 Period
                                             ---------------------------------------------  June 3, 1995 to
                                               December,      December,      December,      December 31,
                                               31, 1998       31, 1997       31, 1996       1995 <F1> 
                                             -------------- -------------- -------------- -----------------
<S>                                          <C>            <C>            <C>            <C>
Operating Data:
Revenues                                     $     266,373  $     153,395  $      96,141  $         38,455
Total expenses                                     201,892        107,905         70,951            27,901
Income (before preferred dividends and
  distributions, minority interests and
  extraordinary items)                              64,481         45,490         25,190            10,554
Preferred dividends and distributions               14,244            ---            ---               ---
Minority interests'                                 10,672          8,624          6,768             3,067
Extraordinary items-gain (loss) (net of
  minority interests' share)                        (1,670)        (2,230)          (895)           (4,234)
Net income                                          37,895         34,636         17,527             3,253

Per Share Data:
Basic: <F2>
Income before extraordinary items            $        1.00  $        1.13  $        0.92  $           0.51
Extraordinary items -(loss)                          (0.04)         (0.07)         (0.04)            (0.29)
Net income                                            0.96           1.06           0.88              0.22

Diluted: <F2a>
Income before extraordinary items            $        0.99  $        1.11  $        0.91  $           0.51
Extraordinary items-(loss)                            (.04)          (.07)          (.04)             (.29)
Diluted net income                                     .95           1.04           0.87              0.22

Balance Sheet Data: (period end):
Commercial real estate properties,
  before accumulated depreciation            $   1,743,223  $   1,015,282  $     519,504  $        290,712
Total assets                                     1,854,816      1,113,257        543,758           242,728
Mortgage notes payable                             253,463        180,023        161,513            98,126
Unsecured credit facility                          465,850        210,250        108,500            40,000
Unsecured term loan                                 20,000            ---            ---               ---
Senior unsecured notes                             150,000        150,000            ---               ---
Market value of equity <F3>                      1,332,882      1,141,592        653,606           303,943
Total market capitalization including
  debt <F3> <F4>                                 2,199,936      1,668,800        921,423           426,798

Other Data:
Funds from operations (basic)  <F5>          $      97,697  $      69,548  $      41,133  $         17,246
Funds from operations (diluted) <F5>         $      99,449  $      69,548  $      41,133  $         17,246
Total square feet (at end of period)                21,000         13,645          8,800             5,430
Number of properties (at end of period)                204            155            110                81
<FN>
<F1>
Represents certain financial information on a consolidated historical basis for
Reckson Associates Realty Corp. and on a combined historical basis for the
Reckson Group.
<F2>
Based on 39,473,000, 32,727,000, 19,928,000 and 14,678,000  weighted average
shares of common stock outstanding for the years ended December 31, 1998,
1997, 1996 and for the period June 3, 1995 to December 31, 1995,
respectively.
<F2a>
Based on 40,010,000, 33,260,000, 20,190,000 and 14,725,000 weighted average
shares of common stock outstanding for the years ended December 31, 1998,
1997, 1996 and for the period June 3, 1995 to December 31, 1995, respectively.
<F3>
Based on the sum of (i) the market value of the Company's common stock and
operating partnership units (assuming conversion) of 47,800,049, 44,988,846,
31,119,364 and 20,690,448 at December 31, 1998, 1997, 1996 and 1995 (based on
a share/unit price of $22.19, $25.38, $21.13 and $14.69 at December 31, 1998,
1997, 1996 and 1995 respectively), (ii) the stated value of 9,192,000 shares
of the Company's preferred stock at December 31, 1998 (based on a stated price
of $25.00 per share) and (iii) the stated value of 42,518 of the Operating
Partnership's preferred units at December 31, 1998 (based on a stated price 
of $1,000 per unit).
<F4>
Debt amount is net of minority partners' proportionate share plus the Company's
share of unconsolidated joint venture debt.
<F5>
See "Management's Discussion and Analysis" for a discussion of funds from
operations.
<F6>
The earnings per share amounts prior to 1997 have been restated as required to
comply with Statement of Financial Accounting Standards No. 128, Earnings Per
Share.  For further discussion of earnings per share and the impact of State-
ment No. 128, see the notes to the consolidated financial statements.
</FN>
</TABLE>
<TABLE>
<CAPTION>
                                                       Reckson Group
                                             ----------------------------------
                                               for the
                                               Period            For the
                                               January 1,        Year Ended
                                               1995 to June      December
                                               2, 1995 <F1>,     31, 1994
                                             ----------------- ----------------
<S>                                          <C>               <C>
Operating Data:
Revenues                                     $         20,889  $        56,931
Total expenses                                         20,695           55,685
Income (before preferred dividends and
  distributions, minority interests and
  extraordinary items)                                    194            1,246
Preferred dividends and distributions                     ---              ---
Minority interests'                                       ---              ---
Extraordinary items-gain (loss) (net of
  minority interests' share)                              ---            4,434
Net income                                                194            5,680

Per Share Data:
Basic: <F2>
Income before extraordinary items                         ---              ---
Extraordinary items -(loss)                               ---              ---
Net income                                                ---              ---

Diluted: <F2a>
Income before extraordinary items                         ---              ---
Extraordinary items-(loss)                                ---              ---
Diluted net income                                        ---              ---

Balance Sheet Data: (period end):
Commercial real estate properties,
  before accumulated depreciation                         ---  $       162,192
Total assets                                              ---          132,035
Mortgage notes payable                                    ---          180,286
Unsecured credit facility                                 ---              ---
Unsecured term loan                                       ---              ---
Senior unsecured notes                                    ---              ---
Market value of equity <F3>                               ---              ---
Total market capitalization including
  debt <F3> <F4>                                          ---              ---

Other Data:
Funds from operations (basic)  <F5>                       ---              ---
Funds from operations (diluted) <F5>                      ---              ---
Total square feet (at end of period)                    4,529            4,529
Number of properties (at end of period)                    72               72
<FN>
<F1>
Represents certain financial information on a consolidated historical basis for
Reckson Associates Realty Corp. and on a combined historical basis for the
Reckson Group.
<F2>
Based on 39,473,000, 32,727,000, 19,928,000 and 14,678,000  weighted average
shares of common stock outstanding for the years ended December 31, 1998,
1997, 1996 and for the period June 3, 1995 to December 31, 1995,
respectively.
<F2a>
Based on 40,010,000, 33,260,000, 20,190,000 and 14,725,000 weighted average
shares of common stock outstanding for the years ended December 31, 1998,
1997, 1996 and for the period June 3, 1995 to December 31, 1995, respectively.
<F3>
Based on the sum of (i) the market value of the Company's common stock and
operating partnership units (assuming conversion) of 47,800,049, 44,988,846,
31,119,364 and 20,690,448 at December 31, 1998, 1997, 1996 and 1995 (based on
a share/unit price of $22.19, $25.38, $21.13 and $14.69 at December 31, 1998,
1997, 1996 and 1995 respectively), (ii) the stated value of 9,192,000 shares
of the Company's preferred stock at December 31, 1998 (based on a stated price
of $25.00 per share) and (iii) the stated value of 42,518 of the Operating
Partnership's preferred units at December 31, 1998 (based on a stated price
of $1,000 per unit).
<F4>
Debt amount is net of minority partners' proportionate share plus the Company's
share of unconsolidated joint venture debt.
<F5>
See "Management's Discussion and Analysis" for a discussion of funds from
operations.
<F6>
The earnings per share amounts prior to 1997 have been restated as required to
comply with Statement of Financial Accounting Standards No. 128, Earnings Per
Share.  For further discussion of earnings per share and the impact of State-
ment No. 128, see the notes to the consolidated financial statements.
</FN>
</TABLE>

Item 7.        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 Associates Realty Corp. (the "Company") and
related notes.
     
     The Company 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 Company's expectations for future
periods.  Certain forward-looking statements, including, without limitation,
statements relating to the timing and success of acquisitions, the financing
of the Company's operations, the ability to lease vacant space and the ability
to renew of relet space under expiring leases, involve certain risks and
uncertainties.  Although the Company believes that the expectations reflected
in such forward-looking statements are based on reasonable assumptions, the
actual results may differ materially from those set forth in the 
forward-looking statements and the Company can give no assurance that its
expectation will be achieved.  Certain factors that might cause the results
of the Company to differ materially from those indicated by such 
forward-looking statements include, among other factors, general economic
conditions, general real estate industry risks, tenant default and
bankruptcies, loss of major tenants, the impact of competition and acquisition,
redevelopment and development risks, the ability to finance business
opportunities and local real estate risks such as an oversupply of space or a
reduction in demand for real estate in the Company's real estate markets.
Consequently, such forward-looking statements should be regarded solely as
reflections of the Company's current operating and development plans and
estimates.  These plans and estimates are subject to revisions from time to
time as additional information becomes available, and actual results may
differ from those indicated in the referenced statements.

Overview and Background

     The Reckson Group, the predecessor to the Company was engaged in the 
ownership, management, operation, leasing and development of commercial real
estate properties, principally office and industrial buildings, and also owned
certain undeveloped land located primarily on Long Island, New York. On June 2,
1995, following completion of the Initial Public Offering (the "IPO") and the
related formation transactions, the Company owned or had an interest in 72 
properties (including one joint venture property) and succeeded to the Reckson
Group's real estate business. 

     The Company is a self-administered and self managed real estate 
investment trust ("REIT") specializing in the acquisition, leasing, financing,
management and development of office and industrial properties.  

     The Company owns all of the interests in its real estate properties
through Reckson Operating Partnership, L.P. (the "Operating Partnership") or
Reckson FS Limited Partnership.  At December 31, 1998, the Company owned 204
properties (the "Properties"), (including two joint venture properties)
encompassing approximately 21.0 million square feet.  The Properties include
73 suburban office properties (the "Office Properties") containing
approximately 10.1 million square feet, 129 industrial properties ( the
"Industrial Properties") containing approximately 10.8 million square feet
and two retail properties containing 20,000 square feet. 

     Since the IPO, the Company has acquired or contracted to acquire
approximately $1.14 billion of Class A suburban office and industrial
properties encompassing approximately 12.8 million square feet located in
the New York Tri-State Area of Long Island, Westchester, Southern Connecticut
and New Jersey.  In that regard, the Company has acquired 13 Office Properties
and 33 Industrial Properties encompassing approximately 2.1 and 2.6 million
square feet, respectively, located on Long Island for an aggregate purchase
price of approximately $302 million.  Since its initial investment in
Westchester the Company has acquired 17 Office Properties  encompassing
approximately 2.4 million square feet and three Industrial Properties
encompassing approximately 163,000 square feet for an aggregate purchase
price of approximately $304 million. Since its initial investment in Southern
Connecticut the Company has acquired two Office Properties encompassing 
approximately 325,000 square feet for an aggregate purchase price of
approximately $61.3 million.  In May 1997, the Company acquired five Office
Properties encompassing approximately 496,000 square feet located in New
Jersey for an aggregate purchase price of approximately $56.9 million and,
in connection with this acquisition, established its New Jersey Division. 
Since its initial investment in New Jersey the Company has acquired 12
Office Properties encompassing approximately 1.5 million square feet and
seven Industrial Properties encompassing approximately 1.1 million square
feet for an aggregate purchase price of approximately $231.6 million.
Additionally, the Company has invested approximately $52.1 million for 
approximately 154 acres of land located in Long Island, 32 acres of land
located in Westchester and 380 acres of land located in New Jersey which
allows for approximately 4.3 million square feet of future development
opportunities.  In addition, the Company has invested approximately $61.3
million in certain mortgage indebtedness encumbering four Class A Office
Properties on Long Island encompassing approximately 577,000 square feet,
a 825,000 square foot Industrial Property located in New Jersey and a 400
acre parcel of land located in New Jersey.  On January 6, 1998, the Company
made its initial investment in the Morris Companies, a New Jersey developer
and owner of "Big Box" warehouse facilities.  In connection with the 
transaction the Morris Companies contributed 100% of their interests in
certain industrial properties to Reckson Morris Operating Partnership, 
L.P., ("RMI") in exchange for operating partnership units in RMI. The 
Company has agreed to invest up to $150 million in RMI. As of December 31,
1998, the Company has invested approximately $93.8 million for an 
approximate 71.8% controlling interest.  In addition, at December 31, 1998,
the Company had advanced approximately $31 million to the Morris Companies
primarily to fund certain construction costs related to development 
properties to be contributed to RMI.

     During 1997, the Company formed Reckson Service Industries, Inc. ("RSI")
and Reckson Strategic Venture Partners, LLC ("RSVP").  The Operating
Partnership owned a 95% non voting common stock interest in RSI through June
10, 1998.  On June 11, 1998, the Operating Partnership distributed its 95%
common stock interest in RSI of approximately $3 million to its owners,
including the Company which, in turn, distributed the common stock of RSI to
its stockholders.  Additionally, during June 1998, the Operating Partnership
established a credit facility with RSI (the"RSI Facility") in the amount of
$100 million for RSI's service sector operations and other general corporate
purposes. As of December 31, 1998, the Company had advanced $33.7 million
under the RSI facility all of which is outstanding.  In addition, the 
Operating Partnership approved the funding of investments of up to $100
million with or in RSVP (the "RSVP Commitment"), through RSVP-controlled
joint venture REIT-qualified investments or advances made to RSI under terms
similar to the RSI Facility.  As of December 31, 1998, approximately $17.3
million had been invested through the RSVP Commitment, of which $10.1
million represents RSVP controlled joint venture investments and $7.2
million represents advances to RSI under the RSVP Commitment.   Such amounts
have been included in investment in real estate joint ventures and
investments in and advances to affiliates, respectively, on the Company's
balance sheet.  RSI serves as the managing member of RSVP.  RSI invests in
operating companies that generally provide commercial services to the RSI
customer base which includes the tenants of RSI's executive suite business
and to properties owned by the Company and its tenants and third parties.
RSVP was formed to provide the Company with a research and development
vehicle to invest in alternative real estate sectors.  RSVP invests primarily
in real estate and real estate related operating companies generally outside 
of the Company's core office and industrial focus.  RSVP's strategy is to
identify and acquire interests in established entrepreneurial enterprises
with experienced management teams in market sectors which are in the early
stages of their growth cycle or offer unique circumstances for attractive
investments as well as a platform for future growth. 
          
     The Operating Partnership and RSI have entered into an intercompany
agreement (the "Reckson Intercompany Agreement") to formalize their
relationship and to limit conflicts of interest.  Under the Reckson
Intercompany Agreement, RSI granted the Operating Partnership a right of first
opportunity to make any REIT -qualified investment that becomes available to
RSI.  In addition, if a REIT-qualified investment opportunity becomes
available to an affiliate of RSI, including RSVP, the Reckson Intercompany
Agreement requires such affiliate to allow the Operating Partnership to
participate in such opportunity to the extent of RSI's interest.

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

     On August 27, 1998 the Company announced the formation of a joint venture
with RSVP and the Dominion Group, an Oklahoma-based, privately-owned group of
companies that focuses on the development, acquisition and ownership of
government occupied office buildings and correctional facilities.  The new
venture, Dominion Properties LLC (the "Dominion Venture"), is owned by
Dominion Venture Group LLC, and by a subsidiary of the Company.  The 
Dominion Venture will engage primarily in acquiring, developing and/or
owning government-occupied office buildings and privately operated
correctional facilities.  Under the Dominion Venture's operating agreement,
RSVP is to invest up to $100 million, some of which may be invested by the
Company ( the "RSVP Capital"). The initial contribution of RSVP Capital 
was approximately $39 million of which approximately $10.1 million was invested 
by a subsidiary of the Company.  The Company's subsidiary funded its capital 
cntribution through  the RSVP Commitment.  In addition, the Company advanced
approximately $2.9 million to RSI through he RSVP Commitment for an investment
in RSVP which was then invested on a joint venture basis with the Dominion
Group in certain service business activities related to the real estate
activities.  As of December 31, 1998, the Dominion Venture had investments in
11 government office buildings and two correctional facilities.  

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

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

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

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

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

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

      In connection with the revised transaction, Tower, the Company and
Crescent have exchanged mutual releases for any claims relating to the Initial
Merger Agreement.
  
      The Company anticipates that it will dispose of the assets in the Tower
portfolio located outside of New York.  In addition, the Company is also
considering the disposition of certain of the Tower properties located in
New York.

      The market capitalization of the Company at December 31, 1998 was
approximately $2.2 billion.  The Company's market capitalization is based on
the market value of the Company's common stock and the Operating Partnership's
units (assuming conversion) of $22.19 per share/unit (based on the closing
price of the Company's common stock on December 31,1998), the Company's
preferred stock of $25 per share, the Operating Partnership's preferred
units of $1,000 per unit and the $867 million (including its share of
unconsolidated joint venture debt and net of minority partners' interests) of
debt outstanding at December 31, 1998.  As a result, the Company's total debt
to total market capitalization ratio at December 31, 1998 equaled
approximately 39.4%.

Results of Operations

      The Company's total revenues increased by $113 million or 73.7% from 1997
to 1998 and $57.3 million or 60% from 1996 to 1997. The growth in total
revenues is substantially attributable to the Company's acquisition of 47
properties and the development of two properties which aggregate approximately
7.4 million square feet in 1998, the acquisition of 45 properties comprising
approximately 4.8 million square feet in 1997 and the acquisition of 29
properties comprising approximately 3.3 million square feet in 1996.
Total revenues were also positively effected by increases in occupancies
in our properties and to increases in rental rates throughout our markets.
Property operating revenues, which include base rents and tenant escalations
and reimbursements ("Property Operating Revenues") increased by $108.7 million
or 75.6% from 1997 to 1998 and $51 million or 55% from 1996 to 1997.  The 1998
increase in Property Operating Revenues is comprised of $2.1 million
attributable to increases in rental rates and changes in occupancies and
$106.6 million attributable to acquisitions of properties.  The remaining
balance of the increase in total revenues in 1998 is primarily attributable
to increases in interest income on the Company's investments in mortgage notes
and notes receivable and income related to the Company's interest in its service
companies primarily attributable to the executive center business.  The 1997
increase in Property Operating Revenues is comprised of $2.1 million
attributable to increases in rental rates and changes in occupancies and $48.9
million attributable to acquisitions of properties.  The remaining balance of 
the increase in total revenues in 1997 is substantially attributable to
interest income on the Company's investments in mortgage notes and notes
receivables.  The increase from 1996 to 1997 was offset by a decrease in the
equity in earnings of service companies as a result of the management and
construction companies focusing most of their resources on the Company's core
portfolio and redevelopment opportunities rather than third party services.
The Company's base rent was increased by the impact of the straight-line rent
adjustment by $7.7 million in 1998, $4.5 million in 1997 and $3.8 million in
1996.

      Property operating expenses, real estate taxes and ground rents
("Property Expenses") increased by $34.4 million from 1997 to 1998 and by $16.8
million from 1996 to 1997.  These increases are primarily due to the
acquisition of properties. Gross operating margins (defined as Property
Operating Revenues less Property Expenses, taken as a percentage of Property
Operating Revenues) for 1998, 1997and 1996 were 66.2%, 64.7% and 63.4%,
respectively.  The year to year increases in gross operating margins results
from increases realized in rental rates, the Company's ability to realize
certain operating efficiencies as a result of operating a larger portfolio of
properties with concentrations of properties in office and industrial parks
or in its established sub-markets, a stable operating cost environment and the
increased ownership of net leased properties.

      Marketing, general and administrative expenses were $15.9 million in
1998, $8.3 million in 1997 and $5.9 million in 1996.   The increase in
marketing, general and administrative expenses is due to the increased costs
of managing the acquisition Properties, the cost of opening and maintaining the
Company's Westchester, Southern Connecticut and New Jersey divisions and the
increase in corporate management and administrative costs associated with the
growth of the Company.  The Company's business strategy has been to expand
into the other Tri-State Area suburban markets by applying its standards for
high quality office and industrial space and premier tenant service to its New
Jersey, Westchester and Southern Connecticut divisions.  In doing this, the
Company seeks to create a superior franchise value that it enjoys in its home
base of Long Island. Over the past three years the Company has supported this
effort by increasing the marketing programs in the other divisions and
strengthening the resources and operating systems in these divisions.
The cost of these efforts are reflected in both marketing, general and
administrative expense as well as the revenue growth of the Company.
Marketing, general and administrative expense as a percentage of total
revenues were 5.98% in 1998, 5.41% in 1997 and  6.18% in 1996.

      Interest expense was $47.8 million in 1998, $21.6 million in 1997 and
$13.3 million in 1996.  The increase of $26.2 million from 1997 to 1998 is
attributable to (i) an increase in mortgage debt including approximately
$14.8 million resulting from the Morris acquisition in January 1998,
approximately $45.1 million resulting from the Cappelli acquisition in
April 1998 and the refinancing of 395 North Service Road in the amount
$21.4 million in October 1998; (ii) a full year of interest on the Company's
senior unsecured notes (the "Senior Unsecured Notes") and (iii) an increased
average balance on the Company's credit facilities.   The increase of $8.3 
million from 1996 to 1997 is attributable to an increase in mortgage debt
including a $50 million mortgage note incurred in connection with the
acquisition of Landmark Square in October 1996, the refinancing of Omni in the
amount of $58 million in August 1997, increased interest cost attributable to
an increased average balance on the Company's credit facilities and interest
on the Company's Senior Unsecured Notes.  The weighted average balance
outstanding on the Company's credit facilities was $377.9 million for 1998,
$103.2 million for 1997and  $71.2 million for 1996.

      Included in amortization expense is amortized finance costs of $1.6
million in 1998, $.80 million in 1997 and $.53 million in 1996. The increase
of $.80 million from 1997 to 1998 is primarily attributable to loan costs
incurred in connection with the Company's $500 million credit facility and
$50 million term loan. The increase of $.27 million from 1996 to 1997 was the
result of the amortization of financing costs associated with the credit
facilities, the Landmark Square mortgage, the Omni refinanced mortgage and
the Senior Unsecured Notes.

      Extraordinary items, net of minority interest resulted in  a $1.7 million
loss in 1998, a $2.2 million loss in 1997and a $.9 million loss in 1996.  The
extraordinary items were all attributed to the write-offs of certain deferred
loan costs incurred in connection with the Company's restructuring of its
credit facilities.

Liquidity and Capital Resources

Summary of Cash Flows

     Net cash provided by operating activities totaled $118.2 million in 1998,
$75.8 million in 1997 and  $41.9 million in 1996.   Increases for each year
were primarily attributable to the growth in cash flow provided by the
acquisition of properties and to a lesser extent from interest income from
mortgage notes and notes receivable.

     Net cash used by investing activities totaled $613.3 million in 1998,
$549.3 million in 1997and  $274.6 million in 1996.  Cash used in investing
activities related primarily to investments in real estate properties
including development costs and investments in mortgage notes and notes
receivable.   In addition, in December 1998, the Company purchased $40 million
of preferred stock of Tower Realty Trust, Inc. in connection with the Merger
transaction. 

     Net cash provided by financing activities totaled $475.6 million in 1998,
$482.7 million in 1997 and $238.4 million in 1996.   Cash provided by financing
activities during 1998, 1997 and 1996 was primarily attributable to proceeds
from public stock offerings and draws on the Company's credit facilities and
additionally, in 1998 the issuance of preferred securities and in 1997 proceeds
from the issuance of Senior Unsecured Notes.

Investing Activities

     During 1998, the Company acquired (i) on Long Island, three Office
Properties encompassing an aggregate of approximately 674,000 square feet for
approximately $63.4 million and two Industrial Properties encompassing
approximately 200,000 square feet for approximately $4.4 million; (ii) in
Westchester, six Office Properties encompassing approximately 980,000 square
feet for approximately $173 million; (iii) in Connecticut, two Office
Properties encompassing an aggregate of approximately 325,000 square feet for
approximately $61.3 million and (iv) in New Jersey, four Class A Office
Properties encompassing approximately 522,000 square feet for approximately
$90.9 million and six Industrial Properties encompassing approximately 985,000
square feet for approximately $41.6 million. In addition, on January 6, 1998,
the Company invested approximately $72 million and acquired a controlling
interest in the Morris Companies, an owner and operator of "Big Box" 
industrial properties located in Secaucus, New Jersey.

     In June 1998, the Company established the RSI credit facility in the
amount of $100 million for RSI's service sector operations and for other
general corporate purposes.  As of December 31, 1998, approximately $33.7
million had been advanced to RSI under this facility.  In addition, the Company
approved the commitment to fund investments of up to $100 million with or in
RSVP.  As of December 31, 1998, the Company has invested approximately $17.3
million under this commitment.   

Financing Activities        

     In connection with the $173 million acquisition of the Cappelli portfolio
and the $10 million purchase of the Cappelli interest in 360 Hamilton Avenue,
the Company issued series B, C and D preferred operating units in the amount
of approximately $42.5 million.  The series B, C and D preferred units have
a current distribution rate of 6.25% and are convertible to common units at
conversion prices of approximately $32.51, $29.39 and $29.12, respectively
for each preferred unit.
     
     During 1998, the Company paid cash dividends of $.99 per share
(representing dividends for three quarters).  In addition, on June 11, 1998,
the Company paid a stock dividend equivalent to $0.0824 per share relating to
the Operating Partnership's distribution of its common stock interest in RSI to
the Company.

     On February 18, 1998, the Company completed a public stock offering and
sold 791,152 common shares at a price of $25.44 per share.  Net proceeds from
the offering were approximately $19.1 million and were used to fund
acquisitions of properties and repay borrowings.

     During April 1998, the Company completed a preferred stock offering and
sold 9,200,000 shares (including 1,200,000 shares related to the exercise of
the underwriters over allotment option) of 7.625%  Series A Convertible
Cumulative Preferred Stock at a price of $25.00 per share.  Net proceeds
from the offering were approximately $220.8 million. The preferred stock is
convertible to the Company's common stock at a conversion rate of .8769
shares of common stock for each share of preferred stock.  
     
     On April 29, 1998, the Company completed a common stock offering and sold
1,093,744 common shares at a price of $24.38 per share. Net proceeds from the
offering were approximately $25.3 million and were used to fund  acquisitions
of properties and repay borrowings.
     
     On July 23, 1998, the Company obtained a three year $500 million
unsecured revolving credit facility (the "Credit Facility") from Chase
Manhattan Bank, Union Bank of Switzerland and PNC Bank as co-managers of
the credit facility bank group.  Interest rates on borrowings under the
Credit Facility are priced off of LIBOR plus a sliding scale ranging from
112.5 basis points to 137.5 basis points based on the leverage ratio of the
Company.  Upon the Company receiving an investment grade rating on its senior
unsecured debt by two rating agencies, the pricing is adjusted based off of
LIBOR plus a scale ranging from 65 basis points to 90 basis points depending
upon the rating.  The Credit Facility replaced and restructured the Company's
existing $250 million unsecured credit facility  and $200 million unsecured 
bridge facility.  As a result, certain deferred loan costs incurred in
connection with those facilities were written off.  Such amount has been
reflected as an extraordinary loss on the Company's statement of operations.
The Company utilizes the Credit Facility primarily to finance the acquisitions
of properties and other real estate investments, fund its development
activities and for working capital purposes.  At December 31, 1998, the Company
had availability under the Credit Facility to borrow an additional $8.1 million
(net of $26.1million of outstanding undrawn letters of credit). 

     On December 4, 1998, the Company obtained a one year $50 million unsecured
term loan (the "Term Loan") from Chase Manhattan Bank.  On January 13, 1999,
the Company and Chase Manhattan Bank increased the total availability under
the Term Loan to $75 million.  Interest rates on borrowings under the Term
Loan are priced off LIBOR plus 150 basis points for the first nine months and
175 basis points for the remaining three months.  At December 31, 1998, the
Company had availability under the Term Loan to borrow an additional $30
million which was increased to $55 million on January 13, 1999.

Capitalization

     The Company's indebtedness at December 31, 1998 totaled $867 million (net
of the minority partners' proportionate share of debt and including the
Company's share of unconsolidated joint venture debt of approximately $22.3
million) and was comprised of $464 million outstanding under the Credit
Facility, $20 million outstanding under the Term Loan, $150 million of Senior
Unsecured Notes and $233 million of mortgage indebtedness with an average
interest rate of approximately 7.9% and an average maturity of approximately
5.7 years.  Based on the Company's total market capitalization of approximately
$2.2 billion at December 31, 1998, (calculated as the sum of (i) a $22.19 stock
price at December 31, 1998 and assuming the conversion of  7,764,630 Operating
Partnership units (ii) a $1,000 stated value at December 31, 1998 of the
Operating Partnership's preferred units (iii) a $25.00 stated value at December
31, 1998 of the Company's preferred stock and (iv)$867 million of debt)the
Company's debt represented 39.4% of its total market capitalization. 

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

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

Inflation

     Certain office leases provide for fixed base rent increases or indexed
escalations. In addition, certain 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
escalation over a base amount. The Company believes that inflationary increases
in expenses will generally be offset by contractual rent increases and expense
escalations described above. 

     The Credit Facility and the Term Loan bear interest at a variable rate,
which will be influenced by changes in short-term interest rates, and are 
sensitive to inflation. 

Impact of Year 2000

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

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

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

     To date, the Company has expended approximately $375,000 and expects to
expend an additional one million dollars in connection with upgrading building
management, mechanical and computer systems. The costs of the project and the
date on which the Company believes it will complete the year 2000 modifications
are based on management's best estimates, which were derived utilizing numerous
assumptions of future events, including the continued availability of certain
resources and other factors.  However, there can be no guarantee that these
estimates will be achieved and actual results could differ materially from
those anticipated.  Specific factors that might cause such material 
differences include, but are not limited to, the availability and costs of
personnel trained in this area, the ability to locate and correct all 
relevant computer codes, and similar uncertainties.

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

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

Funds From Operations

     Management believes that funds from operations ("FFO") is an appropriate
measure of performance of an equity REIT. FFO is defined by the National 
Association of Real Estate Investment Trusts (NAREIT) as net income or loss,
excluding gains or losses from debt 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 Company's operating performance or as an alternative to cash
flow as a measure of liquidity. (See Selected Financial Data).  In March 1995,
NAREIT issued a "White Paper" analysis to address certain interpretive issues
under its definition of FFO.  The White Paper provides that amortization of
deferred financing costs and depreciation of non-rental real estate assets are
no longer to be added back to net income to arrive at FFO.

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

     The following table presents the Company's FFO calculation for the years
ended December 31, 
(in thousands):

<TABLE>
<CAPTION>
                                                     1998         1997        1996
                                                 ----------- ------------ -----------
<S>                                              <C>         <C>          <C>
Income before preferred dividends
   and distributions, limited partners'
   interest in the operating partnership
   and extraordinary  items                      $   61,718  $    44,683  $   24,382
Less:
   Preferred dividends and distributions             14,244          ---         ---
   Extraordinary loss, net of limited
      partners' interest in theoperating
      partnership of $323, $578 and $364,
      respectively                                    1,670        2,230         895
   Limited Partners' minority interest
      in the operating partnership                    7,909        7,817       5,960
                                                 ----------- ------------ -----------
Net Income available to common
   shareholders                                      37,895       34,636      17,527
Adjustments for Funds From Operations
Add:
   Limited Partners' minority interest
      in the operating partnership                    7,909        7,817       5,960
   Depreciation and amortization                     51,424       26,834      17,429
   Minority interests' in consolidated
      partnerships                                    2,763          807         808
   Extraordinary loss, net of limited
      partners' interest in the operating
      partnership of $323, $578 and  $364,
      respectively                                    1,670        2,230         895
Less:
   Gain on sale of property                             ---          672         ---
   Amount distributed to minority
      partners in consolidated
      partnerships                                    3,964        2,104       1,486
                                                 ----------- ------------ -----------
Basic Funds From Operations                          97,697       69,548      41,133
Add:
   Dilutive preferred distributions                   1,752          ---         ---
                                                 ----------- ------------ -----------
Diluted Fund From Operations                     $   99,449  $    69,548  $   41,133
                                                 =========== ============ ===========
Weighted Average Shares/Units
   outstanding <F1>                                  47,201       39,743      26,431
                                                 =========== ============ ===========
Diluted Weighted Average
   Shares/Units outstanding <F1>                     48,651       40,276      26,693
                                                 =========== ============ ===========
<FN>
<F1>
Assumes conversion of limited partnership units of the Operating Partnership.
</FN>
</TABLE>

Item 7(a).     Quantitative and Qualitative Disclosures about market risk.

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

     The following table sets forth the Company's long term debt obligations,
principal cash flows by scheduled maturity, weighted average interest rates
and estimated fair market value ("FMV") at December 31, 1998 (dollars in
thousands):

<TABLE>
<CAPTION>
                                  For the Year Ended December 31,
                         ------------------------------------------------
                           1999     2000      2001     2002       2003   Thereafter   Total     F.M.V
                         -------- -------- --------- --------- ---------- --------- --------- ----------
<S>                      <C>      <C>      <C>       <C>       <C>        <C>       <C>       <C>
Long term debt:
  Fixed rate             $10,752  $32,131  $ 19,440  $ 12,937  $  19,295  $308,908  $403,463  $ 403,463
  Average interest
    rate                   8.72%    7.38%     7.42%     7.91%      7.65%     7.58%     7.60%        ---

  Variable rate          $20,000  $   ---  $465,850  $    ---  $     ---  $    ---  $485,850  $ 485,850
  Average interest
    rate                   7.06%      ---     6.99%       ---        ---       ---     6.99%        ---
</TABLE>

     In addition, the Company has assessed the market risk for its variable
rate debt and believes that a one percent increase in interest rates would have
an approximate $4.9 million increase in interest expense based on approximately
$485.9 million outstanding at December 31, 1998.

     The following table sets forth the Company's mortgage notes and note
receivables by scheduled maturity date, weighted average interest rates and
estimated FMV at December 31, 1998 (dollars in thousands):

<TABLE>
<CAPTION>
                                   For the Year Ended December 31,
                         ------------------------------------------------
                            1999      2000     2001     2002      2003   Thereafter   Total      F.M.V
                         --------- -------- --------- --------- --------- --------- --------- ----------
<S>                      <C>       <C>      <C>       <C>       <C>       <C>       <C>       <C>
Mortgage notes and
notes receivable:
  Fixed rate             $ 74,817  $   ---  $    ---  $  5,600  $    ---  $ 16,990  $ 97,407  $  97,407
  Average interest
    rate                    9.55%      ---       ---    11.00%       ---    11.45%     9.96%        ---
</TABLE>

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


Item 8.        Financial Statements and Supplementary Data

     The response to this item is included in a separate section of this Form
10-K. 

Item 9.        Changes in and Disagreements with Accountants on Accounting and
               Financial Disclosure 

      None.

                             Part III


Item 10.  Directors and Executive Officers of the Registrant

     The information contained in the section captioned "Proposal I: Election
of Directors" of the Company's definitive proxy statement for the 1999 annual
meeting of stockholders is incorporated herein by reference. 

Item 11.  Executive Compensation

     The information contained in the section captioned "Executive 
Compensation" of the Company's definitive proxy statement for the 1999 annual
meeting of stockholders is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     The information contained in the section captioned "Principal and
Management Stockholders" of the Company's definitive proxy statement for the 
1999 annual meeting of stockholders is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions

     The information contained in the section captioned "Certain Relationships
and Related Transactions" of the Company's definitive proxy statement for the
1999 annual meeting of the stockholders is incorporated herein by reference.

                              Part IV


Item 14.  Financial Statements and Schedules, Exhibits and Reports on Form 8-K

(a)(1 and 2)   Financial Statements and Schedules 

     The following consolidated financial information is included as a separate
section of this annual report on Form 10-K: 

                                                                          Page
                                                                         ------
Reckson Associates Realty Corp. 
Report of Independent Auditors                                            IV-5
Consolidated Balance Sheets as of December 31, 1998 and
   December 31, 1997                                                      IV-6
Consolidated Statements of Income for the years ended
December 31, 1998, 1997 and 1996                                          IV-7
Consolidated Statement of Stockholders' Equity for the years
   ended December 31, 1998, 1997 and 1996.                                IV-8
Consolidated Statements of Cash Flows for the years ended
   December 31, 1998, 1997 and 1996 .                                     IV-9
Notes to Financial Statements                                            IV-10
Schedule III - Real Estate and Accumulated Depreciation                  IV-30

     All other schedules are omitted since the required information is not
present in amounts sufficient to require submission of the schedule or because
the information required is included in the financial statements and notes
thereto. 

(3) Exhibits

Exhibit  Filing
Number   Reference              Description            


     3.1     a  Amended and Restated Articles of Incorporation
     3.2     a  By-Laws of Registrant
     3.3     h  Articles Supplementary of the Registrant filed with the
                Maryland State Department of Assessments  and Taxation
                on April 9, 1998
     4.1     b  Specimen Share Certificate of Common Stock
     4.2     h  Specimen Share Certificate of Preferred Stock
    10.1     a  Amended and Restated Agreement of Limited Partnership
                of Reckson Operating Partnership, L. P.
    10.2     h  Supplement to the Amended and Restated Agreement of
                Limited Partnership of Reckson Operating Partnership,
                L.P. Establishing Series A Preferred Units of Limited
                Partnerships Interest.
    10.3     h  Supplement to the Amended and Restated Agreement
                of Limited Partnership of Reckson Operating
                Partnership, L. P. Establishing Series B Preferred Units
                of Limited Partnership Interest.
    10.4     h  Supplement to the Amended and Restated Agreement
                of Limited Partnership of Reckson Operating
                Partnership, L. P. Establishing Series C Preferred
                Units of Limited Partnership Interest.
    10.5     h  Supplement to the Amended and Restated Agreement
                of Limited Partnership of Reckson Operating
                Partnership, L. P. Establishing Series D Preferred
                Units of Limited Partnership Interest.
    10.6     f  Third Amended and Restated Agreement of Limited
                Partnership of Omni Partners, L. P.
    10.7        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and
                Donald Rechler.
    10.8        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and
                Scott Rechler.
    10.9        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and
                Mitchell Rechler.
   10.10        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and
                Gregg Rechler.
   10.11        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and
                Roger Rechler.
   10.12        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and J.
                Michael Maturo.
   10.13     a  Purchase Option Agreements relating to the Reckson
                Option Properties
   10.14     a  Purchase Option Agreements relating to the Other
                Option Properties
   10.15     c  Amended 1995 Stock Option Plan
   10.16     c  1996 Employee Stock Option Plan
   10.17     b  Ground Leases for certain of the properties
   10.18        Third Amended and Restated Agreement of Limited
                Partnership of Reckson FS Limited Partnership
   10.19     a  Indemnity Agreement relating to 100 Oser Avenue
   10.20     f  Amended and Restated 1997 Stock Option Plan
   10.21     f  1998 Stock Option Plan
   10.22     f  Amended and Restated Agreement of Limited
                Partnership of Reckson Morris Operating Partnership,
                L. P. 
   10.23     f  Note Purchase Agreement for the Senior Unsecured Notes
   10.24        Amended and Restated Severance Agreement between
                Registrant and Donald Rechler
   10.25        Amended and Restated Severance Agreement between
                Registrant and Scott Rechler
   10.26        Amended and Restated Severance Agreement between
                Registrant and Mitchell Rechler
   10.27        Amended and Restated Severance Agreement between
                Registrant and Gregg Rechler
   10.28        Amended and Restated Severance Agreement between
                Registrant and Roger Rechler
   10.29        Amended and Restated Severance Agreement between
                Registrant and J. Michael Maturo
   10.30     d  $500 million Credit Agreement dated July 23, 1998
                among Reckson Operating Partnership, L. P. and
                Reckson Morris Operating Partnership, L. P. and the
                Chase Manhattan Bank, UBS AG and PNC Bank and
                other lenders party thereto
   10.31     e  $75 million Amended and Restated Credit Agreement
                dated January 12, 1999 among Reckson Operating
                Partnership, L. P. and Reckson Morris Operating
                Partnership, L. P. and ING (U.S.) Capital LLC and the
                Chase Manhattan Bank and other lenders party thereto
   10.32     g  Agreement and Plan of Merger by and among Tower
                Realty Trust, Inc., Reckson Associates Realty Corp.,
                Reckson Operating Partnership, L. P. and Metropolitan
                Partners LLC, dated December 8, 1998
   10.33     g  Stock Purchase Agreement by and between Tower
                Realty Trust Inc. and Metropolitan Partners LLC, dated
                December 8, 1998
   10.34     g  Amended and Restated Operating Agreement of
                Metropolitan Partners LLC, dated December 8, 1998
   10.35        Intercompany Agreement by and between Reckson
                Operating Partnership, L. P.  and Reckson Service
                Industries, Inc., dated May 13, 1998
   10.36        Credit Agreement dated as of June 15, 1998 between
                Reckson Service Industries, Inc., as borrower and
                Reckson Operating Partnership, L. P., as Lender
                relating to Reckson Strategic Venture Partners, LLC
   10.37        Credit Agreement dated as of June 15, 1998 between
                Reckson Service Industries, Inc., as borrower and
                Reckson Operating Partnership, L. P., as Lender
                relating to the operations of Reckson Service
                Industries, Inc.
    12.1        Statement of Ratios of Earnings to Fixed Charges
    21.1        Statement of Subsidiaries
    23.0        Consent of Independent Auditors
    24.1        Power of Attorney (included in Part IV of the Form 10-K)
    27.0        Financial Data Schedule
---
a  Previously filed as an exhibit to Registration
   Statement on Form S-11 (No.333-1280) and
   incorporated herein by reference.
b  Previously filed as an exhibit to Registration
   Statement on Form S-11 (No.33-84324) and
   incorporated herein by reference.
c  Previously filed as an exhibit to the Company's Form
   8-K report filed with the SEC on November 25, 1996
   and incorporated herein by reference.
d  Previously filed as an exhibit to the Company's Form
   8-K report filed with the SEC on August 14, 1998 and
   incorporated herein by reference.
e  Previously filed as an exhibit to the Company's Form
   8-K report filed with the SEC on February  5, 1999 and
   incorporated herein by reference.
f  Previously filed as an exhibit to the Company's Form
   10-K filed with the SEC on March 26, 1998 and
   incorporated herein by reference.
g  Previously filed as an exhibit to the Company's Form
   8-K report filed with the SEC on December 22, 1998
   and incorporated herein by reference.
h  Previously filed as an exhibit to the Company's Form
   8-K report filed with the SEC on March 1, 1999 and
   incorporated herein by reference.

(b) Reports on Form 8-K  

     On November 2, 1998, the Company filed a report on Form 8-K related to 
press releases announcing the litigation involving the Company and Tower Realty
Trust, Inc.

     On December 8, 1998, the Company filed a report on Form 8-K announcing the
execution of a revised merger agreement with Tower Realty Trust, Inc.

                             SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized on March 15, 1999.

                              Reckson Associates Realty Corp. 

                              By:       /s/ Donald J. Rechler                  
                                       -----------------------
                                        (Donald J. Rechler)
                                     Chairman of the Board, and
                                      Chief Executive Officer

     KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of Reckson Associates Realty Corp., hereby severally constitute Scott
H. Rechler, Mitchell D. Rechler and Michael Maturo, and each of them singly, 
our true and lawful attorneys with full power to them, and each of them singly,
to sign for us and in our names in the capacities indicated below, the Form 
10-K filed herewith and any and all amendments to said Form 10-K, and generally
to do all such things in our names and in our capacities as officers and
directors to enable Reckson Associates Realty Corp. to comply with the
provisions of the Securities Exchange Act of 1934, and all requirements of
the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Form 10-K and any and all amendments thereto. 

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Name                             Title                                  Date
<S>                              <C>                                    <C>
 /s/ Donald J. Rechler           Chairman of the Board, Chief           March 15, 1999
----------------------           Executive Officer and Director
(Donald J. Rechler)              (principal executive officer)

  /s/ Scott Rechler              President, Chief Operating Officer     March 15, 1999
----------------------           and Director 
(Scott Rechler)

  /s/ Roger M. Rechler           Vice Chairman of the Board and         March 15, 1999
----------------------           Director
(Roger M. Rechler)

  /s/ Michael Maturo             Executive Vice President,              March 15, 1999
----------------------           Treasurer and Chief Financial
(Michael Maturo)                 Officer (principal financial officer
                                 and principal accounting officer)

  /s/ Mitchell D. Rechler        Executive Vice President and           March 15, 1999
----------------------           Director
(Mitchell D. Rechler)

 /s/ Harvey R. Blau              Director                               March 15, 1999
----------------------
(Harvey R. Blau)

  /s/ Leonard Feinstein          Director                               March 15, 1999
----------------------
(Leonard Feinstein)

  /s/ John V.N. Klein            Director                               March 15, 1999
----------------------
(John V.N. Klein)

  /s/ Conrad Stephenson          Director                               March 15, 1999
----------------------
(Conrad Stephenson)

  /s/ Herve A. Kevenides         Director                               March 15, 1999
----------------------
(Herve A. Kevenides)

  /s/ Lewis S. Ranieri           Director                               March 15, 1999
----------------------
(Lewis S. Ranieri)
</TABLE>

                         Report of Independent Auditors




Board of Directors and Stockholders
Reckson Associates Realty Corp.

     We have audited the accompanying consolidated balance sheets of Reckson
Associates Realty Corp. as of December 31, 1998 and 1997, and the related
consolidated statements of income, stockholders' equity, and cash flows for
each of the three years in the period ended December 31, 1998.  We have also
audited the financial statement schedule listed in the index at item 14(a).
These financial statements and financial statement schedule are the 
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial statement schedule
based on our audits. 

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion. 

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Reckson 
Associates Realty Corp. at December 31, 1998 and 1997, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1998 in conformity with generally accepted accounting
principles.  Also, in our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as a
whole, presents fairly, in all material respects, the information set forth 
therein.

                              ERNST & YOUNG LLP







New York, New York
February 11, 1999

<PAGE>
<PAGE>



                         RECKSON ASSOCIATES REALTY CORP.
                           CONSOLIDATED BALANCE SHEETS

                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                                             December 31,
                                                      -------------------------
                                                           1998         1997
                                                       ----------    ----------
ASSETS

Commercial real estate properties, at cost 
  (Notes 2, 3, 5, 7 and 8)
   Land ............................................  $   212,540    $  138,526
   Buildings and improvements ......................    1,372,549       818,229
Developments in progress:

   Land ............................................       69,143        36,857
   Development costs ...............................       82,901        17,616
Furniture, fixtures and equipment ..................        6,090         4,054
                                                      -----------    ----------
                                                        1,743,223     1,015,282
           Less accumulated depreciation ...........     (159,049)     (111,068)
                                                      -----------    ----------
                                                        1,584,174       904,214

Investments in real estate joint ventures ..........       15,104         7,223
Investment in mortgage notes and notes
  receivable (Note 8) ..............................       99,268       104,509
Cash and cash equivalents (Note 12) ................        2,349        21,828
Tenant receivables .................................        5,159         4,975
Investments in and advances to affiliates (Note 7) .       53,329        26,547
Deferred rent receivable ...........................       22,526        14,973
Prepaid expenses and other assets (Notes 7 and 8) ..       46,372         5,248
Contract and land deposits and pre-acquisition costs        2,253         7,559
Deferred lease and loan costs, less
   accumulated amortization of $18,170 (1998)
   and $14,844 (1997) ..............................       24,282        16,181
                                                      -----------    ----------
   Total Assets ....................................  $ 1,854,816    $1,113,257
                                                      ===========    ==========

LIABILITIES

Mortgage notes payable (Note 2) ....................  $   253,463    $  180,023
Unsecured credit facility (Note 3) .................      465,850       210,250
Unsecured term loan (Note 3) .......................       20,000          --
Senior unsecured notes (Note 4) ....................      150,000       150,000
Accrued expenses and other liabilities (Note 5) ....       48,565        30,987
Dividends and distributions payable ................       19,663           120
Affiliate payables (Note 7) ........................        2,395           807
                                                      -----------    ----------
   Total Liabilities ...............................      959,936       572,187
                                                      -----------    ----------

Minority interests' in consolidated partnerships ...       52,173         6,655
Preferred unit interest in the operating partnership       42,518          --
Limited Partners' minority interest in
   the operating partnership .......................       94,125        85,750
                                                      -----------    ----------
                                                          188,816        92,405
                                                      -----------    ----------
Commitments and other comments
   (Notes 9, 10, 13 and 16) ........................         --            --

STOCKHOLDERS' EQUITY (Note 6)
Preferred Stock, $.01 par value, 25,000,000
   shares authorized, 9,192,000 and 0 
   issued and outstanding ..........................           92          --
Common Stock, $.01 par value, 100,000,000 shares
   authorized, 40,035,419 and 37,770,158 shares 
   issued and outstanding, respectively.............          400           378
Additional paid in capital..........................      705,572       448,287
                                                      -----------    ----------
   Total Stockholders' Equity.......................      706,064       448,665
                                                      -----------    ----------
   Total Liabilities and Stockholders' Equity.......  $ 1,854,816    $1,113,257
                                                      ===========    ==========

                (see accompanying notes to financial statements)

<PAGE>

<TABLE>
<CAPTION>
                                RECKSON ASSOCIATES REALTY CORP.
                               CONSOLIDATED STATEMENTS OF INCOME

                              (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                                          For the Year Ended December 31,
                                                     -----------------------------------------
                                                        1998            1997          1996
                                                     -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>
REVENUES (Note 10):

  Base rents .....................................   $   224,703    $   128,778    $    82,150
  Tenant escalations and reimbursements ..........        27,744         14,981         10,628
  Equity in earnings of service companies ........         1,233             55          1,031
  Equity in earnings of real estate joint ventures           603            459            266
  Interest income on mortgage notes and notes
    receivable ...................................         7,739          5,437           --
  Investment and other income (Note 8) ...........         4,351          3,685          2,066
                                                     -----------    -----------    -----------

Total Revenues ...................................       266,373        153,395         96,141
                                                     -----------    -----------    -----------

EXPENSES:
   Property operating expenses ...................        47,919         28,943         18,959
   Real estate taxes .............................        35,541         20,579         13,935
   Ground rents ..................................         1,761          1,269          1,107
   Marketing, general and administrative .........        15,919          8,292          5,949
   Interest ......................................        47,795         21,585         13,331
   Depreciation and amortization .................        52,957         27,237         17,670
                                                     -----------    -----------    -----------

Total Expenses ...................................       201,892        107,905         70,951
                                                     -----------    -----------    -----------

Income before preferred dividends and
   distributions, minority interests'
   and extraordinary items .......................        64,481         45,490         25,190
Minority partners' interests in consolidated
   partnerships ..................................        (2,763)          (807)          (808)
Distributions to preferred unit holders ..........        (1,753)          --             --
Limited partners' minority interest
   in the operating partnership ..................        (7,909)        (7,817)        (5,960)
                                                     -----------    -----------    -----------

Income before extraordinary items and
  dividends to preferred shareholders ............        52,056         36,866         18,422
Extraordinary items - (loss)  on
  extinguishment of debts, net of 
  limited partners' minority interest 
  share of $323, $578 and $364,  
  respectively (Note 3).. ........................        (1,670)        (2,230)          (895)

Dividends to preferred shareholders...............       (12,491)          --             --
                                                     -----------    -----------    -----------

Net income available to common 
  shareholders ...................................   $    37,895    $    34,636    $    17,527
                                                     -----------    -----------    -----------

Basic net income per common share:
Income before extraordinary items.................   $      1.00    $      1.13    $       .92
Extraordinary items - (loss) on 
  extinguishment of debts                                   (.04)          (.07)          (.04)
                                                     -----------    -----------    -----------

Net income per common share.....................     $       .96    $      1.06    $       .88
                                                     ===========    ===========    ===========

Weighted average common shares 
  outstanding ..................................      39,473,000     32,727,000     19,928,000
                                                     -----------    -----------    -----------

Diluted net income per common share 
  (Notes 1 and 6) .........................          $       .95    $      1.04    $       .87
                                                     ===========    ===========    ===========

Diluted weighted average common 
  shares outstanding (Notes 
  1 and 6).................................           40,010,000     33,260,000     20,190,000
                                                     ===========    ===========    ===========

</TABLE>

                (see accompanying notes to financial statements)

<PAGE>




                         RECKSON ASSOCIATES REALTY CORP.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                                           Limited
                                                                                   Additional                  Total       Partners'
                                                            Common     Preferred      Paid      Retained    Stockholders'  Minority
                                                             Stock       Stock     in Capital   Earnings       Equity      Interest
                                                           ---------   ---------   ---------    ---------   ------------  ---------
<S>                                                        <C>         <C>         <C>          <C>          <C>          <C>      
Stockholders' equity, December 31, 1995 ................   $      75   $    --     $  61,684    $    --      $  61,759    $  26,148

Proceeds from public offerings .........................          47        --       120,498         --        120,545       24,671
Issuance of operating partnership units
  (Note 12) ............................................        --          --        10,909         --         10,909        3,135
Proceeds from exercise of employee options .............        --          --           263         --            263           75
Two for one stock split (Note 6) .......................         122        --          (122)        --           --           --
Net Income .............................................        --          --          --         17,527       17,527        5,596
Dividends and distributions paid and
 payable ...............................................        --          --        (6,609)     (17,527)     (24,136)      (7,746)
                                                           ---------   ---------   ---------    ---------    ---------    ---------

Stockholders' equity, December 31, 1996 ................         244        --       186,623         --        186,867       51,879
Two for one stock split (Note 6) .......................          50        --           (50)        --           --           --
Proceeds from public offerings .........................          80        --       256,564         --        256,644       33,925
Issuance of operating partnership units
   (Note 12) ...........................................        --          --         9,473         --          9,473        1,236
Proceeds from exercise of employee options .............           4        --         1,706         --          1,710          178
Net Income .............................................        --          --          --         34,636       34,636        7,239
Dividends and distributions paid and
  payable ..............................................        --          --        (6,029)     (34,636)     (40,665)      (8,707)
                                                           ---------   ---------   ---------    ---------    ---------    ---------
Stockholders' equity, December 31, 1997 ................         378        --       448,287         --        448,665       85,750
Proceeds from preferred offering .......................        --            92     220,708         --        220,800         --
Conversions of preferred stock .........................        --          --           (31)        --            (31)          31
Proceeds from public offerings .........................          21        --        41,340         --         41,361        8,785
Issuance of operating partnership units                                                      
   (Note 12) ...........................................        --          --        11,576         --         11,576        2,458
Proceeds from exercise of employee options .............           1        --           990         --            991          210
Net income .............................................        --          --          --         37,895       37,895        7,586
Dividends and distributions paid
   and payable .........................................        --          --       (17,298)     (37,895)     (55,193)     (10,695)
                                                           ---------   ---------   ---------    ---------    ---------    ---------

Stockholders' equity, December 31, 1998 ................   $     400   $      92   $ 705,572    $    --      $ 706,064    $  94,125
                                                           =========   =========   =========    =========    =========    =========

</TABLE>
                (see accompanying notes to financial statements)

<PAGE>

<TABLE>
<CAPTION>
                                           RECKSON ASSOCIATES REALTY CORP.
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                   (IN THOUSANDS)

                                                                                  For the Year Ended December 31,
                                                                                -----------------------------------
                                                                                 1998          1997          1996
                                                                                ---------    ---------    ---------
<S>                                                                             <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS .................................   $  37,895    $  34,636    $  17,527
Adjustments to reconcile net income to net cash provided
 by operating activities:
   Depreciation and amortization ............................................      52,957       27,237       17,670
   Loss on extinguishment of debts, net of minority interest ................       1,670        2,230          895
   Minority partners' interest in consolidated partnerships .................       2,763          807          808
   Limited partners' minority interest in the operating partnership..........       7,909        7,817        5,960
   Gain on sale of interest in Reckson Executive Centers, LLC ...............          (9)        --           --
   Gain on sales of property and securities .................................         (43)        (672)        --
   Distribution from investments in real estate joint ventures ..............         470          408          191
   Equity in  earnings of service companies .................................      (1,233)         (55)        (931)
   Equity in earnings of real estate joint ventures .........................        (603)        (459)        (266)
Changes in operating assets and liabilities:

   Deferred rents receivable ................................................      (7,553)      (4,500)      (3,837)
   Prepaid expenses and other assets ........................................      (6,499)      (1,931)        (608)
   Tenant and affiliate receivables .........................................        (184)      (1,183)        (256)
   Accrued expenses and other liabilities ...................................      30,667       11,427        4,700
                                                                                ---------    ---------    ---------
   Net cash provided by operating activities ................................     118,207       75,762       41,853
                                                                                ---------    ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Purchases of commercial real estate properties ...........................    (449,241)    (429,379)    (181,130)
   Investment in mortgage notes and notes receivable ........................       4,072      (50,282)     (50,892)
   Interest receivables .....................................................       2,602       (2,392)        (870)
   (Increase) decrease in contract deposits and preacquisition costs ........       8,839       (1,303)      (6,668)
   Additions to developments in progress ....................................     (97,570)     (40,367)      (8,427)
   Additions to commercial real estate properties ...........................     (21,181)     (12,038)     (12,441)
   Payment of leasing costs .................................................      (8,802)      (5,417)      (5,028)
   Investments in securities ................................................     (42,299)      (1,756)        --
   Additions to furniture, fixtures and equipment ...........................      (2,071)      (1,159)        (115)
   Investments in and advances to real estate joint ventures ................      (7,773)      (1,734)      (5,832)
   Investment in service companies ..........................................        --         (4,241)      (3,170)
   Distribution from a service company ......................................          15         --           --
   Additions to capital escrow reserves .....................................        (700)        --           --
   Proceeds from sales of property and securities ...........................         809          725         --
                                                                                ---------    ---------    ---------
   Net cash (used in)investing activities ...................................    (613,300)    (549,343)    (274,573)
                                                                                ---------    ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Proceeds from borrowings .................................................        --           --         54,402
   Principal payments on borrowings .........................................      (4,735)      (1,624)        (380)
   Proceeds from issuance of senior unsecured notes .........................        --        150,000         --
   Proceeds from issuance of preferred stock, net of issuance costs..........     220,800         --           --
   Proceeds from mortgage refinancing's, net of refinancing costs ...........      11,458       20,134         --
   Payment of loan costs and prepayment penalties ...........................      (4,738)      (4,983)      (2,525)
   Investments in and advances to affiliates ................................     (23,452)     (20,513)      (2,952)
   Proceeds from credit facilities ..........................................     393,100      421,000      144,500
   Principal payments on credit facilities ..................................    (137,500)    (319,250)     (76,000)
   Proceeds from term loan ..................................................      20,000         --           --
   Proceeds from issuance of common stock, and
     exercise of options net of issuance costs ..............................      51,934      299,991      145,317
   Contribution by a minority partner in a consolidated partnership .........      10,000         --           --
   Distribution to minority partners in consolidated partnerships ...........      (3,570)      (5,355)      (1,392)
   Distributions to limited partners in the operating partnership ...........      (7,576)      (8,707)      (5,719)
   Distributions to preferred unitholders ...................................      (1,312)        --           --
   Dividends to common shareholders .........................................     (39,157)     (47,972)     (16,827)
   Dividends to preferred shareholders ......................................      (9,638)        --           --
                                                                                ---------    ---------    ---------
Net cash provided by financing activities ...................................     475,614      482,721      238,424
                                                                                ---------    ---------    ---------
Net increase (decrease) in cash and cash equivalents ........................     (19,479)       9,140        5,704
Cash and cash equivalents at beginning of period ............................      21,828       12,688        6,984
                                                                                ---------    ---------    ---------
Cash and cash equivalents at end of period ..................................   $   2,349    $  21,828    $  12,688
                                                                                =========    =========    =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid during the period for interest .................................   $  41,822      $20,246    $  13,261
                                                                                =========      =======    =========
</TABLE>

                (see accompanying notes to financial statements)


<PAGE>



                         RECKSON ASSOCIATES REALTY CORP.
                          NOTES TO FINANCIAL STATEMENTS

1.       DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

         Reckson  Associates  Realty  Corp.  (the  "Company")  is a self 
administered and self managed real estate investment trust ("REIT")engaged in
the ownership,  management,  operation,  leasing and  development of commercial
real estate properties, principally office and industrial buildings and owns 
land for future  development  (collectively,  the  "Properties")  located in the
New York tri-state area (the "Tri State Area").

ORGANIZATION AND FORMATION OF THE COMPANY

         The Company was  incorporated in Maryland in September 1994 and on June
2, 1995 completed an initial public offering of 6,120,000  shares (pre split) of
$.01 par value common stock ("the Offering").  The Offering price was $24.25 per
share (pre split) resulting in gross proceeds of $148,410,000.  The Company also
issued 400,000 shares (pre split) in a concurrent offering to the Rechler family
resulting  in  $9,700,000  of  additional  proceeds.   On  June  28,  1995,  the
underwriters exercised their over allotment option and, accordingly, the Company
issued an  additional  918,000  shares (pre split) of common  stock and received
gross proceeds of  $22,261,500.  The aggregate  proceeds to the Company,  net of
underwriters'  discount,  advisory  fee and  offering  costs were  approximately
$162,000,000.

         The  Company  became the sole  general  partner  of  Reckson  Operating
Partnership L.P. (the "Operating Partnership") by contributing substantially all
of the net proceeds of the Offering, in exchange for an approximate 73% interest
in the Operating Partnership. All Properties acquired by the Company are held by
or through the Operating Partnership.

         The  Operating   Partnership   executed  various  option  and  purchase
agreements  whereby  it issued  2,758,960  units  (pre  split) in the  Operating
Partnership  ("Units") to the  continuing  investors  and assumed  approximately
$163,438,000  (net of the  Omni  mortgages)  of  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.

         During  1997,  the Company  formed  Reckson  Service  Industries,  Inc.
("RSI") and Reckson  Strategic  Venture  Partners,  LLC ("RSVP").  The Operating
Partnership owned a 95% non voting common stock interest in RSI through June 10,
1998. On June 11, 1998,  the Operating  Partnership  distributed  its 95% common
stock interest in RSI of approximately  $3 million to its owners,  including the
Company which, in turn, distributed the common stock of RSI to its stockholders.
Additionally,  during June 1998, the Operating Partnership  established a credit
facility  with RSI (the "RSI Facility")  in the amount of $100 million for RSI's
service sector operations and other general corporate  purposes.  As of December
31, 1998,  the Company had advanced $ 33.7 million under the RSI facility all of
which is  outstanding.  In  addition,  the  Operating  Partnership  approved the
funding  of  investments  of up to  $100  million  with or in  RSVP  (the  "RSVP
Commitment"),  through RSVP-controlled joint venture REIT-qualified  investments
or advances made to RSI under terms similar to the RSI Facility.  As of December
31,  1998,  approximately  $17.3  million  had been  invested  through  the RSVP
Commitment,  of which $10.1 million  represents  RSVP  controlled  joint venture
investments  and  $7.2  million  represents  advances  to  RSI  under  the  RSVP
Commitment.  Such amounts have been  included in investment in real estate joint
ventures and  investments  in and advances to affiliates,  respectively,  on the
accompanying balance sheet. RSI serves as the managing member of RSVP. RSI
invests in operating  companies that generally  provide  commercial  services to
the RSI customer base which includes the tenants of RSI's  executive  suite 
business and to properties  owned by the Company and its tenants and third 
parties.  RSVP was formed to provide the Company with a research and development
vehicle to invest in alternative  real estate sectors.  RSVP invests  primarily
in real estate and real estate related operating  companies generally outside of
the Company's core office  and  industrial  focus.  RSVP's  strategy  is to 
identify and acquire interests in established entrepreneurial enterprises with
experienced management teams in market  sectors  which are in the early stages
of their growth cycle or offer unique circumstances for attractive  investments
as well as a platform for future growth.

<PAGE>

         On January 6,  1998,  the  Company  made an initial  investment  in the
Morris  Companies,  a New  Jersey  developer  and owner of "Big  Box"  warehouse
facilities.  In  connection  with the transaction the Morris Companies  
contributed 100% of their interests in certain industrial properties to Reckson
Morris Operating  Partnership,  L.P. ("RMI") in exchange  for  operating 
partnership  units in RMI.  The  Company has agreed to invest up to $150 million
in RMI.  As of December 31, 1998, the Company  has  invested  approximately 
$93.8  million for an  approximate  71.8% controlling interest in RMI.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The  accompanying   consolidated   financial   statements  include  the
consolidated  financial position of the Company and the Operating Partnership as
at December 31, 1998 and 1997 and the results of their operations and their cash
flows for each of the three years in the period ended  December  31,  1998.  The
Operating    Partnership's    investments   in   Metropolitan    Partners,   LLC
("Metropolitan"),  RMI and Omni  Partners,  L. P.  ("Omni") are reflected in the
accompanying  financial  statements on a consolidated basis with a reduction for
minority  partners'  interest.  The operating results of the service  businesses
currently  conducted by Reckson  Management Group,  Inc.,  ("RMG"),  and Reckson
Construction Group, Inc., are reflected in the accompanying financial statements
on the equity method of accounting.  The operating  results of Reckson Executive
Centers,  L.L.C.,  ("REC"), a service business of the Operating Partnership were
reflected  in the  accompanying  financial  statements  on the equity  method of
accounting  through March 31, 1998. On April 1, 1998, the Operating  Partnership
sold its 9.9% interest in REC to RSI. Additionally, the operating results of RSI
were reflected in the accompanying  financial statements on the equity method of
accounting  through June 10, 1998.  On June 11, 1998 the  Operating  Partnership
distributed  its 95% common stock  interest in RSI to its owners,  including the
Company which, in turn, distributed the common stock of RSI to its stockholders.
The Operating  Partnership  also invests in real estate joint  ventures where it
may own less than a controlling interest, such investments are also reflected in
the accompanying  financial  statements on the equity method of accounting.  All
significant  intercompany  balances and transactions have been eliminated in the
consolidated financial statements.

         The minority  interests at December 31, 1998  represent an  approximate
16.2% limited partnership interest in the Operating Partnership,  an approximate
28.2%  interest in RMI, a 25%  interest in  Metropolitan  and a 40%  interest in
Omni.


Use of Estimates

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

Real Estate

         Depreciation is computed  utilizing the  straight-line  method over the
estimated useful lives of ten to thirty years for buildings and improvements and
five to ten years for furniture,  fixtures and equipment.  Tenant  improvements,
which  are  included  in  buildings  and   improvements,   are  amortized  on  a
straight-line basis over the term of the related leases.

Cash Equivalents

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

<PAGE>

Deferred Costs

         Lease fees and loan costs are  capitalized  and amortized over the life
of the related lease or loan. The Company incurred costs related to offerings of
common and preferred stock which were charged to Stockholders' Equity.

Income Taxes

         The Company  generally  will not be subject to federal  income taxes as
long as it qualifies as a REIT.  A REIT will generally  not be subject to 
federal  income  taxation on that portion of income that qualifies as REIT
taxable income and to the extent that it distributes such taxable income to its
stockholders and complies with certain requirements.  As a REIT,  the  Company
is allowed to reduce  taxable  income by all or a portion of distributions  to
stockholders  and must distribute at least 95% of its taxable income to qualify
as a REIT. As distributions,  for federal income tax purposes, have exceeded 
taxable income, no federal income tax provision has been reflected in the
accompanying  consolidated  financial statements.  State income taxes are not
significant.

