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vrt1q2011.htm - Generated by SEC Publisher for SEC Filing

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended:

March 31, 2011

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

For the transition period from:

Commission File Number:

001-11954

VORNADO REALTY TRUST

(Exact name of registrant as specified in its charter)

Maryland		22-1657560
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

888 Seventh Avenue, New York, New York		10019
(Address of principal executive offices)		(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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

x Large Accelerated Filer		o Accelerated Filer
o Non-Accelerated Filer (Do not check if smaller reporting company)		o Smaller Reporting Company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of March 31, 2011, 184,239,623 of the registrant’s common shares of beneficial interest are outstanding.


PART I.		Financial Information:	Page Number

	Item 1.	Financial Statements:

		Consolidated Balance Sheets (Unaudited) as of
		March 31, 2011 and December 31, 2010	3

		Consolidated Statements of Income (Unaudited) for the
		Three Months Ended March 31, 2011 and 2010	4

		Consolidated Statements of Changes in Equity (Unaudited) for the
		Three Months Ended March 31, 2011 and 2010	5

		Consolidated Statements of Cash Flows (Unaudited) for the
		Three Months Ended March 31, 2011 and 2010	6

		Notes to the Consolidated Financial Statements (Unaudited)	8

		Report of the Independent Registered Public Accounting Firm	32

	Item 2.	Management's Discussion and Analysis of Financial
		Condition and Results of Operations	33

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	55

	Item 4.	Controls and Procedures	56


PART II.		Other Information:

	Item 1.	Legal Proceedings	57

	Item 1A.	Risk Factors	58

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58

	Item 3.	Defaults Upon Senior Securities	58

	Item 5.	Other Information	58

	Item 6.	Exhibits	58

Signatures			59

Exhibit Index			60

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VORNADO REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

(Amounts in thousands, except share and per share amounts)			March 31,		December 31,
ASSETS			2011		2010
Real estate, at cost:
	Land		$	4,594,154	$	4,598,303
	Buildings and improvements			12,723,892		12,733,487
	Development costs and construction in progress			220,356		218,156
	Leasehold improvements and equipment			125,859		124,976
		Total		17,664,261		17,674,922
	Less accumulated depreciation and amortization			(2,841,824)		(2,763,997)
Real estate, net				14,822,437		14,910,925
Cash and cash equivalents				618,361		690,789
Restricted cash				234,273		200,822
Marketable securities				821,920		766,116
Accounts receivable, net of allowance for doubtful accounts of $67,589 and $62,979				167,621		157,146
Investments in partially owned entities				1,116,294		927,672
Investment in Toys "R" Us				556,189		447,334
Real Estate Fund investments				230,657		144,423
Mezzanine loans receivable, net				140,567		202,412
Receivable arising from the straight-lining of rents, net of allowance of $7,972 and $7,323				732,384		720,806
Deferred leasing and financing costs, net of accumulated amortization of $233,987 and $223,131				359,677		368,314
Identified intangible assets, net of accumulated amortization of $350,104 and $338,508				333,270		348,745
Assets related to discontinued operations				-		234,464
Due from officers				13,181		13,187
Other assets				345,569		384,316
			$	20,492,400	$	20,517,471

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Notes and mortgages payable			$	8,594,920	$	8,259,298
Senior unsecured notes				982,588		1,082,928
Exchangeable senior debentures				492,690		491,000
Convertible senior debentures				187,198		186,413
Revolving credit facility debt				374,000		874,000
Accounts payable and accrued expenses				469,443		438,479
Deferred credit				578,629		583,369
Deferred compensation plan				97,951		91,549
Deferred tax liabilities				13,279		13,278
Liabilities related to discontinued operations				-		255,922
Other liabilities				90,338		82,856
	Total liabilities			11,881,036		12,359,092
Commitments and contingencies
Redeemable noncontrolling interests:
	Class A units - 12,634,510 and 12,804,202 units outstanding			1,105,520		1,066,974
	Series D cumulative redeemable preferred units - 10,400,001 units outstanding			261,000		261,000
		Total redeemable noncontrolling interests		1,366,520		1,327,974
Vornado shareholders' equity:
	Preferred shares of beneficial interest: no par value per share; authorized 110,000,000
		shares; issued and outstanding 32,339,009 and 32,340,009 shares		782,933		783,088
	Common shares of beneficial interest: $.04 par value per share; authorized
		250,000,000 shares; issued and outstanding 184,239,623 and 183,661,875 shares		7,340		7,317
	Additional capital			6,935,735		6,932,728
	Earnings less than distributions			(1,208,993)		(1,480,876)
	Accumulated other comprehensive income			130,614		73,453
		Total Vornado shareholders' equity		6,647,629		6,315,710
Noncontrolling interests in consolidated subsidiaries				597,215		514,695
	Total equity			7,244,844		6,830,405
			$	20,492,400	$	20,517,471

See notes to the consolidated financial statements (unaudited).

VORNADO REALTY TRUST CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)


		For the Three Months Ended March 31,
(Amounts in thousands, except per share amounts)		2011		2010

REVENUES:
	Property rentals	$	571,160	$	552,457
	Tenant expense reimbursements		90,959		91,930
	Cleveland Medical Mart development project		40,699		-
	Fee and other income		34,293		40,927
Total revenues			737,111		685,314
EXPENSES:
	Operating		290,773		274,693
	Depreciation and amortization		132,227		133,793
	General and administrative		59,003		48,630
	Cleveland Medical Mart development project		38,278		-
	Acquisition and other costs		18,270		-
Total expenses			538,551		457,116
Operating income			198,560		228,198
Income applicable to Toys "R" Us			112,944		125,870
Income from partially owned entities			16,284		11,344
Income from Real Estate Fund			1,080		-
Interest and other investment income, net			117,108		14,704
Interest and debt expense (including amortization of deferred
	financing costs of $4,633 and $4,426 respectively)		(134,765)		(135,727)
Net gain on disposition of wholly owned and partially owned assets			6,677		3,305
Income before income taxes			317,888		247,694
Income tax expense			(6,382)		(5,580)
Income from continuing operations			311,506		242,114
Income (loss) from discontinued operations			134,315		(9,570)
Net income			445,821		232,544
Net (income) attributable to noncontrolling interests in consolidated subsidiaries			(1,350)		(213)
Net (income) attributable to noncontrolling interests in the Operating Partnership,
	including unit distributions		(31,808)		(17,779)
Net income attributable to Vornado			412,663		214,552
Preferred share dividends			(13,448)		(14,267)
NET INCOME attributable to common shareholders		$	399,215	$	200,285


INCOME PER COMMON SHARE - BASIC:
	Income from continuing operations, net	$	1.49	$	1.15
	Income (loss) from discontinued operations, net		0.68		(0.05)
	Net income per common share	$	2.17	$	1.10
	Weighted average shares		183,988		181,542

INCOME PER COMMON SHARE - DILUTED:
	Income from continuing operations, net	$	1.46	$	1.14
	Income (loss) from discontinued operations, net		0.66		(0.05)
	Net income per common share	$	2.12	$	1.09
	Weighted average shares		191,529		183,445

DIVIDENDS PER COMMON SHARE		$	0.69	$	0.65

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
															Accumulated
(Amounts in thousands)													Earnings		Other		Non-
			Preferred Shares				Common Shares				Additional		Less Than		Comprehensive		controlling		Total
			Shares		Amount		Shares		Amount		Capital		Distributions		Income (Loss)		Interests		Equity
Balance, December 31, 2009				33,952	$	823,686		181,214	$	7,218	$	6,961,007	$	(1,577,591)	$	28,449	$	406,637	$	6,649,406
Net income				-		-		-		-		-		214,552		-		213		214,765
Dividends paid on common
	shares			-		-		-		-		-		(117,958)		-		-		(117,958)
Dividends paid on preferred
	shares			-		-		-		-		-		(14,267)		-		-		(14,267)
Common shares issued:
	Upon redemption of Class A
		units, at redemption value		-		-		268		11		18,117		-		-		-		18,128
	Under employees' share
		option plan		-		-		405		16		541		(25,428)		-		-		(24,871)
	Under dividend reinvestment
		plan		-		-		6		-		390		-		-		-		390
Conversion of Series A
	preferred shares to common
	shares			(2)		(137)		4		-		137		-		-		-		-
Deferred compensation shares
	and options			-		-		17		2		1,644		-		-		-		1,646
Change in unrealized net gain
	on securities available-for-sale			-		-		-		-		-		-		17,588		-		17,588
Our share of partially owned
	entities' OCI adjustments			-		-		-		-		-		-		(15,688)		-		(15,688)
Adjustments to carry redeemable
	Class A units at redemption value			-		-		-		-		(104,247)		-		-		-		(104,247)
Other				-		-		-		-		(60)		2		(396)		(59)		(513)
Balance, March 31, 2010				33,950	$	823,549		181,914	$	7,247	$	6,877,529	$	(1,520,690)	$	29,953	$	406,791	$	6,624,379

															Accumulated
(Amounts in thousands)													Earnings		Other		Non-
			Preferred Shares				Common Shares				Additional		Less Than		Comprehensive		controlling		Total
			Shares		Amount		Shares		Amount		Capital		Distributions		Income (Loss)		Interests		Equity
Balance, December 31, 2010				32,340	$	783,088		183,662	$	7,317	$	6,932,728	$	(1,480,876)	$	73,453	$	514,695	$	6,830,405
Net income				-		-		-		-		-		412,663		-		1,350		414,013
Dividends paid on common
	shares			-		-		-		-		-		(126,936)		-		-		(126,936)
Dividends paid on preferred
	shares			-		-		-		-		-		(13,559)		-		-		(13,559)
Common shares issued:
	Upon redemption of Class A
		units, at redemption value		-		-		320		13		27,526		-		-		-		27,539
	Under employees' share
		option plan		-		-		240		10		15,027		(398)		-		-		14,639
	Under dividend reinvestment
		plan		-		-		5		-		434		-		-		-		434
Limited partners' contribution:
	Real Estate Fund			-		-		-		-		-		-		-		92,068		92,068
	Other			-		-		-		-		-		-		-		170		170
Conversion of Series A
	preferred shares to common
	shares			(1)		(50)		2		-		50		-		-		-		-
Deferred compensation shares
	and options			-		-		11		-		2,370		-		-		-		2,370
Change in unrealized net gain
	or loss on securities
	available-for-sale			-		-		-		-		-		-		68,039		-		68,039
Our share of partially owned
	entities' OCI adjustments			-		-		-		-		-		-		(3,791)		-		(3,791)
Adjustments to carry redeemable
	Class A units at redemption value			-		-		-		-		(42,227)		-		-		-		(42,227)
Distributions to limited partners				-		-		-		-		-		-		-		(11,027)		(11,027)
Other				-		(105)		-		-		(173)		113		(7,087)		(41)		(7,293)
Balance, March 31, 2011				32,339	$	782,933		184,240	$	7,340	$	6,935,735	$	(1,208,993)	$	130,614	$	597,215	$	7,244,844

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

			For the Three Months Ended
			March 31,
			2011		2010
(Amounts in thousands)
Cash Flows from Operating Activities:
Net income			$	445,821	$	232,544
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization (including amortization of deferred financing costs)			136,860		140,250
	Equity in net income of partially owned entities, including Toys “R” Us			(129,228)		(137,214)
	Net gain on early extinguishment of debt			(83,907)		-
	Mezzanine loans loss reversal and net gain on disposition			(82,744)		-
	Net gain on sales of real estate			(51,165)		-
	Distributions of income from partially owned entities			25,921		7,123
	Income from the mark-to-market of J.C. Penney derivative position			(17,163)		-
	Amortization of below-market leases, net			(16,892)		(15,907)
	Straight-lining of rental income			(13,942)		(20,922)
	Other non-cash adjustments			8,211		2,252
	Net gain on disposition of wholly owned and partially owned assets			(6,677)		(3,305)
	Litigation loss accrual			-		10,056
	Changes in operating assets and liabilities:
		Real Estate Fund investments		(85,536)		-
		Prepaid assets		34,761		44,855
		Other assets		2,947		(7,464)
		Accounts payable and accrued expenses		30,906		26,137
		Accounts receivable, net		(10,475)		(2,480)
		Other liabilities		8,404		12,123
Net cash provided by operating activities				196,102		288,048
Cash Flows from Investing Activities:
	Investments in partially owned entities			(316,129)		(36,741)
	Distributions of capital from partially owned entities			192,523		7,617
	Proceeds from sales of real estate and related investments			127,199		38,879
	Proceeds from sales and repayments of mezzanine loans			73,608		101,839
	Restricted cash			12,174		(13,899)
	Additions to real estate			(30,281)		(30,247)
	Proceeds from sales of, and return of investment in, marketable securities			15,162		285
	Development costs and construction in progress			(10,994)		(37,598)
	Investments in mezzanine loans receivable and other			(2,841)		(28,873)
	Proceeds from maturing short-term investments			-		25,000
	Purchases of marketable securities			-		(13,917)
	Acquisitions of real estate and other			-		(5,003)
Net cash provided by investing activities				60,421		7,342

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(UNAUDITED)

				For the Three Months Ended
				March 31,
				2011		2010
(Amounts in thousands)
Cash Flows from Financing Activities:
	Repayments of borrowings			$	(1,197,312)	$	(525,246)
	Proceeds from borrowings				937,518		660,335
	Dividends paid on common shares				(126,936)		(117,958)
	Contributions from noncontrolling interests				92,238		-
	Distributions to noncontrolling interests				(23,639)		(13,082)
	Proceeds received from exercise of employee share options				15,470		963
	Dividends paid on preferred shares				(13,559)		(14,267)
	Debt issuance and other costs				(12,161)		(3,351)
	Repurchase of shares related to stock compensation agreements and related
		tax withholdings			(570)		(25,323)
	Purchases of outstanding preferred units and shares				-		(4,000)
Net cash used in financing activities					(328,951)		(41,929)
Net (decrease) increase in cash and cash equivalents					(72,428)		253,461
Cash and cash equivalents at beginning of period					690,789		535,479
Cash and cash equivalents at end of period				$	618,361	$	788,940


Supplemental Disclosure of Cash Flow Information:
	Cash payments for interest (including capitalized interest of $0 and $614)			$	108,458	$	121,573
	Cash payments for income taxes			$	2,509	$	1,701


Non-Cash Investing and Financing Activities:
	Net unrealized gain on securities available for sale			$	68,039	$	17,588
	Contribution of mezzanine loan receivable to a joint venture				73,750		-
	Exchange of real estate				(45,625)		-
	Adjustments to carry redeemable Class A units at redemption value				(42,227)		(104,247)
	Common shares issued upon redemption of Class A units, at redemption value				27,539		18,128
	Decrease in assets and liabilities resulting from deconsolidation
		of discontinued operations:
			Assets related to discontinued operations		(145,333)		-
			Liabilities related to discontinued operations		(232,502)		-



See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Organization

Vornado Realty Trust (“Vornado”) is a fully‑integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”). Accordingly, Vornado’s cash flow and ability to pay dividend to its shareholders is dependent upon the cash flow of the Operating Partnership and the ability of its direct and indirect subsidiaries to first satisfy their obligations to creditors. Vornado is the sole general partner of, and owned approximately 93.3% of the common limited partnership interest in the Operating Partnership at March 31, 2011. All references to “we,” “us,” “our,” the “Company” and “Vornado” refer to Vornado Realty Trust and its consolidated subsidiaries, including the Operating Partnership.

2. Basis of Presentation

The accompanying consolidated financial statements are unaudited and include the accounts of Vornado, and the Operating Partnership and its consolidated partially owned entities. All intercompany amounts have been eliminated. In our opinion, 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 (“GAAP”) have been condensed or omitted. We have 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.

These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2010, as filed with the SEC. The results of operations for the three months ended March 31, 2011 are not necessarily indicative of the operating results for the full year.

3. Acquisitions

Vornado Capital Partners, L.P. and Vornado Capital Partners Parallel, L.P. (the “Fund”)

We are the general partner and investment manager of the $800,000,000 real estate investment Fund, to which we have committed $200,000,000. The Fund has a term of eight years and is our exclusive investment vehicle during its three-year investment period for all investments that fit within the Fund’s investment parameters, as defined. The Fund is accounted for under the AICPA Investment Company Guide and its investments are reported on its balance sheet at fair value, with changes in value each period recognized in earnings. We consolidate the accounts of the Fund into our consolidated financial statements.

As of March 31, 2011, the Fund received $232,301,000 of capital from partners, including $58,076,000 from us and has five investments aggregating approximately $229,959,000. In the first quarter of 2011, we incurred $3,048,000 of placement fees in connection with the February 2011 closing of the Fund, which are included in “general and administrative” expenses on our consolidated statement of income.

One Park Avenue

On March 1, 2011, we as a co-investor, together with the Fund, acquired a 95% interest in One Park Avenue, a 932,000 square foot office building located between 32^nd and 33^rd Streets in New York, for $374,000,000. The purchase price consisted of $137,000,000 in cash and 95% of a new $250,000,000 5-year mortgage that bears interest at 5.0%. The Fund accounts for its 64.7% interest in the property at fair value in accordance with the AICPA Investment Company Guide. We account for our directly owned 30.3% equity interest under the equity method of accounting in our New York Office Properties segment.

VORNADO REALTY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

4. Marketable Securities and Derivative Instruments

Marketable Securities

Our portfolio of marketable securities is comprised of debt and equity securities that are classified as available for sale. Available for sale securities are presented on our consolidated balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the mark-to-market of these securities are recognized as an increase or decrease in “accumulated other comprehensive income” (a component of shareholders’ equity on our consolidated balance sheet) and not recognized in income. Gains and losses are recognized in earnings only upon the sale of the securities and are recorded based on the weighted average cost of such securities.

As of March 31, 2011 and December 31, 2010, the fair value of marketable securities on our consolidated balance sheets, including the owned J.C. Penney common shares, as described below, was $821,920,000 and $766,116,000, respectively, and their average cost was $708,792,000 and $721,027,000, respectively. Aggregate unrealized gains were $113,128,000 and $45,089,000 as of March 31, 2011 and December 31, 2010, respectively. In the first quarter of 2011, we sold certain marketable securities for aggregate proceeds of $15,162,000, resulting in a net gain of $2,091,000 which is included as a component of "net gain on disposition of wholly owned and partially owned assets" on our consolidated statement of income.

Investment in J.C. Penney Company, Inc. (“J.C. Penney”) (NYSE: JCP)

We own an economic interest in 23,400,000 J.C. Penney common shares, or 9.9% of J.C. Penney’s outstanding common shares. Below are the details of our investment.

We own 18,584,010 common shares at an average cost of $25.70 per share, or $477,678,000 in the aggregate. These shares, which have an aggregate fair value of $667,352,000 at March 31, 2011, are included in marketable equity securities on our consolidated balance sheet and are classified as “available for sale.” During the three months ended March 31, 2011, we recognized $66,903,000 from the mark-to-market of these shares, which is included in “accumulated other comprehensive income” (a component of shareholders’ equity on our consolidated balance sheet).

We also own an economic interest in 4,815,990 common shares through a forward contract executed on October 7, 2010, at a weighted average strike price of $28.69 per share, or $138,163,000 in the aggregate. The contract may be settled, at our election, in cash or common shares, in whole or in part, at any time prior to October 9, 2012. The counterparty may accelerate settlement, in whole or in part, upon one year’s notice to us. The strike price per share increases at an annual rate of LIBOR plus 80 basis points. The contract is a derivative instrument that does not qualify for hedge accounting treatment. Mark-to-market adjustments on the underlying common shares are recognized in “interest and other investment income, net” on our consolidated statements of income. During the three months ended March 31, 2011, we recognized $17,163,000 of income from the mark-to-market of the underlying common shares, based on J.C.Penney’s closing share price of $35.91 per share at March 31, 2011.

As of March 31, 2011, the aggregate economic net gain on our investment in J.C. Penney was $224,453,000, based on J.C. Penney’s closing share price of $35.91 per share and our weighted average cost of $26.32 per share.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

5. Investments in Partially Owned Entities

Toys “R” Us (“Toys”)

As of March 31, 2011, we own 32.7% of Toys. The business of Toys is highly seasonal. Historically, Toys’ fourth quarter net income accounts for more than 80% of its fiscal year net income. We account for our investment in Toys under the equity method and record our 32.7% share of Toys net income or loss on a one-quarter lag basis because Toys’ fiscal year ends on the Saturday nearest January 31, and our fiscal year ends on December 31. As of March 31, 2011, the carrying amount of our investment in Toys does not differ materially from our share of the equity in the net assets of Toys on a purchase accounting basis.

