VORNADO REALTY LP - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2004
Or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: to

Commission File Number: 000-22635

VORNADO REALTY L.P.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		13-3925979 (I.R.S. Employer Identification Number)
888 Seventh Avenue, New York, New York (Address of principal executive offices)		10019 (Zip Code)
(212) 894-7000 (Registrant's telephone number, including area code)
N/A (Former name, former address and former fiscal year, if changed since last report)

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 ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes ý No o

INDEX

			Page Number
PART I.		*Financial Information:*
	Item 1.	Financial Statements:
		Consolidated Balance Sheets (Unaudited) as of March 31, 2004 and December 31, 2003	3
		Consolidated Statements of Income (Unaudited) for the Three Months Ended March 31, 2004 and March 31, 2003	4
		Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2004 and March 31, 2003	5
		Notes to Consolidated Financial Statements (Unaudited)	6
		Independent Accountants' Report	20
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3.	Quantitative and Qualitative Disclosures About Market Risks	37
	Item 4.	Controls and Procedures	37
PART II.		*Other Information:*
	Item 1.	Legal Proceedings	38
	Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	38
	Item 6.	Exhibits and Reports on Form 8-K	38
Signatures			39
Exhibit Index			40

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VORNADO REALTY L.P.
CONSOLIDATED BALANCE SHEETS

			(UNAUDITED) March 31, 2004			December 31, 2003
			(Amounts in thousands)
ASSETS
Real estate, at cost:
	Land		$	1,543,436		$	1,503,965
	Buildings and improvements			6,101,067			6,038,275
	Development costs and construction in progress			157,910			133,915
	Leasehold improvements and equipment			75,986			72,297

		Total		7,878,399			7,748,452
	Less accumulated depreciation and amortization			(919,071	)		(869,849	)

		Real estate, net		6,959,328			6,878,603
Cash and cash equivalents, including U.S. government obligations under repurchase agreements of $32,650 and $30,310				291,018			320,542
Escrow deposits and restricted cash				165,777			161,833
Marketable securities				84,533			81,491
Investments and advances to partially-owned entities, including Alexander's of $203,282 and $207,872				769,669			900,600
Due from officers				19,648			19,628
Accounts receivable, net of allowance for doubtful accounts of $14,069 and $15,246				92,842			83,913
Notes and mortgage loans receivable				247,738			285,965
Receivable arising from the straight-lining of rents, net of allowance of $2,901 and $2,830				280,221			267,848
Other assets				360,276			376,801
Assets related to discontinued operations				156,291			141,704

		TOTAL ASSETS	$	9,427,341		$	9,518,928

LIABILITIES AND PARTNERS' CAPITAL
Notes and mortgages payable			$	3,346,944		$	3,339,365
Senior unsecured notes due 2007 and 2010				731,759			725,020
Accounts payable and accrued expenses				236,375			226,100
Officers' compensation payable				24,575			23,349
Deferred credit				81,437			74,253
Other liabilities				11,548			11,982
Liabilities related to discontinued operations				120,000			120,000

	Total liabilities			4,552,638			4,520,069

Minority interest				2,033			3,055

Commitments and contingencies
Partners' Capital:
	Equity			4,901,184			4,982,630
	Distributions in excess of net income			(77,217	)		(38,497	)

				4,823,967			4,944,133
	Deferred compensation units earned but not yet delivered			69,974			70,610
	Deferred compensation units issued but not yet earned			(12,933	)		(7,295	)
	Accumulated other comprehensive loss			(3,634	)		(6,940	)
	Due from officers for purchase of Class A units of beneficial interest			(4,704	)		(4,704	)

		Total partners' capital		4,872,670			4,995,804

		TOTAL LIABILITIES AND PARTNERS' CAPITAL	$	9,427,341		$	9,518,928

See notes to consolidated financial statements.

VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

		For The Three Months Ended March 31,
		2004			2003
		(Amounts in thousands, except per unit amounts)
Revenues:
	Rentals	$	326,694		$	308,621
	Expense reimbursements		48,324			43,262
	Fee and other income		18,032			13,094

Total revenues			393,050			364,977

Expenses:
	Operating		154,366			146,374
	Depreciation and amortization		56,620			50,640
	General and administrative		30,845			27,235

Total expenses			241,831			224,249

Operating income			151,219			140,728
(Loss) income applicable to Alexander's			(2,528	)		7,254
Income from partially-owned entities			13,113			23,234
Interest and other investment income			9,245			9,796
Interest and debt expense (including amortization of deferred financing costs of $1,845 and $1,674)			(58,705	)		(56,900	)
Net gains on disposition of wholly-owned and partially-owned assets other than real estate			776			188
Minority interest			247			(824	)

Income from continuing operations			113,367			123,476
Discontinued operations			827			6,099

Net income			114,194			129,575
Preferred unit distributions			(32,926	)		(29,050	)

NET INCOME applicable to Class A units		$	81,268		$	100,525

NET INCOME PER CLASS A UNIT—BASIC:
Income from continuing operations		$	.57		$	.73
Discontinued operations			.01			.05

Net income per Class A unit		$	.58		$	.78

NET INCOME PER CLASS A UNIT—DILUTED:
Income from continuing operations		$	.54		$	.70
Discontinued operations			.01			.05

Net income per Class A unit		$	.55		$	.75

See notes to consolidated financial statements.

VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

			For The Three Months Ended March 31,
			2004			2003
			(Amounts in thousands)
Cash Flows From Operating Activities:
	Net income		$	114,194		$	129,575
	Adjustments to reconcile net income to net cash provided by operating activities:
		Gain on sale of real estate		—			(2,644	)
		Depreciation and amortization (including debt issuance costs)		58,465			52,314
		Minority interest		(247	)		824
		Net gains on disposition of wholly-owned and partially-owned assets other than real estate		(776	)		(188	)
		Write-off of preferred unit issuance costs		3,895			—
		Straight-lining of rental income		(10,376	)		(10,987	)
		Amortization of acquired below market leases, net		(3,650	)		(1,445	)
		Equity in income of partially-owned entities		(13,113	)		(23,234	)
		Equity in loss (income) of Alexander's		2,528			(7,254	)
		Changes in operating assets and liabilities		6,226			(16,706	)

	Net cash provided by operating activities			157,146			120,255

Cash Flows From Investing Activities:
	Additions to real estate			(29,744	)		(18,269	)
	Development costs and construction in progress			(24,068	)		(12,942	)
	Investments in partially-owned entities			(5,102	)		(15,592	)
	Distributions from partially-owned entities			147,394			8,284
	Repayment of notes and mortgage loans receivable			38,500			23,392
	Cash restricted, primarily mortgage escrows			(3,944	)		2,562
	Acquisition of Building Maintenance Service Company			—			(13,000	)
	Acquisitions of real estate			(54,422	)		(408	)
	Proceeds from sale of real estate			—			4,752

	Net cash provided by (used in) investing activities			68,614			(21,221	)

Cash Flows From Financing Activities:
	Repayments of borrowings			(160,183	)		(59,442	)
	Proceeds from borrowings			150,427			47,000
	Class A unit distributions			(120,142	)		(88,464	)
	Distributions to preferred unit holders and minority partners			(32,926	)		(30,227	)
	Exercise of unit options			20,007			790
	Redemption of perpetual preferred units			(112,467	)		—

	Net cash used in financing activities			(255,284	)		(130,343	)

	Net decrease in cash and cash equivalents			(29,524	)		(31,309	)
	Cash and cash equivalents at beginning of period			320,542			208,200

	Cash and cash equivalents at end of period		$	291,018		$	176,891

Supplemental Disclosure Of Cash Flow Information:
	Cash payments for interest (including capitalized interest of $1,659 and $1,549)		$	48,933		$	49,763

Non-Cash Transactions:
	Financing assumed in acquisitions		$	18,500		$	—
	Unrealized gain on securities available for sale			3,306			311
	Capitalized development payroll			1,580			766

See notes to consolidated financial statements.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. Organization

Vornado Realty L.P. (the "Operating Partnership" and/or the "Company") is a Delaware limited partnership. Vornado Realty Trust ("Vornado"), a fully-integrated real estate investment trust ("REIT"), is the sole general partner of, and owned approximately 86.4% of the limited partnership interest in, the Operating Partnership at March 31, 2004. All references to "We," "Us," and "Company" refer to the Operating Partnership and its consolidated subsidiaries.

2. Basis of Presentation

The accompanying consolidated financial statements are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2003, as filed with the Securities and Exchange Commission. The results of operations for the three months ended March 31, 2004, are not necessarily indicative of the operating results for the full year.

The accompanying consolidated financial statements include the accounts of Vornado Realty L.P. as well as entities in which the Company owns (i) more than 50%, unless a partner has shared board and management representation and authority and substantive participation rights on all significant business decisions or (ii) 50% or less when the Company is considered the primary beneficiary and the entity qualifies as a variable interest entity under FASB Interpretation No. 46 (Revised)—Consolidation of Variable Interest Entities, ("FIN 46R") which became effective on March 31, 2004. All significant intercompany amounts have been eliminated. Equity interests in partially-owned corporate entities are accounted for under the equity method of accounting when the Company's ownership interest is more than 20%, but less than 50%. When partially-owned investments are in partnership form, the 20% threshold for equity method accounting may be reduced. Investments accounted for under the equity method are recorded initially at cost and subsequently adjusted for the Company's share of the net income or loss and cash contributions and distributions to or from these entities. For all other investments, the Company uses the cost method.

Management has made estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

3. Recently Issued Accounting Standards

Financial Accounting Standards Board ("FASB") Interpretation No. 46 (Revised)—Consolidation of Variable Interest Entities ("FIN 46R")

In January 2003, the FASB issued FIN 46, as amended in December 2003 by FIN 46R, which deferred the effective date until the first interim or annual reporting period ending after March 15, 2004. FIN 46R requires the consolidation of an entity by an enterprise known as a "primary beneficiary," (i) if that enterprise has a variable interest that will absorb a majority of the entity's expected losses, if they occur, receive a majority of the entity's expected residual returns, if they occur, or both and (ii) if the entity is a variable interest entity ("VIE"), as defined. An entity qualifies as a VIE if (i) the total equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties or (ii) the equity investors do not have the characteristics of a controlling financial interest in the entity. The initial determination of whether an entity is a VIE shall be made as of the date at which an enterprise becomes involved with the entity and re-evaluated as of the date of triggering events, as defined. The Company has evaluated each partially-owned entity to determine whether any qualify as a VIE, and if so, whether the Company is the primary beneficiary, as defined. The Company has determined that its investment in Newkirk MLP, in which it owns a 22.3% equity interest (see Note 5—Investments in Partially-Owned Entities), qualifies as a VIE. The Company has determined that it is not the primary beneficiary and, accordingly, consolidation is not required. The Company's maximum exposure to loss as a result of its involvement in Newkirk MLP is limited to its equity investment of approximately $145,088,000, as of March 31, 2004. In addition, the Company has variable interests in certain other entities which are primarily financing arrangements. The Company has evaluated these entities in accordance with FIN 46R and has determined that they are not VIEs. Based on the Company's evaluations, the adoption of FIN 46R on March 31, 2004 did not have a material effect on its consolidated financial statements.

4. Acquisitions, Dispositions and Financings

Acquisitions

Forest Plaza Shopping Center

On February 3, 2004, the Company acquired the Forest Plaza Shopping Center for approximately $32,500,000, of which $14,000,000 was paid in cash, and $18,500,000 was debt assumed. The purchase was funded as part of Section 1031 tax-free "like-kind" exchange with the remaining portion of the proceeds from the sale of the Company's Two Park Avenue property. Forest Plaza is a 165,000 square foot shopping center located in Staten Island, New York, anchored by a Waldbaum's supermarket.

25 W. 14^th Street

On March 19, 2004, the Company acquired a 62,000 square foot free-standing retail building located at 25 W. 14^th Street in Manhattan for $40,000,000. The building, which was recently renovated, was 87% occupied as of March 31, 2004. This purchase will ultimately be funded as part of a Section 1031 tax-free "like-kind" exchange with a portion of the proceeds from the sale of the Company's Palisades Residential Complex which is expected to be completed by the third quarter of 2004.

Dispositions

On January 9, 2003, the Company sold its Baltimore, Maryland shopping center for $4,752,000, which resulted in a net gain on sale after closing costs of $2,644,000.

