AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 25, 1999

                                                           REGISTRATION NO. 333-

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-3
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                              VORNADO REALTY TRUST
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                                              
             MARYLAND                                         22-1657560
 (STATE OR OTHER JURISDICTION OF                 (IRS EMPLOYER IDENTIFICATION NUMBER)
  INCORPORATION OR ORGANIZATION)

      PARK 80 WEST, PLAZA II,                                JOSEPH MACNOW
  SADDLE BROOK, NEW JERSEY 07663                        PARK 80 WEST, PLAZA II,
          (201) 587-1000                            SADDLE BROOK, NEW JERSEY 07663
          --------------                                    (201) 587-1000
 (ADDRESS, INCLUDING ZIP CODE, AND                          --------------
 TELEPHONE NUMBER, INCLUDING AREA                  (ADDRESS, INCLUDING ZIP CODE, AND
       CODE, OF REGISTRANT'S                    TELEPHONE NUMBER, INCLUDING AREA CODE,
        EXECUTIVE OFFICES)                               OF AGENT FOR SERVICE)

                                   COPIES TO:

                              ALAN SINSHEIMER, ESQ.
                               SULLIVAN & CROMWELL
                                125 BROAD STREET
                            NEW YORK, NEW YORK 10004

         APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement as
determined by market conditions.

         If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

         If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]

         If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

         If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

         If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

                                                                          PROPOSED           PROPOSED
                                                                           MAXIMUM            MAXIMUM
                                                                          AGGREGATE          AGGREGATE         AMOUNT OF
        TITLE OF SHARES                              AMOUNT TO BE         PRICE PER          OFFERING        REGISTRATION
       TO BE REGISTERED                               REGISTERED          SHARE(2)           PRICE(2)             FEE
       ----------------                               ----------          --------           -------              ---
                                                                                                 
Common shares of beneficial
  interest, par value
  $0.04 per share (1)                                  483,347          $30.34375           $14,666,560         $4,078

(1)      This Registration Statement registers the common shares of beneficial
         interest, par value $0.04 per share, of Vornado Realty Trust
         ("Vornado") issuable if Vornado elects to issue common shares to
         holders of up to 483,347 class A units of limited partnership interest
         in Vornado Realty L.P. (the "Operating Partnership") upon the tender of
         such units for redemption. 16,064 of such units were issued by the
         Operating Partnership in connection with its acquisition of a 60%
         interest in a leasehold for an office building located at 20 Broad
         Street in Manhattan, New York City, on August 5, 1998. 458,964 of such
         units were issued by the Operating Partnership in connection with its
         acquisition of an office building located at 770 Broadway in Manhattan,
         New York City, on July 23, 1998. 8,319 of such units were issued by the
         Operating Partnership in connection with its acquisition of Westport
         Corporate Office Park located in Westport, Connecticut, on January 29,
         1998. This Registration Statement also relates to such additional
         common shares as may be issued as a result of certain adjustments
         including, without limitation, share dividends and share splits.

(2)      Estimated solely for purposes of calculating the registration fee in
         accordance with Rule 457(c) based on the average of the high and low
         reported sales prices on the New York Stock Exchange on October 21,
         1999.

         THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

           THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY
             BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE
              REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
 EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
 SECURITIES AND IT IS NOT THE SOLICITATION OF AN OFFER TO BUY THESE SECURITIES
                 IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

                              SUBJECT TO COMPLETION
                 PRELIMINARY PROSPECTUS DATED OCTOBER 25, 1999

                              VORNADO REALTY TRUST
                              483,347 COMMON SHARES

         We are a fully-integrated real estate investment trust. We may issue up
to 483,347 common shares to holders of up to 483,347 units of limited
partnership interest in Vornado Realty L.P. upon tender of those units for
redemption. Vornado Realty L.P. is the operating partnership through which we
own our assets and operate our business.

         The units that may be redeemed for common shares were issued in
connection with our acquisition of:

           o  a 60% interest in a leasehold for an office building located at
20 Broad Street in Manhattan, New York City, on August 5, 1998;

           o  an office building located at 770 Broadway in Manhattan, New York
City, on July 23, 1998; and

           o  the Westport Corporate Office Park located in Westport,
Connecticut, on January 29, 1998.

         We are required to register the 483,347 common shares pursuant to
registration rights agreements with the holders of those units. We will acquire
units from the redeeming unit holders in exchange for any common shares that we
issue. We have registered the issuance of the common shares to permit their
holders to sell them without restriction in the open market or otherwise, but
the registration of the shares does not necessarily mean that any holders will
elect to redeem their units. Also, upon any redemption, we may elect to pay cash
for the units tendered rather than issue common shares. Although we will incur
expenses in connection with the registration of the 483,347 common shares, we
will not receive any cash proceeds upon their issuance.

         The common shares are listed on the New York Stock Exchange under the
symbol "VNO."

         In order to maintain our qualification as a real estate investment
trust for federal income tax purposes and for other purposes, no person may own
more than 6.7% of the outstanding common shares. Shares owned in excess of this
limit will be deemed "excess shares" under

the declaration of trust. The holder of any excess shares will lose some
ownership rights with respect to these shares, and we will have the right to
purchase them from the holder.

      o  SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR INFORMATION ABOUT FACTORS
RELEVANT TO AN INVESTMENT IN THE COMMON SHARES.

         Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal
offense.

               The date of this prospectus is October 25, 1999.

         YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT AUTHORIZED
ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT MAKING AN
OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. YOU
SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THOSE
DOCUMENTS.

         When we say "we," "our," "us" or "Vornado," we mean Vornado Realty
Trust and its consolidated subsidiaries, except where we make it clear that we
mean only the parent company. When we say the "operating partnership," we mean
Vornado Realty L.P. When we say "you" without any further specification, we mean
the holders of units that were issued in connection with our acquisition of:

            o  a 60% interest in a leasehold for an office building located at
20 Broad Street in Manhattan, New York City, on August 5, 1998;

            o  an office building located at 770 Broadway in Manhattan, New York
City, on July 23, 1998; and

            o  the Westport Corporate Office Park located in Westport,
Connecticut, on January 29, 1998.

                       WHERE YOU CAN FIND MORE INFORMATION

         We file annual, quarterly and special reports, proxy statements and
other information with the SEC. Our SEC filings are available to the public over
the Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms.

         This prospectus is part of a registration statement on Form S-3 filed
by Vornado with the SEC under the Securities Act. As permitted by the rules and
regulations of the SEC, this prospectus omits some of the information contained
in the registration statement. You should read the registration statement and
related exhibits for further information about Vornado and the common shares
offered by this prospectus. Statements in this prospectus about the provisions
of any document filed as an exhibit to the registration statement or otherwise
filed with the SEC are only summaries, and in each instance you should read the
document so filed for complete information about its provisions. Each statement
in this prospectus about the provisions of any document filed with the SEC is
qualified in its entirety by reference to the document.

         The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those

                                       -2-

documents. The information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
we sell all of the securities.

               o  Our Annual Report on Form 10-K for the year ended December 31,
                  1998;

               o  Our Quarterly Reports on Form 10-Q for the periods ended March
                  31, 1999 and June 30, 1999;

               o  Our Current Reports on Form 8-K, filed with the SEC on
                  February 9, 1999, February 12, 1999, March 17, 1999, May 26,
                  1999, July 7, 1999, October 22, 1999, and October 25, 1999;
                  and

               o  Our Current Reports on Form 8-K/A, filed with the SEC on
                  February 9 and February 24, 1999.

         You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:

         Vornado Realty Trust
         Park 80 West, Plaza II
         Saddle Brook, New Jersey 07663
         (201) 587-1000
         Attn: Secretary

                           FORWARD-LOOKING STATEMENTS

         This prospectus includes and incorporates by reference forward-looking
statements. We have based these forward-looking statements on our current
expectations and projections about future events. Various factors could cause
our actual results to differ materially from the results described in the
forward-looking statements. Factors that might cause a material difference of
this kind include, but are not limited to:

               o  changes in the general economic climate;

               o  local conditions such as an oversupply of space or a reduction
                  in demand for real estate in the area;

               o  conditions of our tenants;

               o  competition from other available space;

                                       -3-

               o  increased operating costs and interest expense;

               o  the timing of and costs associated with property improvements;

               o  changes in taxation or zoning laws;

               o  government regulations;

               o  our failure to continue to qualify as a real estate investment
                  trust;

               o  availability of financing on acceptable terms;

               o  potential liability under environmental or other laws or
                  regulations;

               o  general competitive factors; and

               o  failure by us, or by other companies with which we do a
                  significant amount of business, to remediate possible Year
                  2000 problems in computer software or embedded technology.

         We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. See "Risk factors" for more information about some of these
factors.

                                       -4-

                                  RISK FACTORS

         You should carefully consider, among other factors, the matters
described below.

IF YOU REDEEM YOUR UNITS, YOU MAY INCUR ADVERSE TAX CONSEQUENCES AND THE NATURE
OF YOUR INVESTMENT WILL CHANGE.

   YOU SHOULD CAREFULLY CONSIDER THE TAX CONSEQUENCES OF REDEEMING YOUR UNITS.

         The exercise of your right to require the redemption of your units will
be treated for tax purposes as a sale of your units. This sale will be fully
taxable to you, and you will be treated as realizing for tax purposes an amount
equal to the sum of the cash or the value of the common shares received in the
exchange plus the amount of the operating partnership liabilities (including the
operating partnership's share of the liabilities of certain entities in which
the operating partnership owns an interest) considered allocable to the redeemed
units at the time of the redemption. Depending upon your particular
circumstances, it is possible that the amount of gain recognized (or even the
tax liability resulting from that gain) could exceed the amount of cash and the
value of other property (e.g., the common shares) received upon the disposition.
See "Redemption of units - Tax consequences of redemption" for more information
on these tax consequences.

   THE NATURE OF YOUR INVESTMENT WILL CHANGE UPON A REDEMPTION OF YOUR UNITS.

         Unless we elect to assume and perform the operating partnership's
obligation with respect to redeeming your units, you will receive cash on the
specified redemption date (for class A units, which are the kind of units that
you hold, this is generally the tenth business day after we receive your notice
of redemption if our common shares are publicly traded) from the operating
partnership in an amount equal to the market value of the units to be redeemed.
In lieu of the operating partnership's acquiring the units for cash, we have the
right (except as described below, if the common shares are not publicly traded)
to elect to acquire the units on the specified redemption date directly from
you, in exchange for either cash or common shares, and upon acquiring the units,
we will become the owner of your units. See "Redemption of units" for more
information about our right to acquire your units for either cash or common
shares when you redeem them. If you receive cash, you will no longer have any
interest in the operating partnership or Vornado and will not benefit from any
subsequent increases in the price of the common shares and will not receive any
future distributions from the operating partnership or Vornado (unless you
currently own or acquire in the future additional common shares or units). If
you receive common shares, you will become a shareholder of Vornado rather than
a holder of units in the operating partnership. Although an investment in common
shares is substantially equivalent to an investment in units in the operating
partnership, there are some differences between ownership of units and ownership
of common shares.