On May 28, 2010, Toys filed a registration statement with the SEC for the offering and sale of its common stock. The offering, if completed, would result in a reduction of our percentage ownership of Toys’ equity. The size of the offering and its completion are subject to market and other conditions.

Below is a summary of Toys’ latest available financial information on a purchase accounting basis:

(Amounts in thousands)		Balance as of
Balance Sheet:		January 29, 2011		October 30, 2010
	Assets	$	11,972,000	$	12,810,000
	Liabilities		10,145,000		11,317,000
	Toys “R” Us, Inc. equity		1,827,000		1,493,000

		For the Three Months Ended
Income Statement:		January 29, 2011		January 30, 2010
	Total revenues	$	5,972,000	$	5,857,000
	Net income attributable to Toys		339,000		379,000

Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX)

As of March 31, 2011, we own 32.4% of the outstanding common shares of Alexander’s. We manage, lease and develop Alexander’s properties pursuant to the agreements described below which expire in March of each year and are automatically renewable. As of March 31, 2011, Alexander’s owed us $44,357,000 in fees under these agreements.

As of March 31, 2011, the fair value of our investment in Alexander’s, based on Alexander’s March 31, 2011 closing share price of $406.95, was $673,123,000, or $484,843,000 in excess of the carrying amount on our consolidated balance sheet. As of March 31, 2011, the carrying amount of our investment in Alexander’s, excluding amounts owed to us, exceeds our share of the equity in the net assets of Alexander’s by approximately $59,643,000. The majority of this basis difference resulted from the excess of our purchase price for the Alexander’s common stock acquired over the book value of Alexander’s net assets. Substantially all of this basis difference was allocated, based on our estimates of the fair values of Alexander’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation is not material to our share of equity in Alexander’s net income. The basis difference related to the land will be recognized upon disposition of our investment.

Below is a summary of Alexander’s latest available financial information:

(Amounts in thousands)		Balance as of
Balance Sheet:		March 31, 2011		December 31, 2010
	Assets	$	1,685,000	$	1,679,000
	Liabilities		1,339,000		1,335,000
	Noncontrolling interests		3,000		3,000
	Stockholders' equity		343,000		341,000

		For the Three Months Ended
Income Statement:		March 31, 2011		March 31, 2010
	Total revenues	$	63,000	$	59,000
	Net income attributable to Alexander’s		18,000		15,000

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

5. Investments in Partially Owned Entities – continued

Lexington Realty Trust (“Lexington”) (NYSE: LXP)

As of March 31, 2011, we own 18,468,969 Lexington common shares, or approximately 12.6% of Lexington’s common equity. We account for our investment in Lexington under the equity method because we believe we have the ability to exercise significant influence over Lexington’s operating and financial policies, based on, among other factors, our representation on Lexington’s Board of Trustees and the level of our ownership in Lexington as compared to other shareholders. We record our pro rata share of Lexington’s net income or loss on a one-quarter lag basis because we file our consolidated financial statements on Form 10-K and 10-Q prior to the time that Lexington files its consolidated financial statements.

Based on Lexington’s March 31, 2011 closing share price of $9.35, the fair value of our investment in Lexington was $172,685,000, or $115,251,000 in excess of the March 31, 2011 carrying amount on our consolidated balance sheet. As of March 31, 2011, the carrying amount of our investment in Lexington was less than our share of the equity in the net assets of Lexington by approximately $62,315,000. This basis difference resulted primarily from $107,882,000 of non-cash impairment charges recognized during 2008, partially offset by purchase accounting for our acquisition of an additional 8,000,000 common shares of Lexington in October 2008, of which the majority relates to our estimate of the fair values of Lexington’s real estate (land and buildings) as compared to the carrying amounts in Lexington’s consolidated financial statements. The basis difference related to the buildings is being amortized over their estimated useful lives as an adjustment to our equity in net income or loss of Lexington. This amortization is not material to our share of equity in Lexington’s net income or loss. The basis difference attributable to the land will be recognized upon disposition of our investment.

Below is a summary of Lexington’s latest available financial information:

(Amounts in thousands)		Balance as of
Balance Sheet:		December 31, 2010		September 30, 2010
	Assets	$	3,335,000	$	3,385,000
	Liabilities		1,979,000		2,115,000
	Noncontrolling interests		76,000		71,000
	Shareholders’ equity		1,280,000		1,199,000

		For the Three Months Ended
Income Statement:		December 31, 2010		December 31, 2009
	Total revenues	$	86,000	$	86,000
	Net income (loss) attributable to Lexington		12,000		(46,000)

LNR Property LLC (“LNR”)

As of March 31, 2011, we own a 26.2% equity interest in LNR, which we acquired in July 2010. We account for our investment in LNR under the equity method and record our 26.2% share of LNR’s net income or loss on a one-quarter lag basis because we file our consolidated financial statements on Form 10-K and 10-Q prior to receiving LNR’s consolidated financial statements.

LNR consolidates certain commercial mortgage-backed securities (“CMBS”) and Collateralized Debt Obligation (“CDO”) trusts for which it is the primary beneficiary. The assets of these trusts (primarily commercial mortgage loans), which aggregate approximately $142 billion as of December 31, 2010, are the sole source of repayment of the related liabilities, which are non-recourse to LNR and its equity holders, including us. Changes in the fair value of these assets each period are offset by changes in the fair value of the related liabilities through LNR’s consolidated income statement. As of March 31, 2011, the carrying amount of our investment in LNR does not materially differ from our share of LNR’s equity.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

5. Investments in Partially Owned Entities – continued

LNR Property LLC (“LNR”) – continued

Below is a summary of LNR’s latest available financial information:

(Amounts in thousands)		Balance as of
Balance Sheet:		December 31, 2010
	Assets		$	143,327,000
	Liabilities			142,723,000
	Noncontrolling interests			34,000
	LNR equity			570,000

		For the Three Months Ended
Income Statement:		December 31, 2010
	Total revenues		$	36,000
	Net income attributable to LNR			58,000

280 Park Avenue Mezzanine Loans Joint Venture

On March 16, 2011, we formed a 50/50 joint venture with SL Green Realty Corp (“SL Green”) to own the mezzanine debt of 280 Park Avenue, a 1.2 million square foot office building located between 48th and 49th Streets in Manhattan. We contributed our mezzanine loan with a face amount of $73,750,000 and they contributed their mezzanine loans with a face amount of $326,250,000 to the joint venture. We equalized our interest in the joint venture with SL Green by paying them $111,250,000 in cash and assuming $15,000,000 of their debt position. We account for our 50% interest in the joint venture under the equity method of accounting from the date of contribution.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

5. Investments in Partially Owned Entities - continued

Investments in partially owned entities as of March 31, 2011 and December 31, 2010 and income recognized from these investments for the three months ended March 31, 2011 and 2010 are as follows:

			Percentage	Balance as of
(Amounts in thousands)			Ownership as of	March 31,		December 31,
Investments:			March 31, 2011	2011		2010
Toys			32.7 %	$	556,189	$	447,334

Alexander’s			32.4 %	$	188,280	$	186,811
Partially owned office buildings			(1)		220,050		181,838
280 Park Avenue Mezzanine Loans (see page 12)			50 %		185,131		-
LNR			26.2 %		148,227		132,973
India real estate ventures			4%-36.5%		94,077		127,193
Lexington			12.6 %		57,434		57,270
Other equity method investments			(2)		223,095		241,587
				$	1,116,294	$	927,672

				For the Three Months
				Ended March 31,
Our Share of Net Income (Loss):				2011		2010
Toys – 32.7% share of:
	Equity in net income before income taxes			$	179,839	$	173,550
	Income tax expense				(69,018)		(49,710)
	Equity in net income				110,821		123,840
	Interest and other income				2,123		2,030
				$	112,944	$	125,870

Alexander’s – 32.4% share of:
	Equity in net income			$	5,719	$	3,777
	Management, leasing and development fees				2,292		2,683
					8,011		6,460

Lexington – 12.6% share in 2011 and 13.9% share in 2010 of
	equity in net income ⁽³⁾				2,172		6,045

LNR – 26.2% share of equity in net income (acquired in July 2010)⁽⁴⁾					15,254		-

India real estate ventures – 4% to 36.5% range in our
	share of equity in net (loss) income				(207)		1,651

Other, net (including partially owned office buildings)⁽⁵⁾					(8,946)		(2,812)
				$	16,284	$	11,344
___________________________________
(1)		Includes interests in 330 Madison Avenue (25%), One Park Avenue (30.3%), 825 Seventh Avenue (50%), Warner Building and 1101 17th Street (55%), Fairfax Square (20%), Kaempfer equity interests in three office buildings (2.5% to 5.0%), Rosslyn Plaza (46%) and West 57th Street properties (50%).
(2)		Includes interests in Monmouth Mall, Verde Realty Operating Partnership, 85 10th Avenue Associates and redevelopment ventures, including Harlem Park and Farley.

(3)		The three months ended March 31, 2011 and 2010 include $1,452 and $5,998, respectively, of net gains resulting from Lexington's stock issuances.

(4)		Includes $8,977 for our share of a tax settlement gain.

(5)		2011 includes $9,022 for our share of expense, primarily for straight-line rent reserves and the write-off of tenant improvements in connection with a tenant's bankruptcy at the Warner Building.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

5. Investments in Partially Owned Entities – continued

Below is a summary of the debt of our partially owned entities as of March 31, 2011 and December 31, 2010, none of which is recourse to us.

				Interest	100% of
				Rate at	Partially Owned Entities’ Debt at
(Amounts in thousands)				March 31,	March 31,		December 31,
			Maturity	2011	2011		2010
Toys (32.7% interest) (as of January 29, 2011 and October 30, 2010,
respectively):
	Senior unsecured notes (Face value – $950,000)		07/17	10.75 %	$	928,597	$	928,045
	Senior unsecured notes (Face value – $725,000)		12/17	8.50 %		715,821		715,577
	$700 million secured term loan facility		09/16	6.00 %		688,357		689,757
	Senior U.K. real estate facility		04/13	5.02 %		554,621		561,559
	7.625% bonds (Face value – $500,000)		08/11	8.82 %		497,349		495,943
	7.875% senior notes (Face value – $400,000)		04/13	9.50 %		387,459		386,167
	7.375% senior secured notes (Face value – $350,000)		09/16	7.38 %		348,219		350,000
	7.375% senior notes (Face value – $400,000)		10/18	9.99 %		344,734		343,528
	Japan bank loans		03/12-01/16	2.45%-2.85%		177,511		180,500
	Spanish real estate facility		02/13	4.51 %		175,186		179,511
	Japan borrowings		06/13	0.81 %		17,080		141,360
	Junior U.K. real estate facility		04/13	6.81%-7.84%		96,921		98,266
	French real estate facility		02/13	4.51 %		84,291		86,599
	8.750% debentures (Face value – $21,600)		09/21	9.17 %		21,063		21,054
	$1.85 billion credit facility		08/15	-		-		519,810
	European and Australian asset-based revolving credit facility		10/12	-		-		25,767
	Other		Various	Various		176,137		156,853
						5,213,346		5,880,296

Alexander’s (32.4% interest):
	731 Lexington Avenue mortgage note payable, collateralized by
		the office space (prepayable without penalty after 12/13)	02/14	5.33 %		348,781		351,751
	731 Lexington Avenue mortgage note payable, collateralized by
		the retail space (prepayable without penalty after 12/13)	07/15	4.93 %		320,000		320,000
	Rego Park construction loan payable		12/11	1.50 %		277,200		277,200
	Kings Plaza Regional Shopping Center mortgage note payable		06/11	7.46 %		150,375		151,214
	Rego Park mortgage note payable (prepayable without penalty)		03/12	0.75 %		78,246		78,246
	Paramus mortgage note payable (prepayable without penalty)		10/11	5.92 %		68,000		68,000
						1,242,602		1,246,411

Lexington (12.6% interest) (as of December 31, 2010 and
September 30, 2010, respectively):
	Mortgage loans collateralized by Lexington’s real estate (various
		prepayment terms)	2011-2037	5.82 %		1,792,761		1,927,729

LNR (26.2% interest) (as of December 31, 2010 and
September 30, 2010):
	Mortgage notes payable		2011-2043	5.75 %		366,069		508,547
	Liabilities of consolidated CMBS and CDO trusts		n/a	6.06 %		142,197,352		142,001,333
						142,563,421		142,509,880

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

5. Investments in Partially Owned Entities - continued

				Interest	100% of
				Rate at	Partially Owned Entities’ Debt at
(Amounts in thousands)				March 31,	March 31,		December 31,
			Maturity	2011	2011		2010
Partially owned office buildings:
	One Park Avenue (30.3% interest) mortgage note payable		03/16	5.00 %	$	250,000	$	-
	Warner Building (55% interest) mortgage note payable		05/16	6.26 %		292,700		292,700
	330 Madison Avenue (25% interest) mortgage note payable		06/15	1.81 %		150,000		150,000
	Kaempfer Properties (2.5% and 5.0% interests in two partnerships)
		mortgage notes payable, collateralized by the partnerships’ real estate	11/11-12/11	5.86 %		138,705		139,337
	Fairfax Square (20% interest) mortgage note payable (prepayable
		without penalty after 07/14)	12/14	7.00 %		71,571		71,764
	Rosslyn Plaza (46% interest) mortgage note payable		12/11	1.30 %		56,680		56,680
	330 West 34th Street (34.8% interest) mortgage note payable,
		collateralized by land	07/22	5.71 %		50,150		50,150
	West 57th Street (50% interest) mortgage note payable (prepayable
		without penalty)	02/14	4.94 %		22,720		22,922
	825 Seventh Avenue (50% interest) mortgage note payable (prepayable
		without penalty after 04/14)	10/14	8.07 %		20,447		20,565
India Real Estate Ventures:
	TCG Urban Infrastructure Holdings (25% interest) mortgage notes
		payable, collateralized by the entity’s real estate (various
		prepayment terms)	2011-2022	13.88 %		202,029		196,319
Other:
	Verde Realty Operating Partnership (8.3% interest) mortgage notes
		payable, collateralized by the partnerships’ real estate (various
		prepayment terms)	2011-2025	5.91 %		564,270		581,086
	Green Courte Real Estate Partners, LLC (8.3% interest) (as of
		December 31, 2010 and September 30, 2010), mortgage notes
		payable, collateralized by the partnerships’ real estate (various
		prepayment terms)	2011-2018	5.50 %		296,991		296,991
	Waterfront Associates (2.5% interest) up to $250 million construction
		and land loan payable	09/11	2.26% - 3.76%		219,442		217,106
	Monmouth Mall (50% interest) mortgage note payable (prepayable
		without penalty after 07/15)	09/15	5.44 %		163,917		164,474
	Wells/Kinzie Garage (50% interest) mortgage note payable		12/17	5.00 %		14,977		15,022
	Orleans Hubbard Garage (50% interest) mortgage note payable		12/17	5.00 %		9,480		9,508
	Other		Various	5.39 %		417,553		418,339

Based on our ownership interest in the partially owned entities above, our pro rata share of the debt of these partially owned entities was $40,260,412,000 and $40,443,346,000 as of March 31, 2011 and December 31, 2010, respectively. Excluding our pro rata share of LNR’s liabilities related to consolidated CMBS and CDO trusts which are non-recourse to LNR and its equity holders, including us, our pro rata share of partially owned entities debt is $3,041,677,000 and $3,275,917,000 at March 31, 2011 and December 31, 2010, respectively.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

6. Mezzanine Loans Receivable

On March 2, 2011, we sold our mezzanine loan in the Tharaldson Lodging Companies for $70,848,000 in cash, which had a carrying amount of $60,416,000 and recognized a net gain of $10,474,000. The gain is included as a component of “interest and other investment income, net” on our consolidated statement of income.

In the first quarter of 2011, we recognized $72,270,000 of income, representing the difference between the fair value of our 280 Park Avenue Mezzanine Loan of $73,750,000, and its carrying amount of $1,480,000. The $72,270,000 of income, which is included in “interest and other investment income, net” on our consolidated statement of income, is comprised of $63,145,000 from the reversal of the loan loss reserve and $9,125,000 of previously unrecognized interest income. Our decision to reverse the loan loss reserve was based on the increase in value of the underlying collateral. On March 16, 2011, we contributed this mezzanine loan to a 50/50 joint venture with SL Green Realty Corp (see Note 5 – Investments in Partially Owned Entities).

As of March 31, 2011 and December 31, 2010, the carrying amount of mezzanine loans receivable was $140,567,000 and $202,412,000, respectively, net of allowances of $0 and $73,216,000, respectively.

7. Discontinued Operations

On March 31, 2011, the receiver completed the disposition of the High Point Complex in North Carolina. In connection therewith, the property and related debt were removed from our consolidated balance sheet and we recognized a net gain of $83,907,000 on the extinguishment of debt.

In the first quarter of 2011, we sold (i) 1140 Connecticut Avenue and 1227 25^th Street for $127,000,000 in cash, which resulted in a $45,862,000 net gain, and (ii) two retail properties in separate transactions for an aggregate of $38,711,000 in cash, which resulted in net gains aggregating $5,303,000.

The tables below set forth the assets and liabilities related to discontinued operations at March 31, 2011 and December 31, 2010, and their combined results of operations for the three months ended March 31, 2011 and 2010.

	Assets Related to				Liabilities Related to
(Amounts in thousands)	Discontinued Operations as of				Discontinued Operations as of
	March 31,		December 31,		March 31,		December 31,
	2011		2010		2011		2010
High Point	$	-	$	154,563	$	-	$	236,974
1227 25th Street		-		43,630		-		-
1140 Connecticut Avenue		-		36,271		-		18,948
Total	$	-	$	234,464	$	-	$	255,922


					For The Three Months
(Amounts in thousands)					Ended March 31,
					2011		2010
Total revenues					$	5,987	$	11,021
Total expenses						6,744		10,535
						(757)		486
Net gain on extinguishment of High Point debt						83,907		-
Net gain on sale of 1140 Connecticut Avenue and 1227 25th Street						45,862		-
Net gain on sales of other real estate						5,303		-
Litigation loss accrual						-		(10,056)
Income (loss) from discontinued operations					$	134,315	$	(9,570)

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

8. Identified Intangible Assets and Liabilities

The following summarizes our identified intangible assets (primarily acquired above-market leases) and liabilities (primarily acquired below-market leases) as of March 31, 2011 and December 31, 2010.