On February 2, 2004, the Palisades Venture entered into an agreement to sell its only asset, a 538 unit high-rise residential apartment tower in Fort Lee, New Jersey, for $222,500,000. On February 27, 2004, the Company acquired the remaining 25% interest it did not previously own for approximately $17,000,000. The Company's gain on sale after closing costs will be approximately $70,000,000. The sale, which is subject to customary closing conditions, is expected to be completed by the third quarter of 2004.

In the three months ended March 31, 2004 and 2003, the Company sold certain partially-owned development property which resulted in a net gain on disposition of wholly-owned and partially-owned assets other than depreciable real estate of $776,000 and $188,000, respectively.

Financings

On January 6, 2004, the Company redeemed all of its 8.375% Series D-2 Cumulative Redeemable Preferred Units at a redemption price equal to $50.00 per unit for an aggregate of $27.5 million plus accrued distributions. The redemption amount exceeded the carrying amount by $700,000, representing the original issuance costs. Upon redemption, these issuance costs were recorded as a reduction to earnings in arriving at net income applicable to Class A units, in accordance with the July 2003 EITF clarification of Topic D-42.

On March 17, 2004, the Company redeemed all of its Series B Preferred Units at a redemption price equal to $25.00 per share for an aggregate of $85,000,000 plus accrued distributions. The redemption amount exceeded the carrying amount by $3,195,000, representing the original issuance costs. Upon redemption, these issuance costs were recorded as a reduction to earnings in arriving at net income applicable to Class A units, in accordance with the July 2003 EITF clarification of Topic D-42.

For details of the Company's financing activities see Note 7—Notes and Mortgages Payable.

5. Investments and Advances to Partially-Owned Entities

The Company's investments in partially-owned entities and income recognized from such investments are as follows:

Investments:

	March 31, 2004		December 31, 2003
	(Amounts in thousands)
Temperature Controlled Logistics	$	307,247	$	436,225
Alexander's		203,282		207,872
Newkirk Master Limited Partnership ("Newkirk MLP")		145,088		138,762
Monmouth Mall Joint Venture		30,561		30,612
Partially-Owned Office Buildings		44,811		44,645
Starwood Ceruzzi Joint Venture		23,485		23,821
Other		15,195		18,663

	$	769,669	$	900,600

Equity in Income (loss):

		For The Three Months Ended March 31,
		2004			2003
		(Amounts in thousands)
(Loss) income applicable to Alexander's:
	33% share of equity in net (loss) income	$	(7,752	)(1)	$	1,440
	Interest income(2)		2,672			2,527
	Development and guarantee fees(2)		1,074			2,193
	Management and leasing fees(2)		1,478			1,094

		$	(2,528	)	$	7,254

Temperature Controlled Logistics:
	60% share of equity in net income	$	1,074		$	4,361
	Management fees		1,378			1,372
	Other		89			119

			2,541			5,852

Newkirk MLP:
	22.3% share of equity in income(3)		7,813			15,181
	Interest and other income		1,266			1,819

			9,079			17,000

Partially-Owned Office Buildings			523			618
Other			970			(236	)

		$	13,113		$	23,234

(1): Includes the Company's $9,913 share of Alexander's stock appreciation rights compensation expense and the Company's $1,010 share of Alexander's loss on early extinguishment of debt.
(2): Alexander's capitalizes the fees and interest charged by the Company. Because the Company owns 33% of Alexander's, the Company recognizes 67% of such amounts as income and the remainder is reflected as a reduction of the Company's carrying amount of the investment in Alexander's.
(3): The three months ended March 31, 2004, includes the Company's $1,917 share of net gains on sale of real estate. The three months ended March 31, 2003, includes the Company's $8,000 share of net gains on sale of real estate and early extinguishment of debt.

Below is a summary of the debt of partially-owned entities as of March 31, 2004 and December 31, 2003, none of which is guaranteed by the Company.

		100% of Partially-Owned Entities Debt
		March 31, 2004		December 31, 2003
		(Amounts in thousands)
Alexander's (33% interest):
	Lexington Avenue mortgage note payable collateralized by the office space, due in February 2014, with interest at 5.33%	$	400,000	$	—
	Kings Plaza Regional Shopping Center mortgage note payable, due in June 2011, with interest at 7.46% (prepayable with yield maintenance)		215,863		216,587
	Due to Vornado on January 3, 2006 with interest at 12.48% (prepayable without penalty)		124,000		124,000
	Rego Park mortgage note payable, due in June 2009, with interest at 7.25%		82,000		82,000
	Paramus mortgage note payable, due in October 2011, with interest at 5.92% (prepayable without penalty)		68,000		68,000
	Lexington Avenue construction loan payable, due on January 3, 2006, plus two one-year extensions, with interest at LIBOR plus 2.50%		—		240,899
Temperature Controlled Logistics (60% interest):
	Mortgage notes payable collateralized by 85 temperature controlled warehouses, due from 2009 to 2023 with a weighted average interest rate of 5.95% at March 31, 2004 (various prepayment terms)		746,954		509,456
	Other notes payable		38,961		39,365
Newkirk MLP (22.3% interest):
	Portion of first mortgages collateralized by the partnership's real estate, due from 2004 to 2024, with a weighted average interest rate of 6.8% at March 31, 2004 (various prepayment terms)		996,253		1,069,545
Partially-Owned Office Buildings:
	Fairfax Square (20% interest) mortgage note payable, due in August 2009, with interest at 7.50%		67,905		68,051
	330 Madison Avenue (25% interest) mortgage note payable, due in April 2008, with interest at 6.52% (prepayable with yield maintenance)		60,000		60,000
	825 Seventh Avenue (50% interest) mortgage note payable, due in October 2014, with interest at 8.07% (prepayable with yield maintenance)		22,994		23,060
	Wells/Kinzie Garage (50% interest) mortgage note payable, due in May 2009, with interest at 7.03%		15,540		15,606
	Orleans Hubbard (50% interest) mortgage note payable, due in March 2009, with interest at 7.03%		9,758		9,799
	Kaempfer Equity Interests (.1% to 10% interests in six partnerships) Mortgage notes payable, collateralized by the partnerships' real estate, due from 2007 to 2031, with a weighted average interest rate of 6.24% at March 31, 2004 (various prepayment terms)		361,312		361,263
Monmouth Mall (50% interest):
	Mortgage note payable, due in November 2005, with interest at LIBOR plus 2.05% and two one-year extension options (3.53% at March 31, 2004)		135,000		135,000

Based on the Company's ownership interest in the partially-owned entities above, the Company's share of the debt of these partially-owned entities was $1,105,668,000 and $930,567,000 as of March 31, 2004 and December 31, 2003, respectively.

Temperature Controlled Logistics

Based on the joint venture's policy of recognizing rental income when earned and collection is assured or cash is received, the Company did not recognize $6,465,000 and $3,376,000 of rent it was due for the three months ended March 31, 2004 and 2003, which together with previously deferred rent is $55,901,000.

On February 5, 2004, AmeriCold Realty Trust completed a $254,400,000 mortgage financing for 21 of its owned and 7 of its leased temperature-controlled warehouses. The loan bears interest at LIBOR plus 2.95% (with a LIBOR floor of 1.5% with respect to $54,400,000 of the loan) and requires principal payments of $5,000,000 annually. The loan matures in April 2009 and is pre-payable without penalty after April 5, 2006. The net proceeds were approximately $225,000,000 after providing for usual escrows, closing costs and the repayment of $12,900,000 of existing mortgages on two of the warehouses, of which $135,000,000 was distributed to the Company and the remainder was distributed to its partner.

On January 20, and March 29, 2004, a joint venture in which the Company has a 44% interest acquired an aggregate of $10,200,000 of trade receivables from AmeriCold Logistics for $10,000,000 in cash. These receivables have been subsequently collected in full.

Alexander's

The Company owns 33% of the outstanding common stock of Alexander's at March 31, 2004. Alexander's is managed by, and its properties are leased by, the Company pursuant to agreements with a one-year term expiring in March of each year, except for the Lexington Avenue agreements which provide for a term lasting until substantial completion of the development of the property, all of which are automatically renewable. As of March 31, 2004, the Company had a receivable from Alexander's of $39,062,000 under the management and development agreements. In addition, Alexander's paid $493,000 to Building Maintenance Services, a wholly-owned subsidiary of the Company, for cleaning and engineering services at Alexander's Lexington Avenue project.

Effective April 1, 2004, based on Alexander's improved liquidity, the Company modified its term loan and line of credit to Alexander's to reduce the spread it charges from 9.48% to 6%. Accordingly, the current interest rate has been reduced to 9% from 12.48%.

On February 13, 2004, Alexander's completed a $400,000,000 mortgage financing on the Office Space of its Lexington Avenue development project placed by German American Capital Corporation, an affiliate of Deutsche Bank. The loan bears interest at 5.33%, matures in February 2014 and beginning in the third year, provides for principal payments based on a 25-year amortization schedule such that over the remaining eight years of the loan, ten years of amortization will be paid. Of the loan proceeds, $253,529,000 was used to repay the entire amount outstanding under the construction loan with HVB Real Estate Capital (Hypo) ("Construction Loan"). The Construction Loan was modified so that the remaining availability is $237,000,000, which was approximately the amount estimated to complete the Lexington Avenue development project. The interest rate on the Construction Loan is LIBOR plus 2.5% (currently 3.60%) and matures in January 2006, with two one-year extensions. The collateral for the Construction Loan is the same, except that the Office Space has been removed from the lien. Further, the Construction Loan permits the release of the retail space for $15,000,000 and requires all proceeds from the sale of the residential condominiums units to be applied to the Construction Loan balance until it is finally repaid. In connection with reducing the principal amount of the Construction Loan Alexander's wrote-off $3,050,000 of unamortized deferred financing costs in the first quarter of 2004, of which the Company's share was $1,010,000.

Equity in loss from Alexander's includes Alexander's stock appreciation rights compensation expense of which the Company's share was $9,913,000 for the three months ended March 31, 2004, based on a closing Alexander's stock price of $160.00 on March 31, 2004.

6. Notes and Mortgage Loans Receivable

On March 1, 2004, the Company's note receivable of $38,500,000 from Commonwealth Atlantic Properties was repaid.

7. Notes and Mortgages Payable

Following is a summary of the Company's debt:

						Balance as of
				Maturity	Interest Rate as at March 31, 2004	March 31, 2004		December 31, 2003
				(Amounts in thousands)
Notes and Mortgages Payable:
	Fixed Interest:
	Office:
		NYC Office:
			Two Penn Plaza (1)	02/11	4.97%	$	300,000	$	151,420
			888 Seventh Avenue	02/06	6.63%		105,000		105,000
			Eleven Penn Plaza	05/07	8.39%		49,020		49,304
			866 UN Plaza	(2)	(2)		—		33,000
	CESCR Office:
		Crystal Park 1-5		07/06-08/13	6.66%-7.08%		257,285		258,733
		Crystal Gateway 1-4 Crystal Square 5		07/12-01/25	6.75%-7.09%		213,978		214,323
		Crystal Square 2, 3 and 4		10/10-11/14	6.82%-7.08%		143,416		143,854
		Skyline Place		08/06-12/09	6.60%-6.93%		135,253		135,955
		1101 17^th, 1140 Connecticut, 1730 M and 1150 17^th		08/10	6.74%		95,555		95,860
		Courthouse Plaza 1 and 2		01/08	7.05%		78,561		78,848
		Crystal Gateway N., Arlington Plaza and 1919 S. Eads		11/07	6.77%		71,193		71,508
		Reston Executive I, II and III		01/06	6.75%		72,548		72,769
		Crystal Plaza 1-6		10/04	6.65%		68,353		68,654
		One Skyline Tower		06/08	7.12%		64,567		64,818
		Crystal Malls 1-4		12/11	6.91%		59,418		60,764
		1750 Pennsylvania Avenue		06/12	7.26%		49,227		49,346
		One Democracy Plaza		02/05	6.75%		26,745		26,900
	Retail:
		Cross collateralized mortgages payable on 42 shopping centers		03/10	7.93%		480,499		481,902
		Green Acres Mall		02/08	6.75%		147,772		148,386
		Staten Island — Forest Plaza		05/09	7.73%		18,409		—
		Las Catalinas Mall		11/13	6.97%		66,478		66,729
		Montehiedra Town Center		05/07	8.23%		58,646		58,855
		Other		08/21	9.90%		6,914		6,920
	Merchandise Mart:
		Washington Design Center		11/11	6.95%		47,882		48,012
		Market Square Complex		07/11	7.95%		46,539		46,816
		Furniture Plaza		02/13	5.23%		45,542		45,775
		Washington Office Center		(3)	(3)		—		43,166
		Other		10/10-06/28	7.52%-7.71%		18,364		18,434
	Other:
		Industrial Warehouses		10/11	6.95%		48,782		48,917
		Student Housing Complex		11/07	7.45%		18,713		18,777