                                       -5-

         These differences, some of which may be material to you, are discussed
in "Comparison of ownership of units and common shares."

REAL ESTATE INVESTMENTS' VALUE AND INCOME FLUCTUATE DUE TO VARIOUS FACTORS
INCLUDING THOSE DESCRIBED BELOW.

           THE VALUE OF REAL ESTATE FLUCTUATES DEPENDING ON CONDITIONS IN THE
         GENERAL ECONOMY AND THE REAL ESTATE BUSINESS. THESE CONDITIONS MAY ALSO
         LIMIT OUR REVENUES AND AVAILABLE CASH.

         The factors that affect the value of our real estate include, among
other things:

               o  national, regional and local economic conditions;

               o  oversupply of competing properties in a property's area;

               o  reduced demand for space in a property's area;

               o  whether tenants consider a property attractive;

               o  how well we manage our properties;

               o  competition from comparable properties;

               o  whether we are able to collect rent from tenants;

               o  any bankruptcies of our major tenants;

               o  increases or decreases in market rental rates;

               o  how much it costs us to repair, renovate and rent space,
                  including substantial costs of tenant improvements and leasing
                  expenses to release office space;

               o  increases in operating costs due to inflation, increased real
                  estate taxes and other factors;

               o  whether we are able to pass some or all of our increased
                  operating costs through to tenants;

               o  government regulations and changes in zoning or tax laws;

               o  market interest rates;

               o  whether we are able to obtain financing and the terms of our
                  financing; and

               o  our potential liability for environmental or other legal
                  claims.

The rents we receive and the occupancy levels at our properties might decline as
a result of changes in any of these factors. If our rental revenues decline, we
might have less cash available to distribute to our shareholders. In addition,
some of our major expenses, including mortgage payments, real estate taxes and
maintenance costs, generally do not decline when the related rents decline. If
rents decline while costs remain the same, our income and funds available for
distribution to our shareholders would decline.

                                       -6-

           WE DEPEND ON LEASING SPACE TO TENANTS ON ECONOMICALLY FAVORABLE TERMS
         AND COLLECTING RENT FROM OUR TENANTS, WHO MAY NOT BE ABLE TO PAY.

         Our financial results depend on leasing space in our real estate
properties to tenants on economically favorable terms. In addition, because
substantially all of our income comes from rentals of real property, our income
and funds available for distribution to our shareholders will decrease if a
significant number of our tenants cannot pay their rent. If a tenant does not
pay its rent, we might not be able to enforce our rights as landlord without
delays and we might incur substantial legal costs. See "-- Bankruptcy of tenants
may decrease our revenues and available cash" for information about the
bankruptcy and court-approved reorganization of Bradlees Inc., one of our
tenants, and the status of Bradlees' leases.

           BANKRUPTCY OF TENANTS MAY DECREASE OUR REVENUES AND AVAILABLE CASH.

         A number of retail companies, including some of our tenants, have
declared bankruptcy in recent years, and other tenants may declare bankruptcy or
become insolvent in the future. If a major tenant declares bankruptcy or becomes
insolvent, the shopping centers where it leases space may have lower revenue and
operational difficulties, and we may have difficulty leasing the remainder of
the affected shopping centers. Our leases generally do not contain restrictions
designed to ensure the creditworthiness of the tenants. As a result, the
bankruptcy or insolvency of a major tenant could result in a lower level of
funds from operations available for distribution to our shareholders.

         In June 1995, Bradlees filed for protection under Chapter 11 of the
U.S. Bankruptcy Code. Bradlees emerged from bankruptcy in January 1999, when its
plan of reorganization was confirmed. We withdrew our objection to Bradlees'
proposed plan of reorganization after obtaining Bradlees' agreement that its
lease of our 14th Street and Union Square property in New York City would
terminate in March 2000. The lease was scheduled to expire in October 2019, and
contained an option to renew for an additional ten years. In addition, the rent
under the lease was increased by $1,100,000 per annum to $3,400,000 per annum
from January 1999 to the March 2000 termination date. As part of this agreement,
we paid $11,000,000 to Bradlees. We are considering various alternatives for the
redevelopment of this site. We currently lease 15 other locations to Bradlees.
Of these locations, the leases for 14 are fully guaranteed by Stop & Shop
Companies, Inc., a wholly-owned subsidiary of Royal Ahold NV, a leading
international food retailer, and one is guaranteed as to 70% of the rent. If
Bradlees or Stop & Shop fails to perform its obligations under these leases, our
rental revenues could decline and, as a result, our funds from operations
available for distribution to our shareholders could also decline.

           WE MAY ACQUIRE OR DEVELOP NEW PROPERTIES, AND THIS MAY CREATE RISKS.

         We may acquire or develop properties or acquire other real estate
companies when we believe that an acquisition or development matches our
business strategies. We might not succeed in consummating desired acquisitions
or in completing developments on time or within our budget. We also might not
succeed in leasing newly developed or acquired properties at rents sufficient to
cover their costs of acquisition or development and operations.

                                       -7-

         We have experienced rapid growth in recent years, increasing our total
assets from approximately $565 million at December 31, 1996 to approximately
$4,866 million at June 30, 1999. We may continue this rapid growth for the
foreseeable future by acquiring or developing properties when we believe that
market circumstances and investment opportunities are attractive. We may not,
however, be able to manage our growth effectively or to maintain a similar rate
of growth in the future, and the failure to do so may have a material adverse
effect on our financial condition and results of operations.

         If persons selling properties to us wish to defer the payment of taxes
on the sales proceeds, we are likely to pay them in units of the operating
partnership. In transactions of this kind, we may also agree not to sell the
acquired properties or reduce the mortgage indebtedness on them for significant
periods of time. If we borrow funds or assume indebtedness to acquire or develop
properties, the operating partnership's indebtedness as a percentage of
Vornado's asset value or market capitalization might increase. If this happens,
the increased leverage may impair our ability to take actions that would
otherwise be in the best interests of Vornado and our security holders. If our
indebtedness increases significantly, the operating partnership might not be
able to make required principal and interest payments with respect to
indebtedness. See also "-- Vornado's organizational and financial structure
gives rise to operational and financial risks, including those described below
- -- We have indebtedness, and this indebtedness may increase" for further
information about our leverage.

           IT MAY BE DIFFICULT TO BUY AND SELL REAL ESTATE QUICKLY, AND TRANSFER
         RESTRICTIONS APPLY TO SOME OF OUR MORTGAGED PROPERTIES.

         Equity real estate investments are relatively difficult to buy and sell
quickly. We therefore have limited ability to vary our portfolio promptly in
response to changes in economic or other conditions.

         Some of our properties are mortgaged to secure payment of indebtedness.
If we were unable to meet our mortgage payments, the lender could foreclose on
the properties and we could incur a loss. In addition, if we wish to dispose of
one or more of the mortgaged properties, we might not be able to obtain release
of the lien on such mortgaged property. If a lender forecloses on a mortgaged
property or if a mortgage lien prevents us from selling a property, our funds
available for distribution to our shareholders could decline. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources" in our Annual Report on Form 10-K for the year
ended December 31, 1998, and the Notes to the Consolidated Financial Statements
in the same report for information regarding the mortgages on our properties.

           A SIGNIFICANT PROPORTION OF OUR PROPERTIES ARE IN THE NEW YORK
         CITY/NEW JERSEY REGION AND ARE AFFECTED BY THAT REGION'S ECONOMIC
         CYCLE.

         For the year ended December 31, 1998, 59% of our earnings before
interest expense, taxes, depreciation and amortization on a historical basis
came from properties located in the

                                       -8-

New York City metropolitan area and New Jersey. We refer to earnings before
interest expense, taxes, depreciation and amortization as "EBITDA." The
proportion of our EBITDA derived from properties in these areas in that year was
54% on a pro forma basis, giving effect to the completed and pending
acquisitions described under "Business -- Acquisitions and Investments" in our
Annual Report on Form 10-K for the year ended December 31, 1998, as if they had
occurred on January 1, 1998. In addition, we may concentrate a significant
portion of our future acquisitions in New York City and New Jersey. Like other
real estate markets, the real estate market in New York City and New Jersey
experienced economic downturns in the past, including most recently in the late
1980s and early 1990s. Future declines in the economy or the real estate markets
in New York City and New Jersey could hurt our financial performance and the
value of our properties. The factors affecting economic conditions in this
region include:

               o  business layoffs or downsizing;

               o  industry slowdowns;

               o  relocations of businesses;

               o  changing demographics;

               o  increased telecommuting and use of alternative work places;

               o  financial performance and productivity of the publishing,
                  financial, technology, retail, insurance and real estate
                  industries

               o  infrastructure quality; and

               o  any oversupply of or reduced demand for real estate.

The economy or the real estate markets in New York City and New Jersey might not
remain strong.

         ALL OF OUR COLD STORAGE WAREHOUSES ARE LEASED TO ONE TENANT, AND THAT
TENANT MAY DEFER RENT IN SOME CIRCUMSTANCES.

                  Vornado owns a 60% interest in partnerships that own 88
warehouse facilities nationwide with an aggregate of approximately 450 million
cubic feet of refrigerated, frozen and dry storage space. Crescent Real Estate
Equities Company owns the other 40% interest in these partnerships. We refer to
these partnerships as the "Vornado/Crescent Real Estate partnerships." On March
12, 1999, the Vornado/Crescent Real Estate partnerships sold all of the non-real
estate assets encompassing the operations of the cold storage business for
approximately $48,000,000 to a new partnership owned 60% by Vornado Operating
Company (which was spun off from Vornado in October 1998) and 40% by Crescent
Operating Inc. The

                                      -9-

new partnership conducts the cold storage business under the name AmeriCold
Logistics. AmeriCold Logistics leases the underlying cold storage warehouses
used in this business from the Vornado/Crescent Real Estate partnerships that
continue to own the real estate and manages 13 additional warehouses containing
approximately 80 million cubic feet. The leases have a 15-year term with two
five-year renewal options and provide for the payment of fixed base rent and
percentage rent based on customer revenues. AmeriCold Logistics is required to
pay for all costs arising from the operation, maintenance and repair of the
properties as well as property capital expenditures in excess of $5,000,000
annually. Fixed base rent and percentage rent amounted to $87 million for the
period March 12, 1999 (the date when the lease started) through September 30,
1999. AmeriCold Logistics has the right to defer a portion of the rent for up to
three years beginning on March 12, 1999 to the extent that available cash, as
defined in the leases, is insufficient to pay that portion of the rent.