	Balance as of
	March 31,		December 31,
(Amounts in thousands)	2011		2010
Identified intangible assets:
Gross amount	$	683,374	$	687,253
Accumulated amortization		(350,104)		(338,508)
Net	$	333,270	$	348,745
Identified intangible liabilities (included in deferred credit):
Gross amount	$	883,451	$	870,623
Accumulated amortization		(358,794)		(341,718)
Net	$	524,657	$	528,905

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an increase to rental income of $16,759,000 and $15,771,000 for the three months ended March 31, 2011 and 2010, respectively. Estimated annual amortization of acquired below-market leases, net of acquired above-market leases, for each of the five succeeding years commencing January 1, 2012 is as follows:

(Amounts in thousands)
2012	$	52,016
2013		44,087
2014		38,236
2015		35,472
2016		32,093

Amortization of all other identified intangible assets (a component of depreciation and amortization expense) was $14,262,000 and $14,853,000 for the three months ended March 31, 2011 and 2010, respectively. Estimated annual amortization of all other identified intangible assets including acquired in-place leases, customer relationships, and third party contracts for each of the five succeeding years commencing January 1, 2012 is as follows:

(Amounts in thousands)
2012	$	44,777
2013		37,281
2014		18,885
2015		13,929
2016		11,325

We are a tenant under ground leases for certain properties. Amortization of these acquired below-market leases, net of above-market leases resulted in an increase to rent expense of $314,000 and $509,000 for the three months ended March 31, 2011 and 2010, respectively. Estimated annual amortization of these below-market leases, net of above-market leases, for each of the five succeeding years commencing January 1, 2012 is as follows:

(Amounts in thousands)
2012	$	1,256
2013		1,256
2014		1,256
2015		1,256
2016		1,256

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

9. Debt

The following is a summary of our debt:

				Interest
(Amounts in thousands)				Rate at	Balance at
				March 31,	March 31,		December 31,
Notes and mortgages payable:			Maturity (1)	2011	2011		2010
Fixed rate:
	New York Office:
		350 Park Avenue	01/12	5.48 %	$	430,000	$	430,000
		Two Penn Plaza⁽²⁾	03/18	5.13 %		425,000		277,347
		1290 Avenue of the Americas	01/13	5.97 %		421,345		424,136
		770 Broadway	03/16	5.65 %		353,000		353,000
		888 Seventh Avenue	01/16	5.71 %		318,554		318,554
		909 Third Avenue	04/15	5.64 %		206,069		207,045
		Eleven Penn Plaza	12/11	5.20 %		198,282		199,320

	Washington, DC Office:
		Skyline Place	02/17	5.74 %		678,000		678,000
		River House Apartments	04/15	5.43 %		195,546		195,546
		2121 Crystal Drive⁽³⁾	03/23	5.51 %		150,000		-
		Bowen Building	06/16	6.14 %		115,022		115,022
		1215 Clark Street, 200 12th Street and 251 18th Street	01/25	7.09 %		110,509		110,931
		Universal Buildings	04/14	6.38 %		102,119		103,049
		Reston Executive I, II, and III	01/13	5.57 %		93,000		93,000
		2011 Crystal Drive	08/17	7.30 %		81,221		81,362
		1550 and 1750 Crystal Drive	11/14	7.08 %		78,782		79,411
		220 20th Street⁽⁴⁾	02/18	4.61 %		75,982		-
		1235 Clark Street	07/12	6.75 %		52,057		52,314
		2231 Crystal Drive	08/13	7.08 %		45,790		46,358
		1750 Pennsylvania Avenue	06/12	7.26 %		44,926		45,132
		1225 Clark Street	08/13	7.08 %		27,389		27,616
		1800, 1851 and 1901 South Bell Street	12/11	6.91 %		7,658		10,099

	Retail:
		Cross-collateralized mortgages on 40 strip shopping centers	09/20	4.19 %		594,247		597,138
		Montehiedra Town Center	07/16	6.04 %		120,000		120,000
		Broadway Mall	07/13	5.30 %		89,598		90,227
		828-850 Madison Avenue Condominium	06/18	5.29 %		80,000		80,000
		North Bergen (Tonnelle Avenue)⁽⁵⁾	01/18	4.59 %		75,000		-
		Las Catalinas Mall	11/13	6.97 %		57,328		57,737
		510 5th Avenue	01/16	5.60 %		32,071		32,189
		Other	03/12-05/36	5.10%-7.33%		100,870		101,251

	Merchandise Mart:
		Merchandise Mart	12/16	5.57 %		550,000		550,000
		Boston Design Center	09/15	5.02 %		68,235		68,538
		Washington Design Center	11/11	6.95 %		43,227		43,447

	Other:
		555 California Street	09/11	5.79 %		641,551		640,911
		Borgata Land⁽⁶⁾	02/21	5.14 %		60,000		-
		Industrial Warehouses	10/11	6.95 %		24,271		24,358
Total fixed rate notes and mortgages payable				5.61 %	$	6,746,649	$	6,253,038
___________________
		See notes on page 20.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

9. Debt - continued

					Interest
(Amounts in thousands)					Rate at	Balance at
				Spread over	March 31,	March 31,		December 31,
Notes and mortgages payable:			Maturity (1)	LIBOR	2011	2011		2010
Variable rate:
	New York Office:
		Manhattan Mall	02/12	L+55	0.82 %	$	232,000	$	232,000
		866 UN Plaza	05/11	L+40	0.71 %		44,978		44,978
	Washington, DC Office:
		2101 L Street	02/13	L+120	1.45 %		150,000		150,000
		West End 25 (construction loan)⁽⁷⁾	08/11	n/a ⁽⁷⁾	2.75 %		78,554		95,220
		River House Apartments	04/18	n/a ⁽⁸⁾	1.62 %		64,000		64,000
		2200/2300 Clarendon Boulevard	01/15	L+75	1.01 %		57,802		59,278
		1730 M and 1150 17th Street	06/14	L+140	1.66 %		43,580		43,581
		220 20th Street⁽⁴⁾	n/a	n/a	n/a		-		83,573
	Retail:
		Green Acres Mall	02/13	L+140	1.75 %		325,045		335,000
		Bergen Town Center (construction loan)	03/13	L+150	1.79 %		279,044		279,044
		San Jose Strip Center	03/13	L+400	4.32 %		118,285		120,863
		Beverly Connection⁽⁹⁾	07/12	L+350 ⁽⁹⁾	5.00 %		100,000		100,000
		4 Union Square South	04/14	L+325	3.56 %		75,000		75,000
		Cross-collateralized mortgages on 40 strip
		shopping centers⁽¹⁰⁾	09/20	L+136 ⁽¹⁰⁾	2.36 %		60,000		60,000
		435 Seventh Avenue⁽¹¹⁾	08/14	L+300 ⁽¹¹⁾	5.00 %		51,725		51,844
		Other	11/12	L+375	4.02 %		22,108		21,862
	Other:
		220 Central Park South	10/11	L+235–L+245	2.65 %		123,750		123,750
		Other	11/11	L+250	2.80 %		22,400		66,267
	Total variable rate notes and mortgages payable				2.23 %		1,848,271		2,006,260
	Total notes and mortgages payable				4.88 %	$	8,594,920	$	8,259,298

Senior unsecured notes:
	Senior unsecured notes due 2015		04/15		4.25 %	$	499,338	$	499,296
	Senior unsecured notes due 2039⁽¹²⁾		10/39		7.88 %		460,000		460,000
	Floating rate senior unsecured notes due 2011		12/11	L+200	2.30 %		23,250		23,250
	Senior unsecured notes due 2011		n/a		n/a		-		100,382
	Total senior unsecured notes				5.90 %	$	982,588	$	1,082,928

3.88% exchangeable senior debentures due 2025
	(see page 21)		04/12		5.32 %	$	492,690	$	491,000

Convertible senior debentures: (see page 21)
	3.63% due 2026		11/11		5.32 %	$	177,221	$	176,499
	2.85% due 2027		04/12		5.45 %		9,977		9,914
	Total convertible senior debentures ⁽¹³⁾				5.33 %	$	187,198	$	186,413

Unsecured revolving credit facilities:
	$1.595 billion unsecured revolving credit facility		09/12	L+55	0.79 %	$	324,000	$	669,000
	$1.000 billion unsecured revolving credit facility
		($12,423 reserved for outstanding letters of credit)	06/11	L+55	0.79 %		50,000		205,000
	Total unsecured revolving credit facilities				0.79 %	$	374,000	$	874,000
___________________________
	See notes on the following page.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

9. Debt - continued

	Notes to preceding tabular information (Amounts in thousands):

	(1)	Represents the extended maturity for certain loans in which we have the unilateral right, ability and intent to extend. In the case of our convertible and exchangeable debt, represents the earliest date holders may require us to repurchase the debentures.

	(2)	On February 11, 2011, we completed a $425,000 refinancing of this loan. The seven-year loan bears interest at LIBOR plus 2.00%, which was swapped for the term of the loan to a fixed rate of 5.13%. The loan amortizes based on a 30-year schedule beginning in the fourth year. We retained net proceeds of approximately $139,000, after repaying the existing loan and closing costs.
	(3)	On February 10, 2011, we completed a $150,000 financing of this property. The 12-year fixed rate loan bears interest at 5.51% and amortizes based on a 30-year schedule beginning in the third year. This property was previously unencumbered.

	(4)	On January 18, 2011, we repaid the outstanding balance of the construction loan on this property and closed on a new $76,100 mortgage financing at a fixed rate of 4.61%. The new loan has a seven-year term and amortizes based on a 30-year schedule.

	(5)	On January 10, 2011, we completed a $75,000 financing on this property. The seven-year fixed rate loan bears interest at 4.59% and amortizes based on a 25-year schedule beginning in the sixth year. This property was previously unencumbered.

	(6)	In January 2011, we completed a $60,000 financing of this property. The 10-year fixed rate loan bears interest at 5.14% and amortizes based on a 30-year schedule beginning in the third year.

	(7)	In February 2011, we repaid a portion of this loan and extended the maturity to August 2011. This loan bears interest at the prime rate minus 0.50%.
	(8)	This loan bears interest at the Freddie Mac Reference Note Rate plus 1.53%.

	(9)	This loan has a LIBOR floor of 1.50%. The spread over LIBOR increases from 3.50% currently to 5.00% in July 2011.

	(10)	This loan has a LIBOR floor of 1.00%.

	(11)	This loan has a LIBOR floor of 2.00%.

	(12)	These notes may be redeemed at our option in whole or in part beginning on October 1, 2014, at a price equal to the principal amount plus accrued interest.
	(13)	The net proceeds from the offering of these debentures were contributed to the Operating Partnership in the form of an inter-company loan and the Operating Partnership fully and unconditionally guaranteed payment of these debentures. There are no restrictions which limit the Operating Partnership from making distributions to Vornado and Vornado has virtually no independent assets or operations outside of the Operating Partnership.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

9. Debt – continued

Pursuant to the provisions of Accounting Standards Codification (“ASC”) 470-20, Debt with Conversion and Other Options, below is a summary of required disclosures related to our convertible and exchangeable senior debentures.

			2.85% Convertible				3.63% Convertible				3.88% Exchangeable
(Amounts in thousands, except per share amounts)			Senior Debentures due 2027				Senior Debentures due 2026				Senior Debentures due 2025
			March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
Balance Sheet:			2011		2010		2011		2010		2011		2010
	Principal amount of debt component		$	10,233	$	10,233	$	179,052	$	179,052	$	499,982	$	499,982
	Unamortized discount			(256)		(319)		(1,831)		(2,553)		(7,292)		(8,982)
	Carrying amount of debt component		$	9,977	$	9,914	$	177,221	$	176,499	$	492,690	$	491,000
	Carrying amount of equity component		$	956	$	956	$	9,604	$	9,604	$	32,301	$	32,301
	Effective interest rate			5.45 %		5.45 %		5.32 %		5.32 %		5.32 %		5.32 %
	Maturity date (period through which
		discount is being amortized)		4/1/12				11/15/11				4/15/12
	Conversion price per share, as adjusted		$	157.18			$	148.46			$	87.17
	Number of shares on which the
		aggregate consideration to be
		delivered upon conversion is
		determined		- ⁽¹⁾				- ⁽¹⁾				5,736
__________________

(1)		Our convertible senior debentures require that upon conversion, the entire principal amount is to be settled in cash, and at our option, any excess value above the principal amount may be settled in cash or common shares. Based on the March 31, 2011 closing share price of our common shares and the conversion prices in the table above, there was no excess value; accordingly, no common shares would be issued if these securities were settled on this date. The number of common shares on which the aggregate consideration that would be delivered upon conversion is 65 and 1,206 common shares, respectively.

		For the Three Months Ended
(Amounts in thousands)		March 31,
Income Statement:		2011		2010
2.85% Convertible Senior Debentures due 2027:
	Coupon interest	$	73	$	160
	Discount amortization – original issue		11		23
	Discount amortization – ASC 470-20 implementation		52		106
		$	136	$	289

3.63% Convertible Senior Debentures due 2026:
	Coupon interest	$	1,623	$	3,963
	Discount amortization – original issue		196		455
	Discount amortization – ASC 470-20 implementation		526		1,219
		$	2,345	$	5,637

3.88% Exchangeable Senior Debentures due 2025:
	Coupon interest	$	4,844	$	4,844
	Discount amortization – original issue		399		379
	Discount amortization – ASC 470-20 implementation		1,291		1,225
		$	6,534	$	6,448

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

10. Redeemable Noncontrolling Interests

Redeemable noncontrolling interests on our consolidated balance sheets represent Operating Partnership units held by third parties and are comprised of Class A units and Series D-10, D-11, D-14, D-15 and D-16 (collectively, “Series D”) cumulative redeemable preferred units. Redeemable noncontrolling interests on our consolidated balance sheets are recorded at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to “additional capital” in our consolidated statements of changes in equity. Below is a table summarizing the activity of redeemable noncontrolling interests.

(Amounts in thousands)
Balance at December 31, 2009	$	1,251,628
Net income		17,779
Distributions		(13,082)
Conversion of Class A units into common shares, at redemption value		(18,128)
Adjustments to carry redeemable Class A units at redemption value		104,247
Redemption of Series D-12 redeemable units		(4,000)
Other, net		1,304
Balance at March 31, 2010	$	1,339,748


Balance at December 31, 2010	$	1,327,974
Net income		31,808
Distributions		(12,702)
Conversion of Class A units into common shares, at redemption value		(27,539)
Adjustments to carry redeemable Class A units at redemption value		42,227
Other, net		4,752
Balance at March 31, 2011	$	1,366,520

As of March 31, 2011 and December 31, 2010, the aggregate redemption value of redeemable Class A units was $1,105,520,000 and $1,066,974,000, respectively.

Redeemable noncontrolling interests exclude our Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units, as they are accounted for as liabilities in accordance with ASC 480, Distinguishing Liabilities and Equity, because of their possible settlement by issuing a variable number of Vornado common shares. Accordingly the fair value of these units is included as a component of “other liabilities” on our consolidated balance sheets and aggregated $55,097,000 as of March 31, 2011 and December 31, 2010.

In March 2010, we redeemed 246,153 Series D-12 cumulative redeemable preferred units for $16.25 per unit in cash, or $4,000,000 in the aggregate. In connection therewith, we recognized a $2,154,000 net gain which is included as a component of “net income attributable to noncontrolling interests in the Operating Partnership, including unit distributions,” on our consolidated statement of income for the three months ended March 31, 2010.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

11. Shareholders’ Equity

On April 20, 2011, we sold 7,000,000 6.875% Series J Cumulative Redeemable Preferred Shares at a price of $25.00 per share, or $175,000,000 in the aggregate, in an underwritten public offering pursuant to an effective registration statement. On April 21, 2011, the underwriters exercised their option to purchase an additional 1,050,000 shares to cover over-allotments. We retained aggregate net proceeds of $194,736,000, after underwriters’ discounts and issuance costs and contributed the net proceeds to the Operating Partnership in exchange for 8,050,000 Series J Preferred Units (with economic terms that mirror those of the Series J Preferred Shares). Dividends on the Series J Preferred Shares are cumulative and payable quarterly in arrears. The Series J Preferred Shares are not convertible into, or exchangeable for, any of our properties or securities. On or after April 20, 2016 (or sooner under limited circumstances), we, at our option, may redeem the Series J Preferred Shares at a redemption price of $25.00 per share, plus accrued and unpaid dividends through the date of redemption. The Series J Preferred Shares have no maturity date and will remain outstanding indefinitely unless redeemed by us.

12. Fair Value Measurements

ASC 820, Fair Value Measurement and Disclosures defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 – unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment is necessary to interpret Level 2 and 3 inputs in determining the fair value of our financial and non-financial assets and liabilities. Accordingly, our fair value estimates, which are made at the end of each reporting period, may be different than the amounts that may ultimately be realized upon sale or disposition of these assets.

Financial Assets and Liabilities Measured at Fair Value

Financial assets and liabilities that are measured at fair value in our consolidated financial statements consist of (i) marketable securities, (ii) derivative positions in marketable equity securities, (iii) the assets of our deferred compensation plan, which are primarily marketable equity securities and equity investments in limited partnerships, (iv) Real Estate Fund investments, and (v) mandatorily redeemable instruments (Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units). The tables below aggregate the fair values of financial assets and liabilities by the levels in the fair value hierarchy at March 31, 2011 and December 31, 2010, respectively.

			As of March 31, 2011
(Amounts in thousands)			Total		Level 1		Level 2		Level 3
	Marketable securities		$	821,920	$	821,920	$	-	$	-
	Real Estate Fund investments (75% of which is attributable to
		noncontrolling interests)		230,657		-		-		230,657
	Deferred compensation plan assets (included in other assets)			97,951		46,339		-		51,612
	Derivative positions in marketable equity securities			34,779		-		34,779		-
		Total assets	$	1,185,307	$	868,259	$	34,779	$	282,269

	Mandatorily redeemable instruments (included in other liabilities)		$	55,097	$	55,097	$	-	$	-

			As of December 31, 2010
(Amounts in thousands)			Total		Level 1		Level 2		Level 3
	Marketable securities		$	766,116	$	766,116	$	-	$	-
	Real Estate Fund investments (75% of which is attributable to
		noncontrolling interests)		144,423		-		-		144,423
	Deferred compensation plan assets (included in other assets)			91,549		43,699		-		47,850
	Derivative positions in marketable equity securities			17,616		-		17,616		-
		Total assets	$	1,019,704	$	809,815	$	17,616	$	192,273

	Mandatorily redeemable instruments (included in other liabilities)		$	55,097	$	55,097	$	-	$	-

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

12. Fair Value Measurements - continued

Financial Assets and Liabilities Measured at Fair Value - continued

The tables below summarize the changes in the fair value of the Level 3 assets above, by category, for the three months ended March 31, 2011 and 2010.

Real Estate Fund Investments:
	For the Three Months Ended March 31,
(Amounts in thousands)	2011		2010
Beginning balance	$	144,423	$	-
Purchases		100,238		-
Realized and unrealized gains		698		-
Other, net		(14,702)		-
Ending balance	$	230,657	$	-


Deferred Compensation Plan Assets:
	For the Three Months Ended March 31,
(Amounts in thousands)	2011		2010
Beginning balance	$	47,850	$	39,589
Purchases		1,286		3,132
Realized and unrealized gains		3,623		1,108
Other, net		(1,147)		(566)
Ending balance	$	51,612	$	43,263

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value in our consolidated financial statements include mezzanine loans receivable and debt. Estimates of the fair values of these instruments are based on our assessments of available market information and valuation methodologies, including discounted cash flow analyses. The table below summarizes the carrying amounts and fair values of these financial instruments as of March 31, 2011 and December 31, 2010.

			As of March 31, 2011				As of December 31, 2010
			Carrying		Fair		Carrying		Fair
(Amounts in thousands)			Amount		Value		Amount		Value
	Mezzanine loans receivable		$	140,567	$	135,330	$	202,412	$	197,581
	Debt:
		Notes and mortgages payable	$	8,594,920	$	8,857,040	$	8,259,298	$	8,450,812
		Senior unsecured notes		982,588		1,033,680		1,082,928		1,119,512
		Exchangeable senior debentures		492,690		558,105		491,000		554,355
		Convertible senior debentures		187,198		191,958		186,413		191,510
		Revolving credit facility debt		374,000		374,000		874,000		874,000
			$	10,631,396	$	11,014,783	$	10,893,639	$	11,190,189

13. Stock-based Compensation

Our Share Option Plan (the “Plan”) provides for grants of incentive and non-qualified stock options, restricted stock, restricted Operating Partnership units and out-performance plan rewards to certain of our employees and officers. We account for all stock-based compensation in accordance ASC 718, Compensation – Stock Compensation. Stock-based compensation expense for the three months ended March 31, 2011 and 2010 consists of stock option awards, restricted stock awards, Operating Partnership unit awards and out-performance plan awards. In the three months ended March 31, 2011 and 2010, we recognized $7,146,000 and $6,477,000 of stock-based compensation expense, respectively.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

14. Fee and Other Income

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

	For the Three Months
(Amounts in thousands)	Ended March 31,
	2011		2010
Tenant cleaning fees	$	15,423	$	13,652
Management and leasing fees		4,106		9,140
Lease termination fees		1,176		4,970
Other income		13,588		13,165
	$	34,293	$	40,927

Fee and other income above includes management fee income from Interstate Properties, a related party, of $197,000 and $200,000 for the three months ended March 31, 2011 and 2010, respectively. The above table excludes fee income from partially owned entities which is included in income from partially owned entities (see Note 5 – Investments in Partially Owned Entities).

15. Interest and Other Investment Income, Net

The following table sets forth the details of our interest and other investment income:

		For the Three Months
(Amounts in thousands)		Ended March 31,
		2011		2010
Mezzanine loans loss reversal and net gain on disposition		$	82,744	$	-
Income from the mark-to-market of J.C. Penney derivative position			17,163		-
Dividends and interest on marketable securities			7,667		7,245
Mark-to-market of investments in our deferred compensation plan⁽¹⁾			4,952		2,763
Interest on mezzanine loans			2,644		2,715
Other, net			1,938		1,981
		$	117,108	$	14,704
__________________________

(1)	This income is entirely offset by the expense resulting from the mark-to-market of the deferred compensation plan liability, which is included in "general and administrative" expense.

16. Comprehensive Income

	For the Three Months
(Amounts in thousands)	Ended March 31,
	2011		2010
Net income	$	445,821	$	232,544
Other comprehensive income		57,161		1,504
Comprehensive income		502,982		234,048
Less: Comprehensive income attributable to noncontrolling interests		36,759		18,098
Comprehensive income attributable to Vornado	$	466,223	$	215,950

Substantially all of other comprehensive income for the three months ended March 31, 2011 and 2010 relates to income from the mark-to-market of marketable securities classified as available-for-sale and our share of other comprehensive income or loss of partially owned entities.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

17. Income Per Share

The following table provides a reconciliation of both net income and the number of common shares used in the computation of (i) basic income per common share - which utilizes the weighted average number of common shares outstanding without regard to dilutive potential common shares, and (ii) diluted income per common share - which includes the weighted average common shares and potentially dilutive share equivalents. Potentially dilutive share equivalents include our Series A convertible preferred shares, employee stock options, restricted stock and exchangeable senior debentures due 2025.