         During  1998,  the  Company  paid  cash  dividends  of $.99  per  share
(representing  dividends  for  three  quarters)  of which  100%  was  considered
ordinary income for federal income tax purposes.  In addition, on June 11, 1998,
the Company paid a stock dividend equivalent to $.0824 per share relating to the
Operating Partnership's  distribution of its common stock interest in RSI to the
Company.  The stock  dividend was also  considered  ordinary  income for federal
income tax purposes.  During 1997, the Company paid dividends of $1.54 per share
(representing  dividends  for  five  quarters)  of which  approximately  72% was
considered  ordinary  income and 28% was a return of capital for federal  income
tax purposes.

<PAGE>

Revenue Recognition

         Minimum rental income is recognized on a  straight-line  basis over the
term of the lease. The excess of rents recognized over amounts contractually due
are included in deferred rents  receivable on the  accompanying  balance sheets.
Contractually  due but unpaid  rents are included in tenant  receivables  on the
accompanying balance sheets.  Certain lease agreements provide for reimbursement
of real  estate  taxes,  insurance,  common area  maintenance  costs and indexed
rental increases, which are recorded on an accrual basis.

         The Company  records  interest  income on investments in mortgage notes
and notes  receivable  on an accrual basis of  accounting.  The Company does not
accrue  interest  on  impaired  loans  where,  in the  judgment  of  management,
collection  of  interest  according  to  the  contractual  terms  is  considered
doubtful. Among the factors the Company considers in making an evaluation of the
collectibility  of  interest  are,  the  status  of the  loan,  the value of the
underlying  collateral,  the financial condition of the borrower and anticipated
future  events.  Loan  discounts are amortized  over the life of the real estate
using the constant interest method.

Construction Operations

         Construction  operations  are  accounted  for  utilizing  the completed
contract  method.  Under this  method,  costs and related  billings are deferred
until the contract is  substantially  complete.  Estimated losses on uncompleted
contracts are recorded in the period that management  determines that a loss may
be incurred.

<PAGE>

Earnings Per Share

         In 1997,  the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement No. 128, "Earnings per Share".  Statement 128 replaced the calculation
of primary and fully diluted  earnings per share with basic and diluted earnings
per share.  Unlike primary earnings per share, basic earnings per share excludes
any dilutive effects of options,  warrants and convertible  securities.  Diluted
earnings  per share is very similar to the  previously  reported  fully  diluted
earnings per share.  All  earnings  per share  amounts for all periods have been
presented,  and where  appropriate,  restated  to conform to the  Statement  128
requirements.  The  conversion  of Units  into  common  stock  would  not have a
significant effect on per share amounts as the Units share  proportionately with
the common stock in the results of the Operating Partnership's operations.

Stock Options

         The Company has elected to follow  Accounting  Principles Board Opinion
No.  25,  "Accounting  for  Stock  Issued  to  Employees"  (APB 25) and  related
interpretations  in  accounting  for its employee  stock  options  because,  the
alternative  fair value  accounting  provided for under FASB  Statement No. 123,
"Accounting for Stock-Based  Compensation," (FAS No. 123) requires use of option
valuation  models  that were not  developed  for use in valuing  employee  stock
options.  Under APB 25, no  compensation  expense  was  recognized  because  the
exercise  price of the Company's  employee stock options equals the market price
of the underlying stock on the date of grant (see Note 6).

Recent Pronouncements

         In 1997,  the FASB issued the  following  statements  (i) Statement No.
130, "Reporting Comprehensive Income" ("SFAS 130") which is effective for fiscal
years  beginning  after December 15, 1997.  SFAS 130  established  standards for
reporting   comprehensive   income  and  its   components   in  a  full  set  of
general-purpose  financial statements.  SFAS 130 requires that all components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. The adoption of this standard
had no impact on the Company's financial position or results of operations. (ii)
Statement  No. 131  "Disclosures  about  segments of an  Enterprise  and Related
Information"  ("SFAS 131") which is effective for fiscal years  beginning  after
December 15, 1997.  SFAS 131  establishes  standards for  reporting  information
about operating segments in annual financial statements and in interim financial
reports.  It also establishes  standards for related  disclosures about products
and  services,  geographic  areas  and major  customers.  The  adoption  of this
standard  had no  impact on the  Company's  financial  position  or  results  of
operations, but did affect the disclosure of segment information. See Note 11.

Reclassifications

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

<PAGE>

2.       MORTGAGE NOTES PAYABLE

         At December  31,  1998,  there were 17 mortgage  notes  payable with an
aggregate outstanding principal amount of approximately $253 million. Properties
with an  aggregate  carrying  value at December 31, 1998 of  approximately  $330
million are  pledged as  collateral  against  the  mortgage  notes  payable.  In
addition, $48.6 million of the $253  million are  recourse to the  Company.  The
mortgage  notes bear interest at rates  ranging from 6.45% to 9.25%,  and mature
between 1999 and 2012.  The weighted  average  interest rate on the  outstanding
mortgage  notes  payable at December  31, 1998 is 7.8%.  Certain of the mortgage
notes  payable are  guaranteed  by certain  minority  partners in the  Operating
Partnership.

         Scheduled   principal   repayments  during  the  next  five  years  and
thereafter are as follows (in thousands):

          Year Ended December 31,

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

          1999.........................      $   10,752
          2000.........................          32,131
          2001.........................          19,440
          2002.........................          12,937
          2003.........................          19,295
          Thereafter...................         158,908
                                             ----------
                                             $  253,463
                                             ==========

3.       CREDIT FACILITIES

         On July 23,  1998,  the  Company  obtained  a three  year $500  million
unsecured revolving credit facility (the "Credit Facility") from Chase Manhattan
Bank,  Union  Bank of  Switzerland  and PNC Bank as  co-managers  of the  credit
facility bank group.  Interest rates on borrowings under the Credit Facility are
priced off of LIBOR plus a sliding  scale  ranging  from 112.5  basis  points to
137.5 basis points based on the leverage ratio of the Company.  Upon the Company
receiving an investment  grade rating on its senior unsecured debt by two rating
agencies,  the pricing is adjusted  based off of LIBOR plus a scale ranging from
65 basis  points  to 90 basis  points  depending  upon the  rating.  The  Credit
Facility replaced and restructured the Company's existing $250 million unsecured
credit facility and $200 million unsecured bridge facility. As a result, certain
deferred loan costs incurred in connection  with those  facilities  were written
off. Such amount has been  reflected as an  extraordinary  loss on the 
accompanying statement of operations.  The Company utilizes the Credit Facility
primarily to finance the acquisitions of properties and other real estate
investments, fund its  development  activities and for working capital 
purposes.  At December 31, 1998,  the  Company  had  availability  under the
Credit Facility to borrow an additional $8.1 million (net of $26.1 million of
outstanding  undrawn letters of credit).

         On  December  4, 1998,  the  Company  obtained  a one year $50  million
unsecured term loan (the "Term Loan") from Chase  Manhattan Bank. On January 13,
1999,  the Company and Chase  Manhattan  Bank  increased the total  availability
under the Term Loan to $75 million.  Interest rates on borrowings under the Term
Loan are priced off LIBOR  plus 150 basis  points for the first nine  months and
175 basis points for the  remaining  three  months.  At December  31, 1998,  the
Company had availability under the Term Loan to borrow an additional $30 million
which was increased to $55 million on January 13, 1999.


         The Company capitalized interest incurred on borrowings to fund certain
development  costs in the amount of $7,344,102,  $2,351,201 and $800,434 for the
years ended December 31, 1998, 1997 and 1996 respectively.

<PAGE>

4.       SENIOR UNSECURED NOTES

         On August 28, 1997,  the Company  sold $150  million of 10-year  senior
unsecured notes in a privately  placed  transaction.  The senior unsecured notes
were priced at par with  interest at 110 basis points over the 10- year treasury
note for an all in  coupon  of  7.2%.  Interest  is  payable  semiannually  with
principal and unpaid interest due on August 28, 2007.

5.        LAND LEASES

         The Company leases,  pursuant to noncancellable  operating leases,  the
land on which ten of its buildings were constructed.  The leases,  which contain
renewal options, expire between 2018 and 2080. The leases contain provisions for
scheduled  increases  in the  minimum  rent and one of the  leases  additionally
provides  for  adjustments  to rent  based  upon  the fair  market  value of the
underlying land at specified  intervals.  Minimum ground rent is recognized on a
straight-line  basis  over the  terms  of the  leases.  The  excess  of  amounts
recognized  over  amounts  contractually  due is  approximately  $2,316,000  and
$1,948,000  at  December  31,  1998 and 1997  respectively.  These  amounts  are
included in accrued expenses and other  liabilities on the accompanying  balance
sheets.  Future  minimum  lease  commitments  relating  to the land leases as of
December 31, 1998 are as follows (in thousands):

     1999.................................................... $1,781
     2000....................................................  1,783
     2001....................................................  1,800
     2002....................................................  1,819
     2003....................................................  1,818
     Thereafter.............................................. 50,174
                                                             -------
                                                             $59,175
                                                             =======

6.        STOCKHOLDERS' EQUITY

         A Unit and a share of common stock have  essentially  the same economic
characteristics  as they effectively share equally in the net income or loss and
distributions of the Operating Partnership.  Beginning on the second anniversary
of the  consummation of the Offering,  Units may be redeemed for cash or, at the
election of the Company, for shares of common stock on a one-for-one basis.

         On February 12, 1997, the Board of Directors of the Company  declared a
two for one stock  split to be  effected as a stock  dividend  distributable  on
April 15, 1997 to stockholders of record on April 4, 1997.

         On February 18, 1998,  the Company sold 791,152 shares of the Company's
common stock at $25.44 per share for an aggregate consideration of approximately
$20.1 million before deducting offering expenses.

         During April 1998, the Company completed a preferred stock offering and
sold 9,200,000 shares (including 1,200,000 shares related to the exercise of the
underwriters  over allotment  option) of 7.625% Series A Convertible  Cumulative
Preferred Stock at a price of $25.00 per share for an aggregate consideration of
$230  million  before  deducting  offering  expenses.  The  preferred  stock  is
convertible to the Company's  common stock at a conversion  rate of .8769 shares
of common  stock for each share of  preferred  stock.  As of December  31, 1998,
8,000 shares of the preferred  stock were  converted  into the Company's  common
stock.

         On April 29, 1998,  the Company  completed a common stock  offering and
sold  1,093,744  common  shares at a price of $24.38 per share for an  aggregate
consideration of approximately $26.7 million before deducting offering expenses.

<PAGE>

         The Company has  established  the 1995,  1996,  1997 and 1998  Employee
Stock Option Plans (the  "Plans") for the purpose of  attracting  and  retaining
executive officers,  directors and other key employees. As of December 31, 1998,
1,500,000,  400,000,  3,000,000 and 3,000,000 of the Company's authorized shares
have been  reserved  for  issuance  under the 1995,  1996,  1997 and 1998 plans,
respectively.

         The  following  table  sets  forth the  outstanding  options  and their
corresponding exercise price per share:

                                                          Exercise Price Range
                                             Options      --------------------
                                            Granted(1)     From (1)   To(1)
                                            ---------      --------   ------

     1995 Employee Stock Option Plan .....  1,483,538      $12.04     $24.79

     1996 Employee Stock Option Plan .....     71,300      $19.67     $22.67

     1997 Employee Stock Option Plan .....  2,485,965      $22.67     $27.04

     1998 Employee Stock Option Plan .....    999,167      $21.88     $25.67
                                            ---------      ------     ------
         Total ......................       5,039,970
                                            =========

     ---------
     (1)      Prices through December 31, 1996 are split adjusted.

         Options  granted to new employees vest in three equal  installments  on
the first,  second  and third  anniversaries  of the date of the grant.  Options
granted to  existing  employees  are  generally  exercisable  on the date of the
grant.

         In addition, the independent directors of the Company have been granted
options to purchase  117,000  shares  pursuant to the 1995 Employee Stock Option
Plan at exercise  prices  ranging from $12.04 to $24.79 per share and options to
purchase  3,000  shares  pursuant to the 1997  Employee  Stock Option Plan at an
exercise  price of $25.23  per share.  The  options  granted to the  independent
directors were exercisable on the date of the grant.

         The  Company has made loans to certain  executive  officers to purchase
310,834 shares of common stock at market prices ranging from $22.50 per share to
$27.13 per share.  The loans bear  interest at the mid-term  Applicable  Federal
Rate and are  secured by the shares  purchased.  Such  loans  including  accrued
interest will be forgiven each year on the annual  anniversary of the grant date
based upon a ten year  amortization  period  with a balloon  payment  due on the
fifth  anniversary.  As of  December  31,  1998,  the loan  balances  aggregated
approximately  $7,075,000  and have been  included as a reduction of  additional
paid in capital on the accompanying consolidated balance sheets.

         During  1998 and 1997,  74,837 and  126,429,  respectively  of employee
options were  exercised  resulting  in proceeds to the Company of  approximately
$1,107,000 and $1,888,000, respectively.

         Pro forma  information  regarding  net income and earnings per share is
required by FAS No. 123, and has been determined as if the Company had accounted
for its employee  stock  options under the fair value method of FAS No. 123. The
fair  value  for  these  options  was  estimated  at the date of  grant  using a
Black-Scholes   option   pricing  model  with  the  following   weighted-average
assumptions for 1998, 1997 and 1996;  respectively:  risk-free  interest rate of
5%; dividend yields of 6.6%, 4.7% and 7.6%;  volatility  factors of the expected
market  price of the  Company's  common  stock of .167,  and a  weighted-average
expected life of the option of five years.

<PAGE>

         The  Black-Scholes  option  valuation  model was  developed  for use in
estimating the fair value of traded  options which have no vesting  restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.  Because the Company's  employee stock options have  characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially  affect the fair value estimate,  in
management's  opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.

         For purposes of pro forma disclosures,  the estimated fair value of the
options is amortized to expense over the options' vesting period.  The Company's
pro forma information follows for the years ended December 31:

                                          1998           1997          1996
                                       ---------     -----------    ----------
Pro forma net income (in
   thousands) .......................  $   32,846    $    34,287    $   17,431
                                       ==========    ===========    ==========
Basic pro forma earnings per
     share ..........................  $      .83    $      1.05    $      .88
                                       ==========    ===========    ==========
Diluted pro forma earnings per
     share ..........................  $      .82    $      1.03    $      .86
                                       ==========    ===========    ==========


         A  summary  of  the  Company's  stock  option  activity,   and  related
information follows:

                                                               Weighted-Average
                                                  Options      Exercise Price(1)
                                                  -------      -----------------

      Outstanding - December 31, 1995 .........   864,060         $   12.23
          Granted .............................   621,478         $   16.94
          Exercised ...........................   (27,954)        $   12.39
          Forfeited ...........................   (36,370)        $   12.77
                                                ---------      
      Outstanding - December 31, 1996 ......... 1,421,214         $   14.28
          Granted ............................. 1,123,300         $   26.67
          Exercised ...........................  (126,429)        $   14.94
          Forfeited ...........................   (10,319)        $   16.33
                                                ---------      
      Outstanding- December 31, 1997 .......... 2,407,766         $   20.16
          Granted ............................. 2,431,132         $   24.03
          Exercised ...........................   (74,837)        $   14.76
          Forfeited ...........................   (30,417)        $   25.44
                                                ---------      
      Outstanding - December 31, 1998 ......... 4,733,644         $   22.22
                                                =========                  
----------
(1)        Prices through December 31, 1996 are split adjusted

         The weighted  average fair value of options granted for the years ended
December 31, 1996,  1997 and 1998 was $.86,  $1.47 and $2.06,  respectively.  In
addition,  there were 403,564  options at a weighted  average per share exercise
price of $13.95,  1,758,534  options at a weighted  average  per share  exercise
price of $20.16 and 4,527,144  options at a weighted  average per share exercise
price of $22.22 exercisable at December 31, 1996, 1997 and 1998, respectively.

<PAGE>

         Exercise prices for options  outstanding as of December 31, 1998 ranged
from  $12.04  per share to $27.04  per  share.  The  weighted-average  remaining
contractual life of those options is approximately 8.56 years.

         The Company made loans to certain senior  officers to purchase units at
market  prices  ranging from $12.13 per unit to $21.94 per unit.  The loans bear
interest  at rates  ranging  between  8% to 8.5% and are  secured  by the  units
purchased. Approximately $436,000  of such loans will be forgiven ratably at
each   anniversary  of  employment   over  a  three  to  four  year  period  and
approximately $176,000 of such loans is due and payable with accrued interest on
January 9, 2002.  The loan  balances of  approximately  $248,000 and $362,000 at
December 31, 1998 and 1997,  respectively  have been  included as a reduction of
additional paid in capital on the accompanying consolidated balance sheets.

         The following table sets forth the Company's reconciliation of
numerators and denominators of the basic and diluted earnings per weighted
average common share and the computation of basic and diluted earnings per share
as required by FAS Statement 128 for the years ended December 31 (in thousands
except for earnings per share data):   
<TABLE>
<CAPTION>
                                                    1998           1997          1996
                                                ------------    ----------    ----------
<S>                                             <C>             <C>           <C>       
Numerator:

   Income before extraordinary items and
        dividends to preferred shareholders ... $     52,056    $   36,866    $   18,422
   Preferred stock dividends ..................      (12,491)         --            --
                                                  ----------    ----------    ----------
   Numerator for basic an diluted earnings
        per share ............................. $     39,565    $   36,866    $   18,422
                                                  ==========    ==========    ==========

Denominator:
   Denominator for basic earnings per share -
       weighted-average shares ................       39,473        32,727        19,928

   Effect of dilutive securities:
        Employee stock options ................          537           533           262
                                                  ----------    ----------    ----------

   Denominator for diluted earnings per share -
        adjusted weighted-average shares and
        assumed conversions ...................       40,010        33,260        20,190
                                                  ==========    ==========    ==========

Basic earnings per common share:
   Income before extraordinary items ..........   $     1.00    $     1.13    $      .92
   Extraordinary items ........................         (.04)         (.07)         (.04)
                                                  ----------    ----------    ----------
   Net income per common share ................   $      .96    $     1.06    $      .88
                                                  ==========    ==========    ==========
Diluted earnings per common share:
   Income before extraordinary items ..........   $      .99    $     1.11    $      .91
   Extraordinary items ........................         (.04)         (.07)         (.04)
                                                  ----------    ----------    ----------
   Diluted net income per common share ........   $      .95    $     1.04    $      .87
                                                  ==========    ==========    ==========
</TABLE>

<PAGE>

7.       RELATED PARTY TRANSACTIONS

         The  Company,   through  its  subsidiaries  and  affiliates,   provides
management, leasing and other tenant related services to the Properties. Certain
executive  officers of the Company have  continuing  ownership  interests in the
unconsolidated service companies.

         In  connection   with  the  IPO,  the  Company  was  granted   options,
exercisable over a 10 year period to acquire six properties owned by the Reckson
Group, the predecessor to the Company,  (the "Predecessor") (the "Reckson Option
Properties") and four properties in which the Predecessor owns a non-controlling
minority interest (the "Other Option  Properties" and, together with the Reckson
Option  Properties,  the "Option  Properties")  at a purchase price equal to the
lesser of (i) a fixed  purchase  price  and (ii) the Net  Operating  Income,  as
defined,  attributable  to such  Option  Property  during  the 12  month  period
preceding the exercise of the option divided by a capitalization  rate of 11.5%,
but the purchase price shall in no case be less than the outstanding  balance of
the mortgage debt encumbering the Option Property on the acquisition date.

         As of  December  31,  1998,  the Company  acquired  four of the Reckson
Option Properties for an aggregate  purchase price of approximately $35 million.
In connection  with the purchase of such Option  Properties  the Company  issued
475,032  Units at prices  ranging from $16.38 per unit to $21.00 per unit (split
adjusted) as partial  consideration in the transactions.  Such Units were issued
to certain members of management and entities whose partners included members of
management.  Additionally,  during 1998, one of the Other Option  Properties was
sold by the Predecessor to a third party.

         The  Company   made   construction   loan   advances  to  fund  certain
redevelopment and leasing costs relating to one of the Other Option  Properties.
At December 31, 1997 advances due to the Company were approximately  $4,200,000.
Such amount beared  interest at the rate of 11% per annum and was due on demand.
In January 1998, the outstanding  advance  including accrued and unpaid interest
was repaid in full.

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

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

<PAGE>

         On August 27,  1998 the  Company  announced  the  formation  of a joint
venture with RSVP and the Dominion  Group,  an  Oklahoma-based,  privately-owned
group of companies that focuses on the development, acquisition and ownership of
government  occupied  office  buildings  and  correctional  facilities.  The new
venture,  Dominion Properties LLC (the "Dominion Venture"), is owned by Dominion
Venture Group LLC, and by a subsidiary of the Company. The Dominion Venture will
engage  primarily in acquiring,  developing  and/or  owning  government-occupied
office  buildings  and privately  operated  correctional  facilities.  Under the
Dominion Venture's  operating  agreement,  RSVP is to invest up to $100 million,
some of which may be invested by the Company ( the "RSVP Capital").  The initial
contribution   of  RSVP   Capital  was   approximately   $39  million  of  which
approximately  $10.1  million was invested by a subsidiary  of the Company.  The
Company's   subsidiary  funded  its  capital   contribution   through  the  RSVP
Commitment.  In addition, the Company advanced approximately $2.9 million to RSI
through the RSVP Commitment for an investment in RSVP which was then invested on
a joint  venture  basis  with the  Dominion  Group in certain  service  business
activities related to the real estate  activities.  As of December 31, 1998, the
Dominion  Venture had  investments  in 11  government  office  buildings and two
correctional facilities.

<PAGE>

         During  1998,  the Company made  investments  in and advances to RMG of
approximately  $29.5 million.  Such investments and advances were used by RMG in
connection with RMG's acquisition of an approximate 64% ownership interest in an
executive  office  suite  business.  Concurrently  with  RMG's  investment,  RSI
received an option to purchase  RMG's interest at cost plus 8%. RMG is owned 97%
by the Company and 3% by an entity owned by certain officers of the Company.  On
November 9, 1998,  RSI  exercised  its option and, as a result RMG earned income
during the period of  ownership of  approximately  $707,000.  In  addition,  RSI
assumed the outstanding debt plus accrued interest owing to the Company.

8.       COMMERCIAL REAL ESTATE INVESTMENTS

         During 1997, the Company acquired five office  properties  encompassing
approximately  881,000  square feet and 15  industrial  properties  encompassing
approximately 968,000 square feet on Long Island for an aggregate purchase price
of approximately $131 million.

         During 1997, the Company acquired eight office properties  encompassing
approximately 830,000 square feet and three industrial  properties  encompassing
approximately 163,000 square feet in Westchester for an aggregate purchase price
of approximately $117 million. In addition,  the Company acquired  approximately
32 acres of land located in Westchester for a purchase price of approximately $8
million.

         During 1997, the Company acquired one industrial property  encompassing
approximately  452,000  square  feet in  Connecticut  for a  purchase  price  of
approximately $27 million.

         During 1997,  the Company  acquired 13 office  properties  encompassing
approximately 1.5 million square feet and one industrial  property  encompassing
approximately  128,000 square feet in New Jersey for an aggregate purchase price
of approximately $156 million. In addition,  the Company acquired  approximately
303 acres of land  located  in New  Jersey for an  aggregate  purchase  price of
approximately $16.2 million.

         In October  1997,  the Company sold 671 Old Willets Path in  Hauppauge,
New York for approximately $725,000 and recorded a gain on the sale of $672,000.

         On January 6,  1998,  the  Company  made an initial  investment  in the
Morris  Companies,  a New  Jersey  developer  and owner of "Big  Box"  warehouse
facilities.  In  connection  with the transaction the Morris Companies 
contributed 100% of their interests in certain industrial properties to RMI in 
exchange  for  operating partnership  units in RMI.  The  Company has agreed to
invest up to $150 million in RMI.  As of December 31, 1998, the Company  has
invested  approximately $93.8  million for an  approximate  71.8% controlling
interest in RMI.

          During  1998,   the  Company   acquired   three   office   properties
encompassing  approximately  674,000  square feet,  two  industrial  properties
encompassing  approximately 200,000 square feet and approximately 79.9 acres of
vacant  land  which  allows for  approximately  816,000  square  feet of future
development  opportunities  on Long Island for an aggregate  purchase  price of
approximately $82.8 million.

          During 1998, the Company acquired four office properties  encompassing
approximately  522,000  square  feet,  six  industrial  properties  encompassing
approximately  985,000 square feet and approximately  112.2 acres of vacant land
which  allows  for  approximately  815,000  square  feet of  future  development
opportunities  in New Jersey for an aggregate  purchase  price of  approximately
$138.1 million.

         During 1998, the Company acquired  Stamford Towers located in Stamford,
Connecticut for approximately $61.3 million. Stamford Towers is a Class A office
complex  consisting of two eleven story towers  totaling  approximately  325,000
square feet.

         During 1998, the Company acquired a portfolio of six office  properties
encompassing  approximately  980,000 square feet in Westchester County, New York
from Cappelli  Enterprises and affiliated  entities  ("Cappelli") for a purchase
price of approximately $173 million.  The Cappelli  acquisition  includes a five
building,  850,000  square foot Class A office park in Valhalla  and Court House
Square,  a 130,000 square foot Class A office building  located in White Plains.
The Company  also  obtained  from  Cappelli  the  remaining  50% interest in 360
Hamilton  Avenue,  a 365,000  square foot vacant office tower in downtown  White
Plains  for  $10  million  plus  the  return  of his  capital  contributions  of
approximately  $1.5 million.  In addition,  the Company  received an option from
Cappelli to acquire the remaining development parcels within the Valhalla office
park on which up to 875,000 square feet of office space can be developed.  These
acquisitions were financed in part through proceeds from a draw under the credit
facilities,  the  issuance of 42,518  (approximately  $42.5  million)  preferred
operating partnership units (the "Cappelli Preferred Units"), and the assumption
of approximately $47.1 million of mortgage debt. Additionally,  during 1998, the
Company  issued and advanced to Cappelli $19 million under two  liquidity  loans
(the "Cappelli Liquidity Loans").  The Cappelli Liquidity Loans bear interest at
rates ranging from 10% to 10.5% per annum and are secured by  Cappelli's  right,
title and  interest in the  Cappelli  Preferred  Units.  Such  amounts have been
included  in  investments  in  mortgage  notes  and  notes   receivable  on  the
accompanying  balance sheet. On February 3, 1999, the Company made an additional
$5 million advance under the Cappelli Liquidity Loans.

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

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

<PAGE>

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

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

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

<PAGE>

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

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

          The  Company  anticipates  that it will  dispose of the assets in the
Tower portfolio  located  outside of New York. In addition,  the Company is also
considering the disposition of certain of the Tower  properties  located in New
York.

         In addition,  the Company has invested  approximately  $61.3 million in
certain mortgage indebtedness  encumbering four Class A office buildings located
on Long Island encompassing  approximately 577,000 square feet, a 825,000 square
foot  industrial  building  located in New Jersey and a 400 acre  parcel of land
located in New Jersey.  In addition,  the Company has loaned  approximately  $17
million to its  minority  partner  in Omni,  its  flagship  Long  Island  office
property, and effectively increased its economic interest in the property owning
partnership.

9.       FAIR VALUE OF FINANCIAL INSTRUMENTS

         The following  disclosures of estimated fair value at December 31, 1998
were  determined  by  management,   using  available   market   information  and
appropriate  valuation  methodologies.  Considerable  judgment is  necessary  to
interpret  market data and develop  estimated  fair value.  The use of different
market assumptions and/or estimation methodologies may have a material effect on
the estimated fair value amounts.

         Cash  equivalents  and variable  rate debt are carried at amounts which
reasonably approximate their fair values.

         Mortgage  notes  payable have an estimated  aggregate  fair value which
approximates its carrying value. Estimated fair value is based on interest rates
currently  available to the Company for issuance of debt with similar  terms and
remaining maturities.

<PAGE>

10.      RENTAL INCOME

         The Properties are being leased to tenants under operating leases.  The
minimum rental amount due under certain  leases are generally  either subject to
scheduled  fixed  increases  or indexed  escalations.  In  addition,  the leases
generally  also require that the tenants  reimburse the Company for increases in
certain operating costs and real estate taxes above base year costs.

         Included in base rents and tenant escalations and reimbursements in the
accompanying  statements  of  operations  are  amounts  from  Reckson  Executive
Centers,  LLC, a service  business of the Company  through March 31, 1998 and, a
related party as follows (in thousands):

                                                                     TENANT
                                                                 ESCALATIONS AND
     FOR THE PERIODS                              BASE RENTS     REIMBURSEMENTS
     ---------------                              ----------     ---------------
     January 1 through March 31, 1998............  $     597        $    149
     Year ended December 31, 1997................  $   2,154        $    441
     Year ended December 31, 1996................  $   1,898        $    417



         Expected  future  minimum rents to be received over the next five years
and  thereafter  from leases in effect at  December  31, 1998 are as follows (in
thousands):

          1999.................................. $     241,071
          2000..................................       222,112
          2001..................................       187,503
          2002..................................       165,730
          2003..................................       135,441
          Thereafter............................       386,953
                                                 -------------
                                                 $   1,338,810
                                                 =============







<PAGE>

11.   SEGMENT DISCLOSURE

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

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

      The following  table sets forth the  components of the Company's  revenues
and expenses and other related  disclosures as required by FAS Statement 131 for
the year ended December 31, 1998 (in thousands):

<TABLE>
<CAPTION>
                                                                           Southern                                    Consolidated
                     Long Island     Westchester          New Jersey      Connecticut         RMI            Other          Totals
                   ---------------  --------------   -----------------   --------------  -------------   -------------  -----------

<S>                      <C>          <C>                <C>              <C>              <C>            <C>           <C>
REVENUES:

  Base rents......       $   102,421  $     51,983       $     35,425     $     22,134     $   12,740     $      ---    $   224,703
  Tenant escalations and                                                                                                        
    reimbursements......      10,721         7,433              3,746            3,242          2,397            205         27,744
  Equity in earnings of 
    service companies           ---           ---                 ---              ---           ---           1,233          1,233
  Equity in earnings of
    real estate joint 
    ventures............        ---           ---                 ---              ---           ---             603            603
  Interest income on 
    mortgage notes and
    notes receivable....        ---           ---                 ---              ---           ---           7,739          7,739
  Investment and other 
    income..............         407           15                  29                9           ---           3,891          4,351
                        ---------------  --------------   -----------------   --------------  -------------   -------------  -------

Total Revenues..........     113,549       59,431              39,200           25,385        15,137          13,671        266,373
                        ---------------  --------------   -----------------   --------------  -------------   ------------- -------

EXPENSES:

  Property operating 
   expenses............       20,774       13,476               5,245            5,932           392           2,100         47,919
  Real estate taxes....       20,400        7,379               4,442            1,125         2,195             ---         35,541
  Ground rents.........        1,681            1                  34             ---            ---              45          1,761
  Marketing, general and 
   administrative              6,835        1,530               1,820            1,514           456           3,764         15,919
  Interest.............        9,281        3,421                  15            3,934         1,101          30,043         47,795
  Depreciation and 
   amortization........       20,930       10,810               7,536            4,425         3,491           5,765         52,957
                        ---------------  --------------   -----------------   --------------  -------------   -------------  -------

Total Expenses.........       79,901       36,617              19,092           16,930         7,635          41,717        201,892
                        ---------------  --------------   -----------------   --------------  -------------   ------------- --------

  Income before preferred 
   dividends and 
   distributions, minority
   interests' and
   extraordinary items.. $    33,648  $    22,814        $    20,108      $      8,455     $   7,502      $  (28,046)   $    64,481
                        ==============  =========        ===========      ============     =========      ===========   ===========

Total Assets............ $   518,648  $   405,836        $   170,623      $    329,365     $ 156,430      $  273,914    $ 1,854,816
                       ===============  =========        ===========      ============  =============   =============  ============
</TABLE>

<PAGE>

12.      NON-CASH INVESTING AND FINANCING ACTIVITIES

         Additional supplemental disclosures of non-cash investing and financing
activities are as follows (in thousands):

(1)  In January 1997, the Company acquired one of the Reckson Option  Properties
     as follows:

              Mortgage assumed................                   $4,667
              Issuance of 203,804 Units (split adjusted)          4,280
              Cash paid.......................                       61
                                                                 ------
              Total purchase price............                   $9,008
                                                                 ======

(2)  In  November  1997,  the  Company acquired a 181,000 square foot industrial
     building located in Hauppauge, New York as follows:

              Mortgage assumed and repaid.....                   $3,037
              Issuance of 62,905 Units........                    1,578
              Cash paid.......................                       10
                                                                 ------
              Total purchase price............                   $4,625
                                                                 ======

(3)   In December 1997,  the  Company  purchased a 92,000 square foot industrial
      building located in Elmsford, New York as follows:

              Issuance of 183,469 Units.......                   $4,700
                                                                 ======


         On January 2, 1998,  the Company  issued an additional  18,752 Units in
connection  with the  acquisition  of a 92,000 square foot  industrial  building
located  in  Elmsford,  New  York  for an  additional  non  cash  investment  of
approximately $480,000.

         On January 6, 1998, the Company  acquired an office property located in
Uniondale, New York which included the issuance of 513,259 units for a total non
cash investment of $12 million.

         On April 21, 1998, in connection  with the  acquisition of the Cappelli
portfolio,  the Company  assumed  approximately  $45.1 million of  indebtedness,
issued 25,000 Series B preferred  units and 11,518 Series C preferred units with
a combined  stated  value of  approximately  $36.5  million for a total non cash
investment of approximately $81.6 million.  Additionally,  during April 1998, in
connection with the acquisition of 155 Passaic Avenue in Fairfield,  New Jersey,
the Company issued 1,979 Units for a total non cash investment of  approximately
$50,000.

         On June 11, 1998, the Operating Partnership  distributed its 95% common
stock interest in RSI of approximately  $3 million to its owners,  including the
Company which, in turn, distributed the common stock of RSI to its shareholders.

         On July 2, 1998, in  connection  with the  acquisition  of 360 Hamilton
Avenue  located in White Plains,  New York,  the Operating  Partnership  assumed
approximately  $2 million of  indebtedness  and issued  6,000 Series D preferred
units for a total non cash investment of approximately $8.0 million.

         On August 13, 1998, in connection  with the  acquisition  of two office
properties located in Parsippany,  New Jersey, the Operating  Partnership issued
50,072 Units for a total non cash investment of approximately $1.2 million

<PAGE>

         During 1998, in connection with the Company's  investment in the Morris
Companies,  the Company assumed approximately $23 million of indebtedness ($16.9
million net of minority partners  interest).  In addition,  the Morris Companies
contributed net assets of  approximately  $36 million to the Company in exchange
for an approximate 28.2% minority partners interest in RMI.

13.      COMMITMENTS AND OTHER COMMENTS

         The Company  entered into  employment  agreements with its chairman and
five executive officers. The agreements are for five years and expire on May 31,
2003.

         The Company  sponsors a defined  contribution  savings plan pursuant to
section 401(k) of the Internal Revenue Code. Under such plan, there are no prior
service  costs.  All employees are eligible to participate in the plan after six
months of service.  Employer  contributions are based on a discretionary  amount
determined by the Company's  management.  During 1998 and 1997, the Company made
no contributions.

         The  Company  had  outstanding  undrawn  letters of credit  against its
credit facilities of approximately  $26.1 million and $4 million at December 31,
1998 and 1997, respectively.

<PAGE>

14.      QUARTERLY FINANCIAL DATA (UNAUDITED)

         The following  summary  represents the Company's  results of operations
for each quarter during 1998 and 1997 (in thousands, except share amounts):

<TABLE>
<CAPTION>
                                                                                  1998
                                             ------------------------------------------------------------------------------
                                                First Quarter     Second Quarter      Third Quarter      Fourth Quarter
                                             -----------------    --------------      -------------      ------------------
<S>                                           <C>                 <C>                 <C>                <C>
Total revenues..............................  $         55,063    $       66,319      $      71,600      $           73,391
                                             =================    ==============      =============      ==================
Income before preferred dividends and                                                                                      
   distributions, minority interests' and                                                                                  
   extraordinary items......................  $         12,097    $       17,524      $      17,143      $           17,717
Preferred dividends and distributions.......               ---            (4,168)            (5,034)                 (5,042)
Minority interests'.........................            (2,524)           (3,445)            (1,874)                 (2,829)
Extraordinary (loss)........................               ---               ---             (1,670)                    ---
                                             ------------------   ---------------     --------------     -------------------

Net income available to common                                                                                             
   shareholders.............................  $          9,573    $        9,911      $       8,565      $           9,846
                                             =================    ==============      =============      ==================

Basic net income per weighted 
average common share:
Income before extraordinary items...........  $            .25    $          .25      $         .25      $              .25
Extraordinary (loss)........................               ---               ---               (.04)                    ---
                                              -----------------   --------------      --------------     ------------------
Net income..................................  $            .25    $          .25      $         .21      $              .25
                                              ==================  ==============      ==============     ==================

Weighted average common shares                                                                                             
   outstanding..............................          38,182,577      39,636,815          40,011,627             40,034,781
                                              ==================  ==============      ==============     ==================

Diluted net income per common share 
  (Notes 1 and 6):
Income before extraordinary items...........  $              .25  $          .25      $          .25     $              .24
Extraordinary items.........................                 ---             ---                (.04)                   ---
                                              ------------------  --------------      --------------     ------------------

Diluted net income per common share.........  $              .25  $          .25      $          .21     $              .24
                                              ==================  ==============      ==============     ==================

Diluted weighted average common                                                                                            
   shares outstanding.......................          38,767,454      40,178,083          40,533,540             40,533,023
                                              ==================  ==============      ==============     ==================

</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                                                                  1997
                                             ------------------------------------------------------------------------------
                                             First Quarter      Second Quarter      Third Quarter      Fourth Quarter
                                             ----------------   ----------------    --------------     --------------------
<S>                                           <C>               <C>                 <C>                <C>

Total revenues............................    $       31,692    $        36,194     $      40,342      $            45,167
                                             ================   ================    ==============     ====================

Income before minority interests' and                                                                                      
   extraordinary items....................    $        8,805    $        11,990     $      11,470      $            13,225
Minority interests'.......................            (2,021)            (2,194)           (2,061)                  (2,348)
Extraordinary (loss)......................               ---             (1,962)             (268)                     ---
                                             ----------------   ----------------    --------------     --------------------
Net income................................    $        6,784    $         7,834     $       9,141      $            10,877
                                             ================   ================    ==============     ====================

Basic net income per weighted 
  average common share:
Income before extraordinary item..........    $          .26    $           .29     $         .27      $               .31
Extraordinary loss........................               ---               (.06)             (.01)                     ---
                                             ----------------   ----------------    --------------     --------------------

Net income................................    $          .26    $           .23     $         .26      $               .31
                                             ================   ================    ==============     ====================

Weighted average common shares                                                                                             
   outstanding............................        26,569,162         34,298,137        34,477,050               35,445,213
                                             ================   ================    ==============     ====================

Diluted net income per common 
  share (Notes 1 and 6):
Income before extraordinary items...........  $          .25    $          .28      $         .27      $               .30
Extraordinary items.........................             ---              (.06)              (.01)                     ---
                                             ----------------   ----------------    --------------     --------------------

Diluted net income per common share.........  $          .25    $          .22      $         .26      $               .30
                                             ================   ================    ==============     ====================

Diluted weighted average common
   shares outstanding.....................        27,056,018        34,801,582         35,030,464               36,032,319
                                             ================   ================    ==============     ====================
</TABLE>



15.  PRO FORMA RESULTS (UNAUDITED)

         The following  unaudited pro forma operating results of the Company for
the  year  ended  December  31,  1998  have  been  prepared  as if the  property
acquisitions  made during 1998 had  occurred on January 1, 1998.  Unaudited  pro
forma financial information is presented for informational purposes only and may
not be indicative of what the actual  results of operations of the Company would
have been had the events  occurred as of January 1, 1998, nor does it purport to
represent the results of operations for future periods (in thousands):


     Revenues.........................................     $    284,704
                                                           ============
     Income before extraordinary items and 
        dividends to preferred shareholders...........     $     61,290
                                                           ============
     Net Income.......................................     $     47,128
                                                           ============
     Net Income per common share......................     $       1.19
                                                           ============

<PAGE>



                         RECKSON ASSOCIATES REALTY CORP.
              SCHEDULE III-REAL ESTATE AND ACCUMULATED DEPRECIATION
                                DECEMBER 31, 1998
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>


            COLUMN A              COLUMN B              COLUMN C                   COLUMN D
            --------              --------              --------                   --------

                                                                               COST CAPITALIZED
                                                                                SUBSEQUENT TO
                                                      INITIAL COST               ACQUISITION
                                                      ------------               -----------

                                                          BUILDINGS AND              BUILDINGS AND
           DESCRIPTION              ENCUMBRANCE   LAND     IMPROVEMENTS     LAND     IMPROVEMENTS
           -----------              -----------   ----     ------------     ----     ------------
<S>                                 <C>          <C>        <C>             <C>      <C> 
Vanderbilt Industrial                                                                               
   Park, Hauppauge,                                                                                  
   New York 27 buildings in                                                                          
   an industrial park)......                  B   $1,940           $9,955      --_            $9,858

 Airport International                                                                               
   Plaza, Islip, New York                                                                            
   (17 buildings in an                                                                               
   industrial park).........           2,616(C)    1,263           13,608      --_            10,133

 County Line Industrial                                                                              
   Center, Huntington,                                                                               
   New York (3 buildings in                                                                          
   an industrial park)......                  B      628            3,686      --_             2,638

 32 Windsor Place, Islip,                                                                            
   New York.................                  B       32              321      --_                46

 42 Windsor Place, Islip,                                                                            
   New York.................                  B       48              327      --_               542

 505 Walt Whitman Rd.,                                                                               
   Huntington, New York.....                  B      140               42      --_                59

 1170 Northern Blvd., N.                                                                             
   Great Neck, New York.....                  B       30               99      --_                31

 50 Charles Lindbergh                                                                                
   Blvd., Mitchel Field,                                                                             
   New York.................             15,479        A           12,089      --_             4,179

 200 Broadhollow Road,                                                                               
   Melville New York........              6,621      338            3,354      --_             2,994

 48 South Service Road,                                                                              
   Melville, New York.......                  B    1,652           10,245      --_             3,760

 395 North Service Road,                                                                             
   Melville, New York.......             21,375        A           15,551      --_             6,616

 6800 Jericho Turnpike,                                                                              
   Syosset, New York........             15,001      582            6,566      --_             7,238

 6900 Jericho Turnpike,                                                                              
   Syosset, New York........              5,279      385            4,228      --_             2,531

 300 Motor Parkway,                                                                                  
   Hauppauge, New c York....                  B      276            1,136      --_             1,489

 88 Duryea Road, Melville,                                                                           
   New York.................                  B      200            1,565      --_               669

 210 Blydenburgh Road,                                                                               
   Islandia, New York.......                  B       11              158      --_               155

 208 Blydenburgh Road,                                                                               
   Islandia, New York.......                  B       12              192      --_               145

 71 Hoffman Lane, Islandia,                                                                          
   New York.................                  B       19              260      --_               171

 933 Motor Parkway,                                                                                  
   Hauppauge, New York......                  B      106              375      --_               356

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


            COLUMN A                       COLUMN E                   COLUMN F         COLUMN G        COLUMN H       COLUMN I
            --------                       --------                   --------         --------        --------       --------

                                     GROSS AMOUNT AT WHICH                                                                         
                                   CARRIED AT CLOSE OF PERIOD                                                                       

                                                                                                                   LIFE ON WHICH
                                         BUILDINGS AND              ACCUMULATED         DATE OF         DATE        DEPRECIATION
           DESCRIPTION          LAND     IMPROVEMENTS     TOTAL     DEPRECIATION     CONSTRUCTION      ACQUIRED     IS COMPUTED
           -----------          ----     ------------     -----     ------------     ------------      --------     -----------
<S>                            <C>        <C>            <C>        <C>               <C>             <C>             <C>
Vanderbilt Industrial
   Park, Hauppauge,
   New York (27 buildings                                                                1961-           1961-
   in an industrial park)...    $1,940           $19,813  $21,753          $12,431       1979            1979          10-30 Years

 Airport International
   Plaza, Islip, New York
   (17 buildings in an                                                                   1970-           1970-
   industrial park).........     1,263            23,741   25,004           13,555       1988            1988          10-30 Years

 County Line Industrial
   Center, Huntington,
   New York (3 buildings in                                                              1975-          1975-
   an industrial park)......       628             6,324    6,952            4,029       1979            1979          10-30 Years

 32 Windsor Place, Islip,
   New York.................        32               367      399              315       1971            1971          10-30 Years

 42 Windsor Place, Islip,
   New York.................        48               869      917              666       1972            1972          10-30 Years

 505 Walt Whitman Rd.,
   Huntington, New York.....       140               101      241               70       1950            1968          10-30 Years

 1170 Northern Blvd., N.
   Great Neck, New York.....        30               130      160              121       1947            1962          10-30 Years

 50 Charles Lindbergh
   Blvd., Mitchel Field,
   New York.................         0            16,268   16,268            8,155       1984            1984          10-30 Years

 200 Broadhollow Road,
   Melville New York........       338             6,348    6,686            3,454       1981            1981          10-30 Years

 48 South Service Road,
   Melville, New York.......     1,652            14,005   15,657            6,566       1986            1986          10-30 Years

 395 North Service Road,
   Melville, New York.......         0            22,167   22,167           10,014       1988            1988          10-30 Years

 6800 Jericho Turnpike,
   Syosset, New York........       582            13,804   14,386            7,918       1977            1978          10-30 Years

 6900 Jericho Turnpike,
   Syosset, New York........       385             6,759    7,144            3,261       1982            1982          10-30 Years

 300 Motor Parkway,
   Hauppauge, New c York....       276             2,625    2,901            1,236       1979            1979          10-30 Years

 88 Duryea Road, Melville,
   New York.................       200             2,234    2,434            1,148       1980            1980          10-30 Years

 210 Blydenburgh Road,
   Islandia, New York.......        11               313      324              277       1969            1969          10-30 Years

 208 Blydenburgh Road,
   Islandia, New York.......        12               337      349              318       1969            1969          10-30 Years

 71 Hoffman Lane, Islandia,
   New York.................        19               431      450              379       1970            1970          10-30 Years

 933 Motor Parkway,
   Hauppauge, New York......       106               731      837              540       1973            1973          10-30 Years

                                                                                                      Continued-

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


            COLUMN A              COLUMN B              COLUMN C                   COLUMN D
            --------              --------              --------                   --------

                                                                               COST CAPITALIZED
                                                                                SUBSEQUENT TO
                                                      INITIAL COST               ACQUISITION
                                                      ------------               -----------

                                                          BUILDINGS AND              BUILDINGS AND
           DESCRIPTION           ENCUMBRANCE      LAND     IMPROVEMENTS     LAND     IMPROVEMENTS
           -----------           -----------      ----     ------------     ----     ------------

<S>                              <C>              <C>      <C>              <C>       <C>
 65 and 85 South Service                                                                             
   Road Plainview, New York.                  B       40              218      ---                10

 333 Earl Ovington Blvd.,                                                                            
   Mitchel Field, New York                                                                           
   (Omni)...................             57,162        A           67,221      --_            16,548

 135 Fell Court, Islip,                                                                              
   New York.................                  B      462            1,265      ---                47

 40 Cragwood Road, South                                                                             
   Plainfield, New Jersey...                  B      708            7,131      ---             4,772

 110 Marcus Drive,                                                                                   
   Huntington, New York.....                  B      390            1,499      --_                97

 333 East Shore Road, Great                                                                          
   Neck, New York...........                  B        A              564      --_               176

 310 East Shore Road, Great                                                                          
   Neck, New York...........              2,322      485            2,009      --_               304

 70 Schmitt Blvd.,                                                                                   
   Farmingdale New York.....                150      727            3,408      --_                24

 19 Nicholas Drive,
   Yaphank, New York........                  B      160            7,399      --_                38

 1516 Motor Parkway,                                                                                 
   Hauppauge, New York......                  B      603            6,722      --_                13

 125 Baylis Road, Melville,                                                                          
   New York.................                  B    1,601            8,626      --_               814

 35 Pinelawn Road,                                                                                   
   Melville, New York.......                  B      999            7,073      --_             1,937

 520 Broadhollow Road,                                                                               
   Melville, New York.......                  B      457            5,572      --_             1,424

 1660 Walt Whitman Road,                                                                             
   Melville,New York........                  B      370            5,072      --_               429

 70 Maxess Road, Melville,                                                                           
   New York.................                  B      367            1,859       95             2,753

 85 Nicon Court, Hauppauge,                                                                          
   New York.................                  B      797            2,818      --_                54

 104 Parkway Drive So.,                                                                              
   Hauppauge, New York......                  B       54              804      ---               130

 20 Melville Park Rd.,                                                                               
   Melville, New York.......                  B      391            2,650      ---                96

 105 Price Parkway,                                                                                  
   Hauppauge, New York......                  B    2,030            6,327      ---               453

 48 Harbor Park Drive,                                                                               
   Hauppauge, New York......                  B    1,304            2,247      ---                93

 125 Ricefield Lane,                                                                                 
   Hauppauge, New York......                  B       13              852      ---               330


</TABLE>



<PAGE>

<TABLE>
<CAPTION>


            COLUMN A                       COLUMN E                   COLUMN F         COLUMN G        COLUMN H       COLUMN I
            --------                       --------                   --------         --------        --------       --------

                                     GROSS AMOUNT AT WHICH                                                                         
                                  CARRIED AT CLOSE OF PERIOD                                                                       
                                  --------------------------
                                                                                                                   LIFE ON WHICH

                                         BUILDINGS AND              ACCUMULATED         DATE OF         DATE        DEPRECIATION
           DESCRIPTION          LAND     IMPROVEMENTS     TOTAL     DEPRECIATION     CONSTRUCTION      ACQUIRED     IS COMPUTED
           -----------          ----     ------------     -----     ------------     ------------      --------     -----------
<S>                            <C>       <C>              <C>       <C>              <C>              <C>           <C>
 65 and 85 South Service                                                                                                           
   Road Plainview, New York.        40               228      268              223       1961            1961          10-30 Years

 333 Earl Ovington Blvd.,                                                                                                          
   Mitchel Field, New York                                                                                                         
   (Omni)...................         0            83,769   83,769           15,947       1990            1995          10-30 Years

 135 Fell Court, Islip,                                                                                                            
   New York.................       462             1,312    1,774              284       1965            1992          10-30 Years

 40 Cragwood Road, South                                                                                                           
   Plainfield, New Jersey...       708            11,903   12,611            6,331       1970            1983          10-30 Years

 110 Marcus Drive,                                                                                                                 
   Huntington, New York.....       390             1,596    1,986            1,149       1980            1980          10-30 Years

 333 East Shore Road, Great                                                                                                        
   Neck, New York...........         0               740      740              473       1976            1976          10-30 Years

 310 East Shore Road, Great                                                                                                        
   Neck, New York...........       485             2,313    2,798            1,349       1981            1981          10-30 Years

 70 Schmitt Blvd.,                                                                                                                 
   Farmingdale New York.....       727             3,432    4,159              382       1965            1995          10-30 Years

 19 Nicholas Drive,                                                                                                                
   Yaphank, New York........       160             7,437    7,597              845       1989            1995          10-30 Years

 1516 Motor Parkway,                                                                                                               
   Hauppauge, New York......       603             6,735    7,338              785       1981            1995          10-30 Years

 125 Baylis Road, Melville,                                                                                                        
   New York.................     1,601             9,440   11,041              980       1980            1995          10-30 Years

 35 Pinelawn Road,                                                                                                                 
   Melville, New York.......       999             9,010   10,009            1,089       1980            1995          10-30 Years

 520 Broadhollow Road,                                                                                                             
   Melville, New York.......       457             6,996    7,453            1,097       1978            1995          10-30 Years

 1660 Walt Whitman Road,                                                                                                           
   Melville,New York........       370             5,501    5,871              621       1980            1995          10-30 Years

 70 Maxess Road, Melville,                                                                                                         
   New York.................       462             4,612    5,074              385       1967            1995          10-30 Years

 85 Nicon Court, Hauppauge,                                                                                                        
   New York.................       797             2,872    3,669              286       1984            1995          10-30 Years

 104 Parkway Drive So.,                                                                                                            
   Hauppauge, New York......        54               934      988               89       1985            1996          10-30 Years

 20 Melville Park Rd.,                                                                                                             
   Melville, New York.......       391             2,746    3,137              208       1965            1996          10-30 Years

 105 Price Parkway,                                                                                                                
   Hauppauge, New York......     2,030             6,780    8,810              603       1969            1996          10-30 Years

 48 Harbor Park Drive,                                                                                                             
   Hauppauge, New York......     1,304             2,340    3,644              208       1976            1996          10-30 Years

 125 Ricefield Lane,                                                                                                               
   Hauppauge, New York......        13             1,182    1,195              162       1973            1996          10-30 Years

                                                                                                      Continued-

</TABLE>


<PAGE>

<TABLE>
<CAPTION>



 Column A                          Column B                    COLUMN C                    COLUMN D
 --------                          --------                    --------                    --------           

                                                                                       COST CAPITALIZED
                                                                                         SUBSEQUENT TO
                                                             INITIAL COST                 ACQUISITION
                                                             ------------                 -----------           

                                                                 BUILDINGS AND               BUILDINGS AND
 Description                          ENCUMBRANCE       LAND      IMPROVEMENTS      LAND      IMPROVEMENTS
 -----------                          -----------       ----      ------------      ----      ------------

<S>                                   <C>               <C>       <C>               <C>       <C>
 110 Ricefield Lane,                                                                                          
   Hauppauge, New York......                        B       33              1,043      ---                 52

 120 Ricefield Lane,                                                                                          
   Hauppauge, New York......                        B       16              1,051      ---                 30

 135 Ricefield Lane,                                                                                          
   Hauppauge, New York......                        B       24                906      ---                473

 30 Hub Drive, Huntington,                                                                                    
   New York.................                        B      469              1,571      ---                295

 60 Charles Lindbergh,                                                                                        
   Mitchel Field, New York..                        B        A             20,800      ---              1,594

 155 White Plains Rod.,                                                                                       
   Tarrytown, New York......                        B    1,613              2,542      ---                876

 2 Church Street,                                                                                             
   Tarrytown, New York .....                        B      232              1,307      ---                375

 235 Main Street,                                                                                             
   Tarrytown, New York......                        B      955              5,375      ---                760

 245 Main Street,                                                                                             
   Tarrytown, New York......                        B    1,294              7,284      ---                849

 505 White Plains Road,                                                                                       
   Tarrytown, New York......                        B      236              1,332      ---                318

 555 White Plains Road,                                                                                       
   Tarrytown, New York......                        B      712              4,133       51              2,668

 560 White Plains Road,                                                                                       
   Tarrytown, New York......                        B    1,553              8,756      ---              1,795

 580 White Plains Road,                                                                                       
   Tarrytown, New York......                    8,503    2,591             14,595      ---              2,040

 660 White Plains Road,                                                                                       
   Tarrytown, New York......                        B    3,929             22,640       45              2,505

 Landmark Square, Stamford,                                                                                   
   Connecticut..............                   48,579   11,603             64,466      ---             12,176

 110 Bi-County Blvd.,                                                                                         
   Farmingdale, New York....                    4,383    2,342              6,665      ---                123

 RREEF Portfolio,                                                                                             
   Hauppauge, New York (10                                                                                    
   additional buildings in                                                                                    
   Vanderbuilt Industrial                                                                                     
   Park)....................                        B      930             20,619      ---              1,880

 275 Broadhollow Road,                                                                                        
   Melville, New York.......                        B    5,250             11,761      ---                514

 One Eagle Rock, East                                                                                         
   Hanover, New Jersey......                        B      803              7,563      ---              1,580

 710 Bridgeport Avenue,                                                                                       
   Shelton, Connecticut.....                        B    5,405             21,620        7                533

 101 JFK Expressway, Short                                                                                    
   Hills, New Jersey........                        B    7,745             43,889      ---              1,019


</TABLE>

<PAGE>

<TABLE>
<CAPTION>



            COLUMN A                           COLUMN E                   COLUMN F         COLUMN G        COLUMN H       COLUMN I
            --------                           --------                   --------         --------        --------       --------

                                         GROSS AMOUNT AT WHICH
                                      CARRIED AT CLOSE OF PERIOD


                                                                                                                       LIFE ON WHICH
                                             BUILDINGS AND              ACCUMULATED         DATE OF         DATE        DEPRECIATION
           Description              LAND     IMPROVEMENTS     TOTAL     DEPRECIATION     CONSTRUCTION      ACQUIRED     IS COMPUTED
                                    ----     ------------     -----     ------------     ------------      --------     -----------

<S>                                <C>       <C>              <C>       <C>              <C>               <C>         <C>         
 110 Ricefield Lane,
   Hauppauge, New York......            33             1,095    1,128              109       1980            1996       10-30 Years

 120 Ricefield Lane,
   Hauppauge, New York......            16             1,081    1,097               84       1983            1996       10-30 Years

 135 Ricefield Lane,
   Hauppauge, New York......            24             1,379    1,403              200       1981            1996       10-30 Years

 30 Hub Drive, Huntington,
   New York.................           469             1,866    2,335              181       1976            1996       10-30 Years

 60 Charles Lindbergh,
   Mitchel Field, New York..             0            22,394   22,394            2,143       1989            1996       10-30 Years

 155 White Plains Rod.,
   Tarrytown, New York......         1,613             3,418    5,031              258       1963            1996       10-30 Years

 2 Church Street,
   Tarrytown, New York .....           232             1,682    1,914              166       1979            1996       10-30 Years

 235 Main Street,
   Tarrytown, New York......           955             6,135    7,090              612       1974            1996       10-30 Years

 245 Main Street,
   Tarrytown, New York......         1,294             8,133    9,427              836       1983            1996       10-30 Years

 505 White Plains Road,
   Tarrytown, New York......           236             1,650    1,886              183       1974            1996       10-30 Years

 555 White Plains Road,
   Tarrytown, New York......           763             6,801    7,564            1,043       1972            1996       10-30 Years

 560 White Plains Road,
   Tarrytown, New York......         1,553            10,551   12,104            1,494       1980            1996       10-30 Years

 580 White Plains Road,
   Tarrytown, New York......         2,591            16,635   19,226            1,786       1997            1996       10-30 Years

 660 White Plains Road,
   Tarrytown, New York......         3,974            25,145   29,119            2,767       1983            1996       10-30 Years

 Landmark Square, Stamford,
   Connecticut..............        11,603            76,642   88,245            5,438     1973-1984         1996       10-30 Years

 110 Bi-County Blvd.,
   Farmingdale, New York....         2,342             6,788    9,130              477       1984            1997        10-30 Years

 RREEF Portfolio,                      930            22,499    23,429            1,370     1974-1982         1997       10-30 Years
   Hauppauge, New York (10
   additional buildings in
 Vanderbuilt Industrial Park)

 275 Broadhollow Road,
   Melville, New York.......         5,250            12,275   17,525              740       1970            1997      10-30 Years

 One Eagle Rock, East
   Hanover, New Jersey......           803             9,143    9,946              566       1986            1997      10-30 Years

 710 Bridgeport Avenue,
   Shelton, Connecticut.....         5,412            22,153   27,565            1,295     1971-1979         1997      10-30 Years

 101 JFK Expressway, Short
   Hills, New Jersey........         7,745            44,908   52,653            2,462       1981            1997      10-30 Years

                                                                                                          Continued-

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


            COLUMN A                  COLUMN B              COLUMN C                  COLUMN D
            --------                  --------              --------                  --------

                                                                                  COST CAPITALIZED
                                                                                    SUBSEQUENT TO
                                                          INITIAL COST               ACQUISITION
                                                          ------------               -----------

<PAGE>



                                                              BUILDINGS AND             BUILDINGS AND
           DESCRIPTION               ENCUMBRANCE      LAND     IMPROVEMENTS     LAND     IMPROVEMENTS
           -----------               -----------      ----     ------------     ----     ------------
<S>                                    <C>            <C>       <C>             <C>          <C>
 10 Rooney Circle, West                                                                                  
   Orange, New Jersey.......                      B    1,302            4,615        1               418

 Executive Hill Office                                                                                   
   Park, West Orange,                                                                                    
   New Jersey...............                      B    7,629           31,288        4               814

 3 University Plaza,                                                                                     
   Hackensack, New Jersey...                      B    7,894           11,846      ---               595

 400 Garden City Plaza,                                                                                  
   Garden City, New York....                      B   13,986           10,127      ---               389

 425 Rabro Drive,                                                                                        
   Hauppauge, New York......                      B      665            3,489      ---                67

 One Paragon Drive,                                                                                      
   Montvale, New Jersey.....                      B    2,773            9,901      ---               463

 90 Merrick Avenue, East                                                                                 
   Meadow, New York.........                      B        A           19,193      ---             2,152

 150 Motor Parkway,                                                                                      
   Hauppauge, New York......                      B    1,114           20,430      ---             2,365

 390 Motor Parkway,                                                                                      
   Hauppauge, New York......                      B      240            4,459      ---               237

 Royal Executive Park,                                                                                   
   Ryebrook, New York.......                      B   18,343           55,028       --             1,191

 120 White Plains Road,                                                                                  
   Tarrytown, New York......                      B    3,355           24,605      ---                89

 University Square,                                                                                      
   Princeton, New Jersey....                      B    3,288            8,888      ---                70

 100 Andrews Road,                                                                                       
   Hicksville, New York.....                      B    2,337            1,711      151             5,697

 2 Macy Road, Harrison,                                                                                  
   New York.................                      B      642            2,131      ---                47

 80 Grasslands, Elmsford,                                                                                
   New York.................                      B    1,208            6,728      ---               175

 65 Marcus Drive, Melville,                                                                              
   New York.................                      B      295            1,966       57               885

 200 Carter Drive, Edison,                                                                               
   New Jersey...............                      B      240            2,745      ---               ---

 118 Moonachie Avenue,                                                                                   
   Carlstadt, New Jersey....                      B    6,270           12,727      ---               ---

 24 Abeel Road, Monroe,                                                                                  
   New Jersey...............                      B      138            1,195      ---               ---

 275 / 285 Pierce Street,                                                                                
   Franklin New Jersey......                      B      277            1,414      ---                16

 301 / 321 Herrod Blvd.,                                                                                 
   S Brunswick, New Jersey..                      B    3,833           19,342      ---               ---

 1 Nixon Lane, Edison,                                                                                   
   New Jersey...............                      B    1,113            4,918      ---               ---



</TABLE>

<PAGE>

<TABLE>
<CAPTION>
            COLUMN A                           COLUMN E                   COLUMN F         COLUMN G        COLUMN H       COLUMN I
            --------                           --------                   --------         --------        --------       --------

                                         GROSS AMOUNT AT WHICH
                                      CARRIED AT CLOSE OF PERIOD
                                      --------------------------


<PAGE>

                                                                                                                       LIFE ON WHICH
                                             BUILDINGS AND              ACCUMULATED         DATE OF         DATE        DEPRECIATION
           DESCRIPTION              LAND     IMPROVEMENTS     TOTAL     DEPRECIATION     CONSTRUCTION      ACQUIRED     IS COMPUTED
           -----------              ----     ------------     -----     ------------     ------------      --------     -----------
<S>                                 <C>      <C>              <C>       <C>              <C>               <C>          <C>
 10 Rooney Circle, West
   Orange, New Jersey.......         1,303             5,033    6,336              312       1971            1997       10-30 Years

 Executive Hill Office
   Park, West Orange,
   New Jersey...............         7,633            32,102   39,735            1,619     1978-1984         1997       10-30 Years

 3 University Plaza,
   Hackensack, New Jersey...         7,894            12,441   20,335              638       1985            1997       10-30 Years

 400 Garden City Plaza,
   Garden City, New York....        13,986            10,516   24,502              512       1989            1997       10-30 Years

 425 Rabro Drive,
   Hauppauge, New York......           665             3,556    4,221              176       1980            1997       10-30 Years

 One Paragon Drive,
   Montvale, New Jersey.....         2,773            10,364   13,137              456       1980            1997       10-30 Years

 90 Merrick Avenue, East
   Meadow, New York.........             0            21,345   21,345              892       1985            1997       10-30 Years

 150 Motor Parkway,
   Hauppauge, New York......         1,114            22,795   23,909            1,028       1984            1997       10-30 Years

 390 Motor Parkway,
   Hauppauge, New York......           240             4,696    4,936              208       1980            1997       10-30 Years

 Royal Executive Park,
   Ryebrook, New York.......        18,343            56,219   74,562            2,133     1983-1986         1997       10-30 Years

 120 White Plains Road,
   Tarrytown, New York......         3,355            24,694   28,049              890       1984            1997       10-30 Years

 University Square,
   Princeton, New Jersey....         3,288             8,958   12,246              322       1987            1997       10-30 Years

 100 Andrews Road,
   Hicksville, New York.....         2,488             7,408    9,896              463       1954            1996       10-30 Years

 2 Macy Road, Harrison,
   New York.................           642             2,178    2,820               83       1962            1997       10-30 Years

 80 Grasslands, Elmsford,
   New York.................         1,208             6,903    8,111              268     1989/1964         1997       10-30 Years

 65 Marcus Drive, Melville,
   New York.................           352             2,851    3,203              167       1968            1996       10-30 Years

 200 Carter Drive, Edison,
   New Jersey...............           240             2,745    2,985               91       1985            1998       10-30 Years

 118 Moonachie Avenue,
   Carlstadt, New Jersey....         6,270            12,727   18,997              423       1989            1998       10-30 Years

 24 Abeel Road, Monroe,
   New Jersey...............           138             1,195    1,333               40       1979            1998       10-30 Years

 275 / 285 Pierce Street,
   Franklin New Jersey......           277             1,430    1,707               48       1988            1998       10-30 Years

 301 / 321 Herrod Blvd.,
   S Brunswick, New Jersey..         3,833            19,342   23,175              643       1991            1998       10-30 Years

 1 Nixon Lane, Edison,
   New Jersey...............         1,113             4,918    6,031              164       1988            1998       10-30 Years

                                                                                                          Continued-

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


            COLUMN A                  COLUMN B              COLUMN C                   COLUMN D
            --------                  --------              --------                   --------

                                                                                      COST CAPITALIZED
                                                                                        SUBSEQUENT TO
                                                               INITIAL COST               ACQUISITION
                                                               ------------               -----------

                                                              BUILDINGS AND              BUILDINGS AND
           DESCRIPTION               ENCUMBRANCE      LAND     IMPROVEMENTS     LAND     IMPROVEMENTS
           -----------               -----------      ----     ------------     ----     ------------
<S>                                  <C>              <C>       <C>             <C>       <C>
 18 Madison Road,                                                                                        
   Fairfield, New Jersey....                      B       76              871      ---                --

 200 / 250 Kennedy Drive,                                                                                
   Sayreville, New Jersey...                      B    1,018            6,851      ---               ---

 24 Madison Road,                                                                                        
   Fairfield, New Jersey....                      B      131            2,176      ---               ---

 243 St Nicholas Avenue,                                                                                 
   So. Plainfield,                                                                                       
   New Jersey...............                      B      172              551      ---               ---

 26 Madison Road,                                                                                        
   Fairfield, New Jersey....                      B        A            1,492      ---               ---

 300 / 350 Kennedy Drive,                                                                                
   Sayreville, New Jersey...                      B    1,003            7,303      ---               ---

 309 Kennedy Drive,                                                                                      
   Sayreville, New Jersey...                 10,345      297            9,102      ---               ---

 34 Englehard Drive,                                                                                     
   Monroe, New Jersey.......                      B    1,073            6,656      ---               ---

 409 Kennedy Drive,                                                                                      
   Sayreville, New Jersey...                  4,434      126            9,650      ---               ---

 535 Secaucus Road,                                                                                      
   Secaucus, New Jersey.....                      B      798            2,713      ---               ---

 55 Carter Drive, Edison,                                                                                
   New Jersey...............                      B       84            3,905      ---                30

 Mount Ebo Corporate Park,                                                                               
   Brewster, New Jersey.....                      B    1,031            7,204       --                16

 Teterboro-Industrial                                                                                    
   Avenue, Teterboro,                                                                                    
   New jersey...............                      B    2,671           18,875      ---               ---

 22 Madison Road,                                                                                        
   Fairfield, New Jersey....                      B      655            1,445      ---                 1

 135 Fieldcrest Ave.,                                                                                    
   Edison, New Jersey.......                      B      370            3,774      ---               ---

 400 Cabot Drive, Hamilton,                                                                              
   New Jersey...............                      B    2,068           18,614      ---                71

 51 JFK Parkway, Short                                                                                   
   Hills, New York..........                      B    8,732           58,437      ---               323

 Triad V - 1979 Marcus                                                                                   
   Ave., Lake Success,                                                                                   
   New York.................                      B    3,528           31,786      ---             2,966

 100 Forge Way, Rockaway,                                                                                
   New Jersey...............                      B      315              902      ---                53

 200 Forge Way, Rockaway,                                                                                
   New Jersey...............                      B    1,128            3,228      ---               168

 300 Forge Way, Rockaway,                                                                                
   New Jersey...............                      B      376            1,075      ---                63

 400 Forge Way, Rockaway,                                                                                
   New Jersey...............                      B    1,142            3,267      ---               168

 51 -55 Charles Lindergh                                                                                 
   Blvd., Uniondale,                                                                                     
   New York.................                      B        A           27,975      ---             4,119

 155 Passaic Avenue,                                                                                     
   Fairfield, New Jersey....                      B        3            3,538       --               174

 100 Summit Drive,                                                                                       
   Valhalla, New York.......                 23,600    3,007           41,351      ---             1,148


</TABLE>

<PAGE>

<TABLE>
<CAPTION>


            COLUMN A                           COLUMN E                   COLUMN F         COLUMN G        COLUMN H       COLUMN I
            --------                           --------                   --------         --------        --------       --------

                                         GROSS AMOUNT AT WHICH
                                      CARRIED AT CLOSE OF PERIOD

           DESCRIPTION              LAND     BUILDINGS AND    TOTAL     ACCUMULATED         DATE OF         DATE      LIFE ON WHICH
           -----------              ----     IMPROVEMENTS     -----     DEPRECIATION     CONSTRUCTION      ACQUIRED    DEPRECIATION
                                             ------------               ------------     ------------      --------    IS COMPUTED
                                                                                                                       -----------
<S>                               <C>          <C>           <C>          <C>             <C>             <C>           <C>
 18 Madison Road,                       76               871      947               29       1979            1998       10-30 Years
   Fairfield, New Jersey....