         To the extent that operations of AmeriCold Logistics may affect its
ability to pay rent and the amount of percentage rent due under the leases,
Vornado indirectly bears the risks associated with AmeriCold Logistics' cold
storage business. That business faces national, regional and local competition.
Breadth of service, warehouse locations and customer mix are major competitive
factors, since frozen food manufacturers and distributors incur transportation
costs which typically are significantly greater than warehousing costs. In
addition, in some locations, customers depend upon pooling shipments, which
involves combining their products with the products of other customers destined
for the same markets. In these cases, the mix of customers in a warehouse can
significantly influence the cost of delivering products to markets. The size of
a warehouse is important because large customers prefer to have all of the
products needed to serve a given market in a single location to have the
flexibility to increase storage in that single location during seasonal peaks.
If there are several storage locations that satisfy customer mix and size
requirements, AmeriCold Logistics believes that customers generally will select
a storage facility based upon the types of service available, service
performance and price. Vornado does not control AmeriCold Logistics.

           WE MAY INCUR COSTS TO COMPLY WITH ENVIRONMENTAL LAWS.

         Under various Federal, state and local laws, ordinances and
regulations, a current or previous owner or operator of real estate may be
required to investigate and clean up specified hazardous or toxic substances
released at a property. The owner or operator may also be held liable to a
governmental entity or to third parties for property damage or personal injuries
and for investigation and clean-up costs incurred by those parties because of
the contamination. These laws often impose liability without regard to whether
the owner or operator knew of the release of the substances or was responsible
for the release. The presence of contamination or the failure to remediate
contamination may impair the owner's ability to sell or lease real estate or to
borrow using the real estate as collateral. Other Federal, state and local laws,
ordinances and regulations require abatement or removal of asbestos-containing
materials in the event of demolition, renovations or remodeling and also govern
emissions of and exposure to asbestos fibers in the air. The operation and
subsequent

                                      -10-

removal of some underground storage tanks are also regulated by Federal and
state laws. We could be held liable for the costs of remedial action with
respect to the foregoing regulated substances or tanks or related claims arising
out of environmental contamination at our properties.

           WE ARE IN A COMPETITIVE BUSINESS.

         The real estate industry is highly competitive. In each region where we
operate, we compete for tenants with a large number of real estate property
owners. Principal means of competition are rents charged, attractiveness of
location and quality of service. In addition, we expect other major real estate
investors with significant capital will compete with us for attractive
investment opportunities. These competitors include other REITs, investment
banking firms and private institutional investors. This competition has
increased prices for commercial properties and may impair our ability to make
suitable property acquisitions on favorable terms in the future.

           WE MAY NOT BE ABLE TO OBTAIN CAPITAL TO MAKE INVESTMENTS.

         We depend primarily on external financing to fund the growth of our
business. This is because one of the requirements of the Internal Revenue Code
of 1986, as amended, for a REIT is that it distribute 95% of its net taxable
income, excluding net capital gains, to its shareholders. Our access to debt or
equity financing depends on banks' willingness to lend and on conditions in the
capital markets. We and other companies in the real estate industry have
experienced limited availability of bank loans and capital markets financing
from time to time, including during the latter half of 1998. Although we believe
that we will be able to finance any investments we wish to make in the
foreseeable future, financing other than what we already have available might
not be available on acceptable terms. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources" in our Annual Report on Form 10-K for the year ended December 31,
1998 and the Notes to the Consolidated Financial Statements in the same report
for information about our available sources of funds.

           SOME OF OUR POTENTIAL LOSSES MAY NOT BE COVERED BY INSURANCE.

         We carry comprehensive liability, fire, extended coverage and rental
loss insurance on all of our properties. We believe the policy specifications
and insured limits of these policies are adequate and appropriate. There are,
however, some types of losses, including lease and other contract claims, that
generally are not insured. If an uninsured loss or a loss in excess of insured
limits occurs, we could lose all or a portion of the capital we have invested in
a property, as well as the anticipated future revenue from the property. If this
happens, we might nevertheless remain obligated for any mortgage debt or other
financial obligations related to the property.

                                      -11-

VORNADO'S OWNERSHIP STRUCTURE AND RELATED-PARTY TRANSACTIONS MAY GIVE RISE TO
CONFLICTS OF INTEREST.

           STEVEN ROTH AND INTERSTATE PROPERTIES MAY EXERCISE SUBSTANTIAL
         INFLUENCE OVER VORNADO. THEY AND SOME OF VORNADO'S OTHER TRUSTEES AND
         OFFICERS HAVE INTERESTS OR POSITIONS IN OTHER ENTITIES THAT MAY COMPETE
         WITH VORNADO.

         As of September 30, 1999, Interstate Properties and its partners owned
approximately 17.9% of the outstanding common shares of Vornado, 27.5% of
Alexander's Inc.'s common stock and 7.9% of Vornado Operating Company's common
stock, or 17.1% assuming conversion into shares of all of Interstate Properties'
limited partnership units of Vornado Operating L.P. Vornado Operating L.P. is a
Delaware limited partnership of which Vornado Operating Company is the general
partner and through which Vornado Operating Company conducts its business.
Interstate Properties is a general partnership in which Steven Roth, David
Mandelbaum and Russell B. Wight, Jr. are partners. Mr. Roth is the Chairman of
the Board and Chief Executive Officer of Vornado, the Managing General Partner
of Interstate Properties and the Chief Executive Officer and a director of
both Alexander's and Vornado Operating Company. Mr. Wight is a trustee of
Vornado and is also a director of both Alexander's and Vornado Operating
Company. Mr. Mandelbaum is a trustee of Vornado and is also a director of
Alexander's.

         As of September 30, 1999, Vornado owned 29.3% of the outstanding common
stock of Alexander's, Inc. Alexander's is a REIT engaged in leasing, managing,
developing and redeveloping properties, focusing primarily on the locations
where its department stores operated before they ceased operations in 1992.
Alexander's has eight properties, which are located in the New York City
metropolitan area. Mr. Roth and Michael D. Fascitelli, Vornado's President and a
member of the Board of Trustees, are directors of Alexander's. Messrs.
Mandelbaum, Richard R. West and Wight are trustees of Vornado and are also
directors of Alexander's.

         Vornado formed Vornado Operating Company for the purpose of owning
assets that Vornado could not itself own and conducting activities that Vornado
could not itself conduct. Vornado Operating Company is able to do so because it
is taxable as a regular C corporation rather than as a REIT. On October 16,
1998, the operating partnership distributed all of the shares of Vornado
Operating Company to its partners, including Vornado, in proportion to their
ownership of operating partnership units, and Vornado distributed the shares
it received to the holders of its common shares in proportion to their ownership
of Vornado common shares. Four members of Vornado's Board of Trustees, Messrs.
Roth, Fascitelli, West and Wight, are members of Vornado Operating Company's
Board of Directors, and certain members of senior management of Vornado hold
corresponding positions with Vornado Operating Company. Members of Vornado's
Board of Trustees and Vornado Operating Company's Board of Directors and
senior management may have different percentage equity interests in Vornado
and Vornado Operating Company.

                                      -12-

         Because of the foregoing, Mr. Roth and Interstate Properties may have
substantial influence on Vornado, Alexander's and Vornado Operating Company and
on the outcome of any matters submitted to Vornado's, Alexander's or Vornado
Operating Company's shareholders or stockholders for approval. In addition,
there may be conflicts of interest among Messrs. Roth, Mandelbaum and Wight
and Interstate Properties and Vornado's other shareholders concerning Vornado's
operations or financial structure. In addition, Mr. Roth and Interstate
Properties may in the future engage in a wide variety of other activities in
the real estate business, and these activities may result in conflicts of
interest with respect to matters affecting Vornado, Alexander's or Vornado
Operating Company. Matters that may give rise to conflicts of these kinds
include:

               o  determination of which of these entities or persons, if any,
                  may take advantage of potential business opportunities;

               o  decisions concerning the business focus of these entities,
                  including decisions concerning the types of properties and
                  geographic locations in which they make investments;

               o  potential competition between business activities conducted,
                  or sought to be conducted, by these entities or persons,
                  including competition for properties and tenants;

               o  possible corporate transactions, such as acquisitions; and

               o  other strategic decisions affecting the future of these
                  parties.

           VORNADO ENGAGES IN TRANSACTIONS WITH VORNADO OPERATING COMPANY WHOSE
         TERMS MAY OR MAY NOT BE COMPARABLE TO THOSE VORNADO COULD NEGOTIATE
         WITH UNAFFILIATED THIRD PARTIES.

         Vornado and Vornado Operating Company have entered into an intercompany
agreement under which, among other things:

               o  Vornado agreed under specified circumstances to offer Vornado
                  Operating Company an opportunity to lease real property owned
                  now or in the future by Vornado under mutually satisfactory
                  lease terms; and

               o  Vornado Operating Company agreed not to make any real estate
                  investment or other REIT-qualified investment unless it first
                  offers Vornado the opportunity to make the investment and
                  Vornado has rejected that opportunity.

Vornado capitalized Vornado Operating Company with an equity contribution of $25
million of cash and has extended to Vornado Operating Company a $75 million
unsecured five-year revolving line of credit under a credit agreement. The
intercompany agreement and the credit agreement were not

                                      -13-

negotiated at arm's length because Vornado Operating Company was a subsidiary of
Vornado at the time they were negotiated. Therefore, the terms of these
agreements may not be comparable to those Vornado could have negotiated with
an unaffiliated third party.

         Vornado and Vornado Operating Company may enter into additional
transactions in the future. Because Vornado and Vornado Operating Company share
common senior management and because a majority of Vornado's Trustees also
constitute the majority of Vornado Operating Company's Directors, the terms of
the foregoing agreements and any future agreements between Vornado and Vornado
Operating Company may not be comparable to those Vornado could have negotiated
with an unaffiliated third party.

           THERE MAY BE CONFLICTS OF INTEREST BETWEEN VORNADO AND ALEXANDER'S.