			For the Three Months
(Amounts in thousands, except per share amounts)			Ended March 31,
			2011		2010
Numerator:
	Income from continuing operations, net of income attributable to noncontrolling interests		$	286,947	$	224,122
	Income (loss) from discontinued operations, net of income attributable to noncontrolling interests			125,716		(9,570)
	Net income attributable to Vornado			412,663		214,552
	Preferred share dividends			(13,448)		(14,267)
	Net income attributable to common shareholders			399,215		200,285
	Earnings allocated to unvested participating securities			(46)		(20)
	Numerator for basic income per share			399,169		200,265
	Impact of assumed conversions:
		Interest on 3.875% exchangeable senior debentures		6,534		-
		Convertible preferred share dividends		32		41
	Numerator for diluted income per share		$	405,735	$	200,306

Denominator:
	Denominator for basic income per share –
		weighted average shares		183,988		181,542
	Effect of dilutive securities^(1):
		3.875% exchangeable senior debentures		5,736		-
		Employee stock options and restricted share awards		1,749		1,831
		Convertible preferred shares		56		72
	Denominator for diluted income per share –
		weighted average shares and assumed conversions		191,529		183,445

INCOME PER COMMON SHARE – BASIC:
	Income from continuing operations, net		$	1.49	$	1.15
	Income (loss) from discontinued operations, net			0.68		(0.05)
	Net income per common share		$	2.17	$	1.10

INCOME PER COMMON SHARE – DILUTED:
	Income from continuing operations, net		$	1.46	$	1.14
	Income (loss) from discontinued operations, net			0.66		(0.05)
	Net income per common share		$	2.12	$	1.09


(1)		The effect of dilutive securities in the three months ended March 31, 2011 and 2010 excludes an aggregate of 12,787 and 21,029 weighted average common share equivalents, respectively, as their effect was anti-dilutive.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

18. Cleveland Medical Mart Development Project

During 2010, two of our wholly owned subsidiaries entered into agreements with Cuyahoga County, Ohio (the “County”) to develop and operate the Cleveland Medical Mart and Convention Center (the “Facility”), a 1,000,000 square foot showroom, trade show and conference center in Cleveland’s central business district. The County will fund the development of the Facility, using the proceeds it received from the issuance of general obligation bonds and other sources, up to the development budget of $465,000,000 and maintain effective control of the property. During the 17-year development and operating period, our subsidiaries will receive net settled payments of approximately $10,000,000 per year, which is net of its $36,000,000 annual obligation to the County. Our subsidiaries’ obligation has been pledged by the County to the bondholders, but is payable by our subsidiaries only to the extent that they first receive at least an equal payment from the County. Our subsidiaries engaged a contractor to construct the Facility pursuant to a guaranteed maximum price contract; although our subsidiaries are ultimately responsible for cost overruns, the contractor is responsible for all costs incurred in excess of its contract and has provided a completion guaranty. Construction of the Facility is expected to be completed in 2013. Upon completion, our subsidiaries are required to fund $11,500,000, primarily for tenant improvements, and they are responsible for operating expenses and are entitled to the net operating income, if any, of the Facility. The County may terminate the operating agreement five years from the completion of development and periodically thereafter, if our subsidiaries fail to achieve certain performance thresholds.

We account for these agreements using criteria set forth in ASC 605-25, Multiple-Element Arrangements, as our subsidiaries are providing development, marketing, leasing, and other property management related services over the 17-year term. We recognize development fees using the percentage of completion method of accounting. In the first quarter of 2011, we recognized $40,699,000 of revenue, of which $38,278,000 is offset by development costs expensed in the quarter.

19. Commitments and Contingencies

Insurance

We maintain general liability insurance with limits of $300,000,000 per occurrence and all risk property and rental value insurance with limits of $2.0 billion per occurrence, including coverage for terrorist acts, with sub-limits for certain perils such as floods. Our California properties have earthquake insurance with coverage of $150,000,000 per occurrence, subject to a deductible in the amount of 5% of the value of the affected property, up to a $150,000,000 annual aggregate.

Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a portion of our earthquake insurance coverage and as a direct insurer for coverage for acts of terrorism, including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by Terrorism Risk Insurance Program Reauthorization Act. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to PPIC. Our coverage for NBCR losses is up to $2 billion per occurrence, for which PPIC is responsible for a deductible of $3,200,000 and 15% of the balance of a covered loss and the Federal government is responsible for the remaining 85% of a covered loss. We are ultimately responsible for any loss borne by PPIC.

We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism. However, we cannot anticipate what coverage will be available on commercially reasonable terms in future policy years.

Our debt instruments, consisting of mortgage loans secured by our properties which are non-recourse to us, senior unsecured notes, exchangeable senior debentures, convertible senior debentures and revolving credit agreements contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we 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 we are able to obtain it could adversely affect our ability to finance our properties and expand our portfolio.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

19. Commitments and Contingencies – continued

Other Commitments and Contingencies

Our mortgage loans are non-recourse to us. However, in certain cases we have provided guarantees or master leased tenant space. These guarantees and master leases terminate either upon the satisfaction of specified circumstances or repayment of the underlying loans. As of March 31, 2011, the aggregate dollar amount of these guarantees and master leases is approximately $203,250,000.

At March 31, 2011, $12,423,000 of letters of credit were outstanding under one of our revolving credit facilities. Our credit facilities contain financial covenants that require us to maintain minimum interest coverage and maximum debt to market capitalization ratios, and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB. Our credit facilities also contain customary conditions precedent to borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal.

Each of our 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 us.

We are committed to fund additional capital to certain of our partially owned entities aggregating approximately $195,255,000, of which $141,924,000 is committed to the Fund. In addition, we have agreed in principle to contribute up to $52,000,000 to a new investment management fund which will be managed by LNR.

As part of the process of obtaining the required approvals to demolish and develop our 220 Central Park South property into a new residential tower, we have committed to fund the estimated project cost of approximately $400,000,000 to $425,000,000.

Litigation

We are from time to time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation with legal counsel, the outcome of such matters, including the matters referred to below, are not expected to have a material adverse effect on our financial position, results of operations or cash flows.

On January 8, 2003, Stop & Shop filed a complaint with the United States District Court for the District of New Jersey (“USDC-NJ”) claiming that we had 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, froze our right to reallocate which effectively terminated our right to collect the additional rent from Stop & Shop. On March 3, 2003, after we 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 State Supreme Court, asserting substantially the same claims as in its USDC-NJ complaint. We removed the action to the United States District Court for the Southern District of New York. In January 2005, that court remanded the action to the New York State Supreme Court. On February 14, 2005, we served an answer in which we asserted a counterclaim seeking a judgment for all the unpaid additional rent accruing through the date of the judgment and a declaration that Stop & Shop will continue to be liable for the additional rent as long as any of the leases subject to the Master Agreement and Guaranty remain in effect. On May 17, 2005, we filed a motion for summary judgment. On July 15, 2005, Stop & Shop opposed our motion and filed a cross-motion for summary judgment. On December 13, 2005, the Court issued its decision denying the motions for summary judgment. Both parties appealed the Court’s decision and on December 14, 2006, the Appellate Court division issued a decision affirming the Court’s decision. On January 16, 2007, we filed a motion for the reconsideration of one aspect of the Appellate Court’s decision which was denied on March 13, 2007. A trial was held in November 2010 and closing arguments were held in March 2011. We intend to continue to vigorously pursue our claims against Stop & Shop.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

20. Segment Information

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, 2011 and 2010.


(Amounts in thousands)			For the Three Months Ended March 31, 2011
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other⁽³⁾
Property rentals				$	540,472	$	194,242	$	138,884	$	107,447	$	62,565	$	-	$	37,334
Straight-line rent adjustments					13,929		7,870		(5)		4,181		790		-		1,093
Amortization of acquired below-
		market leases, net			16,759		8,177		466		6,960		17		-		1,139
Total rentals					571,160		210,289		139,345		118,588		63,372		-		39,566
Tenant expense reimbursements					90,959		33,876		9,297		39,331		4,023		-		4,432
Cleveland Medical Mart development
		project			40,699		-		-		-		40,699		-		-
Fee and other income:
	Tenant cleaning fees				15,423		23,430		-		-		-		-		(8,007)
	Management and leasing fees				4,106		1,495		2,885		555		103		-		(932)
	Lease termination fees				1,176		65		1,111		-		-		-		-
	Other				13,588		4,763		5,345		1,407		2,036		-		37
Total revenues					737,111		273,918		157,983		159,881		110,233		-		35,096
Operating expenses					290,773		121,909		48,836		60,680		41,946		-		17,402
Depreciation and amortization					132,227		46,146		33,684		28,541		11,062		-		12,794
General and administrative					59,003		5,364		6,537		8,022		7,598		-		31,482
Cleveland Medical Mart development
	project				38,278		-		-		-		38,278		-		-
Acquisition and other costs					18,270		-		-		15,000		3,040		-		230
Total expenses					538,551		173,419		89,057		112,243		101,924		-		61,908
Operating income (loss)					198,560		100,499		68,926		47,638		8,309		-		(26,812)
Income applicable to Toys					112,944		-		-		-		-		112,944		-
Income (loss) from partially owned
	entities				16,284		1,088		(3,915)		318		76		-		18,717
Income from Real Estate Fund					1,080		-		-		-		-		-		1,080
Interest and other investment
	income, net				117,108		172		32		8		9		-		116,887
Interest and debt expense					(134,765)		(33,086)		(28,926)		(23,069)		(9,338)		-		(40,346)
Net gain on disposition of wholly
	owned and partially owned assets				6,677		-		-		-		-		-		6,677
Income (loss) before income taxes					317,888		68,673		36,117		24,895		(944)		112,944		76,203
Income tax expense					(6,382)		(519)		(738)		(5)		(410)		-		(4,710)
Income (loss) from continuing
	operations				311,506		68,154		35,379		24,890		(1,354)		112,944		71,493
Income from discontinued operations					134,315		-		46,466		5,303		82,546		-		-
Net income					445,821		68,154		81,845		30,193		81,192		112,944		71,493
Net (income) loss attributable to
	noncontrolling interests in
	consolidated subsidiaries				(1,350)		(2,271)		-		155		-		-		766
Net (income) attributable to
	noncontrolling interests in the
	Operating Partnership, including
	unit distributions				(31,808)		-		-		-		-		-		(31,808)
Net income attributable to
	Vornado				412,663		65,883		81,845		30,348		81,192		112,944		40,451
Interest and debt expense⁽²⁾					198,848		31,994		32,221		24,164		12,907		40,135		57,427
Depreciation and amortization⁽²⁾					185,848		45,093		41,899		28,976		11,175		34,673		24,032
Income tax expense (benefit)⁽²⁾					66,828		519		848		5		410		69,018		(3,972)
EBITDA⁽¹⁾				$	864,187	$	143,489	$	156,813	$	83,493	$	105,684	$	256,770	$	117,938

See notes on page 31.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

20. Segment Information – continued


(Amounts in thousands)			For the Three Months Ended March 31, 2010
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other⁽³⁾
Property rentals				$	516,623	$	192,604	$	136,826	$	95,107	$	57,657	$	-	$	34,429
Straight-line rent adjustments					20,063		7,794		4,208		6,358		1,102		-		601
Amortization of acquired below-
		market leases, net			15,771		9,205		621		4,516		(121)		-		1,550
Total rentals					552,457		209,603		141,655		105,981		58,638		-		36,580
Tenant expense reimbursements					91,930		33,252		14,917		37,595		3,977		-		2,189
Fee and other income:
	Tenant cleaning fees				13,652		20,418		-		-		-		-		(6,766)
	Management and leasing fees				9,140		1,457		8,096		224		14		-		(651)
	Lease termination fees				4,970		728		446		3,408		388		-		-
	Other				13,165		4,410		5,837		740		1,962		-		216
Total revenues					685,314		269,868		170,951		147,948		64,979		-		31,568
Operating expenses					274,693		115,049		54,757		53,127		37,210		-		14,550
Depreciation and amortization					133,793		43,707		36,212		27,797		11,979		-		14,098
General and administrative					48,630		4,579		5,893		6,941		7,198		-		24,019
Total expenses					457,116		163,335		96,862		87,865		56,387		-		52,667
Operating income (loss)					228,198		106,533		74,089		60,083		8,592		-		(21,099)
Income applicable to Toys					125,870		-		-		-		-		125,870		-
Income (loss) from partially owned
	entities				11,344		1,303		(192)		1,391		176		-		8,666
Interest and other investment
	income, net				14,704		164		26		3		12		-		14,499
Interest and debt expense					(135,727)		(32,686)		(34,157)		(17,642)		(9,363)		-		(41,879)
Net gain on disposition of wholly
	owned and partially owned assets				3,305		-		-		-		796		-		2,509
Income (loss) before income taxes					247,694		75,314		39,766		43,835		213		125,870		(37,304)
Income tax expense					(5,580)		(474)		(686)		(35)		(194)		-		(4,191)
Income (loss) from continuing
	operations				242,114		74,840		39,080		43,800		19		125,870		(41,495)
(Loss) from discontinued operations					(9,570)		-		(8,323)		(202)		(1,045)		-		-
Net income (loss)					232,544		74,840		30,757		43,598		(1,026)		125,870		(41,495)
Net (income) loss attributable to
	noncontrolling interests in
	consolidated subsidiaries				(213)		(2,292)		-		242		-		-		1,837
Net (income) attributable to
	noncontrolling interests in the
	Operating Partnership, including
	unit distributions				(17,779)		-		-		-		-		-		(17,779)
Net income (loss) attributable to
	Vornado				214,552		72,548		30,757		43,840		(1,026)		125,870		(57,437)
Interest and debt expense⁽²⁾					196,187		30,992		35,171		19,354		13,009		41,140		56,521
Depreciation and amortization⁽²⁾					186,149		42,074		39,841		28,811		13,482		35,327		26,614
Income tax expense⁽²⁾					55,706		474		724		35		253		49,710		4,510
EBITDA⁽¹⁾				$	652,594	$	146,088	$	106,493	$	92,040	$	25,718	$	252,047	$	30,208

See notes on the following page.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

20. Segment Information - continued

	Notes to preceding tabular information:

(1)	EBITDA represents "Earnings Before Interest, Taxes, Depreciation and Amortization." We consider EBITDA a supplemental measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on a multiple of EBITDA, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. 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, depreciation and amortization and income tax (benefit) expense in the reconciliation of net income (loss) to EBITDA includes our share of these items from partially owned entities.

(3)	The components of other EBITDA are summarized below. The totals for each of the columns below agree to the total EBITDA for the "other" column in the preceding EBITDA by segment reconciliations.

			For the Three Months
(Amounts in thousands)			Ended March 31,
			2011		2010
Alexander's			$	15,168	$	14,399
Lexington				11,993		17,848
555 California Street				10,965		11,488
LNR (acquired in July 2010)				9,390		-
Industrial warehouses				356		839
Hotel Pennsylvania				(68)		(447)
Other investments				8,999		9,307
				56,803		53,434
Corporate general and administrative expenses⁽¹⁾				(21,355)		(19,388)
Investment income and other, net⁽¹⁾				14,376		11,514
Mezzanine loans loss reversal and net gain on disposition				82,744		-
Income from the mark-to-market of J.C. Penney derivative position				17,163		-
Net gain on sale of condominiums				4,586		2,427
Real Estate Fund placement fees				(3,048)		-
Acquisition costs				(1,523)		-
Net income attributable to noncontrolling interests in the Operating Partnership,
	including unit distributions			(31,808)		(17,779)
			$	117,938	$	30,208


(1)		The amounts in these captions (for this table only) exclude the mark-to-market of our deferred compensation plan assets
		and offsetting liability.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Trustees

Vornado Realty Trust

New York, New York

We have reviewed the accompanying consolidated balance sheet of Vornado Realty Trust (the “Company”) as of March 31, 2011, and the related consolidated statements of income, changes in equity, and cash flows for the three-month periods ended March 31, 2011 and 2010. These interim financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 the standards of the Public Company Accounting Oversight Board (United States), 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 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 the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Vornado Realty Trust as of December 31, 2010, and the related consolidated statements of income, changes in equity, and cash flows for the year then ended (not presented herein); and in our report dated February 23, 2011, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2010 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

May 3, 2011

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 represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. 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 “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Quarterly Report on Form 10‑Q. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or the date of any document incorporated by reference. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a discussion of our consolidated financial statements for the three months ended March 31, 2011. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us 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.

Critical Accounting Policies

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2010 in Management’s Discussion and Analysis of Financial Condition. There have been no significant changes to our policies during 2011.

Overview

Business Objective and Operating Strategy

Our business objective is to maximize shareholder value, which we measure by the total return provided to our shareholders. Below is a table comparing our performance to the Morgan Stanley REIT Index (“RMS”) and the SNL REIT Index ("SNL") for the following periods ended March 31, 2011:

		Total Return⁽¹⁾
		Vornado	RMS	SNL
	One-year	19.2%	24.3%	24.9%
	Three-year	12.6%	6.9%	11.2%
	Five-year	8.2%	7.2%	11.9%
	Ten-year	281.0%	191.9%	207.4%


(1) Past performance is not necessarily indicative of how we will perform in the future.

We intend to achieve our business objective by continuing to pursue our investment philosophy and executing our 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, DC, where we believe there is a 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 and redeveloping existing properties to increase returns and maximize value; and

· Investing in operating companies that have a significant real estate component.

We expect to finance our growth, acquisitions and investments using internally generated funds, proceeds from possible asset sales and by accessing the public and private capital markets. We may also offer Vornado common or preferred shares or Operating Partnership units in exchange for property and may repurchase or otherwise reacquire our shares or any other securities in the future.

We compete with a large number of real estate property owners and developers, some of which may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the national, regional and local economies, the 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. See “Item 1A. Risk Factors” in our Annual Report on Form 10-K, as amended, for additional information regarding these factors.

2011 Acquisitions and Investments

One Park Avenue

280 Park Avenue Mezzanine Loans Joint Venture

Overview - continued

2011 Dispositions

2011 Financing Activities

On February 11, 2011, we completed a $425,000,000 refinancing of Two Penn Plaza, a 1.6 million square foot Manhattan office building. The seven-year loan bears interest at LIBOR plus 2.00%, which was swapped for the term of the loan to a fixed rate of 5.13%. The loan amortizes based on a 30-year schedule beginning in the fourth year. We retained net proceeds of approximately $139,000,000 after repaying the existing loan and closing costs.

On February 10, 2011, we completed a $150,000,000 financing of 2121 Crystal Drive, a 506,000 square foot office building located in Crystal City, Arlington, Virginia. The 12-year fixed rate loan bears interest at 5.51% and amortizes based on a 30-year schedule beginning in the third year. This property was previously unencumbered.

On January 18, 2011, we repaid the outstanding balance of the construction loan on 220 20^th Street and closed on a new $76,100,000 mortgage financing at a fixed rate of 4.61%. The new loan has a seven-year term and amortizes based on a 30-year schedule.

On January 10, 2011, we completed a $75,000,000 financing of North Bergen (Tonnelle Avenue), a 410,000 square foot strip shopping center. The seven-year fixed rate loan bears interest rate at 4.59% and amortizes based on a 25-year schedule beginning in the sixth year. This property was previously unencumbered.

In January 2011, we completed a $60,000,000 financing of land under a portion of the Borgata Hotel and Casino complex. The 10-year fixed rate loan bears interest at 5.14% and amortizes based on a 30-year schedule beginning in the third year.

Overview - continued

Quarter Ended March 31, 2011 Financial Results Summary

Net income attributable to common shareholders for the quarter ended March 31, 2011 was $399,215,000, or $2.12 per diluted share, compared to $200,285,000, or $1.09 per diluted share, for the quarter ended March 31, 2010. Net income for the quarters ended March 31, 2011 and 2010 include $51,165,000 and $307,000, respectively, of net gains on sale of real estate and certain other items that affect comparability, which are listed in the table below. The aggregate of net gains on sale of real estate and the items in the table below, net of amounts attributable to noncontrolling interests, increased net income attributable to common shareholders by $215,400,000, or $1.12 per diluted share for the quarter ended March 31, 2011 and $2,389,000, or $0.01 per diluted share for the quarter ended March 31, 2010.