 200 / 250 Kennedy Drive,            1,018             6,851    7,869              228       1988            1998       10-30 Years
   Sayreville, New Jersey...

 24 Madison Road,                      131             2,176    2,307               72       1980            1998       10-30 Years
   Fairfield, New Jersey....

 243 St Nicholas Avenue,               172               551      723               18       1974            1998       10-30 Years
   So. Plainfield,
   New Jersey...............


 26 Madison Road,                        0             1,492    1,492               50       1980            1998       10-30 Years
   Fairfield, New Jersey....

 300 / 350 Kennedy Drive,            1,003             7,303    8,306              223       1988            1998       10-30 Years
   Sayreville, New Jersey...

 309 Kennedy Drive,                    297             9,102    9,399              303       1996            1998       10-30 Years
   Sayreville, New Jersey...

 34 Englehard Drive,                 1,073             6,656    7,729              221       1980            1998       10-30 Years
   Monroe, New Jersey.......

 409 Kennedy Drive,                    126             9,650    9,776              321       1996            1998       10-30 Years
   Sayreville, New Jersey...

 535 Secaucus Road,                    798             2,713    3,511               90       1979            1998       10-30 Years
   Secaucus, New Jersey.....

 55 Carter Drive, Edison,               84             3,935    4,019              131       1987            1998       10-30 Years
   New Jersey...............

 Mount Ebo Corporate Park,           1,031             7,220    8,251              120                       1998       10-30 Years
   Brewster, New Jersey.....

 Teterboro-Industrial                2,671            18,875   21,546              224       1998            1998       10-30 Years
   Avenue, Teterboro,
   New jersey...............


 22 Madison Road,                      655             1,446    2,101               20       1980            1998       10-30 Years
   Fairfield, New Jersey....
 135 Fieldcrest Ave.,                  370             3,774    4,144               10       1980            1998       10-30 Years
   Edison, New Jersey.......

 400 Cabot Drive, Hamilton,          2,068            18,685   20,753              624       1989            1998       10-30 Years
   New Jersey...............

 51 JFK Parkway, Short               8,732            58,760   67,492            1,636       1988            1998       10-30 Years
   Hills, New York..........

 Triad V - 1979 Marcus               3,528            34,752   38,280            1,089       1987            1998       10-30 Years
   Ave., Lake Success,
   New York.................


 100 Forge Way, Rockaway,              315               955    1,270               31       1986            1989       10-30 Years
   New Jersey...............

 200 Forge Way, Rockaway,            1,128             3,396    4,524              112       1989            1998       10-30 Years
   New Jersey...............

 300 Forge Way, Rockaway,              376             1,138    1,514               37       1989            1998       10-30 Years
   New Jersey...............

 400 Forge Way, Rockaway,            1,142             3,435    4,577              113       1989            1998       10-30 Years
   New Jersey...............

 51 -55 Charles Lindergh                 0            32,094   32,094            1,469       1981            1998       10-30 Years
   Blvd., Uniondale,
   New York.................


 155 Passaic Avenue,                     3             3,712    3,715               83       1984            1998       10-30 Years
   Fairfield, New Jersey....

 100 Summit Drive,                   3,007            42,499   45,506              986       1988            1998       10-30 Years
   Valhalla, New York.......

                                                                                                          Continued-

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


            COLUMN A                  COLUMN B              COLUMN C                   COLUMN D
            --------                  --------              --------                   --------

                                                          INITIAL COST             COST CAPITALIZED
                                                          ------------              SUBSEQUENT TO
                                                                                     ACQUISITION
                                                                                     -----------

           DESCRIPTION               ENCUMBRANCE      LAND    BUILDINGS AND     LAND     BUILDINGS AND
                                                               IMPROVEMENTS              IMPROVEMENTS
          ------------               -----------      ----    -------------     ----     ------------

<S>                                 <C>               <C>        <C>           <C>        <C>
 115 / 117 Stevens Avenue,                        B    1,094           22,490      ---               407
   Valhalla, New York.......

 200 Summit Lake Drive,                      20,764    4,343           37,305      ---               349
   Valhalla, New York.......

 140 Grand Street.,                               B    1,931           18,743      ---               149
   Valhalla, New York ......

 500 Summit Lake Drive,                           B    7,052           37,309      ---               242
   Valhalla, New York.......

 5 Henderson Drive, West                          B    2,450            6,984      ---                30
   Caldwell, New Jersey.....

 Stamford Towers, Stamford,                       B   13,556           47,915       --               930
   Connecticut..............

 99 Cherry Hill Road,                             B    2,359            7,508       --                42
   Parsippany, New Jersey...

 119 Cherry Hill Road,                            B    2,512            7,622      ---               196
   Parsipanny, New Jersey...

 120 Wilbur Place, Bohemia,                       B      202            1,154      ---                44
   New York ................

 45 Melville Park Road,                           B      354            1,487      ---             1,581
   Melville, New York ......

 500 Saw Mill River Road,                         B    1,542            3,796      ---               169
   Elmsford, New York.......

 2004 Orville Drive,                              B      633            4,225      ---             1,208
   No. Bohemia, New York....



 Land held for development                        B   69,143              ---      ---               ---

 Development in progress                      6,850      ---           82,901      ---               ---

 Other property                                   B      ---              ---      ---             2,589
                                           --------  --------      ----------     ----          -------- 
 Total......................               $253,463 $281,272       $1,305,937     $411          $149,513
                                           ======== =========      ==========     ====          ========


</TABLE>

<PAGE>

<TABLE>
<CAPTION>



            COLUMN A                           COLUMN E                   COLUMN F         COLUMN G       COLUMN H       COLUMN I
            --------                           --------                   --------         --------       --------       --------

                                         GROSS AMOUNT AT WHICH
                                      CARRIED AT CLOSE OF PERIOD


           DESCRIPTION              LAND     BUILDINGS AND    TOTAL     ACCUMULATED         DATE OF         DATE       LIFE ON WHICH
           -----------              ----     IMPROVEMENTS     -----     DEPRECIATION     CONSTRUCTION      ACQUIRED     DEPRECIATION
                                             ------------               ------------     ------------      --------     IS COMPUTED
                                                                                                                        -----------
<S>                                <C>        <C>             <C>         <C>                               <C>        <C>
 115 / 117 Stevens Avenue,           1,094            22,897   23,991              514      1984             1998       10-30 Years
   Valhalla, New York.......

 200 Summit Lake Drive,              4,343            37,654   41,997              841      1990             1998       10-30 years
   Valhalla, New York.......

 140 Grand Street.,                  1,931            18,892   20,823              424      1991             1998       10-30 Years
   Valhalla, New York ......

 500 Summit Lake Drive,              7,052            37,551   44,603              632      1986             1998       10-30 Years
   Valhalla, New York.......

 5 Henderson Drive,                  2,450             7,014    9,464              118      1967             1998       10-30 Years
   West Caldwell, New Jersey

 Stamford Towers,                   13,556            48,845   62,401              855      1989             1998       10-30 Years
   Stamford, Connecticut....

 99 Cherry Hill Road,                2,359             7,550    9,909              106      1982             1998       10-30 Years
   Parsippany, New Jersey...

 119 Cherry Hill Road,               2,512             7,818   10,330              108      1982             1998       10-30 Years
   Parsipanny, New Jersey...

 120 Wilbur Place,                     202             1,198    1,400               16      1972             1998       10-30 Years
   Bohemia, New York .......

 45 Melville Park Road,                354             3,068    3,422               57      1998             1998       10-30 Years
   Melville, New York ......

 500 Saw Mill River Road,            1,542             3,965    5,507              132      1968             1998       10-30 Years
   Elmsford, New York.......

 2004 Orville Drive, No.               633             5,433    6,066              128      1998             1998       10-30 Years
   Bohemia, New York........


 Land held for development          69,143                 0   69,143                0        N/A          Various          N/A

Developments in progress               ---            82,901   82,901                0

Other property                         ---             2,589    2,589              325
                                   -------        ----------  ----------      ---------
Total.......................      $281,683        $1,455,450  $1,737,133      $156,231
                                  ========        ==========  ==========      ========
-------------------------------------------------------------------------------
</TABLE>

<PAGE>

A These land  parcels  are leased (see Note 4). B There are no  encumbrances  on
these properties. C The Encumbrance of $2,616 is related to one property.

   The aggregate cost for Federal Income Tax purposes was approximately $1,575
million at December 31, 1998.


<PAGE>

           The changes in real estate for each of the periods in the three years
ended December 31, 1998 are as follows:

<TABLE>
<CAPTION>

                                                  JANUARY 1, 1998     JANUARY 1, 1997     JANUARY 1, 1996
                                                         TO                 TO                  TO
                                                 DECEMBER 31, 1998   DECEMBER 31, 1997   DECEMBER 31, 1996
                                                 -----------------   -----------------   -----------------
<S>                                               <C>                 <C>                  <C>
  Real estate balance at beginning of                    $1,011,228            $516,768            $288,056
   period

  Improvements                                              134,582              37,778              15,174

  Disposal, including write-off of fully                        ---               (154)               (936)
   depreciated building improvements

  Acquisitions                                              591,323             456,836             214,474
                                                        -----------          ----------            --------

  Balance at end of period                               $1,737,133          $1,011,228            $516,768
                                                        ===========          ==========            ========
</TABLE>


     The changes in accumulated  depreciation,  exclusive of amounts relating to
equipment,  autos,  furniture and fixtures, for each of the periods in the three
years ended December 31, 1998 are as follows:
<TABLE>

                                                  JANUARY 1, 1998     JANUARY 1, 1997     JANUARY 1, 1996
                                                         TO                 TO                  TO
                                                 DECEMBER 31, 1998   DECEMBER 31, 1997   DECEMBER 31, 1996
                                                 -----------------   -----------------   -----------------
<S>                                                 <C>                 <C>                 <C>
  Balance at beginning of period                           $108,652             $86,344             $72,499

  Depreciation for period                                    47,579              22,442              14,781

  Disposal, including write-off of fully                        ---               (134)               (936)
  depreciated    building improvements
                                                           --------            ---------           ---------

  Balance at end of period                                 $156,231            $108,652             $86,344
                                                           ========            =========           =========
</TABLE>

                                Exhibit Index

Exhibit  Filing
Number   Reference              Description            


     3.1     a  Amended and Restated Articles of Incorporation
     3.2     a  By-Laws of Registrant
     3.3     h  Articles Supplementary of the Registrant filed with the
                Maryland State Department of Assessments  and Taxation
                on April 9, 1998
     4.1     b  Specimen Share Certificate of Common Stock
     4.2     h  Specimen Share Certificate of Preferred Stock
    10.1     a  Amended and Restated Agreement of Limited Partnership
                of Reckson Operating Partnership, L. P.
    10.2     h  Supplement to the Amended and Restated Agreement of
                Limited Partnership of Reckson Operating Partnership,
                L.P. Establishing Series A Preferred Units of Limited
                Partnerships Interest.
    10.3     h  Supplement to the Amended and Restated Agreement
                of Limited Partnership of Reckson Operating
                Partnership, L. P. Establishing Series B Preferred Units
                of Limited Partnership Interest.
    10.4     h  Supplement to the Amended and Restated Agreement
                of Limited Partnership of Reckson Operating
                Partnership, L. P. Establishing Series C Preferred
                Units of Limited Partnership Interest.
    10.5     h  Supplement to the Amended and Restated Agreement
                of Limited Partnership of Reckson Operating
                Partnership, L. P. Establishing Series D Preferred
                Units of Limited Partnership Interest.
    10.6     f  Third Amended and Restated Agreement of Limited
                Partnership of Omni Partners, L. P.
    10.7        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and
                Donald Rechler.
    10.8        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and
                Scott Rechler.
    10.9        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and
                Mitchell Rechler.
   10.10        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and
                Gregg Rechler.
   10.11        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and
                Roger Rechler.
   10.12        Amendment and Restatement of Employment and
                Non-Competition Agreement between Registrant and J.
                Michael Maturo.
   10.13     a  Purchase Option Agreements relating to the Reckson
                Option Properties
   10.14     a  Purchase Option Agreements relating to the Other
                Option Properties
   10.15     c  Amended 1995 Stock Option Plan
   10.16     c  1996 Employee Stock Option Plan
   10.17     b  Ground Leases for certain of the properties
   10.18        Third Amended and Restated Agreement of Limited
                Partnership of Reckson FS Limited Partnership
   10.19     a  Indemnity Agreement relating to 100 Oser Avenue
   10.20     f  Amended and Restated 1997 Stock Option Plan
   10.21     f  1998 Stock Option Plan
   10.22     f  Amended and Restated Agreement of Limited
                Partnership of Reckson Morris Operating Partnership,
                L. P. 
   10.23     f  Note Purchase Agreement for the Senior Unsecured Notes
   10.24        Amended and Restated Severance Agreement between
                Registrant and Donald Rechler
   10.25        Amended and Restated Severance Agreement between
                Registrant and Scott Rechler
   10.26        Amended and Restated Severance Agreement between
                Registrant and Mitchell Rechler
   10.27        Amended and Restated Severance Agreement between
                Registrant and Gregg Rechler
   10.28        Amended and Restated Severance Agreement between
                Registrant and Roger Rechler
   10.29        Amended and Restated Severance Agreement between
                Registrant and J. Michael Maturo
   10.30     d  $500 million Credit Agreement dated July 23, 1998
                among Reckson Operating Partnership, L. P. and
                Reckson Morris Operating Partnership, L. P. and the
                Chase Manhattan Bank, UBS AG and PNC Bank and
                other lenders party thereto
   10.31     e  $75 million Amended and Restated Credit Agreement
                dated January 12, 1999 among Reckson Operating
                Partnership, L. P. and Reckson Morris Operating
                Partnership, L. P. and ING (U.S.) Capital LLC and the
                Chase Manhattan Bank and other lenders party thereto
   10.32     g  Agreement and Plan of Merger by and among Tower
                Realty Trust, Inc., Reckson Associates Realty Corp.,
                Reckson Operating Partnership, L. P. and Metropolitan
                Partners LLC, dated December 8, 1998
   10.33     g  Stock Purchase Agreement by and between Tower
                Realty Trust Inc. and Metropolitan Partners LLC, dated
                December 8, 1998
   10.34     g  Amended and Restated Operating Agreement of
                Metropolitan Partners LLC, dated December 8, 1998
   10.35        Intercompany Agreement by and between Reckson
                Operating Partnership, L. P.  and Reckson Service
                Industries, Inc., dated May 13, 1998
   10.36        Credit Agreement dated as of June 15, 1998 between
                Reckson Service Industries, Inc., as borrower and
                Reckson Operating Partnership, L. P., as Lender
                relating to Reckson Strategic Venture Partners, LLC
   10.37        Credit Agreement dated as of June 15, 1998 between
                Reckson Service Industries, Inc., as borrower and
                Reckson Operating Partnership, L. P., as Lender
                relating to the operations of Reckson Service
                Industries, Inc.
    12.1        Statement of Ratios of Earnings to Fixed Charges
    21.1        Statement of Subsidiaries
    23.0        Consent of Independent Auditors
    24.1        Power of Attorney (included in Part IV of the Form 10-K)
    27.0        Financial Data Schedule
---
a  Previously filed as an exhibit to Registration
   Statement on Form S-11 (No.333-1280) and
   incorporated herein by reference.
b  Previously filed as an exhibit to Registration
   Statement on Form S-11 (No.33-84324) and
   incorporated herein by reference.
c  Previously filed as an exhibit to the Company's Form
   8-K report filed with the SEC on November 25, 1996
   and incorporated herein by reference.
d  Previously filed as an exhibit to the Company's Form
   8-K report filed with the SEC on August 14, 1998 and
   incorporated herein by reference.
e  Previously filed as an exhibit to the Company's Form
   8-K report filed with the SEC on February  5, 1999 and
   incorporated herein by reference.
f  Previously filed as an exhibit to the Company's Form
   10-K filed with the SEC on March 26, 1998 and
   incorporated herein by reference.
g  Previously filed as an exhibit to the Company's Form
   8-K report filed with the SEC on December 22, 1998
   and incorporated herein by reference.
h  Previously filed as an exhibit to the Company's Form
   8-K report filed with the SEC on March 1, 1999 and
   incorporated herein by reference.
<PAGE>
                                                                    Exhibit 10.7

                          AMENDMENT AND RESTATEMENT OF
                     EMPLOYMENT AND NONCOMPETITION AGREEMENT

         This  AMENDMENT  AND  RESTATEMENT  OF  EMPLOYMENT  AND   NONCOMPETITION
AGREEMENT  ("Agreement")  is made as of the 1st day of June,  1998 by and  among
Donald J. Rechler  ("Executive") and Reckson Associates Realty Corp., a Maryland
corporation  with  a  principal  place  of  business  at 225  Broadhollow  Road,
Melville, New York 11747 (the "Employer") and amends,  supersedes and completely
restates the Employment and Noncompetition  Agreement made as of June 2, 1995 by
and among the Executive and the Employer.

         1. Term.  The term of this  Agreement  shall commence on the date first
above written and,  unless earlier  terminated as provided in Paragraph 7 below,
shall  terminate on the fifth  anniversary of such date (the  "Original  Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination of
this Agreement as provided  therein.  The Original Term may be extended for such
period or periods,  if any, as agreed to by Executive  and the Employer  (each a
"Renewal Term"). The period of Executive's  employment  hereunder  consisting of
the Original Term and all Renewal Terms is herein referred to as the "Employment
Period".

         2. Employment and Duties.

            (a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates.  Executive shall serve the Employer
as a senior  corporate  executive with the title Chief Executive  Officer of the
Employer.  Executive's duties and authority shall be as set forth in the By-laws
of the Employer and as  otherwise  established  by the Board of Directors of the
Employer, shall be commensurate with his titles and positions with the Employer.

            (b)  Executive  agrees  to  his  employment  as  described  in  this
Paragraph  2 and agrees to devote  substantially  all of his  business  time and
efforts  to the  performance  of his  duties  under  this  Agreement,  except as
otherwise approved by the Board of Directors of the Employer; provided, however,
that  nothing  herein  shall  be  interpreted  to  preclude  Executive  from (i)
participating  as an officer or director  of, or advisor to, any  charitable  or
other tax exempt organization or otherwise engaging in charitable,  fraternal or
trade group activities,  (ii) providing services to Reckson Service  Industries,
Inc.  ("RSI") and its  affiliates,  or (iii)  investing  his assets as a passive
investor in other  entities or business  ventures,  provided that he performs no
management  or similar role with  respect to such  entities or ventures and such
investment does not violate Section 8 hereof.

            (c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require. Executive
shall be based in the tri-state  metropolitan  area of New York,  New Jersey and
Connecticut (the "Tri-State metropolitan area").

         3. Compensation and Benefits.  In consideration of Executive's services
hereunder,  the Employer shall compensate  Executive as provided in this Section
3.

            (a) Base  Salary.  The  Employer  shall pay  Executive  an aggregate
annual  salary at the rate of $500,000  per annum during the  Employment  Period
("Base Salary"),  subject to withholding for applicable federal, state and local
taxes.  Base Salary shall be payable in accordance  with the  Employer's  normal
business  practices,  but in no event less frequently than monthly.  Executive's
Base Salary shall be reviewed no less  frequently  than annually by the Employer
and may be increased,  but not decreased,  by the Employer during the Employment
Period.

            (b) Incentive  Compensation.  In addition to the Base Salary payable
to Executive  pursuant to Section 3(a),  during the Employment  Period Executive
shall be eligible to participate in any incentive  compensation  plans in effect
with  respect  to  senior  executive  officers  of  the  Employer,   subject  to
Executive's  compliance with such criteria as the Employer's  Board of Directors
may establish for Executive's participation in such plans from time to time. Any
awards to Executive under such plans will be established by the Employer's Board
of Directors, or a committee thereof, in its sole discretion.

            (c) Stock Options. During the Employment Period,  Executive shall be
eligible to participate in employee stock option plans  established from time to
time for the benefit of senior  executive  officers  and other  employees of the
Employer  in  accordance  with the  terms  and  conditions  of such  plans.  All
decisions  regarding awards to Executive under the Employer's stock option plans
shall be made in the sole discretion of the Employer's Board of Directors,  or a
committee thereof.

            (d)  Expenses.  Executive  shall be  reimbursed  for all  reasonable
business related  expenses  incurred by Executive at the request of or on behalf
of the  Employer,  subject  to such  reasonable  requirements  with  respect  to
substantiation and documentation as may be specified by the Employer.

            (e)  Medical and Dental  Insurance.  During the  Employment  Period,
Executive and Executive's  immediate  family shall be entitled to participate in
such medical and dental  benefit plans as the Employer  shall maintain from time
to time for the benefit of senior  executive  officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.

            (f) Life Insurance and Disability  Insurance.  During the Employment
Period,   the  Employer   shall  provide   Executive  with  life  insurance  and
comprehensive disability insurance.

            (g)  Vacations.  Executive  shall be  entitled  to  reasonable  paid
vacations  in  accordance  with  the then  regular  procedures  of the  Employer
governing senior executive officers,  not to exceed four weeks per annum, in the
aggregate.

            (h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits,  including sick leave and the right to
participate in retirement or pension plans,  as are made generally  available to
senior executive officers and employees of the Employer from time to time.

         4.  Indemnification  and Liability  Insurance.  The Employer  agrees to
indemnify  Executive with respect to any actions  commenced against Executive in
his capacity as an officer or director,  or former  officer or director,  of the
Employer or any affiliate  thereof for which he may serve in such capacity.  The
Employer also agrees to use its best efforts to secure and maintain officers and
directors liability insurance providing coverage for Executive.

         5. Employer's Policies. Executive agrees to observe and comply with the
rules and  regulations  of the  Employer  as adopted by its Boards of  Directors
regarding  the  performance  of his duties and to carry out and perform  orders,
directions and policies  communicated to him from time to time by the Employer's
Boards of Directors.

         6. Nondisclosure Covenant.

            (a) General. All records, financial statements and similar documents
obtained,  reviewed or compiled by Executive in the course of the performance by
him of services for the Employer,  whether or not  confidential  information  or
trade secrets, shall be the exclusive property of the Employer.  Executive shall
have no rights in such documents upon any termination of this Agreement.

            (b)  Confidential  Information.  Executive  will not disclose to any
person or entity (except as required by applicable law or in connection with the
performance of his duties and  responsibilities  hereunder),  or use for his own
benefit or gain, any  confidential  information of the Employer  obtained by him
incident  to  his  employment   with  the  Employer.   The  term   "confidential
information"  includes,  without  limitation,  financial  information,  business
plans,  prospects and  opportunities  which have been discussed or considered by
the  management of the Employer but does not include any  information  which has
become part of the public domain by means other than Executive's  non-observance
of his  obligations  hereunder.  This paragraph shall survive the termination of
this Agreement.

         7. Termination and Severance Payments.

            (a) At-Will  Employment.  Executive's  employment  hereunder  is "at
will" and may be  terminated  by the  Employer at any time with or without  Good
Reason (as  defined in Section  7(e)  below),  by a majority  vote of all of the
members  of the  Board of  Directors  of the  Employer  upon  written  notice to
Executive,  subject only to the severance  provisions  specifically set forth in
this Section 7.

            (b) Termination by Executive.  The Employment Period and Executive's
employment  hereunder may be terminated  effective  immediately  by Executive by
written  notice to the Board of Directors of the Employer  within 30 days of the
occurrence  of (i) a failure of the Board of  Directors of the Employer to elect
Executive  to  offices  with  the same or  substantially  the  same  duties  and
responsibilities  as set forth in  Section  2, (ii) a  material  failure  by the
Employer to comply with the provisions of Section 3 or a material  breach by the
Employer of any other provision of this Agreement, or (iii) a Force Out (as such
term is defined in Section 7(e) below).

            (c)  Certain  Benefits  upon  Termination  by  Executive.  Except as
specifically  provided  in this  Section 7 or  otherwise  required  by law,  all
compensation  and benefits to Executive  under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the foregoing,
if  the  Employment  Period  is  terminated  pursuant  to  Section  7(b)  or  if
Executive's employment is terminated by the Employer other than for Good Reason,
Executive shall be entitled to the following benefits:

                  (i) The Employer shall continue to pay Executive's Base Salary
            for  the  remaining  term  of  this  Agreement  after  the  date  of
            Executive's  termination,  at the rate in  effect on the date of his
            termination and on the same periodic  payment dates as payment would
            have been  made to  Executive  had the  Employment  Period  not been
            terminated;

                  (ii) For the remaining term of this Agreement, Executive shall
            continue to receive all benefits  described in Section 3 existing on
            the date of  termination.  For purposes of the  application  of such
            benefits,  Executive  shall be treated as if he had  remained in the
            employ of the  Employer  with a Base Salary at the rate in effect on
            the date of termination;

                  (iii) For purposes of any stock  option plan of the  Employer,
            Executive  shall be treated as if he had  remained  in the employ of
            the Employer for the remaining term of this Agreement after the date
            of  Executive's  termination  so that (x) any stock options or other
            awards  (including  restricted  stock grants) of the Executive under
            such plan shall  continue  to vest and become  exercisable,  and (y)
            Executive shall be entitled to exercise any  exercisable  options or
            other rights;

                  (iv) If, in spite of the  provisions  above,  any  benefits or
            service  credits  under any benefit  plan or program of the Employer
            may not be paid or provided under such plan or program to Executive,
            or to  Executive's  dependents,  beneficiaries  or  estate,  because
            Executive is no longer considered to be an employee of the Employer,
            the Employer  shall pay or provide for payment of such  benefits and
            service  credits  to  Executive,   or  to  Executive's   dependents,
            beneficiaries  or estate,  for the remaining term of this Agreement;
            and

                  (v) Nothing  herein  shall be deemed to obligate  Executive to
            seek other  employment in the event of any such  termination and any
            amounts earned or benefits  received from such other employment will
            not serve to reduce in any way the amounts and  benefits  payable in
            accordance herewith.

            (d) Termination by the Employer for Good Reason. If (i) Executive is
terminated for Good Reason or (ii)  Executive  shall  voluntarily  terminate his
employment  hereunder  (other than  pursuant to Section 7(b)  hereof),  then the
Employment  Period  shall  terminate as of the  effective  date set forth in the
written notice of such termination (the "Termination  Date") and Executive shall
be entitled to receive only his Base Salary at the rate then in effect until the
Termination  Date and any  outstanding  stock  options held by  Executive  shall
expire in accordance with the terms of the stock option plan or option agreement
under which the stock options were granted.

            (e)  Definitions.  The following terms shall be defined as set forth
below.

                  (i) A  "Change-in-Control"  shall be deemed  to have  occurred
            after the effective date of this Agreement if:

                        (A) any  Person,  together  with  all  "affiliates"  and
                  "associates"  (as such terms are  defined in Rule 12b-2  under
                  the Securities  Exchange Act of 1934 (the "Exchange  Act")) of
                  such Person, shall become the "beneficial owner" (as such term
                  is defined in Rule 13d-3 under the Exchange Act),  directly or
                  indirectly,  of securities of the Employer representing 30% or
                  more of either (A) the combined voting power of the Employer's
                  then  outstanding  securities  having  the right to vote in an
                  election  of  the  Employer's  Board  of  Directors   ("Voting
                  Securities") or (B) the then outstanding shares of all classes
                  of stock of the  Employer (in either such case other than as a
                  result of the  acquisition  of  securities  directly  from the
                  Employer); or

                        (B)  individuals  who, as of the effective  date of this
                  Agreement,  constitute the Employer's  Board of Directors (the
                  "Incumbent  Directors")  cease  for  any  reason,   including,
                  without  limitation,  as a  result  of a tender  offer,  proxy
                  contest, merger or similar transaction, to constitute at least
                  a majority of the Employer's Board of Directors, provided that
                  any person  becoming a director of the Employer  subsequent to
                  the  effective  date  of  this  Agreement  whose  election  or
                  nomination  for  election was approved by a vote of at least a
                  majority of the  Incumbent  Directors  shall,  for purposes of
                  this Agreement, be considered an Incumbent Director; or

                        (C) the  stockholders  of the Employer shall approve (1)
                  any  consolidation or merger of the Employer or any subsidiary
                  where the stockholders of the Employer,  immediately  prior to
                  the consolidation or merger,  would not, immediately after the
                  consolidation  or  merger,  beneficially  own (as such term is
                  defined in Rule 13d-3  under the  Exchange  Act),  directly or
                  indirectly,  shares representing in the aggregate at least 60%
                  of the  voting  shares  of the  corporation  issuing  cash  or
                  securities in the  consolidation or merger (or of its ultimate
                  parent corporation,  if any), (2) any sale, lease, exchange or
                  other transfer (in one transaction or a series of transactions
                  contemplated or arranged by any party as a single plan) of all
                  or substantially  all of the assets of the Employer or (3) any
                  plan or proposal for the  liquidation  or  dissolution  of the
                  Employer;

         Notwithstanding  the  foregoing,  a  "Change-in-Control"  shall  not be
deemed to have occurred for purposes of the  foregoing  clause (A) solely as the
result of an  acquisition of securities by the Employer  which,  by reducing the
number of shares of stock or other Voting Securities outstanding,  increases (x)
the proportionate  number of shares of stock of the Employer  beneficially owned
by any Person to 30% or more of the shares of stock then  outstanding or (y) the
proportionate  voting power  represented by the Voting  Securities  beneficially
owned by any  Person  to 30% or more of the  combined  voting  power of all then
outstanding Voting Securities; provided, however, that if any Person referred to
in clause (x) or (y) of this sentence  shall  thereafter  become the  beneficial
owner of any additional stock of the Employer or other Voting  Securities (other
than pursuant to a share split, stock dividend, or similar transaction),  then a
"Change-in-Control"  shall  be  deemed  to have  occurred  for  purposes  of the
foregoing clause (A).

                  (ii) A "Force  Out"  shall be deemed to have  occurred  in the
            event of a Change-in-Control followed by:

                        (A) a change  in  duties,  responsibilities,  status  or
                  positions with the Employer,  which, in Executive's reasonable
                  judgment,  does not represent a promotion  from or maintaining
                  of Executive's duties,  responsibilities,  status or positions
                  as in effect  immediately prior to the  Change-in-Control,  or
                  any removal of  Executive  from or any failure to reappoint or
                  reelect Executive to such positions, except in connection with
                  the  termination  of  Executive's  employment for Good Reason,
                  disability, retirement or death;

                        (B) a  reduction  by the  Employer in  Executive's  Base
                  Salary    as   in    effect    immediately    prior   to   the
                  Change-in-Control;

                        (C) the  failure by the  Employer  to continue in effect
                  any of the benefit plans,  programs or  arrangements  in which
                  Executive    is    participating    at   the   time   of   the
                  Change-in-Control   of  the  Employer  (unless   Executive  is
                  permitted  to  participate  in any  substitute  benefit  plan,
                  program or arrangement with  substantially  the same terms and
                  to the same extent and with the same rights as  Executive  had
                  with respect to the benefit plan,  program or arrangement that
                  is  discontinued)  other  than  as  a  result  of  the  normal
                  expiration of any such benefit plan, program or arrangement in
                  accordance  with  its  terms as in  effect  at the time of the
                  Change-in-Control, or the taking of any action, or the failure
                  to  act,  by  the  Employer  which  would   adversely   affect
                  Executive's  continued  participation  in any of such  benefit
                  plans,  programs or  arrangements  on at least as  favorable a
                  basis  to  Executive  as is  the  case  on  the  date  of  the
                  Change-in-Control or which would materially reduce Executive's
                  benefits  in the  future  under  any of  such  benefit  plans,
                  programs or arrangements or deprive  Executive of any material
                  benefits   enjoyed   by   Executive   at  the   time   of  the
                  Change-in-Control;

                        (D) the  failure by the  Employer  to provide and credit
                  Executive  with  the  number  of paid  vacation  days to which
                  Executive is then entitled in accordance  with the  Employer's
                  normal vacation policies as in effect immediately prior to the
                  Change-in-Control;

                        (E) the Employer's requiring Executive to be based in an
                  office  located  beyond a reasonable  commuting  distance from
                  Executive's     residence    immediately    prior    to    the
                  Change-in-Control,  except for required travel relating to the
                  Employer's business to an extent substantially consistent with
                  the business travel  obligations which Executive  undertook on
                  behalf of the Employer prior to the Change-in-Control;

                        (F) the  failure  by the  Employer  to  obtain  from any
                  successor  to the  Employer an  agreement  to be bound by this
                  Agreement pursuant to Section 11 hereof; or

                        (G) any  refusal by the  Employer  to  continue to allow
                  Executive  to attend to  matters or engage in  activities  not
                  directly related to the business of the Employer which,  prior
                  to  the  Change-in-Control,  Executive  was  permitted  by the
                  Employer's Boards of Directors to attend to or engage in.

                  (iii)  "Good  Reason"  shall mean a finding by the  Employer's
            Board  of  Directors   that  Executive  has  (A)  acted  with  gross
            negligence or willful  misconduct in connection with the performance
            of his material duties  hereunder;  (B) defaulted in the performance
            of his material  duties  hereunder and has not corrected such action
            within 15 days of receipt of written notice  thereof;  (C) willfully
            acted against the best interests of the Employer,  which act has had
            a  material  and  adverse  impact on the  financial  affairs  of the
            Employer;  or (D) been convicted of a felony or committed a material
            act of common law fraud  against the Employer or its  employees  and
            such act or conviction has had, or the Employer's Board of Directors
            reasonably  determines  will have, a material  adverse effect on the
            interests of the Employer; provided, however, that a finding of Good
            Reason  shall not  become  effective  unless  and until the Board of
            Directors  provides  the  Executive  notice  that it is  considering
            making such finding and a reasonable  opportunity to be heard by the
            Board of Directors.

                  (iv)  "Person"  shall have the meaning used in Sections  13(d)
            and  14(d) of the  Exchange  Act;  provided  however,  that the term
            "Person"  shall not  include  (A) any  current  partner  of  Reckson
            Operating  Partnership,  L.P.,  any  stockholder  or employee of the
            Employer on the date hereof or any estate or member of the immediate
            family  of  such a  partner,  stockholder  or  employee,  or (B) the
            Employer,  any of its  subsidiaries,  or any  trustee,  fiduciary or
            other person or entity holding securities under any employee benefit
            plan of the Employer or any of its subsidiaries.

            (f)  Termination  by Reason of Death.  The  Employment  Period shall
terminate  upon  Executive's  death and in such event,  the  Employer  shall pay
Executive's  Base  Salary  for a period of six (6)  months  from the date of his
death,  or  such  longer  period  as the  Employer's  Boards  of  Directors  may
determine,  to Executive's estate or to a beneficiary designated by Executive in
writing  prior to his death.  Any  unexercised  or unvested  stock options shall
remain exercisable or vest upon Executive's death only to the extent provided in
the applicable option plan and option agreements.

            (g) Termination by Reason of Disability. In the event that Executive
shall become unable to efficiently  perform his duties hereunder  because of any
physical or mental disability or illness, Executive shall be entitled to be paid
his Base Salary  until the later of such time when (i) the period of  disability
or illness  (whether or not the same  disability  or illness)  shall  exceed 180
consecutive  days  during  the  Employment  Period  and (ii)  Executive  becomes
eligible to receive benefits under a comprehensive  disability  insurance policy
obtained by the Employer (the "Disability Period").  Following the expiration of
the  Disability  Period,  the Employer may terminate this Agreement upon written
notice of such  termination.  Any  unexercised  or unvested  stock options shall
remain  exercisable or vest upon such termination only to the extent provided in
the applicable option plan and option agreements .

            (h)  Arbitration  in the Event of a Dispute  Regarding the Nature of
Termination.  In the event that the Employer terminates  Executive's  employment
for Good  Reason and  Executive  contends  that Good  Reason did not exist,  the
Employer's only obligation  shall be to submit such claim to arbitration  before
the American  Arbitration  Association  ("AAA"). In such a proceeding,  the only
issue before the arbitrator will be whether Executive was in fact terminated for
Good Reason. If the arbitrator  determines that Executive was not terminated for
Good Reason, the only remedy that the arbitrator may award is entitlement to the
severance  payments and  benefits  specified  in  Paragraph  7(c),  the costs of
arbitration,  and  Executive's  attorneys'  fees. If the  arbitrator  finds that
Executive  was  terminated  for Good  Reason,  the  arbitrator  will be  without
authority to award Executive anything,  the parties will each be responsible for
their own  attorneys'  fees,  and the costs of  arbitration  will be paid 50% by
Executive and 50% by the Employer.

         8. Noncompetition Covenant.

            (a) Because  Executive's  services to the Employer are essential and
because  Executive  has  access  to  the  Employer's  confidential  information,
Executive covenants and agrees that (i) during the Employment Period and (ii) in
the event that this  Agreement is  terminated by the Employer for Good Reason or
by  Executive   other  than   pursuant  to  Section  7(b)  hereof,   during  the
Noncompetition  Period  Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous consent
of the Directors who are not officers of the Employer, directly or indirectly:

                        (A) engage, participate or assist, as an owner, partner,
                  employee, consultant,  director, officer, trustee or agent, in
                  any business  that engages or attempts to engage in,  directly
                  or indirectly,  the  acquisition,  development,  construction,
                  operation,  management or leasing of any commercial industrial
                  or office  real  estate  property  anywhere  in the  Tri-State
                  metropolitan area, or

                        (B) intentionally  interfere with, disrupt or attempt to
                  disrupt the  relationship,  contractual or otherwise,  between
                  the  Employer  or its  affiliates  and any  tenant,  supplier,
                  contractor,   lender,   employee  or  governmental  agency  or
                  authority.

            (b) For purposes of this Section 8, the Noncompetition  Period shall
mean the period commencing on the date of termination of Executive's  employment
under this  Agreement and ending on the latest of (i) the third  anniversary  of
the effective date of this Agreement,  or (ii) the first anniversary of the date
of termination of Executive's employment under this Agreement.

            (c)  Notwithstanding  anything  contained  herein  to the  contrary,
Executive  is not  prohibited  by  this  Section  8  from  (i)  maintaining  his
investment  in any Option  Property  (as such term is defined in the  Employer's
final  prospectus  relating to the  initial  public  offering of the  Employer's
Common Stock), (ii) from making investments in any entity that engages, directly
or  indirectly,  in  the  acquisition,  development,   construction,  operation,
management or leasing of commercial industrial or office real estate properties,
regardless of where they are located, if the shares or other ownership interests
of such entity are publicly traded and Executive's  aggregate investment in such
entity  constitutes  less than five percent (5%) of the equity ownership of such
entity, or (iii) providing services to RSI and its affiliates.

            (d) The  provisions of this Section 8 shall survive the  termination
of this Agreement.

         9. Conflicting  Agreements.  Executive  hereby  represents and warrants
that the execution of this  Agreement  and the  performance  of his  obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants  against
competition  or similar  covenants  which would  affect the  performance  of his
obligations hereunder.

         10.  Notices.  Any notice  required or permitted  hereunder shall be in
writing  and  shall be  deemed  sufficient  when  given by hand,  by  nationally
recognized  overnight  courier or by  express,  registered  or  certified  mail,
postage  prepaid,  return  receipt  requested,  and addressed to the Employer or
Executive,  as  applicable,  at the  address  indicated  above (or to such other
address as may be provided by notice).

         11. Miscellaneous.  This Agreement (i) constitutes the entire agreement
between the parties  concerning the subject matter hereof and supersedes any and
all prior  agreements or  understandings,  (ii) may not be assigned by Executive
without the prior written consent of the Employer,  and (iii) may be assigned by
the  Employer  and shall be  binding  upon,  and inure to the  benefit  of,  the
Employer's  successors  and  assigns.  Headings  herein are for  convenience  of
reference only and shall not define, limit or interpret the contents hereof.

         12. Amendment.  This Agreement may be amended, modified or supplemented
by the  mutual  consent  of the  parties  in  writing,  but no  oral  amendment,
modification or supplement shall be effective.

         13.  Specific  Enforcement.  The provisions of Sections 6 and 8 of this
Agreement are to be  specifically  enforced if not performed  according to their
terms. Without limiting the generality of the foregoing, the parties acknowledge
that the Employer  would be  irreparably  damaged and there would be no adequate
remedy at law for  Executive's  breach of Sections 6 and 8 of this Agreement and
further acknowledge that the Employer may seek entry of a temporary  restraining
order or preliminary injunction,  in addition to any other remedies available at
law or in equity, to enforce the provisions thereof.

         14. Severability.  If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in any
respect,  such provision(s) shall be ineffective only to the extent and duration
of  such  invalidity,   illegality  or  unenforceability  and  such  invalidity,
illegality or unenforceability  shall not affect the remaining substance of such
provision or any other  provision of this Agreement and this Agreement  shall be
construed  as if such  invalid,  illegal  or  unenforceable  provision  had been
limited or modified (consistent with its general intent) to the extent necessary
so that it shall be valid, legal and enforceable. If it shall not be possible to
so limit or modify  such  invalid,  illegal  or  unenforceable  provision,  this
Agreement  shall be  construed  as if such  invalid,  illegal  or  unenforceable
provision had never been contained  herein,  and the parties will use their best
efforts to substitute a valid, legal and enforceable provision which, insofar as
practicable,  implements  the  purpose  and intent of the  provision  originally
contained herein.

         15.  Governing Law. This  Agreement  shall be construed and governed by
the laws of the State of New York.

         IN WITNESS  WHEREOF,  this Agreement is entered into as of the date and
year first above written.

                                      RECKSON ASSOCIATES REALTY CORP.


                                      By: /s/ Scott Rechler
                                         ----------------------------
                                            Name:  Scott Rechler
                                            Title: President


                                      /s/ Donald Rechler
                                      -------------------------------
                                      Donald J. Rechler

<PAGE>
                                                                   Exhibit 10.8

                          AMENDMENT AND RESTATEMENT OF
                     EMPLOYMENT AND NONCOMPETITION AGREEMENT

         This  AMENDMENT  AND  RESTATEMENT  OF  EMPLOYMENT  AND   NONCOMPETITION
AGREEMENT  ("Agreement")  is made as of the 1st day of June,  1998 by and  among
Scott H. Rechler  ("Executive") and Reckson  Associates Realty Corp., a Maryland
corporation  with  a  principal  place  of  business  at 225  Broadhollow  Road,
Melville, New York 11747 (the "Employer") and amends,  supersedes and completely
restates the Employment and Noncompetition  Agreement made as of June 2, 1995 by
and among the Executive and the Employer.

         1. Term.  The term of this  Agreement  shall commence on the date first
above written and,  unless earlier  terminated as provided in Paragraph 7 below,
shall  terminate on the fifth  anniversary of such date (the  "Original  Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination of
this Agreement as provided  therein.  The Original Term may be extended for such
period or periods,  if any, as agreed to by Executive  and the Employer  (each a
"Renewal Term"). The period of Executive's  employment  hereunder  consisting of
the Original Term and all Renewal Terms is herein referred to as the "Employment
Period".

         2. Employment and Duties.

            (a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates.  Executive shall serve the Employer
as a senior  corporate  executive with the titles  President and Chief Operating
Officer of the Employer.  Executive's duties and authority shall be as set forth
in the By-laws of the  Employer  and as  otherwise  established  by the Board of
Directors of the Employer,  shall be commensurate  with his titles and positions
with the Employer.

            (b)  Executive  agrees  to  his  employment  as  described  in  this
Paragraph  2 and agrees to devote  substantially  all of his  business  time and
efforts  to the  performance  of his  duties  under  this  Agreement,  except as
otherwise approved by the Board of Directors of the Employer; provided, however,
that  nothing  herein  shall  be  interpreted  to  preclude  Executive  from (i)
participating  as an officer or director  of, or advisor to, any  charitable  or
other tax exempt organization or otherwise engaging in charitable,  fraternal or
trade group activities,  (ii) providing services to Reckson Service  Industries,
Inc.  ("RSI") and its  affiliates,  or (iii)  investing  his assets as a passive
investor in other  entities or business  ventures,  provided that he performs no
management  or similar role with  respect to such  entities or ventures and such
investment does not violate Section 8 hereof.

            (c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require. Executive
shall be based in the tri-state  metropolitan  area of New York,  New Jersey and
Connecticut (the "Tri-State metropolitan area").

         3. Compensation and Benefits.  In consideration of Executive's services
hereunder,  the Employer shall compensate  Executive as provided in this Section
3.

            (a) Base  Salary.  The  Employer  shall pay  Executive  an aggregate
annual  salary at the rate of $400,000  per annum during the  Employment  Period
("Base Salary"),  subject to withholding for applicable federal, state and local
taxes.  Base Salary shall be payable in accordance  with the  Employer's  normal
business  practices,  but in no event less frequently than monthly.  Executive's
Base Salary shall be reviewed no less  frequently  than annually by the Employer
and may be increased,  but not decreased,  by the Employer during the Employment
Period.

            (b) Incentive  Compensation.  In addition to the Base Salary payable
to Executive  pursuant to Section 3(a),  during the Employment  Period Executive
shall be eligible to participate in any incentive  compensation  plans in effect
with  respect  to  senior  executive  officers  of  the  Employer,   subject  to
Executive's  compliance with such criteria as the Employer's  Board of Directors
may establish for Executive's participation in such plans from time to time. Any
awards to Executive under such plans will be established by the Employer's Board
of Directors, or a committee thereof, in its sole discretion.

            (c) Stock Options. During the Employment Period,  Executive shall be
eligible to participate in employee stock option plans  established from time to
time for the benefit of senior  executive  officers  and other  employees of the
Employer  in  accordance  with the  terms  and  conditions  of such  plans.  All
decisions  regarding awards to Executive under the Employer's stock option plans
shall be made in the sole discretion of the Employer's Board of Directors,  or a
committee thereof.

            (d)  Expenses.  Executive  shall be  reimbursed  for all  reasonable
business related  expenses  incurred by Executive at the request of or on behalf
of the  Employer,  subject  to such  reasonable  requirements  with  respect  to
substantiation and documentation as may be specified by the Employer.

            (e)  Medical and Dental  Insurance.  During the  Employment  Period,
Executive and Executive's  immediate  family shall be entitled to participate in
such medical and dental  benefit plans as the Employer  shall maintain from time
to time for the benefit of senior  executive  officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.

            (f) Life Insurance and Disability  Insurance.  During the Employment
Period,   the  Employer   shall  provide   Executive  with  life  insurance  and
comprehensive disability insurance.

            (g)  Vacations.  Executive  shall be  entitled  to  reasonable  paid
vacations  in  accordance  with  the then  regular  procedures  of the  Employer
governing senior executive officers,  not to exceed four weeks per annum, in the
aggregate.

            (h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits,  including sick leave and the right to
participate in retirement or pension plans,  as are made generally  available to
senior executive officers and employees of the Employer from time to time.

         4.  Indemnification  and Liability  Insurance.  The Employer  agrees to
indemnify  Executive with respect to any actions  commenced against Executive in
his capacity as an officer or director,  or former  officer or director,  of the
Employer or any affiliate  thereof for which he may serve in such capacity.  The
Employer also agrees to use its best efforts to secure and maintain officers and
directors liability insurance providing coverage for Executive.

         5. Employer's Policies. Executive agrees to observe and comply with the
rules and  regulations  of the  Employer  as adopted by its Boards of  Directors
regarding  the  performance  of his duties and to carry out and perform  orders,
directions and policies  communicated to him from time to time by the Employer's
Boards of Directors.

         6. Nondisclosure Covenant.

            (a) General. All records, financial statements and similar documents
obtained,  reviewed or compiled by Executive in the course of the performance by
him of services for the Employer,  whether or not  confidential  information  or
trade secrets, shall be the exclusive property of the Employer.  Executive shall
have no rights in such documents upon any termination of this Agreement.

            (b)  Confidential  Information.  Executive  will not disclose to any
person or entity (except as required by applicable law or in connection with the
performance of his duties and  responsibilities  hereunder),  or use for his own
benefit or gain, any  confidential  information of the Employer  obtained by him
incident  to  his  employment   with  the  Employer.   The  term   "confidential
information"  includes,  without  limitation,  financial  information,  business
plans,  prospects and  opportunities  which have been discussed or considered by
the  management of the Employer but does not include any  information  which has
become part of the public domain by means other than Executive's  non-observance
of his  obligations  hereunder.  This paragraph shall survive the termination of
this Agreement.

         7. Termination and Severance Payments.

            (a) At-Will  Employment.  Executive's  employment  hereunder  is "at
will" and may be  terminated  by the  Employer at any time with or without  Good
Reason (as  defined in Section  7(e)  below),  by a majority  vote of all of the
members  of the  Board of  Directors  of the  Employer  upon  written  notice to
Executive,  subject only to the severance  provisions  specifically set forth in
this Section 7.

            (b) Termination by Executive.  The Employment Period and Executive's
employment  hereunder may be terminated  effective  immediately  by Executive by
written  notice to the Board of Directors of the Employer  within 30 days of the
occurrence  of (i) a failure of the Board of  Directors of the Employer to elect
Executive  to  offices  with  the same or  substantially  the  same  duties  and
responsibilities  as set forth in  Section  2, (ii) a  material  failure  by the
Employer to comply with the provisions of Section 3 or a material  breach by the
Employer of any other provision of this Agreement, or (iii) a Force Out (as such
term is defined in Section 7(e) below).

            (c)  Certain  Benefits  upon  Termination  by  Executive.  Except as
specifically  provided  in this  Section 7 or  otherwise  required  by law,  all
compensation  and benefits to Executive  under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the foregoing,
if  the  Employment  Period  is  terminated  pursuant  to  Section  7(b)  or  if
Executive's employment is terminated by the Employer other than for Good Reason,
Executive shall be entitled to the following benefits:

                  (i) The Employer shall continue to pay Executive's Base Salary
         for the remaining term of this Agreement  after the date of Executive's
         termination,  at the rate in effect on the date of his  termination and
         on the same  periodic  payment dates as payment would have been made to
         Executive had the Employment Period not been terminated;

                  (ii) For the remaining term of this Agreement, Executive shall
         continue to receive all benefits described in Section 3 existing on the
         date of termination.  For purposes of the application of such benefits,
         Executive  shall be treated as if he had  remained in the employ of the
         Employer  with a Base  Salary  at the  rate in  effect  on the  date of
         termination;

                  (iii) For purposes of any stock  option plan of the  Employer,
         Executive  shall be treated as if he had  remained in the employ of the
         Employer for the  remaining  term of this  Agreement  after the date of
         Executive's  termination  so that (x) any stock options or other awards
         (including  restricted  stock grants) of the Executive  under such plan
         shall continue to vest and become exercisable,  and (y) Executive shall
         be entitled to exercise any exercisable options or other rights;

                  (iv) If, in spite of the  provisions  above,  any  benefits or
         service  credits  under any benefit plan or program of the Employer may
         not be paid or provided under such plan or program to Executive,  or to
         Executive's  dependents,  beneficiaries or estate, because Executive is
         no longer  considered to be an employee of the  Employer,  the Employer
         shall pay or provide for payment of such  benefits and service  credits
         to Executive,  or to Executive's  dependents,  beneficiaries or estate,
         for the remaining term of this Agreement; and

                  (v) Nothing  herein  shall be deemed to obligate  Executive to
         seek  other  employment  in the event of any such  termination  and any
         amounts earned or benefits received from such other employment will not
         serve  to  reduce  in any way  the  amounts  and  benefits  payable  in
         accordance herewith.

         (d)  Termination  by the Employer for Good Reason.  If (i) Executive is
terminated for Good Reason or (ii)  Executive  shall  voluntarily  terminate his
employment  hereunder  (other than  pursuant to Section 7(b)  hereof),  then the
Employment  Period  shall  terminate as of the  effective  date set forth in the
written notice of such termination (the "Termination  Date") and Executive shall
be entitled to receive only his Base Salary at the rate then in effect until the
Termination  Date and any  outstanding  stock  options held by  Executive  shall
expire in accordance with the terms of the stock option plan or option agreement
under which the stock options were granted.

         (e)  Definitions.  The  following  terms  shall be defined as set forth
below.

            (i) A "Change-in-Control" shall be deemed to have occurred after the
effective date of this Agreement if:

                  (A)  any   Person,   together   with  all   "affiliates"   and
         "associates"  (as such  terms  are  defined  in Rule  12b-2  under  the
         Securities  Exchange Act of 1934 (the "Exchange  Act")) of such Person,
         shall  become the  "beneficial  owner" (as such term is defined in Rule
         13d-3 under the Exchange Act), directly or indirectly, of securities of
         the Employer representing 30% or more of either (A) the combined voting
         power of the Employer's then outstanding securities having the right to
         vote in an  election  of the  Employer's  Board of  Directors  ("Voting
         Securities") or (B) the then outstanding shares of all classes of stock
         of the  Employer  (in  either  such case  other than as a result of the
         acquisition of securities directly from the Employer); or

                  (B)  individuals  who,  as  of  the  effective  date  of  this
         Agreement, constitute the Employer's Board of Directors (the "Incumbent
         Directors") cease for any reason,  including,  without limitation, as a
         result of a tender offer, proxy contest, merger or similar transaction,
         to constitute at least a majority of the Employer's Board of Directors,
         provided that any person becoming a director of the Employer subsequent
         to the effective  date of this  Agreement  whose election or nomination
         for  election  was  approved  by a vote of at least a  majority  of the
         Incumbent   Directors  shall,  for  purposes  of  this  Agreement,   be
         considered an Incumbent Director; or

                  (C) the  stockholders  of the Employer  shall  approve (1) any
         consolidation  or merger of the  Employer or any  subsidiary  where the
         stockholders of the Employer, immediately prior to the consolidation or
         merger,  would  not,  immediately  after the  consolidation  or merger,
         beneficially  own (as such  term is  defined  in Rule  13d-3  under the
         Exchange  Act),  directly or  indirectly,  shares  representing  in the
         aggregate at least 60% of the voting shares of the corporation  issuing
         cash or securities in the  consolidation  or merger (or of its ultimate
         parent  corporation,  if any), (2) any sale,  lease,  exchange or other
         transfer (in one transaction or a series of  transactions  contemplated
         or arranged by any party as a single plan) of all or substantially  all
         of the  assets  of the  Employer  or (3) any plan or  proposal  for the
         liquidation or dissolution of the Employer;

         Notwithstanding  the  foregoing,  a  "Change-in-Control"  shall  not be
deemed to have occurred for purposes of the  foregoing  clause (A) solely as the
result of an  acquisition of securities by the Employer  which,  by reducing the
number of shares of stock or other Voting Securities outstanding,  increases (x)
the proportionate  number of shares of stock of the Employer  beneficially owned
by any Person to 30% or more of the shares of stock then  outstanding or (y) the
proportionate  voting power  represented by the Voting  Securities  beneficially
owned by any  Person  to 30% or more of the  combined  voting  power of all then
outstanding Voting Securities; provided, however, that if any Person referred to
in clause (x) or (y) of this sentence  shall  thereafter  become the  beneficial
owner of any additional stock of the Employer or other Voting  Securities (other
than pursuant to a share split, stock dividend, or similar transaction),  then a
"Change-in-Control"  shall  be  deemed  to have  occurred  for  purposes  of the
foregoing clause (A).

            (ii) A "Force Out" shall be deemed to have  occurred in the event of
a Change-in-Control followed by:

                  (A) a change in duties, responsibilities,  status or positions
         with the Employer,  which, in Executive's reasonable judgment, does not
         represent  a  promotion  from or  maintaining  of  Executive's  duties,
         responsibilities, status or positions as in effect immediately prior to
         the Change-in-Control,  or any removal of Executive from or any failure
         to  reappoint  or  reelect  Executive  to  such  positions,  except  in
         connection  with the  termination  of  Executive's  employment for Good
         Reason, disability, retirement or death;

                  (B) a reduction by the Employer in Executive's  Base Salary as
         in effect immediately prior to the Change-in-Control;

                  (C) the  failure by the  Employer to continue in effect any of
         the benefit  plans,  programs or  arrangements  in which  Executive  is
         participating  at the  time of the  Change-in-Control  of the  Employer
         (unless Executive is permitted to participate in any substitute benefit
         plan,  program or arrangement with  substantially the same terms and to
         the same extent and with the same rights as Executive  had with respect
         to the benefit plan, program or arrangement that is discontinued) other
         than as a result of the normal  expiration  of any such  benefit  plan,
         program or arrangement in accordance with its terms as in effect at the
         time of the  Change-in-Control,  or the  taking of any  action,  or the
         failure  to  act,  by  the  Employer  which  would   adversely   affect
         Executive's  continued  participation  in any of  such  benefit  plans,
         programs or  arrangements on at least as favorable a basis to Executive
         as is the case on the  date of the  Change-in-Control  or  which  would
         materially reduce Executive's  benefits in the future under any of such
         benefit plans,  programs or  arrangements  or deprive  Executive of any
         material   benefits   enjoyed   by   Executive   at  the  time  of  the
         Change-in-Control;

                  (D)  the  failure  by  the  Employer  to  provide  and  credit
         Executive  with the number of paid vacation days to which  Executive is
         then  entitled  in  accordance  with  the  Employer's  normal  vacation
         policies as in effect immediately prior to the Change-in-Control;

                  (E) the  Employer's  requiring  Executive  to be  based  in an
         office located beyond a reasonable  commuting distance from Executive's
         residence  immediately  prior  to  the  Change-in-Control,  except  for
         required  travel  relating  to the  Employer's  business  to an  extent
         substantially  consistent  with the business travel  obligations  which
         Executive   undertook   on  behalf  of  the   Employer   prior  to  the
         Change-in-Control;

                  (F) the failure by the  Employer to obtain from any  successor
         to the Employer an agreement to be bound by this Agreement  pursuant to
         Section 11 hereof; or

                  (G) any refusal by the Employer to continue to allow Executive
         to attend to matters or engage in  activities  not directly  related to
         the business of the  Employer  which,  prior to the  Change-in-Control,
         Executive was permitted by the Employer's Boards of Directors to attend
         to or engage in.

            (iii) "Good Reason" shall mean a finding by the Employer's  Board of
Directors  that  Executive  has (A)  acted  with  gross  negligence  or  willful
misconduct in connection with the performance of his material duties  hereunder;
(B) defaulted in the  performance of his material  duties  hereunder and has not
corrected such action within 15 days of receipt of written notice  thereof;  (C)
willfully acted against the best interests of the Employer,  which act has had a
material and adverse  impact on the financial  affairs of the  Employer;  or (D)
been  convicted  of a felony or  committed  a  material  act of common law fraud
against the Employer or its employees and such act or conviction has had, or the
Employer's  Board of  Directors  reasonably  determines  will  have,  a material
adverse  effect on the  interests of the  Employer;  provided,  however,  that a
finding of Good Reason shall not become  effective unless and until the Board of
Directors  provides  the  Executive  notice that it is  considering  making such
finding and a reasonable opportunity to be heard by the Board of Directors.

            (iv)  "Person"  shall have the meaning  used in  Sections  13(d) and
14(d) of the Exchange Act;  provided  however,  that the term "Person" shall not
include (A) any current  partner of Reckson  Operating  Partnership,  L.P.,  any
stockholder  or  employee  of the  Employer  on the date hereof or any estate or
member of the immediate  family of such a partner,  stockholder or employee,  or
(B) the Employer,  any of its subsidiaries,  or any trustee,  fiduciary or other
person or entity  holding  securities  under any  employee  benefit  plan of the
Employer or any of its subsidiaries.

         (f)  Termination  by Reason  of  Death.  The  Employment  Period  shall
terminate  upon  Executive's  death and in such event,  the  Employer  shall pay
Executive's  Base  Salary  for a period of six (6)  months  from the date of his
death,  or  such  longer  period  as the  Employer's  Boards  of  Directors  may
determine,  to Executive's estate or to a beneficiary designated by Executive in
writing  prior to his death.  Any  unexercised  or unvested  stock options shall
remain exercisable or vest upon Executive's death only to the extent provided in
the applicable option plan and option agreements.

         (g)  Termination by Reason of  Disability.  In the event that Executive
shall become unable to efficiently  perform his duties hereunder  because of any
physical or mental disability or illness, Executive shall be entitled to be paid
his Base Salary  until the later of such time when (i) the period of  disability
or illness  (whether or not the same  disability  or illness)  shall  exceed 180
consecutive  days  during  the  Employment  Period  and (ii)  Executive  becomes
eligible to receive benefits under a comprehensive  disability  insurance policy
obtained by the Employer (the "Disability Period").  Following the expiration of
the  Disability  Period,  the Employer may terminate this Agreement upon written
notice of such  termination.  Any  unexercised  or unvested  stock options shall
remain  exercisable or vest upon such termination only to the extent provided in
the applicable option plan and option agreements .

         (h)  Arbitration  in the Event of a  Dispute  Regarding  the  Nature of
Termination.  In the event that the Employer terminates  Executive's  employment
for Good  Reason and  Executive  contends  that Good  Reason did not exist,  the
Employer's only obligation  shall be to submit such claim to arbitration  before
the American  Arbitration  Association  ("AAA"). In such a proceeding,  the only
issue before the arbitrator will be whether Executive was in fact terminated for
Good Reason. If the arbitrator  determines that Executive was not terminated for
Good Reason, the only remedy that the arbitrator may award is entitlement to the
severance  payments and  benefits  specified  in  Paragraph  7(c),  the costs of
arbitration,  and  Executive's  attorneys'  fees. If the  arbitrator  finds that
Executive  was  terminated  for Good  Reason,  the  arbitrator  will be  without
authority to award Executive anything,  the parties will each be responsible for
their own  attorneys'  fees,  and the costs of  arbitration  will be paid 50% by
Executive and 50% by the Employer.

         8. Noncompetition Covenant.

         (a) Because  Executive's  services to the  Employer are  essential  and
because  Executive  has  access  to  the  Employer's  confidential  information,
Executive covenants and agrees that (i) during the Employment Period and (ii) in
the event that this  Agreement is  terminated by the Employer for Good Reason or
by  Executive   other  than   pursuant  to  Section  7(b)  hereof,   during  the
Noncompetition  Period  Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous consent
of the Directors who are not officers of the Employer, directly or indirectly:

                  (A)  engage,  participate  or  assist,  as an owner,  partner,
         employee,  consultant,  director,  officer,  trustee  or agent,  in any
         business that engages or attempts to engage in, directly or indirectly,
         the acquisition,  development,  construction,  operation, management or
         leasing of any  commercial  industrial  or office real estate  property
         anywhere in the Tri-State metropolitan area, or

                  (B)  intentionally  interfere  with,  disrupt  or  attempt  to
         disrupt  the  relationship,   contractual  or  otherwise,  between  the
         Employer  or its  affiliates  and  any  tenant,  supplier,  contractor,
         lender, employee or governmental agency or authority.

         (b) For  purposes of this  Section 8, the  Noncompetition  Period shall
mean the period commencing on the date of termination of Executive's  employment
under this  Agreement and ending on the latest of (i) the third  anniversary  of
the effective date of this Agreement,  or (ii) the first anniversary of the date
of termination of Executive's employment under this Agreement.