         Vornado has agreed to manage Alexander's business affairs and manage
and develop Alexander's properties for an annual fee under a management and
development agreement between Vornado and Alexander's. Vornado assigned this
management agreement to Vornado Management Corp. Vornado owns 100% of the
outstanding shares of non-voting stock of Vornado Management, which entitles
Vornado to 95% of the economic benefits of Vornado Management through
distributions. Messrs. Roth and West own 100% of the outstanding shares of
voting stock of Vornado Management. Vornado also acts as a leasing agent for
Alexander's properties on a fee basis under a leasing agreement. In addition,
Alexander's owes Vornado $45 million which was borrowed in March 1995 and is the
subordinated tranche of a loan in the original amount of $75 million, which has
a current outstanding balance of $65 million. On October 19, 1999, Vornado
announced that it has agreed to lend Alexander's another $50 million, under the
same terms as the existing $45 million loan. None of Mr. Roth, Interstate
Properties or Vornado is obligated to present to Alexander's any particular
investment opportunity which comes to his or its attention, even if the
opportunity might be suitable for investment by Alexander's.

         AN AFFILIATED COMPANY PROVIDES CLEANING AND SECURITY SERVICES TO OUR
OFFICE PROPERTIES UNDER CONTRACTS THAT WERE NOT NEGOTIATED AT ARM'S LENGTH.

         David R. Greenbaum, the Chief Executive Officer of Vornado's Mendik
Division, and other investors own a company which provides cleaning and related
services and security services to office properties. We refer to Messrs.
Greenbaum and these other investors as the "Mendik group." We have entered into
contracts with the Mendik group to provide services to our office properties.
These contracts were not negotiated at arm's length, and their terms may not be
comparable to those we could have negotiated with unaffiliated third parties.
However, we believe, based upon comparable fees charged to other real estate
companies, that our contracts with the Mendik group are fair to us.

VORNADO'S ORGANIZATIONAL AND FINANCIAL STRUCTURE GIVES RISE TO OPERATIONAL AND
FINANCIAL RISKS, INCLUDING THOSE DESCRIBED BELOW.

                                      -14-

           WE DO NOT CONTROL SOME OF OUR AFFILIATES.

         Some of our businesses are currently conducted through corporations in
which Vornado owns all of the non-voting stock and none of the voting stock, and
these corporations provide all of our management, operating and leasing
services. We refer to these corporations as "preferred stock affiliates."
Ownership of the non-voting stock entitles Vornado to substantially all of the
distributed income of these affiliates. The non-voting stock of the preferred
stock affiliates is owned by officers and/or trustees of Vornado. Accordingly,
Vornado is not able to elect the Boards of Directors of the preferred stock
affiliates and does not have the authority to control the management and
operations of these affiliates or the timing or amount of dividends paid by
them. Vornado therefore does not have the authority to require that funds be
distributed to it by any of these entities.

           VORNADO DEPENDS ON ITS DIRECT AND INDIRECT SUBSIDIARIES' DIVIDENDS
         AND DISTRIBUTIONS, AND THESE SUBSIDIARIES' CREDITORS AND PREFERRED
         SECURITY HOLDERS ARE ENTITLED TO PAYMENT OF AMOUNTS PAYABLE TO THEM BY
         THE SUBSIDIARIES BEFORE THE SUBSIDIARIES MAY PAY ANY DIVIDENDS OR
         DISTRIBUTIONS TO VORNADO.

         Substantially all of our assets consist of our partnership interests in
the operating partnership. The operating partnership holds substantially all of
its properties and assets through subsidiaries. The operating partnership
therefore depends for substantially all of its revenue on cash distributions to
it by its subsidiaries, and Vornado in turn depends for substantially all of its
revenue on cash distributions to it by the operating partnership. The creditors
of each direct and indirect subsidiary of Vornado are entitled to payment of
that subsidiary's obligations to them, when due and payable, before
distributions may be made by that subsidiary to its equity holders. In addition,
the holders of preferred units of the operating partnership are entitled to
receive preferred distributions before payment of distributions to holders of
common units, including Vornado. Thus, the operating partnership's ability to
make distributions to holders of units depends on its subsidiaries' ability
first to satisfy their obligations to their creditors and then to make
distributions to the operating partnership. Likewise, Vornado's ability to pay
dividends to holders of common and preferred shares depends on the operating
partnership's ability first to satisfy its obligations to its creditors and make
distributions payable to holders of preferred units and then to make
distributions to Vornado. See "Description of the units and the operating
partnership -- Ranking of units" for information about the outstanding preferred
units. In addition, Vornado's shareholders will have the right to participate in
any distribution of the assets of any of Vornado's direct or indirect
subsidiaries upon the liquidation, reorganization or insolvency of the
subsidiary, and consequently to participate in those assets, only after the
claims of the creditors, including trade creditors, and preferred security
holders, if any, of the subsidiary are satisfied.

           WE HAVE INDEBTEDNESS, AND THIS INDEBTEDNESS MAY INCREASE.

         As of June 30, 1999, we had aggregate indebtedness outstanding of
approximately $1,965 million, approximately $1,487 million of which was secured
by our properties. Substantially all of the secured indebtedness was
non-recourse to Vornado, while

                                      -15-

approximately $478 million of Vornado's aggregate indebtedness was unsecured,
recourse indebtedness of the operating partnership. The operating partnership's
ability to make required principal and interest payments with respect to
indebtedness represented by its debt securities depends on the earnings of its
subsidiaries and on its ability to receive funds from its subsidiaries through
dividends or other payments, since the debt securities are obligations of the
operating partnership only and its subsidiaries are not obligated to pay any
amounts due under the terms of the debt securities or to make funds available
for payment of these amounts in the form of dividends or advances to the
operating partnership.

         As of June 30, 1999, the level of Vornado's debt to enterprise value
was 43%, based on debt of $3,161 million, which included Vornado's proportionate
share of debt of partially-owned entities of $1,196 million. When we say
"enterprise value" in the preceding sentence, we mean market equity value plus
debt less cash. Historically, we have maintained a lower debt-to-enterprise-
value ratio. In the future, in connection with our strategy for growth, this
percentage may change. We may review and modify this policy from time to time
without the vote of our shareholders.

           LOSS OF OUR KEY PERSONNEL COULD HARM OUR OPERATIONS.

         We depend on the efforts of Steven Roth, the Chairman of the Board of
Trustees and Chief Executive Officer of Vornado, and Michael D. Fascitelli, the
President of Vornado. While we believe that we could find replacements for these
key personnel, the loss of their services could harm our operations.

           WE MIGHT FAIL TO QUALIFY OR REMAIN QUALIFIED AS A REIT.

         Although we believe that Vornado will remain organized and will
continue to operate so as to qualify as a REIT for Federal income tax purposes,
we might fail to remain qualified in this way. Qualification as a REIT for
Federal income tax purposes is governed by highly technical and complex
provisions of the Internal Revenue Code for which there are only limited
judicial or administrative interpretations. Vornado's qualification as a REIT
also depends on various facts and circumstances that are not entirely within our
control. In addition, legislation, new regulations, administrative
interpretations or court decisions might significantly change the tax laws with
respect to the requirements for qualification as a REIT or the Federal income
tax consequences of qualification as a REIT. A number of recent legislative
proposals could affect the way Vornado conducts its business. At this time it is
unclear whether these proposals will be enacted into law and, if enacted into
law, the exact form these proposals would take and the effect that they would
have upon Vornado's operations.

         If, with respect to any taxable year, Vornado fails to maintain its
qualification as a REIT, it could not deduct distributions to shareholders in
computing its taxable income and would have to pay Federal income tax on its
taxable income at regular corporate rates. The Federal income tax payable would
include any applicable alternative minimum tax. If Vornado had to pay Federal
income tax, the amount of money available to distribute to shareholders would be

                                      -16-

reduced for the year or years involved, and Vornado would no longer be required
to distribute money to shareholders. In addition, Vornado would also be
disqualified from treatment as a REIT for the four taxable years following the
year during which qualification was lost, unless Vornado was entitled to relief
under the relevant statutory provisions. Although Vornado currently intends to
operate in a manner designed to allow it to qualify as a REIT, future economic,
market, legal, tax or other considerations may cause it to revoke the REIT
election.

           VORNADO'S CHARTER DOCUMENTS AND APPLICABLE LAW MAY HINDER ANY ATTEMPT
         TO ACQUIRE VORNADO.

         Generally, for Vornado to maintain its qualification as a REIT under
the Internal Revenue Code, not more than 50% in value of the outstanding shares
of beneficial interest of Vornado may be owned, directly or indirectly, by five
or fewer individuals at any time during the last half of Vornado's taxable year.
The Internal Revenue Code defines "individuals" for purposes of the requirement
described in the preceding sentence to include some types of entities. Under
Vornado's Amended and Restated Declaration of Trust, no person may own more than
6.7% of the outstanding common shares or 9.9% of the outstanding preferred
shares, with some exceptions for persons who held common shares in excess of the
6.7% limit before Vornado adopted the limit. These restrictions on
transferability and ownership may delay, deter or prevent a change in control of
Vornado or other transaction that might involve a premium price or otherwise be
in the best interest of the shareholders. We refer to Vornado's Amended and
Restated Declaration of Trust, as amended, as the "declaration of trust."

         Vornado's Board of Trustees is divided into three classes of trustees.
Trustees of each class are chosen for three-year staggered terms. Staggered
terms of trustees may reduce the possibility of a tender offer or an attempt to
change control of Vornado, even though a tender offer or change in control might
be in the best interest of our shareholders. Vornado's declaration of trust
authorizes the Board of Trustees:

               o  to cause Vornado to issue additional authorized but unissued
                  common shares or preferred shares;

               o  to classify or reclassify, in one or more series, any unissued
                  preferred shares; and

               o  to set the preferences, rights and other terms of any
                  classified or reclassified shares that Vornado issues.

         The Board of Trustees could establish a series of preferred shares
whose terms could delay, deter or prevent a change in control of Vornado or
other transaction that might involve a premium price or otherwise be in the best
interest of our shareholders, although the Board of Trustees does not now intend
to establish a series of preferred shares of this kind. Vornado's declaration of
trust and bylaws contain other provisions that may delay, deter or prevent a

                                      -17-

change in control of Vornado or other transaction that might involve a premium
price or otherwise be in the best interest of the shareholders.