Funds From Operations attributable to common shareholders plus assumed conversions (“FFO”) for the quarter ended March 31, 2011 was $505,931,000, or $2.64 per diluted share, compared to $353,826,000, or $1.87 per diluted share, for the prior year’s quarter. FFO for the quarters ended March 31, 2011 and 2010 include certain items that affect comparability which are listed in the table below. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO by $167,473,000, or $0.87 per diluted share for the quarter ended March 31, 2011 and $5,248,000, or $0.03 per diluted share for the quarter ended March 31, 2010.

		For the Three Months Ended
		March 31,
(Amounts in thousands)		2011		2010
Items that affect comparability income (expense):
	Net gain on extinguishment of debt	$	83,907	$	-
	Mezzanine loans loss reversal and net gain on disposition		82,744		-
	Income from the mark-to-market of J.C. Penney derivative position		17,163		-
	Our share of LNR's tax settlement gain		8,977		-
	Net gain on sale of condominiums		4,586		2,427
	Net gain resulting from Lexington's stock issuances		1,452		5,998
	Net gain on redemption of perpetual preferred units		-		2,154
	Buy-out of a below-market lease		(15,000)		-
	Real Estate Fund placement fees		(3,048)		-
	Litigation loss accrual		-		(10,056)
	(Negative FFO) FFO attributable to discontinued operations		(757)		3,750
	Other, net		(1,236)		1,373
			178,788		5,646
Noncontrolling interests' share of above adjustments			(11,315)		(398)
Items that affect comparability, net		$	167,473	$	5,248

The percentage increase in GAAP basis and cash basis same store Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of our operating segments for the quarter ended March 31, 2011 over the quarter ended March 31, 2010 and the trailing quarter ended December 31, 2010 are summarized below.

			New York		Washington, DC			Merchandise
Same Store EBITDA:			Office		Office	Retail		Mart
	March 31, 2011 vs. March 31, 2010
		GAAP basis	(1.7%)		5.1%	3.9%		8.6%
		Cash Basis	(0.7%)		10.7%	6.9%		9.6%
	March 31, 2011 vs. December 31, 2010
		GAAP basis	(3.7%)	⁽¹⁾	2.0%	(2.1%)	⁽²⁾	5.8%
		Cash Basis	(1.3%)	⁽¹⁾	2.3%	0.4%	⁽²⁾	6.2%


(1)	Reflects a seasonal increase in utility costs.

(2)	Primarily due to rents from holiday leasing and percentage rents recognized in the fourth quarter.

Calculations of same store EBITDA, reconciliations of our net income to EBITDA and FFO and the reasons we consider these non-GAAP financial measures useful are provided in the following pages of Management’s Discussion and Analysis of the Financial Condition and Results of Operations.

Overview - continued

The leasing activity presented below is based on leases signed during the period and is not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Tenant improvements and leasing commissions presented below are based on our share of square feet leased during the period.

(Square feet in thousands)					New York		Washington, DC				Merchandise Mart
As of March 31, 2011:					Office		Office		Retail ⁽³⁾		Office		Showroom
	Total square feet (in service)					18,445		21,171		25,266		2,621		4,191
	Our share of square feet (in service)					16,501		17,829		23,424		2,621		4,191
	Number of properties					29		82		160		6		6
	Occupancy rate					95.7%		93.4%⁽²⁾		92.4%		90.8%		93.1%

Leasing Activity:
Quarter Ended March 31, 2011:
	Total square feet leased					673		404		353		-		116
	Our share of square feet leased:					336		311		346		-		116
		Initial rent⁽¹⁾			$	50.38	$	37.57	$	31.56	$	-	$	36.06
		Weighted average lease term (years)				13.9		3.8		9.3		-		7.0
		Relet space (included above):
			Square feet			183		268		75		-		116
			Initial rent - cash basis⁽¹⁾		$	57.32	$	36.50	$	26.22	$	-	$	36.06
			Prior escalated rent - cash basis		$	49.27	$	35.32	$	21.09	$	-	$	37.48
			Percentage (decrease) increase:
				Cash basis		16.3%		3.3%		24.3%		-		(3.8%)
				GAAP basis		16.6%		10.2%		31.1%		-		-
		Tenant improvements and leasing
			commissions:
			Per square foot		$	58.08	$	12.04	$	10.01	$	-	$	3.11
			Per square foot per annum:		$	4.17	$	3.17	$	1.08	$	-	$	0.44
				Percentage of initial rent		8.3%		8.4%		3.4%		-		1.2%

As of December 31, 2010:
	Total square feet (in service)	17,454	21,149	25,557	2,608	4,204
	Our share of square feet (in service)	16,194	17,823	23,453	2,608	4,204
	Number of properties	28	82	161	6	6
	Occupancy rate	95.6%	94.3%⁽²⁾	92.3%	91.5%	93.2%

As of March 31, 2010:
	Total square feet (in service)	17,489	20,551	25,075	2,470	6,301
	Our share of square feet (in service)	16,175	18,210	22,684	2,470	6,301
	Number of properties	28	82	164	8	8
	Occupancy rate	95.3%	94.1%⁽²⁾	91.2%	87.5%	89.1%



(1)	Most leases include periodic step-ups in rent which are not reflected in the initial rent per square foot leased.

(2)	Excluding residential and other properties, occupancy rates for the office properties were as follows.
		March 31, 2011	92.5%
		December 31, 2010	94.0%
		March 31, 2010	94.6%

(3)	Mall sales per square foot, including partially owned malls, for the trailing twelve months ended March 31, 2011 and 2010 were $460 and
	$468, respectively.

Net Income and EBITDA by Segment for the Three Months Ended March 31, 2011 and 2010

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, 2011 and 2010.


(Amounts in thousands)			For the Three Months Ended March 31, 2011
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other⁽³⁾
Property rentals				$	540,472	$	194,242	$	138,884	$	107,447	$	62,565	$	-	$	37,334
Straight-line rent adjustments					13,929		7,870		(5)		4,181		790		-		1,093
Amortization of acquired below-
		market leases, net			16,759		8,177		466		6,960		17		-		1,139
Total rentals					571,160		210,289		139,345		118,588		63,372		-		39,566
Tenant expense reimbursements					90,959		33,876		9,297		39,331		4,023		-		4,432
Cleveland Medical Mart development
		project			40,699		-		-		-		40,699		-		-
Fee and other income:
	Tenant cleaning fees				15,423		23,430		-		-		-		-		(8,007)
	Management and leasing fees				4,106		1,495		2,885		555		103		-		(932)
	Lease termination fees				1,176		65		1,111		-		-		-		-
	Other				13,588		4,763		5,345		1,407		2,036		-		37
Total revenues					737,111		273,918		157,983		159,881		110,233		-		35,096
Operating expenses					290,773		121,909		48,836		60,680		41,946		-		17,402
Depreciation and amortization					132,227		46,146		33,684		28,541		11,062		-		12,794
General and administrative					59,003		5,364		6,537		8,022		7,598		-		31,482
Cleveland Medical Mart development
	project				38,278		-		-		-		38,278		-		-
Acquisition and other costs					18,270		-		-		15,000		3,040		-		230
Total expenses					538,551		173,419		89,057		112,243		101,924		-		61,908
Operating income (loss)					198,560		100,499		68,926		47,638		8,309		-		(26,812)
Income applicable to Toys					112,944		-		-		-		-		112,944		-
Income (loss) from partially owned
	entities				16,284		1,088		(3,915)		318		76		-		18,717
Income from Real Estate Fund					1,080		-		-		-		-		-		1,080
Interest and other investment
	income, net				117,108		172		32		8		9		-		116,887
Interest and debt expense					(134,765)		(33,086)		(28,926)		(23,069)		(9,338)		-		(40,346)
Net gain on disposition of wholly
	owned and partially owned assets				6,677		-		-		-		-		-		6,677
Income (loss) before income taxes					317,888		68,673		36,117		24,895		(944)		112,944		76,203
Income tax expense					(6,382)		(519)		(738)		(5)		(410)		-		(4,710)
Income (loss) from continuing
	operations				311,506		68,154		35,379		24,890		(1,354)		112,944		71,493
Income from discontinued operations					134,315		-		46,466		5,303		82,546		-		-
Net income					445,821		68,154		81,845		30,193		81,192		112,944		71,493
Net (income) loss attributable to
	noncontrolling interests in
	consolidated subsidiaries				(1,350)		(2,271)		-		155		-		-		766
Net (income) attributable to
	noncontrolling interests in the
	Operating Partnership, including
	unit distributions				(31,808)		-		-		-		-		-		(31,808)
Net income attributable to
	Vornado				412,663		65,883		81,845		30,348		81,192		112,944		40,451
Interest and debt expense⁽²⁾					198,848		31,994		32,221		24,164		12,907		40,135		57,427
Depreciation and amortization⁽²⁾					185,848		45,093		41,899		28,976		11,175		34,673		24,032
Income tax expense (benefit)⁽²⁾					66,828		519		848		5		410		69,018		(3,972)
EBITDA⁽¹⁾				$	864,187	$	143,489	$	156,813	$	83,493	$	105,684	$	256,770	$	117,938

____________________

See notes on page 40.

Net Income and EBITDA by Segment for the Three Months Ended March 31, 2011 and 2010 - continued


(Amounts in thousands)			For the Three Months Ended March 31, 2010
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other⁽³⁾
Property rentals				$	516,623	$	192,604	$	136,826	$	95,107	$	57,657	$	-	$	34,429
Straight-line rent adjustments					20,063		7,794		4,208		6,358		1,102		-		601
Amortization of acquired below-
		market leases, net			15,771		9,205		621		4,516		(121)		-		1,550
Total rentals					552,457		209,603		141,655		105,981		58,638		-		36,580
Tenant expense reimbursements					91,930		33,252		14,917		37,595		3,977		-		2,189
Fee and other income:
	Tenant cleaning fees				13,652		20,418		-		-		-		-		(6,766)
	Management and leasing fees				9,140		1,457		8,096		224		14		-		(651)
	Lease termination fees				4,970		728		446		3,408		388		-		-
	Other				13,165		4,410		5,837		740		1,962		-		216
Total revenues					685,314		269,868		170,951		147,948		64,979		-		31,568
Operating expenses					274,693		115,049		54,757		53,127		37,210		-		14,550
Depreciation and amortization					133,793		43,707		36,212		27,797		11,979		-		14,098
General and administrative					48,630		4,579		5,893		6,941		7,198		-		24,019
Total expenses					457,116		163,335		96,862		87,865		56,387		-		52,667
Operating income (loss)					228,198		106,533		74,089		60,083		8,592		-		(21,099)
Income applicable to Toys					125,870		-		-		-		-		125,870		-
Income (loss) from partially owned
	entities				11,344		1,303		(192)		1,391		176		-		8,666
Interest and other investment
	income, net				14,704		164		26		3		12		-		14,499
Interest and debt expense					(135,727)		(32,686)		(34,157)		(17,642)		(9,363)		-		(41,879)
Net gain on disposition of wholly
	owned and partially owned assets				3,305		-		-		-		796		-		2,509
Income (loss) before income taxes					247,694		75,314		39,766		43,835		213		125,870		(37,304)
Income tax expense					(5,580)		(474)		(686)		(35)		(194)		-		(4,191)
Income (loss) from continuing
	operations				242,114		74,840		39,080		43,800		19		125,870		(41,495)
(Loss) from discontinued operations					(9,570)		-		(8,323)		(202)		(1,045)		-		-
Net income (loss)					232,544		74,840		30,757		43,598		(1,026)		125,870		(41,495)
Net (income) loss attributable to
	noncontrolling interests in
	consolidated subsidiaries				(213)		(2,292)		-		242		-		-		1,837
Net (income) attributable to
	noncontrolling interests in the
	Operating Partnership, including
	unit distributions				(17,779)		-		-		-		-		-		(17,779)
Net income (loss) attributable to
	Vornado				214,552		72,548		30,757		43,840		(1,026)		125,870		(57,437)
Interest and debt expense⁽²⁾					196,187		30,992		35,171		19,354		13,009		41,140		56,521
Depreciation and amortization⁽²⁾					186,149		42,074		39,841		28,811		13,482		35,327		26,614
Income tax expense⁽²⁾					55,706		474		724		35		253		49,710		4,510
EBITDA⁽¹⁾				$	652,594	$	146,088	$	106,493	$	92,040	$	25,718	$	252,047	$	30,208

___________________________

See notes on the following page.

Net Income and EBITDA by Segment for the Three Months Ended March 31, 2011 and 2010 - continued

Notes to preceding tabular information:

(1) EBITDA represents “Earnings Before Interest, Taxes, Depreciation and Amortization.” We consider EBITDA a supplemental measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on a multiple of EBITDA, we utilize these measures to make investment decisions as well as to compare the performance of our assets to that of our peers. 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, depreciation and amortization and income tax (benefit) expense in the reconciliation of our net income (loss) to EBITDA includes our share of these items from partially owned entities.

(3) The components of other EBITDA are summarized below. The totals for each of the columns below agree to the total EBITDA for the “other” column in the preceding EBITDA by segment reconciliations.

			For the Three Months
(Amounts in thousands)			Ended March 31,
			2011		2010
Alexander's			$	15,168	$	14,399
Lexington				11,993		17,848
555 California Street				10,965		11,488
LNR (acquired in July 2010)				9,390		-
Industrial warehouses				356		839
Hotel Pennsylvania				(68)		(447)
Other investments				8,999		9,307
				56,803		53,434
Corporate general and administrative expenses⁽¹⁾				(21,355)		(19,388)
Investment income and other, net⁽¹⁾				14,376		11,514
Mezzanine loans loss reversal and net gain on disposition				82,744		-
Income from the mark-to-market of J.C. Penney derivative position				17,163		-
Net gain on sale of condominiums				4,586		2,427
Real Estate Fund placement fees				(3,048)		-
Acquisition costs				(1,523)		-
Net income attributable to noncontrolling interests in the Operating Partnership,
	including unit distributions			(31,808)		(17,779)
			$	117,938	$	30,208


(1)		The amounts in these captions (for this table only) exclude the mark-to-market of our deferred compensation plan assets
		and offsetting liability.

Results of Operations – Three Months Ended March 31, 2011 Compared to March 31, 2010

Revenues

Our revenues, which consist of property rentals, tenant expense reimbursements, hotel revenues, trade shows revenues, amortization of acquired below-market leases, net of above-market leases and fee income, were $737,111,000 for the three months ended March 31, 2011, compared to $685,314,000 in the prior year’s quarter, an increase of $51,797,000. Below are the details of the increase (decrease) by segment:

(Amounts in thousands)

						New York		Washington, DC					Merchandise
Increase (decrease) due to:			Total			Office		Office			Retail		Mart			Other
Property rentals:
	Acquisitions and other		$	(1,976)		$	-	$	(8,410)		$	4,997	$	-		$	1,437
	Development			2,366			-		2,569			(203)		-			-
	Hotel Pennsylvania			2,014			-		-			-		-			2,014
	Trade Shows			2,314			-		-			-		2,314			-
	Amortization of acquired below-market
		leases, net		1,174			(1,028)		(155)			2,444		138			(225)
	Leasing activity (see page 37)			12,811			1,714		3,686			5,369		2,282			(240)
				18,703			686		(2,310)			12,607		4,734			2,986

Tenant expense reimbursements:
	Acquisitions/development			(2,217)			-		(3,821)			(1,083)		-			2,687
	Operations			1,246			624		(1,799)			2,819		46			(444)
				(971)			624		(5,620)			1,736		46			2,243

Cleveland Medical Mart development
	project			40,699	⁽¹⁾		-		-			-		40,699	⁽¹⁾		-

Fee and other income:
	BMS cleaning fees			1,771			3,012		-			-		-			(1,241)	⁽²⁾
	Management and leasing fees			(5,034)			38		(5,211)	⁽³⁾		331		89			(281)
	Lease cancellation fee income			(3,794)			(663)		665			(3,408)		(388)			-
	Other			423			353		(492)			667		74			(179)
				(6,634)			2,740		(5,038)			(2,410)		(225)			(1,701)

Total increase (decrease) in revenues			$	51,797		$	4,050	$	(12,968)		$	11,933	$	45,254		$	3,528



(1)		$38,278 is offset by development costs expensed in the quarter. See note (5) on page 42.

(2)		Primarily from the elimination of intercompany fees from operating segments upon consolidation. See note (2) on page 42.

(3)		Primarily from leasing fees in the prior year in connection with our management of a development project.

Results of Operations – Three Months Ended March 31, 2011 Compared to March 31, 2010 - continued

Expenses

Our expenses, which consist primarily of operating, depreciation and amortization and general and administrative expenses, were $538,551,000 for the three months ended March 31, 2011, compared to $457,116,000 in the prior year’s quarter, an increase of $81,435,000. Below are the details of the increase (decrease) by segment:

(Amounts in thousands)

					New York			Washington, DC					Merchandise
Increase (decrease) due to:			Total		Office			Office		Retail			Mart			Other
Operating:
	Acquisitions and other		$	1,569	$	-		$	(4,796)	$	3,678		$	-		$	2,687
	Development/redevelopment			508		-			(11)		519			-			-
	Hotel Pennsylvania			1,562		-			-		-			-			1,562
	Trade Shows			962		-			-		-			962			-
	Operations			11,479		6,860	⁽¹⁾		(1,114)		3,356			3,774			(1,397)	⁽²⁾
				16,080		6,860			(5,921)		7,553			4,736			2,852

Depreciation and amortization:
	Acquisitions/development			(3,027)		-			(4,058)		1,031			-			-
	Operations			1,461		2,439			1,530		(287)			(917)			(1,304)
				(1,566)		2,439			(2,528)		744			(917)			(1,304)

General and administrative:
	Mark-to-market of deferred compensation
		plan liability ⁽³⁾		2,189		-			-		-			-			2,189
	Real Estate Fund placement fees			3,048		-			-		-			-			3,048
	Operations			5,136		785			644		1,081			400			2,226	⁽⁴⁾
				10,373		785			644		1,081			400			7,463

Cleveland Medical Mart development
	project⁽⁵⁾			38,278		-			-		-			38,278	⁽⁵⁾		-

Acquisition and other costs				18,270		-			-		15,000	⁽⁶⁾		3,040			230

Total increase (decrease) in expenses			$	81,435	$	10,084		$	(7,805)	$	24,378		$	45,537		$	9,241


(1)		Results from increases in (i) reimbursable operating expenses of $3,980, (ii) BMS operating expenses of $2,720 and (iii) non-reimbursable operating expenses of $160.
(2)		Primarily from the elimination of intercompany fees from operating segments upon consolidation. See note (2) on page 41.

(3)		This increase in expense is entirely offset by a corresponding increase in income from the mark-to-market of the deferred compensation plan assets, a component of “interest and other investment income, net” on our consolidated statements of income.

(4)		Primarily from higher payroll costs and stock-based compensation expense.

(5)		See note (1) on page 41.

(6)		Represents the buy-out of a below-market lease.

Results of Operations – Three Months Ended March 31, 2011 Compared to March 31, 2010 - continued

Income Applicable to Toys

In the three months ended March 31, 2011, we recognized net income of $112,944,000 from our investment in Toys, comprised of $110,821,000 for our 32.7% share of Toys’ net income ($179,839,000 before our share of Toys’ income tax expense) and $2,123,000 of interest and other income.

In the three months ended March 31, 2010, we recognized net income of $125,870,000 from our investment in Toys, comprised of $123,840,000 for our 32.7% share of Toys’ net income ($173,550,000 before our share of Toys’ income tax expense) and $2,030,000 of interest and other income.

Income from Partially Owned Entities

Summarized below are the components of income from partially owned entities for the three months ended March 31, 2011 and 2010.

		For the Three Months Ended
		March 31,
(Amounts in thousands)		2011		2010
Equity in Net Income (Loss):
Alexander's - 32.4% share of equity in net income		$	8,011	$	6,460

Lexington - 12.6% share in 2011 and 13.9% share in 2010 of equity in net income⁽¹⁾			2,172		6,045

LNR - 26.2% share of equity in net income (acquired in July 2010)⁽²⁾			15,254		-

India real estate ventures - 4% to 36.5% range in our share of equity in net (loss) income			(207)		1,651

Other, net⁽³⁾			(8,946)		(2,812)
		$	16,284	$	11,344


(1)	The three months ended March 31, 2011 and 2010 include $1,452 and $5,998, respectively, of net gains resulting from Lexington's stock issuances.

(2)	Includes $8,977 for our share of a tax settlement gain.

