Crescent, Reckson to Buy Tower Realty

Billionaire investor Richard Rainwater’s Crescent Real Estate Equities Co. and Reckson Associates Realty Corp. agreed to buy Tower Realty Trust for $734 million in cash and assumed debt, giving each an entree into the hot New York office market. Crescent and Reckson will pay $445 million in cash, or $24 a share, and assume about $289 million of debt. Tower shareholders have the option of swapping each share for 0.4615 Reckson share and 0.3523 Crescent share. Fort Worth-based Crescent and Melville, N.Y.-based Reckson are buying Tower through Metropolitan Partners, a newly formed joint venture. Tower owns 24 office buildings with 4.6 million square feet of space in New York, Phoenix, Tucson and Orlando, Fla. The transaction is expected to close in the fourth quarter. On the NYSE, Tower shares fell 56 cents to close at $23.13, Crescent fell 50 cents to close at $33.94, and Reckson closed down 38 cents at $25.13.