			Total Fixed Interest Notes and Mortgages Payable		7.13%		2,794,659		2,713,745

								Balance as of
				Maturity	Spread over LIBOR	Interest Rate as at March 31, 2004		March 31, 2004		December 31, 2003
				(Amounts in thousands)
Notes and Mortgages Payable:
	Variable Interest:
	Office:
		NYC Office:
			One Penn Plaza (1)	06/05	L+125	2.48	%	$	200,000	$	275,000
			770 Broadway	06/06	L+105	2.18	%		170,000		170,000
			909 Third Avenue	08/06	L+70	1.83	%		125,000		125,000
		CESCR Office:
			Commerce Executive III, IV and V	07/05	L+150	2.59	%		42,400		42,582
			Commerce Executive III, IV and V B	07/05	L+85	1.94	%		10,000		10,000
	Other:
		400 North LaSalle		02/05	L+250	4.75	%		4,885		3,038

			Total Variable Interest Notes and Mortgages Payable			2.26	%		552,285		625,620

	Total Notes and Mortgages Payable					6.33	%	$	3,346,944	$	3,339,365

	Liabilities related to discontinued operations:
		Palisades construction loan		01/05	L+175	2.84	%	$	120,000	$	120,000

	Senior unsecured notes due 2007 at fair value (accreted face amount of $499,535 and $499,499)			06/07	L+77	1.77	%	$	532,009	$	525,279

	Senior unsecured notes due 2010			12/10		4.77	%	$	199,750	$	199,741

	Unsecured revolving credit facility			07/06	L+65	N/A		$	—	$	—

(1): On February 5, 2004, the Company completed a $300,000 refinancing of Two Penn Plaza. The loan bears interest at 4.97% and matures in February 2011. The Company retained net proceeds of $41,000 after repaying the existing $151,000 loan, $75,000 of the $275,000 mortgage loan on its One Penn Plaza property and the $33,000 mortgage loan on 866 UN Plaza.
(2): Repaid in February 2004.
(3): Repaid in January 2004.

8. Fee And Other Income

The following table sets forth the details of fee and other income:

	For The Three Months Ended March 31,
(Amounts in thousands)	For The Three Months Ended March 31,
(Amounts in thousands)	2004		2003
Tenant cleaning fees	$	7,384	$	7,698
Management and leasing fees		6,052		2,278
Other income		4,596		3,118

	$	18,032	$	13,094

Fee and other income above includes management fee income from Interstate Properties, a related party, of $213,000 and $176,000 in the three months ended March 31, 2004 and 2003. The above table excludes fee income from partially-owned entities which is included in income from partially-owned entities (see Note 5).

9. Discontinued Operations

Assets related to discontinued operations at March 31, 2004, consist primarily of real estate, net of accumulated depreciation and represent the Company's retail properties located in Vineland, New Jersey, and Baltimore (Dundalk), Maryland as well as the Palisades located in Fort Lee, New Jersey. Liabilities related to discontinued operations represent the Palisades mortgage payable of $120,000,000 at March 31, 2004 and December 31, 2003, respectively.

The combined results of operations of the assets related to discontinued operations as well as the Company's Two Park Avenue office property, sold on October 10, 2003, which resulted in a net gain of $156,433,000, and Baltimore and Hagerstown, Maryland retail properties, which were sold on January 9, 2003 and November 3, 2003 (resulting in net gains of $2,644,000 and $1,945,000) are shown as discontinued operations. The following is a summary of the combined results of operations of these properties:

	For The Three Months Ended March 31,
(Amounts in thousands)	For The Three Months Ended March 31,
(Amounts in thousands)	2004		2003
Total revenues	$	4,118	$	12,028
Total expenses		3,291		8,573

Net income		827		3,455
Gain on sale of Baltimore		—		2,644

Income from discontinued operations	$	827	$	6,099

10. Income Per Class A Unit

The following table provides a reconciliation of both net income and the number of Class A units used in the computation of (i) basic income per Class A unit—which utilizes the weighted average number of Class A units outstanding without regard to dilutive potential Class A units, and (ii) diluted income per Class A unit—which includes the weighted average Class A units and dilutive unit equivalents. Potential dilutive unit equivalents include the Company's Series A, B-1, B-2 and F-1 Convertible Preferred units.

			For The Three Months Ended March 31,
			2004			2003
			(Amounts in thousands except per unit amounts)
Numerator:
	Income from continuing operations		$	113,367		$	123,476
	Discontinued operations			827			6,099

	Net income			114,194			129,575
	Preferred unit distributions			(32,926	)		(29,050	)

	Numerator for basic and diluted income per Class A unit—net income applicable to Class A units		$	81,268		$	100,525

Denominator:
	Denominator for basic income per Class A unit—weighted average units			141,263			129,537
	Effect of dilutive securities:
		Convertible preferred units		—			2,004
		Employee unit options		5,189			1,946
		Deferred compensation units issued but not yet earned		234			125

	Denominator for diluted income per Class A unit—weighted average units and assumed conversions			146,686			133,612

INCOME PER CLASS A UNIT—BASIC:
	Income from continuing operations		$	.57		$	.73
	Discontinued operations			.01			.05

	Net income per common Class A unit		$	.58		$	.78

INCOME PER CLASS A UNIT—DILUTED:
	Income from continuing operations		$	.54		$	.70
	Discontinued operations			.01			.05

	Net income per Class A unit		$	.55		$	.75

11. Comprehensive Income

The following table sets forth the Company's comprehensive income:

	For The Three Months Ended March 31,
	2004			2003
	(Amounts in thousands)
Net income	$	114,194		$	129,575
Preferred unit distributions		(32,926	)		(29,050	)

Net income applicable to Class A units		81,268			100,525
Other comprehensive income		3,305			91

Comprehensive income	$	84,573		$	100,616

12. Commitments and Contingencies

At March 31, 2004, the Company's $600,000,000 revolving credit facility had a zero balance, and the Company utilized $12,805,000 of availability under the facility for letters of credit and guarantees.

Each of the Company's properties has been subjected to varying degrees of environmental assessment at various times. The environmental assessments did not reveal any material environmental contamination. However, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites, or changes in cleanup requirements would not result in significant costs to the Company.

The Company carries comprehensive liability and all risk property insurance ((i) fire, (ii) flood, (iii) extended coverage, (iv) "acts of terrorism" as defined in the Terrorism Risk Insurance Act of 2002 which expires in 2005 and (v) rental loss insurance) with respect to its assets. In April 2004, the Company renewed its all risk policies and increased its coverage for Acts of Terrorism for each of its New York Office, CESCR Office and Merchandise Mart divisions. Below is a summary of the current all risk property insurance and terrorism risk insurance for each of the Company's business segments:

	Coverage Per Occurrence
	All Risk(1)		Sub-Limits for Acts of Terrorism
New York Office	$	1,400,000,000	$	750,000,000
CESCR Office		1,400,000,000		750,000,000
Retail		500,000,000		500,000,000
Merchandise Mart		1,400,000,000		750,000,000
Temperature Controlled Logistics		225,000,000		225,000,000

(1): Limited as to terrorism insurance by the sub-limit shown in the adjacent column.

In addition to the coverage above, the Company carries lesser amounts of coverage for terrorist acts not covered by the Terrorism Risk Insurance Act of 2002.

The Company's debt instruments, consisting of mortgage loans secured by its properties (which are generally non-recourse to the Company), its senior unsecured notes due 2007 and 2010 and its revolving credit agreement, contain customary covenants requiring the Company to maintain insurance. Although the Company believes that it has adequate insurance coverage under these agreements, the Company may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. Further, if lenders insist on greater coverage than the Company is able to obtain, it could adversely affect the Company's ability to finance and/or refinance its properties and expand its portfolio.

From time to time, the Company has disposed of substantial amounts of real estate to third parties for which, as to certain properties, it remains contingently liable for rent payments or mortgage indebtedness that cannot be quantified by the Company.

There are various legal actions against the Company in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the outcome of such matters will not have a material effect on the Company's financial condition, results of operations or cash flow.

13. Stock-Based Compensation

Prior to 2003, the Company accounted for stock-based compensation using the intrinsic value method (i.e. the difference between the price per unit at the grant date and the option exercise price). Accordingly, no stock-based compensation was recognized in the Company's consolidated financial statements for plan awards granted prior to 2003. If compensation cost for plan awards granted prior to 2003 had been determined based on fair value at the grant dates, net income and income per Class A unit would have been reduced to the pro-forma amounts below:

			For The Three Months Ended March 31,
			2004			2003
			(Amounts in thousands, except per unit amounts)
Net income applicable to Class A units:
	As reported		$	81,268		$	100,525
	Stock-based compensation cost, net of minority interest			(1,138	)		(1,384	)

	Pro-forma		$	80,130		$	99,141

Net income per share applicable to Class A units:
	Basic:
		As reported	$	.58		$	.78
		Pro-forma	$	.57		$	.77
	Diluted:
		As reported	$	.55		$	.75
		Pro-forma	$	.55		$	.74

14. Retirement Plans

The following table sets forth the components of net periodic benefit costs:

	For The Three Months Ended March 31,
	2004			2003
	(Amounts in thousands)
Service cost	$	—		$	—
Interest cost		304			311
Expected return on plan assets		(267	)		(279	)
Amortization of prior service cost		53			51

Net periodic cost	$	90		$	83

Employer Contributions

During the quarter ended March 31, 2004, the Company made contributions of $510,000 to the plans. The Company anticipates additional contributions of $480,000 to the plans during the remainder of 2004.

15. Related Party Transactions

On March 10, 2004, the Company loaned $2,000,000 to Melvyn Blum, an executive officer of the Company, pursuant to the revolving credit facility contained in his January 2000 employment agreement. The loan bears interest at 1.57% per annum (the Federal rate) and is due on March 10, 2007.

16. Segment Information

The Company has four business segments: Office, Retail, Merchandise Mart Properties and Temperature Controlled Logistics.

		For The Three Months Ended March 31,
		2004																		2003
(Amounts in thousands)		Total			Office			Retail			Merchandise Mart			Temperature Controlled Logistics			Other(4)			Total			Office			Retail			Merchandise Mart			Temperature Controlled Logistics			Other(4)
Property rentals		$	312,668		$	212,728		$	37,180		$	49,853		$	—		$	12,907		$	296,189		$	202,854		$	33,665		$	48,645		$	—		$	11,025
Straight-line rents:
	Contractual rent increases		9,942			8,376			820			705			—			41			8,630			7,453			400			796			—			(19	)
	Amortization of free rent		434			(2,495	)		2,011			920			—			(2	)		2,357			473			1,767			117			—			—
Amortization of acquired below market leases, net			3,650			2,661			989			—			—			—			1,445			1,278			167			—			—			—

Total rentals			326,694			221,270			41,000			51,478			—			12,946			308,621			212,058			35,999			49,558			—			11,006
Expense reimbursements			48,324			28,123			15,385			4,078			—			738			43,262			23,782			13,853			4,782			—			845
Fee and other income:
	Tenant cleaning fees		7,384			7,384			—			—			—			—			7,698			7,698			—			—			—			—
	Management and leasing fees		6,052			5,728			293			14			—			17			2,278			2,090			176			—			—			12
	Other		4,596			3,330			161			1,023			—			82			3,118			1,321			1,009			740			—			48

Total revenues			393,050			265,835			56,839			56,593			—			13,783			364,977			246,949			51,037			55,080			—			11,911

Operating expenses			154,366			98,602			18,496			25,250			—			12,018			146,374			91,793			18,934			24,869			—			10,778
Depreciation and amortization			56,620			39,167			6,086			7,435			—			3,932			50,640			36,021			4,161			7,103			—			3,355
General and administrative			30,845			11,552			2,955			5,035			—			11,303			27,235			8,158			2,374			4,785			—			11,918

Total expenses			241,831			149,321			27,537			37,720			—			27,253			224,249			135,972			25,469			36,757			—			26,051