         (c)   Notwithstanding   anything  contained  herein  to  the  contrary,
Executive  is not  prohibited  by  this  Section  8  from  (i)  maintaining  his
investment  in any Option  Property  (as such term is defined in the  Employer's
final  prospectus  relating to the  initial  public  offering of the  Employer's
Common Stock), (ii) from making investments in any entity that engages, directly
or  indirectly,  in  the  acquisition,  development,   construction,  operation,
management or leasing of commercial industrial or office real estate properties,
regardless of where they are located, if the shares or other ownership interests
of such entity are publicly traded and Executive's  aggregate investment in such
entity  constitutes  less than five percent (5%) of the equity ownership of such
entity, or (iii) providing services to RSI and its affiliates.

         (d) The  provisions of this Section 8 shall survive the  termination of
this Agreement.

         9. Conflicting  Agreements.  Executive  hereby  represents and warrants
that the execution of this  Agreement  and the  performance  of his  obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants  against
competition  or similar  covenants  which would  affect the  performance  of his
obligations hereunder.

         10.  Notices.  Any notice  required or permitted  hereunder shall be in
writing  and  shall be  deemed  sufficient  when  given by hand,  by  nationally
recognized  overnight  courier or by  express,  registered  or  certified  mail,
postage  prepaid,  return  receipt  requested,  and addressed to the Employer or
Executive,  as  applicable,  at the  address  indicated  above (or to such other
address as may be provided by notice).

         11. Miscellaneous.  This Agreement (i) constitutes the entire agreement
between the parties  concerning the subject matter hereof and supersedes any and
all prior  agreements or  understandings,  (ii) may not be assigned by Executive
without the prior written consent of the Employer,  and (iii) may be assigned by
the  Employer  and shall be  binding  upon,  and inure to the  benefit  of,  the
Employer's  successors  and  assigns.  Headings  herein are for  convenience  of
reference only and shall not define, limit or interpret the contents hereof.

         12. Amendment.  This Agreement may be amended, modified or supplemented
by the  mutual  consent  of the  parties  in  writing,  but no  oral  amendment,
modification or supplement shall be effective.

         13.  Specific  Enforcement.  The provisions of Sections 6 and 8 of this
Agreement are to be  specifically  enforced if not performed  according to their
terms. Without limiting the generality of the foregoing, the parties acknowledge
that the Employer  would be  irreparably  damaged and there would be no adequate
remedy at law for  Executive's  breach of Sections 6 and 8 of this Agreement and
further acknowledge that the Employer may seek entry of a temporary  restraining
order or preliminary injunction,  in addition to any other remedies available at
law or in equity, to enforce the provisions thereof.

         14. Severability.  If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in any
respect,  such provision(s) shall be ineffective only to the extent and duration
of  such  invalidity,   illegality  or  unenforceability  and  such  invalidity,
illegality or unenforceability  shall not affect the remaining substance of such
provision or any other  provision of this Agreement and this Agreement  shall be
construed  as if such  invalid,  illegal  or  unenforceable  provision  had been
limited or modified (consistent with its general intent) to the extent necessary
so that it shall be valid, legal and enforceable. If it shall not be possible to
so limit or modify  such  invalid,  illegal  or  unenforceable  provision,  this
Agreement  shall be  construed  as if such  invalid,  illegal  or  unenforceable
provision had never been contained  herein,  and the parties will use their best
efforts to substitute a valid, legal and enforceable provision which, insofar as
practicable,  implements  the  purpose  and intent of the  provision  originally
contained herein.

         15.  Governing Law. This  Agreement  shall be construed and governed by
the laws of the State of New York.

         IN WITNESS  WHEREOF,  this Agreement is entered into as of the date and
year first above written.

                                      RECKSON ASSOCIATES REALTY CORP.

                                      By: /s/ Michael Maturo
                                         ----------------------------------
                                            Name:  Michael Maturo
                                            Title: Executive Vice President


                                      /s/ Scott H. Rechler
                                      -------------------------------------
                                      Scott H. Rechler
<PAGE>
                                                                    Exhibit 10.9


                          AMENDMENT AND RESTATEMENT OF
                     EMPLOYMENT AND NONCOMPETITION AGREEMENT

         This  AMENDMENT  AND  RESTATEMENT  OF  EMPLOYMENT  AND   NONCOMPETITION
AGREEMENT  ("Agreement")  is made as of the 1st day of  June,  1998 by and
among Mitchell D. Rechler  ("Executive") and Reckson  Associates Realty Corp., a
Maryland corporation with a principal place of business at 225 Broadhollow Road,
Melville, New York 11747 (the "Employer") and amends,  supersedes and completely
restates the Employment and Noncompetition  Agreement made as of June 2, 1995 by
and among the Executive and the Employer.

         1. Term.  The term of this  Agreement  shall commence on the date first
above written and,  unless earlier  terminated as provided in Paragraph 7 below,
shall  terminate on the fifth  anniversary of such date (the  "Original  Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination of
this Agreement as provided  therein.  The Original Term may be extended for such
period or periods,  if any, as agreed to by Executive  and the Employer  (each a
"Renewal Term"). The period of Executive's  employment  hereunder  consisting of
the Original Term and all Renewal Terms is herein referred to as the "Employment
Period".

         2. Employment and Duties.

            (a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates.  Executive shall serve the Employer
as a senior  corporate  executive with the title Executive Vice President of the
Employer.  Executive's duties and authority shall be as set forth in the By-laws
of the Employer and as  otherwise  established  by the Board of Directors of the
Employer, shall be commensurate with his titles and positions with the Employer.

            (b)  Executive  agrees  to  his  employment  as  described  in  this
Paragraph  2 and agrees to devote  substantially  all of his  business  time and
efforts  to the  performance  of his  duties  under  this  Agreement,  except as
otherwise approved by the Board of Directors of the Employer; provided, however,
that  nothing  herein  shall  be  interpreted  to  preclude  Executive  from (i)
participating  as an officer or director  of, or advisor to, any  charitable  or
other tax exempt organization or otherwise engaging in charitable,  fraternal or
trade group activities,  (ii) providing services to Reckson Service  Industries,
Inc.  ("RSI") and its  affiliates,  or (iii)  investing  his assets as a passive
investor in other  entities or business  ventures,  provided that he performs no
management  or similar role with  respect to such  entities or ventures and such
investment does not violate Section 8 hereof.

            (c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require. Executive
shall be based in the tri-state  metropolitan  area of New York,  New Jersey and
Connecticut (the "Tri-State metropolitan area").

         3. Compensation and Benefits.  In consideration of Executive's services
hereunder,  the Employer shall compensate  Executive as provided in this Section
3.

            (a) Base  Salary.  The  Employer  shall pay  Executive  an aggregate
annual  salary at the rate of $300,000  per annum during the  Employment  Period
("Base Salary"),  subject to withholding for applicable federal, state and local
taxes.  Base Salary shall be payable in accordance  with the  Employer's  normal
business  practices,  but in no event less frequently than monthly.  Executive's
Base Salary shall be reviewed no less  frequently  than annually by the Employer
and may be increased,  but not decreased,  by the Employer during the Employment
Period.

            (b) Incentive  Compensation.  In addition to the Base Salary payable
to Executive  pursuant to Section 3(a),  during the Employment  Period Executive
shall be eligible to participate in any incentive  compensation  plans in effect
with  respect  to  senior  executive  officers  of  the  Employer,   subject  to
Executive's  compliance with such criteria as the Employer's  Board of Directors
may establish for Executive's participation in such plans from time to time. Any
awards to Executive under such plans will be established by the Employer's Board
of Directors, or a committee thereof, in its sole discretion.

            (c) Stock Options. During the Employment Period,  Executive shall be
eligible to participate in employee stock option plans  established from time to
time for the benefit of senior  executive  officers  and other  employees of the
Employer  in  accordance  with the  terms  and  conditions  of such  plans.  All
decisions  regarding awards to Executive under the Employer's stock option plans
shall be made in the sole discretion of the Employer's Board of Directors,  or a
committee thereof.

            (d)  Expenses.  Executive  shall be  reimbursed  for all  reasonable
business related  expenses  incurred by Executive at the request of or on behalf
of the  Employer,  subject  to such  reasonable  requirements  with  respect  to
substantiation and documentation as may be specified by the Employer.

            (e)  Medical and Dental  Insurance.  During the  Employment  Period,
Executive and Executive's  immediate  family shall be entitled to participate in
such medical and dental  benefit plans as the Employer  shall maintain from time
to time for the benefit of senior  executive  officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.

            (f) Life Insurance and Disability  Insurance.  During the Employment
Period,   the  Employer   shall  provide   Executive  with  life  insurance  and
comprehensive disability insurance.

            (g)  Vacations.  Executive  shall be  entitled  to  reasonable  paid
vacations  in  accordance  with  the then  regular  procedures  of the  Employer
governing senior executive officers,  not to exceed four weeks per annum, in the
aggregate.

            (h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits,  including sick leave and the right to
participate in retirement or pension plans,  as are made generally  available to
senior executive officers and employees of the Employer from time to time.

         4.  Indemnification  and Liability  Insurance.  The Employer  agrees to
indemnify  Executive with respect to any actions  commenced against Executive in
his capacity as an officer or director,  or former  officer or director,  of the
Employer or any affiliate  thereof for which he may serve in such capacity.  The
Employer also agrees to use its best efforts to secure and maintain officers and
directors liability insurance providing coverage for Executive.

         5. Employer's Policies. Executive agrees to observe and comply with the
rules and  regulations  of the  Employer  as adopted by its Boards of  Directors
regarding  the  performance  of his duties and to carry out and perform  orders,
directions and policies  communicated to him from time to time by the Employer's
Boards of Directors.

         6. Nondisclosure Covenant.

            (a) General. All records, financial statements and similar documents
obtained,  reviewed or compiled by Executive in the course of the performance by
him of services for the Employer,  whether or not  confidential  information  or
trade secrets, shall be the exclusive property of the Employer.  Executive shall
have no rights in such documents upon any termination of this Agreement.

            (b)  Confidential  Information.  Executive  will not disclose to any
person or entity (except as required by applicable law or in connection with the
performance of his duties and  responsibilities  hereunder),  or use for his own
benefit or gain, any  confidential  information of the Employer  obtained by him
incident  to  his  employment   with  the  Employer.   The  term   "confidential
information"  includes,  without  limitation,  financial  information,  business
plans,  prospects and  opportunities  which have been discussed or considered by
the  management of the Employer but does not include any  information  which has
become part of the public domain by means other than Executive's  non-observance
of his  obligations  hereunder.  This paragraph shall survive the termination of
this Agreement.

         7. Termination and Severance Payments.

            (a) At-Will  Employment.  Executive's  employment  hereunder  is "at
will" and may be  terminated  by the  Employer at any time with or without  Good
Reason (as  defined in Section  7(e)  below),  by a majority  vote of all of the
members  of the  Board of  Directors  of the  Employer  upon  written  notice to
Executive,  subject only to the severance  provisions  specifically set forth in
this Section 7.

            (b) Termination by Executive.  The Employment Period and Executive's
employment  hereunder may be terminated  effective  immediately  by Executive by
written  notice to the Board of Directors of the Employer  within 30 days of the
occurrence  of (i) a failure of the Board of  Directors of the Employer to elect
Executive  to  offices  with  the same or  substantially  the  same  duties  and
responsibilities  as set forth in  Section  2, (ii) a  material  failure  by the
Employer to comply with the provisions of Section 3 or a material  breach by the
Employer of any other provision of this Agreement, or (iii) a Force Out (as such
term is defined in Section 7(e) below).

            (c)  Certain  Benefits  upon  Termination  by  Executive.  Except as
specifically  provided  in this  Section 7 or  otherwise  required  by law,  all
compensation  and benefits to Executive  under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the foregoing,
if  the  Employment  Period  is  terminated  pursuant  to  Section  7(b)  or  if
Executive's employment is terminated by the Employer other than for Good Reason,
Executive shall be entitled to the following benefits:

                  (i) The Employer shall continue to pay Executive's Base Salary
         for the remaining term of this Agreement  after the date of Executive's
         termination,  at the rate in effect on the date of his  termination and
         on the same  periodic  payment dates as payment would have been made to
         Executive had the Employment Period not been terminated;

                  (ii) For the remaining term of this Agreement, Executive shall
         continue to receive all benefits described in Section 3 existing on the
         date of termination.  For purposes of the application of such benefits,
         Executive  shall be treated as if he had  remained in the employ of the
         Employer  with a Base  Salary  at the  rate in  effect  on the  date of
         termination;

                  (iii) For purposes of any stock  option plan of the  Employer,
         Executive  shall be treated as if he had  remained in the employ of the
         Employer for the  remaining  term of this  Agreement  after the date of
         Executive's  termination  so that (x) any stock options or other awards
         (including  restricted  stock grants) of the Executive  under such plan
         shall continue to vest and become exercisable,  and (y) Executive shall
         be entitled to exercise any exercisable options or other rights;

                  (iv) If, in spite of the  provisions  above,  any  benefits or
         service  credits  under any benefit plan or program of the Employer may
         not be paid or provided under such plan or program to Executive,  or to
         Executive's  dependents,  beneficiaries or estate, because Executive is
         no longer  considered to be an employee of the  Employer,  the Employer
         shall pay or provide for payment of such  benefits and service  credits
         to Executive,  or to Executive's  dependents,  beneficiaries or estate,
         for the remaining term of this Agreement; and

                  (v) Nothing  herein  shall be deemed to obligate  Executive to
         seek  other  employment  in the event of any such  termination  and any
         amounts earned or benefits received from such other employment will not
         serve  to  reduce  in any way  the  amounts  and  benefits  payable  in
         accordance herewith.

            (d) Termination by the Employer for Good Reason. If (i) Executive is
terminated for Good Reason or (ii)  Executive  shall  voluntarily  terminate his
employment  hereunder  (other than  pursuant to Section 7(b)  hereof),  then the
Employment  Period  shall  terminate as of the  effective  date set forth in the
written notice of such termination (the "Termination  Date") and Executive shall
be entitled to receive only his Base Salary at the rate then in effect until the
Termination  Date and any  outstanding  stock  options held by  Executive  shall
expire in accordance with the terms of the stock option plan or option agreement
under which the stock options were granted.

            (e)  Definitions.  The following terms shall be defined as set forth
below.

                  (i) A  "Change-in-Control"  shall be deemed  to have  occurred
         after the effective date of this Agreement if:

                           (A) any Person,  together with all  "affiliates"  and
                  "associates"  (as such terms are  defined in Rule 12b-2  under
                  the Securities  Exchange Act of 1934 (the "Exchange  Act")) of
                  such Person, shall become the "beneficial owner" (as such term
                  is defined in Rule 13d-3 under the Exchange Act),  directly or
                  indirectly,  of securities of the Employer representing 30% or
                  more of either (A) the combined voting power of the Employer's
                  then  outstanding  securities  having  the right to vote in an
                  election  of  the  Employer's  Board  of  Directors   ("Voting
                  Securities") or (B) the then outstanding shares of all classes
                  of stock of the  Employer (in either such case other than as a
                  result of the  acquisition  of  securities  directly  from the
                  Employer); or

                           (B) individuals who, as of the effective date of this
                  Agreement,  constitute the Employer's  Board of Directors (the
                  "Incumbent  Directors")  cease  for  any  reason,   including,
                  without  limitation,  as a  result  of a tender  offer,  proxy
                  contest, merger or similar transaction, to constitute at least
                  a majority of the Employer's Board of Directors, provided that
                  any person  becoming a director of the Employer  subsequent to
                  the  effective  date  of  this  Agreement  whose  election  or
                  nomination  for  election was approved by a vote of at least a
                  majority of the  Incumbent  Directors  shall,  for purposes of
                  this Agreement, be considered an Incumbent Director; or

                           (C) the  stockholders  of the Employer  shall approve
                  (1)  any  consolidation  or  merger  of  the  Employer  or any
                  subsidiary where the stockholders of the Employer, immediately
                  prior to the consolidation or merger,  would not,  immediately
                  after the  consolidation or merger,  beneficially own (as such
                  term is  defined  in  Rule  13d-3  under  the  Exchange  Act),
                  directly or indirectly,  shares  representing in the aggregate
                  at least 60% of the voting shares of the  corporation  issuing
                  cash or securities in the  consolidation  or merger (or of its
                  ultimate  parent  corporation,  if any), (2) any sale,  lease,
                  exchange or other transfer (in one  transaction or a series of
                  transactions contemplated or arranged by any party as a single
                  plan)  of  all or  substantially  all  of  the  assets  of the
                  Employer or (3) any plan or proposal  for the  liquidation  or
                  dissolution of the Employer;

         Notwithstanding  the  foregoing,  a  "Change-in-Control"  shall  not be
deemed to have occurred for purposes of the  foregoing  clause (A) solely as the
result of an  acquisition of securities by the Employer  which,  by reducing the
number of shares of stock or other Voting Securities outstanding,  increases (x)
the proportionate  number of shares of stock of the Employer  beneficially owned
by any Person to 30% or more of the shares of stock then  outstanding or (y) the
proportionate  voting power  represented by the Voting  Securities  beneficially
owned by any  Person  to 30% or more of the  combined  voting  power of all then
outstanding Voting Securities; provided, however, that if any Person referred to
in clause (x) or (y) of this sentence  shall  thereafter  become the  beneficial
owner of any additional stock of the Employer or other Voting  Securities (other
than pursuant to a share split, stock dividend, or similar transaction),  then a
"Change-in-Control"  shall  be  deemed  to have  occurred  for  purposes  of the
foregoing clause (A).

                  (ii) A "Force  Out"  shall be deemed to have  occurred  in the
         event of a Change-in-Control followed by:

                           (A) a change in duties,  responsibilities,  status or
                  positions with the Employer,  which, in Executive's reasonable
                  judgment,  does not represent a promotion  from or maintaining
                  of Executive's duties,  responsibilities,  status or positions
                  as in effect  immediately prior to the  Change-in-Control,  or
                  any removal of  Executive  from or any failure to reappoint or
                  reelect Executive to such positions, except in connection with
                  the  termination  of  Executive's  employment for Good Reason,
                  disability, retirement or death;

                           (B) a reduction by the Employer in  Executive's  Base
                  Salary    as   in    effect    immediately    prior   to   the
                  Change-in-Control;

                           (C) the failure by the Employer to continue in effect
                  any of the benefit plans,  programs or  arrangements  in which
                  Executive    is    participating    at   the   time   of   the
                  Change-in-Control   of  the  Employer  (unless   Executive  is
                  permitted  to  participate  in any  substitute  benefit  plan,
                  program or arrangement with  substantially  the same terms and
                  to the same extent and with the same rights as  Executive  had
                  with respect to the benefit plan,  program or arrangement that
                  is  discontinued)  other  than  as  a  result  of  the  normal
                  expiration of any such benefit plan, program or arrangement in
                  accordance  with  its  terms as in  effect  at the time of the
                  Change-in-Control, or the taking of any action, or the failure
                  to  act,  by  the  Employer  which  would   adversely   affect
                  Executive's  continued  participation  in any of such  benefit
                  plans,  programs or  arrangements  on at least as  favorable a
                  basis  to  Executive  as is  the  case  on  the  date  of  the
                  Change-in-Control or which would materially reduce Executive's
                  benefits  in the  future  under  any of  such  benefit  plans,
                  programs or arrangements or deprive  Executive of any material
                  benefits   enjoyed   by   Executive   at  the   time   of  the
                  Change-in-Control;

                           (D) the failure by the Employer to provide and credit
                  Executive  with  the  number  of paid  vacation  days to which
                  Executive is then entitled in accordance  with the  Employer's
                  normal vacation policies as in effect immediately prior to the
                  Change-in-Control;

                           (E) the Employer's requiring Executive to be based in
                  an office located beyond a reasonable  commuting distance from
                  Executive's     residence    immediately    prior    to    the
                  Change-in-Control,  except for required travel relating to the
                  Employer's business to an extent substantially consistent with
                  the business travel  obligations which Executive  undertook on
                  behalf of the Employer prior to the Change-in-Control;

                           (F) the  failure by the  Employer  to obtain from any
                  successor  to the  Employer an  agreement  to be bound by this
                  Agreement pursuant to Section 11 hereof; or

                           (G) any refusal by the  Employer to continue to allow
                  Executive  to attend to  matters or engage in  activities  not
                  directly related to the business of the Employer which,  prior
                  to  the  Change-in-Control,  Executive  was  permitted  by the
                  Employer's Boards of Directors to attend to or engage in.

                        (iii)  "Good   Reason"  shall  mean  a  finding  by  the
            Employer's  Board of  Directors  that  Executive  has (A) acted with
            gross  negligence  or  willful  misconduct  in  connection  with the
            performance of his material duties  hereunder;  (B) defaulted in the
            performance of his material  duties  hereunder and has not corrected
            such action within 15 days of receipt of written notice thereof; (C)
            willfully  acted against the best  interests of the Employer,  which
            act has had a material and adverse  impact on the financial  affairs
            of the  Employer;  or (D) been  convicted of a felony or committed a
            material  act of  common  law  fraud  against  the  Employer  or its
            employees  and such act or  conviction  has had,  or the  Employer's
            Board of  Directors  reasonably  determines  will  have,  a material
            adverse effect on the interests of the Employer;  provided, however,
            that a finding of Good Reason shall not become  effective unless and
            until the Board of Directors  provides the Executive  notice that it
            is considering  making such finding and a reasonable  opportunity to
            be heard by the Board of Directors.

                        (iv)  "Person"  shall have the meaning  used in Sections
            13(d) and 14(d) of the Exchange Act; provided however, that the term
            "Person"  shall not  include  (A) any  current  partner  of  Reckson
            Operating  Partnership,  L.P.,  any  stockholder  or employee of the
            Employer on the date hereof or any estate or member of the immediate
            family  of  such a  partner,  stockholder  or  employee,  or (B) the
            Employer,  any of its  subsidiaries,  or any  trustee,  fiduciary or
            other person or entity holding securities under any employee benefit
            plan of the Employer or any of its subsidiaries.

            (f)  Termination  by Reason of Death.  The  Employment  Period shall
terminate  upon  Executive's  death and in such event,  the  Employer  shall pay
Executive's  Base  Salary  for a period of six (6)  months  from the date of his
death,  or  such  longer  period  as the  Employer's  Boards  of  Directors  may
determine,  to Executive's estate or to a beneficiary designated by Executive in
writing  prior to his death.  Any  unexercised  or unvested  stock options shall
remain exercisable or vest upon Executive's death only to the extent provided in
the applicable option plan and option agreements.

            (g) Termination by Reason of Disability. In the event that Executive
shall become unable to efficiently  perform his duties hereunder  because of any
physical or mental disability or illness, Executive shall be entitled to be paid
his Base Salary  until the later of such time when (i) the period of  disability
or illness  (whether or not the same  disability  or illness)  shall  exceed 180
consecutive  days  during  the  Employment  Period  and (ii)  Executive  becomes
eligible to receive benefits under a comprehensive  disability  insurance policy
obtained by the Employer (the "Disability Period").  Following the expiration of
the  Disability  Period,  the Employer may terminate this Agreement upon written
notice of such  termination.  Any  unexercised  or unvested  stock options shall
remain  exercisable or vest upon such termination only to the extent provided in
the applicable option plan and option agreements .

            (h)  Arbitration  in the Event of a Dispute  Regarding the Nature of
Termination.  In the event that the Employer terminates  Executive's  employment
for Good  Reason and  Executive  contends  that Good  Reason did not exist,  the
Employer's only obligation  shall be to submit such claim to arbitration  before
the American  Arbitration  Association  ("AAA"). In such a proceeding,  the only
issue before the arbitrator will be whether Executive was in fact terminated for
Good Reason. If the arbitrator  determines that Executive was not terminated for
Good Reason, the only remedy that the arbitrator may award is entitlement to the
severance  payments and  benefits  specified  in  Paragraph  7(c),  the costs of
arbitration,  and  Executive's  attorneys'  fees. If the  arbitrator  finds that
Executive  was  terminated  for Good  Reason,  the  arbitrator  will be  without
authority to award Executive anything,  the parties will each be responsible for
their own  attorneys'  fees,  and the costs of  arbitration  will be paid 50% by
Executive and 50% by the Employer.

         8. Noncompetition Covenant.

            (a) Because  Executive's  services to the Employer are essential and
because  Executive  has  access  to  the  Employer's  confidential  information,
Executive covenants and agrees that (i) during the Employment Period and (ii) in
the event that this  Agreement is  terminated by the Employer for Good Reason or
by  Executive   other  than   pursuant  to  Section  7(b)  hereof,   during  the
Noncompetition  Period  Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous consent
of the Directors who are not officers of the Employer, directly or indirectly:

                  (A)  engage,  participate  or  assist,  as an owner,  partner,
         employee,  consultant,  director,  officer,  trustee  or agent,  in any
         business that engages or attempts to engage in, directly or indirectly,
         the acquisition,  development,  construction,  operation, management or
         leasing of any  commercial  industrial  or office real estate  property
         anywhere in the Tri-State metropolitan area, or

                  (B)  intentionally  interfere  with,  disrupt  or  attempt  to
         disrupt  the  relationship,   contractual  or  otherwise,  between  the
         Employer  or its  affiliates  and  any  tenant,  supplier,  contractor,
         lender, employee or governmental agency or authority.

            (b) For purposes of this Section 8, the Noncompetition  Period shall
mean the period commencing on the date of termination of Executive's  employment
under this  Agreement and ending on the latest of (i) the third  anniversary  of
the effective date of this Agreement,  or (ii) the first anniversary of the date
of termination of Executive's employment under this Agreement.

            (c)  Notwithstanding  anything  contained  herein  to the  contrary,
Executive  is not  prohibited  by  this  Section  8  from  (i)  maintaining  his
investment  in any Option  Property  (as such term is defined in the  Employer's
final  prospectus  relating to the  initial  public  offering of the  Employer's
Common Stock), (ii) from making investments in any entity that engages, directly
or  indirectly,  in  the  acquisition,  development,   construction,  operation,
management or leasing of commercial industrial or office real estate properties,
regardless of where they are located, if the shares or other ownership interests
of such entity are publicly traded and Executive's  aggregate investment in such
entity  constitutes  less than five percent (5%) of the equity ownership of such
entity, or (iii) providing services to RSI and its affiliates.

            (d) The  provisions of this Section 8 shall survive the  termination
of this Agreement.

         9. Conflicting  Agreements.  Executive  hereby  represents and warrants
that the execution of this  Agreement  and the  performance  of his  obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants  against
competition  or similar  covenants  which would  affect the  performance  of his
obligations hereunder.

         10.  Notices.  Any notice  required or permitted  hereunder shall be in
writing  and  shall be  deemed  sufficient  when  given by hand,  by  nationally
recognized  overnight  courier or by  express,  registered  or  certified  mail,
postage  prepaid,  return  receipt  requested,  and addressed to the Employer or
Executive,  as  applicable,  at the  address  indicated  above (or to such other
address as may be provided by notice).

         11. Miscellaneous.  This Agreement (i) constitutes the entire agreement
between the parties  concerning the subject matter hereof and supersedes any and
all prior  agreements or  understandings,  (ii) may not be assigned by Executive
without the prior written consent of the Employer,  and (iii) may be assigned by
the  Employer  and shall be  binding  upon,  and inure to the  benefit  of,  the
Employer's  successors  and  assigns.  Headings  herein are for  convenience  of
reference only and shall not define, limit or interpret the contents hereof.

         12. Amendment.  This Agreement may be amended, modified or supplemented
by the  mutual  consent  of the  parties  in  writing,  but no  oral  amendment,
modification or supplement shall be effective.

         13.  Specific  Enforcement.  The provisions of Sections 6 and 8 of this
Agreement are to be  specifically  enforced if not performed  according to their
terms. Without limiting the generality of the foregoing, the parties acknowledge
that the Employer  would be  irreparably  damaged and there would be no adequate
remedy at law for  Executive's  breach of Sections 6 and 8 of this Agreement and
further acknowledge that the Employer may seek entry of a temporary  restraining
order or preliminary injunction,  in addition to any other remedies available at
law or in equity, to enforce the provisions thereof.

         14. Severability.  If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in any
respect,  such provision(s) shall be ineffective only to the extent and duration
of  such  invalidity,   illegality  or  unenforceability  and  such  invalidity,
illegality or unenforceability  shall not affect the remaining substance of such
provision or any other  provision of this Agreement and this Agreement  shall be
construed  as if such  invalid,  illegal  or  unenforceable  provision  had been
limited or modified (consistent with its general intent) to the extent necessary
so that it shall be valid, legal and enforceable. If it shall not be possible to
so limit or modify  such  invalid,  illegal  or  unenforceable  provision,  this
Agreement  shall be  construed  as if such  invalid,  illegal  or  unenforceable
provision had never been contained  herein,  and the parties will use their best
efforts to substitute a valid, legal and enforceable provision which, insofar as
practicable,  implements  the  purpose  and intent of the  provision  originally
contained herein.

         15.  Governing Law. This  Agreement  shall be construed and governed by
the laws of the State of New York.

         IN WITNESS  WHEREOF,  this Agreement is entered into as of the date and
year first above written.

                                      RECKSON ASSOCIATES REALTY CORP.

                                      By: /s/ Scott Rechler
                                         ----------------------------
                                            Name:  Scott Rechler
                                            Title: President

                                      /s/ Mitchell D. Rechler
                                      -------------------------------
                                      Mitchell D. Rechler
<PAGE>
                                                                   Exhibit 10.10


                          AMENDMENT AND RESTATEMENT OF
                     EMPLOYMENT AND NONCOMPETITION AGREEMENT

         This  AMENDMENT  AND  RESTATEMENT  OF  EMPLOYMENT  AND   NONCOMPETITION
AGREEMENT  ("Agreement")  is made as of the 1st day of June,  1998 by and  among
Gregg Rechler  ("Executive")  and Reckson  Associates  Realty Corp.,  a Maryland
corporation  with  a  principal  place  of  business  at 225  Broadhollow  Road,
Melville, New York 11747 (the "Employer") and amends,  supersedes and completely
restates the Employment and Noncompetition  Agreement made as of June 2, 1995 by
and among the Executive and the Employer.

         1. Term.  The term of this  Agreement  shall commence on the date first
above written and,  unless earlier  terminated as provided in Paragraph 7 below,
shall  terminate on the fifth  anniversary of such date (the  "Original  Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination of
this Agreement as provided  therein.  The Original Term may be extended for such
period or periods,  if any, as agreed to by Executive  and the Employer  (each a
"Renewal Term"). The period of Executive's  employment  hereunder  consisting of
the Original Term and all Renewal Terms is herein referred to as the "Employment
Period".

         2. Employment and Duties.

            (a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates.  Executive shall serve the Employer
as a senior  corporate  executive  with the titles  Executive Vice President and
Secretary of the  Employer.  Executive's  duties and  authority  shall be as set
forth in the By-laws of the Employer and as otherwise  established  by the Board
of  Directors  of the  Employer,  shall  be  commensurate  with his  titles  and
positions with the Employer.

            (b)  Executive  agrees  to  his  employment  as  described  in  this
Paragraph  2 and agrees to devote  substantially  all of his  business  time and
efforts  to the  performance  of his  duties  under  this  Agreement,  except as
otherwise approved by the Board of Directors of the Employer; provided, however,
that  nothing  herein  shall  be  interpreted  to  preclude  Executive  from (i)
participating  as an officer or director  of, or advisor to, any  charitable  or
other tax exempt organization or otherwise engaging in charitable,  fraternal or
trade group activities,  (ii) providing services to Reckson Service  Industries,
Inc.  ("RSI") and its  affiliates,  or (iii)  investing  his assets as a passive
investor in other  entities or business  ventures,  provided that he performs no
management  or similar role with  respect to such  entities or ventures and such
investment does not violate Section 8 hereof.

            (c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require. Executive
shall be based in the tri-state  metropolitan  area of New York,  New Jersey and
Connecticut (the "Tri-State metropolitan area").

         3. Compensation and Benefits.  In consideration of Executive's services
hereunder,  the Employer shall compensate  Executive as provided in this Section
3.

            (a) Base  Salary.  The  Employer  shall pay  Executive  an aggregate
annual  salary at the rate of $300,000  per annum during the  Employment  Period
("Base Salary"),  subject to withholding for applicable federal, state and local
taxes.  Base Salary shall be payable in accordance  with the  Employer's  normal
business  practices,  but in no event less frequently than monthly.  Executive's
Base Salary shall be reviewed no less  frequently  than annually by the Employer
and may be increased,  but not decreased,  by the Employer during the Employment
Period.

            (b) Incentive  Compensation.  In addition to the Base Salary payable
to Executive  pursuant to Section 3(a),  during the Employment  Period Executive
shall be eligible to participate in any incentive  compensation  plans in effect
with  respect  to  senior  executive  officers  of  the  Employer,   subject  to
Executive's  compliance with such criteria as the Employer's  Board of Directors
may establish for Executive's participation in such plans from time to time. Any
awards to Executive under such plans will be established by the Employer's Board
of Directors, or a committee thereof, in its sole discretion.

            (c) Stock Options. During the Employment Period,  Executive shall be
eligible to participate in employee stock option plans  established from time to
time for the benefit of senior  executive  officers  and other  employees of the
Employer  in  accordance  with the  terms  and  conditions  of such  plans.  All
decisions  regarding awards to Executive under the Employer's stock option plans
shall be made in the sole discretion of the Employer's Board of Directors,  or a
committee thereof.

            (d)  Expenses.  Executive  shall be  reimbursed  for all  reasonable
business related  expenses  incurred by Executive at the request of or on behalf
of the  Employer,  subject  to such  reasonable  requirements  with  respect  to
substantiation and documentation as may be specified by the Employer.

            (e)  Medical and Dental  Insurance.  During the  Employment  Period,
Executive and Executive's  immediate  family shall be entitled to participate in
such medical and dental  benefit plans as the Employer  shall maintain from time
to time for the benefit of senior  executive  officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.

            (f) Life Insurance and Disability  Insurance.  During the Employment
Period,   the  Employer   shall  provide   Executive  with  life  insurance  and
comprehensive disability insurance.

            (g)  Vacations.  Executive  shall be  entitled  to  reasonable  paid
vacations  in  accordance  with  the then  regular  procedures  of the  Employer
governing senior executive officers,  not to exceed four weeks per annum, in the
aggregate.

            (h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits,  including sick leave and the right to
participate in retirement or pension plans,  as are made generally  available to
senior executive officers and employees of the Employer from time to time.

         4.  Indemnification  and Liability  Insurance.  The Employer  agrees to
indemnify  Executive with respect to any actions  commenced against Executive in
his capacity as an officer or director,  or former  officer or director,  of the
Employer or any affiliate  thereof for which he may serve in such capacity.  The
Employer also agrees to use its best efforts to secure and maintain officers and
directors liability insurance providing coverage for Executive.

         5. Employer's Policies. Executive agrees to observe and comply with the
rules and  regulations  of the  Employer  as adopted by its Boards of  Directors
regarding  the  performance  of his duties and to carry out and perform  orders,
directions and policies  communicated to him from time to time by the Employer's
Boards of Directors.

         6. Nondisclosure Covenant.

            (a) General. All records, financial statements and similar documents
obtained,  reviewed or compiled by Executive in the course of the performance by
him of services for the Employer,  whether or not  confidential  information  or
trade secrets, shall be the exclusive property of the Employer.  Executive shall
have no rights in such documents upon any termination of this Agreement.

            (b)  Confidential  Information.  Executive  will not disclose to any
person or entity (except as required by applicable law or in connection with the
performance of his duties and  responsibilities  hereunder),  or use for his own
benefit or gain, any  confidential  information of the Employer  obtained by him
incident  to  his  employment   with  the  Employer.   The  term   "confidential
information"  includes,  without  limitation,  financial  information,  business
plans,  prospects and  opportunities  which have been discussed or considered by
the  management of the Employer but does not include any  information  which has
become part of the public domain by means other than Executive's  non-observance
of his  obligations  hereunder.  This paragraph shall survive the termination of
this Agreement.

         7. Termination and Severance Payments.

            (a) At-Will  Employment.  Executive's  employment  hereunder  is "at
will" and may be  terminated  by the  Employer at any time with or without  Good
Reason (as  defined in Section  7(e)  below),  by a majority  vote of all of the
members  of the  Board of  Directors  of the  Employer  upon  written  notice to
Executive,  subject only to the severance  provisions  specifically set forth in
this Section 7.

            (b) Termination by Executive.  The Employment Period and Executive's
employment  hereunder may be terminated  effective  immediately  by Executive by
written  notice to the Board of Directors of the Employer  within 30 days of the
occurrence  of (i) a failure of the Board of  Directors of the Employer to elect
Executive  to  offices  with  the same or  substantially  the  same  duties  and
responsibilities  as set forth in  Section  2, (ii) a  material  failure  by the
Employer to comply with the provisions of Section 3 or a material  breach by the
Employer of any other provision of this Agreement, or (iii) a Force Out (as such
term is defined in Section 7(e) below).

            (c)  Certain  Benefits  upon  Termination  by  Executive.  Except as
specifically  provided  in this  Section 7 or  otherwise  required  by law,  all
compensation  and benefits to Executive  under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the foregoing,
if  the  Employment  Period  is  terminated  pursuant  to  Section  7(b)  or  if
Executive's employment is terminated by the Employer other than for Good Reason,
Executive shall be entitled to the following benefits:

                  (i) The Employer shall continue to pay Executive's Base Salary
         for the remaining term of this Agreement  after the date of Executive's
         termination,  at the rate in effect on the date of his  termination and
         on the same  periodic  payment dates as payment would have been made to
         Executive had the Employment Period not been terminated;

                  (ii) For the remaining term of this Agreement, Executive shall
         continue to receive all benefits described in Section 3 existing on the
         date of termination.  For purposes of the application of such benefits,
         Executive  shall be treated as if he had  remained in the employ of the
         Employer  with a Base  Salary  at the  rate in  effect  on the  date of
         termination;

                  (iii) For purposes of any stock  option plan of the  Employer,
         Executive  shall be treated as if he had  remained in the employ of the
         Employer for the  remaining  term of this  Agreement  after the date of
         Executive's  termination  so that (x) any stock options or other awards
         (including  restricted  stock grants) of the Executive  under such plan
         shall continue to vest and become exercisable,  and (y) Executive shall
         be entitled to exercise any exercisable options or other rights;

                  (iv) If, in spite of the  provisions  above,  any  benefits or
         service  credits  under any benefit plan or program of the Employer may
         not be paid or provided under such plan or program to Executive,  or to
         Executive's  dependents,  beneficiaries or estate, because Executive is
         no longer  considered to be an employee of the  Employer,  the Employer
         shall pay or provide for payment of such  benefits and service  credits
         to Executive,  or to Executive's  dependents,  beneficiaries or estate,
         for the remaining term of this Agreement; and

                  (v) Nothing  herein  shall be deemed to obligate  Executive to
         seek  other  employment  in the event of any such  termination  and any
         amounts earned or benefits received from such other employment will not
         serve  to  reduce  in any way  the  amounts  and  benefits  payable  in
         accordance herewith.

            (d) Termination by the Employer for Good Reason. If (i) Executive is
terminated for Good Reason or (ii)  Executive  shall  voluntarily  terminate his
employment  hereunder  (other than  pursuant to Section 7(b)  hereof),  then the
Employment  Period  shall  terminate as of the  effective  date set forth in the
written notice of such termination (the "Termination  Date") and Executive shall
be entitled to receive only his Base Salary at the rate then in effect until the
Termination  Date and any  outstanding  stock  options held by  Executive  shall
expire in accordance with the terms of the stock option plan or option agreement
under which the stock options were granted.

            (e)  Definitions.  The following terms shall be defined as set forth
below.

                  (i) A  "Change-in-Control"  shall be deemed  to have  occurred
         after the effective date of this Agreement if:

                           (A) any Person,  together with all  "affiliates"  and
                  "associates"  (as such terms are  defined in Rule 12b-2  under
                  the Securities  Exchange Act of 1934 (the "Exchange  Act")) of
                  such Person, shall become the "beneficial owner" (as such term
                  is defined in Rule 13d-3 under the Exchange Act),  directly or
                  indirectly,  of securities of the Employer representing 30% or
                  more of either (A) the combined voting power of the Employer's
                  then  outstanding  securities  having  the right to vote in an
                  election  of  the  Employer's  Board  of  Directors   ("Voting
                  Securities") or (B) the then outstanding shares of all classes
                  of stock of the  Employer (in either such case other than as a
                  result of the  acquisition  of  securities  directly  from the
                  Employer); or

                           (B) individuals who, as of the effective date of this
                  Agreement,  constitute the Employer's  Board of Directors (the
                  "Incumbent  Directors")  cease  for  any  reason,   including,
                  without  limitation,  as a  result  of a tender  offer,  proxy
                  contest, merger or similar transaction, to constitute at least
                  a majority of the Employer's Board of Directors, provided that
                  any person  becoming a director of the Employer  subsequent to
                  the  effective  date  of  this  Agreement  whose  election  or
                  nomination  for  election was approved by a vote of at least a
                  majority of the  Incumbent  Directors  shall,  for purposes of
                  this Agreement, be considered an Incumbent Director; or

                           (C) the  stockholders  of the Employer  shall approve
                  (1)  any  consolidation  or  merger  of  the  Employer  or any
                  subsidiary where the stockholders of the Employer, immediately
                  prior to the consolidation or merger,  would not,  immediately
                  after the  consolidation or merger,  beneficially own (as such
                  term is  defined  in  Rule  13d-3  under  the  Exchange  Act),
                  directly or indirectly,  shares  representing in the aggregate
                  at least 60% of the voting shares of the  corporation  issuing
                  cash or securities in the  consolidation  or merger (or of its
                  ultimate  parent  corporation,  if any), (2) any sale,  lease,
                  exchange or other transfer (in one  transaction or a series of
                  transactions contemplated or arranged by any party as a single
                  plan)  of  all or  substantially  all  of  the  assets  of the
                  Employer or (3) any plan or proposal  for the  liquidation  or
                  dissolution of the Employer;

         Notwithstanding  the  foregoing,  a  "Change-in-Control"  shall  not be
deemed to have occurred for purposes of the  foregoing  clause (A) solely as the
result of an  acquisition of securities by the Employer  which,  by reducing the
number of shares of stock or other Voting Securities outstanding,  increases (x)
the proportionate  number of shares of stock of the Employer  beneficially owned
by any Person to 30% or more of the shares of stock then  outstanding or (y) the
proportionate  voting power  represented by the Voting  Securities  beneficially
owned by any  Person  to 30% or more of the  combined  voting  power of all then
outstanding Voting Securities; provided, however, that if any Person referred to
in clause (x) or (y) of this sentence  shall  thereafter  become the  beneficial
owner of any additional stock of the Employer or other Voting  Securities (other
than pursuant to a share split, stock dividend, or similar transaction),  then a
"Change-in-Control"  shall  be  deemed  to have  occurred  for  purposes  of the
foregoing clause (A).

                        (ii) A "Force  Out" shall be deemed to have  occurred in
            the event of a Change-in-Control followed by:

                           (A) a change in duties,  responsibilities,  status or
                  positions with the Employer,  which, in Executive's reasonable
                  judgment,  does not represent a promotion  from or maintaining
                  of Executive's duties,  responsibilities,  status or positions
                  as in effect  immediately prior to the  Change-in-Control,  or
                  any removal of  Executive  from or any failure to reappoint or
                  reelect Executive to such positions, except in connection with
                  the  termination  of  Executive's  employment for Good Reason,
                  disability, retirement or death;

                           (B) a reduction by the Employer in  Executive's  Base
                  Salary    as   in    effect    immediately    prior   to   the
                  Change-in-Control;

                           (C) the failure by the Employer to continue in effect
                  any of the benefit plans,  programs or  arrangements  in which
                  Executive    is    participating    at   the   time   of   the
                  Change-in-Control   of  the  Employer  (unless   Executive  is
                  permitted  to  participate  in any  substitute  benefit  plan,
                  program or arrangement with  substantially  the same terms and
                  to the same extent and with the same rights as  Executive  had
                  with respect to the benefit plan,  program or arrangement that
                  is  discontinued)  other  than  as  a  result  of  the  normal
                  expiration of any such benefit plan, program or arrangement in
                  accordance  with  its  terms as in  effect  at the time of the
                  Change-in-Control, or the taking of any action, or the failure
                  to  act,  by  the  Employer  which  would   adversely   affect
                  Executive's  continued  participation  in any of such  benefit
                  plans,  programs or  arrangements  on at least as  favorable a
                  basis  to  Executive  as is  the  case  on  the  date  of  the
                  Change-in-Control or which would materially reduce Executive's
                  benefits  in the  future  under  any of  such  benefit  plans,
                  programs or arrangements or deprive  Executive of any material
                  benefits   enjoyed   by   Executive   at  the   time   of  the
                  Change-in-Control;

                           (D) the failure by the Employer to provide and credit
                  Executive  with  the  number  of paid  vacation  days to which
                  Executive is then entitled in accordance  with the  Employer's
                  normal vacation policies as in effect immediately prior to the
                  Change-in-Control;

                           (E) the Employer's requiring Executive to be based in
                  an office located beyond a reasonable  commuting distance from
                  Executive's     residence    immediately    prior    to    the
                  Change-in-Control,  except for required travel relating to the
                  Employer's business to an extent substantially consistent with
                  the business travel  obligations which Executive  undertook on
                  behalf of the Employer prior to the Change-in-Control;

                           (F) the  failure by the  Employer  to obtain from any
                  successor  to the  Employer an  agreement  to be bound by this
                  Agreement pursuant to Section 11 hereof; or

                           (G) any refusal by the  Employer to continue to allow
                  Executive  to attend to  matters or engage in  activities  not
                  directly related to the business of the Employer which,  prior
                  to  the  Change-in-Control,  Executive  was  permitted  by the
                  Employer's Boards of Directors to attend to or engage in.

                        (iii)  "Good   Reason"  shall  mean  a  finding  by  the
            Employer's  Board of  Directors  that  Executive  has (A) acted with
            gross  negligence  or  willful  misconduct  in  connection  with the
            performance of his material duties  hereunder;  (B) defaulted in the
            performance of his material  duties  hereunder and has not corrected
            such action within 15 days of receipt of written notice thereof; (C)
            willfully  acted against the best  interests of the Employer,  which
            act has had a material and adverse  impact on the financial  affairs
            of the  Employer;  or (D) been  convicted of a felony or committed a
            material  act of  common  law  fraud  against  the  Employer  or its
            employees  and such act or  conviction  has had,  or the  Employer's
            Board of  Directors  reasonably  determines  will  have,  a material
            adverse effect on the interests of the Employer;  provided, however,
            that a finding of Good Reason shall not become  effective unless and
            until the Board of Directors  provides the Executive  notice that it
            is considering  making such finding and a reasonable  opportunity to
            be heard by the Board of Directors.

                        (iv)  "Person"  shall have the meaning  used in Sections
            13(d) and 14(d) of the Exchange Act; provided however, that the term
            "Person"  shall not  include  (A) any  current  partner  of  Reckson
            Operating  Partnership,  L.P.,  any  stockholder  or employee of the
            Employer on the date hereof or any estate or member of the immediate
            family  of  such a  partner,  stockholder  or  employee,  or (B) the
            Employer,  any of its  subsidiaries,  or any  trustee,  fiduciary or
            other person or entity holding securities under any employee benefit
            plan of the Employer or any of its subsidiaries.

            (f)  Termination  by Reason of Death.  The  Employment  Period shall
terminate  upon  Executive's  death and in such event,  the  Employer  shall pay
Executive's  Base  Salary  for a period of six (6)  months  from the date of his
death,  or  such  longer  period  as the  Employer's  Boards  of  Directors  may
determine,  to Executive's estate or to a beneficiary designated by Executive in
writing  prior to his death.  Any  unexercised  or unvested  stock options shall
remain exercisable or vest upon Executive's death only to the extent provided in
the applicable option plan and option agreements.

            (g) Termination by Reason of Disability. In the event that Executive
shall become unable to efficiently  perform his duties hereunder  because of any
physical or mental disability or illness, Executive shall be entitled to be paid
his Base Salary  until the later of such time when (i) the period of  disability
or illness  (whether or not the same  disability  or illness)  shall  exceed 180
consecutive  days  during  the  Employment  Period  and (ii)  Executive  becomes
eligible to receive benefits under a comprehensive  disability  insurance policy
obtained by the Employer (the "Disability Period").  Following the expiration of
the  Disability  Period,  the Employer may terminate this Agreement upon written
notice of such  termination.  Any  unexercised  or unvested  stock options shall
remain  exercisable or vest upon such termination only to the extent provided in
the applicable option plan and option agreements .

            (h)  Arbitration  in the Event of a Dispute  Regarding the Nature of
Termination.  In the event that the Employer terminates  Executive's  employment
for Good  Reason and  Executive  contends  that Good  Reason did not exist,  the
Employer's only obligation  shall be to submit such claim to arbitration  before
the American  Arbitration  Association  ("AAA"). In such a proceeding,  the only
issue before the arbitrator will be whether Executive was in fact terminated for
Good Reason. If the arbitrator  determines that Executive was not terminated for
Good Reason, the only remedy that the arbitrator may award is entitlement to the
severance  payments and  benefits  specified  in  Paragraph  7(c),  the costs of
arbitration,  and  Executive's  attorneys'  fees. If the  arbitrator  finds that
Executive  was  terminated  for Good  Reason,  the  arbitrator  will be  without
authority to award Executive anything,  the parties will each be responsible for
their own  attorneys'  fees,  and the costs of  arbitration  will be paid 50% by
Executive and 50% by the Employer.

         8. Noncompetition Covenant.

            (a) Because  Executive's  services to the Employer are essential and
because  Executive  has  access  to  the  Employer's  confidential  information,
Executive covenants and agrees that (i) during the Employment Period and (ii) in
the event that this  Agreement is  terminated by the Employer for Good Reason or
by  Executive   other  than   pursuant  to  Section  7(b)  hereof,   during  the
Noncompetition  Period  Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous consent
of the Directors who are not officers of the Employer, directly or indirectly:

                  (A)  engage,  participate  or  assist,  as an owner,  partner,
         employee,  consultant,  director,  officer,  trustee  or agent,  in any
         business that engages or attempts to engage in, directly or indirectly,
         the acquisition,  development,  construction,  operation, management or
         leasing of any  commercial  industrial  or office real estate  property
         anywhere in the Tri-State metropolitan area, or

                  (B)  intentionally  interfere  with,  disrupt  or  attempt  to
         disrupt  the  relationship,   contractual  or  otherwise,  between  the
         Employer  or its  affiliates  and  any  tenant,  supplier,  contractor,
         lender, employee or governmental agency or authority.

            (b) For purposes of this Section 8, the Noncompetition  Period shall
mean the period commencing on the date of termination of Executive's  employment
under this  Agreement and ending on the latest of (i) the third  anniversary  of
the effective date of this Agreement,  or (ii) the first anniversary of the date
of termination of Executive's employment under this Agreement.

            (c)  Notwithstanding  anything  contained  herein  to the  contrary,
Executive  is not  prohibited  by  this  Section  8  from  (i)  maintaining  his
investment  in any Option  Property  (as such term is defined in the  Employer's
final  prospectus  relating to the  initial  public  offering of the  Employer's
Common Stock), (ii) from making investments in any entity that engages, directly
or  indirectly,  in  the  acquisition,  development,   construction,  operation,
management or leasing of commercial industrial or office real estate properties,
regardless of where they are located, if the shares or other ownership interests
of such entity are publicly traded and Executive's  aggregate investment in such
entity  constitutes  less than five percent (5%) of the equity ownership of such
entity, or (iii) providing services to RSI and its affiliates.

            (d) The  provisions of this Section 8 shall survive the  termination
of this Agreement.

         9. Conflicting  Agreements.  Executive  hereby  represents and warrants
that the execution of this  Agreement  and the  performance  of his  obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants  against
competition  or similar  covenants  which would  affect the  performance  of his
obligations hereunder.

         10.  Notices.  Any notice  required or permitted  hereunder shall be in
writing  and  shall be  deemed  sufficient  when  given by hand,  by  nationally
recognized  overnight  courier or by  express,  registered  or  certified  mail,
postage  prepaid,  return  receipt  requested,  and addressed to the Employer or
Executive,  as  applicable,  at the  address  indicated  above (or to such other
address as may be provided by notice).

         11. Miscellaneous.  This Agreement (i) constitutes the entire agreement
between the parties  concerning the subject matter hereof and supersedes any and
all prior  agreements or  understandings,  (ii) may not be assigned by Executive
without the prior written consent of the Employer,  and (iii) may be assigned by
the  Employer  and shall be  binding  upon,  and inure to the  benefit  of,  the
Employer's  successors  and  assigns.  Headings  herein are for  convenience  of
reference only and shall not define, limit or interpret the contents hereof.

         12. Amendment.  This Agreement may be amended, modified or supplemented
by the  mutual  consent  of the  parties  in  writing,  but no  oral  amendment,
modification or supplement shall be effective.

         13.  Specific  Enforcement.  The provisions of Sections 6 and 8 of this
Agreement are to be  specifically  enforced if not performed  according to their
terms. Without limiting the generality of the foregoing, the parties acknowledge
that the Employer  would be  irreparably  damaged and there would be no adequate
remedy at law for  Executive's  breach of Sections 6 and 8 of this Agreement and
further acknowledge that the Employer may seek entry of a temporary  restraining
order or preliminary injunction,  in addition to any other remedies available at
law or in equity, to enforce the provisions thereof.

         14. Severability.  If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in any
respect,  such provision(s) shall be ineffective only to the extent and duration
of  such  invalidity,   illegality  or  unenforceability  and  such  invalidity,
illegality or unenforceability  shall not affect the remaining substance of such
provision or any other  provision of this Agreement and this Agreement  shall be
construed  as if such  invalid,  illegal  or  unenforceable  provision  had been
limited or modified (consistent with its general intent) to the extent necessary
so that it shall be valid, legal and enforceable. If it shall not be possible to
so limit or modify  such  invalid,  illegal  or  unenforceable  provision,  this
Agreement  shall be  construed  as if such  invalid,  illegal  or  unenforceable
provision had never been contained  herein,  and the parties will use their best
efforts to substitute a valid, legal and enforceable provision which, insofar as
practicable,  implements  the  purpose  and intent of the  provision  originally
contained herein.

         15.  Governing Law. This  Agreement  shall be construed and governed by
the laws of the State of New York.

         IN WITNESS  WHEREOF,  this Agreement is entered into as of the date and
year first above written.

                                      RECKSON ASSOCIATES REALTY CORP.

                                      By: /s/ Scott Rechler
                                         ----------------------------
                                            Name:  Scott Rechler
                                            Title: President

                                      /s/ Gregg Rechler
                                      -------------------------------
                                      Gregg Rechler
<PAGE>
                                                                   Exhibit 10.11


                     EMPLOYMENT AND NONCOMPETITION AGREEMENT

         This EMPLOYMENT AND NONCOMPETITION  AGREEMENT  ("Agreement") is made as
of the 1st day of  June,  1998 by and  among  Roger  Rechler  ("Executive")  and
Reckson  Associates Realty Corp., a Maryland  corporation with a principal place
of business at 225 Broadhollow Road,  Melville,  New York 11747 (the "Employer")
and amends,  supersedes and  completely  restates the  Noncompetition  Agreement
previously made by and among the Executive and the Employer.

         1. Term.  The term of this  Agreement  shall commence on the date first
above written and,  unless earlier  terminated as provided in Paragraph 7 below,
shall  terminate on the fifth  anniversary of such date (the  "Original  Term");
provided, however, that Sections 6 and 8 hereof shall survive the termination of
this Agreement as provided  therein.  The Original Term may be extended for such
period or periods,  if any, as agreed to by Executive  and the Employer  (each a
"Renewal Term"). The period of Executive's  employment  hereunder  consisting of
the Original Term and all Renewal Terms is herein referred to as the "Employment
Period".

         2. Employment and Duties.

            (a) During the Employment Period, Executive shall be employed in the
business of the Employer and its affiliates.  Executive shall serve the Employer
as a senior  corporate  executive with the title Executive Vice President of the
Employer.  Executive's duties and authority shall be as set forth in the By-laws
of the Employer and as  otherwise  established  by the Board of Directors of the
Employer, shall be commensurate with his titles and positions with the Employer.

            (b)  Executive  agrees  to  his  employment  as  described  in  this
Paragraph  2 and agrees to devote  substantially  all of his  business  time and
efforts  to the  performance  of his  duties  under  this  Agreement,  except as
otherwise approved by the Board of Directors of the Employer; provided, however,
that  nothing  herein  shall  be  interpreted  to  preclude  Executive  from (i)
participating  as an officer or director  of, or advisor to, any  charitable  or
other tax exempt organization or otherwise engaging in charitable,  fraternal or
trade group activities,  (ii) providing services to Reckson Service  Industries,
Inc.  ("RSI") and its  affiliates,  or (iii)  investing  his assets as a passive
investor in other  entities or business  ventures,  provided that he performs no
management  or similar role with  respect to such  entities or ventures and such
investment does not violate Section 8 hereof.

            (c) In performing his duties hereunder, Executive shall be available
for reasonable travel as the needs of the Employer's business require. Executive
shall be based in the tri-state  metropolitan  area of New York,  New Jersey and
Connecticut (the "Tri-State metropolitan area").

         3. Compensation and Benefits.  In consideration of Executive's services
hereunder,  the Employer shall compensate  Executive as provided in this Section
3.

            (a) Base  Salary.  The  Employer  shall pay  Executive  an aggregate
annual  salary at the rate of $300,000  per annum during the  Employment  Period
("Base Salary"),  subject to withholding for applicable federal, state and local
taxes.  Base Salary shall be payable in accordance  with the  Employer's  normal
business  practices,  but in no event less frequently than monthly.  Executive's
Base Salary shall be reviewed no less  frequently  than annually by the Employer
and may be increased,  but not decreased,  by the Employer during the Employment
Period.

            (b) Incentive  Compensation.  In addition to the Base Salary payable
to Executive  pursuant to Section 3(a),  during the Employment  Period Executive
shall be eligible to participate in any incentive  compensation  plans in effect
with  respect  to  senior  executive  officers  of  the  Employer,   subject  to
Executive's  compliance with such criteria as the Employer's  Board of Directors
may establish for Executive's participation in such plans from time to time. Any
awards to Executive under such plans will be established by the Employer's Board
of Directors, or a committee thereof, in its sole discretion.

            (c) Stock Options. During the Employment Period,  Executive shall be
eligible to participate in employee stock option plans  established from time to
time for the benefit of senior  executive  officers  and other  employees of the
Employer  in  accordance  with the  terms  and  conditions  of such  plans.  All
decisions  regarding awards to Executive under the Employer's stock option plans
shall be made in the sole discretion of the Employer's Board of Directors,  or a
committee thereof.

            (d)  Expenses.  Executive  shall be  reimbursed  for all  reasonable
business related  expenses  incurred by Executive at the request of or on behalf
of the  Employer,  subject  to such  reasonable  requirements  with  respect  to
substantiation and documentation as may be specified by the Employer.

            (e)  Medical and Dental  Insurance.  During the  Employment  Period,
Executive and Executive's  immediate  family shall be entitled to participate in
such medical and dental  benefit plans as the Employer  shall maintain from time
to time for the benefit of senior  executive  officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.

            (f) Life Insurance and Disability  Insurance.  During the Employment
Period,   the  Employer   shall  provide   Executive  with  life  insurance  and
comprehensive disability insurance.

            (g)  Vacations.  Executive  shall be  entitled  to  reasonable  paid
vacations  in  accordance  with  the then  regular  procedures  of the  Employer
governing senior executive officers,  not to exceed four weeks per annum, in the
aggregate.

            (h) Other Benefits. During the Employment Period, the Employer shall
provide to Executive such other benefits,  including sick leave and the right to
participate in retirement or pension plans,  as are made generally  available to
senior executive officers and employees of the Employer from time to time.

         4.  Indemnification  and Liability  Insurance.  The Employer  agrees to
indemnify  Executive with respect to any actions  commenced against Executive in
his capacity as an officer or director,  or former  officer or director,  of the
Employer or any affiliate  thereof for which he may serve in such capacity.  The
Employer also agrees to use its best efforts to secure and maintain officers and
directors liability insurance providing coverage for Executive.

         5. Employer's Policies. Executive agrees to observe and comply with the
rules and  regulations  of the  Employer  as adopted by its Boards of  Directors
regarding  the  performance  of his duties and to carry out and perform  orders,
directions and policies  communicated to him from time to time by the Employer's
Boards of Directors.

         6. Nondisclosure Covenant.

            (a) General. All records, financial statements and similar documents
obtained,  reviewed or compiled by Executive in the course of the performance by
him of services for the Employer,  whether or not  confidential  information  or
trade secrets, shall be the exclusive property of the Employer.  Executive shall
have no rights in such documents upon any termination of this Agreement.

            (b)  Confidential  Information.  Executive  will not disclose to any
person or entity (except as required by applicable law or in connection with the
performance of his duties and  responsibilities  hereunder),  or use for his own
benefit or gain, any  confidential  information of the Employer  obtained by him
incident  to  his  employment   with  the  Employer.   The  term   "confidential
information"  includes,  without  limitation,  financial  information,  business
plans,  prospects and  opportunities  which have been discussed or considered by
the  management of the Employer but does not include any  information  which has
become part of the public domain by means other than Executive's  non-observance
of his  obligations  hereunder.  This paragraph shall survive the termination of
this Agreement.

         7. Termination and Severance Payments.

            (a) At-Will  Employment.  Executive's  employment  hereunder  is "at
will" and may be  terminated  by the  Employer at any time with or without  Good
Reason (as  defined in Section  7(e)  below),  by a majority  vote of all of the
members  of the  Board of  Directors  of the  Employer  upon  written  notice to
Executive,  subject only to the severance  provisions  specifically set forth in
this Section 7.

            (b) Termination by Executive.  The Employment Period and Executive's
employment  hereunder may be terminated  effective  immediately  by Executive by
written  notice to the Board of Directors of the Employer  within 30 days of the
occurrence  of (i) a failure of the Board of  Directors of the Employer to elect
Executive  to  offices  with  the same or  substantially  the  same  duties  and
responsibilities  as set forth in  Section  2, (ii) a  material  failure  by the
Employer to comply with the provisions of Section 3 or a material  breach by the
Employer of any other provision of this Agreement, or (iii) a Force Out (as such
term is defined in Section 7(e) below).

            (c)  Certain  Benefits  upon  Termination  by  Executive.  Except as
specifically  provided  in this  Section 7 or  otherwise  required  by law,  all
compensation  and benefits to Executive  under this Agreement shall terminate on
the date of termination of the Employment Period. Notwithstanding the foregoing,
if  the  Employment  Period  is  terminated  pursuant  to  Section  7(b)  or  if
Executive's employment is terminated by the Employer other than for Good Reason,
Executive shall be entitled to the following benefits:

                  (i) The Employer shall continue to pay Executive's Base Salary
         for the remaining term of this Agreement  after the date of Executive's
         termination,  at the rate in effect on the date of his  termination and
         on the same  periodic  payment dates as payment would have been made to
         Executive had the Employment Period not been terminated;

                  (ii) For the remaining term of this Agreement, Executive shall
         continue to receive all benefits described in Section 3 existing on the
         date of termination.  For purposes of the application of such benefits,
         Executive  shall be treated as if he had  remained in the employ of the
         Employer  with a Base  Salary  at the  rate in  effect  on the  date of
         termination;

                  (iii) For purposes of any stock  option plan of the  Employer,
         Executive  shall be treated as if he had  remained in the employ of the
         Employer for the  remaining  term of this  Agreement  after the date of
         Executive's  termination  so that (x) any stock options or other awards
         (including  restricted  stock grants) of the Executive  under such plan
         shall continue to vest and become exercisable,  and (y) Executive shall
         be entitled to exercise any exercisable options or other rights;

                  (iv) If, in spite of the  provisions  above,  any  benefits or
         service  credits  under any benefit plan or program of the Employer may
         not be paid or provided under such plan or program to Executive,  or to
         Executive's  dependents,  beneficiaries or estate, because Executive is
         no longer  considered to be an employee of the  Employer,  the Employer
         shall pay or provide for payment of such  benefits and service  credits
         to Executive,  or to Executive's  dependents,  beneficiaries or estate,
         for the remaining term of this Agreement; and

                  (v) Nothing  herein  shall be deemed to obligate  Executive to
         seek  other  employment  in the event of any such  termination  and any
         amounts earned or benefits received from such other employment will not
         serve  to  reduce  in any way  the  amounts  and  benefits  payable  in
         accordance herewith.

            (d) Termination by the Employer for Good Reason. If (i) Executive is
terminated for Good Reason or (ii)  Executive  shall  voluntarily  terminate his
employment  hereunder  (other than  pursuant to Section 7(b)  hereof),  then the
Employment  Period  shall  terminate as of the  effective  date set forth in the
written notice of such termination (the "Termination  Date") and Executive shall
be entitled to receive only his Base Salary at the rate then in effect until the
Termination  Date and any  outstanding  stock  options held by  Executive  shall
expire in accordance with the terms of the stock option plan or option agreement
under which the stock options were granted.

            (e)  Definitions.  The following terms shall be defined as set forth
below.

                  (i) A  "Change-in-Control"  shall be deemed  to have  occurred
         after the effective date of this Agreement if:

                           (A) any Person,  together with all  "affiliates"  and
                  "associates"  (as such terms are  defined in Rule 12b-2  under
                  the Securities  Exchange Act of 1934 (the "Exchange  Act")) of
                  such Person, shall become the "beneficial owner" (as such term
                  is defined in Rule 13d-3 under the Exchange Act),  directly or
                  indirectly,  of securities of the Employer representing 30% or
                  more of either (A) the combined voting power of the Employer's
                  then  outstanding  securities  having  the right to vote in an
                  election  of  the  Employer's  Board  of  Directors   ("Voting
                  Securities") or (B) the then outstanding shares of all classes
                  of stock of the  Employer (in either such case other than as a
                  result of the  acquisition  of  securities  directly  from the
                  Employer); or

                           (B) individuals who, as of the effective date of this
                  Agreement,  constitute the Employer's  Board of Directors (the
                  "Incumbent  Directors")  cease  for  any  reason,   including,
                  without  limitation,  as a  result  of a tender  offer,  proxy
                  contest, merger or similar transaction, to constitute at least
                  a majority of the Employer's Board of Directors, provided that
                  any person  becoming a director of the Employer  subsequent to
                  the  effective  date  of  this  Agreement  whose  election  or
                  nomination  for  election was approved by a vote of at least a
                  majority of the  Incumbent  Directors  shall,  for purposes of
                  this Agreement, be considered an Incumbent Director; or

                           (C) the  stockholders  of the Employer  shall approve
                  (1)  any  consolidation  or  merger  of  the  Employer  or any
                  subsidiary where the stockholders of the Employer, immediately
                  prior to the consolidation or merger,  would not,  immediately
                  after the  consolidation or merger,  beneficially own (as such
                  term is  defined  in  Rule  13d-3  under  the  Exchange  Act),
                  directly or indirectly,  shares  representing in the aggregate
                  at least 60% of the voting shares of the  corporation  issuing
                  cash or securities in the  consolidation  or merger (or of its
                  ultimate  parent  corporation,  if any), (2) any sale,  lease,
                  exchange or other transfer (in one  transaction or a series of
                  transactions contemplated or arranged by any party as a single
                  plan)  of  all or  substantially  all  of  the  assets  of the
                  Employer or (3) any plan or proposal  for the  liquidation  or
                  dissolution of the Employer;

         Notwithstanding  the  foregoing,  a  "Change-in-Control"  shall  not be
deemed to have occurred for purposes of the  foregoing  clause (A) solely as the
result of an  acquisition of securities by the Employer  which,  by reducing the
number of shares of stock or other Voting Securities outstanding,  increases (x)
the proportionate  number of shares of stock of the Employer  beneficially owned
by any Person to 30% or more of the shares of stock then  outstanding or (y) the
proportionate  voting power  represented by the Voting  Securities  beneficially
owned by any  Person  to 30% or more of the  combined  voting  power of all then
outstanding Voting Securities; provided, however, that if any Person referred to
in clause (x) or (y) of this sentence  shall  thereafter  become the  beneficial
owner of any additional stock of the Employer or other Voting  Securities (other
than pursuant to a share split, stock dividend, or similar transaction),  then a
"Change-in-Control"  shall  be  deemed  to have  occurred  for  purposes  of the
foregoing clause (A).