         Under the Maryland General Corporation Law, as amended, as applicable
to real estate investment trusts, specified "business combinations" between a
Maryland real estate investment trust and an Interested Shareholder (as defined
below) or an affiliate of the Interested Shareholder are prohibited for five
years after the most recent date on which the Interested Shareholder becomes an
Interested Shareholder. Business combinations for purposes of the preceding
sentence are defined by the statute to include specified mergers,
consolidations, share exchanges and asset transfers and some issuances and
reclassifications of equity securities. After the end of the five-year period,
any business combination with an Interested Shareholder or an affiliate of the
Interested Shareholder must be recommended by the Board of Trustees of the trust
and approved by the affirmative vote of at least:

               o  80% of the votes entitled to be cast by holders of outstanding
                  shares of beneficial interest of the trust; and

               o  two-thirds of the votes entitled to be cast by holders of
                  voting shares of the trust other than shares held by the
                  Interested Shareholder with whom, or with whose affiliate, the
                  business combination is to be effected or held by an affiliate
                  or associate of the Interested Shareholder, voting together as
                  a single voting group.

These percentage approval requirements do not apply if, among other conditions,
the trust's common shareholders receive a statutorily defined minimum price for
their shares and the consideration is received in cash or in the same form as
previously paid by the Interested Shareholder for its common shares. The
provisions of the Maryland General Corporation Law also do not apply to business
combinations that are approved or exempted by the Board of Trustees of the trust
before the Interested Shareholder becomes an Interested Shareholder. The
Maryland General Corporation Law defines "Interested Shareholder" as any person
who beneficially owns ten percent or more of the voting power of the trust's
shares or an affiliate or an associate (as defined in the Maryland General
Corporation Law) of the trust who, at any time within the two-year period before
the date in question, was the beneficial owner of ten percent or more of the
voting power of the then outstanding voting shares of beneficial interest of the
trust. A person is not an Interested Shareholder if, prior to the time the
person would have become an Interested Shareholder, the Board approved the
transaction which would have resulted in the person becoming an Interested
Shareholder.

         Vornado's Board of Trustees has adopted a resolution exempting any
business combination between Vornado and any Trustee or officer of Vornado or an
affiliate of any Trustee or officer of Vornado. As a result, the Trustees and
officers of Vornado and their affiliates may be able to enter into business
combinations with Vornado which may not be in the best interest of shareholders.
With respect to business combinations with other persons, the business
combination provisions of the Maryland General Corporation Law may delay,

                                      -18-

deter or prevent a change in control of Vornado or other transaction that might
involve a premium price or otherwise be in the best interest of the
shareholders.

THE MARKET FOR VORNADO'S SHARES GIVES RISE TO VARIOUS RISKS, INCLUDING THOSE
DESCRIBED BELOW.

           VORNADO HAS MANY SHARES AVAILABLE FOR FUTURE SALE, WHICH COULD HURT
         THE MARKET PRICE OF OUR SHARES.

         As of September 30, 1999, 23,291,025 common shares were reserved for
issuance upon redemption of units. These shares may be sold in the public market
after registration under the Securities Act of 1933 under registration rights
agreements between Vornado and the holders of the units. These shares may also
be sold in the public market under Rule 144 under the Securities Act or other
available exemptions from registration. In addition, we have reserved a number
of common shares for issuance under our employee benefit plans, and these common
shares will be available for sale from time to time. We have granted options to
purchase additional common shares to some of our executive officers and
employees. We cannot predict the effect that future sales of common shares, or
the perception that sales of common shares could occur, will have on the market
prices of our equity securities.

           CHANGES IN MARKET CONDITIONS COULD HURT THE MARKET PRICE OF OUR
          SHARES.

         The value of our shares depends on various market conditions, which may
change from time to time. Among the market conditions that may affect the value
of our shares are the following:

               o  the extent of institutional investor interest in Vornado;

               o  the reputation of REITs generally and the attractiveness of
                  their equity securities in comparison to other equity
                  securities, including securities issued by other real estate
                  companies, and fixed income securities;

               o  our financial condition and performance; and

               o  general financial market conditions.

In addition, the stock market in recent years has experienced extreme price and
volume fluctuations that have often been unrelated or disproportionate to the
operating performance of companies.

                                      -19-

           INCREASED MARKET INTEREST RATES MAY HURT THE VALUE OF OUR SHARES.

         We believe that investors consider the distribution rate on REIT
shares, expressed as a percentage of the price of the shares, relative to market
interest rates as an important factor in deciding whether to buy or sell the
shares. If market interest rates go up, prospective purchasers of REIT shares
may expect a higher distribution rate. Higher interest rates would not, however,
result in more funds for us to distribute and, in fact, would likely increase
our borrowing costs and might decrease our funds available for distribution.
Thus, higher market interest rates could cause the market price of our shares to
decline.

                                      -20-

                      VORNADO AND THE OPERATING PARTNERSHIP

         Vornado is a fully-integrated real estate investment trust. Vornado
conducts its business through, and substantially all of its interests in
properties are held by, the operating partnership. Vornado is the sole general
partner of, and owned approximately 86% of the common limited partnership
interest in, the operating partnership at September 30, 1999.

         The operating partnership currently owns directly or indirectly:

               o  all or portions of 23 office building properties in the New
                  York City metropolitan area (primarily Manhattan) containing
                  approximately 14.1 million square feet;

               o  a 34% limited partnership interest in Charles E. Smith
                  Commercial Realty L.P., a limited partnership which owns
                  interests in and manages approximately 10.7 million square
                  feet of office properties in Northern Virginia and Washington,
                  D.C., and manages an additional 14.6 million square feet of
                  office and other commercial properties in the Washington, D.C.
                  area;

               o  59 shopping center properties in seven states and Puerto Rico
                  containing 12.2 million square feet, including 1.4 million
                  square feet built by tenants on land leased from us;

               o  a 60% interest in partnerships that own 88 warehouse
                  facilities nationwide with an aggregate of approximately 450
                  million cubic feet of refrigerated, frozen and dry storage
                  space, which excludes 13 additional warehouses containing
                  approximately 80 million cubic feet managed by AmeriCold
                  Logistics;

               o  the Merchandise Mart Properties portfolio containing 6.7
                  million square feet, including the 3.4 million square foot
                  Merchandise Mart in Chicago;

               o  approximately 29.3% of the outstanding common stock of
                  Alexander's, which has eight properties in the New York City
                  metropolitan area;

               o  the Hotel Pennsylvania, a New York City hotel which contains
                  800,000 square feet of space with 1,700 rooms and 400,000
                  square feet of retail and office space;

               o  eight dry warehouse/industrial properties in New Jersey
                  containing 2.0 million square feet; and

               o  other real estate and investments.

                                      -21-

         The principal executive offices of Vornado and the operating
partnership are located at Park 80 West, Plaza II, Saddle Brook, N.J. 07663;
telephone (201) 587-1000.

                                 USE OF PROCEEDS

         Vornado will not receive any cash proceeds from the issuance of the
shares offered by this prospectus but will acquire units in the operating
partnership in exchange for any shares that Vornado may issue to a redeeming
unit holder.

                                      -22-

                               REDEMPTION OF UNITS

         At any time after the date on which your class A units first become
redeemable (see next sentence), you have the right to have your units redeemed
in whole or in part by the operating partnership for cash equal to the fair
market value, at the time of redemption, of one common share of Vornado for each
unit redeemed. If units were issued to you in connection with our acquisition of
a 60% interest in a leasehold for an office building located at 20 Broad Street
in Manhattan, New York City, on August 5, 1998, then the date on which these
units first become redeemable is November 1, 1999; if units were issued to you
in connection with our acquisition of an office building located at 770 Broadway
in Manhattan, New York City, on July 23, 1998, then that date is July 23, 1999;
and if units were issued to you in connection with our acquisition of the
Westport Corporate Office Park located in Westport, Connecticut, on January 29,
1998, then that date is January 29, 1999. We have the right to issue you one
common share for each unit tendered instead of paying the cash redemption
amount. You may redeem units only in compliance with the securities laws, the
Second Amended and Restated Agreement of Limited Partnership of the operating
partnership, dated as of October 20, 1997, as amended, the Limited Partner
Acceptance of Partnership Agreement that you signed when you received your
units, and the declaration of trust's limits on ownership of common shares. We
refer to the Second Amended and Restated Agreement of Limited Partnership of the
operating partnership, as amended, as the "partnership agreement."

         You may exercise the right to redeem your units by providing a notice
of redemption, substantially in the form attached as an exhibit to the
partnership agreement, to the operating partnership, with a copy to Vornado. You
may also be required to furnish the operating partnership and Vornado with
certain other certificates and forms. The partnership agreement establishes some
limitations on your right to redeem units. Unless we elect to assume and perform
the operating partnership's obligation with respect to the redemption, as
described below, you will receive cash on the specified redemption date from the
operating partnership in an amount equal to the market value of the units to be
redeemed. When we say "specified redemption date" in the context of class A
units, which are the kind of units that you hold, we mean:

               o  if Vornado's common shares are publicly traded, the tenth
                  business day after we receive a notice of redemption; and

               o  if Vornado's common shares are not publicly traded, the
                  thirtieth business day after we receive a notice of
                  redemption.

When we say "business day," we mean a day that is not a Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized or
required by law to close. The market value of a unit for the purpose of
redemption will be equal to the average of the closing trading price of a
Vornado common share on the NYSE for the ten trading days before

                                      -23-

the day on which we received the notice of redemption or, if that day is not a
business day, the first business day after that day.

         Instead of the operating partnership's acquiring the units for cash, we
have the right to acquire the units on the specified redemption date directly
from you, in exchange for either the market value of the units in cash or for
common shares. However, we do not have this right if the common shares are not
publicly traded, as described below. If we acquire the units, we will become
their owner. In either case, acquisition of the units by Vornado will be treated
as a sale of the units to Vornado for Federal income tax purposes. The payment
of the redemption price may be conditioned on our sole satisfaction that any New
York Real Estate Transfer Tax and New York City Real Property Transfer Tax
payable by reason of your redeeming units prior to the second anniversary of the
date on which such units were issued to you have been paid in full or that
adequate provision has been made therefor. If we elect to acquire the units in
exchange for shares, then you are obligated, as a condition to the effective
exercise of the redemption right, to escrow with Vornado an amount equal to the
New York Real Estate Transfer Tax and New York City Real Property Transfer Tax
that would have been payable as of the exercise of the redemption right,
assuming that you transfer the shares received prior to the second anniversary
of the date on which the units were issued to you. Such escrow may be used by us
or you for the payment of the taxes described above, provided, in the latter
event, that we have determined, in our good faith discretion, that such tax will
be paid. See "-- Tax consequences of redemption -- Tax treatment of redemption
of units" for information about the tax consequences of redeeming units to the
redeeming unit holder.

         If we determine to acquire the units in exchange for common shares, the
total number of common shares to be paid to you will be equal to the product of
the number of units times the conversion factor. See "Description of units --
Sales of assets" for further information about the conversion factor, which is
1.0 as of the date of this prospectus. Vornado currently anticipates that it
generally will elect to acquire directly units tendered for redemption and to
issue common shares in exchange for the units rather than paying cash, but we
will decide whether to pay cash or issue common shares upon redemption of units
when units are tendered for redemption.