(3)	Represents our equity in net income or loss of partially owned office buildings in New York and Washington, DC, the Monmouth Mall, Verde Realty Operating Partnership, 85 10th Avenue Associates and others. The three months ended March 31, 2011 includes $9,022 for our share of expense, primarily for straight-line rent reserves and the write-off of tenant improvements in connection with a tenant's bankruptcy at the Warner Building.

Income from Real Estate Fund

In the three months ended March 31, 2011, we recognized income of $1,080,000 from our Real Estate Fund.

Results of Operations – Three Months Ended March 31, 2011 Compared to March 31, 2010 - continued

Interest and Other Investment Income, net

Interest and other investment income, net (comprised of the mark-to-market of derivative positions in marketable equity securities, interest income on mezzanine loans receivable, other interest income and dividend income) was $117,108,000 in the three months ended March 31, 2011, compared to $14,704,000 in the prior year’s quarter, an increase of $102,404,000. This increase resulted from:


(Amounts in thousands)
Mezzanine loans loss reversal and net gain on disposition		$	82,744
Income from the mark-to-market of J.C. Penney derivative position			17,163
Increase in the value of investments in our deferred compensation plan (offset by a corresponding
	increase in the liability for plan assets in general and administrative expenses)		2,189
Other, net			308
		$	102,404

Interest and Debt Expense

Interest and debt expense was $134,765,000 in the three months ended March 31, 2011, compared to $135,727,000 in the prior year’s quarter, a decrease of $962,000. This decrease was primarily due to savings of (i) $6,196,000 applicable to the acquisition, retirement and repayment of our convertible senior debentures and senior unsecured notes, (ii) $4,579,000 from the deconsolidation of the Warner Building resulting from the sale of a 45% interest in October 2010, and (iii) $3,950,000 from the repayment of the Springfield Mall mortgage at a discount in December 2010, partially offset by (iv) $6,645,000 from the issuance of $660,000,000 of cross-collateralized debt secured by 40 of our strip shopping centers, (v) $5,057,000 from the issuance of $500,000,000 of senior unsecured notes in March 2010, and (vi) $1,262,000 from the consolidation of the San Jose Shopping Center resulting from our acquisition in October 2010 of the 55% interest we did not previously own.

Net Gain on Disposition of Wholly Owned and Partially Owned Assets

Net gain on disposition of wholly owned and partially owned assets was $6,677,000 in the three months ended March 31, 2011, compared to $3,305,000 in the prior year’s quarter and resulted primarily from the sales of residential condominiums and marketable securities.

Income Tax Expense

Income tax expense was $6,382,000 in the three months ended March 31, 2011, compared to $5,580,000 in the prior year’s quarter, an increase of $802,000. This increase resulted primarily from higher taxable income of our taxable REIT subsidiaries.

Results of Operations – Three Months Ended March 31, 2011 Compared to March 31, 2010 - continued

Income (Loss) from Discontinued Operations

The table below sets forth the combined results of assets related to discontinued operations for the three months ended March 31, 2011 and 2010, including the High Point Complex in North Carolina, which was disposed by the receiver on March 31, 2011.


	For the Three Months Ended
	March 31,
(Amounts in thousands)	2011		2010
Total revenues	$	5,987	$	11,021
Total expenses		6,744		10,535
		(757)		486
Net gain on extinguishment of High Point debt		83,907		-
Net gain on sale of 1140 Connecticut Avenue and 1227 25th Street		45,862		-
Net gain on sales of other real estate		5,303		-
Litigation loss accrual		-		(10,056)
Income (loss) from discontinued operations	$	134,315	$	(9,570)

Net Income Attributable to Noncontrolling Interests in Consolidated Subsidiaries

Net income attributable to noncontrolling interests in consolidated subsidiaries was $1,350,000 in the three months ended March 31, 2011, compared to $213,000 in the prior year’s quarter, an increase of $1,137,000. This increase resulted primarily from higher income allocated to the noncontrolling interests at 555 California Street.

Net Income Attributable to Noncontrolling Interests in the Operating Partnership, including Unit Distributions

Net income attributable to noncontrolling interests in the Operating Partnership, including unit distributions for the three months ended March 31, 2011 and 2010 is comprised of (i) allocations of income to redeemable noncontrolling interests of $27,305,000 and $15,215,000, respectively, (ii) preferred unit distributions of the Operating Partnership of $4,503,000 and $4,718,000, respectively, and (iii) a net gain of $2,154,000 on the redemption of a portion of the Series D-12 perpetual preferred units in the three months ended March 31, 2010. The increase of $12,090,000 in allocations of income to redeemable noncontrolling interests resulted primarily from higher net income subject to allocation to unitholders.

Preferred Share Dividends

Preferred share dividends were $13,448,000 for the three months ended March 31, 2011, compared to $14,267,000 for the prior year’s quarter, a decrease of $819,000. This decrease resulted from the redemption of all of the Series D-10 preferred shares in September 2010.

Results of Operations – Three Months Ended March 31, 2011 Compared to March 31, 2010 - continued

Same Store EBITDA

Same store EBITDA represents EBITDA from property level operations which are owned by us in both the current and prior year reporting periods. Same store EBITDA excludes segment-level overhead expenses, which are expenses that we do not consider to be property-level expenses, as well as other non-operating items. We present same store EBITDA on both a GAAP basis and a cash basis, which excludes income from the straight-lining of rents, amortization of below-market leases, net of above-market leases and other non-cash adjustments. We present these non-GAAP measures to (i) facilitate meaningful comparisons of the operational performance of our properties and segments, (ii) make decisions on whether to buy, sell or refinance properties, and (iii) compare the performance of our properties and segments to those of our peers. Same store EBITDA should not be considered as an alternative to net income or cash flow from operations and may not be comparable to similarly titled measures employed by other companies.

Below are the same store EBITDA results on a GAAP and cash basis for each of our segments for the three months ended March 31, 2011, compared to the three months ended March 31, 2010.

			New York		Washington, DC				Merchandise
(Amounts in thousands)			Office		Office		Retail		Mart
EBITDA for the three months ended March 31, 2011			$	143,489	$	156,813	$	83,493	$	105,684
	Add-back: non-property level overhead
		expenses included above		5,364		6,537		8,022		7,598
	Less: EBITDA from acquisitions, dispositions
		and other non-operating income or expenses		(1,325)		(51,629)		5,982		(83,798)
GAAP basis same store EBITDA for the three months
		ended March 31, 2011		147,528		111,721		97,497		29,484
	Less: Adjustments for straight-line rents,
		amortization of below-market leases, net and other
		non-cash adjustments		(14,037)		469		(6,834)		(807)
Cash basis same store EBITDA for the three months
		ended March 31, 2011	$	133,491	$	112,190	$	90,663	$	28,677


EBITDA for the three months ended March 31, 2010			$	146,088	$	106,493	$	92,040	$	25,718
	Add-back: non-property level overhead
		expenses included above		4,579		5,893		6,941		7,198
	Less: EBITDA from acquisitions, dispositions
		and other non-operating income or expenses		(624)		(6,091)		(5,116)		(5,776)
GAAP basis same store EBITDA for the three months
		ended March 31, 2010		150,043		106,295		93,865		27,140
	Less: Adjustments for straight-line rents,
		amortization of below-market leases, net and other
		non-cash adjustments		(15,608)		(4,992)		(9,029)		(981)
Cash basis same store EBITDA for the three months
		ended March 31, 2010	$	134,435	$	101,303	$	84,836	$	26,159


(Decrease) increase in GAAP basis same store EBITDA for
		the three months ended March 31, 2011 over the
		three months ended March 31, 2010	$	(2,515)	$	5,426	$	3,632	$	2,344

(Decrease) increase in Cash basis same store EBITDA for
		the three months ended March 31, 2011 over the
		three months ended March 31, 2010	$	(944)	$	10,887	$	5,827	$	2,518


% (decrease) increase in GAAP basis same store EBITDA				(1.7%)		5.1%		3.9%		8.6%

% (decrease) increase in Cash basis same store EBITDA				(0.7%)		10.7%		6.9%		9.6%

SUPPLEMENTAL INFORMATION

Three Months Ended March 31, 2011 vs. Three Months Ended December 31, 2010

Our revenues and expenses are subject to seasonality during the year which impacts quarterly net earnings, cash flows and funds from operations, and therefore impacts comparisons of the current quarter to the previous quarter. The business of Toys is highly seasonal. Historically, Toys’ fourth quarter net income, which we record on a one-quarter lag basis in our first quarter, accounts for more than 80% of Toys’ fiscal year net income. The Office and Merchandise Mart segments have historically experienced higher utility costs in the first and third quarters of the year. The Merchandise Mart segment also has experienced higher earnings in the second and fourth quarters of the year due to major trade shows occurring in those quarters. The Retail segment revenue in the fourth quarter is typically higher due to the recognition of percentage rental income.

Below are the same store EBITDA results on a GAAP and cash basis for each of our segments for the three months ended March 31, 2011, compared to the three months ended December 31, 2010.

			New York		Washington, DC				Merchandise
(Amounts in thousands)			Office		Office		Retail		Mart
EBITDA for the three months ended March 31, 2011			$	143,489	$	156,813	$	83,493	$	105,684
	Add-back: non-property level overhead expenses
		included above		5,364		6,537		8,022		7,598
	Less: EBITDA from acquisitions, dispositions
		and other non-operating income or expenses		(1,070)		(51,629)		8,177		(82,919)
GAAP basis same store EBITDA for the three months
	ended March 31, 2011			147,783		111,721		99,692		30,363
	Less: Adjustments for straight-line rents, amortization of
		below-market leases, net and other non-cash adjustments		(14,038)		469		(9,029)		(807)
Cash basis same store EBITDA for the three months
	ended March 31, 2011		$	133,745	$	112,190	$	90,663	$	29,556


EBITDA for the three months ended December 31, 2010⁽¹⁾			$	139,451	$	163,581	$	136,535	$	9,124
	Add-back: non-property level overhead expenses
		included above		4,761		7,385		7,019		6,534
	Less: EBITDA from acquisitions, dispositions
		and other non-operating income or expenses		9,229		(61,441)		(41,747)		13,043
GAAP basis same store EBITDA for the three months
	ended December 31, 2010			153,441		109,525		101,807		28,701
	Less: Adjustments for straight-line rents, amortization of
		below-market leases, net and other non-cash adjustments		(17,930)		183		(11,524)		(858)
Cash basis same store EBITDA for the three months
	ended December 31, 2010		$	135,511	$	109,708	$	90,283	$	27,843


(Decrease) increase in GAAP basis same store EBITDA for
	the three months ended March 31, 2011 over the
	three months ended December 31, 2010		$	(5,658)	$	2,196	$	(2,115)	$	1,662

(Decrease) increase in Cash basis same store EBITDA for
	the three months ended March 31, 2011 over the
	three months ended December 31, 2010		$	(1,766)	$	2,482	$	380	$	1,713


% (decrease) increase in GAAP basis same store EBITDA				(3.7%)		2.0%		(2.1%)		5.8%

% (decrease) increase in Cash basis same store EBITDA				(1.3%)		2.3%		0.4%		6.2%


(1)		Below is the reconciliation of net income (loss) to EBITDA for the three months ended December 31, 2010

			New York		Washington, DC				Merchandise
(Amounts in thousands)			Office		Office		Retail		Mart
Net income (loss) attributable to Vornado for the three months
	ended December 31, 2010		$	63,985	$	92,542	$	83,157	$	(19,191)
Interest and debt expense				31,805		31,819		24,378		16,009
Depreciation and amortization				43,164		38,354		29,000		12,015
Income tax expense				497		866		-		291
EBITDA for the three months ended December 31, 2010			$	139,451	$	163,581	$	136,535	$	9,124

LIQUIDITY AND CAPITAL RESOURCES

We anticipate that cash flow from continuing operations over the next twelve months will be adequate to fund our business operations, cash distributions to unitholders of the Operating Partnership, cash dividends to shareholders, debt amortization and recurring capital expenditures. Capital requirements for development expenditures and acquisitions (excluding Fund acquisitions) may require funding from borrowings and/or equity offerings. In addition, the Fund has aggregate unfunded equity commitments of $567,699,000 for acquisitions, including $141,924,000 from us. We may from time to time purchase or retire outstanding debt securities. Such purchases, if any, will depend on prevailing market conditions, liquidity requirements and other factors. The amounts involved in connection with these transactions could be material to our consolidated financial statements.

Property rental income is our primary source of cash flow and is dependent upon the occupancy and rental rates of our properties. Other sources of liquidity to fund cash requirements include proceeds from debt financings, including mortgage loans, senior unsecured borrowings, and our revolving credit facilities; proceeds from the issuance of common and preferred equity; and asset sales. Our cash requirements include property operating expenses, capital improvements, tenant improvements, leasing commissions, dividends to shareholders, distributions to unitholders of the Operating Partnership, as well as acquisition and development costs.

Cash Flows for the Three Months Ended March 31, 2011

Our cash and cash equivalents were $618,361,000 at March 31, 2011, a $72,428,000 decrease over the balance at December 31, 2010. This decrease was primarily due to cash flows from financing activities as discussed below.

Our consolidated outstanding debt was $10,631,396,000 at March 31, 2011, a $262,243,000 decrease over the balance at December 31, 2010. As of March 31, 2011 and December 31, 2010, $374,000,000 and $874,000,000, respectively, was outstanding under our revolving credit facilities. During the remainder of 2011 and 2012, $1,435,142,000 and $1,715,165,000 of our outstanding debt matures, respectively. We may refinance our maturing debt as it comes due or choose to repay it.

Cash flows provided by operating activities of $196,102,000 was comprised of (i) net income of $445,821,000 and (ii) distributions of income from partially owned entities of $25,921,000, partially offset by (iii) $256,647,000 of non-cash adjustments, which include depreciation and amortization expense, the effect of straight-lining of rental income and equity in net income of partially owned entities, and (iv) the net change in operating assets and liabilities of $18,993,000, including $85,536,000 related to Real Estate Fund investments.

Net cash provided by investing activities of $60,421,000 was comprised of (i) $192,523,000 of capital distributions from partially owned entities, (ii) $127,199,000 of proceeds from sales of real estate and related investments, (iii) $73,608,000 of proceeds from sales and repayments of mezzanine loans (iv) $15,162,000 of proceeds from sales of, and return of investments in, marketable securities and (v) changes in restricted cash of $12,174,000, partially offset by (vi) $316,129,000 of investments in partially owned entities, (vii) $30,281,000 of additions to real estate, (viii) $10,994,000 of development costs and construction in progress and (ix) $2,841,000 of investments in mezzanine loans receivable and other.

Net cash used in financing activities of $328,951,000 was comprised of (i) $1,197,312,000 for the repayments of borrowings, (ii) $126,936,000 of dividends paid on common shares, (iii) $23,639,000 of distributions to noncontrolling interests, (iv) $13,559,000 of dividends paid on preferred shares, (v) $12,161,000 of debt issuance and other costs and (vi) $570,000 for the repurchase of shares related to stock compensation agreements and related tax holdings, partially offset by (vii) $937,518,000 of proceeds from borrowings, (viii) $92,238,000 of contributions from noncontrolling interests and (ix) $15,470,000 of proceeds received from exercise of employee share options.

LIQUIDITY AND CAPITAL RESOURCES – continued

Cash Flows for the Three Months Ended March 31, 2010

Our cash and cash equivalents were $788,940,000 at March 31, 2010, a $253,461,000 increase over the balance at December 31, 2009. This increase resulted from $288,048,000 of net cash provided by operating activities and $7,342,000 of net cash provided by investing activities, partially offset by $41,929,000 of net cash used in financing activities.

Our consolidated outstanding debt was $10,838,141,000 at March 31, 2010, a $152,438,000 increase over the balance at December 31, 2009. This increase was primarily due to the public offering of $500,000,000 of 4.25% senior unsecured notes in March 2010.

Our share of debt of unconsolidated subsidiaries was $2,822,363,000 at March 31, 2010, a $327,277,000 decrease from the balance at December 31, 2009.

Cash flows provided by operating activities of $288,048,000 was comprised of (i) net income of $232,544,000, (ii) distributions of income from partially owned entities of $7,123,000 and (iii) the net change in operating assets and liabilities of $73,171,000, partially offset by (iv) $24,790,000 of non-cash adjustments, including depreciation and amortization expense, non-cash impairment losses, the effect of straight-lining of rental income and equity in net income of partially owned entities.

Net cash provided by investing activities of $7,342,000 was primarily comprised of (i) proceeds received from repayment of mezzanine loans receivable of $101,839,000, (ii) proceeds from the sale of real estate and related investments of $38,879,000, (iii) proceeds from maturing short-term investments of $25,000,000 and (iv) distributions of capital from partially owned entities of $7,617,000, partially offset by (v) development and redevelopment expenditures of $37,598,000, (vi) investments in partially owned entities of $36,741,000, (vii) additions to real estate of $30,247,000, (viii) investments in mezzanine loans receivable and other of $28,873,000, (ix) purchases of marketable equity securities of $13,917,000, (x) restricted cash of $13,899,000 and (xi) deposits in connection with real estate acquisitions of $5,003,000.

Net cash used in financing activities of $41,929,000 was primarily comprised of (i) proceeds from borrowings of $660,335,000, partially offset by, (ii) repayments of borrowings, including the purchase of our senior unsecured notes, of $525,246,000, (iii) dividends paid on common shares of $117,958,000, (iv) repurchase of shares related to stock compensation arrangements and related tax withholdings of $25,323,000, (v) dividends paid on preferred shares of $14,267,000 and (vi) distributions to noncontrolling interests of $13,082,000.

LIQUIDITY AND CAPITAL RESOURCES - continued

Capital Expenditures

Our capital expenditures consist of expenditures to maintain assets, tenant improvement allowances and leasing commissions. Recurring capital improvements include expenditures to maintain a property’s competitive position within the market and tenant improvements and leasing commissions necessary to re-lease expiring leases or renew or extend existing leases. Non-recurring capital improvements include expenditures completed in the year of acquisition and the following two years that were planned at the time of acquisition as well as tenant improvements and leasing commissions for space that was vacant at the time of acquisition of a property. Our development and redevelopment expenditures include all hard and soft costs associated with the development or redevelopment of a property, including tenant improvements, leasing commissions, 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, 2011.

						New York		Washington, DC				Merchandise
(Amounts in thousands)				Total		Office		Office		Retail		Mart		Other
Capital Expenditures (accrual basis):
Expenditures to maintain assets				$	7,051	$	3,002	$	1,069	$	645	$	1,577	$	758
Tenant improvements					13,390		8,310		3,632		1,033		415		-
Leasing commissions					3,392		1,959		963		470		-		-
Non-recurring capital expenditures					11,881		9,237		-		1,967		-		677
Total capital expenditures and leasing
	commissions (accrual basis)				35,714		22,508		5,664		4,115		1,992		1,435
Adjustments to reconcile to cash basis:
		Expenditures in the current year
			applicable to prior periods		27,096		13,804		3,608		4,802		4,564		318
		Expenditures to be made in future
			periods for the current period		(25,799)		(17,632)		(4,297)		(3,470)		(400)		-
Total capital expenditures and leasing
	commissions (cash basis)			$	37,011	$	18,680	$	4,975	$	5,447	$	6,156	$	1,753

Tenant improvements and leasing commissions:
	Per square foot per annum			$	2.74	$	4.17	$	3.17	$	1.08	$	0.44	$	-
	Percentage of initial rent				7.0%		8.3%		8.4%		3.4%		1.2%		-

Development and Redevelopment
	Expenditures:
Bergen Town Center				$	3,034	$	-	$	-	$	3,034	$	-	$	-
Green Acres Mall					2,982		-		-		2,982		-		-
Poughkeepsie, New York					535		-		-		535		-		-
Other					4,443		1,009		1,763		1,249		155		267
				$	10,994	$	1,009	$	1,763	$	7,800	$	155	$	267

LIQUIDITY AND CAPITAL RESOURCES - continued

						New York		Washington, DC				Merchandise
(Amounts in thousands)				Total		Office		Office		Retail		Mart		Other
Capital Expenditures (accrual basis):
Expenditures to maintain assets				$	7,784	$	4,505	$	1,118	$	383	$	614	$	1,164
Tenant improvements					19,673		11,686		1,991		3,944		2,052		-
Leasing commissions					4,565		3,221		795		505		-		44
Non-recurring capital expenditures					421		-		-		104		-		317
Total capital expenditures and leasing
	commissions (accrual basis)				32,443		19,412		3,904		4,936		2,666		1,525
Adjustments to reconcile to cash basis:
		Expenditures in the current year
			applicable to prior periods		26,340		16,928		4,174		2,927		821		1,490
		Expenditures to be made in future
			periods for the current period		(20,884)		(11,017)		(2,361)		(4,553)		(1,355)		(1,598)
Total capital expenditures and leasing
	commissions (cash basis)			$	37,899	$	25,323	$	5,717	$	3,310	$	2,132	$	1,417

Tenant improvements and leasing commissions:
	Per square foot per annum			$	3.14	$	6.86	$	2.05	$	2.23	$	0.94	$	-
	Percentage of initial rent				9.8%		15.3%		5.1%		10.6%		3.9%		-

Development and Redevelopment
	Expenditures:
West End 25				$	4,521	$	-	$	4,521	$	-	$	-	$	-
1540 Broadway					4,030		-		-		4,030		-		-
Bergen Town Center					4,003		-		-		4,003		-		-
220 20th Street					3,762		-		3,762		-		-		-
Residential condominiums					2,982		-		-		-		-		2,982
North Bergen, New Jersey					2,688		-		-		2,688		-		-
Poughkeepsie, New York					1,548		-		-		1,548		-		-
Beverly Connection					1,528		-		-		1,528		-		-
Garfield, New Jersey					1,344		-		-		1,344		-		-
Other					11,192		1,899		4,419		1,592		321		2,961
				$	37,598	$	1,899	$	12,702	$	16,733	$	321	$	5,943

LIQUIDITY AND CAPITAL RESOURCES – continued

Insurance

Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a portion of our earthquake insurance coverage and as a direct insurer for coverage for acts of terrorism, including nuclear, biological, chemical and radiological (“NBCR”) acts, as defined by the Terrorism Risk Insurance Program Reauthorization Act Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and the Federal government with no exposure to PPIC. Our coverage for NBCR losses is up to $2 billion per occurrence, for which PPIC is responsible for a deductible of $3,200,000 and 15% of the balance of a covered loss and the Federal government is responsible for the remaining 85% of a covered loss. We are ultimately responsible for any loss borne by PPIC.