                  (ii) A "Force  Out"  shall be deemed to have  occurred  in the
         event of a Change-in-Control followed by:

                           (A) a change in duties,  responsibilities,  status or
                  positions with the Employer,  which, in Executive's reasonable
                  judgment,  does not represent a promotion  from or maintaining
                  of Executive's duties,  responsibilities,  status or positions
                  as in effect  immediately prior to the  Change-in-Control,  or
                  any removal of  Executive  from or any failure to reappoint or
                  reelect Executive to such positions, except in connection with
                  the  termination  of  Executive's  employment for Good Reason,
                  disability, retirement or death;

                           (B) a reduction by the Employer in  Executive's  Base
                  Salary    as   in    effect    immediately    prior   to   the
                  Change-in-Control;

                           (C) the failure by the Employer to continue in effect
                  any of the benefit plans,  programs or  arrangements  in which
                  Executive    is    participating    at   the   time   of   the
                  Change-in-Control   of  the  Employer  (unless   Executive  is
                  permitted  to  participate  in any  substitute  benefit  plan,
                  program or arrangement with  substantially  the same terms and
                  to the same extent and with the same rights as  Executive  had
                  with respect to the benefit plan,  program or arrangement that
                  is  discontinued)  other  than  as  a  result  of  the  normal
                  expiration of any such benefit plan, program or arrangement in
                  accordance  with  its  terms as in  effect  at the time of the
                  Change-in-Control, or the taking of any action, or the failure
                  to  act,  by  the  Employer  which  would   adversely   affect
                  Executive's  continued  participation  in any of such  benefit
                  plans,  programs or  arrangements  on at least as  favorable a
                  basis  to  Executive  as is  the  case  on  the  date  of  the
                  Change-in-Control or which would materially reduce Executive's
                  benefits  in the  future  under  any of  such  benefit  plans,
                  programs or arrangements or deprive  Executive of any material
                  benefits   enjoyed   by   Executive   at  the   time   of  the
                  Change-in-Control;

                           (D) the failure by the Employer to provide and credit
                  Executive  with  the  number  of paid  vacation  days to which
                  Executive is then entitled in accordance  with the  Employer's
                  normal vacation policies as in effect immediately prior to the
                  Change-in-Control;

                           (E) the Employer's requiring Executive to be based in
                  an office located beyond a reasonable  commuting distance from
                  Executive's     residence    immediately    prior    to    the
                  Change-in-Control,  except for required travel relating to the
                  Employer's business to an extent substantially consistent with
                  the business travel  obligations which Executive  undertook on
                  behalf of the Employer prior to the Change-in-Control;

                           (F) the  failure by the  Employer  to obtain from any
                  successor  to the  Employer an  agreement  to be bound by this
                  Agreement pursuant to Section 11 hereof; or

                           (G) any refusal by the  Employer to continue to allow
                  Executive  to attend to  matters or engage in  activities  not
                  directly related to the business of the Employer which,  prior
                  to  the  Change-in-Control,  Executive  was  permitted  by the
                  Employer's Boards of Directors to attend to or engage in.

                  (iii)  "Good  Reason"  shall mean a finding by the  Employer's
         Board of Directors that  Executive has (A) acted with gross  negligence
         or  willful  misconduct  in  connection  with  the  performance  of his
         material  duties  hereunder;  (B) defaulted in the  performance  of his
         material  duties  hereunder and has not corrected such action within 15
         days of receipt of written notice thereof;  (C) willfully acted against
         the best  interests of the  Employer,  which act has had a material and
         adverse  impact on the financial  affairs of the Employer;  or (D) been
         convicted  of a felony or  committed a material act of common law fraud
         against the Employer or its employees  and such act or  conviction  has
         had, or the Employer's  Board of Directors  reasonably  determines will
         have,  a material  adverse  effect on the  interests  of the  Employer;
         provided,  however,  that a finding  of Good  Reason  shall not  become
         effective  unless  and  until  the  Board  of  Directors  provides  the
         Executive  notice  that it is  considering  making  such  finding and a
         reasonable opportunity to be heard by the Board of Directors.

                  (iv)  "Person"  shall have the meaning used in Sections  13(d)
         and 14(d) of the Exchange Act; provided however, that the term "Person"
         shall  not  include  (A)  any  current  partner  of  Reckson  Operating
         Partnership,  L.P., any  stockholder or employee of the Employer on the
         date hereof or any estate or member of the  immediate  family of such a
         partner,  stockholder  or  employee,  or (B) the  Employer,  any of its
         subsidiaries,  or any  trustee,  fiduciary  or other  person  or entity
         holding  securities  under any employee benefit plan of the Employer or
         any of its subsidiaries.

            (f)  Termination  by Reason of Death.  The  Employment  Period shall
terminate  upon  Executive's  death and in such event,  the  Employer  shall pay
Executive's  Base  Salary  for a period of six (6)  months  from the date of his
death,  or  such  longer  period  as the  Employer's  Boards  of  Directors  may
determine,  to Executive's estate or to a beneficiary designated by Executive in
writing  prior to his death.  Any  unexercised  or unvested  stock options shall
remain exercisable or vest upon Executive's death only to the extent provided in
the applicable option plan and option agreements.

            (g) Termination by Reason of Disability. In the event that Executive
shall become unable to efficiently  perform his duties hereunder  because of any
physical or mental disability or illness, Executive shall be entitled to be paid
his Base Salary  until the later of such time when (i) the period of  disability
or illness  (whether or not the same  disability  or illness)  shall  exceed 180
consecutive  days  during  the  Employment  Period  and (ii)  Executive  becomes
eligible to receive benefits under a comprehensive  disability  insurance policy
obtained by the Employer (the "Disability Period").  Following the expiration of
the  Disability  Period,  the Employer may terminate this Agreement upon written
notice of such  termination.  Any  unexercised  or unvested  stock options shall
remain  exercisable or vest upon such termination only to the extent provided in
the applicable option plan and option agreements .

            (h)  Arbitration  in the Event of a Dispute  Regarding the Nature of
Termination.  In the event that the Employer terminates  Executive's  employment
for Good  Reason and  Executive  contends  that Good  Reason did not exist,  the
Employer's only obligation  shall be to submit such claim to arbitration  before
the American  Arbitration  Association  ("AAA"). In such a proceeding,  the only
issue before the arbitrator will be whether Executive was in fact terminated for
Good Reason. If the arbitrator  determines that Executive was not terminated for
Good Reason, the only remedy that the arbitrator may award is entitlement to the
severance  payments and  benefits  specified  in  Paragraph  7(c),  the costs of
arbitration,  and  Executive's  attorneys'  fees. If the  arbitrator  finds that
Executive  was  terminated  for Good  Reason,  the  arbitrator  will be  without
authority to award Executive anything,  the parties will each be responsible for
their own  attorneys'  fees,  and the costs of  arbitration  will be paid 50% by
Executive and 50% by the Employer.

         8. Noncompetition Covenant.

            (a) Because  Executive's  services to the Employer are essential and
because  Executive  has  access  to  the  Employer's  confidential  information,
Executive covenants and agrees that (i) during the Employment Period and (ii) in
the event that this  Agreement is  terminated by the Employer for Good Reason or
by  Executive   other  than   pursuant  to  Section  7(b)  hereof,   during  the
Noncompetition  Period  Executive will not, without the prior written consent of
the Board of Directors of the Employer which shall include the unanimous consent
of the Directors who are not officers of the Employer, directly or indirectly:

                        (A) engage, participate or assist, as an owner, partner,
            employee,  consultant,  director,  officer, trustee or agent, in any
            business  that  engages  or  attempts  to  engage  in,  directly  or
            indirectly, the acquisition,  development,  construction, operation,
            management  or leasing of any  commercial  industrial or office real
            estate property anywhere in the Tri-State metropolitan area, or

                        (B) intentionally  interfere with, disrupt or attempt to
            disrupt the  relationship,  contractual  or  otherwise,  between the
            Employer or its  affiliates  and any tenant,  supplier,  contractor,
            lender, employee or governmental agency or authority.

            (b) For purposes of this Section 8, the Noncompetition  Period shall
mean the period commencing on the date of termination of Executive's  employment
under this  Agreement and ending on the latest of (i) the third  anniversary  of
the effective date of this Agreement,  or (ii) the first anniversary of the date
of termination of Executive's employment under this Agreement.

            (c)  Notwithstanding  anything  contained  herein  to the  contrary,
Executive  is not  prohibited  by  this  Section  8  from  (i)  maintaining  his
investment  in any Option  Property  (as such term is defined in the  Employer's
final  prospectus  relating to the  initial  public  offering of the  Employer's
Common Stock), (ii) from making investments in any entity that engages, directly
or  indirectly,  in  the  acquisition,  development,   construction,  operation,
management or leasing of commercial industrial or office real estate properties,
regardless of where they are located, if the shares or other ownership interests
of such entity are publicly traded and Executive's  aggregate investment in such
entity  constitutes  less than five percent (5%) of the equity ownership of such
entity, or (iii) providing services to RSI and its affiliates.

            (d) The  provisions of this Section 8 shall survive the  termination
of this Agreement.

         9. Conflicting  Agreements.  Executive  hereby  represents and warrants
that the execution of this  Agreement  and the  performance  of his  obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants  against
competition  or similar  covenants  which would  affect the  performance  of his
obligations hereunder.

         10.  Notices.  Any notice  required or permitted  hereunder shall be in
writing  and  shall be  deemed  sufficient  when  given by hand,  by  nationally
recognized  overnight  courier or by  express,  registered  or  certified  mail,
postage  prepaid,  return  receipt  requested,  and addressed to the Employer or
Executive,  as  applicable,  at the  address  indicated  above (or to such other
address as may be provided by notice).

         11. Miscellaneous.  This Agreement (i) constitutes the entire agreement
between the parties  concerning the subject matter hereof and supersedes any and
all prior  agreements or  understandings,  (ii) may not be assigned by Executive
without the prior written consent of the Employer,  and (iii) may be assigned by
the  Employer  and shall be  binding  upon,  and inure to the  benefit  of,  the
Employer's  successors  and  assigns.  Headings  herein are for  convenience  of
reference only and shall not define, limit or interpret the contents hereof.

         12. Amendment.  This Agreement may be amended, modified or supplemented
by the  mutual  consent  of the  parties  in  writing,  but no  oral  amendment,
modification or supplement shall be effective.

         13.  Specific  Enforcement.  The provisions of Sections 6 and 8 of this
Agreement are to be  specifically  enforced if not performed  according to their
terms. Without limiting the generality of the foregoing, the parties acknowledge
that the Employer  would be  irreparably  damaged and there would be no adequate
remedy at law for  Executive's  breach of Sections 6 and 8 of this Agreement and
further acknowledge that the Employer may seek entry of a temporary  restraining
order or preliminary injunction,  in addition to any other remedies available at
law or in equity, to enforce the provisions thereof.

         14. Severability.  If a court of competent jurisdiction adjudicates any
one or more of the provisions hereof as invalid, illegal or unenforceable in any
respect,  such provision(s) shall be ineffective only to the extent and duration
of  such  invalidity,   illegality  or  unenforceability  and  such  invalidity,
illegality or unenforceability  shall not affect the remaining substance of such
provision or any other  provision of this Agreement and this Agreement  shall be
construed  as if such  invalid,  illegal  or  unenforceable  provision  had been
limited or modified (consistent with its general intent) to the extent necessary
so that it shall be valid, legal and enforceable. If it shall not be possible to
so limit or modify  such  invalid,  illegal  or  unenforceable  provision,  this
Agreement  shall be  construed  as if such  invalid,  illegal  or  unenforceable
provision had never been contained  herein,  and the parties will use their best
efforts to substitute a valid, legal and enforceable provision which, insofar as
practicable,  implements  the  purpose  and intent of the  provision  originally
contained herein.

         15.  Governing Law. This  Agreement  shall be construed and governed by
the laws of the State of New York.

         IN WITNESS  WHEREOF,  this Agreement is entered into as of the date and
year first above written.

                                      RECKSON ASSOCIATES REALTY CORP.

                                      By: /s/ Scott Rechler
                                         ----------------------------
                                         Name:  Scott Rechler
                                         Title: President

                                      /s/ Roger Rechler
                                      -------------------------------
                                      Roger Rechler

<PAGE>
                                                                  Exhibit 10.12

                          AMENDMENT AND RESTATEMENT OF
                     EMPLOYMENT AND NONCOMPETITION AGREEMENT


     This AMENDMENT AND RESTATEMENT OF EMPLOYMENT AND NONCOMPETITION AGREEMENT
("Agreement")  is made as of the 1st day of June,  1998 by and  among  Michael
Maturo   ("Executive")  and  Reckson   Associates  Realty  Corp.,  a  Maryland
corporation  with a  principal  place of  business  at 225  Broadhollow  Road,
Melville,  New  York  11747  (the  "Employer")  and  amends,   supersedes  and
completely  restates the  Employment and  Noncompetition  Agreement made as of
June 2, 1995 by and among the Executive and the Employer.

     1. Term.  The term of this  Agreement  shall  commence  on the date first
        ----
above written and, unless earlier terminated as provided in Paragraph 7 below,
shall terminate on the fifth  anniversary of such date (the "Original  Term");
provided,  however, that Sections 6 and 8 hereof shall survive the termination
of this Agreement as provided  therein.  The Original Term may be extended for
such period or periods,  if any, as agreed to by  Executive  and the  Employer
(each a  "Renewal  Term").  The  period of  Executive's  employment  hereunder
consisting of the Original Term and all Renewal Terms is herein referred to as
the "Employment Period".

     2.   Employment and Duties.
          ---------------------
          (a) During the Employment Period, Executive shall be employed in the
business  of the  Employer  and its  affiliates.  Executive  shall  serve  the
Employer  as a senior  corporate  executive  with the  titles  Executive  Vice
President, Chief Financial Officer and Treasurer of the Employer.  Executive's
duties and authority  shall be as set forth in the By-laws of the Employer and
as otherwise  established by the Board of Directors of the Employer,  shall be
commensurate with his titles and positions with the Employer.

          (b)  Executive  agrees  to  his  employment  as  described  in  this
Paragraph 2 and agrees to devote  substantially  all of his business  time and
efforts to the  performance  of his duties  under  this  Agreement,  except as
otherwise  approved  by the  Board of  Directors  of the  Employer;  provided,
however,  that nothing herein shall be interpreted to preclude  Executive from
(i)  participating as an officer or director of, or advisor to, any charitable
or  other  tax  exempt  organization  or  otherwise  engaging  in  charitable,
fraternal  or trade  group  activities,  (ii)  providing  services  to Reckson
Service  Industries,  Inc. ("RSI") and its affiliates,  or (iii) investing his
assets as a passive investor in other entities or business ventures,  provided
that he performs no  management  or similar role with respect to such entities
or ventures and such investment does not violate Section 8 hereof.

          (c) In performing his duties hereunder, Executive shall be available
for  reasonable  travel  as the  needs  of the  Employer's  business  require.
Executive shall be based in the tri-state  metropolitan  area of New York, New
Jersey and Connecticut (the "Tri-State metropolitan area").

     3.  Compensation  and  Benefits.  In   consideration    of    Executive's
         ---------------------------
services  hereunder,  the Employer shall  compensate  Executive as provided in
this Section 3.

          (a)  Base  Salary.  The Employer  shall pay  Executive  an aggregate
               ------------
annual salary at the rate of $300,000 per annum during the  Employment  Period
("Base  Salary"),  subject to withholding  for applicable  federal,  state and
local taxes.  Base Salary shall be payable in accordance  with the  Employer's
normal  business  practices,  but in no event less  frequently  than  monthly.
Executive's  Base Salary shall be reviewed no less frequently than annually by
the Employer and may be increased,  but not decreased,  by the Employer during
the Employment Period.

          (b)  Incentive Compensation.  In addition to the Base Salary payable
               -----------------------
to Executive  pursuant to Section 3(a), during the Employment Period Executive
shall be eligible to participate in any incentive compensation plans in effect
with  respect  to  senior  executive  officers  of the  Employer,  subject  to
Executive's compliance with such criteria as the Employer's Board of Directors
may establish for Executive's  participation  in such plans from time to time.
Any awards to Executive under such plans will be established by the Employer's
Board of Directors, or a committee thereof, in its sole discretion.

          (c)  Stock Options. During the Employment Period, Executive shall be
               -------------
eligible to participate in employee stock option plans  established  from time
to time for the benefit of senior  executive  officers and other  employees of
the Employer in accordance  with the terms and  conditions of such plans.  All
decisions  regarding  awards to Executive  under the  Employer's  stock option
plans  shall  be  made in the  sole  discretion  of the  Employer's  Board  of
Directors, or a committee thereof.

          (d)  Expenses.  Executive  shall be  reimbursed  for all  reasonable
               --------
business related expenses incurred by Executive at the request of or on behalf
of the  Employer,  subject to such  reasonable  requirements  with  respect to
substantiation and documentation as may be specified by the Employer.

          (e)  Medical and Dental  Insurance.  During the  Employment  Period,
               -----------------------------
Executive and Executive's immediate family shall be entitled to participate in
such medical and dental benefit plans as the Employer shall maintain from time
to time for the benefit of senior executive officers of the Employer and their
families, on the terms and subject to the conditions set forth in such plans.

          (f)  Life Insurance and Disability Insurance.  During the Employment
               ----------------------------------------
Period,   the  Employer  shall  provide  Executive  with  life  insurance  and
comprehensive disability insurance.

          (g)  Vacations.  Executive  shall be  entitled  to  reasonable  paid
               ---------
vacations  in  accordance  with the then  regular  procedures  of the Employer
governing  senior executive  officers,  not to exceed four weeks per annum, in
the aggregate.

          (h)  Other Benefits.During the Employment Period, the Employer shall
               --------------
provide to Executive such other  benefits,  including sick leave and the right
to participate in retirement or pension plans, as are made generally available
to senior executive officers and employees of the Employer from time to time.

     4.  Indemnification and Liability  Insurance.  The   Employer  agrees  to
         ----------------------------------------
indemnify Executive with respect to any actions commenced against Executive in
his capacity as an officer or director,  or former officer or director, of the
Employer or any affiliate thereof for which he may serve in such capacity. The
Employer  also agrees to use its best efforts to secure and maintain  officers
and directors liability insurance providing coverage for Executive.

     5.  Employer's Policies.  Executive agrees to observe and comply with
         -------------------
the  rules  and  regulations  of the  Employer  as  adopted  by its  Boards of
Directors regarding the performance of his duties and to carry out and perform
orders,  directions and policies  communicated to him from time to time by the
Employer's Boards of Directors.

     6.   Nondisclosure Covenant.
          ----------------------
          (a)  General. All records, financial statements and similar documents
               -------
obtained,  reviewed or compiled by Executive in the course of the  performance
by him of services for the Employer,  whether or not confidential  information
or trade secrets,  shall be the exclusive property of the Employer.  Executive
shall have no rights in such documents upon any termination of this Agreement.

          (b)  Confidential  Information.  Executive  will not disclose to any
               -------------------------
person or entity (except as required by applicable  law or in connection  with
the performance of his duties and responsibilities  hereunder), or use for his
own benefit or gain, any confidential  information of the Employer obtained by
him  incident to his  employment  with the  Employer.  The term  "confidential
information" includes,  without limitation,  financial  information,  business
plans,  prospects and opportunities which have been discussed or considered by
the management of the Employer but does not include any information  which has
become   part  of  the  public   domain  by  means   other  than   Executive's
non-observance of his obligations hereunder.  This paragraph shall survive the
termination of this Agreement.

     7.   Termination and Severance Payments.
          ----------------------------------

          (a)  At-Will  Employment.  Executive's employment  hereunder  is "at
               -------------------
will" and may be  terminated  by the Employer at any time with or without Good
Reason (as defined in Section  7(e) below),  by a majority  vote of all of the
members of the Board of  Directors  of the  Employer  upon  written  notice to
Executive,  subject only to the severance provisions specifically set forth in
this Section 7.

          (b)  Termination by Executive. The Employment Period and Executive's
               ------------------------
employment hereunder may be terminated  effective  immediately by Executive by
written notice to the Board of Directors of the Employer within 30 days of the
occurrence of (i) a failure of the Board of Directors of the Employer to elect
Executive  to  offices  with the same or  substantially  the same  duties  and
responsibilities  as set forth in Section  2, (ii) a  material  failure by the
Employer to comply with the  provisions  of Section 3 or a material  breach by
the Employer of any other  provision of this  Agreement,  or (iii) a Force Out
(as such term is defined in Section 7(e) below).

          (c)  Certain  Benefits  upon  Termination  by  Executive.  Except as
               ---------------------------------------------------
specifically  provided in this  Section 7 or  otherwise  required by law,  all
compensation and benefits to Executive under this Agreement shall terminate on
the  date  of  termination  of  the  Employment  Period.  Notwithstanding  the
foregoing,  if the Employment Period is terminated pursuant to Section 7(b) or
if  Executive's  employment is terminated by the Employer  other than for Good
Reason, Executive shall be entitled to the following benefits:

          (i) The Employer shall continue to pay  Executive's  Base Salary for
     the  remaining  term of this  Agreement  after  the  date of  Executive's
     termination,  at the rate in effect on the date of his termination and on
     the same  periodic  payment  dates as  payment  would  have  been made to
     Executive had the Employment Period not been terminated;

          (ii)  For the  remaining  term of this  Agreement,  Executive  shall
     continue to receive all  benefits  described in Section 3 existing on the
     date of  termination.  For purposes of the  application of such benefits,
     Executive  shall be  treated as if he had  remained  in the employ of the
     Employer  with a Base  Salary  at the  rate  in  effect  on the  date  of
     termination;

          (iii)  For  purposes  of any  stock  option  plan  of the  Employer,
     Executive  shall be  treated as if he had  remained  in the employ of the
     Employer  for the  remaining  term of this  Agreement  after  the date of
     Executive's  termination  so that (x) any stock  options or other  awards
     (including  restricted  stock  grants) of the  Executive  under such plan
     shall continue to vest and become exercisable, and (y) Executive shall be
     entitled to exercise any exercisable options or other rights;

          (iv) If, in spite of the provisions  above,  any benefits or service
     credits under any benefit plan or program of the Employer may not be paid
     or provided  under such plan or program to Executive,  or to  Executive's
     dependents,  beneficiaries  or  estate,  because  Executive  is no longer
     considered to be an employee of the Employer,  the Employer  shall pay or
     provide for payment of such benefits and service credits to Executive, or
     to Executive's  dependents,  beneficiaries  or estate,  for the remaining
     term of this Agreement; and

          (v) Nothing  herein  shall be deemed to obligate  Executive  to seek
     other  employment  in the event of any such  termination  and any amounts
     earned or benefits  received from such other employment will not serve to
     reduce  in any  way  the  amounts  and  benefits  payable  in  accordance
     herewith.

          (d) Termination by the Employer for Good Reason. If (i) Executive is
              ------------------------------------------- 
terminated for Good Reason or (ii) Executive shall voluntarily  terminate his
employment  hereunder  (other than pursuant to Section 7(b) hereof),  then the
Employment  Period shall  terminate as of the effective  date set forth in the
written  notice of such  termination  (the  "Termination  Date") and Executive
shall be entitled  to receive  only his Base Salary at the rate then in effect
until the Termination Date and any outstanding stock options held by Executive
shall expire in  accordance  with the terms of the stock option plan or option
agreement under which the stock options were granted.

          (e)  Definitions.  The following terms shall be defined as set forth
below.

          (i) A "Change-in-Control" shall be deemed to have occurred after the
     effective date of this Agreement if:

               (A) any Person, together with all "affiliates" and "associates"
          (as such  terms are  defined  in Rule  12b-2  under  the  Securities
          Exchange Act of 1934 (the  "Exchange  Act")) of such  Person,  shall
          become the "beneficial owner" (as such term is defined in Rule 13d-3
          under the Exchange Act),  directly or  indirectly,  of securities of
          the  Employer  representing  30% or more of either (A) the  combined
          voting power of the Employer's then  outstanding  securities  having
          the  right  to  vote  in an  election  of the  Employer's  Board  of
          Directors  ("Voting  Securities") or (B) the then outstanding shares
          of all classes of stock of the  Employer  (in either such case other
          than as a result of the acquisition of securities  directly from the
          Employer); or

               (B)  individuals   who,  as  of  the  effective  date  of  this
          Agreement,   constitute  the  Employer's  Board  of  Directors  (the
          "Incumbent  Directors")  cease for any  reason,  including,  without
          limitation,  as a result of a tender offer, proxy contest, merger or
          similar  transaction,  to  constitute  at  least a  majority  of the
          Employer's  Board of Directors,  provided that any person becoming a
          director of the Employer  subsequent to the  effective  date of this
          Agreement  whose election or nomination for election was approved by
          a vote of at least a majority of the Incumbent  Directors shall, for
          purposes of this Agreement, be considered an Incumbent Director; or

               (C) the  stockholders  of the  Employer  shall  approve (1) any
          consolidation  or merger of the Employer or any subsidiary where the
          stockholders of the Employer, immediately prior to the consolidation
          or merger, would not, immediately after the consolidation or merger,
          beneficially  own (as such term is defined  in Rule 13d-3  under the
          Exchange Act),  directly or indirectly,  shares  representing in the
          aggregate  at least  60% of the  voting  shares  of the  corporation
          issuing cash or securities in the consolidation or merger (or of its
          ultimate parent corporation,  if any), (2) any sale, lease, exchange
          or other transfer (in one  transaction  or a series of  transactions
          contemplated  or arranged  by any party as a single  plan) of all or
          substantially  all of the assets of the  Employer or (3) any plan or
          proposal for the liquidation or dissolution of the Employer;

     Notwithstanding the foregoing, a "Change-in-Control"  shall not be deemed
to have occurred for purposes of the foregoing clause (A) solely as the result
of an acquisition of securities by the Employer  which, by reducing the number
of shares of stock or other Voting Securities  outstanding,  increases (x) the
proportionate number of shares of stock of the Employer  beneficially owned by
any Person to 30% or more of the shares of stock then  outstanding  or (y) the
proportionate  voting power represented by the Voting Securities  beneficially
owned by any Person to 30% or more of the  combined  voting  power of all then
outstanding Voting Securities;  provided, however, that if any Person referred
to in  clause  (x)  or  (y) of  this  sentence  shall  thereafter  become  the
beneficial  owner of any  additional  stock of the  Employer  or other  Voting
Securities (other than pursuant to a share split,  stock dividend,  or similar
transaction),  then a "Change-in-Control" shall be deemed to have occurred for
purposes of the foregoing clause (A).

          (ii) A "Force Out" shall be deemed to have  occurred in the event of
     a Change-in-Control followed by:

               (A) a change in duties,  responsibilities,  status or positions
          with the Employer,  which, in Executive's reasonable judgment,  does
          not represent a promotion from or maintaining of Executive's duties,
          responsibilities, status or positions as in effect immediately prior
          to the  Change-in-Control,  or any removal of Executive  from or any
          failure to reappoint or reelect Executive to such positions,  except
          in connection  with the  termination of  Executive's  employment for
          Good Reason, disability, retirement or death;

               (B) a reduction by the Employer in  Executive's  Base Salary as
          in effect immediately prior to the Change-in-Control;

               (C) the  failure by the  Employer  to continue in effect any of
          the benefit plans,  programs or  arrangements  in which Executive is
          participating at the time of the  Change-in-Control  of the Employer
          (unless  Executive  is permitted to  participate  in any  substitute
          benefit plan,  program or arrangement  with  substantially  the same
          terms and to the same extent and with the same  rights as  Executive
          had with respect to the benefit plan, program or arrangement that is
          discontinued) other than as a result of the normal expiration of any
          such benefit plan,  program or  arrangement  in accordance  with its
          terms  as in  effect  at the time of the  Change-in-Control,  or the
          taking of any action,  or the failure to act, by the Employer  which
          would adversely affect Executive's continued participation in any of
          such  benefit  plans,  programs  or  arrangements  on  at  least  as
          favorable  a basis  to  Executive  as is the case on the date of the
          Change-in-Control  or  which  would  materially  reduce  Executive's
          benefits in the future under any of such benefit plans,  programs or
          arrangements or deprive  Executive of any material  benefits enjoyed
          by Executive at the time of the Change-in-Control;

               (D) the failure by the Employer to provide and credit Executive
          with the number of paid  vacation  days to which  Executive  is then
          entitled in accordance with the Employer's  normal vacation policies
          as in effect immediately prior to the Change-in-Control;

               (E) the Employer's requiring Executive to be based in an office
          located  beyond a reasonable  commuting  distance  from  Executive's
          residence  immediately  prior to the  Change-in-Control,  except for
          required  travel  relating to the  Employer's  business to an extent
          substantially  consistent with the business travel obligations which
          Executive   undertook  on  behalf  of  the  Employer  prior  to  the
          Change-in-Control;

               (F) the failure by the Employer to obtain from any successor to
          the Employer an agreement to be bound by this Agreement  pursuant to
          Section 11 hereof; or

               (G) any refusal by the Employer to continue to allow  Executive
          to attend to matters or engage in activities not directly related to
          the business of the Employer which, prior to the  Change-in-Control,
          Executive  was  permitted by the  Employer's  Boards of Directors to
          attend to or engage in.

          (iii) "Good Reason" shall mean a finding by the Employer's  Board of
     Directors that  Executive has (A) acted with gross  negligence or willful
     misconduct  in connection  with the  performance  of his material  duties
     hereunder;  (B)  defaulted  in the  performance  of his  material  duties
     hereunder and has not corrected  such action within 15 days of receipt of
     written notice thereof; (C) willfully acted against the best interests of
     the  Employer,  which act has had a material  and  adverse  impact on the
     financial  affairs of the Employer;  or (D) been convicted of a felony or
     committed a material act of common law fraud  against the Employer or its
     employees and such act or conviction has had, or the Employer's  Board of
     Directors  reasonably  determines will have, a material adverse effect on
     the interests of the Employer;  provided, however, that a finding of Good
     Reason shall not become effective unless and until the Board of Directors
     provides the Executive notice that it is considering  making such finding
     and a reasonable opportunity to be heard by the Board of Directors.

          (iv)  "Person"  shall have the meaning  used in  Sections  13(d) and
     14(d) of the Exchange Act; provided however, that the term "Person" shall
     not  include (A) any current  partner of Reckson  Operating  Partnership,
     L.P.,  any  stockholder or employee of the Employer on the date hereof or
     any  estate  or  member  of the  immediate  family  of  such  a  partner,
     stockholder or employee, or (B) the Employer, any of its subsidiaries, or
     any trustee, fiduciary or other person or entity holding securities under
     any employee benefit plan of the Employer or any of its subsidiaries.

          (f)  Termination  by Reason of Death.  The  Employment  Period shall
               --------------------------------
terminate  upon  Executive's  death and in such event,  the Employer shall pay
Executive's  Base  Salary for a period of six (6) months  from the date of his
death,  or such  longer  period  as the  Employer's  Boards of  Directors  may
determine,  to Executive's estate or to a beneficiary  designated by Executive
in writing prior to his death. Any unexercised or unvested stock options shall
remain  exercisable or vest upon Executive's death only to the extent provided
in the applicable option plan and option agreements.

          (g) Termination by Reason of Disability. In the event that Executive
              -----------------------------------
shall become unable to efficiently perform his duties hereunder because of any
physical or mental  disability or illness,  Executive  shall be entitled to be
paid his Base  Salary  until the  later of such  time  when (i) the  period of
disability or illness  (whether or not the same  disability or illness)  shall
exceed 180  consecutive  days during the Employment  Period and (ii) Executive
becomes  eligible  to  receive  benefits  under  a  comprehensive   disability
insurance policy obtained by the Employer (the "Disability Period"). Following
the  expiration of the  Disability  Period,  the Employer may  terminate  this
Agreement upon written notice of such termination. Any unexercised or unvested
stock options shall remain  exercisable or vest upon such  termination only to
the extent provided in the applicable option plan and option agreements.

          (h)  Arbitration  in the Event of a Dispute  Regarding the Nature of
               ----------------------------------------------------------------
Termination.  In the event that the Employer terminates Executive's employment
-----------
for Good Reason and  Executive  contends  that Good Reason did not exist,  the
Employer's only obligation shall be to submit such claim to arbitration before
the American Arbitration  Association ("AAA"). In such a proceeding,  the only
issue before the arbitrator  will be whether  Executive was in fact terminated
for  Good  Reason.  If  the  arbitrator  determines  that  Executive  was  not
terminated  for Good Reason,  the only remedy that the arbitrator may award is
entitlement  to the  severance  payments and  benefits  specified in Paragraph
7(c),  the costs of  arbitration,  and  Executive's  attorneys'  fees.  If the
arbitrator finds that Executive was terminated for Good Reason, the arbitrator
will be without authority to award Executive  anything,  the parties will each
be  responsible  for their own  attorneys'  fees, and the costs of arbitration
will be paid 50% by Executive and 50% by the Employer.

    8.  Noncompetition Covenant.

          (a)  Because Executive's  services to the Employer are essential and
because  Executive  has  access to the  Employer's  confidential  information,
Executive  covenants and agrees that (i) during the Employment Period and (ii)
in the event that this Agreement is terminated by the Employer for Good Reason
or by  Executive  other than  pursuant  to  Section  7(b)  hereof,  during the
Noncompetition Period Executive will not, without the prior written consent of
the Board of  Directors  of the  Employer  which shall  include the  unanimous
consent of the  Directors  who are not officers of the  Employer,  directly or
indirectly:

               (A)  engage,  participate  or  assist,  as an  owner,  partner,
          employee,  consultant,  director,  officer, trustee or agent, in any
          business  that  engages  or  attempts  to  engage  in,  directly  or
          indirectly, the acquisition,  development,  construction, operation,
          management  or leasing of any  commercial  industrial or office real
          estate property anywhere in the Tri-State metropolitan area, or

               (B) intentionally interfere with, disrupt or attempt to disrupt
          the relationship,  contractual or otherwise, between the Employer or
          its  affiliates  and  any  tenant,  supplier,   contractor,  lender,
          employee or governmental agency or authority.

          (b) For purposes of this Section 8, the Noncompetition  Period shall
mean  the  period  commencing  on  the  date  of  termination  of  Executive's
employment  under  this  Agreement  and  ending on the latest of (i) the third
anniversary  of the  effective  date of this  Agreement,  or  (ii)  the  first
anniversary of the date of termination  of Executive's  employment  under this
Agreement.

          (c)  Notwithstanding  anything  contained  herein  to the  contrary,
Executive  is not  prohibited  by this  Section  8 from  (i)  maintaining  his
investment in any Option  Property (as such term is defined in the  Employer's
final  prospectus  relating to the initial  public  offering of the Employer's
Common  Stock),  (ii) from  making  investments  in any entity  that  engages,
directly  or  indirectly,  in  the  acquisition,  development,   construction,
operation,  management  or leasing of  commercial  industrial  or office  real
estate  properties,  regardless  of where they are  located,  if the shares or
other  ownership  interests of such entity are publicly traded and Executive's
aggregate investment in such entity constitutes less than five percent (5%) of
the equity  ownership of such entity,  or (iii) providing  services to RSI and
its affiliates.

          (d)  The provisions of this Section 8 shall survive the  termination
of this Agreement.

     9.  Conflicting Agreements. Executive hereby represents and warrants that
         ----------------------
the  execution  of this  Agreement  and  the  performance  of his  obligations
hereunder will not breach or be in conflict with any other  agreement to which
he is a party or is bound,  and that he is not now  subject  to any  covenants
against competition or similar covenants which would affect the performance of
his obligations hereunder.

     10.  Notices.  Any notice  required or  permitted  hereunder  shall be in
          -------
writing  and shall be deemed  sufficient  when  given by hand,  by  nationally
recognized  overnight  courier or by express,  registered  or certified  mail,
postage prepaid,  return receipt  requested,  and addressed to the Employer or
Executive,  as applicable,  at the address  indicated  above (or to such other
address as may be provided by notice).

     11.  Miscellaneous.  This Agreement (i) constitutes the entire  agreement
          -------------
between the parties  concerning  the subject  matter hereof and supersedes any
and all  prior  agreements  or  understandings,  (ii) may not be  assigned  by
Executive without the prior written consent of the Employer,  and (iii) may be
assigned by the Employer and shall be binding  upon,  and inure to the benefit
of, the Employer's successors and assigns. Headings herein are for convenience
of  reference  only and shall not  define,  limit or  interpret  the  contents
hereof.

     12. Amendment. This Agreement may be amended, modified or supplemented by
         ---------
the  mutual  consent  of  the  parties  in  writing,  but no  oral  amendment,
modification or supplement shall be effective.

     13.  Specific  Enforcement.  The  provisions  of Sections 6 and 8 of this
          ---------------------
Agreement are to be specifically  enforced if not performed according to their
terms.  Without  limiting  the  generality  of  the  foregoing,   the  parties
acknowledge that the Employer would be irreparably  damaged and there would be
no adequate remedy at law for  Executive's  breach of Sections 6 and 8 of this
Agreement  and  further  acknowledge  that the  Employer  may seek  entry of a
temporary  restraining  order or  preliminary  injunction,  in addition to any
other  remedies  available  at law or in  equity,  to enforce  the  provisions
thereof.

     14. Severability.  If a court of competent  jurisdiction  adjudicates any
         ------------
one or more of the provisions  hereof as invalid,  illegal or unenforceable in
any respect,  such  provision(s)  shall be ineffective  only to the extent and
duration  of  such  invalidity,   illegality  or  unenforceability   and  such
invalidity,  illegality  or  unenforceability  shall not affect the  remaining
substance of such provision or any other  provision of this Agreement and this
Agreement  shall be construed  as if such  invalid,  illegal or  unenforceable
provision had been limited or modified (consistent with its general intent) to
the extent necessary so that it shall be valid,  legal and enforceable.  If it
shall  not be  possible  to so  limit  or  modify  such  invalid,  illegal  or
unenforceable provision, this Agreement shall be construed as if such invalid,
illegal or unenforceable  provision had never been contained  herein,  and the
parties  will  use  their  best  efforts  to  substitute  a valid,  legal  and
enforceable  provision which,  insofar as practicable,  implements the purpose
and intent of the provision originally contained herein.

     15.  Governing Law. This Agreement shall be construed and governed by the
          -------------
laws of the State of New York.

         IN WITNESS WHEREOF, this Agreement is entered into as of the date and
year first above written.

                                          RECKSON ASSOCIATES REALTY CORP.

                                          By:  /s/ Scott Rechler         
                                               -----------------------------
                                               Name:  Scott Rechler
                                               Title: President


                                                /s/ Michael Maturo
                                                ----------------------------
                                                    Michael Maturo


<PAGE>
                                                                 Exhibit 10.18

                         THIRD AMENDED AND RESTATED
                       AGREEMENT OF LIMITED PARTNERSHIP
                                      OF
                        RECKSON FS LIMITED PARTNERSHIP


          THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of
Reckson FS Limited Partnership, a Delaware limited partnership (the
"Partnership"), is hereby made and entered into as of July 21, 1998, by
Reckson Financing LLC., a Delaware limited liability company, as general
partner (the "General Partner"), and Reckson Operating Partnership, L.P., a
Delaware limited partnership, as limited partner (the "Limited Partner",
together with the General Partner, the "Partners").

          WHEREAS, the Partnership has been heretofore formed as a limited
partnership under the Uniform Act (as defined below), pursuant to an Agreement
of Limited Partnership of the Partnership, dated as of May 22, 1995 (the
"Original Partnership Agreement"), and a Certificate of Limited Partnership of
the Partnership, filed with the Office of the Secretary of State of the State
of Delaware on May 22, 1995;

          WHEREAS, the Original Agreement was amended and restated by
the Amended and Restated Agreement of Limited Partnership of the Partnership,
dated as of June 2, 1995;

          WHEREAS, the Amended and Restated Agreement of Limited Partnership
was amended and restated by the Second Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of April 30, 1997;

          WHEREAS, Reckson FS Inc. has transferred its general partnership
interest in the Partnership in exchange for additional partnership units in
the Limited Partner and simultaneously the General Partner has acquired such
general partnership interests through the direction of the Limited Partner;

          WHEREAS, Reckson Financing LLC (the "General Partner") shall act as
general partner of the Partnership from and after the date first written
above; and

          WHEREAS, the Partners have caused to be filed an Amended and
Restated Certificate of Limited Partnership with the Secretary of State of the
State of Delaware to reflect the admission of the General Partner as the
general partner of the Partnership and the withdrawal of Reckson FS, Inc. as
general partner of the Partnership.

          NOW, THEREFORE, in consideration of the mutual covenants, agreements
and premises herein set forth, the parties hereto agree as follows:



                                   ARTICLE 1
                              GENERAL PROVISIONS

          Section 1.1   Formation of the Limited Partnership
                        ------------------------------------

          The Partnership has been formed as a limited partnership under and
pursuant to the Delaware Revised Uniform Limited Partnership Act, as amended
from time to time (the "Uniform Act"). The name of the Partnership is "Reckson
FS Limited Partnership". All business of the Partnership shall be conducted
under the Partnership name.

          Section 1.2   Registered Office and Agent; Principal
                        --------------------------------------
                                    Office
                                    ------

          The registered office of the Partnership in the State of Delaware is
located at 1209 Orange Street, Wilmington, New Castle County, Delaware 19801,
and the registered agent for service of process on the Partnership in the
State of Delaware at such address is The Corporation Trust Company. The
principal office of the Partnership is 225 Broadhollow Road, Melville, New
York 11747, or such other place as the General Partner may from time to time
designate. The Partnership may maintain offices at such other place or places
within or outside the States of Delaware and New York as the General Partner
deems advisable.

          Section 1.3  Purpose of the Partnership
                       -------------------------             
The Partnership may engage in any lawful act or business activity for which
partnerships may be organized under the laws of the State of Delaware,
including:

     A. acquiring, owning, improving, developing, constructing, leasing,
operating, financing and refinancing, holding, guaranteeing borrowings and/or
granting security interests in connection with borrowings, mortgaging,
selling, disposing of, exchanging or otherwise dealing in or with commercial
real property; and

     B. entering into, or modifying, contractual arrangements for the
management of real estate and real estate-related assets in connection with
any of the foregoing.


          Section 1.4  Liability of Partners
                       ---------------------
          A. The General Partner shall have such liability for the repayment,
satisfaction and discharge of the debts, liabilities and obligations of the
Partnership as is provided by the Uniform Act for the general partners of a
limited partnership.

          B. Except as otherwise expressly required by law, the Limited
Partner, in its capacity as such, shall have no liability in excess of (i) the
amount of its capital contributions to the Partnership, (ii) its share of any
undistributed profits and assets of the Partnership, (iii) its obligation to
make other payments expressly provided for in this Agreement, and (iv) the
amount of any distribution wrongfully distributed to it. The Limited Partner
shall not otherwise be liable to the Partnership for the repayment,
satisfaction, or discharge of the Partnership's debts, liabilities, and
obligations. The Limited Partner shall not have any obligation to contribute
money or property in excess of its obligations to the Partnership, nor shall
it be personally liable to any third party for any liability or other
obligation of the Partnership.

          Section 1.5  Continuations as Partners
                       -------------------------  
          On the date hereof, upon execution and delivery of this Agreement,
Reckson Financing LLC shall hereafter act as the general partner of the
Partnership, and the Limited Partner shall continue as the limited partner of
the Partnership.

                                   ARTICLE 2
                           MANAGEMENT OF PARTNERSHIP

          Section 2.1  Management
                       ----------
          Except as otherwise expressly provided in this Agreement, the
General Partner shall have complete and exclusive discretion in the management
and control of the affairs and business of the Partnership and shall have all
powers necessary, convenient, appropriate or incidental to carry out the
purposes, conduct the business and exercise the powers of the Partnership. The
General Partner shall possess and enjoy with respect to the Partnership all of
the rights and powers of a partner of a partnership without limited partners
to the extent permitted by Delaware law. The General Partner shall conduct the
business of the Partnership in accordance with this Agreement and the Uniform
Act.

                                   ARTICLE 3
                             CAPITAL CONTRIBUTIONS

          Section 3.1  Capital Contributions
                       ---------------------

          The Partners contributed capital to the Partnership at the time of
the execution of the Amended and Restated Agreement of Limited Partnership.
The Partners may agree from time to time to contribute additional capital to
the Partnership.

                                   ARTICLE 4
              CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS

          Section 4.1  Establishment and Maintenance of Capital Accounts
                       -------------------------------------------------
          A separate capital account (each, a "Capital Account") shall be
maintained for each Partner in accordance with the rules of Treasury
Regulations Section 1.704-1(b)(2)(iv), and this Section 4.1 shall be
interpreted and applied in a manner consistent therewith. Whenever the
Partnership would be permitted to adjust the Capital Accounts of the Partners
pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to reflect
revaluations of Partnership property, the General Partner may cause the
Partnership to so adjust the Capital Accounts of the Partners.

          Section 4.2  Allocation of Profits and Losses
                       --------------------------------
          (a) Except as otherwise provided in this Article 4, all book profits
and losses of the Partnership shall be allocated one percent (1%) to the
General Partner and ninety-nine percent (99%) to the Limited Partner. For this
purpose, book profits and losses shall be the taxable income or loss of the
Partnership as determined for federal income tax purposes increased by the
amount, if any, of tax-exempt income received or accrued by the Partnership
and reduced by the amount, if any, of all expenditures of the Partnership
described in Section 705(a)(2)(B) of the Internal Revenue Code of 1986, as
amended (the "Code") (including expenditures treated as so described under
Treasury Regulations Section 1.704-1(b)(2)(iv)(i)).

          (b) In the event that the book value of any property shall differ
from its adjusted basis for federal income tax purposes, either because the
value of such property differs from its adjusted basis upon its contribution
to the Partnership or as the result of a revaluation of the property in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f),
depreciation, depletion, amortization and gain or loss with respect to such
property, as computed for purposes of calculating book profits and losses,
shall be determined in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv)(g).

          Section 4.3  Limitation on Losses
                       --------------------
          No allocation shall be made pursuant to this Article 4 to the extent
that it shall cause or increase a deficit balance in any Partner's Capital
Account in excess of such Partner's obligation (including any deemed
obligation under the Treasury Regulations), if any, to restore a deficit in
its Capital Account as of the end of the Partnership taxable year to which
such allocation relates (an "Adjusted Deficit Balance"). In determining
whether a Partner has an Adjusted Deficit Balance, a Partner's Capital Account
shall be reduced by the amounts described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6). Any items of deduction and loss in
excess of the limitations set forth in this Section 4.3 shall be allocated to
the General Partner.

          Section 4.4  Partnership Minimum Gain Chargeback
                       -----------------------------------
          Notwithstanding any other provisions of this Article 4, in the event
that there is a net decrease in Partnership Minimum Gain during a Partnership
taxable year, the Partners shall be allocated items of income and gain in
accordance with Treasury Regulations Section 1.704-2(f). For purposes of this
Article 4, the term "Partnership Minimum Gain" shall have the meaning set
forth in Treasury Regulations Section 1.704-2(b)(2), and any Partner's share
of Partnership Minimum Gain shall be determined in accordance with Treasury
Regulations Section 1.704-2(g). This Section 4.4 is intended to comply with
the minimum gain chargeback requirement of Treasury Regulations Section
1.704-2(f) and shall be interpreted and applied in a manner consistent
therewith.

          Section 4.5  Partner Nonrecourse Debt
                       ------------------------
          Notwithstanding any other provisions of this Article 4 (other than
Section 4.4), to the extent required by Treasury Regulations Section
1.704-2(i), any items of income, gain, deduction and loss of the Partnership
that are attributable to a nonrecourse debt of the Partnership that
constitutes "partner nonrecourse debt" as defined in Treasury Regulations
Section 1.704-2(b)(4) shall be allocated in accordance with the provisions of
Treasury Regulations Section 1.704-2(i). The allocations required by this
Section 4.5 shall include, without limitation, chargebacks of partner
nonrecourse debt minimum gain in accordance with Treasury Regulations Section
1.704-2(i)(4).

          Section 4.6  Qualified Income Offset
                       -----------------------  
          Any Partner who unexpectedly receives an adjustment, allocation or
distribution described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4),
(5) or (6) shall be allocated items of income and gain in an amount and manner
sufficient to eliminate as quickly as possible, to the extent required under
the rules in Treasury Regulations Section 1.704-1(b)(2)(ii)(d), any resulting
Adjusted Deficit Balance, calculated after taking into account the allocations
in Section 4.4. This Section 4.6 is intended to constitute a qualified income
offset under Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted and applied in a manner consistent therewith. Section 4.7 Curative
Allocations.

          Section 4.7  Curative Allocations
                       -------------------- 
          Notwithstanding any other provision of this Article 4, the special
allocations set forth in Sections 4.3, 4.4, 4.5 and 4.6 of this Agreement
shall be taken into account in allocating other items of partnership income,
deduction and loss among the Partners so that, to the maximum extent possible,
the net amount of such allocations of other items of income, deduction and
loss and such special allocations shall be equal to the net amount that would
have been allocated to such Partner if the special allocations had not
occurred.

          Section 4.8  Tax Allocations
                       ---------------
          Solely for income tax purposes, each item of income, gain, loss and
deduction of the Partnership shall be allocated among the Partners in the same
manner as its correlative item of book income, gain, loss or deduction is
allocated under this Article 4 (taking into account the special allocations
set forth in Sections 4.3 through 4.7), subject to the rules of Section
704(c)(1)(A) of the Code and the Treasury Regulations promulgated thereunder
and Treasury Regulations Section 1.704-1(b)(4)(i).

          Section 4.9  Operating Distributions
                       -----------------------
          The General Partner may, but shall not be obligated to, distribute
all or any portion of cash from operations to each of the Partners. Any such
distributions shall be made 1% to the General Partner and 99% to the Limited
Partner. Notwithstanding any provision to the contrary contained in this
Agreement, the Partnership, and the General Partner on behalf of the
Partnership, shall not make a distribution to any Partner on account of its
interest in the Partnership if such distribution would violate Section 17-607
of the Uniform Act or other applicable law.


          Section 4.10  Distributions upon Liquidation
                        ------------------------------
          After payment (or the making of reasonable provision for the
payment) of all liabilities of the Partnership, all net proceeds from the sale
of the Partnership's property upon liquidation of the Partnership and all
other assets of the Partnership shall be distributed to the Partners in
accordance with their positive Capital Account balances in compliance with
Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2). If any properties of the
Partnership are to be distributed in kind, such properties shall be
distributed on the basis of the fair market value thereof. The liquidator, as
defined in Section 6.2 below, shall use its best efforts to distribute such
properties to the Limited Partner. The fair market value of such properties
shall be determined by the liquidator in its reasonable discretion. In the
event a Partner's interest (but not the Partnership itself) is liquidated
within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g), any
liquidating distributions to such Partner shall be made in accordance with
Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2).

          Section 4.11  Property Contributed as Security. Notwithstanding any
                        --------------------------------
other provisions of this Article 4, to the extent property is contributed to
the Partnership by the Limited Partner without any corresponding contribution
by the General Partner, all profits, losses and distributions attributable to
such property shall be made 100% to the Limited Partner.

                                   ARTICLE 5
                           TRANSFERS AND WITHDRAWALS

          Section 5.1  Transfer of General Partner's Partnership Interest
                       --------------------------------------------------
          The General Partner may transfer its interest or withdraw as General
Partner upon 60 days' notice to the Limited Partner.

          Section 5.2  Additional or Substituted Limited Partners
                       ------------------------------------------
          The Limited Partner may assign or transfer its interest in the
Partnership with the consent of the General Partner.

                                   ARTICLE 6
                      DISSOLUTION AND WINDING UP AFFAIRS

          Section 6.1  Dissolution
                       -----------
          The Partnership shall be dissolved and its affairs wound up upon the
happening of any one of the following dissolution events:

          (a) the withdrawal, removal, dissolution, insolvency, bankruptcy or
other event of withdrawal of the General Partner or the occurrence of an event
that causes the General Partner to cease to be a general partner of the
Partnership under the Uniform Act unless, (i) at the time, there is at least
one other general partner of the Partnership and such general partner or a
majority of such general partners, if more than one, agrees to continue the
business of the Partnership and said general partner or partners of the
Partnership continue the business of the Partnership, or (ii) within ninety
(90) days after the occurrence of such event, not less than a majority in
interest of the remaining Partners (or such greater percentage in interest as
is required by the Uniform Act) agree in writing to continue the business of
the Partnership and to the appointment, effective as of the date of such
event, if required, of one or more additional general partners of the
Partnership;

          (b) an agreement in writing by the Limited Partner and the General
Partner that the Partnership should be dissolved in accordance with applicable
state law;

          (c) except as otherwise provided herein, the occurrence of any event
which, under the Uniform Act, mandates the dissolution of the Partnership; and

          (d) the expiration of the term of the Partnership specified in
Section 8.2 of this Agreement.

          Section 6.2  Winding Up
                       ----------  
          In the event of the dissolution of the Partnership for any reason,
the "liquidator" (which shall be the General Partner unless dissolution occurs
due to an event specified in Section 6.1(a), in which case the liquidator
shall be the person selected by the Limited Partner) shall commence to wind up
the affairs of the Partnership and to liquidate or distribute its assets as
soon as is reasonably practicable in a prudent business manner. The liquidator
shall have the right to manage the business of the Partnership in accordance
with the terms hereof during the winding up period and to determine in good
faith the time, manner and terms of any sale or sales of Partnership property
pursuant to such liquidation.

          Section 6.3  Distribution Upon Dissolution and Termination
                       ---------------------------------------------
          Distributions upon dissolution and liquidation of the Partnership
shall be made in accordance with Section 4.10.

                                   ARTICLE 7
                        EXCULPATION AND INDEMNIFICATION

          Section 7.1  Exculpatory Provisions
                       ----------------------   
          (a) Notwithstanding any other terms of this Agreement, whether
express or implied, or obligation or duty at law or in equity, neither the
General Partner, its affiliates, nor any of their respective officers,
directors, shareholders, partners, employees, representatives or agents nor
any officer, employee, representative or agent of the Partnership and its
affiliates (individually, a "Covered Person" and collectively, the "Covered
Persons") shall be liable to the Partnership or any Partner for any act or
omission (in relation to the Partnership, this Agreement, any related document
or any transaction or investment contemplated hereby or thereby) taken or
omitted in good faith by a Covered Person and in the reasonable belief that
such act or omission is in or is not contrary to the best interests of the
Partnership and is within the scope of authority granted to such Covered
Person by this Agreement, provided that such act or omission does not
constitute fraud, willful misconduct, bad faith or gross negligence
("Disabling Conduct").

          (b) A Covered Person may rely and shall incur no liability in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture,
paper, document, signature or writing reasonably believed by it to be genuine,
and may rely on a certificate signed by an officer of any Person in order to
ascertain any fact with respect to such Person or within such Person's
knowledge and may rely on an opinion of counsel selected by such Covered
Person with respect to legal matters unless such Covered Person acts in bad
faith.

     Section 7.2  Indemnification 
                       --------------- 
     (a) To the fullest extent permitted by law, the Partnership shall
indemnify and hold harmless the General Partner, its affiliates and all
directors, officers, shareholders, partners, employees, representatives and
agents of the General Partner and its affiliates and all officers, employees,
representatives and agents of the Partnership and its affiliates
(individually, an "Indemnified Person" and collectively, the "Indemnified
Persons") from and against any and all losses, claims, demands, liabilities,
expenses (including all fees and expenses), judgements, fines, settlements,
and other amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, in which the
Indemnified Person may be involved, or threatened to be involved, as a party
or otherwise, by reason of its management of the affairs of the Partnership,
or the General Partner or its status as a General Partner, an affiliate
thereof, or partner, director, officer, stockholder, employee, representative
or agent thereof or of the Partnership or a person serving at the request of
the Partnership, the General Partner or any affiliate thereof in another
entity in a similar capacity, which relates to or arises out of the
Partnership, its property, its business or affairs, and regardless of whether
the liability or expense accrued at or relates to, in whole or in part, any
time before, on or after the date hereof. The negative disposition of any
action, suit or proceeding by judgment, order, settlement, conviction or upon
a plea of nolo contendere, or its equivalent, shall not, of itself, create a
presumption that the Indemnified Person acted in a manner contrary to the
standard set forth in Section 7.2(b) below. Any indemnification pursuant to
this Section 7.2 shall be made only out of the assets of the Partnership.

     (b) An Indemnified Person shall not be entitled to indemnification under
this Section 7.2 with respect to any claim, issue or matter in which it has
engaged in Disabling Conduct; provided, however, that a court of competent
jurisdiction may determine upon application that, despite such Disabling
Conduct, in view of all the circumstances of the case, the Indemnified Person
is fairly and reasonably entitled to indemnification for such liabilities and
expenses as the court may deem proper.

     (c) To the fullest extent permitted by law, expenses (including legal
fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Partnership prior to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Partnership of an undertaking by or on
behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in this Section 7.2.

     (d) The indemnification provided by this Section 7.2 shall be in addition
to any other rights to which an Indemnified Person may be entitled under any
agreement, by law or vote of the Partners as a matter of law or otherwise,
both as to action in the Indemnified Person's capacity as the General Partner,
an affiliate thereof or a partner, director, officer, stockholder, partner,
representative, employee or agent thereof, or an officer, employee,
representative or agent of the Partnership or an affiliate thereof and, as to
action in any other capacity, shall continue as to an Indemnified Person who
has ceased to serve in such capacity and shall inure to the benefit of the
heirs, successors, assigns and administrators of an Indemnified Person.

     (e) The General Partner and the Partnership may purchase and maintain
insurance, to the extent and in such amounts as the General Partner shall, in
its sole discretion, deem reasonable, on behalf of Indemnified Persons and

such other Persons as the General Partner shall determine, against any
liability that may be asserted against or expenses that may be incurred by
such person in connection with activities of the Partnership or such
indemnities, regardless of whether the Partnership would have the power to
indemnify such Person against such liability under the provisions of this
Agreement. The General Partner and the Partnership may enter into indemnity
contracts with Indemnified Persons and adopt written procedures pursuant to
which arrangements are made for the advancement of expenses and the funding of
obligations under this Section 7.2 and containing such other procedures
regarding indemnification as are appropriate.

     (f) In no event may an Indemnified Person subject the Limited Partners to
personal liability by reason of any indemnification of an Indemnified Person
under this Agreement or otherwise.

     (g) An Indemnified Person shall not be denied indemnification in whole or
in part under this Section 7.2 because the Indemnified Person had an interest
in the transaction with respect to which the indemnification applies if the
transaction is otherwise permitted by the terms of this Agreement.

     (h) The provisions of this Section 7.2 are for the benefit of the
indemnified Persons and their heirs, successors, assigns, administrators and
personal representatives and shall not be deemed to be for the benefit of any
other Persons. The provisions of this Section 7.2 shall not be amended in any
way that would adversely affect the Indemnified Person without the consent of
the Indemnified Person.

          7.3  Duties of a General Partner and Others Controlling a General
               ------------------------------------------------------------
Partner
------
          To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or to the Partners, the General Partner and any other Indemnified
Person acting in connection with the Partnership's business or affairs, shall
not be liable to the Partnership or to any Partner for its good faith reliance
on the provisions of this Agreement. The provisions of this Agreement, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity, are agreed by the Partners to replace
such other duties and liabilities of such Indemnified Person.

                                   ARTICLE 8
                                 MISCELLANEOUS

          Section 8.1  Books and Records
                       -----------------
          The Partnership shall maintain its records and books of account
separate from those of any other person or entity (including Reckson
Associates Realty Corp., Reckson Financing LLC and Reckson Operating
Partnership, L.P.).

          Section 8.2  Term
                       ----
          The term of the Partnership commenced on the date the Certificate of
Limited Partnership relating to the Partnership was filed in the office of the
Secretary of State of Delaware in accordance with the Uniform Act and shall
continue until December 31, 2045 unless sooner dissolved and terminated
pursuant to the provisions of this Agreement.

          Section 8.3  Amendments
                       ----------
          This Agreement may be amended only in a writing signed by each of
the partners of the Partnership.

          Section 8.4  Binding Effect
                       --------------
          This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.

          Section 8.5  Counterparts
                       ------------
          This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or
the same counterpart. Each party shall become bound by this Agreement
immediately upon affixing its signature hereto.

          Section 8.6  Applicable Law
                       --------------
          This Agreement shall be construed and enforced in accordance with
and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.

          Section 8.7  Invalidity of Provisions
                       ------------------------
          If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

          Section 8.8  Entire Agreement
                       ----------------
          This Agreement contains the entire understanding and agreement among
the Partners with respect to the subject matter hereof and supersedes any
other prior written or oral understandings or agreements among them with
respect thereto.



<PAGE>



          IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.

                                      GENERAL PARTNER

                                      RECKSON FINANCING LLC

                                 By:    Reckson Operating Partnership, L.P.,
                                        Its Sole Member


                                 By:    Reckson Associates Realty Corp.,
                                        Its General Partner

                                 By:    /s/ Scott Rechler
                                        ----------------------------------  
                                        Name:  Scott Rechler
                                        Title: President



                                 LIMITED PARTNER

                                 RECKSON OPERATING PARTNERSHIP, L.P.

                                 By:    Reckson Associates Realty Corp.,
                                        Its General Partner

                                 By:    /s/ Scott Rechler
                                        -------------------------------------
                                        Name:  Scott Rechler
                                        Title: President


<PAGE>
                                EXHIBIT 10.24
    
                            SEVERANCE AGREEMENT


      SEVERANCE AGREEMENT, dated as of the 25th day of February, 1998  (the 
"Agreement") by and between Donald J. Rechler (the "Executive"), and Reckson
Associates Realty Corp., a Maryland corporation with a principal place of 
business at 225 Broadhollow Road, Melville, New York 11747 (the "Employer").

      Terms used in this Agreement with the initial letter capitalized shall, 
unless otherwise defined herein, have the meanings specified in the Employment
and Noncompetition Agreement, dated June 2, 1995, between the Employer and the
Executive and in any amendment to or restatement of such agreement (the 
"Employment Agreement").

                           W I T N E S S E T H :

      WHEREAS, Executive and Employer have previously entered into the 
Employment Agreement; and

      WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.

      NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows: 

      Employment and Noncompetition Agreement.  This Agreement is supplementary
to and, except as explicitly set forth herein, does not limit or alter any of 
the terms and conditions established under the Employment Agreement.

      Term.  The term and duration of this Agreement shall be identical to the 
term of the Employment Agreement, provided, however, that if a Change-in-Control
shall occur during the Employment Period, the term of this Agreement, the 
Employment Agreement and the Employment Period shall continue in effect until 
the later of (i) the date on which the term of the Employment Agreement 
otherwise would have ended or (ii) the date which is thirty-six months beyond
the end of the calendar year in which the Change-in-Control occurs.  Section 1
of the Employment Agreement is hereby amended in accordance with the foregoing.

      Termination and Severance Payments.  Sections 7(a), (b) and (c) of the 
Employment Agreement are hereby superseded in their entirety by this Section 3.

      At-Will Employment.  Executive's employment pursuant to the Employment 
Agreement is "at will" and may be terminated by the Employer at any time with or
without Good Reason, by a majority vote of all of the members of the Board of 
Directors of the Employer upon written notice to Executive, subject only to the
severance provisions specifically set forth in this Section 3 and in Sections 7
(d) through 7(h) of the Employment Agreement.

      Termination by Executive.  The Employment Period and Executive's 
employment under the Employment Agreement may be terminated effective
immediately by Executive by written notice to the Board of Directors of the
Employer (i) within 30 days of the occurrence of a failure of the Board of
Directors of the Employer to elect Executive to offices with the same or
substantially the same duties and responsibilities as set forth in Section 2 of
the Employment Agreement, (ii) within 30 days of the occurrence of a material 
failure by the Employer to comply with the provisions of Section 3 of the 
Employment Agreement or a material breach by the Employer of any other 
provision of the Employment Agreement, or (iii) at any time during the 30 day
period beginning on the effective date of a Change in Control and the 30 day 
period beginning one year after the effective date of a Change-in-Control.