Operating income (loss)			151,219			116,514			29,302			18,873			—			(13,470	)		140,728			110,977			25,568			18,323			—			(14,140	)
Income applicable to Alexander's			(2,528	)		—			—			—			—			(2,528	)		7,254			—			—			—			—			7,254
Income from partially-owned entities			13,113			523			747			120			2,541	(3)		9,182			23,234			618			(468	)		6			5,852	(3)		17,226
Interest and other investment income			9,245			244			39			36			—			8,926			9,796			884			47			30			—			8,835
Interest and debt expense			(58,705	)		(33,090	)		(14,991	)		(2,900	)		—			(7,724	)		(56,900	)		(33,804	)		(14,782	)		(3,211	)		—			(5,103	)
Net gains on disposition of wholly-owned and partially-owned assets other than real estate			776			—			—			—			—			776			188			—			—			188			—			—
Minority interest			247			—			—			—			—			247			(824	)		(818	)		—			—			—			(6	)

Income from continuing operations			113,367			84,191			15,097			16,129			2,541	(3)		(4,591	)		123,476			77,857			10,365			15,336			5,852	(3)		14,066
Discontinued operations			827			—			222			—			—			605			6,099			4,399			2,747			—			—			(1,047	)

Net income			114,194			84,191			15,319			16,129			2,541			(3,986	)		129,575			82,256			13,112			15,336			5,852			13,019
Interest and debt expense(2)			77,981			34,046			15,744			3,128			7,507			17,556			74,190			34,306			15,530			3,328			6,146			14,880
Depreciation and amortization(2)			71,296			39,950			6,750			7,569			8,688			8,339			66,110			37,637			5,011			7,191			8,749			7,522
Income Taxes			81			11			—			—			—			70			—			—			—			—			—			—

EBITDA(1)		$	263,552		$	158,198		$	37,813		$	26,826		$	18,736		$	21,979		$	269,875		$	154,199		$	33,653		$	25,855		$	20,747		$	35,421


See footnotes on page 19.

Notes to segment information:

(1): EBITDA represents "Earnings Before Interest, Taxes, Depreciation and Amortization." Management considers EBITDA a supplemental measure for making decisions and assessing the performance of its segments. EBITDA should not be considered a substitute for net income. EBITDA may not be comparable to similarly titled measures employed by other companies.
(2): Interest and debt expense and depreciation and amortization included in the reconciliation of net income to EBITDA reflects amounts which are netted in income from partially-owned entities.
(3): Net of rent not recognized of $6,465 and $3,376 for the three months ended March 31, 2004 and 2003.
(4): Other EBITDA is comprised of:

		For The Three Months Ended March 31,
		2004			2003
		(Amounts in thousands)
Newkirk MLP:
	Equity in income of limited partnership	$	15,268		$	23,515
	Interest and other income		2,924			2,106
Alexander's			1,599			8,995
Industrial warehouses			1,265			1,542
Palisades			1,674			638
Student Housing			536			628
Hotel Pennsylvania			294			(905	)

			23,560			36,519
Minority interest expense			247			(6	)
Unallocated general and administrative expenses			(10,022	)		(10,883	)
Investment income and other			8,194			9,791

Total		$	21,979		$	35,421

INDEPENDENT ACCOUNTANTS' REPORT

Partners
Vornado Realty L.P.
New York, New York

We have reviewed the accompanying condensed consolidated balance sheet of Vornado Realty L.P. as of March 31, 2004, and the related condensed consolidated statements of income and cash flows for the three-month periods ended March 31, 2004 and 2003. These interim financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of Vornado Realty L.P. as of December 31, 2003, and the related consolidated statements of income, partners' capital, and cash flows for the year then ended (not presented herein); and in our report dated March 2, 2004, we expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph relating to the Company's adoption of SFAS No. 142 "Goodwill and Other Intangible Assets" and SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets." In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2003 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

DELOITTE & TOUCHE LLP

Parsippany, New Jersey
May 7, 2004

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

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "believes," "expects," "anticipates," "intends," "plans," "will," "would," "may" or similar expressions in this quarterly report on Form 10-Q. These forward-looking statements are subject to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond our ability to control or predict. Factors that may cause actual results to differ materially from those contemplated by the forward-looking statements include, but are not limited to, those set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2003 under "Forward Looking Statements" and "Item 1. Business—Certain Factors That May Adversely Affect the Company's Business and Operations." For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use caution in relying on forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

Management's Discussion and Analysis of Financial Condition and Results of Operations includes a discussion of the Company's consolidated financial statements for the three months ended March 31, 2004. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Overview

The Company owns and operates office, retail and showroom properties with large concentrations of office and retail properties in the New York City metropolitan area and in the Washington, D.C. and Northern Virginia area. In addition, the Company has a 60% interest in a partnership that owns cold storage warehouses nationwide.

The Company's business objective is to maximize Vornado Realty Trust's shareholder value. The Company measures its success in meeting this objective by Vornado Realty Trust's total return to its shareholders. Below is a table comparing Vornado's performance to the Morgan Stanley REIT Index ("RMS") for the following periods ending March 31, 2004:

	Total Return
	Vornado		RMS
Three-months	12.2	%	12.1	%
One-year	80.2	%	51.6	%
Three-years	104.9	%	80.1	%
Five-years	137.5	%	127.8	%
Ten-years	510.0	%	227.9	%⁽¹⁾

(1): From inception on July 25, 1995

The Company intends to continue to achieve its business objective by pursuing its investment philosophy and executing its operating strategies through:

•: Maintaining a superior team of operating and investment professionals and an entrepreneurial spirit.
•: Investing in properties in select markets, such as New York City and Washington, D.C., where we believe there is high likelihood of capital appreciation.
•: Acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher rents.
•: Investing in retail properties in select under-stored locations such as the New York City metropolitan area.
•: Developing/redeveloping the Company's existing properties to increase returns and maximize value.

The Company competes with a large number of real estate property owners and developers. Principal factors of competition are rent charged, attractiveness of location and quality and breadth of services provided. The Company's success depends upon, among other factors, trends of the national and local economies, financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation and population trends. The current economic recovery is fostered, in part, by low interest rates, Federal tax cuts, and increases in government spending. To the extent this recovery stalls, the Company may experience lower occupancy rates which may lead to lower initial rental rates, higher leasing costs and a corresponding decrease in net income, funds from operations and cash flow. Alternatively, if the recovery continues, the Company may experience higher occupancy rates leading to higher initial rents and higher interest rates causing an increase in the Company's weighted average cost of capital and a corresponding effect on net income, funds from operations and cash flow.

Overview (continued)—Leasing Activity

The following table sets forth certain information for the properties the Company owns directly or indirectly, including leasing activity. Tenant improvements and leasing commissions are presented below based on square feet leased during the period and on a per annum basis based on the weighted average term of the leases.

					Office									Merchandise Mart
					New York City			CESCR			Retail			Office			Showroom			Temperature Controlled Logistics
					(Square feet and cubic feet in thousands)
As of March 31, 2004:
	Square feet					13,259			13,963			13,116			2,821			5,623		17,476
	Cubic feet					—			—			—			—			—		440,700
	Number of properties					20			63			62			9			9		87
	Occupancy rate					95.5	%		93.7	%		93.5	%		92.1	%		95.0	%	67.5	%
	Leasing Activity:
		Quarter ended March 31, 2004:
			Square feet			360			765			236			43			368		—
			Initial rent(1)		$	40.20		$	29.30		$	19.80		$	19.00		$	21.76		—
			Weighted average lease terms (years)			10.1			4.2			8.5			3.6			6.1		—
			Rent per square foot on relet space:
				Square feet		215			706			112			43			368		—
				Initial rent(1)	$	40.09		$	29.84		$	23.89		$	19.00		$	21.76		—
				Prior escalated rent	$	38.31		$	30.36		$	18.31		$	26.47		$	21.60		—
				Percentage increase (decrease)		4.6	%		(1.7	)%		30.5	%		(28.2	)%		0.7	%	—
			Rent per square foot on space previously vacant:
				Square feet		145			59			124			—			—		—
				Initial rent(1)	$	40.35		$	22.82		$	16.09			—			—		—
				Tenant improvements and leasing commissions per square foot	$	40.97		$	12.08		$	1.58		$	6.77		$	5.52		—
				Tenant improvements and leasing commissions per square foot per annum(2)	$	4.06		$	2.88		$	0.19		$	1.88		$	0.91		—
As of December 31, 2003:
	Square feet					13,253			13,963			12,888			2,808			5,624		17,476
	Cubic feet					—			—			—			—			—		440,700
	Number of properties					20			63			60			9			9		87
	Occupancy rate					95.2	%		93.9	%		93.0	%		92.6	%		95.1	%	76.2	%
As of March 31, 2003:
	Square feet					14,312			13,387			12,514			2,798			5,601		17,509
	Cubic feet					—			—			—			—			—		441,500
	Number of properties					21			55			62			9			9		88
	Occupancy rate					95.9	%		93.2	%		87.5	%		92.7	%		95.3	%	73.1	%

(1): Most leases include periodic step-ups in rent, which are not reflected in the initial rent per square foot leased.
(2): May not be indicative of the amounts for the full year.

In addition to the above, 22,000 square feet of retail space included in the NYC office properties was leased for the quarter ended March 31, 2004, at an initial rent of $149 per square foot.

Critical Accounting Policies

A summary of the Company's critical accounting policies is included in the Company's annual report on Form 10-K for the year ended December 31, 2003 in Management's Discussion and Analysis of Financial Condition and Results of Operations and in the footnotes to the consolidated financial statements, Note 2—Summary of Significant Accounting Policies also included in the Company's annual report on Form 10-K. There have been no significant changes to those policies during 2004.

Reconciliation of Net Income and EBITDA

Below is a summary of net income and a reconciliation of net income to EBITDA(1) by segment for the three months ended March 31, 2004 and 2003.

		For The Three Months Ended March 31, 2004
		Total			Office			Retail			Merchandise Mart			Temperature Controlled Logistics			Other(4)
		(Amounts in thousands)
Property rentals		$	312,668		$	212,728		$	37,180		$	49,853		$	—		$	12,907
Straight-line rents:
	Contractual rent increases		9,942			8,376			820			705			—			41
	Amortization of free rent		434			(2,495	)		2,011			920			—			(2	)
Amortization of acquired below market leases, net			3,650			2,661			989			—			—			—

Total rentals			326,694			221,270			41,000			51,478			—			12,946
Expense reimbursements			48,324			28,123			15,385			4,078			—			738
Fee and other income:
	Tenant cleaning fees		7,384			7,384			—			—			—			—
	Management and leasing fees		6,052			5,728			293			14			—			17
	Other		4,596			3,330			161			1,023			—			82

Total revenues			393,050			265,835			56,839			56,593			—			13,783

Operating expenses			154,366			98,602			18,496			25,250			—			12,018
Depreciation and amortization			56,620			39,167			6,086			7,435			—			3,932
General and administrative			30,845			11,552			2,955			5,035			—			11,303

Total expenses			241,831			149,321			27,537			37,720			—			27,253

Operating income (loss)			151,219			116,514			29,302			18,873			—			(13,470	)
Loss applicable to Alexander's			(2,528	)		—			—			—			—			(2,528	)
Income from partially-owned entities			13,113			523			747			120			2,541	(3)		9,182
Interest and other investment income			9,245			244			39			36			—			8,926
Interest and debt expense			(58,705	)		(33,090	)		(14,991	)		(2,900	)		—			(7,724	)
Net gains on disposition of wholly-owned and partially-owned assets other than real estate			776			—			—			—			—			776
Minority interest			247			—			—			—			—			247

Income (loss) from continuing operations			113,367			84,191			15,097			16,129			2,541			(4,591	)
Discontinued operations			827			—			222			—			—			605

Net income			114,194			84,191			15,319			16,129			2,541			(3,986	)
Interest and debt expense(2)			77,981			34,046			15,744			3,128			7,507			17,556
Depreciation and amortization(2)			71,296			39,950			6,750			7,569			8,688			8,339
Income taxes			81			11			—			—			—			70

EBITDA(1)		$	263,552		$	158,198		$	37,813		$	26,826		$	18,736		$	21,979

See footnotes on page 26.