Other Commitments and Contingencies

LIQUIDITY AND CAPITAL RESOURCES - continued

Other Commitments and Contingencies - continued

Litigation

FUNDS FROM OPERATIONS (“FFO”)

FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gain from sales of depreciated real estate assets, depreciation and amortization expense from real estate assets, extraordinary items and other specified non-cash items, including the pro-rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income as a performance measure or cash flows as a liquidity measure. FFO may not be comparable to similarly titled measures employed by other companies. The calculations of both the numerator and denominator used in the computation of income per share are disclosed in footnote 17 – Income per Share, in the notes to our consolidated financial statements on page 26 of this Quarterly Report on Form 10-Q.

FFO for the Three Months Ended March 31, 2011 and 2010

FFO attributable to common shareholders plus assumed conversions was $505,931,000, or $2.64 per diluted share for the three months ended March 31, 2011, compared to $353,826,000, or $1.87 per diluted share for the prior year’s quarter. Details of certain items that affect comparability are discussed in the financial results summary of our “Overview.”

			For The Three Months
(Amounts in thousands, except per share amounts)			Ended March 31,
Reconciliation of our net income to FFO:			2011		2010
Net income attributable to Vornado			$	412,663	$	214,552
Depreciation and amortization of real property				124,321		127,614
Net gain on sales of real estate				(51,165)		-
Proportionate share of adjustments to equity in net income of Toys, to arrive at FFO:
		Depreciation and amortization of real property		17,729		17,501
		Income tax effect of above adjustment		(6,205)		(6,125)
Proportionate share of adjustments to equity in net income of partially owned entities,
	excluding Toys, to arrive at FFO:
		Depreciation and amortization of real property		23,969		19,541
		Net gain on sales of real estate		(1,649)		(307)
Noncontrolling interests' share of above adjustments				(6,850)		(11,171)
FFO				512,813		361,605
Preferred share dividends				(13,448)		(14,267)
FFO attributable to common shareholders				499,365		347,338
Interest on 3.875% exchangeable senior debentures				6,534		6,447
Convertible preferred share dividends				32		41
FFO attributable to common shareholders plus assumed conversions			$	505,931	$	353,826

Reconciliation of Weighted Average Shares
	Weighted average common shares outstanding			183,988		181,542
	Effect of dilutive securities:
		3.875% exchangeable senior debentures		5,736		5,736
		Employee stock options and restricted share awards		1,749		1,831
		Convertible preferred shares		56		72
	Denominator for FFO per diluted share			191,529		189,181

FFO attributable to common shareholders plus assumed conversions per diluted share			$	2.64	$	1.87

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We have exposure to fluctuations in market interest rates. Market interest rates are sensitive to many factors that are beyond our control. Our exposure to a change in interest rates on our consolidated and non-consolidated debt (all of which arises out of non-trading activity) is as follows:

(Amounts in thousands, except per share amounts)			2011						2010
						Weighted	Effect of 1%				Weighted
			March 31,			Average	Change In		December 31,		Average
Consolidated debt:			Balance			Interest Rate	Base Rates		Balance		Interest Rate
	Variable rate		$	2,245,521		1.99%	$	22,455	$	2,903,510		1.76%
	Fixed rate			8,385,875		5.63%		-		7,990,129		5.66%
			$	10,631,396		4.86%		22,455	$	10,893,639		4.62%
Pro-rata share of debt of non-consolidated
	entities (non-recourse):
	Variable rate – excluding Toys		$	296,541		1.43%		2,965	$	345,308		1.39%
	Variable rate – Toys			283,000		6.50%		2,830		501,623		4.95%
	Fixed rate (including $1,417,000 and
		$1,421,820 of Toys debt in 2011 and 2010)		2,462,136	⁽¹⁾	6.71%		-		2,428,986		6.86%
			$	3,041,677		6.17%		5,795	$	3,275,917		5.99%
Noncontrolling interests’ share of above								(1,780)
Total change in annual net income							$	26,470
Per share-diluted							$	0.14



(1)	Excludes $37 billion for our 26.2% pro rata shares of liabilities related to consolidated CMBS and CDO trusts which are non-recourse to LNR and its equity holders, including us.

We may utilize various financial instruments to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies, depending on our analysis of the interest rate environment and the costs and risks of such strategies. As of March 31, 2011, variable rate debt with an aggregate principal amount of $562,010,000 and a weighted average interest rate of 2.84% was subject to LIBOR caps. These caps are based on a notional amount of $558,725,000 and cap LIBOR at a weighted average rate of 5.68%. In addition, we have one interest rate swap on a $425,000,000 loan that swapped the rate from LIBOR plus 2.00% (2.26% at March 31, 2011) to a fixed rate of 5.13% for the seven-year term of the loan.

As of March 31, 2011, we have investments in mezzanine loans with an aggregate carrying amount of $78,544,000 that are based on variable interest rates which partially mitigate our exposure to a change in interest rates on our variable rate debt.

Fair Value of Debt

The estimated fair value of our consolidated debt is calculated based on current market prices and 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. As of March 31, 2011, the estimated fair value of our consolidated debt was $11,014,783,000.

Derivative Instruments

We have, and may in the future enter into, derivative positions that do not qualify for hedge accounting treatment, including our economic interest in J.C. Penney common shares. Because these derivatives do not qualify for hedge accounting treatment, the gains or losses resulting from their mark-to-market at the end of each reporting period are recognized as an increase or decrease in “interest and other investment income, net” on our consolidated statements of income. In addition, we are, and may in the future be, subject to additional expense based on the notional amount of the derivative positions and a specified spread over LIBOR. Because the market value of these instruments can vary significantly between periods, we may experience significant fluctuations in the amount of our investment income or expense in any given period. During the three months ended March 31, 2011 we recognized $17,163,000 of income from derivative instruments.

Item 4. Controls and Procedures

Disclosure Controls and Procedures: The Company’s management, with the participation of the Company’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, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2011, such disclosure controls and procedures were effective.

Internal Control Over Financial Reporting: There have not been any changes in the Company’s internal control over financial reporting (as such term is 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

Item 1A. Risk Factors

There were no material changes to the Risk Factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In the first quarter of 2011, we issued 30,317 common shares upon the redemption of Class A units of the Operating Partnership held by persons who received units, in private placements in earlier periods, in exchange for their interests in limited partnerships that owned real estate. The common shares were issued without registration under the Securities Act of 1933 in reliance on Section 4 (2) of that Act.

Information relating to compensation plans under which our equity securities are authorized for issuance is set forth under Part III, Item 12 of the Annual Report on Form 10-K for the year ended December 31, 2010, and such information is incorporated by reference herein.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

None.

Item 6. Exhibits

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.

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 TRUST
		(Registrant)


Date: May 3, 2011	By:	/s/ Joseph Macnow
		Joseph Macnow, Executive Vice President - Finance and Administration and Chief Financial Officer (duly authorized officer and principal financial and accounting officer)

	EXHIBIT INDEX

Exhibit No.
	3.1		-	Articles of Restatement of Vornado Realty Trust, as filed with the State		*
					Department of Assessments and Taxation of Maryland on July 30, 2007 - Incorporated
					by reference to Exhibit 3.75 to Vornado Realty Trust’s Quarterly Report on Form 10-Q
					for the quarter ended June 30, 2007 (File No. 001-11954), filed on July 31, 2007

	3.2		-	Amended and Restated Bylaws of Vornado Realty Trust, as amended on March 2, 2000 -		*
					Incorporated by reference to Exhibit 3.12 to Vornado Realty Trust’s Annual Report on
					Form 10-K for the year ended December 31, 1999 (File No. 001-11954), filed on
					March 9, 2000

	3.3		-	Articles Supplementary, 6.875% Series J Cumulative Redeemable Preferred Shares of		*
					Beneficial Interest, liquidation preference $25.00 per share, no par value - Incorporated by
					reference to Exhibit 3.2 of Vornado Realty Trust's Registration Statement on Form 8-A
					(File No. 001-11954), filed on April 20, 2011

	3.4		-	Second Amended and Restated Agreement of Limited Partnership of Vornado Realty L.P.,		*
					dated as of October 20, 1997 (the “Partnership Agreement”) – Incorporated by reference
					to Exhibit 3.26 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter
					ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003

	3.5		-	Amendment to the Partnership Agreement, dated as of December 16, 1997 – Incorporated by		*
					reference to Exhibit 3.27 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for
					the quarter ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003

	3.6		-	Second Amendment to the Partnership Agreement, dated as of April 1, 1998 – Incorporated		*
					by reference to Exhibit 3.5 to Vornado Realty Trust’s Registration Statement on Form S-3
					(File No. 333-50095), filed on April 14, 1998

	3.7		-	Third Amendment to the Partnership Agreement, dated as of November 12, 1998 -		*
					Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust’s Current Report on
					Form 8-K (File No. 001-11954), filed on November 30, 1998

	3.8		-	Fourth Amendment to the Partnership Agreement, dated as of November 30, 1998 -		*
					Incorporated by reference to Exhibit 3.1 to Vornado Realty Trust’s Current Report on
					Form 8-K (File No. 001-11954), filed on February 9, 1999

	3.9		-	Fifth Amendment to the Partnership Agreement, dated as of March 3, 1999 - Incorporated by		*
					reference to Exhibit 3.1 to Vornado Realty Trust’s Current Report on Form 8-K
					(File No. 001-11954), filed on March 17, 1999

	3.10		-	Sixth Amendment to the Partnership Agreement, dated as of March 17, 1999 - Incorporated		*
					by reference to Exhibit 3.2 to Vornado Realty Trust’s Current Report on Form 8-K
					(File No. 001-11954), filed on July 7, 1999

	3.11		-	Seventh Amendment to the Partnership Agreement, dated as of May 20, 1999 - Incorporated		*
					by reference to Exhibit 3.3 to Vornado Realty Trust’s Current Report on Form 8-K
					(File No. 001-11954), filed on July 7, 1999

	3.12		-	Eighth Amendment to the Partnership Agreement, dated as of May 27, 1999 - Incorporated		*
					by reference to Exhibit 3.4 to Vornado Realty Trust’s Current Report on Form 8-K
					(File No. 001-11954), filed on July 7, 1999

	3.13		-	Ninth Amendment to the Partnership Agreement, dated as of September 3, 1999 -		*
					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 25, 1999


					_______________________
		*			Incorporated by reference.

3.14		-	Tenth Amendment to the Partnership Agreement, dated as of September 3, 1999 -		*
				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 25, 1999

3.15		-	Eleventh Amendment to the Partnership Agreement, dated as of November 24, 1999 -		*
				Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust’s Current Report on
				Form 8-K (File No. 001-11954), filed on December 23, 1999

3.16		-	Twelfth Amendment to the Partnership Agreement, dated as of May 1, 2000 - Incorporated		*
				by reference to Exhibit 3.2 to Vornado Realty Trust’s Current Report on Form 8-K
				(File No. 001-11954), filed on May 19, 2000

3.17		-	Thirteenth Amendment to the Partnership Agreement, dated as of May 25, 2000 -		*
				Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust’s Current Report on
				Form 8-K (File No. 001-11954), filed on June 16, 2000

3.18		-	Fourteenth Amendment to the Partnership Agreement, dated as of December 8, 2000 -		*
				Incorporated by reference to Exhibit 3.2 to Vornado Realty Trust’s Current Report on
				Form 8-K (File No. 001-11954), filed on December 28, 2000

3.19		-	Fifteenth Amendment to the Partnership Agreement, dated as of December 15, 2000 -		*
				Incorporated by reference to Exhibit 4.35 to Vornado Realty Trust’s Registration
				Statement on Form S-8 (File No. 333-68462), filed on August 27, 2001

3.20		-	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

3.21		-	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

3.22		-	Eighteenth Amendment to the Partnership Agreement, dated as of January 1, 2002 -		*
				Incorporated by reference to Exhibit 3.1 to Vornado Realty Trust’s Current Report on
				Form 8-K/A (File No. 001-11954), filed on March 18, 2002

3.23		-	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

3.24		-	Twentieth Amendment to the Partnership Agreement, dated April 9, 2003 - Incorporated by		*
				reference to Exhibit 3.46 to Vornado Realty Trust’s Quarterly Report on Form 10-Q for
				the quarter ended March 31, 2003 (File No. 001-11954), filed on May 8, 2003

3.25		-	Twenty-First Amendment to the Partnership Agreement, dated as of July 31, 2003 -		*
				Incorporated by reference to Exhibit 3.47 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

3.26		-	Twenty-Second Amendment to the Partnership Agreement, dated as of November 17, 2003 –		*
				Incorporated by reference to Exhibit 3.49 to Vornado Realty Trust’s Annual Report on
				Form 10-K for the year ended December 31, 2003 (File No. 001-11954), filed on
				March 3, 2004

3.27		-	Twenty-Third Amendment to the Partnership Agreement, dated May 27, 2004 – Incorporated		*
				by reference to Exhibit 99.2 to Vornado Realty Trust’s Current Report on Form 8-K
				(File No. 001-11954), filed on June 14, 2004



				_______________________
	*			Incorporated by reference.

3.28		-	Twenty-Fourth Amendment to the Partnership Agreement, dated August 17, 2004 –		*
				Incorporated by reference to Exhibit 3.57 to Vornado Realty Trust and Vornado Realty
				L.P.’s Registration Statement on Form S-3 (File No. 333-122306), filed on
				January 26, 2005

3.29		-	Twenty-Fifth Amendment to the Partnership Agreement, dated November 17, 2004 –		*
				Incorporated by reference to Exhibit 3.58 to Vornado Realty Trust and Vornado Realty
				L.P.’s Registration Statement on Form S-3 (File No. 333-122306), filed on
				January 26, 2005

3.30		-	Twenty-Sixth Amendment to the Partnership Agreement, dated December 17, 2004 –		*
				Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on
				Form 8-K (File No. 000-22685), filed on December 21, 2004

3.31		-	Twenty-Seventh Amendment to the Partnership Agreement, dated December 20, 2004 –		*
				Incorporated by reference to Exhibit 3.2 to Vornado Realty L.P.’s Current Report on
				Form 8-K (File No. 000-22685), filed on December 21, 2004

3.32		-	Twenty-Eighth Amendment to the Partnership Agreement, dated December 30, 2004 -		*
				Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on
				Form 8-K (File No. 000-22685), filed on January 4, 2005

3.33		-	Twenty-Ninth Amendment to the Partnership Agreement, dated June 17, 2005 - Incorporated		*
				by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K
				(File No. 000-22685), filed on June 21, 2005

3.34		-	Thirtieth Amendment to the Partnership Agreement, dated August 31, 2005 - Incorporated by		*
				reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on Form 8-K
				(File No. 000-22685), filed on September 1, 2005

3.35		-	Thirty-First Amendment to the Partnership Agreement, dated September 9, 2005 -		*
				Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s Current Report on
				Form 8-K (File No. 000-22685), filed on September 14, 2005

3.36		-	Thirty-Second Amendment and Restated Agreement of Limited Partnership, dated as of		*
				December 19, 2005 – Incorporated by reference to Exhibit 3.59 to Vornado Realty L.P.’s
				Quarterly Report on Form 10-Q for the quarter ended March 31, 2006
				(File No. 000-22685), filed on May 8, 2006

3.37		-	Thirty-Third Amendment to Second Amended and Restated Agreement of Limited		*
				Partnership, dated as of April 25, 2006 – Incorporated by reference to Exhibit 10.2 to
				Vornado Realty Trust’s Form 8-K (File No. 001-11954), filed on May 1, 2006

3.38		-	Thirty-Fourth Amendment to Second Amended and Restated Agreement of Limited		*
				Partnership, dated as of May 2, 2006 – Incorporated by reference to Exhibit 3.1 to
				Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on
				May 3, 2006

3.39		-	Thirty-Fifth Amendment to Second Amended and Restated Agreement of Limited		*
				Partnership, dated as of August 17, 2006 – Incorporated by reference to Exhibit 3.1 to
				Vornado Realty L.P.’s Form 8-K (File No. 000-22685), filed on August 23, 2006

3.40		-	Thirty-Sixth Amendment to Second Amended and Restated Agreement of Limited		*
				Partnership, dated as of October 2, 2006 – Incorporated by reference to Exhibit 3.1 to
				Vornado Realty L.P.’s Form 8-K (File No. 000-22685), filed on January 22, 2007


				_______________________
	*			Incorporated by reference.

3.41		-	Thirty-Seventh Amendment to Second Amended and Restated Agreement of Limited		*
				Partnership, dated as of June 28, 2007 – Incorporated by reference to Exhibit 3.1 to
				Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on
				June 27, 2007

3.42		-	Thirty-Eighth Amendment to Second Amended and Restated Agreement of Limited		*
				Partnership, dated as of June 28, 2007 – Incorporated by reference to Exhibit 3.2 to
				Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on
				June 27, 2007

3.43		-	Thirty-Ninth Amendment to Second Amended and Restated Agreement of Limited		*
				Partnership, dated as of June 28, 2007 – Incorporated by reference to Exhibit 3.3 to
				Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on
				June 27, 2007

3.44		-	Fortieth Amendment to Second Amended and Restated Agreement of Limited		*
				Partnership, dated as of June 28, 2007 – Incorporated by reference to Exhibit 3.4 to
				Vornado Realty L.P.’s Current Report on Form 8-K (File No. 000-22685), filed on
				June 27, 2007

3.45		-	Forty-First Amendment to Second Amended and Restated Agreement of Limited		*
				Partnership, dated as of March 31, 2008 – Incorporated by reference to Exhibit 3.44 to
				Vornado Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended March 31,
				2008 (file No. 001-11954), filed on May 6, 2008

3.46		-	Forty-Second Amendment to Second Amended and Restated Agreement of Limited Partnership,		*
				dated as of December 17, 2010 – Incorporated by reference to Exhibit 99.1 to Vornado
				Realty L.P.'s Current Report on Form 8-K (File No. 000-22685), filed on December 21, 2010

3.47		-	Forty-Third Amendment to Second Amended and Restated Agreement of Limited Partnership,		*
				dated as of April 20, 2011 – Incorporated by reference to Exhibit 3.1 to Vornado
				Realty L.P.'s Current Report on Form 8-K (File No. 000-22685), filed on April 21, 2011

4.1		-	Indenture, dated as of November 25, 2003, between Vornado Realty L.P. and The Bank of		*
				New York, as Trustee - Incorporated by reference to Exhibit 4.10 to Vornado Realty
				Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005
				(File No. 001-11954), filed on April 28, 2005

4.2		-	Indenture, dated as of November 20, 2006, among Vornado Realty Trust, as Issuer, Vornado		*
				Realty L.P., as Guarantor and The Bank of New York, as Trustee – Incorporated by
				reference to Exhibit 4.1 to Vornado Realty Trust’s Current Report on Form 8-K
				(File No. 001-11954), filed on November 27, 2006

			Certain instruments defining the rights of holders of long-term debt securities of Vornado
				Realty Trust and its subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation
				S-K. Vornado Realty Trust hereby undertakes to furnish to the Securities and Exchange
				Commission, upon request, copies of any such instruments.