      Certain Benefits upon Termination by Executive.  Except as specifically 
provided in this Section 3 or in Sections 7(d) through 7(h) of the Employment 
Agreement or as otherwise required by law, all compensation and benefits to 
Executive under the Employment Agreement shall terminate on the date of 
termination of the Employment Period.  Notwithstanding the foregoing, if the
Employment Period is terminated pursuant to Section 3(b) or if Executive's 
employment is terminated by the Employer other than for Good Reason, Executive
shall be entitled to the following benefits:

      The Employer shall pay the Executive (x) his or her full Base Salary 
though the date of termination at the rate in effect on such date, (y) 
compensation for accrued but unused vacation time, plus (z) a pro rata portion
of the Executive's incentive compensation for the calendar year in which the 
event of termination occurs, assuming that the Executive would have received 
incentive compensation for such full calendar year equal to the product of (A)
the Base Salary that would be payable to the Executive pursuant to subsection 3
(a) of the Employment Agreement for such full calendar year and (B) the greater
of (a) 1/2 or (b) a percentage equal to the percentage of the Executive's Base
Salary for the immediately preceding fiscal year that was paid to the Executive
as incentive compensation (including all cash and other incentive compensation,
and including shares of Common Stock) for the immediately preceding fiscal year,
expressed as a percentage (the greater of clauses (a) and (b) being herein
referred to as the "Deemed Bonus Percentage");

      The Employer shall pay as severance to the Executive, not later than the
tenth day following the date of termination, a lump sum severance payment (the
"Severance Payment") equal to the aggregate of all compensation due to the 
Executive hereunder had his or her employment not been so terminated (without
duplication of subsection 3(c)(i) above), including, without limitation, all 
incentive compensation which would have been due to the Executive pursuant to
subsection 3(b) of the Employment Agreement, through the expiration of this 
Agreement (as such Agreement may continue in effect under Section 2 hereof in
the event of a Change-in-Control) assuming that the Executive would have 
received incentive compensation for each calendar year through the expiration
of this Agreement (as such Agreement may continue in effect under Section 2 
hereof in the event of a Change-in-Control) equal to the product of (A) the 
Base Salary payable to the Executive pursuant to subsection 3(a) of the 
Employment Agreement for each such calendar year and (B) the Deemed Bonus
Percentage; provided, however, that such Severance Payment shall not be payable
to the Executive until (x) the Executive has executed and delivered to the 
Employer a general release in a form to be determined by the Employer in good
faith, and (y) any applicable revocation period with respect to such release 
has expired.  For purposes of determining Executive's annual compensation in 
the preceding sentence, compensation payable to the Executive by the Employer
12345678901234567890123456789012345678901234567890123456789012345678901234567890
shall include every type and form of compensation includible in the Executive's
gross income in respect of his or her employment by the Employer (including, 
without limitation, all income reported on an Internal Revenue Service Form 
W-2), compensation income recognized as a result of the Executive's exercise of
stock options or sale of the stock so acquired and including, without 
limitation, any annual incentive compensation paid in cash or securities to such
Executive; 

      An amount equal to the Additional Amount pursuant to Section 5 below;

      For the remaining term of the Employment Agreement, Executive shall 
continue to receive all benefits described in Section 3 of the Employment 
Agreement existing on the date of termination and any other benefits then 
provided by Employer to Executive in addition to those described in Section 3 of
the Employment Agreement, including, but not limited to, the life insurance 
coverage provided by Employer to Executive and the automobile provided by 
Employer to Executive and automobile insurance and maintenance in respect of
such automobile.  For purposes of the application of such benefits, Executive
shall be treated as if he or she had remained in the employ of the Employer with
a Base Salary at the rate in effect on the date of termination;

      For purposes of any stock option plan of the Employer, (x) any stock 
options or other awards (including restricted stock grants) of the Executive
under such plan shall vest and become exercisable upon any such termination,
and (y) Executive shall be treated as if he or she had remained in the employ of
the Employer for the remaining term of the Employment Agreement after the date 
of Executive's termination so that Executive shall be entitled to exercise any 
exercisable options or other rights;

      For purposes of any section 401(k) plan or other deferred compensation 
plan of the Employer, Executive shall be treated as if he or she had remained in
the employ of the Employer for the remaining term of the Employment Agreement 
after the date of Executive's termination so that Executive may continue to 
receive all matching contributions as provided by the Employer in connection
with such plan or any other contributions by Employer in connection with such
plan as in effect immediately prior to such termination;

      The amount of any outstanding loans made by the Employer to the Executive
to acquire shares of Common Stock or units of limited partnership interest in 
Reckson Operating Partnership, L.P., together with any interest accrued on any
such loans, and any related "tax" loans made by the Employer to the Executive in
respect of tax liabilities owing as the result of the forgiveness of such loans
(including forgiveness pursuant to the terms of this Section 3(c)(vii)), 
together with any interest accrued on any such tax loans, shall be deemed
forgiven and Executive shall have no further liability in respect thereof;

      If, in spite of the provisions above, any benefits or service credits 
under any benefit plan or program of the Employer may not be paid or provided
under such plan or program to Executive, or to Executive's dependents,
beneficiaries or estate, because Executive is no longer considered to be an
employee of the Employer, the Employer shall pay or provide for payment of such
benefits and service credits to Executive, or to Executive's dependents, 
beneficiaries or estate, for the remaining term of the Employment Agreement;
and

      Nothing herein shall be deemed to obligate Executive to seek other 
employment in the event of any such termination and any amounts earned or
benefits received from such other employment will not serve to reduce in any way
the amounts and benefits payable in accordance herewith.

      Expenses.  Section 3(e) of the Employment Agreement is hereby amended by 
this Section 4.  In addition to the expenses referred to in Section 3(e) of the
Employment Agreement, the Employer shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Executive
as they become due as a result of (i) the termination of the Employment Period 
or Executive's employment pursuant to this Agreement or the Employment Agreement
(including all such fees and expenses, if any, incurred in contesting or 
disputing any such termination), (ii) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement, the Employment Agreement or by 
any other plan or arrangement maintained by the Employer under which the 
Executive is or may be entitled to receive benefits or (iii) any action taken by
the Employer against the Executive, unless and until such time that a final 
judgement has been rendered in favor of the Employer and all appeals related to
any such action have been exhausted; provided however, that the circumstances 
set forth above occurred on or after a Change-in-Control.

      Additional Amount.  Whether or not Section 3 is applicable, if in the 
opinion of tax counsel selected by the Executive and reasonably acceptable to 
the Employer, the Executive has or will receive any compensation or recognize 
any income (whether or not pursuant to this Agreement, the Employment Agreement
or any plan or other arrangement of the Employer and whether or not the 
Employment Period or the Executive's employment with the Employer has 
terminated) which will constitute an "excess parachute payment" within the
meaning of Section 280G(b)(1) of the Code (or for which a tax is otherwise
payable under Section 4999 of the Code), then the Employer shall pay the 
Executive an additional amount (the "Additional Amount") equal to the sum of
(i) all taxes payable by the Executive under Section 4999 of the Code with 
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount.  Any amounts payable pursuant to this 
Section 4 shall be paid by the Employer to the Executive within 30 days of each
written request therefor made by the Executive.

      Income Tax Payment.  Whether or not Section 3 is applicable, if (i) the 
Executive has or will receive any compensation or recognize any income (whether
or not pursuant to this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer and whether or not the Employment Period or the 
Executive's employment with the Employer has terminated) in connection with a
"Change-in-Control" (as that term may be interpreted in this Agreement, the 
Employment Agreement or any plan or other arrangement of the Employer), and 
(ii) such compensation or income represents non-cash compensation or income 
(including, without limitation, non-cash compensation or income attributable to
the vesting or exercise of stock options and other awards (including restricted
stock grants) under any stock option plan of the Employer), then the Employer 
shall pay the Executive in cash an amount (the "Income Tax Payment") equal to 
all federal, state and local income taxes payable by Executive with respect to
such non-cash compensation or income.  The Income Tax Payment shall be paid by
the Employer to the Executive within 30 days of the written request therefor 
made by the Executive.

      Notices.  Any notice required or permitted hereunder shall be in writing 
and shall be deemed sufficient when given by hand, by nationally recognized 
overnight courier or by express, registered or certified mail, postage prepaid,
return receipt requested, and addressed to the Employer or Executive, as 
applicable, at the address indicated above (or to such other address as may be
provided by notice).

      Miscellaneous.  This Agreement (i) may not be assigned by Executive 
without the prior written consent of the Employer and (ii) may be assigned by
the Employer and shall be binding upon, and inure to the benefit of, the 
Employer's successors and assigns.  Headings herein are for convenience of 
reference only and shall not define, limit or interpret the contents hereof.

	Amendment.  This Agreement may be amended, modified or supplemented by the
mutual consent of the parties in writing, but no oral amendment, modification or
supplement shall be effective.

      Severability.  If a court of competent jurisdiction adjudicates any one or
more of the provisions hereof as invalid, illegal or unenforceable in any 
respect, such provision(s) shall be ineffective only to the extent and duration
of such invalidity, illegality or unenforceability and such invalidity, 
illegality or unenforceability shall not affect the remaining substance of such
provision or any other provision of this Agreement and this Agreement shall be 
construed as if such invalid, illegal or unenforceable provision had been 
limited or modified (consistent with its general intent) to the extent 
necessary so that it shall be valid, legal and enforceable.  If it shall not be
possible to so limit or modify such invalid, illegal or unenforceable provision,
this Agreement shall be construed as if such invalid, illegal or unenforceable 
provision had never been contained herein, and the parties will use their best 
efforts to substitute a valid, legal and enforceable provision which, insofar 
as practicable, implements the purpose and intent of the provision originally 
contained herein.

      Governing Law.  This Agreement shall be construed and governed by the laws
of the State of New York.

      IN WITNESS WHEREOF, this Agreement is entered into as of the date and year
first above written.


						RECKSON ASSOCIATES REALTY CORP.



                                    By:    /s/ Scott Rechler
                                           -----------------------
                                       Name:  Scott Rechler
                                       Title: President


                                    By:    /s/ Donald J. Rechler
                                           -----------------------
                                           Donald J. Rechler
<PAGE>
                                EXHIBIT 10.25
      
                            SEVERANCE AGREEMENT


      SEVERANCE AGREEMENT, dated as of the 25th day of February, 1998 (the 
"Agreement") by and between Scott H. Rechler (the "Executive"), and Reckson
Associates Realty Corp., a Maryland corporation with a principal place of 
business at 225 Broadhollow Road, Melville, New York 11747 (the "Employer").

      Terms used in this Agreement with the initial letter capitalized shall, 
unless otherwise defined herein, have the meanings specified in the Employment
and Noncompetition Agreement, dated June 2, 1995, between the Employer and the
Executive and in any amendment to or restatement of such agreement (the 
"Employment Agreement").

                           W I T N E S S E T H :

      WHEREAS, Executive and Employer have previously entered into the 
Employment Agreement; and

      WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.

      NOW THEREFORE, in consideration of the premises and subject to the terms 
and conditions set forth herein, the parties hereto agree as follows: 

      Employment and Noncompetition Agreement.  This Agreement is supplementary
to and, except as explicitly set forth herein, does not limit or alter any of 
the terms and conditions established under the Employment Agreement.

      Term.  The term and duration of this Agreement shall be identical to the 
term of the Employment Agreement, provided, however, that if a Change-in-Control
shall occur during the Employment Period, the term of this Agreement, the 
Employment Agreement and the Employment Period shall continue in effect until
the later of (i) the date on which the term of the Employment Agreement 
otherwise would have ended or (ii) the date which is thirty-six months beyond 
the end of the calendar year in which the Change-in-Control occurs.  Section 1
of the Employment Agreement is hereby amended in accordance with the foregoing.

      Termination and Severance Payments.  Sections 7(a), (b) and (c) of the 
Employment Agreement are hereby superseded in their entirety by this Section 3.

      At-Will Employment.  Executive's employment pursuant to the Employment 
Agreement is "at will" and may be terminated by the Employer at any time with or
without Good Reason, by a majority vote of all of the members of the Board of 
Directors of the Employer upon written notice to Executive, subject only to the
severance provisions specifically set forth in this Section 3 and in Sections 
7(d) through 7(h) of the Employment Agreement.

      Termination by Executive.  The Employment Period and Executive's 
employment under the Employment Agreement may be terminated effective 
immediately by Executive by written notice to the Board of Directors of the 
Employer (i) within 30 days of the occurrence of a failure of the Board of 
Directors of the Employer to elect Executive to offices with the same or 
substantially the same duties and responsibilities as set forth in Section 2 of
the Employment Agreement, (ii) within 30 days of the occurrence of a material 
failure by the Employer to comply with the provisions of Section 3 of the 
Employment Agreement or a material breach by the Employer of any other 
provision of the Employment Agreement, or (iii) at any time during the 30 day
period beginning on the effective date of a Change in Control and the 30 day 
period beginning one year after the effective date of a Change-in-Control.

	Certain Benefits upon Termination by Executive.  Except as specifically 
provided in this Section 3 or in Sections 7(d) through 7(h) of the Employment 
Agreement or as otherwise required by law, all compensation and benefits to 
Executive under the Employment Agreement shall terminate on the date of 
termination of the Employment Period.  Notwithstanding the foregoing, if the 
Employment Period is terminated pursuant to Section 3(b) or if Executive's 
employment is terminated by the Employer other than for Good Reason, Executive
shall be entitled to the following benefits:

      The Employer shall pay the Executive (x) his or her full Base Salary 
though the date of termination at the rate in effect on such date, (y) 
compensation for accrued but unused vacation time, plus (z) a pro rata portion
of the Executive's incentive compensation for the calendar year in which the 
event of termination occurs, assuming that the Executive would have received 
incentive compensation for such full calendar year equal to the product of (A)
the Base Salary that would be payable to the Executive pursuant to subsection 
3(a) of the Employment Agreement for such full calendar year and (B) the greater
of (a) 1/2 or (b) a percentage equal to the percentage of the Executive's Base 
Salary for the immediately preceding fiscal year that was paid to the Executive
as incentive compensation (including all cash and other incentive compensation,
and including shares of Common Stock) for the immediately preceding fiscal year,
expressed as a percentage (the greater of clauses (a) and (b) being herein 
referred to as the "Deemed Bonus Percentage");

      The Employer shall pay as severance to the Executive, not later than the 
tenth day following the date of termination, a lump sum severance payment (the
"Severance Payment") equal to the aggregate of all compensation due to the 
Executive hereunder had his or her employment not been so terminated (without
duplication of subsection 3(c)(i) above), including, without limitation, all 
incentive compensation which would have been due to the Executive pursuant to
subsection 3(b) of the Employment Agreement, through the expiration of this 
Agreement (as such Agreement may continue in effect under Section 2 hereof in
the event of a Change-in-Control) assuming that the Executive would have 
received incentive compensation for each calendar year through the expiration
of this Agreement (as such Agreement may continue in effect under Section 2 
hereof in the event of a Change-in-Control) equal to the product of (A) the 
Base Salary payable to the Executive pursuant to subsection 3(a) of the 
Employment Agreement for each such calendar year and (B) the Deemed Bonus
Percentage; provided, however, that such Severance Payment shall not be payable
12345678901234567890123456789012345678901234567890123456789012345678901234567890
to the Executive until (x) the Executive has executed and delivered to the 
Employer a general release in a form to be determined by the Employer in good
faith, and (y) any applicable revocation period with respect to such release has
expired.  For purposes of determining Executive's annual compensation in the 
preceding sentence, compensation payable to the Executive by the Employer shall
include every type and form of compensation includible in the Executive's gross
income in respect of his or her employment by the Employer (including, without
limitation, all income reported on an Internal Revenue Service Form W-2), 
compensation income recognized as a result of the Executive's exercise of stock
options or sale of the stock so acquired and including, without limitation, any
annual incentive compensation paid in cash or securities to such Executive; 

      An amount equal to the Additional Amount pursuant to Section 5 below;

      For the remaining term of the Employment Agreement, Executive shall 
continue to receive all benefits described in Section 3 of the Employment 
Agreement existing on the date of termination and any other benefits then 
provided by Employer to Executive in addition to those described in Section 3
of the Employment Agreement, including, but not limited to, the life insurance
coverage provided by Employer to Executive and the automobile provided by 
Employer to Executive and automobile insurance and maintenance in respect of
such automobile.  For purposes of the application of such benefits, Executive
shall be treated as if he or she had remained in the employ of the Employer 
with a Base Salary at the rate in effect on the date of termination;

      For purposes of any stock option plan of the Employer, (x) any stock 
options or other awards (including restricted stock grants) of the Executive
under such plan shall vest and become exercisable upon any such termination, and
(y) Executive shall be treated as if he or she had remained in the employ of the
Employer for the remaining term of the Employment Agreement after the date of 
Executive's termination so that Executive shall be entitled to exercise any 
exercisable options or other rights;

      For purposes of any section 401(k) plan or other deferred compensation 
plan of the Employer, Executive shall be treated as if he or she had remained in
the employ of the Employer for the remaining term of the Employment Agreement 
after the date of Executive's termination so that Executive may continue to 
receive all matching contributions as provided by the Employer in connection
with such plan or any other contributions by Employer in connection with such 
plan as in effect immediately prior to such termination;

      The amount of any outstanding loans made by the Employer to the Executive
to acquire shares of Common Stock or units of limited partnership interest in 
Reckson Operating Partnership, L.P., together with any interest accrued on any
such loans, and any related "tax" loans made by the Employer to the Executive in
respect of tax liabilities owing as the result of the forgiveness of such loans
(including forgiveness pursuant to the terms of this Section 3(c)(vii)), 
together with any interest accrued on any such tax loans, shall be deemed
forgiven and Executive shall have no further liability in respect thereof;

      If, in spite of the provisions above, any benefits or service credits 
under any benefit plan or program of the Employer may not be paid or provided 
under such plan or program to Executive, or to Executive's dependents, 
beneficiaries or estate, because Executive is no longer considered to be an 
employee of the Employer, the Employer shall pay or provide for payment of such
benefits and service credits to Executive, or to Executive's dependents, 
beneficiaries or estate, for the remaining term of the Employment Agreement;
and

      Nothing herein shall be deemed to obligate Executive to seek other 
employment in the event of any such termination and any amounts earned or 
benefits received from such other employment will not serve to reduce in any way
the amounts and benefits payable in accordance herewith.

      Expenses.  Section 3(e) of the Employment Agreement is hereby amended by 
this Section 4.  In addition to the expenses referred to in Section 3(e) of the
Employment Agreement, the Employer shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Executive
as they become due as a result of (i) the termination of the Employment Period 
or Executive's employment pursuant to this Agreement or the Employment Agreement
(including all such fees and expenses, if any, incurred in contesting or 
disputing any such termination), (ii) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement, the Employment Agreement or by 
any other plan or arrangement maintained by the Employer under which the 
Executive is or may be entitled to receive benefits or (iii) any action taken by
the Employer against the Executive, unless and until such time that a final 
judgement has been rendered in favor of the Employer and all appeals related to
any such action have been exhausted; provided however, that the circumstances 
set forth above occurred on or after a Change-in-Control.

      Additional Amount.  Whether or not Section 3 is applicable, if in the 
opinion of tax counsel selected by the Executive and reasonably acceptable to 
the Employer, the Executive has or will receive any compensation or recognize 
any income (whether or not pursuant to this Agreement, the Employment Agreement
or any plan or other arrangement of the Employer and whether or not the 
Employment Period or the Executive's employment with the Employer has 
terminated) which will constitute an "excess parachute payment" within the
meaning of Section 280G(b)(1) of the Code (or for which a tax is otherwise
payable under Section 4999 of the Code), then the Employer shall pay the 
Executive an additional amount (the "Additional Amount") equal to the sum of
(i) all taxes payable by the Executive under Section 4999 of the Code with 
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount.  Any amounts payable pursuant to this 
Section 4 shall be paid by the Employer to the Executive within 30 days of each
written request therefor made by the Executive.

      Income Tax Payment.  Whether or not Section 3 is applicable, if (i) the 
Executive has or will receive any compensation or recognize any income (whether
or not pursuant to this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer and whether or not the Employment Period or the 
Executive's employment with the Employer has terminated) in connection with a 
"Change-in-Control" (as that term may be interpreted in this Agreement, the 
Employment Agreement or any plan or other arrangement of the Employer), and (ii)
such compensation or income represents non-cash compensation or income 
(including, without limitation, non-cash compensation or income attributable to
the vesting or exercise of stock options and other awards (including restricted
stock grants) under any stock option plan of the Employer), then the Employer 
shall pay the Executive in cash an amount (the "Income Tax Payment") equal to 
all federal, state and local income taxes payable by Executive with respect to
such non-cash compensation or income.  The Income Tax Payment shall be paid by
the Employer to the Executive within 30 days of the written request therefor 
made by the Executive.

      Notices.  Any notice required or permitted hereunder shall be in writing 
and shall be deemed sufficient when given by hand, by nationally recognized 
overnight courier or by express, registered or certified mail, postage prepaid,
return receipt requested, and addressed to the Employer or Executive, as 
applicable, at the address indicated above (or to such other address as may be
provided by notice).

      Miscellaneous.  This Agreement (i) may not be assigned by Executive 
without the prior written consent of the Employer and (ii) may be assigned by
the Employer and shall be binding upon, and inure to the benefit of, the 
Employer's successors and assigns.  Headings herein are for convenience of
reference only and shall not define, limit or interpret the contents hereof.

      Amendment.  This Agreement may be amended, modified or supplemented by the
mutual consent of the parties in writing, but no oral amendment, modification or
supplement shall be effective.

      Severability.  If a court of competent jurisdiction adjudicates any one or
more of the provisions hereof as invalid, illegal or unenforceable in any 
respect, such provision(s) shall be ineffective only to the extent and duration
of such invalidity, illegality or unenforceability and such invalidity, 
illegality or unenforceability shall not affect the remaining substance of such
provision or any other provision of this Agreement and this Agreement shall be 
construed as if such invalid, illegal or unenforceable provision had been 
limited or modified (consistent with its general intent) to the extent 
necessary so that it shall be valid, legal and enforceable.  If it shall not be
possible to so limit or modify such invalid, illegal or unenforceable provision,
this Agreement shall be construed as if such invalid, illegal or unenforceable 
provision had never been contained herein, and the parties will use their best 
efforts to substitute a valid, legal and enforceable provision which, insofar as
practicable, implements the purpose and intent of the provision originally 
contained herein.

      Governing Law.  This Agreement shall be construed and governed by the laws
of the State of New York.

      IN WITNESS WHEREOF, this Agreement is entered into as of the date and year
first above written.


						RECKSON ASSOCIATES REALTY CORP.



                                    By:    /s/ Michael Maturo
                                           -----------------------
                                       Name:  Michael Maturo
	                                 Title: Executive Vice President


                                    By:    /s/ Scott Rechler
                                           -----------------------
                                           Scott Rechler
<PAGE>
                                EXHIBIT 10.26
            
                             SEVERANCE AGREEMENT


      SEVERANCE AGREEMENT, dated as of the 25th day of February, 1998  (the 
"Agreement") by and between Mitchell D. Rechler (the "Executive"), and Reckson
Associates Realty Corp., a Maryland corporation with a principal place of 
business at 225 Broadhollow Road, Melville, New York 11747 (the "Employer").

      Terms used in this Agreement with the initial letter capitalized shall, 
unless otherwise defined herein, have the meanings specified in the Employment
and Noncompetition Agreement, dated June 2, 1995, between the Employer and the
Executive and in any amendment to or restatement of such agreement (the 
"Employment Agreement").

                           W I T N E S S E T H :

      WHEREAS, Executive and Employer have previously entered into the 
Employment Agreement; and

     WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.

     NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows: 

     Employment and Noncompetition Agreement.  This Agreement is supplementary
to and, except as explicitly set forth herein, does not limit or alter any of 
the terms and conditions established under the Employment Agreement.

      Term.  The term and duration of this Agreement shall be identical to the
term of the Employment Agreement, provided, however, that if a Change-in-Control
shall occur during the Employment Period, the term of this Agreement, the 
Employment Agreement and the Employment Period shall continue in effect until 
the later of (i) the date on which the term of the Employment Agreement 
otherwise would have ended or (ii) the date which is thirty-six months beyond
the end of the calendar year in which the Change-in-Control occurs.  Section 1
of the Employment Agreement is hereby amended in accordance with the foregoing.

	Termination and Severance Payments.  Sections 7(a), (b) and (c) of the 
Employment Agreement are hereby superseded in their entirety by this Section 3.


      At-Will Employment.  Executive's employment pursuant to the Employment 
Agreement is "at will" and may be terminated by the Employer at any time with or
without Good Reason, by a majority vote of all of the members of the Board of 
Directors of the Employer upon written notice to Executive, subject only to the
severance provisions specifically set forth in this Section 3 and in Sections 
7(d) through 7(h) of the Employment Agreement.

Termination by Executive.  The Employment Period and Executive's employment 
under the Employment Agreement may be terminated effective immediately by 
Executive by written notice to the Board of Directors of the Employer (i) within
30 days of the occurrence of a failure of the Board of Directors of the Employer
to elect Executive to offices with the same or substantially the same duties and
responsibilities as set forth in Section 2 of the Employment Agreement, (ii) 
within 30 days of the occurrence of a material failure by the Employer to comply
with the provisions of Section 3 of the Employment Agreement or a material 
breach by the Employer of any other provision of the Employment Agreement, or
(iii) at any time during the 30 day period beginning on the effective date of a
Change in Control and the 30 day period beginning one year after the effective 
date of a Change-in-Control.

      Certain Benefits upon Termination by Executive.  Except as specifically 
provided in this Section 3 or in Sections 7(d) through 7(h) of the Employment 
Agreement or as otherwise required by law, all compensation and benefits to 
Executive under the Employment Agreement shall terminate on the date of 
termination of the Employment Period.  Notwithstanding the foregoing, if the
Employment Period is terminated pursuant to Section 3(b) or if Executive's 
employment is terminated by the Employer other than for Good Reason, Executive
shall be entitled to the following benefits:

	  The Employer shall pay the Executive (x) his or her full Base Salary 
though the date of termination at the rate in effect on such date, (y) 
compensation for accrued but unused vacation time, plus (z) a pro rata portion
of the Executive's incentive compensation for the calendar year in which the
event of termination occurs, assuming that the Executive would have received
incentive compensation for such full calendar year equal to the product of (A)
the Base Salary that would be payable to the Executive pursuant to subsection
3(a) of the Employment Agreement for such full calendar year and (B) the greater
of (a) 1/2 or (b) a percentage equal to the percentage of the Executive's Base 
Salary for the immediately preceding fiscal year that was paid to the Executive
as incentive compensation (including all cash and other incentive compensation,
and including shares of Common Stock) for the immediately preceding fiscal year,
expressed as a percentage (the greater of clauses (a) and (b) being herein 
referred to as the "Deemed Bonus Percentage");

      The Employer shall pay as severance to the Executive, not later than the
tenth day following the date of termination, a lump sum severance payment (the
"Severance Payment") equal to the aggregate of all compensation due to the 
Executive hereunder had his or her employment not been so terminated (without
duplication of subsection 3(c)(i) above), including, without limitation, all 
incentive compensation which would have been due to the Executive pursuant to
subsection 3(b) of the Employment Agreement, through the expiration of this 
Agreement (as such Agreement may continue in effect under Section 2 hereof in
the event of a Change-in-Control) assuming that the Executive would have
received incentive compensation for each calendar year through the expiration
of this Agreement (as such Agreement may continue in effect under Section 2 
hereof in the event of a Change-in-Control) equal to the product of (A) the 
Base Salary payable to the Executive pursuant to subsection 3(a) of the 
Employment Agreement for each such calendar year and (B) the Deemed Bonus
Percentage; provided, however, that such Severance Payment shall not be payable
to the Executive until (x) the Executive has executed and delivered to the 
Employer a general release in a form to be determined by the Employer in good
faith, and (y) any applicable revocation period with respect to such release 
has expired.  For purposes of determining Executive's annual compensation in 
the preceding sentence, compensation payable to the Executive by the Employer
shall include every type and form of compensation includible in the Executive's
gross income in respect of his or her employment by the Employer (including, 
without limitation, all income reported on an Internal Revenue Service Form 
W-2), compensation income recognized as a result of the Executive's exercise of
stock options or sale of the stock so acquired and including, without 
limitation, any annual incentive compensation paid in cash or securities to such
Executive; 

      An amount equal to the Additional Amount pursuant to Section 5 below;

      For the remaining term of the Employment Agreement, Executive shall 
continue to receive all benefits described in Section 3 of the Employment 
Agreement existing on the date of termination and any other benefits then 
provided by Employer to Executive in addition to those described in Section 3
of the Employment Agreement, including, but not limited to, the life insurance
coverage provided by Employer to Executive and the automobile provided by 
Employer to Executive and automobile insurance and maintenance in respect of
such automobile.  For purposes of the application of such benefits, Executive
shall be treated as if he or she had remained in the employ of the Employer with
a Base Salary at the rate in effect on the date of termination;

      For purposes of any stock option plan of the Employer, (x) any stock 
options or other awards (including restricted stock grants) of the Executive
under such plan shall vest and become exercisable upon any such termination, and
(y) Executive shall be treated as if he or she had remained in the employ of the
Employer for the remaining term of the Employment Agreement after the date of 
Executive's termination so that Executive shall be entitled to exercise any 
exercisable options or other rights;

      For purposes of any section 401(k) plan or other deferred compensation 
plan of the Employer, Executive shall be treated as if he or she had remained in
the employ of the Employer for the remaining term of the Employment Agreement 
after the date of Executive's termination so that Executive may continue to 
receive all matching contributions as provided by the Employer in connection
with such plan or any other contributions by Employer in connection with such
plan as in effect immediately prior to such termination;

      The amount of any outstanding loans made by the Employer to the Executive
to acquire shares of Common Stock or units of limited partnership interest in 
Reckson Operating Partnership, L.P., together with any interest accrued on any
such loans, and any related "tax" loans made by the Employer to the Executive in
respect of tax liabilities owing as the result of the forgiveness of such loans
(including forgiveness pursuant to the terms of this Section 3(c)(vii)),
together with any interest accrued on any such tax loans, shall be deemed 
forgiven and Executive shall have no further liability in respect thereof;

      If, in spite of the provisions above, any benefits or service credits 
under any benefit plan or program of the Employer may not be paid or provided
under such plan or program to Executive, or to Executive's dependents, 
beneficiaries or estate, because Executive is no longer considered to be an
employee of the Employer, the Employer shall pay or provide for payment of such
benefits and service credits to Executive, or to Executive's dependents,
beneficiaries or estate, for the remaining term of the Employment Agreement;
and

      Nothing herein shall be deemed to obligate Executive to seek other 
employment in the event of any such termination and any amounts earned or
benefits received from such other employment will not serve to reduce in any way
the amounts and benefits payable in accordance herewith.

      Expenses.  Section 3(e) of the Employment Agreement is hereby amended by 
this Section 4.  In addition to the expenses referred to in Section 3(e) of the
Employment Agreement, the Employer shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Executive
as they become due as a result of (i) the termination of the Employment Period 
or Executive's employment pursuant to this Agreement or the Employment Agreement
(including all such fees and expenses, if any, incurred in contesting or 
disputing any such termination), (ii) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement, the Employment Agreement or by
any other plan or arrangement maintained by the Employer under which the
Executive is or may be entitled to receive benefits or (iii) any action taken by
the Employer against the Executive, unless and until such time that a final 
judgement has been rendered in favor of the Employer and all appeals related to
any such action have been exhausted; provided however, that the circumstances
set forth above occurred on or after a Change-in-Control.

      Additional Amount.  Whether or not Section 3 is applicable, if in the
opinion of tax counsel selected by the Executive and reasonably acceptable to
the Employer, the Executive has or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement, the Employment Agreement
or any plan or other arrangement of the Employer and whether or not the 
Employment Period or the Executive's employment with the Employer has 
terminated) which will constitute an "excess parachute payment" within the
meaning of Section 280G(b)(1) of the Code (or for which a tax is otherwise
payable under Section 4999 of the Code), then the Employer shall pay the 
Executive an additional amount (the "Additional Amount") equal to the sum of
(i) all taxes payable by the Executive under Section 4999 of the Code with 
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount.  Any amounts payable pursuant to this
Section 4 shall be paid by the Employer to the Executive within 30 days of each
written request therefor made by the Executive.

      Income Tax Payment.  Whether or not Section 3 is applicable, if (i) the 
Executive has or will receive any compensation or recognize any income (whether
or not pursuant to this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer and whether or not the Employment Period or the 
Executive's employment with the Employer has terminated) in connection with a 
"Change-in-Control" (as that term may be interpreted in this Agreement, the 
Employment Agreement or any plan or other arrangement of the Employer), and (ii)
such compensation or income represents non-cash compensation or income
(including, without limitation, non-cash compensation or income attributable to
the vesting or exercise of stock options and other awards (including restricted
stock grants) under any stock option plan of the Employer), then the Employer 
shall pay the Executive in cash an amount (the "Income Tax Payment") equal to
all federal, state and local income taxes payable by Executive with respect to
such non-cash compensation or income.  The Income Tax Payment shall be paid by
the Employer to the Executive within 30 days of the written request therefor 
made by the Executive.

      Notices.  Any notice required or permitted hereunder shall be in writing 
and shall be deemed sufficient when given by hand, by nationally recognized 
overnight courier or by express, registered or certified mail, postage prepaid,
return receipt requested, and addressed to the Employer or Executive, as
applicable, at the address indicated above (or to such other address as may be
provided by notice).

      Miscellaneous.  This Agreement (i) may not be assigned by Executive 
without the prior written consent of the Employer and (ii) may be assigned by
the Employer and shall be binding upon, and inure to the benefit of, the 
Employer's successors and assigns.  Headings herein are for convenience of
reference only and shall not define, limit or interpret the contents hereof.

      Amendment.  This Agreement may be amended, modified or supplemented by the
mutual consent of the parties in writing, but no oral amendment, modification or
supplement shall be effective.

      Severability.  If a court of competent jurisdiction adjudicates any one or
more of the provisions hereof as invalid, illegal or unenforceable in any 
respect, such provision(s) shall be ineffective only to the extent and duration
of such invalidity, illegality or unenforceability and such invalidity, 
illegality or unenforceability shall not affect the remaining substance of such
provision or any other provision of this Agreement and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had been
limited or modified (consistent with its general intent) to the extent 
necessary so that it shall be valid, legal and enforceable.  If it shall not be
possible to so limit or modify such invalid, illegal or unenforceable provision,
this Agreement shall be construed as if such invalid, illegal or unenforceable 
provision had never been contained herein, and the parties will use their best
efforts to substitute a valid, legal and enforceable provision which, insofar
as practicable, implements the purpose and intent of the provision originally
contained herein.

      Governing Law.  This Agreement shall be construed and governed by the laws
of the State of New York.

      IN WITNESS WHEREOF, this Agreement is entered into as of the date and year
first above written.



						RECKSON ASSOCIATES REALTY CORP.



                                    By:    /s/ Scott Rechler
                                           -----------------------
                                        Name:  Scott Rechler
                                        Title: President


                                    By:    /s/ Mitchell D. Rechler
                                           -----------------------
                                           Mitchell D. Rechler

<PAGE>
                                EXHIBIT 10.27

                             SEVERANCE AGREEMENT


      SEVERANCE AGREEMENT, dated as of the 25th day of February, 1998  (the 
"Agreement") by and between Gregg M. Rechler (the "Executive"), and Reckson 
Associates Realty Corp., a Maryland corporation with a principal place of 
business at 225 Broadhollow Road, Melville, New York 11747 (the "Employer").

      Terms used in this Agreement with the initial letter capitalized shall, 
unless otherwise defined herein, have the meanings specified in the Employment
and Noncompetition Agreement, dated June 2, 1995, between the Employer and the
Executive and in any amendment to or restatement of such agreement (the 
"Employment Agreement").

                            W I T N E S S E T H :

	WHEREAS, Executive and Employer have previously entered into the 
Employment Agreement; and

      WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.

      NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows: 

      Employment and Noncompetition Agreement.  This Agreement is supplementary
to and, except as explicitly set forth herein, does not limit or alter any of 
the terms and conditions established under the Employment Agreement.

      Term.  The term and duration of this Agreement shall be identical to the
term of the Employment Agreement, provided, however, that if a Change-in-Control
shall occur during the Employment Period, the term of this Agreement, the 
Employment Agreement and the Employment Period shall continue in effect until
the later of (i) the date on which the term of the Employment Agreement 
otherwise would have ended or (ii) the date which is thirty-six months beyond
the end of the calendar year in which the Change-in-Control occurs.  Section 1
of the Employment Agreement is hereby amended in accordance with the foregoing.

      Termination and Severance Payments.  Sections 7(a), (b) and (c) of the 
Employment Agreement are hereby superseded in their entirety by this Section 3.


      At-Will Employment.  Executive's employment pursuant to the Employment 
Agreement is "at will" and may be terminated by the Employer at any time with or
without Good Reason, by a majority vote of all of the members of the Board of 
Directors of the Employer upon written notice to Executive, subject only to the
severance provisions specifically set forth in this Section 3 and in Sections 
7(d) through 7(h) of the Employment Agreement.

      Termination by Executive.  The Employment Period and Executive's 
employment under the Employment Agreement may be terminated effective 
immediately by Executive by written notice to the Board of Directors of the
Employer (i) within 30 days of the occurrence of a failure of the Board of 
Directors of the Employer to elect Executive to offices with the same or 
substantially the same duties and responsibilities as set forth in Section 2 of
the Employment Agreement, (ii) within 30 days of the occurrence of a material 
failure by the Employer to comply with the provisions of Section 3 of the 
Employment Agreement or a material breach by the Employer of any other 
provision of the Employment Agreement, or (iii) at any time during the 30 day
period beginning on the effective date of a Change in Control and the 30 day
period beginning one year after the effective date of a Change-in-Control.

      Certain Benefits upon Termination by Executive.  Except as specifically 
provided in this Section 3 or in Sections 7(d) through 7(h) of the Employment
Agreement or as otherwise required by law, all compensation and benefits to 
Executive under the Employment Agreement shall terminate on the date of 
termination of the Employment Period.  Notwithstanding the foregoing, if the
Employment Period is terminated pursuant to Section 3(b) or if Executive's 
employment is terminated by the Employer other than for Good Reason, Executive
shall be entitled to the following benefits:

      The Employer shall pay the Executive (x) his or her full Base Salary
though the date of termination at the rate in effect on such date, (y) 
compensation for accrued but unused vacation time, plus (z) a pro rata portion
of the Executive's incentive compensation for the calendar year in which the 
event of termination occurs, assuming that the Executive would have received 
incentive compensation for such full calendar year equal to the product of (A)
the Base Salary that would be payable to the Executive pursuant to subsection
3(a) of the Employment Agreement for such full calendar year and (B) the greater
of (a) 1/2 or (b) a percentage equal to the percentage of the Executive's Base 
Salary for the immediately preceding fiscal year that was paid to the Executive
as incentive compensation (including all cash and other incentive compensation,
and including shares of Common Stock) for the immediately preceding fiscal year,
expressed as a percentage (the greater of clauses (a) and (b) being herein
referred to as the "Deemed Bonus Percentage");

      The Employer shall pay as severance to the Executive, not later than the
tenth day following the date of termination, a lump sum severance payment (the
"Severance Payment") equal to the aggregate of all compensation due to the 
Executive hereunder had his or her employment not been so terminated (without
duplication of subsection 3(c)(i) above), including, without limitation, all
incentive compensation which would have been due to the Executive pursuant to
subsection 3(b) of the Employment Agreement, through the expiration of this 
Agreement (as such Agreement may continue in effect under Section 2 hereof in
the event of a Change-in-Control) assuming that the Executive would have 
received incentive compensation for each calendar year through the expiration
of this Agreement (as such Agreement may continue in effect under Section 2 
hereof in the event of a Change-in-Control) equal to the product of (A) the 
Base Salary payable to the Executive pursuant to subsection 3(a) of the 
Employment Agreement for each such calendar year and (B) the Deemed Bonus
Percentage; provided, however, that such Severance Payment shall not be payable
to the Executive until (x) the Executive has executed and delivered to the 
Employer a general release in a form to be determined by the Employer in good
faith, and (y) any applicable revocation period with respect to such release has
expired.  For purposes of determining Executive's annual compensation in the 
preceding sentence, compensation payable to the Executive by the Employer shall
include every type and form of compensation includible in the Executive's gross
income in respect of his or her employment by the Employer (including, without 
limitation, all income reported on an Internal Revenue Service Form W-2), 
compensation income recognized as a result of the Executive's exercise of stock
options or sale of the stock so acquired and including, without limitation, any
annual incentive compensation paid in cash or securities to such Executive; 

      An amount equal to the Additional Amount pursuant to Section 5 below;

      For the remaining term of the Employment Agreement, Executive shall
continue to receive all benefits described in Section 3 of the Employment
Agreement existing on the date of termination and any other benefits then
provided by Employer to Executive in addition to those described in Section 3
of the Employment Agreement, including, but not limited to, the life insurance
coverage provided by Employer to Executive and the automobile provided by 
Employer to Executive and automobile insurance and maintenance in respect of
such automobile.  For purposes of the application of such benefits, Executive
shall be treated as if he or she had remained in the employ of the Employer
with a Base Salary at the rate in effect on the date of termination;

      For purposes of any stock option plan of the Employer, (x) any stock
options or other awards (including restricted stock grants) of the Executive
under such plan shall vest and become exercisable upon any such termination,
and (y) Executive shall be treated as if he or she had remained in the employ
of the Employer for the remaining term of the Employment Agreement after the
date of Executive's termination so that Executive shall be entitled to exercise
any exercisable options or other rights;

      For purposes of any section 401(k) plan or other deferred compensation
plan of the Employer, Executive shall be treated as if he or she had remained in
the employ of the Employer for the remaining term of the Employment Agreement
after the date of Executive's termination so that Executive may continue to 
receive all matching contributions as provided by the Employer in connection
with such plan or any other contributions by Employer in connection with such
plan as in effect immediately prior to such termination;

      The amount of any outstanding loans made by the Employer to the Executive
to acquire shares of Common Stock or units of limited partnership interest in 
Reckson Operating Partnership, L.P., together with any interest accrued on any
such loans, and any related "tax" loans made by the Employer to the Executive in
respect of tax liabilities owing as the result of the forgiveness of such loans
(including forgiveness pursuant to the terms of this Section 3(c)(vii)), 
together with any interest accrued on any such tax loans, shall be deemed
forgiven and Executive shall have no further liability in respect thereof;

      If, in spite of the provisions above, any benefits or service credits
under any benefit plan or program of the Employer may not be paid or provided
under such plan or program to Executive, or to Executive's dependents,
beneficiaries or estate, because Executive is no longer considered to be an
employee of the Employer, the Employer shall pay or provide for payment of such
benefits and service credits to Executive, or to Executive's dependents, 
beneficiaries or estate, for the remaining term of the Employment Agreement;
and

      Nothing herein shall be deemed to obligate Executive to seek other 
employment in the event of any such termination and any amounts earned or 
benefits received from such other employment will not serve to reduce in any way
the amounts and benefits payable in accordance herewith.

      Expenses.  Section 3(e) of the Employment Agreement is hereby amended by 
this Section 4.  In addition to the expenses referred to in Section 3(e) of the
Employment Agreement, the Employer shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Executive
as they become due as a result of (i) the termination of the Employment Period 
or Executive's employment pursuant to this Agreement or the Employment Agreement
(including all such fees and expenses, if any, incurred in contesting or 
disputing any such termination), (ii) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement, the Employment Agreement or by
any other plan or arrangement maintained by the Employer under which the 
Executive is or may be entitled to receive benefits or (iii) any action taken by
the Employer against the Executive, unless and until such time that a final 
judgement has been rendered in favor of the Employer and all appeals related to
any such action have been exhausted; provided however, that the circumstances
set forth above occurred on or after a Change-in-Control.

      Additional Amount.  Whether or not Section 3 is applicable, if in the 
opinion of tax counsel selected by the Executive and reasonably acceptable to
the Employer, the Executive has or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement, the Employment Agreement
or any plan or other arrangement of the Employer and whether or not the 
Employment Period or the Executive's employment with the Employer has 
terminated) which will constitute an "excess parachute payment" within the
meaning of Section 280G(b)(1) of the Code (or for which a tax is otherwise
payable under Section 4999 of the Code), then the Employer shall pay the 
Executive an additional amount (the "Additional Amount") equal to the sum of (i)
all taxes payable by the Executive under Section 4999 of the Code with respect 
to all such excess parachute payments and any such Additional Amount, plus (ii)
all federal, state and local income taxes payable by Executive with respect to
any such Additional Amount.  Any amounts payable pursuant to this Section 4 
shall be paid by the Employer to the Executive within 30 days of each written
request therefor made by the Executive.

      Income Tax Payment.  Whether or not Section 3 is applicable, if (i) the 
Executive has or will receive any compensation or recognize any income (whether
or not pursuant to this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer and whether or not the Employment Period or the 
Executive's employment with the Employer has terminated) in connection with a
"Change-in-Control" (as that term may be interpreted in this Agreement, the 
Employment Agreement or any plan or other arrangement of the Employer), and (ii)
such compensation or income represents non-cash compensation or income 
(including, without limitation, non-cash compensation or income attributable to
the vesting or exercise of stock options and other awards (including restricted
stock grants) under any stock option plan of the Employer), then the Employer 
shall pay the Executive in cash an amount (the "Income Tax Payment") equal to 
all federal, state and local income taxes payable by Executive with respect to
such non-cash compensation or income.  The Income Tax Payment shall be paid by
the Employer to the Executive within 30 days of the written request therefor 
made by the Executive.

      Notices.  Any notice required or permitted hereunder shall be in writing
and shall be deemed sufficient when given by hand, by nationally recognized 
overnight courier or by express, registered or certified mail, postage prepaid,
return receipt requested, and addressed to the Employer or Executive, as
applicable, at the address indicated above (or to such other address as may be
provided by notice).

      Miscellaneous.  This Agreement (i) may not be assigned by Executive 
without the prior written consent of the Employer and (ii) may be assigned by
the Employer and shall be binding upon, and inure to the benefit of, the 
Employer's successors and assigns.  Headings herein are for convenience of
reference only and shall not define, limit or interpret the contents hereof.

      Amendment.  This Agreement may be amended, modified or supplemented by the
mutual consent of the parties in writing, but no oral amendment, modification or
supplement shall be effective.

      Severability.  If a court of competent jurisdiction adjudicates any one or
more of the provisions hereof as invalid, illegal or unenforceable in any
respect, such provision(s) shall be ineffective only to the extent and duration
of such invalidity, illegality or unenforceability and such invalidity,
illegality or unenforceability shall not affect the remaining substance of such
provision or any other provision of this Agreement and this Agreement shall be 
construed as if such invalid, illegal or unenforceable provision had been 
limited or modified (consistent with its general intent) to the extent necessary
so that it shall be valid, legal and enforceable.  If it shall not be possible 
to so limit or modify such invalid, illegal or unenforceable provision, this 
Agreement shall be construed as if such invalid, illegal or unenforceable 
provision had never been contained herein, and the parties will use their best
efforts to substitute a valid, legal and enforceable provision which, insofar 
as practicable, implements the purpose and intent of the provision originally
contained herein.

      Governing Law.  This Agreement shall be construed and governed by the laws
of the State of New York.

      IN WITNESS WHEREOF, this Agreement is entered into as of the date and year
first above written.



						RECKSON ASSOCIATES REALTY CORP.



                                    By:    /s/ Scott Rechler
                                           -----------------------
                                        Name:  Scott Rechler
                                        Title: President


                                    By:    /s/ Gregg M. Rechler
                                           -----------------------
                                           Gregg M. Rechler
<PAGE>
                                EXHIBIT 10.28

                             SEVERANCE AGREEMENT


      SEVERANCE AGREEMENT, dated as of the 1st day of June, 1998  (the 
"Agreement") by and between Roger Rechler (the "Executive"), and Reckson
Associates Realty Corp., a Maryland corporation with a principal place of
business at 225 Broadhollow Road, Melville, New York 11747 (the "Employer").

      Terms used in this Agreement with the initial letter capitalized shall, 
unless otherwise defined herein, have the meanings specified in the Employment
and Noncompetition Agreement, dated as of the date hereof, between the Employer
and the Executive and in any amendment to or restatement of such agreement (the
"Employment Agreement").

                           W I T N E S S E T H :

      WHEREAS, Executive and Employer have previously entered into the 
Employment Agreement; and

      WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.

      NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows: 

      Employment and Noncompetition Agreement.  This Agreement is supplementary
to and, except as explicitly set forth herein, does not limit or alter any of 
the terms and conditions established under the Employment Agreement.

      Term.  The term and duration of this Agreement shall be identical to the
term of the Employment Agreement, provided, however, that if a 
Change-in-Control shall occur during the Employment Period, the term of this
Agreement, the Employment Agreement and the Employment Period shall continue in
effect until the later of (i) the date on which the term of the Employment 
Agreement otherwise would have ended or (ii) the date which is thirty-six months
beyond the end of the calendar year in which the Change-in-Control occurs.  
Section 1 of the Employment Agreement is hereby amended in accordance with the
foregoing.

      Termination and Severance Payments.  Sections 7(a), (b) and (c) of the 
Employment Agreement are hereby superseded in their entirety by this Section 3.


      At-Will Employment.  Executive's employment pursuant to the Employment 
Agreement is "at will" and may be terminated by the Employer at any time with or
without Good Reason, by a majority vote of all of the members of the Board of 
Directors of the Employer upon written notice to Executive, subject only to the
severance provisions specifically set forth in this Section 3 and in Sections 
7(d) through 7(h) of the Employment Agreement.

      Termination by Executive.  The Employment Period and Executive's 
employment under the Employment Agreement may be terminated effective 
immediately by Executive by written notice to the Board of Directors of the 
Employer (i) within 30 days of the occurrence of a failure of the Board of 
Directors of the Employer to elect Executive to offices with the same or 
substantially the same duties and responsibilities as set forth in Section 2 of
the Employment Agreement, (ii) within 30 days of the occurrence of a material 
failure by the Employer to comply with the provisions of Section 3 of the 
Employment Agreement or a material breach by the Employer of any other provision
of the Employment Agreement, or (iii) at any time during the 30 day period
beginning on the effective date of a Change in Control and the 30 day period
beginning one year after the effective date of a Change-in-Control.

      Certain Benefits upon Termination by Executive.  Except as specifically 
provided in this Section 3 or in Sections 7(d) through 7(h) of the Employment 
Agreement or as otherwise required by law, all compensation and benefits to 
Executive under the Employment Agreement shall terminate on the date of 
termination of the Employment Period.  Notwithstanding the foregoing, if the
Employment Period is terminated pursuant to Section 3(b) or if Executive's 
employment is terminated by the Employer other than for Good Reason, Executive
shall be entitled to the following benefits:

      The Employer shall pay the Executive (x) his or her full Base Salary 
though the date of termination at the rate in effect on such date, (y) 
compensation for accrued but unused vacation time, plus (z) a pro rata portion
of the Executive's incentive compensation for the calendar year in which the 
event of termination occurs, assuming that the Executive would have received
incentive compensation for such full calendar year equal to the product of (A)
the Base Salary that would be payable to the Executive pursuant to subsection 
3(a) of the Employment Agreement for such full calendar year and (B) the 
greater of (a) 1/2 or (b) a percentage equal to the percentage of the 
Executive's Base Salary for the immediately preceding fiscal year that was paid
to the Executive as incentive compensation (including all cash and other 
incentive compensation, and including shares of Common Stock) for the 
immediately preceding fiscal year, expressed as a percentage (the greater of
clauses (a) and (b) being herein referred to as the "Deemed Bonus Percentage");

      The Employer shall pay as severance to the Executive, not later than the
tenth day following the date of termination, a lump sum severance payment (the
"Severance Payment") equal to the aggregate of all compensation due to the 
Executive hereunder had his or her employment not been so terminated (without
duplication of subsection 3(c)(i) above), including, without limitation, all 
incentive compensation which would have been due to the Executive pursuant to
subsection 3(b) of the Employment Agreement, through the expiration of this 
Agreement (as such Agreement may continue in effect under Section 2 hereof in
the event of a Change-in-Control) assuming that the Executive would have 
received incentive compensation for each calendar year through the expiration
of this Agreement (as such Agreement may continue in effect under Section 2 
hereof in the event of a Change-in-Control) equal to the product of (A) the 
Base Salary payable to the Executive pursuant to subsection 3(a) of the 
Employment Agreement for each such calendar year and (B) the Deemed Bonus
Percentage; provided, however, that such Severance Payment shall not be 
payable to the Executive until (x) the Executive has executed and delivered to
the Employer a general release in a form to be determined by the Employer in 
good faith, and (y) any applicable revocation period with respect to such 
release has expired.  For purposes of determining Executive's annual 
compensation in the preceding sentence, compensation payable to the Executive 
by the Employer shall include every type and form of compensation includible in
the Executive's gross income in respect of his or her employment by the Employer
(including, without limitation, all income reported on an Internal Revenue 
Service Form W-2), compensation income recognized as a result of the Executive's
exercise of stock options or sale of the stock so acquired and including, 
without limitation, any annual incentive compensation paid in cash or securities
to such Executive; 

      An amount equal to the Additional Amount pursuant to Section 5 below;

  For the remaining term of the Employment Agreement, Executive shall continue 
to receive all benefits described in Section 3 of the Employment Agreement 
existing on the date of termination and any other benefits then provided by
Employer to Executive in addition to those described in Section 3 of the 
Employment Agreement, including, but not limited to, the life insurance coverage
provided by Employer to Executive and the automobile provided by Employer to 
Executive and automobile insurance and maintenance in respect of such 
automobile.  For purposes of the application of such benefits, Executive shall
be treated as if he or she had remained in the employ of the Employer with a 
Base Salary at the rate in effect on the date of termination;

      For purposes of any stock option plan of the Employer, (x) any stock 
options or other awards (including restricted stock grants) of the Executive
under such plan shall vest and become exercisable upon any such termination, and
(y) Executive shall be treated as if he or she had remained in the employ of the
Employer for the remaining term of the Employment Agreement after the date of 
Executive's termination so that Executive shall be entitled to exercise any 
exercisable options or other rights;

      For purposes of any section 401(k) plan or other deferred compensation 
plan of the Employer, Executive shall be treated as if he or she had remained in
the employ of the Employer for the remaining term of the Employment Agreement 
after the date of Executive's termination so that Executive may continue to 
receive all matching contributions as provided by the Employer in connection
with such plan or any other contributions by Employer in connection with such
plan as in effect immediately prior to such termination;

      The amount of any outstanding loans made by the Employer to the Executive
to acquire shares of Common Stock or units of limited partnership interest in 
Reckson Operating Partnership, L.P., together with any interest accrued on any
such loans, and any related "tax" loans made by the Employer to the Executive 
in respect of tax liabilities owing as the result of the forgiveness of such 
loans (including forgiveness pursuant to the terms of this Section 3(c)(vii)),
together with any interest accrued on any such tax loans, shall be deemed 
forgiven and Executive shall have no further liability in respect thereof;

      If, in spite of the provisions above, any benefits or service credits 
under any benefit plan or program of the Employer may not be paid or provided
under such plan or program to Executive, or to Executive's dependents, 
beneficiaries or estate, because Executive is no longer considered to be an
employee of the Employer, the Employer shall pay or provide for payment of such
benefits and service credits to Executive, or to Executive's dependents, 
beneficiaries or estate, for the remaining term of the Employment Agreement; and

      Nothing herein shall be deemed to obligate Executive to seek other 
employment in the event of any such termination and any amounts earned or
benefits received from such other employment will not serve to reduce in any way
the amounts and benefits payable in accordance herewith.

      Expenses.  Section 3(e) of the Employment Agreement is hereby amended by
this Section 4.  In addition to the expenses referred to in Section 3(e) of the
Employment Agreement, the Employer shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Executive
as they become due as a result of (i) the termination of the Employment Period 
or Executive's employment pursuant to this Agreement or the Employment Agreement
(including all such fees and expenses, if any, incurred in contesting or 
disputing any such termination), (ii) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement, the Employment Agreement or by
any other plan or arrangement maintained by the Employer under which the 
Executive is or may be entitled to receive benefits or (iii) any action taken by
the Employer against the Executive, unless and until such time that a final 
judgement has been rendered in favor of the Employer and all appeals related to
any such action have been exhausted; provided however, that the circumstances 
set forth above occurred on or after a Change-in-Control.

      Additional Amount.  Whether or not Section 3 is applicable, if in the 
opinion of tax counsel selected by the Executive and reasonably acceptable to 
the Employer, the Executive has or will receive any compensation or recognize
any income (whether or not pursuant to this Agreement, the Employment Agreement
or any plan or other arrangement of the Employer and whether or not the 
Employment Period or the Executive's employment with the Employer has 
terminated) which will constitute an "excess parachute payment" within the
meaning of Section 280G(b)(1) of the Code (or for which a tax is otherwise
payable under Section 4999 of the Code), then the Employer shall pay the
Executive an additional amount (the "Additional Amount") equal to the sum of
(i) all taxes payable by the Executive under Section 4999 of the Code with 
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount.  Any amounts payable pursuant to this
Section 4 shall be paid by the Employer to the Executive within 30 days of each
written request therefor made by the Executive.

      Income Tax Payment.  Whether or not Section 3 is applicable, if (i) the 
Executive has or will receive any compensation or recognize any income (whether
or not pursuant to this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer and whether or not the Employment Period or the 
Executive's employment with the Employer has terminated) in connection with a 
"Change-in-Control" (as that term may be interpreted in this Agreement, the 
Employment Agreement or any plan or other arrangement of the Employer), and (ii)
such compensation or income represents non-cash compensation or income 
(including, without limitation, non-cash compensation or income attributable to
the vesting or exercise of stock options and other awards (including restricted
stock grants) under any stock option plan of the Employer), then the Employer 
shall pay the Executive in cash an amount (the "Income Tax Payment") equal to 
all federal, state and local income taxes payable by Executive with respect to
such non-cash compensation or income.  The Income Tax Payment shall be paid by
the Employer to the Executive within 30 days of the written request therefor 
made by the Executive.

      Notices.  Any notice required or permitted hereunder shall be in writing 
and shall be deemed sufficient when given by hand, by nationally recognized 
overnight courier or by express, registered or certified mail, postage prepaid,
return receipt requested, and addressed to the Employer or Executive, as 
applicable, at the address indicated above (or to such other address as may be
provided by notice).

      Miscellaneous.  This Agreement (i) may not be assigned by Executive 
without the prior written consent of the Employer and (ii) may be assigned by 
the Employer and shall be binding upon, and inure to the benefit of, the 
Employer's successors and assigns.  Headings herein are for convenience of
reference only and shall not define, limit or interpret the contents hereof.

      Amendment.  This Agreement may be amended, modified or supplemented by the
mutual consent of the parties in writing, but no oral amendment, modification or
supplement shall be effective.

      Severability.  If a court of competent jurisdiction adjudicates any one or
more of the provisions hereof as invalid, illegal or unenforceable in any 
respect, such provision(s) shall be ineffective only to the extent and duration
of such invalidity, illegality or unenforceability and such invalidity, 
illegality or unenforceability shall not affect the remaining substance of such
provision or any other provision of this Agreement and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had been 
limited or modified (consistent with its general intent) to the extent necessary
so that it shall be valid, legal and enforceable.  If it shall not be possible 
to so limit or modify such invalid, illegal or unenforceable provision, this 
Agreement shall be construed as if such invalid, illegal or unenforceable 
provision had never been contained herein, and the parties will use their best
efforts to substitute a valid, legal and enforceable provision which, insofar 
as practicable, implements the purpose and intent of the provision originally 
contained herein.

      Governing Law.  This Agreement shall be construed and governed by the laws
of the State of New York.

      IN WITNESS WHEREOF, this Agreement is entered into as of the date and year
first above written.



						RECKSON ASSOCIATES REALTY CORP.



                                    By:    /s/ Scott Rechler
                                           -----------------------
                                       Name:  Scott Rechler
	                                 Title: President


                                    By:    /s/ Roger Rechler
                                           -----------------------
                                           Roger Rechler

<PAGE>
                                EXHIBIT 10.29

                            SEVERANCE AGREEMENT

      SEVERANCE AGREEMENT, dated as of the 25th day of February, 1998  (the 
"Agreement") by and between Michael Maturo (the "Executive"), and Reckson
Associates Realty Corp., a Maryland corporation with a principal place of
business at 225 Broadhollow Road, Melville, New York 11747 (the "Employer").
Terms used in this Agreement with the initial letter capitalized shall, 
unless otherwise defined herein, have the meanings specified in the Employment
and Noncompetition Agreement, dated June 15, 1995, between the Employer and the
Executive and in any amendment to or restatement of such agreement (the
"Employment Agreement").

                           W I T N E S S E T H :

      WHEREAS, Executive and Employer have previously entered into the
Employment Agreement; and

      WHEREAS, the Employer desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Employer.

      NOW THEREFORE, in consideration of the premises and subject to the terms
and conditions set forth herein, the parties hereto agree as follows: 

1.    Employment and Noncompetition Agreement.  This Agreement is supplementary
to and, except as explicitly set forth herein, does not limit or alter any of 
the terms and conditions established under the Employment Agreement.

2.    Term.  The term and duration of this Agreement shall be identical to the
term of the Employment Agreement, provided, however, that if a 
Change-in-Control shall occur during the Employment Period, the term of this
Agreement, the Employment Agreement and the Employment Period shall continue in
effect until the later of (i) the date on which the term of the Employment
Agreement otherwise would have ended or (ii) the date which is thirty-six months
beyond the end of the calendar year in which the Change-in-Control occurs.
Section 1 of the Employment Agreement is hereby amended in accordance with the
foregoing.

3.    Termination and Severance Payments.  Sections 7(a), (b) and (c) of the
Employment Agreement are hereby superseded in their entirety by this Section 3.

      (a)   At-Will Employment.  Executive's employment pursuant to the
Employment Agreement is "at will" and may be terminated by the Employer at any
time with or without Good Reason, by a majority vote of all of the members of
the Board of Directors of the Employer upon written notice to Executive, subject
only to the severance provisions specifically set forth in this Section 3 and in
Sections 7(d) through 7(h) of the Employment Agreement.

      (b)   Termination by Executive.  The Employment Period and Executive's
employment under the Employment Agreement may be terminated effective 
immediately by Executive by written notice to the Board of Directors of the
Employer (i) within 30 days of the occurrence of a failure of the Board of 
Directors of the Employer to elect Executive to offices with the same or 
substantially the same duties and responsibilities as set forth in Section 2 of
the Employment Agreement, (ii) within 30 days of the occurrence of a material 
failure by the Employer to comply with the provisions of Section 3 of the 
Employment Agreement or a material breach by the Employer of any other provision
of the Employment Agreement, or (iii) at any time during the 30 day period 
beginning on the effective date of a Change in Control and the 30 day period
beginning one year after the effective date of a Change-in-Control.

      (c)   Certain Benefits upon Termination by Executive.  Except as 
specifically provided in this Section 3 or in Sections 7(d) through 7(h) of the
Employment Agreement or as otherwise required by law, all compensation and
benefits to Executive under the Employment Agreement shall terminate on the date
of termination of the Employment Period.  Notwithstanding the foregoing, if the
Employment Period is terminated pursuant to Section 3(b) or if Executive's
employment is terminated by the Employer other than for Good Reason, Executive
shall be entitled to the following benefits:

 		(i)    The Employer shall pay the Executive (x) his or her full Base
Salary though the date of termination at the rate in effect on such date, (y) 
compensation for accrued but unused vacation time, plus (z) a pro rata portion
of the Executive's incentive compensation for the calendar year in which the 
event of termination occurs, assuming that the Executive would have received 
incentive compensation for such full calendar year equal to the product of (A)
the Base Salary that would be payable to the Executive pursuant to subsection 
3(a) of the Employment Agreement for such full calendar year and (B) the greater
of (a) 1/2 or (b) a percentage equal to the percentage of the Executive's Base 
Salary for the immediately preceding fiscal year that was paid to the Executive
as incentive compensation (including all cash and other incentive compensation,
and including shares of Common Stock) for the immediately preceding fiscal year,
expressed as a percentage (the greater of clauses (a) and (b) being herein 
referred to as the "Deemed Bonus Percentage");

            (ii)   The Employer shall pay as severance to the Executive, not 
later than the tenth day following the date of termination, a lump sum severance
payment (the "Severance Payment") equal to the aggregate of all compensation due
to the Executive hereunder had his or her employment not been so terminated
(without duplication of subsection 3(c)(i) above), including, without 
limitation, all incentive compensation which would have been due to the
Executive pursuant to subsection 3(b) of the Employment Agreement, through the
expiration of this Agreement (as such Agreement may continue in effect under 
Section 2 hereof in the event of a Change-in-Control) assuming that the 
Executive would have received incentive compensation for each calendar year
through the expiration of this Agreement (as such Agreement may continue in
effect under Section 2 hereof in the event of a Change-in-Control) equal to the
product of (A) the Base Salary payable to the Executive pursuant to subsection
3(a) of the Employment Agreement for each such calendar year and (B) the Deemed
Bonus Percentage; provided, however, that such Severance Payment shall not be 
payable to the Executive until (x) the Executive has executed and delivered to 
the Employer a general release in a form to be determined by the Employer in
good faith, and (y) any applicable revocation period with respect to such 
release has expired.  For purposes of determining Executive's annual 
compensation in the preceding sentence, compensation payable to the Executive 
by the Employer shall include every type and form of compensation includible in
the Executive's gross income in respect of his or her employment by the Employer
(including, without limitation, all income reported on an Internal Revenue 
Service Form W-2), compensation income recognized as a result of the Executive's
exercise of stock options or sale of the stock so acquired and including, 
without limitation, any annual incentive compensation paid in cash or securities
to such Executive; 

            (iii)  An amount equal to the Additional Amount pursuant to Section
5 below;

            (iv)   For the remaining term of the Employment Agreement, Executive
shall continue to receive all benefits described in Section 3 of the Employment
Agreement existing on the date of termination and any other benefits then
provided by Employer to Executive in addition to those described in Section 3 of
the Employment Agreement, including, but not limited to, the life insurance 
coverage provided by Employer to Executive and the automobile provided by 
Employer to Executive and automobile insurance and maintenance in respect of
such automobile.  For purposes of the application of such benefits, Executive
shall be treated as if he or she had remained in the employ of the Employer with
a Base Salary at the rate in effect on the date of termination;

            (v)    For purposes of any stock option plan of the Employer, (x)
any stock options or other awards (including restricted stock grants) of the 
Executive under such plan shall vest and become exercisable upon any such
termination, and (y) Executive shall be treated as if he or she had remained in
the employ of the Employer for the remaining term of the Employment Agreement 
after the date of Executive's termination so that Executive shall be entitled to
exercise any exercisable options or other rights;

            (vi)   For purposes of any section 401(k) plan or other deferred 
compensation plan of the Employer, Executive shall be treated as if he or she
had remained in the employ of the Employer for the remaining term of the 
Employment Agreement after the date of Executive's termination so that Executive
may continue to receive all matching contributions as provided by the Employer
in connection with such plan or any other contributions by Employer in 
connection with such plan as in effect immediately prior to such termination;


            (vii)  The amount of any outstanding loans made by the Employer to 
the Executive to acquire shares of Common Stock or units of limited partnership
interest in Reckson Operating Partnership, L.P., together with any interest
accrued on any such loans, and any related "tax" loans made by the Employer to
the Executive in respect of tax liabilities owing as the result of the 
forgiveness of such loans (including forgiveness pursuant to the terms of this
Section 3(c)(vii)), together with any interest accrued on any such tax loans, 
shall be deemed forgiven and Executive shall have no further liability in
respect thereof; 

            (viii) If, in spite of the provisions above, any benefits or service
credits under any benefit plan or program of the Employer may not be paid or 
provided under such plan or program to Executive, or to Executive's dependents,
beneficiaries or estate, because Executive is no longer considered to be an 
employee of the Employer, the Employer shall pay or provide for payment of such
benefits and service credits to Executive, or to Executive's dependents, 
beneficiaries or estate, for the remaining term of the Employment Agreement;
and

            (ix)   Nothing herein shall be deemed to obligate Executive to seek
other employment in the event of any such termination and any amounts earned or
benefits received from such other employment will not serve to reduce in any way
the amounts and benefits payable in accordance herewith.