         When you redeem units, your right to receive distributions for the
units so redeemed or exchanged will cease, unless the record date for a
distribution was a date before the specified redemption date. You must redeem at
least 1,000 units at a time, or all of your remaining units if you own less than
1,000 units. No redemption or exchange can occur if delivery of common shares on
the specified redemption date to the unit holder seeking redemption would be
prohibited either under Vornado's declaration of trust or under applicable
Federal or state securities laws as long as the common shares are publicly
traded.

         Each unit holder has agreed with Vornado under the partnership
agreement that all units delivered for redemption must be delivered to the
operating partnership or Vornado, as the case may be, free and clear of all
liens. Neither Vornado nor the operating partnership will be under any
obligation to acquire units if there are liens on the units. Each unit holder
has

                                      -24-

also agreed to pay any state or local property transfer tax that is payable as a
result of the transfer of his or her units to the operating partnership or
Vornado.

         If a unit holder assigns his or her units to another person, that
person may redeem the units. In that case, the redemption price will be paid
directly to that person and not to the unit holder.

         If Vornado provides notice to the unit holders that it intends to make
an extraordinary distribution of cash or property to its shareholders or to
effect a merger, a sale of all or substantially all of its assets or any other
similar extraordinary transaction, the right to redeem units will be exercisable
during the period commencing on the date on which Vornado provides that notice
and ending on either:

               o  if there is a record date to determine shareholders eligible
                  to receive the extraordinary distribution or to vote upon the
                  approval of the merger, sale or other extraordinary
                  transaction, the record date; or

               o  if there is no record date of this kind, the date that is
                  twenty days after the date on which Vornado provides notice of
                  the extraordinary distribution or extraordinary transaction.

A holder must have held his or her units for at least one year from the date of
issuance to have the right to redeem them under these circumstances. If this
paragraph applies, the specified redemption date will be the sooner of:

               o  the tenth business day after the operating partnership
                  receives the notice of redemption; or

               o  the business day immediately preceding the record date to
                  determine shareholders eligible to receive the extraordinary
                  distribution or vote on approval of the extraordinary
                  transaction.

However, if the specified redemption date occurs in less than ten business days
and the operating partnership elects to redeem the units for cash, the operating
partnership will have up to ten business days after receiving the notice of
redemption to deliver payment for the units.

         If Vornado merges or consolidates with another company or sells all or
substantially all of its assets as a whole and Vornado's shareholders are
obligated to accept cash and/or debt obligations in full or partial payment for
their common shares in the transaction, then the portion of the payment per unit
payable upon redemption of the units that must be accepted in cash and/or debt
obligations will be equal to an amount of cash equal to the sum of:

               o  the cash payable for one common share multiplied by the
                  conversion factor; and

                                      -25-

               o  the value, on the date on which the transaction is
                  consummated, of the debt obligations to be received with
                  respect to one common share multiplied by the conversion
                  factor.

The balance of the amount payable per unit when units are redeemed will be
payable in an amount calculated consistently with the second paragraph of this
section. If a transaction of the kind described in this paragraph occurs at a
time when the consent of some unit holders is required under those lockup
agreements that are contained in the partnership agreement, then the portion of
the payment per unit to those unit holders payable upon redemption of their
units that they must accept in cash and/or debt obligations will be increased by
an amount that will provide them with an internal rate of return on that portion
of the payment from the date of the transaction to the date of redemption of the
units equal to the treasury constant yield, as defined in the partnership
agreement. The lockup agreements are described under "Description of units and
the operating partnership -- Borrowing by the operating partnership."

         If the common shares are not publicly traded but another entity whose
shares are publicly traded owns more than 50% of the shares of Vornado, the unit
holders' right to redeem units will be determined by reference to the publicly
traded stock of that majority owner of Vornado. In that case, the general
partner of the operating partnership will have the right to elect to acquire the
units to be redeemed for publicly traded stock of the majority owner of Vornado.
If the common shares are not publicly traded and there is no majority owner of
Vornado with publicly traded stock, the unit holders' right to redeem units
would be based upon the net fair market value of the operating partnership's
assets at the time the units are redeemed, as determined in good faith by
Vornado. In that case, Vornado and the operating partnership would be obligated
to pay for redeemed units in cash, payable on the thirtieth business day after
Vornado receives the notice of redemption.

REGISTRATION RIGHTS

         Under registration rights agreements between Vornado and the unit
holders named in these agreements, which have been filed as an exhibit to the
registration statement of which this prospectus forms a part, those unit holders
have the right to demand registration of the common shares for which their units
may be redeemed when they redeem their units, unless the shares they receive are
already registered under an effective registration statement filed with the SEC.
The registration rights agreements provide that Vornado will pay all expenses of
registering the shares. The agreements also provide that the holders of the
shares will pay any brokerage and sales commissions, fees and disbursements of
counsel to the holders, accountants and other advisors, and any transfer taxes
relating to the sale or disposition of the shares by the holders.

TAX CONSEQUENCES OF REDEMPTION

         The following discussion summarizes the material Federal income tax
considerations that may be relevant to a unit holder who redeems his or her
units. This discussion only

                                      -26-

applies to unit holders that provide an affidavit to the operating partnership,
at the time their units are redeemed, stating that the unit holder is not a
foreign person and stating the unit holder's taxpayer identification number,
under penalties of perjury.

         YOU SHOULD CONSULT YOUR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES
TO YOU OF REDEEMING YOUR UNITS, INCLUDING THE FEDERAL, STATE, LOCAL AND FOREIGN
TAX CONSEQUENCES OF REDEEMING UNITS IN YOUR PARTICULAR CIRCUMSTANCES AND
POTENTIAL CHANGES IN APPLICABLE LAWS.

  TAX TREATMENT OF REDEMPTION OF UNITS

         If Vornado assumes and performs the redemption obligation, the
partnership agreement provides that the redemption will be treated by Vornado,
the operating partnership and the redeeming unit holder as a sale of units by
the redeeming unit holder to Vornado at the time the units are redeemed. This
sale will be fully taxable to the redeeming unit holder, and the redeeming unit
holder will be treated as realizing for tax purposes an amount equal to the sum
of:

               o  the cash or the value of the common shares received in the
                  exchange; plus

               o  the amount of operating partnership liabilities allocable to
                  the redeemed units at the time they are redeemed.

The amount of operating partnership liabilities considered in this calculation
will include the operating partnership's share of the liabilities of some
entities in which the operating partnership owns an interest. The determination
of the amount of gain or loss is discussed more fully under "-- Tax treatment of
disposition of units by unit holders generally" below.

         If Vornado does not elect to assume the obligation to redeem a unit
holder's units, the operating partnership will redeem the units for cash. If the
operating partnership redeems units for cash that Vornado contributes to the
operating partnership for that purpose, the redemption likely would be treated
for tax purposes as a sale of the units to Vornado in a fully taxable
transaction, although this is not certain. If the redemption is treated that way
for tax purposes, the redeeming unit holder would be treated as realizing an
amount equal to the sum of:

               o  the cash received in the exchange; plus

               o  the amount of operating partnership liabilities allocable to
                  the redeemed units at the time they are redeemed.

The amount of operating partnership liabilities considered in this calculation
will include the operating partnership's share of the liabilities of some
entities in which the operating

                                      -27-

partnership owns an interest. The determination of the amount of gain or loss if
a redemption is treated as a sale for tax purposes is discussed more fully under
"-- Tax treatment of disposition of units by unit holders generally" below.

         If, instead, the operating partnership chooses to redeem units for cash
that is not contributed by Vornado for that purpose, the tax consequences would
be the same as described in the previous paragraph with the following exception.
If the operating partnership redeems less than all of a unit holder's units, the
unit holder would not be permitted to recognize any loss occurring on the
transaction and would recognize taxable gain only to the extent that the amount
he or she would be treated as receiving, as described above, exceeded his or her
adjusted basis in all of his or her units immediately before the redemption.

  POTENTIAL APPLICATION OF DISGUISED SALE REGULATIONS TO A REDEMPTION OF UNITS

         A redemption of units may cause the original transfer of property to
the operating partnership in exchange for units to be treated as a "disguised
sale" of property. The Internal Revenue Code and the Treasury regulations under
the Internal Revenue Code generally provide that, unless one of the prescribed
exceptions is applicable, a partner's contribution of property to a partnership
and a simultaneous or subsequent transfer of money or other consideration from
the partnership to the partner, including the partnership's assumption of a
liability or taking the property subject to a liability, will be presumed to be
a sale, in whole or in part, of the property by the partner to the partnership.
Further, the Treasury regulations provide generally that, in the absence of an
applicable exception, if a partnership transfers money or other consideration to
a partner within two years after the partner contributed property to the
partnership, the transactions will be presumed to be a sale of the contributed
property unless the facts and circumstances clearly establish that the transfers
do not constitute a sale. The Treasury regulations also provide that if two
years have passed between the time when the partner contributed property to the
partnership and the time when the partnership transferred money or other
consideration to the partner, the transactions will be presumed not to be a sale
unless the facts and circumstances clearly establish that the transfers
constitute a sale.

         Accordingly, if the operating partnership redeems a unit, the Internal
Revenue Service could contend that the redemption should be treated as a
disguised sale because the redeeming unit holder will receive cash or common
shares after having contributed property to the operating partnership. If the
IRS took that position successfully, the issuance of the units in exchange for
the contributed property could be taxable as a disguised sale under the Treasury
regulations.

  TAX TREATMENT OF DISPOSITION OF UNITS BY UNIT HOLDERS GENERALLY

         If a unit holder redeems units in a manner that is treated as a sale of
the units, the gain or loss from the sale or other disposition will be based on
the difference between:

                                      -28-

               o  the amount considered realized for tax purposes; and

               o  the unit holder's tax basis in the units.

See "-- Basis of units" below for information about the tax basis of units.

     If a unit holder sells units, the "amount realized" will be measured by the
sum of

               o  the cash and fair market value of other property received,
                  including any common shares; plus

               o  the portion of the operating partnership's liabilities
                  allocable to the units sold.

The amount of operating partnership liabilities considered in this calculation
will include the operating partnership's share of the liabilities of some
entities in which the operating partnership owns an interest.

         A selling unit holder will recognize gain to the extent that the amount
he or she realizes in the sale exceeds his or her basis in the units sold. It is
possible that the amount of gain recognized or even the tax liability resulting
from the gain could exceed the amount of cash and the value of any other
property, including common shares, received in exchange for the units.