10.1		-	Master Agreement and Guaranty, between Vornado, Inc. and Bradlees New Jersey, Inc. dated		*
				as of May 1, 1992 - Incorporated by reference to Vornado, Inc.’s Quarterly Report on
				Form 10-Q for the quarter ended March 31, 1992 (File No. 001-11954), filed May 8, 1992

10.2		-	Registration Rights Agreement between Vornado, Inc. and Steven Roth, dated December 29,		*
				1992 - Incorporated by reference to Vornado Realty Trust’s Annual Report on Form 10-K
				for the year ended December 31, 1992 (File No. 001-11954), filed February 16, 1993
				______________________
	*			Incorporated by reference.

10.3	**	-	Stock Pledge Agreement between Vornado, Inc. and Steven Roth dated December 29, 1992		*
				- Incorporated by reference to Vornado, Inc.’s Annual Report on Form 10-K for the year
				ended December 31, 1992 (File No. 001-11954), filed February 16, 1993

10.4	**	-	Management Agreement between Interstate Properties and Vornado, Inc. dated July 13, 1992		*
				- Incorporated by reference to Vornado, Inc.’s Annual Report on Form 10-K for the year
				ended December 31, 1992 (File No. 001-11954), filed February 16, 1993

10.5	**	-	Employment Agreement, dated as of April 15, 1997, by and among Vornado Realty Trust,		*
				The Mendik Company, L.P. and David R. Greenbaum - Incorporated by reference to
				Exhibit 10.4 to Vornado Realty Trust’s Current Report on Form 8-K
				(File No. 001-11954), filed on April 30, 1997

10.6	**	-	Promissory Note from Steven Roth to Vornado Realty Trust, dated December 23, 2005 –		*
				Incorporated by reference to Exhibit 10.15 to Vornado Realty Trust Annual Report on
				Form 10-K for the year ended December 31, 2005 (File No. 001-11954), filed on
				February 28, 2006

10.7	**	-	Letter agreement, dated November 16, 1999, between Steven Roth and Vornado Realty Trust		*
				- Incorporated by reference to Exhibit 10.51 to Vornado Realty Trust’s Annual Report on
				Form 10-K for the year ended December 31, 1999 (File No. 001-11954), filed on
				March 9, 2000

10.8		-	Agreement and Plan of Merger, dated as of October 18, 2001, by and among Vornado Realty		*
				Trust, Vornado Merger Sub L.P., Charles E. Smith Commercial Realty L.P., Charles E.
				Smith Commercial Realty L.L.C., Robert H. Smith, individually, Robert P. Kogod,
				individually, and Charles E. Smith Management, Inc. - Incorporated by reference to
				Exhibit 2.1 to Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954),
				filed on January 16, 2002

10.9		-	Tax Reporting and Protection Agreement, dated December 31, 2001, by and among Vornado,		*
				Vornado Realty L.P., Charles E. Smith Commercial Realty L.P. and Charles E. Smith
				Commercial Realty L.L.C. - Incorporated by reference to Exhibit 10.3 to Vornado Realty
				Trust’s Current Report on Form 8-K/A (File No. 1-11954), filed on March 18, 2002

10.10		-	Employment Agreement between Vornado Realty Trust and Michael D. Fascitelli, dated		*
				March 8, 2002 - Incorporated by reference to Exhibit 10.7 to Vornado Realty Trust’s
				Quarterly Report on Form 10-Q for the quarter ended March 31, 2002
				(File No. 001-11954), filed on May 1, 2002

10.11	**	-	First Amendment, dated October 31, 2002, to the Employment Agreement between Vornado		*
				Realty Trust and Michael D. Fascitelli, dated March 8, 2002 - Incorporated by reference
				to Exhibit 99.6 to the Schedule 13D filed by Michael D. Fascitelli on November 8, 2002

10.12	**	-	Amendment to Real Estate Retention Agreement, dated as of July 3, 2002, by and between		*
				Alexander’s, Inc. and Vornado Realty L.P. - Incorporated by reference to Exhibit
				10(i)(E)(3) to Alexander’s Inc.’s Quarterly Report for the quarter ended June 30, 2002
				(File No. 001-06064), filed on August 7, 2002

10.13		-	59th Street Real Estate Retention Agreement, dated as of July 3, 2002, by and between		*
				Vornado Realty L.P., 731 Residential LLC and 731 Commercial LLC - Incorporated by
				reference to Exhibit 10(i)(E)(4) to Alexander’s Inc.’s Quarterly Report for the quarter
				ended June 30, 2002 (File No. 001-06064), filed on August 7, 2002



				_______________________
	*			Incorporated by reference.
	**			Management contract or compensatory agreement.

10.14		-	Amended and Restated Management and Development Agreement, dated as of July 3, 2002,		*
				by and between Alexander's, Inc., the subsidiaries party thereto and Vornado
				Management Corp. - Incorporated by reference to Exhibit 10(i)(F)(1) to Alexander's
				Inc.'s Quarterly Report for the quarter ended June 30, 2002 (File No. 001-06064),
				filed on August 7, 2002

10.15		-	Amendment dated May 29, 2002, to the Stock Pledge Agreement between Vornado Realty		*
				Trust and Steven Roth dated December 29, 1992 - Incorporated by reference to Exhibit 5
				of Interstate Properties’ Schedule 13D/A dated May 29, 2002 (File No. 005-44144), filed
				on May 30, 2002

10.16	**	-	Vornado Realty Trust’s 2002 Omnibus Share Plan - Incorporated by reference to Exhibit 4.2		*
				to Vornado Realty Trust’s Registration Statement on Form S-8 (File No. 333-102216)
				filed December 26, 2002

10.17	**	-	Form of Stock Option Agreement between the Company and certain employees –		*
				Incorporated by reference to Exhibit 10.77 to Vornado Realty Trust’s
				Annual Report on Form 10-K for the year ended December 31, 2004
				(File No. 001-11954), filed on February 25, 2005

10.18	**	-	Form of Restricted Stock Agreement between the Company and certain employees –		*
				Incorporated by reference to Exhibit 10.78 to Vornado Realty Trust’s Annual Report on
				Form 10-K for the year ended December 31, 2004 (File No. 001-11954), filed on
				February 25, 2005

10.19	**	-	Amendment, dated March 17, 2006, to the Vornado Realty Trust Omnibus Share Plan –		*
				Incorporated by reference to Exhibit 10.50 to Vornado Realty Trust’s Quarterly Report on
				Form 10-Q for the quarter ended March 31, 2006 (File No. 001-11954), filed on
				May 2, 2006

10.20	**	-	Form of Vornado Realty Trust 2006 Out-Performance Plan Award Agreement, dated as of		*
				April 25, 2006 – Incorporated by reference to Exhibit 10.1 to Vornado Realty Trust’s
				Form 8-K (File No. 001-11954), filed on May 1, 2006

10.21	**	-	Form of Vornado Realty Trust 2002 Restricted LTIP Unit Agreement – Incorporated by		*
				reference to Vornado Realty Trust’s Form 8-K (Filed No. 001-11954), filed on
				May 1, 2006

10.22	**	-	Revolving Credit Agreement, dated as of June 28, 2006, among the Operating Partnership,		*
				the banks party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of
				America, N.A. and Citicorp North America, Inc., as Syndication Agents, Deutsche Bank
				Trust Company Americas, Lasalle Bank National Association, and UBS Loan Finance
				LLC, as Documentation Agents and Vornado Realty Trust – Incorporated by reference to
				Exhibit 10.1 to Vornado Realty Trust’s Form 8-K (File No. 001-11954), filed on
				June 28, 2006

10.23	**	-	Amendment No.2, dated May 18, 2006, to the Vornado Realty Trust Omnibus Share Plan		*
				– Incorporated by reference to Exhibit 10.53 to Vornado Realty Trust’s Quarterly
				Report on Form 10-Q for the quarter ended June 30, 2006 (File No. 001-11954), filed
				on August 1, 2006

10.24	**	-	Amended and Restated Employment Agreement between Vornado Realty Trust and Joseph		*
				Macnow dated July 27, 2006 – Incorporated by reference to Exhibit 10.54 to Vornado
				Realty Trust’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006
				(File No. 001-11954), filed on August 1, 2006


				_______________________
	*			Incorporated by reference.
	**			Management contract or compensatory agreement.

10.25		-	Guaranty, made as of June 28, 2006, by Vornado Realty Trust, for the benefit of JP Morgan		*
				Chase Bank - Incorporated by reference to Exhibit 10.53 to Vornado Realty Trust's
				Quarterly Report on Form 10-Q for the quarter ended September 30, 2006
				(File No. 001-11954), filed on October 31, 2006

10.26	**	-	Amendment, dated October 26, 2006, to the Vornado Realty Trust Omnibus Share Plan –		*
				Incorporated by reference to Exhibit 10.54 to Vornado Realty Trust’s Quarterly Report
				on Form 10-Q for the quarter ended September 30, 2006 (File No. 001-11954), filed on
				October 31, 2006

10.27	**	-	Amendment to Real Estate Retention Agreement, dated January 1, 2007, by and between		*
				Vornado Realty L.P. and Alexander’s Inc. – Incorporated by reference to Exhibit 10.55
				to Vornado Realty Trust’s Annual Report on Form 10-K for the year ended
				December 31, 2006 (File No. 001-11954), filed on February 27, 2007

10.28	**	-	Amendment to 59th Street Real Estate Retention Agreement, dated January 1, 2007, by and		*
				among Vornado Realty L.P., 731 Retail One LLC, 731 Restaurant LLC, 731 Office One
				LLC and 731 Office Two LLC. – Incorporated by reference to Exhibit 10.56 to
				Vornado Realty Trust’s Annual Report on Form 10-K for the year ended
				December 31, 2006 (File No. 001-11954), filed on February 27, 2007

10.29	**	-	Employment Agreement between Vornado Realty Trust and Mitchell Schear, as of April 19,		*
				2007 – Incorporated by reference to Exhibit 10.46 to Vornado Realty Trust’s Quarterly
				Report on Form 10-Q for the quarter ended March 31, 2007 (File No. 001-11954),
				filed on May 1, 2007

10.30		-	Revolving Credit Agreement, dated as of September 28, 2007, among Vornado Realty L.P. as		*
				borrower, Vornado Realty Trust as General Partner, the Banks signatory thereto, each as a
				Bank, JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of America, N.A. as
				Syndication Agent, Citicorp North America, Inc., Deutsche Bank Trust Company
				Americas, and UBS Loan Finance LLC as Documentation Agents, and J.P. Morgan
				Securities Inc. and Bank of America Securities LLC as Lead Arrangers and Bookrunners.
				- Incorporated by reference to Exhibit 10.1 to Vornado Realty Trust’s Current Report
				on Form 8-K (File No. 001-11954), filed on October 4, 2007

10.31		-	Second Amendment to Revolving Credit Agreement, dated as of September 28, 2007, by and		*
				among Vornado Realty L.P. as borrower, Vornado Realty Trust as General Partner, the
				Banks listed on the signature pages thereof, and J.P. Morgan Chase Bank N.A., as
				Administrative Agent for the Banks - Incorporated by reference to Exhibit 10.2 to
				Vornado Realty Trust’s Current Report on Form 8-K (File No. 001-11954),
				filed on October 4, 2007

10.32	**	-	Form of Vornado Realty Trust 2002 Omnibus Share Plan Non-Employee Trustee Restricted		*
				LTIP Unit Agreement – Incorporated by reference to Exhibit 10.45 to Vornado Realty
				Trust’s Annual Report on Form 10-K for the year ended December 31, 2007 (File No.
				001-11954) filed on February 26, 2008

10.33	**	-	Form of Vornado Realty Trust 2008 Out-Performance Plan Award Agreement – Incorporated		*
				by reference to Exhibit 10.46 to Vornado Realty Trust’s Quarterly Report on Form 10-Q
				for the quarter ended March 31, 2008 (File No. 001-11954) filed on May 6, 2008

10.34	**	-	Amendment to Employment Agreement between Vornado Realty Trust and Michael D.		*
				Fascitelli, dated December 29, 2008. Incorporated by reference to Exhibit 10.47 to
				Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31,
				2008 (File No. 001-11954) filed on February 24, 2009


				_______________________
	*			Incorporated by reference.
	**			Management contract or compensatory agreement.

10.35	**	-	Amendment to Employment Agreement between Vornado Realty Trust and Joseph Macnow,		*
				dated December 29, 2008. Incorporated by reference to Exhibit 10.48 to Vornado Realty
				Trust’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No.
				001-11954) filed on February 24, 2009

10.36	**	-	Amendment to Employment Agreement between Vornado Realty Trust and David R.		*
				Greenbaum, dated December 29, 2008. Incorporated by reference to Exhibit 10.49 to
				Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31,
				2008 (File No. 001-11954) filed on February 24, 2009

10.37	**	-	Amendment to Indemnification Agreement between Vornado Realty Trust and David R.		*
				Greenbaum, dated December 29, 2008. Incorporated by reference to Exhibit 10.50 to
				Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31,
				2008 (File No. 001-11954) filed on February 24, 2009

10.38	**	-	Amendment to Employment Agreement between Vornado Realty Trust and Mitchell N.		*
				Schear, dated December 29, 2008. Incorporated by reference to Exhibit 10.51 to Vornado
				Realty Trust’s Annual Report on Form 10-K for the year ended December 31, 2008 (File
				No. 001-11954) filed on February 24, 2009

10.39	**	-	Amendment to Employment Agreement between Vornado Realty Trust and Christopher G.		*
				Kennedy, dated December 29, 2008. Incorporated by reference to Exhibit 10.53 to
				Vornado Realty Trust’s Annual Report on Form 10-K for the year ended December 31,
				2008 (File No. 001-11954) filed on February 24, 2009

10.40	**	-	Vornado Realty Trust's 2010 Omnibus Share Plan. Incorporated by reference to Exhibit 10.41 to		*
				Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended June 30, 2010
				(File No. 001-11954) filed on August 3, 2010

10.41	**	-	Employment Agreement between Vornado Realty Trust and Michael J. Franco, dated		*
				September 24, 2010. Incorporated by reference to Exhibit 10.42 to Vornado Realty Trust's
				Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (File No. 001-11954)
				filed on November 2, 2010

10.42	**	-	Form of Vornado Realty Trust 2010 Omnibus Share Plan Stock Agreement. Incorporated by		*
				reference to Exhibit 10.42 to Vornado Realty Trust's Annual Report on Form 10-K for the year
				ended December 31, 2010 (File No. 001-11954) filed on February 23, 2011

10.43	**	-	Form of Vornado Realty Trust 2010 Omnibus Share Plan Restricted LTIP Unit Agreement		*
				Incorporated by reference to Exhibit 10.43 to Vornado Realty Trust's Annual Report on Form
				10-K for the year ended December 31, 2010 (File No. 001-11954) filed on February 23, 2011

10.44	**	-	Form of Vornado Realty Trust 2010 Omnibus Share Plan Restricted Stock Agreement		*
				Incorporated by reference to Exhibit 10.44 to Vornado Realty Trust's Annual Report on Form
				10-K for the year ended December 31, 2010 (File No. 001-11954) filed on February 23, 2011

10.45	**	-	Letter Agreement between Vornado Realty Trust and Michelle Felman, dated December 21, 2010.		*
				Incorporated by reference to Exhibit 10.45 to Vornado Realty Trust's Annual Report on Form
				10-K for the year ended December 31, 2010 (File No. 001-11954) filed on February 23, 2011


				_______________________
	*			Incorporated by reference.
	**			Management contract or compensatory agreement.

10.46	**	-	Waiver and Release between Vornado Realty Trust and Michelle Felman, dated December 21,		*
				2010. Incorporated by reference to Exhibit 10.46 to Vornado Realty Trust's Annual Report
				on Form 10-K for the year ended December 31, 2010 (File No. 001-11954) filed on
				February 23, 2011

15.1		-	Letter regarding Unaudited Interim Financial Infromation

31.1		-	Rule 13a-14 (a) Certification of the Chief Executive Officer

31.2		-	Rule 13a-14 (a) Certification of the Chief Financial Officer

32.1		-	Section 1350 Certification fo the Chief Executive Officer

32.2		-	Section 1350 Certification fo the Chief Finacial Officer

101.INS		-	XBRL Instance Document

101.SCH		-	XBRL Taxonomy Extension Schema

101.CAL		-	XBRL Taxonomy Extension Calculation Linkbase

101.DEF		-	XBRL Taxonomy Extension Definition Linkbase

101.LAB		-	XBRL Taxonomy Extension Label Linkbase

101.PRE		-	XBRL Taxonomy Extension Presentation Linkbase


			______________________
	*		Incorporated by reference.
	**		Management contract or compensatory agreement.

ex151.htm - Generated by SEC Publisher for SEC Filing

EXHIBIT 15.1

May 3, 2011

Vornado Realty Trust

New York, New York

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of Vornado Realty Trust for the periods ended March 31, 2011 and 2010, as indicated in our report dated May 3, 2011; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, is incorporated by reference in the following registration statements of Vornado Realty Trust:

Registration Statement No. 333-68462 on Form S-8

Amendment No.1 to Registration Statement No. 333-36080 on Form S-3

Registration Statement No. 333-64015 on Form S-3

Amendment No.1 to Registration Statement No. 333-50095 on Form S-3

Registration Statement No. 333-52573 on Form S-8

Registration Statement No. 333-29011 on Form S-8

Registration Statement No. 333-09159 on Form S-8

Registration Statement No. 333-76327 on Form S-3

Amendment No.1 to Registration Statement No. 333-89667 on Form S-3

Registration Statement No. 333-81497 on Form S-8

Registration Statement No. 333-102216 on Form S-8

Amendment No.1 to Registration Statement No. 333-102215 on Form S-3

Amendment No.1 to Registration Statement No. 333-102217 on Form S-3

Registration Statement No. 333-105838 on Form S-3

Registration Statement No. 333-107024 on Form S-3

Registration Statement No. 333-109661 on Form S-3

Registration Statement No. 333-114146 on Form S-3

Registration Statement No. 333-114807 on Form S-3

Registration Statement No. 333-121929 on Form S-3

Amendment No.1 to Registration Statement No. 333-120384 on Form S-3

Registration Statement No. 333-126963 on Form S-3

Registration Statement No. 333-139646 on Form S-3

Registration Statement No. 333-141162 on Form S-3

Registration Statement No. 333-150592 on Form S-3

Registration Statement No. 333-150593 on Form S-8

Registration Statement No. 333-166856 on Form S-3

Registration Statement No. 333-172880 on Form S-8

and in the following joint registration statements of Vornado Realty Trust and Vornado Realty L.P.:

Amendment No. 4 to Registration Statement No. 333-40787 on Form S-3

Amendment No. 4 to Registration Statement No. 333-29013 on Form S-3

Registration Statement No. 333-108138 on Form S-3

Registration Statement No. 333-122306 on Form S-3

Registration Statement No. 333-138367 on Form S-3

Registration Statement No. 333-162775 on Form S-3

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

ex311.htm - Generated by SEC Publisher for SEC Filing

EXHIBIT 31.1

CERTIFICATION

I, Michael D. Fascitelli, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Vornado Realty Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure control and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	May 3, 2011
	/s/ Michael D. Fascitelli
	Michael D. Fascitelli
	President and Chief Executive Officer

ex312.htm - Generated by SEC Publisher for SEC Filing

EXHIBIT 31.2

CERTIFICATION

I, Joseph Macnow, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Vornado Realty Trust;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	May 3, 2011
	/s/ Joseph Macnow
	Joseph Macnow
	Executive Vice President and Chief Financial Officer

ex321.htm - Generated by SEC Publisher for SEC Filing

EXHIBIT 32.1

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsection (a) and (b) of Section 1350 of Chapter 63 of Title 18 of the United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350 of Chapter 63 of Title 18 of the United States Code), the undersigned officer of Vornado Realty Trust (the “Company”), hereby certifies, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for quarter ended March 31, 2011 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


May 3, 2011		/s/ Michael D. Fascitelli
	Name:	Michael D. Fascitelli
	Title:	President and Chief Executive Officer

ex322.htm - Generated by SEC Publisher for SEC Filing

EXHIBIT 32.2

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsection (a) and (b) of Section 1350 of Chapter 63 of Title 18 of the United States Code)


May 3, 2011		/s/ Joseph Macnow
	Name:	Joseph Macnow
	Title:	Executive Vice President and Chief Financial Officer