4.    Expenses.  Section 3(e) of the Employment Agreement is hereby amended by
this Section 4.  In addition to the expenses referred to in Section 3(e) of the
Employment Agreement, the Employer shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Executive
as they become due as a result of (i) the termination of the Employment Period
or Executive's employment pursuant to this Agreement or the Employment Agreement
(including all such fees and expenses, if any, incurred in contesting or 
disputing any such termination), (ii) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement, the Employment Agreement or by
any other plan or arrangement maintained by the Employer under which the 
Executive is or may be entitled to receive benefits or (iii) any action taken by
 the Employer against the Executive, unless and until such time that a final 
judgement has been rendered in favor of the Employer and all appeals related to
any such action have been exhausted; provided however, that the circumstances
set forth above occurred on or after a Change-in-Control.

5.    Additional Amount.  Whether or not Section 3 is applicable, if in the 
opinion of tax counsel selected by the Executive and reasonably acceptable to 
the Employer, the Executive has or will receive any compensation or recognize 
any income (whether or not pursuant to this Agreement, the Employment Agreement
or any plan or other arrangement of the Employer and whether or not the 
Employment Period or the Executive's employment with the Employer has 
terminated) which will constitute an "excess parachute payment" within the
meaning of Section 280G(b)(1) of the Code (or for which a tax is otherwise
payable under Section 4999 of the Code), then the Employer shall pay the 
Executive an additional amount (the "Additional Amount") equal to the sum of
(i) all taxes payable by the Executive under Section 4999 of the Code with 
respect to all such excess parachute payments and any such Additional Amount,
plus (ii) all federal, state and local income taxes payable by Executive with
respect to any such Additional Amount.  Any amounts payable pursuant to this 
Section 4 shall be paid by the Employer to the Executive within 30 days of each
written request therefor made by the Executive.

6.    Income Tax Payment.  Whether or not Section 3 is applicable, if (i) the 
Executive has or will receive any compensation or recognize any income (whether
or not pursuant to this Agreement, the Employment Agreement or any plan or other
arrangement of the Employer and whether or not the Employment Period or the 
Executive's employment with the Employer has terminated) in connection with a
"Change-in-Control" (as that term may be interpreted in this Agreement, the 
Employment Agreement or any plan or other arrangement of the Employer), and (ii)
such compensation or income represents non-cash compensation or income 
(including, without limitation, non-cash compensation or income attributable to
the vesting or exercise of stock options and other awards (including restricted
stock grants) under any stock option plan of the Employer), then the Employer 
shall pay the Executive in cash an amount (the "Income Tax Payment") equal to 
all federal, state and local income taxes payable by Executive with respect to
such non-cash compensation or income.  The Income Tax Payment shall be paid by
the Employer to the Executive within 30 days of the written request therefor 
made by the Executive.

7.    Notices.  Any notice required or permitted hereunder shall be in writing 
and shall be deemed sufficient when given by hand, by nationally recognized 
overnight courier or by express, registered or certified mail, postage prepaid,
return receipt requested, and addressed to the Employer or Executive, as 
applicable, at the address indicated above (or to such other address as may be
provided by notice).

8.    Miscellaneous.  This Agreement (i) may not be assigned by Executive 
without the prior written consent of the Employer and (ii) may be assigned by
the Employer and shall be binding upon, and inure to the benefit of, the 
Employer's successors and assigns.  Headings herein are for convenience of
reference only and shall not define, limit or interpret the contents hereof.

9.    Amendment.  This Agreement may be amended, modified or supplemented by the
mutual consent of the parties in writing, but no oral amendment, modification or
supplement shall be effective.

10.   Severability.  If a court of competent jurisdiction adjudicates any one or
more of the provisions hereof as invalid, illegal or unenforceable in any 
respect, such provision(s) shall be ineffective only to the extent and duration
of such invalidity, illegality or unenforceability and such invalidity, 
illegality or unenforceability shall not affect the remaining substance of such
provision or any other provision of this Agreement and this Agreement shall be 
construed as if such invalid, illegal or unenforceable provision had been 
limited or modified (consistent with its general intent) to the extent necessary
so that it shall be valid, legal and enforceable.  If it shall not be possible 
to so limit or modify such invalid, illegal or unenforceable provision, this 
Agreement shall be construed as if such invalid, illegal or unenforceable 
provision had never been contained herein, and the parties will use their best
efforts to substitute a valid, legal and enforceable provision which, insofar as
practicable, implements the purpose and intent of the provision originally
contained herein.

11.   Governing Law.  This Agreement shall be construed and governed by the laws
of the State of New York.

      IN WITNESS WHEREOF, this Agreement is entered into as of the date and year
first above written.

						RECKSON ASSOCIATES REALTY CORP.



                                    By:    /s/ Scott Rechler
                                           -----------------------
                                        Name:  Scott Rechler
                                        Title: President


                                    By:    /s/ Michael Maturo
                                           -----------------------
                                           Michael Maturo

<PAGE>     
                                EXHIBIT 10.35
                           INTERCOMPANY AGREEMENT

     THIS INTERCOMPANY AGREEMENT (the "Agreement") is made and entered into as
of the 13th day of May, 1998, by and between Reckson Operating Partnership,
L.P., a Delaware limited partnership (the "Operating Partnership"), and Reckson
Service Industries, Inc., a Delaware corporation ("RSI").

W I T N E S S E T H:

     WHEREAS, Reckson Associates Realty Corp., a Maryland corporation
("Reckson"), is the managing general partner of, and owns a supermajority
interest in, the Operating Partnership;

     WHEREAS, the Operating Partnership has determined that it is precluded
from pursuing, or is limited in the manner in which it pursues, various
business opportunities due to the status of Reckson as a real estate investment
trust ("REIT") under sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the "Code");

     WHEREAS, RSI has been formed primarily to provide various commercial
services to the Operating Partnership and its tenants and other third parties
and is expected to pursue real estate or real estate related investment
opportunities through one or more real estate opportunity funds, including
Reckson Strategic Venture Partners, LLC ("RSVP"), which may make or acquire
real estate or real estate-related investments other than REIT-Qualified
Investments (as hereinafter defined) and REIT-Qualified Investments that the
Operating Partnership has decided not to pursue;

     WHEREAS, based upon management's knowledge of and relationships with the
Operating Partnership's tenants, the parties hereto believe that RSI will be
able to offer on competitive market terms a high quality level of services to
the Operating Partnership and its tenants and other third parties, which
services are currently provided by third parties in a more limited and
fragmented manner or are not currently provided at all;

     WHEREAS, the Operating Partnership believes that RSI, particularly through
RSVP or other real estate opportunity funds, may source attractive
opportunities for REIT-Qualified Investments, which may be in sectors outside
of the Operating Partnership's traditional markets; and

     WHEREAS, in light of the purposes for which RSI was formed, the Operating
Partnership and RSI desire to enter into this Agreement in order to (i) reduce
any potential conflict of interest by allocating to each party a right of first
opportunity with respect to certain matters referred to herein and (ii) provide
access to certain information for the benefit of the other party.

     NOW, THEREFORE, in consideration of the premises and mutual undertakings
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
undersigned parties hereby agree as follows:

     1. Definitions. Except as may be otherwise herein expressly provided, the
following terms and phrases shall have the meanings as set forth below:

          (a) "Affiliate" means any entity in which a majority of the
beneficial ownership interests are owned by another specified entity or by any
entity controlled by, controlling or under common control with another
specified entity.

          (b) "Master Lease Opportunity" means the opportunity to become the
lessee under a "master" lease arrangement of a property owned or subsequently
acquired by the Operating Partnership if the Operating Partnership, in its sole
discretion, determines that, consistent with the status of Reckson as a REIT,
the Operating Partnership is required to enter into such a "master" lease
arrangement for such property and that RSI or an Affiliate of RSI is qualified
to be the lessee based on experience in the industry and financial and legal
qualifications.

          (c) "REIT Opportunity" means a direct or indirect opportunity to
invest in (i) real estate, real estate mortgages, real estate derivatives, or
entities that invest primarily in or have a substantial portion of their assets
in the aforementioned types of assets, or (ii) any other investment which may
be structured in a manner so as to be a REIT-Qualified Investment, as
determined by the Operating Partnership in its sole discretion. The Operating
Partnership shall have the right from time to time to provide written notice to
RSI specifying certain more limited criteria for a REIT Opportunity. Any such
written notice from the Operating Partnership may be modified or canceled by
written notice given by the Operating Partnership at any time. The definition
of REIT Opportunity shall be modified as appropriate from time to time in
accordance with any such written notices sent by the Operating Partnership.

          (d) A "REIT-Qualified Investment" means an investment, the income
from which would qualify under the 95% gross income test set forth in section
856(c)(2) of the Code, the ownership of which would not cause a REIT to violate
the asset limitations set forth in section 856(c)(5) of the Code, and which
otherwise meets the federal income tax requirements applicable to REITs.

          (e) "Service Provider Opportunity" means (i) the opportunity to
provide to the Operating Partnership and its tenants and other third parties
commercial services (other than customary services) utilized by lessees of real
estate or (ii) a Master Lease Opportunity. RSI shall have the right from time
to time to provide written notice to the Operating Partnership specifying more
limited criteria for a Service Provider Opportunity. Any such written notice
from RSI may be modified or canceled by written notice given by RSI at any
time. The definition of Service Provider Opportunity shall be modified as
appropriate from time to time in accordance with any such written notices sent
by RSI.

     2. Operating Partnership Right of First Opportunity.

          (a) During the term of this Agreement, if RSI develops a REIT
Opportunity, or if any REIT Opportunity otherwise becomes available to RSI,
then, subject to the provisions of Section 2(b), RSI shall offer such REIT
Opportunity first to the Operating Partnership. In the event that an Affiliate
of RSI (including, but not limited to, RSVP) develops a REIT Opportunity, or if
any REIT Opportunity otherwise becomes available to such Affiliate, then,
subject to the provisions of Section 2(b), RSI shall (i) cause such Affiliate
to offer such REIT Opportunity to the Operating Partnership in the form of
joint venture with such Affiliate to the extent of RSI's interest therein and
(ii) to the extent that such joint venture has invested funds in excess of 25%
of such Affiliate's total common equity in a particular real estate sector,
cause such Affiliate to offer all subsequent REIT Opportunities in such sector
directly to the Operating Partnership. The offer of a REIT Opportunity to the
Operating Partnership shall be made by written notice (the "RSI Notice"), which
RSI Notice shall contain a detailed description of the material terms and
conditions of the REIT Opportunity developed by or made available to RSI or the
applicable Affiliate, as the case may be, including, without limitation, any
noncompetition provisions. The Operating Partnership shall have ten days (the
"Ten-Day Period") from the date of receipt of the RSI Notice to notify RSI or
the applicable Affiliate, as the case may be, in writing that it has accepted
or rejected the REIT Opportunity. If the Operating Partnership does not respond
by the end of the Ten-Day Period, the Operating Partnership shall be deemed to
have rejected the REIT Opportunity. If the Operating Partnership accepts a REIT
Opportunity, but subsequently decides not to pursue such opportunity, or for
any other reason fails to consummate a REIT Opportunity, the Operating
Partnership shall immediately provide written notice that it is no longer
pursuing such REIT Opportunity to RSI or the applicable Affiliate, as the case
may be.

          (b) If the Operating Partnership rejects a REIT Opportunity, or
accepts a REIT Opportunity but thereafter provides, or is required by the
provisions hereof to provide, written notice to RSI or the applicable
Affiliate, as the case may be, that it is no longer pursuing such REIT
Opportunity, RSI or such Affiliate, as the case may be, shall, for a period of
six months or, to the extent that there are ongoing discussions relating
thereto, a period of one year after the Operating Partnership Withdrawal Date
(as hereinafter defined), be entitled to acquire the related REIT-Qualified
Investment (i) on terms and conditions that are not materially more favorable
to RSI or such Affiliate, as the case may be, than the terms and conditions set
forth in the RSI Notice relating to such REIT Opportunity or (ii) if the
Operating Partnership, at any time after the RSI Notice, negotiated different
terms or conditions with respect to such REIT Opportunity, then on terms and
conditions that are not materially more favorable than the terms and conditions
negotiated by the Operating Partnership. If RSI or an Affiliate of RSI
(including, but not limited to, RSVP) enters into a binding agreement to
acquire a REIT-Qualified Investment within a six-month or one year period, as
applicable, after the Operating Partnership Withdrawal Date and subsequently
one or more additional REIT Opportunities in the same real estate sector become
available to RSI or such Affiliate, as the case may be, then RSI or such
Affiliate, as the case may be, shall be under no obligation to offer such REIT
Opportunity to the Operating Partnership and RSI or such Affiliate, as the case
may be, may immediately enter into a binding agreement to acquire such
Qualified Investment. If RSI or such Affiliate, as the case may be, does not
enter into a binding agreement to acquire such REIT-Qualified Investment within
such six-month or one-year period, as applicable, or if the terms and
conditions are materially more favorable to RSI than the terms and conditions
set forth in the RSI Notice (or, if applicable, than the terms and conditions
negotiated by the Operating Partnership subsequent to the RSI Notice), then RSI
or such Affiliate, as the case may be, shall again be required to comply with
the procedures set forth above in Section 2(a) if it desires to enter into a
binding agreement to acquire such REIT-Qualified Investment. The Operating
Partnership Withdrawal Date means any one of the following dates, as
applicable: (i) the date that the Operating Partnership notifies RSI or the
applicable Affiliate, as the case may be, that it has rejected the REIT
Opportunity, (ii) if the Operating Partnership does not respond to RSI or the
applicable Affiliate, as the case may be, regarding the REIT Opportunity, the
expiration date of the Ten-Day Period, or (iii) if the Operating Partnership
accepts the REIT Opportunity but subsequently ceases to pursue the opportunity,
the earlier of (A) 30 days after the date on which the Operating Partnership
ceases to pursue the REIT Opportunity or (B) the date of receipt by RSI or the
applicable Affiliate, as the case may be, of written notice from the Operating
Partnership that it is no longer pursuing the REIT Opportunity.

          (c) RSI agrees to use commercially reasonable efforts to assist the
Operating Partnership in consummating any REIT Opportunity accepted by the
Operating Partnership that was developed by, or otherwise became available to,
RSI (including, without limitation, structuring such opportunity as a
REIT-Qualified Investment) and RSI shall cause its Affiliates to do the same.
Any expenses incurred that are directly related to structuring an investment as
a REIT-Qualified Investment shall be borne solely by the Operating Partnership.

     3. RSI Access to Tenants; RSI Right of First Opportunity for Service
Provider Opportunity.

          (a) During the term of this Agreement, the Operating Partnership
shall provide RSI with access to its tenants so that RSI may offer services
directly to such tenants, including, but not limited to, providing an updated
listing of all of the tenants of the Operating Partnership on a semi-annual
basis and the names of contacts at such tenants. The Operating Partnership will
use commercially reasonable efforts to facilitate the solicitation of such
tenants by RSI in respect of non-customary commercial services to be provided
by them and, if the Operating Partnership develops a Service Provider
Opportunity as a result of such efforts or otherwise, or if a Service Provider
Opportunity otherwise becomes available to the Operating Partnership, the
Operating Partnership shall offer such Service Provider Opportunity first to
RSI. If the Operating Partnership accepts a REIT Opportunity presented to it by
RSI or its Affiliates, then the Service Provider Opportunity in respect of such
REIT Opportunity and any future investments by the Operating Partnership in the
same real estate sector shall also be subject to the right of first opportunity
provided for in this Section 3(a).

          The offer of a Service Provider Opportunity to RSI shall be made by
written notice (the "Operating Partnership Notice"), which Operating
Partnership Notice shall contain a detailed description of the material terms
and conditions of the Service Provider Opportunity developed by or made
available to the Operating Partnership. The Operating Partnership shall
thereafter provide or cause to be provided promptly to RSI such additional
information relating to the Service Provider Opportunity as RSI reasonably may
request. For a period of 30 days after the date that the Operating Partnership
delivers the Operating Partnership Notice, the Operating Partnership and RSI
shall negotiate with each other on an exclusive basis with respect to such
Service Provider Opportunity. RSI shall offer to provide services to the
Operating Partnership in respect of a Service Provider Opportunity at market
rates and on terms and conditions as attractive as the best available for
comparable services in the market or (it being understood that RSI will provide
market information on such services to the Operating Partnership during such
30-day period) those offered by RSI to third parties. If the Operating
Partnership and RSI are unable to enter into a mutually satisfactory
arrangement with respect to such Service Provider Opportunity within such
30-day period, or if RSI determines that it is not interested in pursuing such
Service Provider Opportunity (in which event RSI shall provide written notice
to the Operating Partnership promptly after such determination), then the
Operating Partnership shall be entitled, for a period of six months or, to the
extent that there are ongoing discussions relating thereto, one year after the
expiration of such 30-day period, to enter into a binding agreement with
respect to such Service Provider Opportunity with any party on terms and
conditions that are not materially more favorable to the Operating Partnership
than the terms and conditions last proposed in writing by the Operating
Partnership to RSI. If the Operating Partnership does not enter into a binding
agreement with respect to such Service Provider Opportunity within such
six-month or one-year period, as applicable, or if the terms and conditions are
more materially favorable to the Operating Partnership than the terms and
conditions last proposed in writing by the Operating Partnership to RSI, the
Operating Partnership shall again be required to comply with the procedures set
forth above in this Section 3(a) if it desires to pursue such Service Provider
Opportunity.

          (b) Notwithstanding anything to the contrary contained in this
Agreement, (1) the Operating Partnership shall not be required to offer to RSI
any Service Provider Opportunity in connection with a proposed acquisition
involving a Master Lease Opportunity until a binding contract has been entered
into with respect to such acquisition, and the consummation of any agreement
between the Operating Partnership and RSI with respect to a Service Provider
Opportunity shall be subject to the actual closing of such acquisition by the
Operating Partnership, (2) the Operating Partnership shall have the right, in
its sole discretion, to decide not to pursue, or to discontinue at any time
pursuing, any investment opportunity, even if such opportunity, if pursued,
would create a Service Provider Opportunity, and (3) the Operating Partnership
shall have no obligation to offer any opportunity other than a Service Provider
Opportunity to RSI.

          (c) The Operating Partnership agrees to use commercially reasonable
efforts to assist RSI in structuring and consummating all dealings with outside
parties in connection with any Service Provider Opportunity that was developed
by, or otherwise became available to, the Operating Partnership. The Operating
Partnership shall have the right, in its sole discretion, to structure any
investment as a REIT- Qualified Investment, even if such structuring prevents
the Operating Partnership from creating a Service Provider Opportunity for RSI.

     4. General Terms and Conditions for Rights of First Opportunity/
Notification Rights.

          (a) Unless waived or unless agreed to as part of an investment, each
party shall bear its own expenses with respect to any opportunity to which this
Agreement is applicable, and each party agrees that it shall not be entitled to
any compensation from the other party with respect to any such opportunity

          (b) A party shall not be required to comply with the right of first
opportunity and notification requirements set forth in this Agreement during
any period in which the other party or any Affiliate of such other party is in
default of this Agreement or any other agreement entered into by the parties
hereto or any of their Affiliates, if such default is material and remains
uncured for fifteen days after receipt of notice thereof.

          (c) The Operating Partnership shall not enter into any arrangement or
agreement to provide any Service Provider Opportunity to any party other than
RSI, and RSI shall not, and shall cause its Affiliates not to, enter into any
arrangement or agreement to provide REIT Opportunities to any party other than
the Operating Partnership, except, in each case, as permitted in this
Agreement.

          (d) Any REIT Opportunity which is offered to and accepted by the
Operating Partnership under this Agreement may be entered into by or on behalf
of the Operating Partnership or by any designee which is an Affiliate of the
Operating Partnership. Any Service Provider Opportunity which is offered to and
accepted by RSI under this Agreement may be entered into by or on behalf of RSI
or by any Affiliate of RSI.

          (e) All first opportunity and notification rights set forth in this
Agreement shall be subordinated to any seller consent and confidentiality
requirements. Accordingly, no party shall be required to comply with the first
opportunity and notification rights set forth in this Agreement if such
compliance would violate any seller consent or confidentiality requirements.

          (f) While it is the intention of the parties to align their
businesses in accordance with the terms of this Agreement, each party shall act
independently in its own best interests, and neither party shall be considered
a partner or agent of the other party or to owe any fiduciary or other common
law duty to the other party.

          (g) All provisions hereof requiring the giving of notice shall be
satisfied through the giving of notice to the Board of Directors of Reckson or
RSI, as the case may be, or a committee of such Board formed for the specific
purpose of addressing matters covered in this Agreement.

     5. Services of Officers and Directors. It is acknowledged and agreed
that the directors and executive officers of either party hereto may serve in
similar capacities with the other party hereto.

     6. RSI Ownership Limitation. So long as this Agreement is in effect,
the certificate of incorporation of RSI shall contain provisions to the effect
that (i) no stockholder of RSI may own, or be deemed to own by virtue of the
attribution provisions of Section 856(d)(5) of the Code, more than 9.9% of the
aggregate number or value of the outstanding shares of RSI common stock
("Common Stock"), (ii) no stockholder of RSI may own more than 9.9% in value of
all of the outstanding shares of capital stock of RSI, taking into account all
classes of such capital stock outstanding, (iii) any shares of RSI stock owned
or purported to be owned in violation of the foregoing restrictions shall
automatically be transferred to a trust for the benefit of a charitable
beneficiary and be subject to "Excess Stock" provisions similar to those
contained in Article VII of the Articles of Amendment and Restatement of
Reckson, and (iv) stockholders of RSI shall be required to disclose to RSI upon
demand such information with respect to the ownership of RSI capital stock as
the Company deems necessary to determine Reckson's compliance with the REIT
provisions of the Code, provided that the ownership limitations described in
clauses (i) and (ii) above shall be subject to exceptions so as to enable a
stockholder (x) to acquire and own any Common Stock distributed by Reckson to
its shareholders, (y) to acquire and own Common Stock in satisfaction of
obligations under that certain standby agreement between RSI and RSI Standby
LLC with respect to the purchase of Common Stock subject to certain
subscription rights distributed by RSI to its shareholders that expire
unexercised, and (z) to acquire and own employee stock options and Common Stock
issued pursuant to the exercise of employee stock options. The board of
directors of RSI shall not grant any waivers or exemptions from the foregoing
limitations without the consent of the board of directors of Reckson, which may
be granted or withheld in Reckson's sole discretion. RSI shall request from its
stockholders, pursuant to the provision described in clause (iv) above, such
information as Reckson shall direct RSI to request, and RSI shall promptly
advise Reckson of the responses it receives to such request.

     7. Specific Performance. Each party hereto hereby acknowledges that
the obligations undertaken by it pursuant to this Agreement are unique and that
the other party hereto would likely have no adequate remedy at law if such
party shall fail to perform its obligations hereunder, and such party therefor
confirms that the other party's right to specific performance of the terms of
this Agreement is essential to protect the rights and interests of the other
party. Accordingly, in addition to any other remedies that a party hereto may
have at law or in equity, such party shall have the right to have all
obligations, covenants, agreements and other provisions of this Agreement
specifically performed by the other party hereto and the right to obtain a
temporary restraining order or a temporary or permanent injunction to secure
specific performance and to prevent a breach or threatened breach of this
Agreement by the other party hereto. Each party submits to the jurisdiction of
the courts of the State of Delaware for this purpose.

     8. Affiliates. Each party hereto shall cause all Affiliates under its
control to comply with the terms hereof. Reckson, by its signature below,
hereby agrees that it shall comply with the terms of this Agreement applicable
to the Operating Partnership.

     9. Term. The term of this Agreement shall commence as of the date
first written above and shall terminate on May 13, 2008. This Agreement may
be extended at the option of either of the parties hereto for two additional
five-year periods, upon notice given to the other party within six months of
the expiration hereof. Notwithstanding the foregoing, a party hereto may
terminate this Agreement if the other party or any Affiliate of such other
party is in default of this Agreement or any other agreement entered into by
the parties hereto or any of their Affiliates, if such default is material and
remains uncured for fifteen days after receipt of notice thereof.

     10. Miscellaneous.

        (a)  Notices. Notices shall be sent to the parties at the following
addresses:

               Reckson Operating Partnership, L.P.
               225 Broadhollow Road
               Melville, NY  11747
               Facsimile:  516-756-1764
               Attention:  Jason M. Barnett, Esq.

               with a copy to:

               Edward F. Petrosky, Esq.
               Brown & Wood LLP
               One World Trade Center
               NY, NY  10048
               Facsimile:  212-839-5599

               Reckson Service Industries, Inc.
               225 Broadhollow Road
               Melville, NY  11747
               Facsimile: 516-756-1764
               Attention:  Scott H. Rechler

               with a copy to:

               Mitchell Rechler, Secretary


     Notices may be sent by certified mail, return receipt requested, Federal
Express or comparable overnight delivery service, or facsimile. Notice will be
deemed received on the fourth business day following deposit in U.S. mail and
on the first business day following deposit with Federal Express or other
delivery service, or transmission by facsimile. Any party to this Agreement may
change its address for notice by giving written notice to the other party at
the address and in accordance with the procedures provided above.

          (b) Reasonable and Necessary Restrictions. Each of the parties hereto
hereby acknowledges and agrees that the restrictions, prohibitions and other
provisions of this Agreement are reasonable, fair and equitable in scope, term
and duration, are necessary to protect the legitimate business interests of the
parties hereto and are a material inducement to the parties hereto to enter
into the transactions described in and contemplated by the recitals hereto.
Each party hereto covenants that it will not sue to challenge the
enforceability of this Agreement or raise any equitable defense to its
enforcement.

          (c) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns. Except as otherwise permitted in this Agreement, this Agreement shall
not be assigned without the express written consent of each of the parties
hereto. Notwithstanding the foregoing, this Agreement may be assigned without
the consent of any party hereto in connection with any merger, consolidation,
reorganization or other combination of a party with or into another entity
where the party is not the surviving entity.

          (d) Amendments; Waivers. No termination, cancellation, modification,
amendment, deletion, addition or other change in this Agreement, or any
provision hereof, or waiver of any right or remedy herein provided, shall be
effective for any purpose unless such change or waiver is specifically set
forth in a writing signed by the party or parties to be bound thereby. The
waiver of any right or remedy with respect to any occurrence on one occasion
shall not be deemed a waiver of such right or remedy with respect to such
occurrence on any other occasion.

          (e) Choice of Law. This Agreement and the rights and obligations of
the parties hereunder shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the principles of choice of
law thereof.

          (f) Severability. In the event that one or more of the terms or
provisions of this Agreement or the application thereof to any person(s) or in
any circumstance(s) shall, for any reason and to any extent, be found by a
court of competent jurisdiction to be invalid, illegal or unenforceable, such
court shall have the power, and hereby is directed, to substitute for or limit
such invalid term(s), provision(s) or application(s) and to enforce such
substituted or limited terms or provisions, or the application thereof. Subject
to the foregoing, the invalidity, illegality or enforceability of any one or
more of the terms or provisions of this Agreement, as the same may be amended
from time to time, shall not affect the validity, legality or enforceability of
any other term or provision hereof.

          (g) Entire Agreement; No Third-Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements,
understandings, negotiations and discussions, whether written or oral, between
the parties hereto with respect to the subject matter hereof, so that no such
external or separate agreement relating to the subject matter of this Agreement
shall have any effect or be binding, unless the same is referred to
specifically in this Agreement or is executed by the parties after the date
hereof. This Agreement is not intended to confer upon any other person any
rights or remedies hereunder and shall not be enforceable by any party not a
signatory to this Agreement.

          (h) Gender; Number. As the context requires, any word used herein in
the singular shall extend to and include the plural, any word used in the
plural shall extend to and include the singular and any word used in any gender
or the neuter shall extend to and include each other gender or be neutral.

          (i) Headings. The headings of the sections hereof are inserted for
convenience of reference only and are not intended to be a part of or affect
the meaning or interpretation of this Agreement or of any term or provision
hereof.

          (j) Counterparts. This Agreement may be executed in two or more
counterparts, each of which together shall be deemed to be an original and all
of which together shall be deemed to constitute one and the same agreement.


<PAGE>



     IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed by one of its duly authorized signatories as of
the date first above written.

                                    RECKSON OPERATING PARTNERSHIP, L.P.

                                    By:  Reckson Associates Realty Corp.,
                                         its sole general partner

                                    By: /s/ Mitchell D. Rechler
                                       ------------------------------------
                                        Name:  Mitchell D. Rechler
                                        Title: Executive Vice President

                                    RECKSON SERVICE INDUSTRIES, INC.

                                    By: /s/ Scott Rechler
                                       ------------------------------------
                                        Name:  Scott Rechler
                                        Title: President
<PAGE>
                                 EXHIBIT 10.36
                                CREDIT AGREEMENT

                                  dated as of

                                 June 15, 1998

                                    between

                       RECKSON SERVICE INDUSTRIES, INC.,

                                  as Borrower

                                      and

                      RECKSON OPERATING PARTNERSHIP, L.P.,

                                   as Lender

                                  relating to

                    RECKSON STRATEGIC VENTURE PARTNERS, LLC


<PAGE>


                               Table of Contents

                                                                         Page

                                   ARTICLE I.

                                  DEFINITIONS

Section 1.1 Definitions....................................................1
        (a)      Terms Generally...........................................1
        (b)      Other Terms...............................................1

                                  ARTICLE II.
                         THE REVOLVING CREDIT FACILITY

Section 2.1 Commitment and Loans...........................................6
Section 2.2 Borrowing Procedure............................................6
Section 2.3 Termination and Reduction of Commitment........................6
Section 2.4 Repayment......................................................6
Section 2.5 Optional Prepayment............................................7

                                  ARTICLE III.
                               INTEREST AND FEES

Section 3.1 Interest Rate..................................................7
Section 3.2 Interest on Overdue Amounts....................................7
Section 3.3 Maximum Interest Rate..........................................8

                                  ARTICLE IV.
                            DISBURSEMENT AND PAYMENT

Section 4.1 Method and Time of Payments.....................................8
Section 4.2 Compensation for Losses.........................................9
Section 4.3 Withholding and Additional Costs................................9

       (a)    Withholding...................................................9
       (b)    Additional Costs.............................................10
       (c)    Certificate, Etc.............................................10

Section 4.4 Expenses; Indemnity............................................10
Section 4.5 Survival.......................................................11

                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

Section 5.1 Representations and Warranties.................................11
       (a)    Good Standing and Power......................................11
       (b)    Authority....................................................11
       (c)    Authorizations...............................................12
       (d)    Binding Obligation...........................................12
       (e)    Litigation...................................................12
       (f)    No Conflicts.................................................12
       (g)    Taxes........................................................12
       (h)    Properties...................................................12
       (i)    Compliance with Laws and Charter Documents...................13
       (j)    No Material Adverse Effect...................................13
       (k)    Disclosure...................................................13

Section 5.2 Survival.......................................................13

                                  ARTICLE VI.
                              CONDITIONS PRECEDENT

Section 6.1 Conditions to the Availability of the Commitment...............13
       (a)    This Agreement...............................................13
       (b)    Certificate of Incorporation and By-Laws.....................13
       (c)    Representations and Warranties...............................14
       (d)    Other Documents..............................................14
       (e)    REIT Status of Reckson.......................................14
       (f)    Certain Loans Subject to Reckson's Approval..................14

Section 6.2 Conditions to All Loans........................................14
       (a)    Borrowing Request............................................14
       (b)    No Default...................................................14
       (c)    Debt-to-Equity Ratio.........................................14
       (d)    Representations and Warranties; Covenants....................14

Section 6.3 Satisfaction of Conditions Precedent...........................15

                                  ARTICLE VII.

                                   COVENANTS

Section 7.1 Affirmative Covenants..........................................15
       (a)    Financial Statements; Compliance Certificates................15
       (b)    Existence....................................................15
       (c)    Compliance with Law and Agreements...........................16
       (d)    Authorizations...............................................16
       (e)    Inspection...................................................16
       (f)    Maintenance of Records.......................................16
       (g)    Notice of Defaults and Adverse Developments..................16

Section 7.2 Negative Covenants.............................................16
       (a)    Mergers, Consolidations and Sales of Assets..................17
       (b)    Liens........................................................17
       (c)    Indebtedness.................................................17
       (d)    Dividends....................................................17
       (e)    Certain Amendments...........................................17

                                 ARTICLE VIII.
                               EVENTS OF DEFAULT

Section 8.1 Events of Default..............................................17

                                  ARTICLE IX.
                          EVIDENCE OF LOANS; TRANSFERS

Section 9.1 Evidence of Loans..............................................19

                                   ARTICLE X.

                                 MISCELLANEOUS

Section 10.1 Applicable Law................................................20
Section 10.2 Waiver of Jury................................................20
Section 10.3 Jurisdiction and Venue; Service of Process....................20
Section 10.4 Confidentiality...............................................21
Section 10.5 Amendments and Waivers........................................21
Section 10.6 Cumulative Rights; No Waiver..................................21
Section 10.7 Notices.......................................................21
Section 10.8 Certain Acknowledgments.......................................22
Section 10.9 Separability..................................................22
Section 10.10 Parties in Interest..........................................22
Section 10.11 Execution in Counterparts....................................22


<PAGE>



          CREDIT AGREEMENT, dated as of June 15, 1998, between Reckson Service
Industries, Inc., a Delaware corporation, and Reckson Operating Partnership,
L.P., a Delaware limited partnership relating to Reckson Strategic Venture
Partners, LLC ("RSVP").

                              W I T N E S S E T H:

          WHEREAS, the Borrower has requested the Lender to commit to lend to
the Borrower up to $100 million on a revolving basis for investment in RSVP;
and

          WHEREAS, the Lender is willing to make revolving credit loans on the
terms and conditions provided herein;

          NOW, THEREFORE, the parties agree as follows:

                                  ARTICLE I.

                                  DEFINITIONS

     Section 1.1  Definitions.

     (a) Terms Generally. The definitions ascribed to terms in this Agreement
apply equally to both the singular and plural forms of such terms. Whenever the
context may require, any pronoun shall be deemed to include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be interpreted as if followed by the phrase "without
limitation". The phrase "individually or in the aggregate" shall be deemed
general in scope and not to refer to any specific Section or clause of this
Agreement. All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise require. The
table of contents, headings and captions herein shall not be given effect in
interpreting or construing the provisions of this Agreement. Except as
otherwise expressly provided herein, all references to "dollars" or "$" shall
be deemed references to the lawful money of the United States of America.

     (b) Other Terms. The following terms have the meanings ascribed to them
below or in the Sections of this Agreement indicated below:

          "Adjusted Indebtedness" means, with respect to the Borrower, the
     Borrower's Indebtedness determined without regard for any amounts
     described in clause (viii) of the definition of "Indebtedness."

          "Affiliate" means, with respect to any Person, any other Person that
     controls, is controlled by, or is under common control with, such Person.

          "Agreement" means this credit agreement, as it may be amended,
     modified or supplemented from time to time.

          "Available Commitment" means, on any day, an amount equal to (i) the
     Commitment on such day minus (ii) the aggregate outstanding principal
     amount of Loans on such day.

          "Borrower" means Reckson Service Industries, Inc., a Delaware
     corporation.

          "Borrowing Date" means, with respect to any Loan, the Business Day
     set forth in the relevant Borrowing Request as the date upon which the
     Borrower desires to borrow such Loan;

          "Borrowing Request" means a request by the Borrower for a Loan, which
     shall specify (i) the requested Borrowing Date and (ii) the aggregate
     amount of such Loan.

          "Business Day" means any day that is not a Saturday, Sunday or other
     day on which commercial banks in The City of New York are authorized by
     law to close.

          "Capital Lease Obligations" means, with respect to any Person, the
     obligation of such Person to pay rent or other amounts under any lease
     with respect to any property (whether real, personal or mixed) acquired or
     leased by such Person that is required to be accounted for as a liability
     on a consolidated balance sheet of such Person.

          "Commitment" means $100 million less (i) the amount of loans made by
     the Lender to the Borrower for the funding of investments made by RSVP
     prior to the spin-off distribution of shares of common stock of Borrower
     by Reckson and (ii) the amount of any investments made by the Lender in
     joint venture investments made with RSVP, and as such amount may be
     reduced from time to time pursuant to Section 2.3.

          "Commitment Termination Date" means the earlier to occur of (i) June
     15, 2003 and (ii) the date, if any, on which the Commitment is terminated.

          "Confidential Information" means information delivered to the Lender
     by or on behalf of the Borrower in connection with the transactions
     contemplated by or otherwise pursuant to this Agreement that is
     confidential or proprietary in nature at the time it is so delivered or
     information obtained by the Lender in the course of its review of the
     books or records of the Borrower contemplated herein; provided that such
     term shall not include information W that was publicly known or otherwise
     known to the Lender prior to the time of such disclosure, (ii) that
     subsequently becomes publicly known through no act or omission by the
     Lender or any Person acting on the Lender's behalf, (iii) that otherwise
     becomes known to the Lender other than through disclosure by the Borrower
     or (iv) that constitutes financial information delivered to the Lender
     that is otherwise publicly available.

          "Default" means any event or circumstance which, with the giving of
     notice or the passage of time, or both, would be an Event of Default.

          "EBITDA" means for any fiscal period, the Consolidated Net Income or
     Consolidated Net Loss, as the case may be, for such fiscal period, after
     restoring thereto amounts deducted for (a) extraordinary losses (or
     deducting therefrom any amounts included therein on account of
     extraordinary gains) and special charges, (b) depreciation and
     amortization (including write-offs or write-downs) and special charges,
     (c) the amount of interest expense of the Borrower and its Subsidiaries,
     if any, determined on a consolidated basis in accordance with GAAP, for
     such period on the aggregate principal amount of their consolidated
     indebtedness, (d) the amount of tax expense of the Borrower and its
     Subsidiaries, if any, determined on a consolidated basis in accordance
     with GAAP, for such period and (e) the aggregate amount of fixed and
     contingent rentals payable by the Borrower and its Subsidiaries, if any,
     determined on a consolidated basis in accordance with GAAP, for such
     period with respect to leases of real and personal property.

          "Effective Date" has the meaning assigned to such term in Section
     6.1.

          "Event of Default" has the meaning assigned to such term in Section
     8.1.

          "GAAP" means generally accepted accounting principles, as set forth
     in the opinions and pronouncements of the Accounting Principles Board of
     the American Institute of Certified Public Accountants and statements and
     pronouncements of the Financial Accounting Standards Board or in such
     other statements by such other entities as may be approved by a
     significant segment of the accounting profession of the United States of
     America.

          "Governmental Authority" means any nation or government, any state or
     other political subdivision thereof and any entity exercising executive,
     legislative, judicial, regulatory or administrative functions of or
     pertaining to government.

          "Guaranty" means, with respect to any Person, any obligation,
     contingent or otherwise, of such Person guaranteeing or having the
     economic effect of guaranteeing any Indebtedness of any other Person (the
     "primary obligor") in any manner, whether directly or indirectly, and
     including any obligation of such Person (i) to purchase or pay (or advance
     or supply funds for the purchase or payment of) such Indebtedness or to
     purchase (or to advance or supply funds for the purchase of) any security
     for the payment of such Indebtedness, (ii) to purchase property,
     securities or services for the purpose of assuring the holder of such
     Indebtedness of the payment of such Indebtedness or (iii) to maintain
     working capital, equity capital or the financial condition or liquidity of
     the primary obligor so as to enable the primary obligor to pay such
     Indebtedness. The term "Guaranteed" shall have the corresponding meaning.

          "Indebtedness" means, with respect to any Person, (i) all obligations
     of such Person for borrowed money or for the deferred purchase price of
     property or services (including all obligations, contingent or otherwise,
     of such Person in connection with letters of credit, bankers' acceptances,
     interest rate swap agreements, interest rate cap agreements or other
     similar instruments, including currency swaps) other than indebtedness to
     trade creditors and service providers incurred in the ordinary course of
     business and payable on usual and customary terms, (ii) all obligations of
     such Person evidenced by bonds, notes, debentures or other similar
     instruments, (iii) all indebtedness created or arising under any
     conditional sale or other title retention agreement with respect to
     property acquired by such Person (even though the remedies available to
     the seller or lender under such agreement are limited to repossession or
     sale of such property), (iv) all Capital Lease Obligations of such Person,
     (v) all obligations of the types described in clauses (i), (ii), (iii) or
     (iv) above secured by (or for which the obligee has an existing right,
     contingent or otherwise, to be secured by) any Lien upon or in any
     property (including accounts, contract rights and other intangibles) owned
     by such Person, even though such Person has not assumed or become liable
     for the payment of such Indebtedness, (vi) all preferred stock issued by
     such Person which is redeemable, prior to full satisfaction of the
     Borrower's obligations under this Agreement (including repayment in full
     of the Loans and all interest accrued thereon), other than at the option
     of such Person, valued at the greater of its voluntary or involuntary
     liquidation preference plus accrued and unpaid dividends, (vii) all
     Indebtedness of others Guaranteed by such Person and (viii) all
     Indebtedness of any partnership of which such Person is a general partner.

          "Indemnitee" has the meaning assigned to such term in Section 4.4(b).

          "Intercompany Agreement" means the intercompany agreement, dated as
     of the date hereof, by and between the Borrower and the Lender.

          "Interest Period" means, with respect to any Loan, each three-month
     period commencing on the date such Loan is made or at the end of the
     preceding Interest Period, as the case may be; provided, however, that:

               (i) any Interest Period that would otherwise end on a day that
          is not a Business Day shall be extended to the next Business Day,
          unless such Business Day falls in another calendar month, in which
          case such Interest Period shall end on the next preceding Business
          Day;

               (ii) any Interest Period that begins on the last Business Day of
          a calendar month (or on a day for which there is no numerically
          corresponding day in the calendar month at the end of such Interest
          Period) shall, subject to clause (iii) below, end on the last
          Business Day of a calendar month; and

               (iii) any Interest Period that would otherwise end after the
          Commitment Termination Date then in effect shall end on such
          Commitment Termination Date.

          "Lender" means Reckson Operating Partnership, L.P., a Delaware
     limited partnership.

          "Lien" means, with respect to any asset of a Person, (i) any
     mortgage, deed of trust, lien, pledge, encumbrance, charge or security
     interest in or on such asset, (ii) the interest of a vendor or lessor
     under any conditional sale agreement, capital lease or title retention
     agreement relating to such asset, and (iii) in the case of securities, any
     purchase option, call or similar right of any other Person with respect to
     such securities.

          "Loans" has the meaning assigned to such term in Section 2.1.

          "Material Adverse Effect" means any material and adverse effect on
     (i) the consolidated business, properties, condition (financial or
     otherwise) or operations, present or prospective, of the Borrower and its
     Subsidiaries, (ii) the ability of the Borrower timely to perform any of
     its material obligations, or of the Lender to exercise any remedy, under
     this Agreement or (iii) the legality, validity, binding nature or
     enforceability of this Agreement.

          "Net Assets" means, with respect to the Borrower, the greater of (i)
     the sum of the Borrower's paid-in capital and retained earnings or (ii)
     the excess of the Value of all of the Borrower's assets of any kind over
     the Borrower's Adjusted Indebtedness.

          "Permitted Liens" means, collectively, the following: (i) Liens
     expressly approved by the Lender, which approval shall not be unreasonably
     withheld; (ii) Liens imposed by any Governmental Authority for taxes,
     assessments or charges not yet due or that are being contested in good
     faith by appropriate proceedings and for which adequate reserves are being
     maintained (in accordance with GAAP); and (iii) Liens existing on the date
     hereof.

          "Person" means any individual, sole proprietorship, partnership,
     joint venture, trust, unincorporated organization, association,
     corporation, institution, public benefit corporation, entity or government
     (whether Federal, state, county, city, municipal or otherwise, including
     any instrumentality, division, agency, body or department thereof).

          "Prime Rate" means the prime rate (or if a range is given, the
     highest prime rate) listed under "Money Rates" in The Wall Street Journal
     for such date or, if The Wall Street Journal is not published on such
     date, then in The Wall Street Journal most recently published.

          "Reckson" means Reckson Associates Realty Corp., a Maryland
     corporation.

          "Responsible Officer" means the chief executive officer, president,
     chief financial officer, chief accounting officer, treasurer or any vice
     president, senior vice president or executive vice president of the
     General Partner.

          "RSI Facility Agreement" means the credit agreement dated the date
     hereof between Borrower and Lender in respect of the operations of Reckson
     Service Industries, Inc.

          "RSVP Platform" means a particular real estate market sector in which
     RSVP invests.

          "SEC" means the Securities and Exchange Commission (or any successor
     Governmental Authority).

          "Subsidiary" means, at any time and with respect to any Person, any
     other Person the shares of stock or other ownership interests of which
     having ordinary voting power to elect a majority of the board of directors
     or with respect to other matters of such Person are at the time owned, or
     the management or policies of which is otherwise at the time controlled,
     directly or indirectly through one or more intermediaries (including other
     Subsidiaries) or both, by such first Person. Unless otherwise qualified or
     the context indicates clearly to the contrary, all references to a
     "Subsidiary" or "Subsidiaries" in this Agreement refer to a Subsidiary or
     Subsidiaries of the Borrower.

          "Taxes" has the meaning assigned to such term in Section 4.3(a).

          "Value" means, with respect to any asset owned by the Borrower, the
     present value of the net cash flow reasonably projected by the Borrower to
     be received with respect to its ownership of such assets, discounted at an
     interest rate that the Borrower reasonably determines appropriate given
     the risks associated with such asset and such projected net cash flow, but
     in no event at an interest rate lower than 2% above the Prime Rate in
     effect at the time that the determination of Value is made.

                                  ARTICLE II.
                         THE REVOLVING CREDIT FACILITY

     Section 2.1 Commitment and Loans. Until the Commitment Termination Date,
subject to the terms and conditions of this Agreement, the Lender agrees to
make revolving credit loans (collectively, "Loans") in dollars to the Borrower
in an aggregate principal amount at any one time outstanding not to exceed the
Commitment.

     Section 2.2 Borrowing Procedure.  In order to borrow a Loan, the Borrower
shall give a Borrowing Request to the Lender, by telephone, telex or telecopy
or in writing, not later than 10:30 A.M., New York time, on the third Business
Day before the Borrowing Date (or such later time or date as the Lender may in
its sole discretion permit). (If any Borrowing Request is made otherwise than
in writing, Borrower shall promptly confirm such Borrowing Request in writing.)
Subject to satisfaction, or waiver by the Lender, of each of the applicable
conditions precedent contained in Article VI, on the Borrowing Date the Lender
shall make available, in immediately available funds, to the Borrower the
amount of the requested Loan.

     Section 2.3 Termination and Reduction of Commitment.  The Borrower may
terminate the Commitment, or reduce the amount thereof, by giving written
notice to the Lender, not later than 5:00 P.M., New York time, on the fifth
Business Day prior to the date of termination or reduction (or such later time
or date as the Lender may in its sole discretion permit).

     Section 2.4 Repayment.  Loans shall be repaid, together with all accrued
and unpaid interest thereon, on the Commitment Termination Date.

     Section 2.5 Optional Prepayment.  The Borrower may prepay Loans by giving
notice (specifying the Loans to be prepaid in whole or in part, the principal
amount thereof to be prepaid and the date of prepayment) to the Lender, by
telephone, telex, telecopy or in writing not later than 12:00 noon, New York
time, on the fourth Business Day preceding the proposed date of prepayment (or
such later time or date as the Lender may in its sole discretion permit). (If
any such prepayment notice is made otherwise than in writing, Borrower shall
promptly confirm such notice in writing.) Each such prepayment shall be at the
aggregate principal amount of the principal being prepaid, together with
accrued interest on the principal being prepaid to the date of prepayment and
the amounts required by Section 4.3. Subject to the terms and conditions of
this Agreement, prepaid Loans may be reborrowed.

                                  ARTICLE III.
                               INTEREST AND FEES

     Section 3.1 Interest Rate.  Each Loan shall bear interest from the date
made until the date repaid, payable in arrears, with respect to Interest
Periods of three months or less, on the last day of such Interest Period, and
with respect to Interest Periods longer than three months, on the day which is
three months after the commencement of such Interest Period and on the last day
of such Interest Period, at a rate per annum equal to the greater of (i) the
sum of (x) 2% and (y) the Prime Rate for the applicable Interest Period and
(ii) 12%. With respect to each Loan outstanding for one year or longer, such
12% rate shall increase to 12.48%, 12.98%, 13.50% and 14.04% as of the
anniversary of the making of such Loan, for the second, third, fourth and fifth
years that such Loan is outstanding, respectively. Notwithstanding the
foregoing, if the amount of interest to be paid by the Borrower to the Lender
exceeds the amount of EBITDA of the Borrower for the immediately preceding
calendar quarter (ending the last day of September, December, March, or June),
the Borrower shall not be obligated to repay the amount of interest in excess
of EBITDA of the Borrower for such period. Any such amount of unpaid interest
shall be added to principal and shall accrue interests thereon. Payments under
the Notes shall be applied first to any fees, costs or expenses due under the
Notes or hereunder, then to interest, and then to principal. Notwithstanding
any other provision of this Agreement, all outstanding principal and interest
of the Loan and all other amounts payable hereunder, if not sooner paid, shall
be due and payable on the Commitment Termination Date.

     Section 3.2 Interest on Overdue Amounts.  All overdue amounts (including
principal, interest and fees) hereunder, and, during the continuance of any
Event of Default that shall have occurred, each Loan, shall bear interest,
payable on demand, at a rate per annum equal to the greater of (i) the sum of
(x) 3% and (y) Prime Rate for the applicable Interest Period and (ii) 13%. With
respect to each Loan outstanding for one year or longer, such 13% rate shall
increase to 13.48%, 13.98%, 14.50% and 15.04% as of the anniversary of the
making of such Loan for the second, third, fourth and fifth years that such
Loan is outstanding, respectively.

     Section 3.3 Maximum Interest Rate. (a) Nothing in this Agreement shall
require the Borrower to pay interest at a rate exceeding the maximum rate
permitted by applicable law. Neither this Section nor Section 10.1 is intended
to limit the rate of interest payable for the account of the Lender to the
maximum rate permitted by the laws of the State of New York (or any other
applicable law) if a higher rate is permitted with respect to the Lender by
supervening provisions of U.S. Federal law.

     (b) If the amount of interest payable for the account of the Lender on any
interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to this Article III, would exceed the
maximum amount permitted by applicable law to be charged by the Lender, the
amount of interest payable for its account on such interest payment date shall
automatically be reduced to such maximum permissible amount.

     (c) If the amount of interest payable for the account of the Lender in
respect of any interest computation period is reduced pursuant to Section
3.3(b) and the amount of interest payable for its account in respect of any
subsequent interest computation period would be less than the maximum amount
permitted by law to be charged by the Lender, then the amount of interest
payable for its account in respect of such subsequent interest computation
period shall be automatically increased to such maximum permissible amount;
provided that at no time shall the aggregate amount by which interest paid for
the account of the Lender has been increased pursuant to this Section 3.3(c)
exceed the aggregate amount by which interest paid for its account has
theretofore been reduced pursuant to Section 3.3(b).

                                  ARTICLE IV.

                            DISBURSEMENT AND PAYMENT

     Section 4.1  Method and Time of Payments.

     (a) All payments by the Borrower hereunder shall be made without setoff or
counterclaim to the Lender, for its account, in dollars and in immediately
available funds to the account of the Lender theretofore designated in writing
to the Borrower not later than 12:00 noon, New York time, on the date when due
or, in the case of payments pursuant to Sections 4.3 and 4.4 or payments
otherwise specified as payable upon demand, forthwith upon written demand
therefor.

     (b) Whenever any payment from the Borrower shall be due on a day that is
not a Business Day, the date of payment thereof shall be extended to the next
succeeding Business Day. If the date for any payment of principal is extended
by operation of law or otherwise, interest thereon shall be payable for such
extended time.


<PAGE>




     Section 4.2  Compensation for Losses. (a) If (i) the Borrower prepays
Loans, (ii) the Borrower revokes any Borrowing Request or (iii) Loans (or
portions thereof) shall become or be declared to be due prior to the scheduled
maturity thereof, then the Borrower shall pay to the Lender an amount that will
compensate the Lender for any loss (other than lost profit) or premium or
penalty incurred by the Lender as a result of such prepayment, declaration or
revocation in respect of funds obtained for the purpose of making or
maintaining the Lender's Loans, or any portion thereof. Such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that would have accrued on the amount so paid or prepaid, or not borrowed, for
the period from the date of such payment or prepayment or failure to borrow to
the last day of such Interest Period (or, in the case of a failure to borrow,
the Interest Period that would have commenced on the expected Borrowing Date)
in each case at the applicable rate of interest for such Loan over (ii) the
amount of interest (as reasonably determined by the Lender) that would have
accrued on such amount were it on deposit for a comparable period with leading
banks in the London interbank market.

     (b) If requested by the Borrower, in connection with a payment due
pursuant to this Section 4.2, the Lender shall provide to the Borrower a
certificate setting forth in reasonable detail the amount required to be paid
by the Borrower to the Lender and the computations made by the Lender to
determine such amount. In the absence of manifest error, such certificate shall
be conclusive as to the amount required to be paid.

     Section 4.3  Withholding and Additional Costs.

     (a) Withholding. All payments under this Agreement (including payments of
principal and interest) shall be payable to the Lender free and clear of any
and all present and future taxes, levies, imposts, duties, deductions,
withholdings, fees, liabilities and similar charges (collectively, "Taxes").
If any Taxes are required to be withheld or deducted from any amount payable
under this Agreement, then the amount payable under this Agreement shall be
increased to the amount which, after deduction from such increased amount of
all Taxes required to be withheld or deducted therefrom, will yield to the
Lender the amount stated to be payable under this Agreement. The Borrower shall
also hold the Lender harmless and indemnify it for any stamp or other taxes
with respect to the preparation, execution, delivery, recording, performance or
enforcement of this Agreement (all of which shall be included within "Taxes") .
If any of the Taxes specified in this Section 4.3(a) are paid by the Lender,
the Borrower shall, upon demand of the Lender, promptly reimburse the Lender
for such payments, together with any interest, penalties and expenses incurred
in connection therewith. The Borrower shall deliver to the Lender certificates
or other valid vouchers for all Taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder.

     (b)  Additional Costs. Subject to Section 4.3(c), and without duplication
of any amounts payable described in Section 4.2 or 4.3(a), if after the date
hereof any change in any law or regulation or in the interpretation thereof by
any court or administrative or Governmental Authority charged with the
administration thereof or the enactment of any law or regulation shall either
(1) impose, modify or deem applicable any reserve, special deposit or similar
requirement against the Lender's Commitment or Loans or (2) impose on the
Lender any other condition regarding this Agreement, its Commitment or the
Loans and the result of any event referred to in clause (1) or (2) shall be to
increase the cost to the Lender of maintaining its Commitment or any Loans made
by the Lender (which increase in cost shall be calculated in accordance with
the Lender's reasonable averaging and attribution methods) by an amount which
the Lender deems to be material, then, upon demand by the Lender, the Borrower
shall pay to the Lender an amount equal to such increase in cost.

     (c) Certificate, Etc. If requested by the Borrower, in connection with any
demand for payment pursuant to this Section 4.3, the Lender shall provide to
the Borrower a certificate setting forth in reasonable detail the basis for
such demand, the amount required to be paid by the Borrower to the Lender, the
computations made by the Lender to determine such amount and satisfaction of
the conditions set forth in the next sentence. Anything to the contrary herein
notwithstanding, the Lender shall not have the right to demand any payment or
compensation under this Section 4.3 (i) with respect to any period more than
180 days prior to the date it has made a demand pursuant to this Section 4.3,
and (ii) to the extent that the Lender determines in good faith that the
interest rate on the relevant Loans appropriately accounts for any increased
cost or reduced rate of return. In the absence of manifest error, the
certificate referred to above shall be conclusive as to the amount required to
be paid.

     Section 4.4 Expenses; Indemnity. (a) The Borrower agrees: (i) to pay or
reimburse the Lender for all reasonable out-of-pocket costs and expenses
incurred in connection with the preparation and execution of, and any
amendment, supplement or modification to, this Agreement and any other
documents prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees and disbursements of Brown & Wood LLP, counsel
to the Lender; and (ii) to pay or reimburse the Lender for all reasonable costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to the Lender. The
Borrower also agrees to indemnify the Lender against any transfer taxes,
documentary taxes, assessments or charges made by any Governmental Authority by
reason of the execution and delivery of this Agreement.

     (b) The Borrower agrees to indemnify the Lender and its directors,
officers, partners, employees, agents and Affiliates (for purposes of this
paragraph, each, an "Indemnitee") against, and to hold each Indemnitee harmless
from, any and all claims, liabilities, damages, losses, costs, charges and
expenses (including fees and expenses of counsel) incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a
result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated by this Agreement, the performance by the parties
thereto of their respective obligations under this Agreement or the
consummation of the transactions and the other transactions contemplated by
this Agreement, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee.

     (c) All amounts due under this Section 4.4 shall be payable in immediately
available funds upon written demand therefor.

     Section 4.5 Survival. The provisions of Sections 4.2, 4.3 and 4.4 shall
remain operative and in full force and effect regardless of the expiration of
the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the reduction or termination of the
Commitment, the invalidity or unenforceability of any term or provision of this
Agreement, or any investigation made by or on behalf of the Lender.

                                  ARTICLE V.

                         REPRESENTATIONS AND WARRANTIES

     Section 5.1 Representations and Warranties. The Borrower represents and
warrants to the Lender as follows:

     (a) Good Standing and Power.  The Borrower and each Subsidiary is a
limited partnership or corporation, duly organized and validly existing in good
standing under the laws of the jurisdiction of its organization; each has the
power to own its property and to carry on its business as now being conducted;
and each is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it
therein or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified, or to be in good
standing, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

     (b) Authority.  The Borrower has full power and authority to execute and
deliver, and to incur and perform its obligations under, this Agreement, which
has been duly authorized by all proper and necessary action. No consent or
approval of limited partners is required as a condition to the validity or
performance of, or the exercise by the Lender of any of its rights or remedies
under, this Agreement.

     (c) Authorizations.  All authorizations, consents, approvals,
registrations, notices, exemptions and licenses with or from any Governmental
Authority or other Person necessary for the execution, delivery and performance
by the Borrower of, and the incurrence and performance of each of its
obligations under, this Agreement, and the exercise by the Lender of its
remedies under this Agreement have been effected or obtained and are in full
force and effect.

     (d) Binding Obligation.  This Agreement constitutes the valid and legally
binding obligation of the Borrower enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.

     (e) Litigation. There are no proceedings or investigations now pending or,
to the knowledge of the Borrower, threatened before any court or arbitrator or
before or by any Governmental Authority which, individually or in the
aggregate, if determined adversely to the interests of the Borrower or any
Subsidiary, could reasonably be expected to have a Material Adverse Effect.

     (f) No Conflicts.  There is no statute, regulation, rule, order or
judgment, and no provision of any agreement or instrument binding upon the
Borrower or any Subsidiary, or affecting their properties, and no provision of
the certificate of limited partnership, certificate of incorporation, agreement
of limited partnership or by-laws (or similar constitutive instruments) of the
Borrower or any Subsidiary, that would prohibit, conflict with or in any way
impair the execution or delivery of, or the incurrence or performance of any
obligations of the Borrower under, this Agreement, or result in or require the
creation or imposition of any Lien on property of the Borrower or any
Subsidiary as a consequence of the execution, delivery and performance of this
Agreement.

     (g) Taxes.  The Borrower and the Subsidiaries each has filed or caused to
be filed all tax returns that are required to be filed and paid all taxes that
are required to be shown to be due and payable on said returns or on any
assessment made against it or any of its property and all other taxes,
assessments, fees, liabilities, penalties or other charges imposed on it or any
of its property by any Governmental Authority, except for any taxes,
assessments, fees, liabilities, penalties or other charges which are being
contested in good faith and (unless the amount thereof is not material to the
Borrower's consolidated financial condition) for which adequate reserves have
been established in accordance with GAAP.

     (h) Properties.  The Borrower and the Subsidiaries each has good and
marketable title to, or valid leasehold interests in, all of its respective
properties and assets. All such assets and properties are so owned or held free
and clear of all Liens, except Permitted Liens.

     (i) Compliance with Laws and Charter Documents.  Neither the Borrower nor
any Subsidiary is, or as a result of performing any of its obligations under
this Agreement will be, in violation of (a) any law, statute, rule, regulation
or order of any Governmental Authority applicable to it or its properties or
assets or (b) its certificate of limited partnership, certificate of
incorporation, agreement of limited partnership, by-laws or any similar
document.

     (j) No Material Adverse Effect.  Since May 15, 1997, there has not
occurred or arisen any event, condition or circumstance that, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

     (k) Disclosure.  All information relating to the Borrower or its
Subsidiaries delivered in writing to the Lender in connection with the
negotiation, execution and delivery of this Agreement is true and complete in
all material respects. There is no material fact of which the Borrower is aware
which, individually or in the aggregate, would reasonably be expected adversely
to influence the Lender's credit analysis relating to the Borrower and its
Subsidiaries which has not been disclosed to the Lender in writing.

     Section 5.2  Survival.  All representations and warranties made by the
Borrower in this Agreement, and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement, shall
be considered to have been relied upon by the Lender, (ii) survive the making
of Loans regardless of any investigation made by, or on behalf of, the Lender
and (iii) continue in full force and effect as long as the Commitment has not
been terminated and, thereafter, so long as any Loan, fee or other amount
payable under this Agreement remains unpaid.

                                  ARTICLE VI.

                              CONDITIONS PRECEDENT

     Section 6.1  Conditions to the Availability of the Commitment.  The
obligations of the Lender hereunder are subject to, and the Lender's Commitment
shall not become available until the earliest date (the "Effective Date") on
which each of the following conditions precedent shall have been satisfied or
waived in writing by the Lender:

     (a)  This Agreement.  The Lender shall have received this Agreement duly
executed and delivered by the Borrower.

     (b)  Certificate of Incorporation and By-Laws. The Lender shall have
received the following:

          (i) a copy of the Certificate of Incorporation of the Borrower, as in
     effect on the Effective Date, certified by the Secretary of State of
     Delaware, and a certificate from such Secretary of State as to the good
     standing of the Borrower, in each case as of a date reasonably close to
     the Effective Date; and

          (ii) a certificate of a Responsible Officer of the Borrower, dated
     the Effective Date, and stating that attached thereto is a true and
     complete copy of the By-Laws of the Borrower as in effect on such date.

     (c) Representations and Warranties. The representations and warranties
contained in Section 5.1 shall be true and correct on the Effective Date, and
the Lender shall have received a certificate, signed by a Responsible Officer
of the Borrower, to that effect.

     (d) Other Documents. The Lender shall have received such other
certificates, opinions and other documents as the Lender reasonably may
require.

     (e) REIT Status of Reckson. The borrowing shall not, in the sole judgment
of the Lender, endanger Reckson's status as a REIT.

     (f) Certain Loans Subject to Reckson's Approval. In respect of any Loan or
Loans aggregating $25 million in a single RSVP Platform, Reckson shall have
approved the Lender's making such Loan in its sole discretion.

     Section 6.2  Conditions to All Loans. The obligations of the Lender to
make each Loan are subject to the conditions precedent that, on the date of
each Loan and after giving effect thereto, each of the following conditions
precedent shall have been satisfied, or waived in writing by the Lender:

          (a) Borrowing Request. The Lender shall have received a Borrowing
     Request in accordance with the terms of this Agreement.

     (b) No Default. No Default or Event of Default shall have occurred and be
continuing, nor shall any Default or Event of Default occur as a result of the
making of such Loan.

          (c) Debt-to-Equity Ratio. The Lender shall have received from the
     Borrower a certificate demonstrating that the ratio of the Borrower's
     Adjusted Indebtedness to the Borrower's Net Assets, taking into account
     the requested Loan and the assets, if any, to be acquired by the Borrower
     with the proceeds of such Loan, shall not exceed 4-to-1.

          (d) Representations and Warranties; Covenants . The representations
     and warranties contained in Section 5.1 shall have been true and correct
     when made and (except to the extent that any representation or warranty
     speaks as of a date certain) shall be true and correct on the Borrowing
     Date with the same effect as though such representations and warranties
     were made on such Borrowing Date; and the Borrower shall have complied
     with all of its covenants and agreements under this Agreement.

     Section 6.3  Satisfaction of Conditions Precedent. Each of (i) the
delivery by the Borrower of a Borrowing Request (unless the Borrower notifies
the Lender in writing to the contrary prior to the Borrowing Date) and (ii) the
acceptance of the proceeds of a Loan shall be deemed to constitute a
certification by the Borrower that, as of the Borrowing Date, each of the
conditions precedent contained in Section 6.2 has been satisfied with respect
to the Loan then being made.

                                 ARTICLE VII.

                                  COVENANTS

     Section 7.1 Affirmative Covenants. Until satisfaction in full of all the
obligations of the Borrower under this Agreement and termination of the
Commitment of the Lender hereunder, the Borrower will:

     (a)  Financial Statements; Compliance Certificates. Furnish to the Lender:

               (i) as soon as available, but in no event more than 60 days
          following the end of each of the first three quarters of each fiscal
          year, copies of the Borrower's Quarterly Report on Form 10-Q being
          filed with the SEC, which shall include a consolidated balance sheet
          and consolidated income statement of the Borrower and the
          Subsidiaries for such quarter;

               (ii) as soon as available, but in no event more than 120 days
          following the end of each fiscal year, a copy of the Borrower's
          Annual Report on Form 10-K being filed with the SEC, which shall
          include the consolidated financial statements of the Borrower and the
          Subsidiaries, together with a report thereon by Ernst & Young LLP (or
          another firm of independent certified public accountants reasonably
          satisfactory to the Lender), for such year;

               (iii) within five Business Days of any Responsible Officer of
          the Borrower obtaining knowledge of any Default or Event of Default,
          if such Default or Event of Default is then continuing, a certificate
          of a Responsible Officer of the Borrower stating that such
          certificate is a "Notice of Default" and setting forth the details
          thereof and the action which the Borrower is taking or proposes to
          take with respect thereto; and

               (iv) such additional information, reports or statements,
          regarding the business, financial condition or results of operations
          of the Borrower and its Subsidiaries, as the Lender from time to time
          may reasonably request.

          (b)  Existence.  Except as permitted by Section 7.2(a), maintain its
     existence in good standing and qualify and remain qualified to do business
     in each jurisdiction in which the character of the properties owned or
     leased by it therein or in which the transaction of its business is such
     that the failure to qualify, individually or in the aggregate, could
     reasonably be expected to have a Material Adverse Effect.

          (c)  Compliance with Law and Agreements.  Comply, and cause each
     Subsidiary to comply, with all applicable laws, ordinances, orders, rules,
     regulations and requirements of all Governmental Authorities and with all
     agreements except where the necessity of compliance therewith is contested
     in good faith by appropriate proceedings or where the failure to comply
     therewith, individually or in the aggregate, could not reasonably be
     expected to have a Material Adverse Effect.