		For The Three Months Ended March 31, 2003
		Total			Office			Retail			Merchandise Mart			Temperature Controlled Logistics			Other(4)
		(Amounts in thousands)
Property rentals		$	296,189		$	202,854		$	33,665		$	48,645		$	—		$	11,025
Straight-line rents:
	Contractual rent increases		8,630			7,453			400			796			—			(19	)
	Amortization of free rent		2,357			473			1,767			117			—			—
Amortization of acquired below market leases, net			1,445			1,278			167			—			—			—

Total rentals			308,621			212,058			35,999			49,558			—			11,006
Expense reimbursements			43,262			23,782			13,853			4,782			—			845
Fee and other income:
	Tenant cleaning fees		7,698			7,698			—			—			—			—
	Management and leasing fees		2,278			2,090			176			—			—			12
	Other		3,118			1,321			1,009			740			—			48

Total revenues			364,977			246,949			51,037			55,080			—			11,911

Operating expenses			146,374			91,793			18,934			24,869			—			10,778
Depreciation and amortization			50,640			36,021			4,161			7,103			—			3,355
General and administrative			27,235			8,158			2,374			4,785			—			11,918

Total expenses			224,249			135,972			25,469			36,757			—			26,051

Operating income (loss)			140,728			110,977			25,568			18,323			—			(14,140	)
Income applicable to Alexander's			7,254			—			—			—			—			7,254
Income from partially-owned entities			23,234			618			(468	)		6			5,852	(3)		17,226
Interest and other investment income			9,796			884			47			30			—			8,835
Interest and debt expense			(56,900	)		(33,804	)		(14,782	)		(3,211	)		—			(5,103	)
Net gains on disposition of wholly-owned and partially-owned assets other than real estate			188			—			—			188			—			—
Minority interest			(824	)		(818	)		—			—			—			(6	)

Income from continuing operations			123,476			77,857			10,365			15,336			5,852			14,066
Discontinued operations			6,099			4,399			2,747			—			—			(1,047	)

Net income			129,575			82,256			13,112			15,336			5,852			13,019
Interest and debt expense(2)			74,190			34,306			15,530			3,328			6,146			14,880
Depreciation and amortization(2)			66,110			37,637			5,011			7,191			8,749			7,522

EBITDA(1)		$	269,875		$	154,199		$	33,653		$	25,855		$	20,747		$	35,421

See following page for footnotes.

Notes:

(1): EBITDA represents "Earnings Before Interest, Taxes, Depreciation and Amortization." EBITDA should not be considered a substitute for net income. EBITDA may not be comparable to similarly titled measures employed by other companies.
(2): Interest and debt expense and depreciation and amortization included in the reconciliation of net income to EBITDA reflects amounts which are netted in income from partially-owned entities.
(3): Net of rent not recognized of $6,465 and $3,376 for the three months ended March 31, 2004 and 2003.
(4): Other EBITDA is comprised of:

			For The Three Months Ended March 31,
			2004			2003
			(Amounts in thousands)
Newkirk MLP:
	Equity in income of limited partnership(A)		$	15,268		$	23,515
	Interest and other income			2,924			2,106
Alexander's				1,599(B	)		8,995
Industrial warehouses				1,265			1,542
Palisades				1,674			638
Student Housing				536			628
Hotel Pennsylvania(C)				294			(905	)

				23,560			36,519
Minority interest expense				247			(6	)
Unallocated general and administrative expenses				(10,022	)		(10,883	)
Investment income and other				8,194			9,791

		Total	$	21,979		$	35,421

(A): EBITDA for the three months ended March 31, 2004, includes the Company's $1,917 share of gains on sale of real estate. EBITDA for the three months ended March 31, 2003, includes the Company's $8,000 share of gains on sale of real estate and early extinguishment of debt.
(B): Includes Alexander's stock appreciation rights compensation expense, of which the Company's share was $9,913, based on a closing price for Alexander's stock of $160.00 on March 31, 2004 and the Company's $1,010 share of Alexander's loss on early extinguishment of debt.
(C): Average occupancy and REVPAR were 64.2% and $55.26 for the three months ended March 31, 2004 compared to 53.4% and $45.38 for the prior year's quarter.

Results of Operations

Revenues

The Company's revenues, which consist of property rentals, expense reimbursements, hotel revenues, trade show revenues, amortization of acquired below market leases net of above market leases pursuant to SFAS No. 141, and fee and other income, were $393,050,000 for the quarter ended March 31, 2004, compared to $364,977,000 in the prior year's quarter, an increase of $28,073,000. Below are the details of the increase by segment:

(Amounts in thousands)			Date of Acquisition	Total			Office			Retail			Merchandise Mart			Other
Rentals:
	Acquisitions:
		2101 L Street	August 2003	$	2,980		$	2,980		$	—		$	—		$	—
		Bergen Mall	December 2003		2,465			—			2,465			—			—
		Forest Plaza Shopping Center	February 2004		492			—			492			—			—
		25 W. 14^th Street	March 2004		67			—			67			—			—
	Increase in amortization of acquired below market leases, net				2,205			1,383			822			—			—
	Operations:
		Hotel activity			1,306	(1)		—			—			—			1,306	(1)
		Trade show activity			1,348	(2)		—			—			1,348	(2)		—
		Leasing activity			7,210			4,849	(3)		1,155	(4)		572			634

	Total increase in property rentals				18,073			9,212			5,001			1,920			1,940

Tenant expense reimbursements:
	Acquisitions				1,691			162			1,529			—			—
	Operations				3,371			4,179	(5)		3			(704	)		(107	)

	Total increase (decrease) in tenant expense reimbursements				5,062			4,341			1,532			(704	)		(107	)

Fee and other income:
	Acquisitions:
		Kaempfer management and leasing fees			3,695			3,695			—			—			—
	Increase (decrease) in:
		Lease cancellation fee income			1,360			2,361			(876	)		(125	)		—
		BMS tenant cleaning fees			(314	)		(314	)		—			—			—
		Management and leasing fees			529			393			117			14			5
		Other			(332	)		(802	)		28			408			34

Total increase (decrease) in fee and other income					4,938			5,333			(731	)		297			39

Total increase in revenues				$	28,073		$	18,886		$	5,802		$	1,513		$	1,872

(1): Average occupancy and REVPAR were 64.2% and $55.26 for the three months ended March 31, 2004 compared to 53.4% and $45.38 for the prior year's quarter.
(2): Primarily due to Spring Bridal Show which was held in the first quarter of 2004 vs. the second quarter 2003.
(3): Reflects increases of $2,686 from New York City Office and $2,163 from CESCR. These increases resulted primarily from higher rents for space relet.
(4): Resulted primarily from (i) an increase in the occupancy rate from 87.5% at March 31, 2003 to 93.5% at March 31, 2004 and (ii) higher rents for space relet.
(5): Reflects higher reimbursements from tenants resulting primarily from increases in real estate taxes, utilities and repairs and maintenance. The increases in New York City and CESCR office were $2,410 and $1,769, respectively.

See Overview—Leasing Activity on page 23 for further details of leasing activity and corresponding changes in occupancy.

Expenses

The Company's expenses were $241,831,000 for the quarter ended March 31, 2004, compared to $224,249,000 in the prior year's quarter, an increase of $17,582,000. Below are the details of the increase by segment:

(Amounts in thousands)			Total		Office			Retail			Merchandise Mart			Other
Operating:
	Acquisitions:
		2101 L Street	$	1,065	$	1,065		$	—		$	—		$	—
		Bergen Mall		1,555		—			1,555			—			—
		Forest Plaza Shopping Center		166		—			166			—			—
	Hotel activity			1,985		—			—			—			1,985
	Trade Show activity			1,329		—			—			1,329			—
	Operations			1,892		5,744	(1)		(2,159	)(2)		(948	)		(745	)

				7,992		6,809			(438	)		381			1,240

Depreciation and amortization:
	Acquisitions			1,837		557			1,280			—			—
	Operations			4,143		2,589	(3)		645	(3)		332			577

				5,980		3,146			1,925			332			577

General and administrative:
	Acquisitions			1,037		1,037			—			—			—
	Operations			2,573		2,357	(4)		581			250			(615	)

				3,610		3,394			581			250			(615	)

Total increase			$	17,582	$	13,349		$	2,068		$	963		$	1,202

(1): Results primarily from an increase in utilities, real estate taxes and repairs and maintenance, of which $2,674 relates to the New York City Office portfolio and $3,070 relates to the CESCR portfolio.
(2): Results primarily from a decrease in allowance for bad debts which was recorded in the three months ended March 31, 2003, in connection with prior year's common area maintenance and tax billings related to former Bradlees' leases. These receivables were subsequently collected.
(3): Primarily due to additions to buildings and improvements during 2003.
(4): Of this increase (i) $941 results from severance primarily in connection with exiting the Washington, D.C. third-party tenant representation business and (ii) $288 results from advertising and promotional expenses at 640 Fifth Avenue which is in the final stages of re-development.

Income Applicable to Alexander's

Equity in net loss applicable to Alexander's (loan interest income, management, leasing, development and commitment fees, and equity in income) was $2,528,000 in the quarter ended March 31, 2004, compared to income of $7,254,000 in the prior year's quarter, a decrease of $9,782,000. This decrease resulted from the Company's $9,913,000 share of Alexander's stock appreciation rights compensation expense and the Company's $1,010,000 share of Alexander's loss on early extinguishment of debt in the three months ended March 31, 2004, partially offset by income from the commencement of the lease with Bloomberg on November 15, 2003 at Alexander's 731 Lexington Avenue property.

Income from Partially-Owned Entities

Below is the detail of income from partially-owned entities by investment as well as the increase (decrease) in income from partially-owned entities for the quarters ended March 31, 2004 and 2003:

			Total			Monmouth Mall			Temperature Controlled Logistics			Newkirk MLP			Starwood Ceruzzi Joint Venture			Partially- Owned Office Buildings			Other
			(Amounts in thousands)
For the three months ended:
March 31, 2004:
	Revenues					$	5,930		$	29,631		$	60,509		$	328		$	29,627

	Expenses:
		Operating, general and administrative					(2,165	)		(1,952	)		(2,392	)		(810	)		(12,073	)
		Depreciation					(1,047	)		(14,121	)		(12,344	)		(176	)		(4,793	)
		Interest expense					(1,506	)		(12,512	)		(20,725	)		—			(8,140	)
	Other, net						(810	)		744			8,007			—			(1,884	)

	Net income (loss)					$	402		$	1,790		$	33,055		$	(658	)	$	2,737

	Company's interest						50	%		60	%		22.3	%		80	%		23	%
	Equity in net income		$	9,423			201		$	1,074		$	7,813	(2)		(527	)		639			223
	Interest and other income			2,062			823			89			1,266			—			(116	)		—
	Fee income			1,628			250			1,378			—			—			—			—

	Income from partially-owned entities		$	13,113		$	1,274		$	2,541	(1)	$	9,079		$	(527	)	$	523		$	223

March 31, 2003:
	Revenues					$	6,021		$	32,915		$	71,413		$	327		$	13,134

	Expenses:
		Operating, general and administrative					(2,937	)		(1,794	)		(2,831	)		(702	)		(5,769	)
		Depreciation					(998	)		(14,244	)		(10,133	)		(316	)		(2,281	)
		Interest expense					(1,497	)		(10,244	)		(27,589	)		—			(2,821	)
	Other, net						(821	)		636			36,520			(1,095	)		127

	Net (loss) income					$	(232	)	$	7,269		$	67,380		$	(1,786	)	$	2,390

	Company's interest						50	%		60	%		22.5	%		80	%		26	%
	Equity in net income		$	18,847		$	(116	)	$	4,361		$	15,181	(2)	$	(1,429	)	$	618		$	232
	Interest and other income			2,760			822			119			1,819			—			—			—
	Fee income			1,627			255			1,372			—			—			—			—

	Income from partially-owned entities		$	23,234		$	961		$	5,852		$	17,000		$	(1,429	)	$	618		$	232

(Decrease) increase in Income of partially-owned entities			$	(10,121	)	$	313		$	(3,311	)(1)	$	(7,921	)(2)	$	902	(3)	$	(95	)	$	(9	)

(1): Due to lower cash rents received in the current quarter from the tenant (AmeriCold Logistics). The tenant has reported that (i) its revenue for the current quarter ended March 31, 2004 from the warehouses it leases from the Landlord, is lower than last year by 0.4%, and (ii) its gross margin before rent at these warehouses for the corresponding period is lower than last year by $2,440 (a 6.1% decrease). This decrease in gross margin is attributable to (i) start up costs for existing customers at new locations and (ii) a change in revenue mix as higher margin storage revenues declined and lower margin handling revenues increased. In addition, the tenant had higher general and administrative expenses and lower other income.
(2): Equity in income for the three months ended March 31, 2004, includes the Company's $1,917 share of gains on sale of real estate. Equity in income for the three months ended March 31, 2003, includes the Company's $8,000 share of gains on sale of real estate and early extinguishment of debt.
(3): Equity in income for the three months ended March 31, 2003, includes the Company's $876 share of a net loss on disposition of leasehold improvements.