         Except as described below, any gain recognized upon a sale or other
disposition of units will be treated as gain attributable to the sale or
disposition of a capital asset. To the extent, however, that the amount realized
upon the sale of a unit attributable to a unit holder's share of "unrealized
receivables" of the operating partnership (as defined in Section 751 of the
Internal Revenue Code) exceeds the basis attributable to those assets, this
excess will be treated as ordinary income. Unrealized receivables include, to
the extent not previously included in operating partnership income, any rights
to payment for services rendered or to be rendered. Unrealized receivables also
include amounts that would be subject to recapture as ordinary income if the
operating partnership had sold its assets at their fair market value at the time
of the transfer of a unit.

         For non-corporate holders, the maximum rate of tax on the net capital
gain from the sale or exchange or a capital asset held for more than one year is
20%. The maximum rate for net capital gains attributable to the sale of
depreciable real property held for more than one year is 25% to the extent of
the prior deductions for depreciation that are not otherwise recaptured as
ordinary income under the existing depreciation recapture rules.

         The IRS has authority to issue regulations that could, among other
things, apply these rates on a look-through basis in the case of "pass-through"
entities such as Vornado and the operating partnership. The IRS has not yet
issued regulations of this kind. If it does not issue regulations of this kind
in the future, the rate of tax that would apply to the disposition of a unit
by a non-corporate holder

                                      -29-

would be determined based upon the period of time over which the non-corporate
holder held the unit. The IRS might, however, issue regulations that would
provide that the rate of tax that would apply to the disposition of a unit by a
non-corporate holder would be determined based upon the nature of the assets of
the operating partnership and the periods of time over which the operating
partnership held the assets. Moreover, if the IRS adopts regulations of this
kind, they might apply retroactively.

  BASIS OF UNITS

         In general, a unit holder who received units in exchange for
contributing an interest in a partnership has an initial tax basis in the units
equal to his or her basis in the contributed partnership interest. A unit
holder's initial basis in his or her units generally is increased by:

               o  the unit holder's share of operating partnership taxable and
                  tax-exempt income;

               o  increases in his or her share of the liabilities of the
                  operating partnership, including the operating partnership's
                  share of the liabilities of some entities in which the
                  operating partnership owns an interest; and

               o  any gain recognized under Section 737 of the Internal Revenue
                  Code due to the receipt of a distribution from the operating
                  partnership within seven years after the unit holder
                  contributed property to the operating partnership.

Generally, a unit holder's initial basis in his or her units is decreased by:

               o  his or her share of operating partnership distributions;

               o  decreases in his or her share of liabilities of the operating
                  partnership, including the operating partnership's share of
                  the liabilities of some entities in which the operating
                  partnership owns an interest;

               o  his or her share of losses of the operating partnership; and

               o  his or her share of nondeductible expenditures of the
                  operating partnership that are not chargeable to capital.

However, a unit holder's initial basis will not decrease below zero.

                                      -30-

                          DESCRIPTION OF COMMON SHARES

         The following description of the common shares does not describe every
aspect of the common shares and is only a summary of, and is qualified in its
entirety by reference to, the provisions governing the common shares contained
in the declaration of trust and bylaws. Copies of the declaration of trust and
bylaws are exhibits to the registration statement of which this prospectus is a
part. See "Where you can find more information" for information about how to
obtain copies of the declaration of trust and bylaws.

VORNADO'S AUTHORIZED AND OUTSTANDING CLASSES OF SHARES

         The declaration of trust authorizes the issuance of up to 290,000,000
shares of beneficial interest, consisting of 125,000,000 common shares, $.04 par
value per share, 20,000,000 preferred shares of beneficial interest no par value
per share, and 145,000,000 excess shares of beneficial interest, $.04 par value
per share. We refer to the excess shares of beneficial interest, $.04 par value
per share, as "excess shares." See "-- Restrictions on ownership" for a
discussion of the possible issuance of excess shares.

         As of September 30, 1999, 85,946,899 common shares were issued and
outstanding, 5,789,239 series A preferred shares were issued and outstanding,
3,400,000 8.5% series B cumulative redeemable preferred shares were issued and
outstanding, 4,600,000 8.5% series C cumulative redeemable preferred shares were
issued and outstanding, and no 8.5% series D-1 cumulative redeemable preferred
shares, 8.375% series D-2 cumulative redeemable preferred shares, 8.25% series
D-3 cumulative redeemable preferred shares, 8.25% series D-4 cumulative
redeemable preferred shares or excess shares were issued and outstanding. The
common shares of Vornado are listed on the NYSE under the symbol "VNO".

DIVIDEND AND VOTING RIGHTS OF HOLDERS OF COMMON SHARES

         The holders of common shares are entitled to receive dividends when, if
and as authorized by the Board of Trustees and declared by Vornado out of assets
legally available to pay dividends, if receipt of the dividends is in compliance
with the provisions in the declaration of trust restricting the transfer of
shares of beneficial interest. However, if any preferred shares are at the time
outstanding, Vornado may only pay dividends or other distributions on common
shares or purchase common shares if full cumulative dividends have been paid on
outstanding preferred shares and there is no arrearage in any mandatory sinking
fund on outstanding preferred shares. The terms of the series of preferred
shares that are now issued and outstanding do not provide for any mandatory
sinking fund.

         The holders of common shares are entitled to one vote for each share on
all matters on which shareholders are entitled to vote, including elections of
trustees. There is no cumulative voting in the election of trustees, which means
that the holders of a majority of the outstanding common shares can elect all of
the trustees then standing for election. The holders of

                                      -31-

common shares do not have any conversion, redemption or preemptive rights to
subscribe to any securities of Vornado. If Vornado is dissolved, liquidated or
wound up, holders of common shares are entitled to share proportionally in any
assets remaining after the prior rights of creditors, including holders of
Vornado's indebtedness, and the aggregate liquidation preference of any
preferred shares then outstanding are satisfied in full.

         The common shares have equal dividend, distribution, liquidation and
other rights and have no preference, appraisal or exchange rights. All
outstanding common shares are, and any common shares offered by a prospectus
supplement, upon issuance, will be, duly authorized, fully paid and
non-assessable.

         The transfer agent for the common shares is First Union National Bank,
Charlotte, North Carolina.

RESTRICTIONS ON OWNERSHIP OF COMMON SHARES

  THE COMMON SHARES BENEFICIAL OWNERSHIP LIMIT

         For Vornado to maintain its qualification as a REIT under the Internal
Revenue Code, not more than 50% of the value of its outstanding shares of
beneficial interest may be owned, directly or indirectly, by five or fewer
individuals at any time during the last half of a taxable year and the shares of
beneficial interest must be beneficially owned by 100 or more persons during at
least 335 days of a taxable year of 12 months, or during a proportionate part of
a shorter taxable year. The Internal Revenue Code defines "individuals" to
include some entities for purposes of the preceding sentence. All references to
a shareholder's ownership of common shares in this section "-- The common shares
beneficial ownership limit" assume application of the applicable attribution
rules of the Internal Revenue Code under which, for example, a shareholder is
deemed to own shares owned by his or her spouse.

         The declaration of trust contains a number of provisions which restrict
the ownership and transfer of shares and which are designed to safeguard Vornado
against an inadvertent loss of its REIT status. The declaration of trust
contains a limitation that restricts, with some exceptions, shareholders from
owning more than a specified percentage of the outstanding common shares. We
call this percentage the "common shares beneficial ownership limit". The common
shares beneficial ownership limit was initially set at 2.0% of the outstanding
common shares. The Board of Trustees subsequently adopted a resolution raising
the common shares beneficial ownership limit from 2.0% to 6.7% of the
outstanding common shares. The shareholders who owned more than 6.7% of the
common shares immediately after the merger of Vornado, Inc. into Vornado in May
1993 may continue to do so and may acquire additional common shares through
stock option and similar plans or from other shareholders who owned more than
6.7% of the common shares immediately after that merger. However, common shares
cannot be transferred if, as a result, more than 50% in value of the outstanding
shares of Vornado would be owned by five or fewer individuals. While the
shareholders who owned more than 6.7% of the common shares immediately after

                                      -32-

the merger of Vornado, Inc. into Vornado in May 1993 are not generally permitted
to acquire additional common shares from any other source, these shareholders
may acquire additional common shares from any source if Vornado issues
additional common shares, up to the percentage held by them immediately before
Vornado issues the additional shares.

         Shareholders should be aware that events other than a purchase or other
transfer of common shares can result in ownership, under the applicable
attribution rules of the Internal Revenue Code, of common shares in excess of
the common shares beneficial ownership limit. For instance, if two shareholders,
each of whom owns 3.5% of the outstanding common shares, were to marry, then
after their marriage both shareholders would be deemed to own 7.0% of the
outstanding common shares, which is in excess of the common shares beneficial
ownership limit. Similarly, if a shareholder who owns 4.9% of the outstanding
common shares were to purchase a 50% interest in a corporation which owns 4.8%
of the outstanding common shares, then the shareholder would be deemed to own
7.3% of the outstanding common shares. You should consult your own tax advisors
concerning the application of the attribution rules of the Internal Revenue Code
in your particular circumstances.

  THE CONSTRUCTIVE OWNERSHIP LIMIT

         Under the Internal Revenue Code, rental income received by a REIT from
persons in which the REIT is treated, under the applicable attribution rules of
the Internal Revenue Code, as owning a 10% or greater interest does not
constitute qualifying income for purposes of the income requirements that REITs
must satisfy. For these purposes, a REIT is treated as owning any stock owned,
under the applicable attribution rules of the Internal Revenue Code, by a person
that owns 10% or more of the value of the outstanding shares of the REIT. The
attribution rules of the Code applicable for these purposes are different from
those applicable with respect to the common shares beneficial ownership limit.
All references to a shareholder's ownership of common shares in this section
"-- The constructive ownership limit" assume application of the applicable
attribution rules of the Internal Revenue Code.

         In order to ensure that rental income of Vornado will not be treated as
nonqualifying income under the rule described in the preceding paragraph, and
thus to ensure that Vornado will not inadvertently lose its REIT status as a
result of the ownership of shares by a tenant, or a person that holds an
interest in a tenant, the declaration of trust contains an ownership limit that
restricts, with some exceptions, shareholders from owning more than 9.9% of the
outstanding shares of any class. We refer to this 9.9% ownership limit as the
"constructive ownership limit." The shareholders who owned shares in excess of
the constructive ownership limit immediately after the merger of Vornado, Inc.
into Vornado in May 1993 generally are not subject to the constructive ownership
limit. The declaration of trust also contains restrictions that are designed to
ensure that the shareholders who owned shares in excess of the constructive
ownership limit immediately after the merger of Vornado, Inc. into Vornado in
May 1993 will not, in the aggregate, own a large enough interest in a tenant or
subtenant of the REIT to cause rental income received, directly or indirectly,
by the REIT from that tenant or subtenant to be treated as nonqualifying income
for purposes of the income requirements that

                                      -33-

REITs must satisfy. The restrictions described in the preceding sentence have an
exception for tenants and subtenants from whom the REIT receives, directly or
indirectly, rental income that is not in excess of a specified threshold.