          (d)  Authorizations.  Obtain, make and keep in full force and effect
     all authorizations from and registrations with Governmental Authorities
     required for the validity or enforceability of this Agreement.

          (e)  Inspection.  Permit, and cause each Subsidiary to permit, the
     Lender to have one or more of its officers and employees, or any other
     Person designated by the Lender, to visit and inspect any of the
     properties of the Borrower and the Subsidiaries and to examine the minute
     books, books of account and other records of the Borrower and the
     Subsidiaries, and to photocopy extracts from such minute books, books of
     account and other records, and to discuss its affairs, finances and
     accounts with its officers and with the Borrower's independent
     accountants, during normal business hours and at such other reasonable
     times, for the purpose of monitoring the Borrower's compliance with its
     obligations under this Agreement.

          (f)  Maintenance of Records.  Keep, and cause each Subsidiary to keep,
     proper books of record and account in which full, true and correct entries
     will be made of all dealings or transactions of or in relation to its
     business and affairs.

          (g)  Notice of Defaults and Adverse Developments. Promptly notify the
     Lender upon the discovery by any Responsible officer of the occurrence of
     (i) any Default or Event of Default; (ii) any event, development or
     circumstance whereby the financial statements most recently furnished to
     the Lender fail in any material respect to present fairly, in accordance
     with GAAP, the financial condition and operating results of the Borrower
     and the Subsidiaries as of the date of such financial statements; (iii)
     any material litigation or proceedings that are instituted or threatened
     (to the knowledge of the Borrower) against the Borrower or any Subsidiary
     or any of their respective assets; (iv) any event, development or
     circumstance which, individually or in the aggregate, could reasonably be
     expected to result in an event of default (or, with the giving of notice
     or lapse of time or both, an event of default) under any Indebtedness and
     the amount thereof; and (v) any other development in the business or
     affairs of the Borrower or any Subsidiary if the effect thereof would
     reasonably be expected, individually or in the aggregate, to have a
     Material Adverse Effect; in each case describing the nature thereof and
     the action the Borrower proposes to take with respect thereto.

     Section 7.2  Negative Covenants.  Until satisfaction in full of all the
obligations of the Borrower under this Agreement and termination of the
Commitment of the Lender hereunder, the Borrower will not:

     (a)  Mergers, Consolidations and Sales of Assets.  Wind up, liquidate or
dissolve its affairs or enter into any merger, consolidation or share exchange,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time), whether in one or a series of transactions, all
or any substantial part of its assets, or permit any Subsidiary so to do,
unless such transaction or series of transactions are expressly approved by the
Lender, which approval shall not be unreasonably withheld.

     (b) Liens . Create, incur, assume or suffer to exist any Lien upon or with
respect to any of its property or assets, whether now owned or hereafter
acquired, or assign or otherwise convey any right to receive income, except
Permitted Liens.

     (c) Indebtedness. Create, incur, issue, assume, guarantee or suffer to
exist any Indebtedness, except:

          (i) Indebtedness to the Lender under this Agreement or under the RSI
     Facility Agreement,

          (ii) Non-recourse Indebtedness of the Borrower and any Subsidiary
     secured by mortgages, encumbrances or liens specifically permitted by
     Section 7.2(b), and

          (iii) Indebtedness expressly approved by the Lender in writing, which
     approval may be withheld in the Lender's sole discretion.

     (d) Dividends.  Declare any dividends on any of its shares of capital
stock unless such dividend or distribution is expressly approved in writing by
the Lender.

     (e) Certain Amendments.  Amend, modify or waive, or permit to be amended,
modified or waived, any provision of its Certificate of Incorporation unless,
within not less than 5 days prior to such amendment, modification or waiver (or
such later time as the Lender may in its sole discretion permit), the Borrower
shall have given the Lender notice thereof, including all relevant terms and
conditions thereof, and the Lender shall have consented in writing thereto.

                                 ARTICLE VIII.

                               EVENTS OF DEFAULT

     Section 8.1  Events of Default. If one or more of the following events
(each, an "Event of Default") shall occur:

     (a) The Borrower shall fail duly to pay any principal of any Loan when
due, whether at maturity, by notice of intention to prepay or otherwise; or

     (b) The Borrower shall fail duly to pay any interest, fee or any other
amount payable under this Agreement within two days after the same shall be
due; or

     (c) Borrower shall fail duly to observe or perform any term, covenant, or
agreement contained in Section 7.2; or

     (d) The Borrower shall fail duly to observe or perform any other term,
covenant or agreement contained in this Agreement, and such failure shall have
continued unremedied for a period of 30 days; or

     (e) Any representation or warranty made or deemed made by the Borrower in
this Agreement, or any statement or representation made in any certificate,
report or opinion delivered by or on behalf of the Borrower in connection with
this Agreement, shall prove to have been false or misleading in any material
respect when so made or deemed made; or

     (f) The Borrower shall fail to pay any Indebtedness (other than
obligations here under) in an amount of $100,000 or more when due; or any such
Indebtedness having an aggregate principal amount outstanding of $100,000 or
more shall become or be declared to be due prior to the expressed maturity
thereof; or

     (g) An involuntary case or other proceeding shall be commenced against the
Borrower seeking liquidation, reorganization or other relief with respect to it
or its debts under any applicable bankruptcy, insolvency, reorganization or
similar law or seeking the appointment of a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of more than 60 days; or an order
or decree approving or ordering any of the foregoing shall be entered and
continued unstayed and in effect; or

     (h) The Borrower shall commence a voluntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or similar law or any other
case or proceeding to be adjudicated a bankrupt or insolvent, or any of them
shall consent to the entry of a decree or order for relief in respect of the
Borrower in an involuntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against any of them, or any of them
shall file a petition or answer or consent seeking reorganization or relief
under any applicable law, or any of them shall consent to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official of
the Borrower or any substantial part of its property, or the Borrower shall
make an assignment for the benefit of creditors, or the Borrower shall admit in
writing its inability to pay its debts generally as they become due, or the
Borrower shall take corporate action in furtherance of any such action;

     (i) One or more judgments against the Borrower or attachments against its
property, which in the aggregate exceed $100,000, or the operation or result of
which could be to interfere materially and adversely with the conduct of the
business of the Borrower remain unpaid, unstayed on appeal, undischarged,
unbonded, or undismissed for a period of more than 30 days; or

     (j) Any court or governmental or regulatory authority shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which prohibits, enjoins or otherwise
restricts, in a manner that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, any of the transactions
contemplated under this Agreement; or

     (k) Any Event of Default shall occur and be continuing under the RSI
Facility Agreement.

then, and at any time during the continuance of such Event of Default, the
Lender may, by written notice to the Borrower, take either or both of the
following actions, at the same or different times: (i) terminate forthwith the
Commitment and (ii) declare any Loans then outstanding to be due, whereupon the
principal of the Loans so declared to be due, together with accrued interest
thereon and any unpaid amounts accrued under this Agreement, shall become
forthwith due, without presentment, demand, protest or any other notice of any
kind (all of which are hereby expressly waived by the Borrower); provided that,
in the case of any Event of Default described in Section 8.1(g) or (h)
occurring with respect to the Borrower, the Commitment shall automatically and
immediately terminate and the principal of all Loans then outstanding, together
with accrued interest thereon and any unpaid amounts accrued under this
Agreement, shall automatically and immediately become due without presentment,
demand, protest or any other notice of any kind (all of which are hereby
expressly waived by the Borrower).

                                  ARTICLE IX.

                          EVIDENCE OF LOANS; TRANSFERS

     Section 9.1 Evidence of Loans. (a) The Lender shall maintain accounts
evidencing the indebtedness of the Borrower to the Lender resulting from each
Loan made by the Lender from time to time, including the amounts of principal
and interest payable and paid to the Lender in respect of Loans.

         (b) The Lender's written records described above shall be available
for inspection during ordinary business hours by the Borrower from time to time
upon reasonable prior notice to the Lender.

         (c) The entries made in the Lender's written or electronic records and
the foregoing accounts shall be prima facie evidence of the existence and
amounts of the indebtedness of the Borrower therein recorded; provided,
however, that the failure of the Lender to maintain any such account or such
records, as applicable, or any error therein, shall not in any manner affect
the validity or enforceability of any obligation of the Borrower to repay any
Loan actually made by the Lender in accordance with the terms of this
Agreement.

                                  ARTICLE X.

                                 MISCELLANEOUS

     Section 10.1  Applicable Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

     Section 10.2  Waiver of Jury.  THE BORROWER AND THE LENDER EACH HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, OR THE
RELATIONSHIPS ESTABLISHED HEREUNDER.

     Section 10.3  Jurisdiction and Venue; Service of Process. (a) The Borrower
and the Lender each hereby irrevocably submits to the non-exclusive
jurisdiction of any state or federal court in the Borough of Manhattan, The
City of New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Agreement and to the laying of venue in the
Borough of Manhattan The City of New York. The Borrower and the Lender each
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any objection to the laying of the venue of any such suit, action or proceeding
brought in the aforesaid courts and hereby irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum.

     (b) Borrower agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 10.7 or at such other address
of which the Lender shall have been notified pursuant thereto. The Borrower
further agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

     (c) The Borrower waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.

     Section 10.4  Confidentiality. The Lender agrees (on behalf of itself and
each of its Affiliates, partners, officers, employees and representatives) to
use its best efforts to keep confidential, in accordance with their customary
procedures for handling confidential information of this nature and in
accordance with commercially reasonable business practices, any Confidential
Information; provided that nothing herein shall limit the disclosure of any
such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for the Lender, (iii) to auditors or
accountants, (iv) by the Lender to an Affiliate thereof, or (v) in connection
with any litigation relating to enforcement of this Agreement; provided
further, that, unless specifically prohibited by applicable law or court order,
the Lender shall, prior to disclosure thereof, notify the Borrower of any
request for disclosure of any Confidential Information (x) by any Governmental
Authority or representative thereof or (y) pursuant to legal process.

     Section 10.5  Amendments and Waivers. (a) Any provision of this Agreement
may be amended, modified, supplemented or waived, but only by a written
amendment or supplement, or written waiver, signed by the Borrower and the
Lender.

     (b) Except to the extent expressly set forth therein, any waiver shall be
effective only in the specific instance and for the specific purpose for which
such waiver is given.

     Section 10.6  Cumulative Rights; No Waiver.  Each and every right granted
to the Lender hereunder or under any other document delivered in connection
herewith, or allowed it by law or equity, shall be cumulative and not exclusive
and may be exercised from time to time. No failure on the part of the Lender to
exercise, and no delay in exercising, any right will operate as a waiver
thereof, nor will any single or partial exercise by the Lender of any right
preclude any other or future exercise thereof or the exercise of any other
right.

     Section 10.7  Notices. Any communication, demand or notice to be given
hereunder will be duly given when delivered in writing or by telecopy to a
party at its address as indicated below or such other address as such party may
specify in a notice to the other party hereto. A communication, demand or
notice given pursuant to this Agreement shall be addressed:

          If to the Borrower, to:

                   Reckson Service Industries, Inc.
                   225 Broadhollow Road
                   Melville, New York  11747

                   Telecopy:          (516) 719-7400

                   Attention:         Chief Financial Officer


<PAGE>



          If to the Lender, to:

                   Reckson Operating Partnership, L.P.
                   225 Broadhollow Road
                   Melville, New York  11747

                   Telecopy:          (516) 694-6900

                   Attention:         Chief Financial Officer

     This Section 10. 7 shall not apply to notices referred to in Article II of
this Agreement, except to the extent set forth therein.

     Section 10.8 Certain Acknowledgments. The Borrower hereby confirms and
acknowledges that (a) the Lender does not have any fiduciary or similar
relationship to the Borrower by virtue of this Agreement and the transactions
contemplated herein and that the relationship established by this Agreement
between the Lender and the Borrower is solely that of creditor and debtor and
(b) no joint venture exists between the Borrower and the Lender by virtue of
this Agreement and the transactions contemplated herein.

     Section 10.9  Separability.  In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect under any law, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.

     Section 10.10 Parties in Interest. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Lender and their respective
successors and assigns, except that the Borrower may not assign any of its
rights hereunder without the prior written consent of the Lender, and any
purported assignment by the Borrower without such consent shall be void.

     Section 10.11 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all the counterparts shall together constitute one and the same
instrument.


<PAGE>



          IN WITNESS WHEREOF, the parties hereto have caused this Agreement 
to be duly executed as of the date first above written.

                                   RECKSON SERVICE INDUSTRIES, INC.,

                                   as Borrower

                                   By:  /s/ Scott Rechler
                                       ----------------------------------
                                      Name:  Scott Rechler
                                      Title: President

                                   RECKSON OPERATING PARTNERSHIP, L.P.,

                                   as Lender

                                   By: RECKSON ASSOCIATES REALTY CORP.,
                                       its general partner

                                   By:  /s/ Mitchell D. Rechler
                                       ----------------------------------
                                      Name:  Mitchell D. Rechler
                                      Title: Executive Vice President

                              
<PAGE>
                                 Exhibit 10.37

                                CREDIT AGREEMENT

                                  dated as of

                                 June 15, 1998

                                    between

                       RECKSON SERVICE INDUSTRIES, INC.,

                                  as Borrower

                                      and

                      RECKSON OPERATING PARTNERSHIP, L.P.,

                                   as Lender

                         relating to the operations of

                        RECKSON SERVICE INDUSTRIES, INC.


<PAGE>

                               Table of Contents

                                                                         Page

                                   ARTICLE I.
                                  DEFINITIONS

Section 1.1 Definitions....................................................1
       (a)    Terms Generally..............................................1
       (b)    Other Terms..................................................1

                                  ARTICLE II.
                         THE REVOLVING CREDIT FACILITY

Section 2.1 Commitment and Loans............................................6
Section 2.2 Borrowing Procedure.............................................6
Section 2.3 Termination and Reduction of Commitment.........................6
Section 2.4 Repayment.......................................................6
Section 2.5 Optional Prepayment.............................................7

                                  ARTICLE III.
                               INTEREST AND FEES

Section 3.1 Interest Rate....................................................7
Section 3.2 Interest on Overdue Amounts......................................7
Section 3.3 Maximum Interest Rate............................................7
Section 3.3 Neither this Section nor Section 10..............................8

                                  ARTICLE IV.
                            DISBURSEMENT AND PAYMENT

Section 4.1 Method and Time of Payments......................................8
Section 4.2 Compensation for Losses..........................................8
Section 4.2 Loans, or any portion thereof....................................9
Section 4.3 Withholding and Additional Costs.................................9

       (a)    Withholding....................................................9
       (b)    Additional Costs...............................................9
       (c)    Certificate, Etc..............................................10

Section 4.4 Expenses; Indemnity.............................................10
Section 4.5 Survival........................................................10

                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

Section 5.1 Representations and Warranties..................................11
       (a)    Good Standing and Power.......................................11
       (b)    Authority.....................................................11
       (c)    Authorizations................................................11
       (d)    Binding Obligation............................................11
       (e)    Litigation....................................................11
       (f)    No Conflicts..................................................12
       (g)    Taxes.........................................................12
       (h)    Properties....................................................12
       (i)    Compliance with Laws and Charter Documents....................12
       (j)    No Material Adverse Effect....................................12
       (k)    Disclosure....................................................12

Section 5.2 Survival........................................................13

                                  ARTICLE VI.
                              CONDITIONS PRECEDENT

Section 6.1 Conditions to the Availability of the Commitment................13
       (a)    This Agreement................................................13
       (b)    Certificate of Incorporation and By-Laws......................13
       (c)    Representations and Warranties................................13
       (d)    Other Documents...............................................13
       (e)    REIT Status of Reckson........................................13
       (f)    Certain Loans Subject to Reckson's Approval...................13

Section 6.2 Conditions to All Loans.........................................14
       (a)    Borrowing Request.............................................14
       (b)    No Default....................................................14
       (c)    Debt-to-Equity Ratio..........................................14
       (d)    Representations and Warranties; Covenants.....................14

Section 6.3 Satisfaction of Conditions Precedent............................14

                                  ARTICLE VII.
                                   COVENANTS

Section 7.1 Affirmative Covenants...........................................14
       (a)    Financial Statements; Compliance Certificates.................14
       (b)    Existence.....................................................15
       (c)    Compliance with Law and Agreements............................15
       (d)    Authorizations................................................15
       (e)    Inspection....................................................15
       (f)    Maintenance of Records........................................16
       (g)    Notice of Defaults and Adverse Developments...................16

Section 7.2 Negative Covenants..............................................16
       (a)    Mergers, Consolidations and Sales of Assets...................16
       (b)    Liens.........................................................16
       (c)    Indebtedness..................................................16
       (d)    Dividends.....................................................17
       (e)    Certain Amendments............................................17

                                 ARTICLE VIII.
                               EVENTS OF DEFAULT

Section 8.1 Events of Default...............................................17

                                  ARTICLE IX.
                          EVIDENCE OF LOANS; TRANSFERS

Section 9.1 Evidence of Loans...............................................19

                                   ARTICLE X.
                                 MISCELLANEOUS

Section 10.1 Applicable Law.................................................19
Section 10.2 Waiver of Jury.................................................19
Section 10.3 Jurisdiction and Venue; Service of Process.....................19
Section 10.4 Confidentiality................................................20
Section 10.5 Amendments and Waivers.........................................20
Section 10.6 Cumulative Rights; No Waiver...................................20
Section 10.7 Notices........................................................20
Section 10.8 Certain Acknowledgments........................................21
Section 10.9 Separability...................................................21
Section 10.10 Parties in Interest...........................................21
Section 10.11 Execution in Counterparts.....................................21


<PAGE>


          CREDIT AGREEMENT, dated as of June 15, 1998, between Reckson Service
Industries, Inc., a Delaware corporation, and Reckson Operating Partnership,
L.P., a Delaware limited partnership, relating to the operations of Reckson
Service Industries, Inc.

                              W I T N E S S E T H:

          WHEREAS, the Borrower has requested the Lender to commit to lend to
the Borrower up to $100 million on a revolving basis for acquisitions of assets
and general corporate purposes; and WHEREAS, the Lender is willing to make
revolving credit loans on the terms and conditions provided herein; NOW,
THEREFORE, the parties agree as follows: 

                                  ARTICLE I.

                                  DEFINITIONS

     Section 1.1 Definitions.

     (a) Terms Generally . The definitions ascribed to terms in this Agreement
apply equally to both the singular and plural forms of such terms. Whenever the
context may require, any pronoun shall be deemed to include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be interpreted as if followed by the phrase "without
limitation". The phrase "individually or in the aggregate" shall be deemed
general in scope and not to refer to any specific Section or clause of this
Agreement. All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise require. The
table of contents, headings and captions herein shall not be given effect in
interpreting or construing the provisions of this Agreement. Except as
otherwise expressly provided herein, all references to "dollars" or "$" shall
be deemed references to the lawful money of the United States of America.

     (b) Other Terms . The following terms have the meanings ascribed to them
below or in the Sections of this Agreement indicated below:

          "Adjusted Indebtedness" means, with respect to the Borrower, the
     Borrower's Indebtedness determined without regard for any amounts
     described in clause (viii) of the definition of "Indebtedness."

          "Affiliate" means, with respect to any Person, any other Person that
     controls, is controlled by, or is under common control with, such Person.

          "Agreement" means this credit agreement, as it may be amended,
     modified or supplemented from time to time.

          "Available Commitment" means, on any day, an amount equal to (i) the
     Commitment on such day minus (ii) the aggregate outstanding principal
     amount of Loans on such day.

          "Borrower" means Reckson Service Industries, Inc., a Delaware
     corporation.

          "Borrowing Date" means, with respect to any Loan, the Business Day
     set forth in the relevant Borrowing Request as the date upon which the
     Borrower desires to borrow such Loan;

          "Borrowing Request" means a request by the Borrower for a Loan, which
     shall specify (i) the requested Borrowing Date and (ii) the aggregate
     amount of such Loan.

          "Business Day" means any day that is not a Saturday, Sunday or other
     day on which commercial banks in The City of New York are authorized by
     law to close.

          "Capital Lease Obligations" means, with respect to any Person, the
     obligation of such Person to pay rent or other amounts under any lease
     with respect to any property (whether real, personal or mixed) acquired or
     leased by such Person that is required to be accounted for as a liability
     on a consolidated balance sheet of such Person.

          "Commercial Services" means businesses that provide services for
     occupants of office, industrial and other property types that Reckson may
     not be permitted to provide under Federal tax laws applicable to a real
     estate investment trust or that have not traditionally been provided by
     Reckson.

          "Commitment" means $100 million, as such amount may be reduced from
     time to time pursuant to Section 2.3.

          "Commitment Termination Date" means the earlier to occur of (i) June
     15, 2003 and (ii) the date, if any, on which the Commitment is terminated.

          "Confidential Information" means information delivered to the Lender
     by or on behalf of the Borrower in connection with the transactions
     contemplated by or otherwise pursuant to this Agreement that is
     confidential or proprietary in nature at the time it is so delivered or
     information obtained by the Lender in the course of its review of the
     books or records of the Borrower contemplated herein; provided that such
     term shall not include information W that was publicly known or otherwise
     known to the Lender prior to the time of such disclosure, (ii) that
     subsequently becomes publicly known through no act or omission by the
     Lender or any Person acting on the Lender's behalf, (iii) that otherwise
     becomes known to the Lender other than through disclosure by the Borrower
     or (iv) that constitutes financial information delivered to the Lender
     that is otherwise publicly available. "Default" means any event or
     circumstance which, with the giving of notice or the passage of time, or
     both, would be an Event of Default.

          "EBITDA" means for any fiscal period, the Consolidated Net Income or
     Consolidated Net Loss, as the case may be, for such fiscal period, after
     restoring thereto amounts deducted for (a) extraordinary losses (or
     deducting therefrom any amounts included therein on account of
     extraordinary gains) and special charges, (b) depreciation and
     amortization (including write-offs or write-downs) and special charges,
     (c) the amount of interest expense of the Borrower and its Subsidiaries,
     if any, determined on a consolidated basis in accordance with GAAP, for
     such period on the aggregate principal amount of their consolidated
     indebtedness, (d) the amount of tax expense of the Borrower and its
     Subsidiaries, if any, determined on a consolidated basis in accordance
     with GAAP, for such period and (e) the aggregate amount of fixed and
     contingent rentals payable by the Borrower and its Subsidiaries, if any,
     determined on a consolidated basis in accordance with GAAP, for such
     period with respect to leases of real and personal property.

          "Effective Date" has the meaning assigned to such term in Section
     6.1.

          "Event of Default" has the meaning assigned to such term in Section
     8.1.

          "GAAP" means generally accepted accounting principles, as set forth
     in the opinions and pronouncements of the Accounting Principles Board of
     the American Institute of Certified Public Accountants and statements and
     pronouncements of the Financial Accounting Standards Board or in such
     other statements by such other entities as may be approved by a
     significant segment of the accounting profession of the United States of
     America. "Governmental Authority" means any nation or government, any
     state or other political subdivision thereof and any entity exercising
     executive, legislative, judicial, regulatory or administrative functions
     of or pertaining to government.

          "Guaranty" means, with respect to any Person, any obligation,
     contingent or otherwise, of such Person guaranteeing or having the
     economic effect of guaranteeing any Indebtedness of any other Person (the
     "primary obligor") in any manner, whether directly or indirectly, and
     including any obligation of such Person (i) to purchase or pay (or advance
     or supply funds for the purchase or payment of) such Indebtedness or to
     purchase (or to advance or supply funds for the purchase of) any security
     for the payment of such Indebtedness, (ii) to purchase property,
     securities or services for the purpose of assuring the holder of such
     Indebtedness of the payment of such Indebtedness or (iii) to maintain
     working capital, equity capital or the financial condition or liquidity of
     the primary obligor so as to enable the primary obligor to pay such
     Indebtedness. The term "Guaranteed" shall have the corresponding meaning.

          "Indebtedness" means, with respect to any Person, (i) all obligations
     of such Person for borrowed money or for the deferred purchase price of
     property or services (including all obligations, contingent or otherwise,
     of such Person in connection with letters of credit, bankers' acceptances,
     interest rate swap agreements, interest rate cap agreements or other
     similar instruments, including currency swaps) other than indebtedness to
     trade creditors and service providers incurred in the ordinary course of
     business and payable on usual and customary terms, (ii) all obligations of
     such Person evidenced by bonds, notes, debentures or other similar
     instruments, (iii) all indebtedness created or arising under any
     conditional sale or other title retention agreement with respect to
     property acquired by such Person (even though the remedies available to
     the seller or lender under such agreement are limited to repossession or
     sale of such property), (iv) all Capital Lease Obligations of such Person,
     (v) all obligations of the types described in clauses (i), (ii), (iii) or
     (iv) above secured by (or for which the obligee has an existing right,
     contingent or otherwise, to be secured by) any Lien upon or in any
     property (including accounts, contract rights and other intangibles) owned
     by such Person, even though such Person has not assumed or become liable
     for the payment of such Indebtedness, (vi) all preferred stock issued by
     such Person which is redeemable, prior to full satisfaction of the
     Borrower's obligations under this Agreement (including repayment in full
     of the Loans and all interest accrued thereon), other than at the option
     of such Person, valued at the greater of its voluntary or involuntary
     liquidation preference plus accrued and unpaid dividends, (vii) all
     Indebtedness of others Guaranteed by such Person and (viii) all
     Indebtedness of any partnership of which such Person is a general partner.

          "Indemnitee" has the meaning assigned to such term in Section 4.4(b).

          "Intercompany Agreement" means the intercompany agreement, dated as
     of the date hereof, by and between the Borrower and the Lender.

          "Interest Period" means, with respect to any Loan, each three-month
     period commencing on the date such Loan is made or at the end of the
     preceding Interest Period, as the case may be; provided, however, that:

               (i) any Interest Period that would otherwise end on a day that
          is not a Business Day shall be extended to the next Business Day,
          unless such Business Day falls in another calendar month, in which
          case such Interest Period shall end on the next preceding Business
          Day;

               (ii) any Interest Period that begins on the last Business Day of
          a calendar month (or on a day for which there is no numerically
          corresponding day in the calendar month at the end of such Interest
          Period) shall, subject to clause (iii) below, end on the last
          Business Day of a calendar month; and

               (iii) any Interest Period that would otherwise end after the
          Commitment Termination Date then in effect shall end on such
          Commitment Termination Date.

          "Lender" means Reckson Operating Partnership, L.P., a Delaware
     limited partnership.
         
          "Lien" means, with respect to any asset of a Person, (i) any
     mortgage, deed of trust, lien, pledge, encumbrance, charge or security
     interest in or on such asset, (ii) the interest of a vendor or lessor
     under any conditional sale agreement, capital lease or title retention
     agreement relating to such asset, and (iii) in the case of securities, any
     purchase option, call or similar right of any other Person with respect to
     such securities.

          "Loans" has the meaning assigned to such term in Section 2.1.

          "Material Adverse Effect" means any material and adverse effect on
     (i) the consolidated business, properties, condition (financial or
     otherwise) or operations, present or prospective, of the Borrower and its
     Subsidiaries, (ii) the ability of the Borrower timely to perform any of
     its material obligations, or of the Lender to exercise any remedy, under
     this Agreement or (iii) the legality, validity, binding nature or
     enforceability of this Agreement.

          "Net Assets" means, with respect to the Borrower, the greater of (i)
     the sum of the Borrower's paid-in capital and retained earnings or (ii)
     the excess of the Value of all of the Borrower's assets of any kind over
     the Borrower's Adjusted Indebtedness.

          "Permitted Liens" means, collectively, the following: (i) Liens
     expressly approved by the Lender, which approval shall not be unreasonably
     withheld; (ii) Liens imposed by any Governmental Authority for taxes,
     assessments or charges not yet due or that are being contested in good
     faith by appropriate proceedings and for which adequate reserves are being
     maintained (in accordance with GAAP); and (iii) Liens existing on the date
     hereof.

          "Person" means any individual, sole proprietorship, partnership,
     joint venture, trust, unincorporated organization, association,
     corporation, institution, public benefit corporation, entity or government
     (whether Federal, state, county, city, municipal or otherwise, including
     any instrumentality, division, agency, body or department thereof).

          "Prime Rate" means the prime rate (or if a range is given, the
     highest prime rate) listed under "Money Rates" in The Wall Street Journal
     for such date or, if The Wall Street Journal is not published on such
     date, then in The Wall Street Journal most recently published.

          "Reckson" means Reckson Associates Realty Corp., a Maryland
     corporation.

          "Responsible Officer" means the chief executive officer, president,
     chief financial officer, chief accounting officer, treasurer or any vice
     president, senior vice president or executive vice president of the
     General Partner.

          "RSVP-ROP Facility Agreement" means the credit agreement dated the
     date hereof between Borrower and Lender in respect of the operations of
     Reckson Strategic Venture Partners, LLC.

          "SEC" means the Securities and Exchange Commission (or any successor
     Governmental Authority).

          "Subsidiary" means, at any time and with respect to any Person, any
     other Person the shares of stock or other ownership interests of which
     having ordinary voting power to elect a majority of the board of directors
     or with respect to other matters of such Person are at the time owned, or
     the management or policies of which is otherwise at the time controlled,
     directly or indirectly through one or more intermediaries (including other
     Subsidiaries) or both, by such first Person. Unless otherwise qualified or
     the context indicates clearly to the contrary, all references to a
     "Subsidiary" or "Subsidiaries" in this Agreement refer to a Subsidiary or
     Subsidiaries of the Borrower.

          "Taxes" has the meaning assigned to such term in Section 4.3(a).

          "Value" means, with respect to any asset owned by the Borrower, the
     present value of the net cash flow reasonably projected by the Borrower to
     be received with respect to its ownership of such assets, discounted at an
     interest rate that the Borrower reasonably determines appropriate given
     the risks associated with such asset and such projected net cash flow, but
     in no event at an interest rate lower than 2% above the Prime Rate in
     effect at the time that the determination of Value is made.

                                  ARTICLE II.

                         THE REVOLVING CREDIT FACILITY

     Section 2.1  Commitment and Loans . Until the Commitment Termination
Date, subject to the terms and conditions of this Agreement, the Lender agrees
to make revolving credit loans (collectively, "Loans") in dollars to the
Borrower in an aggregate principal amount at any one time outstanding not to
exceed the Commitment.

     Section 2.2  Borrowing Procedure. In order to borrow a Loan, the Borrower
shall give a Borrowing Request to the Lender, by telephone, telex or telecopy
or in writing, not later than 10:30 A.M., New York time, on the third Business
Day before the Borrowing Date (or such later time or date as the Lender may in
its sole discretion permit). (If any Borrowing Request is made otherwise than
in writing, Borrower shall promptly confirm such Borrowing Request in writing.)
Subject to satisfaction, or waiver by the Lender, of each of the applicable
conditions precedent contained in Article VI, on the Borrowing Date the Lender
shall make available, in immediately available funds, to the Borrower the
amount of the requested Loan.

     Section 2.3  Termination and Reduction of Commitment . The Borrower may
terminate the Commitment, or reduce the amount thereof, by giving written
notice to the Lender, not later than 5:00 P.M., New York time, on the fifth
Business Day prior to the date of termination or reduction (or such later time
or date as the Lender may in its sole discretion permit).

     Section 2.4  Repayment. Loans shall be repaid, together with all accrued
and unpaid interest thereon, on the Commitment Termination Date.

     Section 2.5 Optional Prepayment.  The Borrower may prepay Loans by giving
notice (specifying the Loans to be prepaid in whole or in part, the principal
amount thereof to be prepaid and the date of prepayment) to the Lender, by
telephone, telex, telecopy or in writing not later than 12:00 noon, New York
time, on the fourth Business Day preceding the proposed date of prepayment (or
such later time or date as the Lender may in its sole discretion permit). (If
any such prepayment notice is made otherwise than in writing, Borrower shall
promptly confirm such notice in writing.) Each such prepayment shall be at the
aggregate principal amount of the principal being prepaid, together with
accrued interest on the principal being prepaid to the date of prepayment and
the amounts required by Section 4.3. Subject to the terms and conditions of
this Agreement, prepaid Loans may be reborrowed.

                                 ARTICLE III.

                               INTEREST AND FEES

     Section 3.1  Interest Rate. Each Loan shall bear interest from the date
made until the date repaid, payable in arrears, with respect to Interest
Periods of three months or less, on the last day of such Interest Period, and
with respect to Interest Periods longer than three months, on the day which is
three months after the commencement of such Interest Period and on the last day
of such Interest Period, at a rate per annum equal to the greater of (i) the
sum of (x) 2% and (y) the Prime Rate for the applicable Interest Period and
(ii) 12%. With respect to each Loan outstanding for one year or longer, such
12% rate shall increase to 12.48%, 12.98%, 13.50% and 14.04% as of the
anniversary of the making of such Loan, for the second, third, fourth and fifth
years that such Loan is outstanding, respectively. Notwithstanding the
foregoing, if the amount of interest to be paid by the Borrower to the Lender
exceeds the amount of EBITDA of the Borrower for the immediately preceding
calendar quarter (ending the last day of September, December, March, or June),
the Borrower shall not be obligated to repay the amount of interest in excess
of EBITDA of the Borrower for such period. Any such amount of unpaid interest
shall be added to principal and shall accrue interests thereon. Payments under
the Notes shall be applied first to any fees, costs or expenses due under the
Notes or hereunder, then to interest, and then to principal. Notwithstanding
any other provision of this Agreement, all outstanding principal and interest
of the Loan and all other amounts payable hereunder, if not sooner paid, shall
be due and payable on the Commitment Termination Date.

     Section 3.2  Interest on Overdue Amounts. All overdue amounts (including
principal, interest and fees) hereunder, and, during the continuance of any
Event of Default that shall have occurred, each Loan, shall bear interest,
payable on demand, at a rate per annum equal to the greater of (i) the sum of
(x) 3% and (y) Prime Rate for the applicable Interest Period and (ii) 13%. With
respect to each Loan outstanding for one year or longer, such 13% rate shall
increase to 13.48%, 13.98%, 14.50% and 15.04% as of the anniversary of the
making of such Loan for the second, third, fourth and fifth years that such
Loan is outstanding, respectively.

     Section 3.3  Maximum Interest Rate. (a) Nothing in this Agreement shall
require the Borrower to pay interest at a rate exceeding the maximum rate
permitted by applicable law. Neither this Section nor Section 10.1 is intended
to limit the rate of interest payable for the account of the Lender to the
maximum rate permitted by the laws of the State of New York (or any other
applicable law) if a higher rate is permitted with respect to the Lender by
supervening provisions of U.S. Federal law.

     (b)  If the amount of interest payable for the account of the Lender on any
interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to this Article III, would exceed the
maximum amount permitted by applicable law to be charged by the Lender, the
amount of interest payable for its account on such interest payment date shall
automatically be reduced to such maximum permissible amount.

     (c)  If the amount of interest payable for the account of the Lender in
respect of any interest computation period is reduced pursuant to Section
3.3(b) and the amount of interest payable for its account in respect of any
subsequent interest computation period would be less than the maximum amount
permitted by law to be charged by the Lender, then the amount of interest
payable for its account in respect of such subsequent interest computation
period shall be automatically increased to such maximum permissible amount;
provided that at no time shall the aggregate amount by which interest paid for
the account of the Lender has been increased pursuant to this Section 3.3(c)
exceed the aggregate amount by which interest paid for its account has
theretofore been reduced pursuant to Section 3.3(b).

                                  ARTICLE IV.

                            DISBURSEMENT AND PAYMENT

     Section 4.1  Method and Time of Payments .

     (a) All payments by the Borrower hereunder shall be made without setoff or
counterclaim to the Lender, for its account, in dollars and in immediately
available funds to the account of the Lender theretofore designated in writing
to the Borrower not later than 12:00 noon, New York time, on the date when due
or, in the case of payments pursuant to Sections 4.3 and 4. 4 or payments
otherwise specified as payable upon demand, forthwith upon written demand
therefor.

     (b) Whenever any payment from the Borrower shall be due on a day that is
not a Business Day, the date of payment thereof shall be extended to the next
succeeding Business Day. If the date for any payment of principal is extended
by operation of law or otherwise, interest thereon shall be payable for such
extended time.

     Section 4.2  Compensation for Losses. (a) If (i) the Borrower prepays
Loans, (ii) the Borrower revokes any Borrowing Request or (iii) Loans (or
portions thereof) shall become or be declared to be due prior to the scheduled
maturity thereof, then the Borrower shall pay to the Lender an amount that will
compensate the Lender for any loss (other than lost profit) or premium or
penalty incurred by the Lender as a result of such prepayment, declaration or
revocation in respect of funds obtained for the purpose of making or
maintaining the Lender's Loans, or any portion thereof. Such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that would have accrued on the amount so paid or prepaid, or not borrowed, for
the period from the date of such payment or prepayment or failure to borrow to
the last day of such Interest Period (or, in the case of a failure to borrow,
the Interest Period that would have commenced on the expected Borrowing Date)
in each case at the applicable rate of interest for such Loan over (ii) the
amount of interest (as reasonably determined by the Lender) that would have
accrued on such amount were it on deposit for a comparable period with leading
banks in the London interbank market.

     (b) If requested by the Borrower, in connection with a payment due
pursuant to this Section 4.2, the Lender shall provide to the Borrower a
certificate setting forth in reasonable detail the amount required to be paid
by the Borrower to the Lender and the computations made by the Lender to
determine such amount. In the absence of manifest error, such certificate shall
be conclusive as to the amount required to be paid.

     Section 4.3  Withholding and Additional Costs .

     (a) Withholding.  All payments under this Agreement (including payments of
principal and interest) shall be payable to the Lender free and clear of any
and all present and future taxes, levies, imposts, duties, deductions,
withholdings, fees, liabilities and similar charges (collectively, "Taxes") .
If any Taxes are required to be withheld or deducted from any amount payable
under this Agreement, then the amount payable under this Agreement shall be
increased to the amount which, after deduction from such increased amount of
all Taxes required to be withheld or deducted therefrom, will yield to the
Lender the amount stated to be payable under this Agreement. The Borrower shall
also hold the Lender harmless and indemnify it for any stamp or other taxes
with respect to the preparation, execution, delivery, recording, performance or
enforcement of this Agreement (all of which shall be included within "Taxes") .
If any of the Taxes specified in this Section 4.3(a) are paid by the Lender,
the Borrower shall, upon demand of the Lender, promptly reimburse the Lender
for such payments, together with any interest, penalties and expenses incurred
in connection therewith. The Borrower shall deliver to the Lender certificates
or other valid vouchers for all Taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder.

     (b) Additional Costs. Subject to Section 4.3(c), and without duplication
of any amounts payable described in Section 4.2 or 4.3(a), if after the date
hereof any change in any law or regulation or in the interpretation thereof by
any court or administrative or Governmental Authority charged with the
administration thereof or the enactment of any law or regulation shall either
(1) impose, modify or deem applicable any reserve, special deposit or similar
requirement against the Lender's Commitment or Loans or (2) impose on the
Lender any other condition regarding this Agreement, its Commitment or the
Loans and the result of any event referred to in clause (1) or (2) shall be to
increase the cost to the Lender of maintaining its Commitment or any Loans made
by the Lender (which increase in cost shall be calculated in accordance with
the Lender's reasonable averaging and attribution methods) by an amount which
the Lender deems to be material, then, upon demand by the Lender, the Borrower
shall pay to the Lender an amount equal to such increase in cost.

     (c) Certificate, Etc. If requested by the Borrower, in connection with any
demand for payment pursuant to this Section 4.3, the Lender shall provide to
the Borrower a certificate setting forth in reasonable detail the basis for
such demand, the amount required to be paid by the Borrower to the Lender, the
computations made by the Lender to determine such amount and satisfaction of
the conditions set forth in the next sentence. Anything to the contrary herein
notwithstanding, the Lender shall not have the right to demand any payment or
compensation under this Section 4.3 (i) with respect to any period more than
180 days prior to the date it has made a demand pursuant to this Section 4.3,
and (ii) to the extent that the Lender determines in good faith that the
interest rate on the relevant Loans appropriately accounts for any increased
cost or reduced rate of return. In the absence of manifest error, the
certificate referred to above shall be conclusive as to the amount required to
be paid.

     Section 4.4  Expenses; Indemnity. (a) The Borrower agrees: (i) to pay or
reimburse the Lender for all reasonable out-of-pocket costs and expenses
incurred in connection with the preparation and execution of, and any
amendment, supplement or modification to, this Agreement and any other
documents prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees and disbursements of Brown & Wood LLP, counsel
to the Lender; and (ii) to pay or reimburse the Lender for all reasonable costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to the Lender. The
Borrower also agrees to indemnify the Lender against any transfer taxes,
documentary taxes, assessments or charges made by any Governmental Authority by
reason of the execution and delivery of this Agreement.

     (b) The Borrower agrees to indemnify the Lender and its directors,
officers, partners, employees, agents and Affiliates (for purposes of this
paragraph, each, an "Indemnitee") against, and to hold each Indemnitee harmless
from, any and all claims, liabilities, damages, losses, costs, charges and
expenses (including fees and expenses of counsel) incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a
result of (i) the execution or delivery of this Agreement or any agreement or
instrument contemplated by this Agreement, the performance by the parties
thereto of their respective obligations under this Agreement or the
consummation of the transactions and the other transactions contemplated by
this Agreement, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee.

     (c) All amounts due under this Section 4.4 shall be payable in immediately
available funds upon written demand therefor.

     Section 4.5  Survival. The provisions of Sections 4.2, 4.3 and 4.4 shall
remain operative and in full force and effect regardless of the expiration of
the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the reduction or termination of the
Commitment, the invalidity or unenforceability of any term or provision of this
Agreement, or any investigation made by or on behalf of the Lender.

                                  ARTICLE V.

                         REPRESENTATIONS AND WARRANTIES

     Section 5.1 Representations and Warranties. The Borrower represents and
warrants to the Lender as follows:

          (a) Good Standing and Power . The Borrower and each Subsidiary is a
     limited partnership or corporation, duly organized and validly existing in
     good standing under the laws of the jurisdiction of its organization; each
     has the power to own its property and to carry on its business as now
     being conducted; and each is duly qualified to do business and is in good
     standing in each jurisdiction in which the character of the properties
     owned or leased by it therein or in which the transaction of its business
     makes such qualification necessary, except where the failure to be so
     qualified, or to be in good standing, individually or in the aggregate,
     could not reasonably be expected to have a Material Adverse Effect.

          (b) Authority . The Borrower has full power and authority to execute
     and deliver, and to incur and perform its obligations under, this
     Agreement, which has been duly authorized by all proper and necessary
     action. No consent or approval of limited partners is required as a
     condition to the validity or performance of, or the exercise by the Lender
     of any of its rights or remedies under, this Agreement.

          (c) Authorizations . All authorizations, consents, approvals,
     registrations, notices, exemptions and licenses with or from any
     Governmental Authority or other Person necessary for the execution,
     delivery and performance by the Borrower of, and the incurrence and
     performance of each of its obligations under, this Agreement, and the
     exercise by the Lender of its remedies under this Agreement have been
     effected or obtained and are in full force and effect.

          (d) Binding Obligation . This Agreement constitutes the valid and
     legally binding obligation of the Borrower enforceable in accordance with
     its terms, subject as to enforcement to bankruptcy, insolvency,
     reorganization, moratorium and similar laws of general applicability
     relating to or affecting creditors' rights and to general equity
     principles.

          (e) Litigation . There are no proceedings or investigations now
     pending or, to the knowledge of the Borrower, threatened before any court
     or arbitrator or before or by any Governmental Authority which,
     individually or in the aggregate, if determined adversely to the interests
     of the Borrower or any Subsidiary, could reasonably be expected to have a
     Material Adverse Effect.

          (f) No Conflicts . There is no statute, regulation, rule, order or
     judgment, and no provision of any agreement or instrument binding upon the
     Borrower or any Subsidiary, or affecting their properties, and no
     provision of the certificate of limited partnership, certificate of
     incorporation, agreement of limited partnership or by-laws (or similar
     constitutive instruments) of the Borrower or any Subsidiary, that would
     prohibit, conflict with or in any way impair the execution or delivery of,
     or the incurrence or performance of any obligations of the Borrower under,
     this Agreement, or result in or require the creation or imposition of any
     Lien on property of the Borrower or any Subsidiary as a consequence of the
     execution, delivery and performance of this Agreement.

          (g) Taxes . The Borrower and the Subsidiaries each has filed or
     caused to be filed all tax returns that are required to be filed and paid
     all taxes that are required to be shown to be due and payable on said
     returns or on any assessment made against it or any of its property and
     all other taxes, assessments, fees, liabilities, penalties or other
     charges imposed on it or any of its property by any Governmental
     Authority, except for any taxes, assessments, fees, liabilities, penalties
     or other charges which are being contested in good faith and (unless the
     amount thereof is not material to the Borrower's consolidated financial
     condition) for which adequate reserves have been established in accordance
     with GAAP.

          (h) Properties . The Borrower and the Subsidiaries each has good and
     marketable title to, or valid leasehold interests in, all of its
     respective properties and assets. All such assets and properties are so
     owned or held free and clear of all Liens, except Permitted Liens.

          (i) Compliance with Laws and Charter Documents . Neither the Borrower
     nor any Subsidiary is, or as a result of performing any of its obligations
     under this Agreement will be, in violation of (a) any law, statute, rule,
     regulation or order of any Governmental Authority applicable to it or its
     properties or assets or (b) its certificate of limited partnership,
     certificate of incorporation, agreement of limited partnership, by-laws or
     any similar document.

          (j) No Material Adverse Effect . Since May 15, 1997, there has not
     occurred or arisen any event, condition or circumstance that, individually
     or in the aggregate, could reasonably be expected to have a Material
     Adverse Effect.

          (k) Disclosure . All information relating to the Borrower or its
     Subsidiaries delivered in writing to the Lender in connection with the
     negotiation, execution and delivery of this Agreement is true and complete
     in all material respects. There is no material fact of which the Borrower
     is aware which, individually or in the aggregate, would reasonably be
     expected adversely to influence the Lender's credit analysis relating to
     the Borrower and its Subsidiaries which has not been disclosed to the
     Lender in writing.

     Section 5.2  Survival. All representations and warranties made by the
Borrower in this Agreement, and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement, shall
be considered to have been relied upon by the Lender, (ii) survive the making
of Loans regardless of any investigation made by, or on behalf of, the Lender
and (iii) continue in full force and effect as long as the Commitment has not
been terminated and, thereafter, so long as any Loan, fee or other amount
payable under this Agreement remains unpaid.

                                  ARTICLE VI.

                              CONDITIONS PRECEDENT

     Section 6.1  Conditions to the Availability of the Commitment. The
obligations of the Lender hereunder are subject to, and the Lender's Commitment
shall not become available until the earliest date (the "Effective Date") on
which each of the following conditions precedent shall have been satisfied or
waived in writing by the Lender:

          (a) This Agreement . The Lender shall have received this Agreement
     duly executed and delivered by the Borrower.

          (b) Certificate of Incorporation and By-Laws . The Lender shall have
     received the following:

               (i) a copy of the Certificate of Incorporation of the Borrower,
          as in effect on the Effective Date, certified by the Secretary of
          State of Delaware, and a certificate from such Secretary of State as
          to the good standing of the Borrower, in each case as of a date
          reasonably close to the Effective Date; and

               (ii) a certificate of a Responsible Officer of the Borrower,
          dated the Effective Date, and stating that attached thereto is a true
          and complete copy of the By-Laws of the Borrower as in effect on such
          date.

          (c) Representations and Warranties . The representations and
     warranties contained in Section 5.1 shall be true and correct on the
     Effective Date, and the Lender shall have received a certificate, signed
     by a Responsible Officer of the Borrower, to that effect.

          (d) Other Documents . The Lender shall have received such other
     certificates, opinions and other documents as the Lender reasonably may
     require.

          (e) REIT Status of Reckson . The borrowing shall not, in the sole
     judgment of the Lender, endanger Reckson's status as a REIT.

          (f) Certain Loans Subject to Reckson's Approval. In respect of any
     Loan or Loans aggregating in excess of $10 million, any single Commercial
     Service, as well as any Loan relating to an investment by Borrower in any
     area other than Commercial Services, Reckson shall have approved the
     Lender's making such Loan in its sole discretion.

     Section 6.2  Conditions to All Loans. The obligations of the Lender to make
each Loan are subject to the conditions precedent that, on the date of each
Loan and after giving effect thereto, each of the following conditions
precedent shall have been satisfied, or waived in writing by the Lender:

          (a) Borrowing Request . The Lender shall have received a Borrowing
     Request in accordance with the terms of this Agreement.

          (b) No Default . No Default or Event of Default shall have occurred
     and be continuing, nor shall any Default or Event of Default occur as a
     result of the making of such Loan.

          (c) Debt-to-Equity Ratio. The Lender shall have received from the
     Borrower a certificate demonstrating that the ratio of the Borrower's
     Adjusted Indebtedness to the Borrower's Net Assets, taking into account
     the requested Loan and the assets, if any, to be acquired by the Borrower
     with the proceeds of such Loan, shall not exceed 4-to-1.

          (d) Representations and Warranties; Covenants . The representations
     and warranties contained in Section 5. 1 shall have been true and correct
     when made and (except to the extent that any representation or warranty
     speaks as of a date certain) shall be true and correct on the Borrowing
     Date with the same effect as though such representations and warranties
     were made on such Borrowing Date; and the Borrower shall have complied
     with all of its covenants and agreements under this Agreement.

     Section 6.3  Satisfaction of Conditions Precedent. Each of (i) the
delivery by the Borrower of a Borrowing Request (unless the Borrower notifies
the Lender in writing to the contrary prior to the Borrowing Date) and (ii) the
acceptance of the proceeds of a Loan shall be deemed to constitute a
certification by the Borrower that, as of the Borrowing Date, each of the
conditions precedent contained in Section 6. 2 has been satisfied with respect
to the Loan then being made.

                                 ARTICLE VII.

                                  COVENANTS

     Section 7.1  Affirmative Covenants. Until satisfaction in full of all the
obligations of the Borrower under this Agreement and termination of the
Commitment of the Lender hereunder, the Borrower will:

     (a)  Financial Statements; Compliance Certificates. Furnish to the Lender:

               (i) as soon as available, but in no event more than 60 days
          following the end of each of the first three quarters of each fiscal
          year, copies of the Borrower's Quarterly Report on Form 10-Q being
          filed with the SEC, which shall include a consolidated balance sheet
          and consolidated income statement of the Borrower and the
          Subsidiaries for such quarter;

               (ii) as soon as available, but in no event more than 120 days
          following the end of each fiscal year, a copy of the Borrower's
          Annual Report on Form 10-K being filed with the SEC, which shall
          include the consolidated financial statements of the Borrower and the
          Subsidiaries, together with a report thereon by Ernst & Young LLP (or
          another firm of independent certified public accountants reasonably
          satisfactory to the Lender), for such year;

               (iii) within five Business Days of any Responsible Officer of
          the Borrower obtaining knowledge of any Default or Event of Default,
          if such Default or Event of Default is then continuing, a certificate
          of a Responsible Officer of the Borrower stating that such
          certificate is a "Notice of Default" and setting forth the details
          thereof and the action which the Borrower is taking or proposes to
          take with respect thereto; and

               (iv) such additional information, reports or statements,
          regarding the business, financial condition or results of operations
          of the Borrower and its Subsidiaries, as the Lender from time to time
          may reasonably request.

          (b) Existence. Except as permitted by Section 7. 2(a), maintain its
     existence in good standing and qualify and remain qualified to do business
     in each jurisdiction in which the character of the properties owned or
     leased by it therein or in which the transaction of its business is such
     that the failure to qualify, individually or in the aggregate, could
     reasonably be expected to have a Material Adverse Effect.

          (c) Compliance with Law and Agreements. Comply, and cause each
     Subsidiary to comply, with all applicable laws, ordinances, orders, rules,
     regulations and requirements of all Governmental Authorities and with all
     agreements except where the necessity of compliance therewith is contested
     in good faith by appropriate proceedings or where the failure to comply
     therewith, individually or in the aggregate, could not reasonably be
     expected to have a Material Adverse Effect.

          (d) Authorizations. Obtain, make and keep in full force and effect
     all authorizations from and registrations with Governmental Authorities
     required for the validity or enforceability of this Agreement.

          (e) Inspection. Permit, and cause each Subsidiary to permit, the
     Lender to have one or more of its officers and employees, or any other
     Person designated by the Lender, to visit and inspect any of the
     properties of the Borrower and the Subsidiaries and to examine the minute
     books, books of account and other records of the Borrower and the
     Subsidiaries, and to photocopy extracts from such minute books, books of
     account and other records, and to discuss its affairs, finances and
     accounts with its officers and with the Borrower's independent
     accountants, during normal business hours and at such other reasonable
     times, for the purpose of monitoring the Borrower's compliance with its
     obligations under this Agreement.

          (f) Maintenance of Records . Keep, and cause each Subsidiary to keep,
     proper books of record and account in which full, true and correct entries
     will be made of all dealings or transactions of or in relation to its
     business and affairs.

          (g) Notice of Defaults and Adverse Developments . Promptly notify the
     Lender upon the discovery by any Responsible officer of the occurrence of
     (i) any Default or Event of Default; (ii) any event, development or
     circumstance whereby the financial statements most recently furnished to
     the Lender fail in any material respect to present fairly, in accordance
     with GAAP, the financial condition and operating results of the Borrower
     and the Subsidiaries as of the date of such financial statements; (iii)
     any material litigation or proceedings that are instituted or threatened
     (to the knowledge of the Borrower) against the Borrower or any Subsidiary
     or any of their respective assets; (iv) any event, development or
     circumstance which, individually or in the aggregate, could reasonably be
     expected to result in an event of default (or, with the giving of notice
     or lapse of time or both, an event of default) under any Indebtedness and
     the amount thereof; and (v) any other development in the business or
     affairs of the Borrower or any Subsidiary if the effect thereof would
     reasonably be expected, individually or in the aggregate, to have a
     Material Adverse Effect; in each case describing the nature thereof and
     the action the Borrower proposes to take with respect thereto.

     Section 7.2  Negative Covenants. Until satisfaction in full of all the
obligations of the Borrower under this Agreement and termination of the
Commitment of the Lender hereunder, the Borrower will not:

     (a)  Mergers, Consolidations and Sales of Assets . Wind up, liquidate or
dissolve its affairs or enter into any merger, consolidation or share exchange,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time), whether in one or a series of transactions, all
or any substantial part of its assets, or permit any Subsidiary so to do,
unless such transaction or series of transactions are expressly approved by the
Lender, which approval shall not be unreasonably withheld.

     (b)  Liens. Create, incur, assume or suffer to exist any Lien upon or with
respect to any of its property or assets, whether now owned or hereafter
acquired, or assign or otherwise convey any right to receive income, except
Permitted Liens.

     (c) Indebtedness . Create, incur, issue, assume, guarantee or suffer to
exist any Indebtedness, except:

          (i) Indebtedness to the Lender under this Agreement or under the
     RSVP-ROP Facility Agreement,

         (ii) Non-recourse Indebtedness of the Borrower and any Subsidiary
     secured by mortgages, encumbrances or liens specifically permitted by
     Section 7. 2(b), and

        (iii) Indebtedness expressly approved by the Lender in writing, which
     approval may be withheld in the Lender's sole discretion.

          (d) Dividends . Declare any dividends on any of its shares of capital
     stock unless such dividend or distribution is expressly approved in
     writing by the Lender.

          (e) Certain Amendments . Amend, modify or waive, or permit to be
     amended, modified or waived, any provision of its Certificate of
     Incorporation unless, within not less than 5 days prior to such amendment,
     modification or waiver (or such later time as the Lender may in its sole
     discretion permit), the Borrower shall have given the Lender notice
     thereof, including all relevant terms and conditions thereof, and the
     Lender shall have consented in writing thereto.

                                 ARTICLE VIII.

                               EVENTS OF DEFAULT

     Section 8.1 Events of Default. If one or more of the following events
(each, an "Event of Default") shall occur:

     (a) The Borrower shall fail duly to pay any principal of any Loan when
due, whether at maturity, by notice of intention to prepay or otherwise; or

     (b) The Borrower shall fail duly to pay any interest, fee or any other
amount payable under this Agreement within two days after the same shall be
due; or

     (c) Borrower shall fail duly to observe or perform any term, covenant, or
agreement contained in Section 7. 2; or

     (d) The Borrower shall fail duly to observe or perform any other term,
covenant or agreement contained in this Agreement, and such failure shall have
continued unremedied for a period of 30 days; or

     (e) Any representation or warranty made or deemed made by the Borrower in
this Agreement, or any statement or representation made in any certificate,
report or opinion delivered by or on behalf of the Borrower in connection with
this Agreement, shall prove to have been false or misleading in any material
respect when so made or deemed made; or

     (f) The Borrower shall fail to pay any Indebtedness (other than
obligations here under) in an amount of $100,000 or more when due; or any such
Indebtedness having an aggregate principal amount outstanding of $100,000 or
more shall become or be declared to be due prior to the expressed maturity
thereof; or

     (g) An involuntary case or other proceeding shall be commenced against the
Borrower seeking liquidation, reorganization or other relief with respect to it
or its debts under any applicable bankruptcy, insolvency, reorganization or
similar law or seeking the appointment of a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of it or any substantial
part of its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of more than 60 days; or an order
or decree approving or ordering any of the foregoing shall be entered and
continued unstayed and in effect; or

     (h) The Borrower shall commence a voluntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or similar law or any other
case or proceeding to be adjudicated a bankrupt or insolvent, or any of them
shall consent to the entry of a decree or order for relief in respect of the
Borrower in an involuntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against any of them, or any of them
shall file a petition or answer or consent seeking reorganization or relief
under any applicable law, or any of them shall consent to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official of
the Borrower or any substantial part of its property, or the Borrower shall
make an assignment for the benefit of creditors, or the Borrower shall admit in
writing its inability to pay its debts generally as they become due, or the
Borrower shall take corporate action in furtherance of any such action;

     (i) One or more judgments against the Borrower or attachments against its
property, which in the aggregate exceed $100,000, or the operation or result of
which could be to interfere materially and adversely with the conduct of the
business of the Borrower remain unpaid, unstayed on appeal, undischarged,
unbonded, or undismissed for a period of more than 30 days; or

     (j) Any court or governmental or regulatory authority shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which prohibits, enjoins or otherwise
restricts, in a manner that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, any of the transactions
contemplated under this Agreement; or

     (k) Any Event of Default shall occur and be continuing under the RSVP-ROP
Facility Agreement.

then, and at any time during the continuance of such Event of Default, the
Lender may, by written notice to the Borrower, take either or both of the
following actions, at the same or different times: (i) terminate forthwith the
Commitment and (ii) declare any Loans then outstanding to be due, whereupon the
principal of the Loans so declared to be due, together with accrued interest
thereon and any unpaid amounts accrued under this Agreement, shall become
forthwith due, without presentment, demand, protest or any other notice of any
kind (all of which are hereby expressly waived by the Borrower); provided that,
in the case of any Event of Default described in Section 8. 1(g) or (h)
occurring with respect to the Borrower, the Commitment shall automatically and
immediately terminate and the principal of all Loans then outstanding, together
with accrued interest thereon and any unpaid amounts accrued under this
Agreement, shall automatically and immediately become due without presentment,
demand, protest or any other notice of any kind (all of which are hereby
expressly waived by the Borrower).

                                  ARTICLE IX.

                          EVIDENCE OF LOANS; TRANSFERS

     Section 9.1  Evidence of Loans. (a) The Lender shall maintain accounts
evidencing the indebtedness of the Borrower to the Lender resulting from each
Loan made by the Lender from time to time, including the amounts of principal
and interest payable and paid to the Lender in respect of Loans.

     (b) The Lender's written records described above shall be available for
inspection during ordinary business hours by the Borrower from time to time
upon reasonable prior notice to the Lender.

     (c) The entries made in the Lender's written or electronic records and the
foregoing accounts shall be prima facie evidence of the existence and amounts
of the indebtedness of the Borrower therein recorded; provided, however, that
the failure of the Lender to maintain any such account or such records, as
applicable, or any error therein, shall not in any manner affect the validity
or enforceability of any obligation of the Borrower to repay any Loan actually
made by the Lender in accordance with the terms of this Agreement.

                                  ARTICLE X.

                                 MISCELLANEOUS

     Section 10.1  Applicable Law . THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

     Section 10.2  Waiver of Jury . THE BORROWER AND THE LENDER EACH HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, OR THE
RELATIONSHIPS ESTABLISHED HEREUNDER.

     Section 10.3  Jurisdiction and Venue; Service of Process. (a) The Borrower
and the Lender each hereby irrevocably submits to the non-exclusive
jurisdiction of any state or federal court in the Borough of Manhattan, The
City of New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Agreement and to the laying of venue in the
Borough of Manhattan The City of New York. The Borrower and the Lender each
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any objection to the laying of the venue of any such suit, action or proceeding
brought in the aforesaid courts and hereby irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum.

     (b) Borrower agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 10.7 or at such other address
of which the Lender shall have been notified pursuant thereto. The Borrower
further agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

     (c) The Borrower waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.

     Section 10.4  Confidentiality. The Lender agrees (on behalf of itself and
each of its Affiliates, partners, officers, employees and representatives) to
use its best efforts to keep confidential, in accordance with their customary
procedures for handling confidential information of this nature and in
accordance with commercially reasonable business practices, any Confidential
Information; provided that nothing herein shall limit the disclosure of any
such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for the Lender, (iii) to auditors or
accountants, (iv) by the Lender to an Affiliate thereof, or (v) in connection
with any litigation relating to enforcement of this Agreement; provided
further, that, unless specifically prohibited by applicable law or court order,
the Lender shall, prior to disclosure thereof, notify the Borrower of any
request for disclosure of any Confidential Information (x) by any Governmental
Authority or representative thereof or (y) pursuant to legal process.

     Section 10.5  Amendments and Waivers. (a) Any provision of this Agreement
may be amended, modified, supplemented or waived, but only by a written
amendment or supplement, or written waiver, signed by the Borrower and the
Lender.

     (b) Except to the extent expressly set forth therein, any waiver shall be
effective only in the specific instance and for the specific purpose for which
such waiver is given.

     Section 10.6  Cumulative Rights; No Waiver. Each and every right granted
to the Lender hereunder or under any other document delivered in connection
herewith, or allowed it by law or equity, shall be cumulative and not exclusive
and may be exercised from time to time. No failure on the part of the Lender to
exercise, and no delay in exercising, any right will operate as a waiver
thereof, nor will any single or partial exercise by the Lender of any right
preclude any other or future exercise thereof or the exercise of any other
right.

     Section 10.7  Notices. Any communication, demand or notice to be given
hereunder will be duly given when delivered in writing or by telecopy to a
party at its address as indicated below or such other address as such party may
specify in a notice to the other party hereto. A communication, demand or
notice given pursuant to this Agreement shall be addressed:

          If to the Borrower, to:

               Reckson Service Industries, Inc.
               225 Broadhollow Road
               Melville, New York  11747

               Telecopy:          (516) 719-7400

               Attention:         Chief Financial Officer

          If to the Lender, to:

               Reckson Operating Partnership, L.P.
               225 Broadhollow Road
               Melville, New York  11747

               Telecopy:          (516) 694-6900

               Attention:         Chief Financial Officer

          This Section 10.7 shall not apply to notices referred to in
Article II of this Agreement, except to the extent set forth therein.

     Section 10.8  Certain Acknowledgments. The Borrower hereby confirms and
acknowledges that (a) the Lender does not have any fiduciary or similar
relationship to the Borrower by virtue of this Agreement and the transactions
contemplated herein and that the relationship established by this Agreement
between the Lender and the Borrower is solely that of creditor and debtor and
(b) no joint venture exists between the Borrower and the Lender by virtue of
this Agreement and the transactions contemplated herein.

     Section 10.9  Separability. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect under any law, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.

     Section 10.10  Parties in Interest. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Lender and their respective
successors and assigns, except that the Borrower may not assign any of its
rights hereunder without the prior written consent of the Lender, and any
purported assignment by the Borrower without such consent shall be void.

     Section 10.11 Execution in Counterparts . This Agreement may be executed
in any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all the counterparts shall together constitute one and the same
instrument.

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.

                                     RECKSON SERVICE INDUSTRIES, INC.,
                                     as Borrower



                                     By:  /s/ Scott Rechler
                                         -------------------------------------
                                        Name:  Scott Rechler
                                        Title: President

                                     RECKSON OPERATING PARTNERSHIP, L.P.,
                                     as Lender


                                     By: RECKSON ASSOCIATES REALTY CORP.,
                                         its general partner

                                     By:  /s/ Mitchell D. Rechler
                                         -------------------------------------
                                         Name:  Mitchell D. Rechler
                                         Title: Executive Vice President


<PAGE>

                              Exhibit 12.1
  
                     Reckson Associates Realty Corp.
                  Ratios of Earnings to Fixed Charges


The following table set forth the Company's consolidated ratios of earnings to
fixed charges for the periods shown:

                                    June 3,   January    For the 
For the years ended December 31,    1995 to   1, 1995    year ended
---------- ---------- ----------    December  to June    December
     1998       1997       1996     31, 1995  2, 1995    31, 1994
---------- ---------- ----------    --------- ---------- ------------

    2.11x      2.77x      2.72x        2.71x  1.02x (1)  $ 493,000 (1,2)

(1) Prior to completion of the IPO on June 2, 1995, the Company's
predecessors operated in a manner as to minimize net taxable income to the
owners.  The IPO and the related formation transactions permitted the Company
to deleverage its properties significantly, resulting in a significantly 
improved ratio of earnings to fixed charges.

(2) The excess of fixed charges over earnings amounted to approximately 
$493,000.
	
The Company's consolidated ratio of earnings to fixed charges and preferred
dividends and distributions for the year ended December 31, 1998 was 1.89x.
The Company had no preferred capital outstanding prior to April 1998.

<PAGE>
                              Exhibit 21.1
  
                     Reckson Associates Realty Corp.
                       Statement of Subsidiaries

Name                                  State of Organization
-----------------------------------   -----------------------
Reckson Operating Partnership, L.P    Maryland
Omni Partners, L.P.                   Delaware
Reckson FS Limited Partnership        Delaware
Reckson Morris industrial Trust       Maryland
Reckson Management Group, Inc.        New York
Reckson Construction Group, Inc.      New York
Reckson Short Hills, LLC              Delaware
Reckson / Stamford Towers, LLC        Delaware

<PAGE>

                               EXHIBIT 23.0
   
                    RECKSON ASSOCIATES REALTY CORP.
                    CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement
Form S-3 No. 333-67129 of Reckson Associates Realty Corp. of our report dated
February 11, 1999, with respect to the consolidated financial statements and
schedule of Reckson Associates Realty Corp. included in this Annual Report
Form 10-K for the year ended December 31, 1998.

                                         Ernst & Young, LLP


New York, New York
March 16, 1999
<PAGE>