Interest and Other Investment Income

Interest and other investment income (interest income on mortgage loans receivable, other interest income and dividend income) was $9,245,000 for the quarter ended March 31, 2004, compared to $9,796,000 in the prior year's quarter, a decrease of $551,000. This decrease resulted primarily from $6,284,000 of interest received in the first quarter of 2003 in connection with the Dearborn Center loan receivable repayment (of which $5,655,000 was contingent interest income), offset by interest income recognized in the first quarter of 2004, on the $225,000,000 GM Building mezzanine loans.

Interest and Debt Expense

Interest and debt expense was $58,705,000 for the three months ended March 31, 2004, compared to $56,900,000 in the prior year's quarter, an increase of $1,805,000. This increase resulted primarily from higher average outstanding debt during the quarter ended March 31, 2004.

Net Gains on Disposition of Wholly-owned and Partially-owned Assets other than Real Estate

Net gains on disposition of "wholly-owned and partially-owned assets other than depreciable real estate" reflects the Company's $776,000 share of gains on disposition of certain partially-owned development assets in the current quarter and a $188,000 gain on sale of Kinzie Park Condominium units in the prior year's quarter.

Discontinued Operations

	For The Three Months Ended March 31,
	2004		2003
	(Amounts in thousands)
Total revenues	$	4,118	$	12,028
Total expenses		3,291		8,573

Net income		827		3,455
Gain on sale of Baltimore		—		2,644

Income from discontinued operations	$	827	$	6,099

Three Months Ended March 31, 2004 and March 31, 2003

Below are the details of the changes by segment in EBITDA.

		Total		Office			Retail			Merchandise Mart			Temperature Controlled Logistics			Other
		(Amounts in thousands)
Three months ended March 31, 2003		$	269,875	$	154,199		$	33,653		$	25,855		$	20,747		$	35,421

2004 Operations:
	Same store operations(1)				3,405			1,404			1,057			(1,975	)(3)
	Acquisitions, dispositions and non-same store income and expenses				594			2,756			(86	)		(36	)

Three months ended March 31, 2004		$	263,552	$	158,198		$	37,813		$	26,826		$	18,736		$	21,979

% increase (decrease) in same store operations					2.3	%(2)		4.4	%		4.1	%		(9.5	)%(3)

(1): Represents operations which were owned for the same period in each year and excludes non-recurring income and expenses.
(2): EBITDA and the same store percentage increase were $81,530 and 1.9% for the New York office portfolio and $76,668 and 2.7% for the CESCR portfolio.
(3): The Company reflects its 60% share of Vornado Crescent Portland Partnership's (the "Landlord") rental income it receives from AmeriCold Logistics, its tenant, which leases the underlying temperature controlled warehouses used in its business. The Company's joint venture does not recognize rental income unless earned and collection is assured or cash is received. The Company did not recognize $6,465 of rent it was due for the three months ended March 31, 2004, which together with previously deferred rent is $55,901. The tenant has advised the Landlord that (i) its revenue for the current quarter ended March 31, 2004 from the warehouses it leases from the Landlord, is lower than last year by 0.4%, and (ii) its gross margin before rent at these warehouses for the corresponding period is lower than last year by $2,440 (a 6.1% decrease). This decrease in gross margin is attributable to (i) start up costs for existing customers at new locations and (ii) a change in revenue mix as higher margin storage revenues declined and lower margin handling revenues increased. In addition, the tenant had higher general and administrative expenses and lower other income.

Liquidity And Capital Resources

Three Months Ended March 31, 2004

Cash flows provided by operating activities of $157,146,000 was primarily comprised of (i) income of $114,194,000, (ii) adjustments for non-cash items of $36,726,000 and (iii) the net change in operating assets and liabilities of $6,226,000. The adjustments for non-cash items are primarily comprised of (i) depreciation and amortization of $58,465,000, (ii) write-off of preferred share and unit issuance costs of $3,895,000, partially offset by, (iii) the effect of straight-lining of rental income of $10,376,000, (iv) equity in net income of partially-owned entities and Alexander's of $10,585,000 and (v) amortization of acquired below market leases net of above market leases of $3,650,000.

Net cash provided by investing activities of $68,614,000 was primarily comprised of (i) distributions from partially-owned entities of $147,394,000, (ii) repayments on notes and mortgages receivable of $38,500,000, partially offset by, (iii) capital expenditures of $29,744,000, (iv) development and redevelopment expenditures of $24,068,000, (v) investments in partially-owned entities of $5,102,000, and (vi) acquisitions of real estate of $54,422,000.

Net cash used in financing activities of $255,284,000 was primarily comprised of (i) distributions to Class A unit holders of $120,142,000 (ii) repayments of borrowings of $160,183,000, (iii) redemption of preferred units of $112,467,000, (iv) distributions to preferred unit holders and minority partners of $32,926,000, partially offset by, (v) proceeds from borrowings of $150,427,000 and (vi) proceeds of $20,007,000 from the exercise by employees of unit options.

Capital expenditures are categorized as follows:

•: Recurring—capital improvements expended to maintain a property's competitive position within the market and tenant improvements and leasing commissions for costs to re-lease expiring leases or renew or extend existing leases.
•: Non-recurring—capital improvements completed in the year of acquisition and the following two years which were planned at the time of acquisition and tenant improvements and leasing commissions for space which was vacant at the time of acquisition of a property.
•: Development and Redevelopment expenditures include all hard and soft costs associated with the development or redevelopment of a property, including tenant improvements, leasing commissions and capitalized interest and operating costs until the property is substantially complete and ready for its intended use.

Below are the details of capital expenditures, leasing commissions and development and redevelopment expenditures and a reconciliation of total expenditures on an accrual basis to the cash expended in the three months ended March 31, 2004. See page 23 for per square foot data.

			Total			New York Office			CESCR			Retail			Merchandise Mart			Other
			(Amounts in thousands)
Capital Expenditures—Accrual basis:
	Expenditures to maintain the assets:
		Recurring	$	13,268		$	1,220		$	3,812		$	79		$	5,804		$	2,353
		Non-recurring		—			—			—			—			—			—

				13,268			1,220			3,812			79			5,804			2,353

	Tenant improvements:
		Recurring		18,579			10,033			6,119			218			2,209			—
		Non-recurring		939			—			939			—			—			—

				19,518			10,033			7,058			218			2,209			—

	Total		$	32,786		$	11,253		$	10,870		$	297		$	8,013		$	2,353

Leasing Commissions:
	Recurring		$	7,026		$	4,716		$	2,040		$	154		$	116		$	—
	Non-recurring			140			—			140			—			—			—

			$	7,166		$	4,716		$	2,180		$	154		$	116		$	—

Square feet leased				1,772			360			765			236			411			—

Total Capital Expenditures and Leasing Commissions—Accrual basis			$	39,952		$	15,969		$	13,050		$	451		$	8,129		$	2,353
Adjustments to reconcile accrual basis to cash basis:
		Expenditures in the current year applicable to prior periods		18,751			7,831			9,119			1,067			734			—
		Expenditures to be made in future periods for the current period		(21,963	)		(13,092	)		(7,873	)		(347	)		(651	)		—

Total Capital Expenditures and Leasing Commissions — Cash basis			$	36,740		$	10,708		$	14,296		$	1,171		$	8,212		$	2,353

Development and Redevelopment:
	Expenditures:
		640 Fifth Avenue	$	4,557		$	4,557		$	—		$	—		$	—		$	—
		4 Union Square South		7,320			—			—			7,320			—			—
		Other		12,191			206			3,917			7,026			—			1,042

			$	24,068		$	4,763		$	3,917		$	14,346		$	—		$	1,042

Three Months Ended March 31, 2003

Cash flow provided by operating activities of $120,255,000 was primarily comprised of (i) income of $129,575,000, (ii) adjustments for non-cash items of $7,386,000, partially offset by (iii) the net change in operating assets and liabilities of $16,706,000. The adjustments for non-cash items were primarily comprised of (i) depreciation and amortization of $52,314,000, partially offset by (ii) the effect of straight-lining of rental income of $10,987,000, (iii) equity in net income of partially-owned entities and Alexander's of $30,488,000, and (iv) amortization of acquired below market leases net of above market leases of $1,445,000.

Net cash used in investing activities of $21,221,000 was primarily comprised of (i) distributions from partially-owned entities of $8,284,000, (ii) repayments on notes receivable of $23,392,000, (iii) proceeds from the sale of real estate of $4,752,000, (iv) decrease in restricted cash of $2,562,000 partially offset by, (v) recurring capital expenditures of $16,872,000, (vi) non-recurring capital expenditures of $732,000, (vii) development and redevelopment expenditures of $12,942,000, (viii) investments in partially-owned entities of $15,592,000, and (ix) acquisitions of real estate of $13,000,000.

Net cash used in financing activities of $130,343,000 was primarily comprised of (i) distributions to Class A unit holders of $88,464,000, (ii) distributions to preferred unit holders and minority partners of $30,227,000, (iii) repayments of borrowings of $59,442,000, partially offset by (iv) proceeds from borrowings of $47,000,000.

			Total			New York Office			CESCR			Retail		Merchandise Mart			Other
			(Amounts in thousands)
Capital Expenditures—Accrual basis:
	Expenditures to maintain the assets:
		Recurring	$	7,964		$	3,765		$	470		$	100	$	2,261		$	1,368
		Non-recurring		218			—			218			—		—			—

				8,182			3,765			688			100		2,261			1,368

	Tenant improvements:
		Recurring		21,985			5,817			3,112			74		12,982			—
		Non-recurring		514			—			514			—		—			—

				22,499			5,817			3,626			74		12,982			—

	Total		$	30,681		$	9,582		$	4,314		$	174	$	15,243		$	1,368

Leasing Commissions:
	Recurring		$	4,784		$	2,716		$	287		$	167	$	1,614		$	—
	Non-recurring			401			—			401			—		—			—

			$	5,185		$	2,716		$	688		$	167	$	1,614		$	—

Square feet leased				1,445			235			563			110		537			—

Total Capital Expenditures and Leasing Commissions—Accrual basis			$	35,866		$	12,298		$	5,002		$	341	$	16,857		$	1,368
Adjustments to reconcile accrual basis to cash basis:
	Expenditures in the current year applicable to prior periods			12,153			2,734			6,702			—		2,717			—
	Expenditures to be made in future periods for the current period			(26,775	)		(8,287	)		(3,767	)		—		(14,721	)		—

Total Capital Expenditures and Leasing Commissions—Cash basis			$	21,244		$	6,745		$	7,937		$	341	$	4,853		$	1,368

Development and Redevelopment:
	Expenditures:
		640 Fifth Avenue	$	4,890		$	4,890		$	—		$	—	$	—		$	—
		Other		8,052			5,227			1,169			1,831		116			(291	)

			$	12,942		$	10,117		$	1,169		$	1,831	$	116		$	(291	)

SUPPLEMENTAL INFORMATION

Three Months Ended March 31, 2004 vs. Three Months Ended December 31, 2003

Below are the details of the changes by segment in EBITDA for the three months ended March 31, 2004 from the three months ended December 31, 2003.

		Total		Office			Retail			Merchandise Mart			Temperature Controlled Logistics			Other
		(Amounts in thousands)
Three months ended December 31, 2003		$	425,192	$	310,418		$	37,530		$	31,173		$	22,093		$	23,978

2004 Operations:
	Same store operations(1)				3,126			528			(2,438	)(4)		(2,021	)
	Acquisitions, dispositions and other non-same store income and expenses				(155,346	)(2)		(245	)		(1,909	)		(1,336	)

Three months ended March 31, 2004		$	263,552	$	158,198		$	37,813		$	26,826		$	18,736		$	21,979

	% increase (decrease) in same store operations				2.0	%(3)		1.6	%		(8.4	%)(4)		(9.7	%)

(1): Represents operations which were owned for the same period in each year and excludes non-recurring income and expenses.
(2): Primarily relates to the sale of Two Park Avenue on October 10, 2003, which resulted in a net gain of $156,433.
(3): Same store percentage increase was 1.1% for the New York office portfolio, and 3.0% for the CESCR portfolio.
(4): Primarily seasonality of operations.

Below is a reconciliation of net income and EBITDA for the three months ended December 31, 2003.

	Total		Office		Retail		Merchandise Mart		Temperature Controlled Logistics		Other
	(Amounts in thousands)
Net income (loss) for the three months ended December 31, 2003	$	272,454	$	234,947	$	15,151	$	17,653	$	7,213	$	(2,510	)
Interest and debt expense		72,841		34,555		15,583		4,246		6,158		12,299
Depreciation and amortization		78,270		40,871		6,796		9,274		8,722		12,607
Income taxes		1,627		45		—		—		—		1,582

EBITDA for the three months ended December 31, 2003	$	425,192	$	310,418	$	37,530	$	31,173	$	22,093	$	23,978

Acquisitions

On February 3, 2004, the Company acquired the Forest Plaza Shopping Center for approximately $32,500,000, of which $14,000,000 was paid in cash, and $18,500,000 was debt assumed. The purchase was funded as part of Section 1031 tax-free "like kind" exchange with the remaining portion of the proceeds from the sale of the Company's Two Park Avenue property. Forest Plaza is a 165,000 square foot shopping center located in Staten Island, New York, anchored by a Waldbaum's supermarket.

Dispositions

On January 9, 2003, the Company sold its Baltimore, Maryland shopping center for $4,752,000, which resulted in a net gain on sale after closing costs of $2,644,000.

Financings

For details of the Company's financing activities see Note 7—Notes and Mortgages Payable.

The Company anticipates that cash from continuing operations will be adequate to fund business operations and the payment of dividends and distributions on an on-going basis for more than the next twelve months; however, capital outlays for significant acquisitions would require funding from borrowings or equity offerings.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

The Company has exposure to fluctuations in market interest rates. Market interest rates are highly sensitive to many factors that are beyond the control of the Company. Various financial instruments exist which would allow management to mitigate the impact of interest rate fluctuations on the Company's cash flows and earnings.

As of March 31, 2004, the Company has an interest rate swap as described in footnote 1 to the table below. In addition, during 2003 the Company purchased two interest rate caps with notional amounts aggregating $295,000,000, and simultaneously sold two interest rate caps with the same aggregate notional amount on substantially the same terms as the caps purchased. As the significant terms of these arrangements are the same, the effects of a revaluation of these instruments are expected to substantially offset one another. Management may engage in additional hedging strategies in the future, depending on management's analysis of the interest rate environment and the costs and risks of such strategies.

The Company's exposure to a change in interest rates on its wholly-owned and partially-owned debt (all of which arises out of non-trading activity) is as follows:

			As at March 31, 2004							As at December 31, 2003
			Balance			Weighted Average Interest Rate		Effect of 1% Increase In Base Rates		Balance		Weighted Average Interest Rate
			(Amounts in thousands, except per unit amounts)
Wholly-owned debt:
	Variable rate		$	1,204,294	(1)	2.10	%	$	12,043	$	1,270,899	2.22	%
	Fixed rate			2,994,409		6.98	%		—		2,913,486	7.19	%

			$	4,198,703		5.58	%		12,043	$	4,184,385	5.68	%

Partially-owned debt:
	Variable rate		$	226,023		3.96	%		2,260	$	153,140	3.64	%
	Fixed rate			879,645		6.75	%		—		777,427	7.07	%

			$	1,105,668		6.18	%		2,260	$	930,567	6.51	%

Total decrease in the Company's annual net income								$	14,303

		Per Class A unit-diluted						$	.10

(1): Includes $532,009 for the Company's senior unsecured notes due 2007, as the Company entered into interest rate swap agreements that effectively converted the interest rate from a fixed rate of 5.625% to a floating rate of LIBOR plus .7725%, based upon the trailing three month LIBOR rate (2.18% if set on March 31, 2004). In accordance with SFAS 133, as amended, the Company is required to fair value the debt at each reporting period. At March 31, 2004, the fair value adjustment was $32,474, and is included in the balance of the senior unsecured notes above.

The fair value of the Company's debt, based on discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt, exceeds the aggregate carrying amount by approximately $113,199,000 at March 31, 2004.

Item 4. Controls and Procedures

Disclosure Controls and Procedures: The management of Vornado (the Company's sole general partner), with the participation of Vornado's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on such evaluation, Vornado's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures are effective.

Internal Control Over Financial Reporting: There have not been any changes in the Company's internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is from time to time involved in legal actions arising in the ordinary course of its business. In the opinion of management, after consultation with legal counsel, the outcome of such matters, including in respect of the matters referred to below, is not expected to have a material adverse effect on the Company's financial position, results of operations or cash flows.

The following supplements and amends the discussion set forth under Item 3 "Legal Proceedings" in the Company's Annual Report on Form 10-K for the year ended December 31, 2003.

Stop & Shop

As previously disclosed, on January 8, 2003, Stop & Shop filed a complaint with the United States District Court for the District of New Jersey ("USDC-NJ") claiming the Company has no right to reallocate and therefore continue to collect the $5,000,000 of annual rent from Stop & Shop pursuant to the Master Agreement and Guaranty, because of the expiration of the East Brunswick, Jersey City, Middletown, Union and Woodbridge leases to which the $5,000,000 of additional rent was previously allocated. Stop & Shop asserted that a prior order of the Bankruptcy Court for the Southern District of New York dated February 6, 2001, as modified on appeal to the District Court for the Southern District of New York on February 13, 2001, terminated the Company's right to reallocate. On March 3, 2003, after the Company moved to dismiss for lack of jurisdiction, Stop & Shop voluntarily withdrew its complaint.

On March 26, 2003, Stop & Shop filed a new complaint in New York Supreme Court, asserting substantially the same claims as in its USDC-NJ complaint. On April 9, 2003, the Company moved the New York Supreme Court action to the United States District Court for the Southern District of New York. On June 30, 2003, the District Court ordered that the case be placed in suspension and ordered the parties to proceed in a related case that the Company commenced in the United States Bankruptcy Court for the Southern District of New York. On July 24, 2003, the Bankruptcy Court referred the related case to mediation. The mediation has not been concluded. If this matter is not resolved through mediation, the hearing will reconvene in the Bankruptcy Court. The Company believes that the additional rent provision of the guaranty expires at the earliest in 2012 and will vigorously oppose Stop & Shop's complaint.

Item 2. Changes in Securities and Use of Proceeds and Issuer Purchases of Equity Securities

During the three months ended March 31, 2004, the Company issued 6,922,017 Class A Units in exchange for certain of the preferred units of the Company. Of these Class A units, 5,679,727 were issued to the holder of the Company's Series E-1 preferred units in a 1 for 1.1364 exchange of the Series E-1 preferred units. All of the Class A units were issued without registration under the Securities Act of 1933 in reliance on Section 4(2) of that Act.

Item 6. Exhibits and Reports on Form 8-K

(a): Exhibits required by Item 601 of Regulation S-K are filed herewith or incorporated herein by reference and are listed in the attached Exhibit Index.
(b): Reports on Form 8-K:

During the three months ended March 31, 2004, the Company did not file any reports on Form 8-K.

SIGNATURES

Pursuant to the requirements 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.

		VORNADO REALTY L.P. (Registrant)
	By:	Vornado Realty Trust, sole general partner
Date: May 7, 2004	By:	/s/ JOSEPH MACNOW Joseph Macnow, Executive Vice President—Finance and Administration and Chief Financial Officer of Vornado Realty Trust, sole general partner of Vornado Realty L.P. (duly authorized officer and principal financial and accounting officer)

EXHIBIT INDEX

Exhibit No.
3.1	—	Amended and Restated Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on April 16, 1993—Incorporated by reference to Exhibit 3(a) to Vornado's Registration Statement on Form S-4 (File No. 33-60286), filed on April 15, 1993	*
3.2	—	Articles of Amendment of Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on May 23, 1996—Incorporated by reference to Exhibit 3.2 to Vornado's Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 001-11954), filed on March 11, 2002	*
3.3	—	Articles of Amendment of Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on April 3, 1997—Incorporated by reference to Exhibit 3.3 to Vornado's Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 001-11954), filed on March 11, 2002	*
3.4	—	Articles of Amendment of Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on October 14, 1997—Incorporated by reference to Exhibit 3.2 to Vornado's Registration Statement on Form S-3 (File No. 333-36080), filed on May 2, 2000	*
3.5	—	Articles of Amendment of Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on April 22, 1998—Incorporated by reference to Exhibit 3.5 to Vornado's Quarterly Report on Form 10-Q for the period ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003	*
3.6	—	Articles of Amendment of Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on November 24, 1999—Incorporated by reference to Exhibit 3.4 to Vornado's Registration Statement on Form S-3 (File No. 333-36080), filed on May 2, 2000	*
3.7	—	Articles of Amendment of Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on April 20, 2000—Incorporated by reference to Exhibit 3.5 to Vornado's Registration Statement on Form S-3 (File No. 333-36080), filed on May 2, 2000	*
3.8	—	Articles of Amendment of Declaration of Trust of Vornado, as filed with the State Department of Assessments and Taxation of Maryland on September 14, 2000—Incorporated by reference to Exhibit 4.6 to Vornado's Registration Statement on Form S-8 (File No. 333-68462), filed on August 27, 2001	*
3.9	—	Articles of Amendment of Declaration of Trust of Vornado dated May 31, 2002, as filed with the Department of Assessments and Taxation of the State of Maryland on June 13, 2002—incorporated by reference to Exhibit 3.9 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File No. 001-11954) filed on August 7, 2002	*

* Incorporated by reference.

3.10	—	Articles of Amendment of Declaration of Trust of Vornado dated June 6, 2002, as filed with the Department of Assessments and Taxation of the State of Maryland on June 13, 2002—incorporated by reference to Exhibit 3.10 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File No. 001-11954), filed on August 7, 2002	*
3.11	—	Articles Supplementary Classifying Vornado's $3.25 Series A Preferred Shares of Beneficial Interest, liquidation preference $50.00 per share—Incorporated by reference to Exhibit 3.11 to Vornado's Quarterly Report on Form 10-Q for the period ended March 31, 2003 (File No.001-11954), filed on May 8, 2003	*
3.12	—	Articles Supplementary Classifying Vornado's $3.25 Series A Convertible Preferred Shares of Beneficial Interest, as filed with the State Department of Assessments and Taxation of Maryland on December 15, 1997—Incorporated by reference to Exhibit 3.10 to Vornado's Annual Report on Form 10-K for the year ended December 31, 2001 (File No. 001-11954), filed on March 31, 2002	*
3.13	—	Articles Supplementary Classifying Vornado's Series D-1 8.5% Cumulative Redeemable Preferred Shares of Beneficial Interest, no par value (the "Series D-1 Preferred Shares")—Incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K, dated November 12, 1998 (File No. 001-11954), filed on November 30, 1998	*
3.14	—	Articles Supplementary Classifying Additional Series D-1 8.5% Preferred Shares of Beneficial Interest, liquidation preference $25.00 per share, no par value—Incorporated by reference to Exhibit 3.2 to Vornado's Current Report on Form 8-K/A, dated November 12, 1998 (File No. 001-11954), filed on February 9, 1999	*
3.15	—	Articles Supplementary Classifying 8.5% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation preference $25.00 per share, no par value—Incorporated by reference to Exhibit 3.3 of Vornado's Current Report on Form 8-K, dated March 3, 1999 (File No. 001-11954), filed on March 17, 1999	*
3.16	—	Articles Supplementary Classifying Vornado's Series C 8.5% Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation preference $25.00 per share, no par value—Incorporated by reference to Exhibit 3.7 to Vornado's Registration Statement on Form 8-A (File No. 001-11954), filed on May 19, 1999	*
3.17	—	Articles Supplementary Classifying Vornado Realty Trust's Series D-2 8.375% Cumulative Redeemable Preferred Shares, dated as of May 27, 1999, as filed with the State Department of Assessments and Taxation of Maryland on May 27, 1999—Incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K, dated May 27, 1999 (File No. 001-11954), filed on July 7, 1999	*
3.18	—	Articles Supplementary Classifying Vornado's Series D-3 8.25% Cumulative Redeemable Preferred Shares, dated September 3, 1999, as filed with the State Department of Assessments and Taxation of Maryland on September 3, 1999—Incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K, dated September 3, 1999 (File No. 001-11954), filed on October 25, 1999	*
3.19	—	Articles Supplementary Classifying Vornado's Series D-4 8.25% Cumulative Redeemable Preferred Shares, dated September 3, 1999, as filed with the State Department of Assessments and Taxation of Maryland on September 3, 1999—Incorporated by reference to Exhibit 3.2 to Vornado's Current Report on Form 8-K, dated September 3, 1999 (File No. 001-11954), filed on October 25, 1999	*

* Incorporated by reference.

3.20	—	Articles Supplementary Classifying Vornado's Series D-5 8.25% Cumulative Redeemable Preferred Shares—Incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K, dated November 24, 1999 (File No. 001-11954), filed on December 23, 1999	*
3.21	—	Articles Supplementary Classifying Vornado's Series D-6 8.25% Cumulative Redeemable Preferred Shares, dated May 1, 2000, as filed with the State Department of Assessments and Taxation of Maryland on May 1, 2000—Incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K, dated May 1, 2000 (File No. 001-11954), filed May 19, 2000	*
3.22	—	Articles Supplementary Classifying Vornado's Series D-7 8.25% Cumulative Redeemable Preferred Shares, dated May 25, 2000, as filed with the State Department of Assessments and Taxation of Maryland on June 1, 2000—Incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K, dated May 25, 2000 (File No. 001-11954), filed on June 16, 2000	*
3.23	—	Articles Supplementary Classifying Vornado's Series D-8 8.25% Cumulative Redeemable Preferred Shares—Incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K, dated December 8, 2000 (File No. 001-11954), filed on December 28, 2000	*
3.24	—	Articles Supplementary Classifying Vornado's Series D-9 8.75% Preferred Shares, dated September 21, 2001, as filed with the State Department of Assessments and Taxation of Maryland on September 25, 2001—Incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K (File No. 001-11954), filed on October 12, 2001	*
3.25	—	Articles Supplementary Classifying Vornado's Series D-10 7.00% Cumulative Redeemable Preferred Shares, dated November 17, 2003 (incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K (File No. 001-11954), filed on November 18, 2003)	*
3.26	—	Amended and Restated Bylaws of Vornado, as amended on March 2, 2000—Incorporated by reference to Exhibit 3.12 to Vornado's Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 001-11954), filed on March 9, 2000	*
3.27	—	Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of October 20, 1997 (the "Partnership Agreement")—Incorporated by reference to Exhibit 3.26 to Vornado's Quarterly Report on Form 10-Q for the period ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003	*
3.28	—	Amendment to the Partnership Agreement, dated as of December 16, 1997—Incorporated by reference to Exhibit 3.27 to Vornado's Quarterly Report on Form 10-Q for the period ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003	*
3.29	—	Second Amendment to the Partnership Agreement, dated as of April 1, 1998—Incorporated by reference to Exhibit 3.5 to Vornado's Registration Statement on Form S-3 (File No. 333-50095), filed on April 14, 1998	*
3.30	—	Third Amendment to the Partnership Agreement, dated as of November 12, 1998—Incorporated by reference to Exhibit 3.2 of Vornado's Current Report on Form 8-K, dated November 12, 1998 (File No. 001-11954), filed on November 30, 1998	*
3.31	—	Fourth Amendment to the Partnership Agreement, dated as of November 30, 1998—Incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K, dated December 1, 1998 (File No. 001-11954), filed on February 9, 1999	*

* Incorporated by reference.

3.32	—	Fifth Amendment to the Partnership Agreement, dated as of March 3, 1999—Incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K, dated March 3, 1999 (File No. 001-11954), filed on March 17, 1999	*
3.33	—	Sixth Amendment to the Partnership Agreement, dated as of March 17, 1999—Incorporated by reference to Exhibit 3.2 to Vornado's Current Report on Form 8-K, dated May 27, 1999 (File No. 001-11954), filed on July 7, 1999	*
3.34	—	Seventh Amendment to the Partnership Agreement, dated as of May 20, 1999—Incorporated by reference to Exhibit 3.3 to Vornado's Current Report on Form 8-K, dated May 27, 1999 (File No. 001-11954), filed on July 7, 1999	*
3.35	—	Eighth Amendment to the Partnership Agreement, dated as of May 27, 1999—Incorporated by reference to Exhibit 3.4 to Vornado's Current Report on Form 8-K, dated May 27, 1999 (File No. 001-11954), filed on July 7, 1999	*
3.36	—	Ninth Amendment to the Partnership Agreement, dated as of September 3, 1999—Incorporated by reference to Exhibit 3.3 to Vornado's Current Report on Form 8-K (File No. 001-11954), filed on October 25, 1999	*
3.37	—	Tenth Amendment to the Partnership Agreement, dated as of September 3, 1999—Incorporated by reference to Exhibit 3.4 to Vornado's Current Report on Form 8-K, dated September 3, 1999 (File No. 001-11954), filed on October 25, 1999	*
3.38	—	Eleventh Amendment to the Partnership Agreement, dated as of November 24, 1999—Incorporated by reference to Exhibit 3.2 to Vornado's Current Report on Form 8-K, dated November 24, 1999 (File No. 001-11954), filed on December 23, 1999	*
3.39	—	Twelfth Amendment to the Partnership Agreement, dated as of May 1, 2000—Incorporated by reference to Exhibit 3.2 to Vornado's Current Report on Form 8-K, dated May 1, 2000 (File No. 001-11954), filed on May 19, 2000	*
3.40	—	Thirteenth Amendment to the Partnership Agreement, dated as of May 25, 2000—Incorporated by reference to Exhibit 3.2 to Vornado's Current Report on Form 8-K, dated May 25, 2000 (File No. 001-11954), filed on June 16, 2000	*
3.41	—	Fourteenth Amendment to the Partnership Agreement, dated as of December 8, 2000—Incorporated by reference to Exhibit 3.2 to Vornado's Current Report on Form 8-K, dated December 8, 2000 (File No. 001-11954), filed on December 28, 2000	*
3.42	—	Fifteenth Amendment to the Partnership Agreement, dated as of December 15, 2000—Incorporated by reference to Exhibit 4.35 of Vornado Realty Trust's Registration Statement on Form S-8 (File No. 333-68462), filed on August 27, 2001	*
3.43	—	Sixteenth Amendment to the Partnership Agreement, dated as of July 25, 2001—Incorporated by reference to Exhibit 3.3 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954), filed on October 12, 2001	*
3.44	—	Seventeenth Amendment to the Partnership Agreement, dated as of September 21, 2001—Incorporated by reference to Exhibit 3.4 to Vornado Realty Trust's Current Report on Form 8-K (File No. 001-11954), filed on October 12, 2001	*

* Incorporated by reference.

3.45	—	Eighteenth Amendment to the Partnership Agreement, dated as of January 1, 2002—Incorporated by reference to Exhibit 3.1 to Vornado's Current Report on Form 8-K/A (File No. 001-11954), filed on March 18, 2002	*
3.46	—	Nineteenth Amendment to the Partnership Agreement, dated as of July 1, 2002—Incorporated by reference to Exhibit 3.47 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File No. 001-11954), filed on August 7, 2002	*
3.47	—	Twentieth Amendment to the Partnership Agreement, dated April 9, 2003—Incorporated by reference to Exhibit 3.27 to Vornado's Quarterly Report on Form 10-Q for the period ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003	*
3.48	—	Twenty-First Amendment to the Partnership Agreement, dated as of July 31, 2003—Incorporated by reference to Exhibit 10.5 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003 (File No. 001-11954), filed on November 7, 2003	*
3.49	—	Twenty-Second Amendment to the Partnership Agreement, dated as of November 17, 2003—Incorporated by reference to Exhibit 3.49 to Vornado's Annual Report on Form 10-K for the year ended December 31, 2003, (File No. 001-11954), filed on March 3, 2004	*
4.1	—	Instruments defining the rights of security holders (see Exhibits 3.1 through 3.24 to this Quarterly Report on Form 10-Q)	*
4.2	—	Specimen certificate representing Vornado's Common Shares of Beneficial Interest, par value $0.04 per share—Incorporated by reference to Exhibit 4.1 of Amendment No. 1 to Vornado's Registration Statement on Form S-3 (File No. 33-62395), filed on October 26, 1995	*
4.3	—	Specimen certificate representing Vornado's $3.25 Series A Preferred Shares of Beneficial Interest, liquidation preference $50.00 per share, no par value—Incorporated by reference to Exhibit 4.3 to Vornado's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003	*
4.4	—	Specimen certificate evidencing Vornado's Series B 8.5% Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation preference $25.00 per share, no par value—Incorporated by reference to Exhibit 4.2 to Vornado's Registration Statement on Form 8-A (File No. 001-11954), filed on March 15, 1999	*
4.5	—	Specimen certificate evidencing Vornado's 8.5% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation preferences $25.00 per share, no par value—Incorporated by reference to Exhibit 4.2 to Vornado's Registration Statement on Form 8-A (File No. 001-11954), filed May 19, 1999	*
4.6	—	Indenture and Servicing Agreement, dated as of March 1, 2000, among Vornado, LaSalle Bank National Association, ABN Amro Bank N.V. and Midland Loan Services, Inc.—Incorporated by reference to Exhibit 10.48 to Vornado's Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 001-11954), filed on March 9, 2000	*
4.7	—	Indenture, dated as of June 24, 2002, between Vornado Realty L.P. and The Bank of New York, as Trustee—Incorporated by reference to Exhibit 4.1 to Vornado Realty L.P.'s Current Report on Form 8-K dated June 19, 2002 (File No. 000-22685), filed on June 24, 2002	*

* Incorporated by reference.

4.8	—	Officer's Certificate pursuant to Sections 102 and 301 of the Indenture, dated June 24, 2002—Incorporated by reference to Exhibit 4.2 to Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File No. 001-11954), filed on August 7, 2002	*
10.1	—	Vornado Realty Trust's 1993 Omnibus Share Plan, as amended—Incorporated by reference to Exhibit 4.1 to Vornado Realty Trust's registration statement on Form S-8 (File No. 331-09159), filed on July 30, 1996	*
10.2	—	Second Amendment, dated as of June 12, 1997, to Vornado's 1993 Omnibus Share Plan, as amended—Incorporated by reference to Vornado's Registration Statement on Form S-8 (File No. 333-29011), filed on June 12, 1997	*
10.3	—	Master Agreement and Guaranty, between Vornado, Inc. and Bradlees New Jersey, Inc. dated as of May 1, 1992—Incorporated by reference to Vornado's Quarterly Report on Form 10-Q for quarter ended March 31, 1992 (File No. 001-11954), filed on May 8, 1992	*
10.4	—	Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing dated as of November 24, 1993 made by each of the entities listed therein, as mortgagors to Vornado Finance Corp., as mortgagee—Incorporated by reference to Vornado's Current Report on Form 8-K dated November 24, 1993 (File No. 001-11954), filed on December 1, 1993	*
10.5**	—	Employment Agreement between Vornado Realty Trust and Joseph Macnow dated January 1, 1998—Incorporated by reference to Exhibit 10.7 to Vornado's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 (File No. 001-11954), filed on November 12, 1998	*
10.6**	—	Employment Agreement between Vornado Realty Trust and Michael D. Fascitelli, dated December 2, 1996—Incorporated by reference to Exhibit 10 (c)3 to Vornado's Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 001-11954), filed on March 13, 1997	*
10.7	—	Registration Rights Agreement between Vornado, Inc. and Steven Roth, dated December 29, 1992—Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed on February 16, 1993	*
10.8	—	Stock Pledge Agreement between Vornado, Inc. and Steven Roth dated December 29, 1992—Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed on February 16, 1993	*
10.9	—	Management Agreement between Interstate Properties and Vornado, Inc. dated July 13, 1992—Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed on February 16, 1993	*
10.10	—	Real Estate Retention Agreement between Vornado, Inc., Keen Realty Consultants, Inc. and Alexander's, Inc., dated as of July 20, 1992 —Incorporated by reference to Vornado's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 001-11954), filed on February 16, 1993	*
10.11	—	Amendment to Real Estate Retention Agreement dated February 6, 1995—Incorporated by reference to Exhibit 10(f)2 to Vornado's Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 001-11954), filed on March 23, 1995	*

* Incorporated by reference.