         Shareholders should be aware that events other than a purchase or other
transfer of shares can result in ownership, under the applicable attribution
rules of the Internal Revenue Code, of shares in excess of the constructive
ownership limit. As the attribution rules that apply with respect to the
constructive ownership limit differ from those that apply with respect to the
common shares beneficial ownership limit, the events other than a purchase or
other transfer of shares which can result in share ownership in excess of the
constructive ownership limit can differ from those which can result in share
ownership in excess of the common shares beneficial ownership limit. You should
consult your own tax advisors concerning the application of the attribution
rules of the Internal Revenue Code in your particular circumstances.

  ISSUANCE OF EXCESS SHARES IF THE OWNERSHIP LIMITS ARE VIOLATED

         The declaration of trust provides that a transfer of common shares that
would otherwise result in ownership, under the applicable attribution rules of
the Internal Revenue Code, of common shares in excess of the common shares
beneficial ownership limit or the constructive ownership limit, or which would
cause the shares of beneficial interest of Vornado to be beneficially owned by
fewer than 100 persons, will have no effect and the purported transferee will
acquire no rights or economic interest in the common shares. In addition, the
declaration of trust provides that common shares that would otherwise be owned,
under the applicable attribution rules of the Internal Revenue Code, in excess
of the common shares beneficial ownership limit or the constructive ownership
limit will be automatically exchanged for excess shares. These excess shares
will be transferred, by operation of law, to Vornado as trustee of a trust for
the exclusive benefit of a beneficiary designated by the purported transferee or
purported holder. While so held in trust, excess shares are not entitled to vote
and are not entitled to participate in any dividends or distributions made by
Vornado. Any dividends or distributions received by the purported transferee or
other purported holder of the excess shares before Vornado discovers the
automatic exchange for excess shares must be repaid to Vornado upon demand.

         If the purported transferee or purported holder elects to designate a
beneficiary of an interest in the trust with respect to the excess shares, he or
she may designate only a person whose ownership of the shares will not violate
the common shares beneficial ownership limit or the constructive ownership
limit. When the designation is made, the excess shares will be automatically
exchanged for common shares. The declaration of trust contains provisions
designed to ensure that the purported transferee or other purported holder of
the excess shares may not receive, in return for transferring an interest in the
trust with respect to the excess shares, an amount that reflects any
appreciation in the common shares for which the excess shares were exchanged
during the period that the excess shares were outstanding but will bear the
burden of any decline in value during that period. Any amount received by a

                                      -34-

purported transferee or other purported holder for designating a beneficiary in
excess of the amount permitted to be received must be turned over to Vornado.
The declaration of trust provides that Vornado, or its designee, may purchase
any excess shares that have been automatically exchanged for common shares as a
result of a purported transfer or other event. The price at which Vornado, or
its designee, may purchase the excess shares will be equal to the lesser of:

               o  in the case of excess shares resulting from a purported
                  transfer for value, the price per share in the purported
                  transfer that resulted in the automatic exchange for excess
                  shares, or in the case of excess shares resulting from some
                  other event, the market price of the common shares exchanged
                  on the date of the automatic exchange for excess shares; and

               o  the market price of the common shares exchanged for the excess
                  shares on the date that Vornado accepts the deemed offer to
                  sell the excess shares.

Vornado's right to buy the excess shares will exist for 90 days, beginning on
the date that the automatic exchange for excess shares occurred or, if Vornado
did not receive a notice concerning the purported transfer that resulted in the
automatic exchange for excess shares, the date that the Board of Trustees
determines in good faith that an exchange for excess shares has occurred.

  OTHER PROVISIONS CONCERNING THE RESTRICTIONS ON OWNERSHIP

         The Board of Trustees may exempt persons from the common shares
beneficial ownership limit or the constructive ownership limit, including the
limitations applicable to holders who owned in excess of 6.7% of the common
shares immediately after the merger of Vornado, Inc. into Vornado in May 1993,
if evidence satisfactory to the Board of Trustees is presented showing that the
exemption will not jeopardize Vornado's status as a REIT under the Internal
Revenue Code. Before granting an exemption of this kind, the Board of Trustees
may require a ruling from the IRS and/or an opinion of counsel satisfactory to
it and/or representations and undertakings from the applicant with respect to
preserving the REIT status of Vornado.

         The foregoing restrictions on transferability and ownership will not
apply if the Board of Trustees determines that it is no longer in the best
interests of Vornado to attempt to qualify, or to continue to qualify, as a
REIT.

         All persons who own, directly or by virtue of the applicable
attribution rules of the Internal Revenue Code, more than 2.0% of the
outstanding common shares must give a written notice to Vornado containing the
information specified in the declaration of trust by January 31 of each year. In
addition, each shareholder will be required to disclose to the Company upon
demand any information that Vornado may request, in good faith, to determine

                                      -35-

Vornado's status as a REIT or to comply with Treasury regulations promulgated
under the REIT provisions of the Internal Revenue Code.

         The ownership restrictions described above may have the effect of
precluding acquisition of control of Vornado unless the Board of Trustees
determines that maintenance of REIT status is no longer in the best interests of
Vornado.

                                      -36-

             DESCRIPTION OF THE UNITS AND THE OPERATING PARTNERSHIP

         The following description of the material terms of the units and some
material provisions of the partnership agreement does not describe every aspect
of the units or the partnership agreement and is only a summary of, and
qualified in its entirety by reference to, applicable provisions of Delaware law
and the partnership agreement. A copy of the partnership agreement is filed as
an exhibit to the registration statement of which this prospectus is a part. See
"Where you can find more information" for information about how to obtain a copy
of the partnership agreement. For a comparison of the voting rights and some
other rights of unit holders in the operating partnership and shareholders of
Vornado, see "Comparison of ownership of units and common shares."

THE OPERATING PARTNERSHIP'S OUTSTANDING CLASSES OF UNITS

         Holders of units, other than Vornado in its capacity as general
partner, hold a limited partnership interest in the operating partnership. All
holders of units, including Vornado in its capacity as general partner, are
entitled to share in cash distributions from, and in the profits and losses of,
the operating partnership.

         Holders of units have the rights to which limited partners are entitled
under the partnership agreement and the Delaware Revised Uniform Limited
Partnership Act. The units are not registered under any Federal or state
securities laws, and they are not listed on any exchange or quoted on any
national market system. The partnership agreement imposes restrictions on the
transfer of units. See "--Restrictions on transfers of units" below for further
information about these restrictions.

         As of September 30, 1999, there were outstanding:

               o  5,789,239 series A preferred units;

               o  3,400,000 series B pass-through preferred units;

               o  4,600,000 series C pass-through preferred units;

               o  899,566 series B-1 convertible preferred units;

               o  449,783 series B-2 restricted convertible preferred units;

               o  747,912 series C-1 convertible preferred units;

               o  3,500,000 series D-1 preferred units;

               o  549,336 series D-2 preferred units;

                                      -37-

               o  8,000,000 series D-3 preferred units;

               o  5,000,000 series D-4 preferred units;

               o  4,998,000 Series E-1 convertible preferred units;

               o  92,194,728 class A units, including 6,247,829 not held by
                  Vornado; and

               o  1,256,908 class D units.

DISTRIBUTIONS WITH RESPECT TO UNITS

         The partnership agreement provides for distributions, as determined in
the manner provided in the partnership agreement, to Vornado and the limited
partners in proportion to their percentage interests in the operating
partnership, subject to the distribution preferences that are described in the
next paragraph. As general partner of the operating partnership, Vornado has the
exclusive right to declare and cause the operating partnership to make
distributions as and when Vornado deems appropriate or desirable in its sole
discretion. For so long as Vornado elects to qualify as a REIT, Vornado will
make reasonable efforts, as determined by it in its sole discretion, to make
distributions to partners in amounts such that Vornado will be able to pay
shareholder dividends that will satisfy the requirements for qualification as a
REIT and avoid any Federal income or excise tax liability for Vornado.

         Distributions vary among the holders of different classes of units:

               o  The series A preferred units entitle Vornado as their holder
                  to a cumulative preferential distribution at an annual rate of
                  $3.25 per series A preferred unit, which we refer to as the
                  "series A preferred distribution preference". The series A
                  preferred units correspond to the series A preferred shares of
                  Vornado.

               o  The series B pass-through preferred units entitle Vornado as
                  their holder to a cumulative preferential distribution at an
                  annual rate of $2.125 per unit, which we call the "series B
                  pass-through preferred distribution preference". The series B
                  pass-through preferred units correspond to the series B
                  preferred shares of Vornado.

               o  The series C pass-through preferred units entitle Vornado as
                  their holder to a cumulative preferential distribution at an
                  annual rate of $2.125 per unit, which we call the "series C
                  pass-through preferred distribution preference". The series C
                  pass-through preferred units correspond to the series C
                  preferred shares of Vornado.

                                       -38-

               o  The series B-1 convertible preferred units entitle their
                  holder to a preferential distribution at the annual rate of
                  $2.50 per unit, and the series B-2 restricted preferred units
                  entitle their holders to a preferential distribution at the
                  annual rate of $4.00 per unit. We refer to these preferential
                  distributions as the "series B-1 and B-2 preferred
                  distribution preferences".

               o  The series C-1 preferred units entitle their holder to a
                  preferential distribution at the annual rate of $3.25 per
                  unit, which we refer to as the "series C-1 preferred
                  distribution preference".

               o  The series D-1 preferred units entitle their holder to a
                  preferential distribution at the annual rate of $2.125 per
                  unit, which we refer to as the "series D-1 preferred
                  distribution preference".

               o  The series D-2 preferred units entitle their holder to a
                  preferential distribution at the annual rate of $4.1875 per
                  unit, which we refer to as the "series D-2 preferred
                  distribution preference".

               o  The series D-3 preferred units entitle their holder to a
                  preferential distribution at the annual rate of $2.0625 per
                  unit, which we refer to as the "series D-3 preferred
                  distribution preference".

               o  The series D-4 preferred units entitle their holder to a
                  preferential distribution at the annual rate of $2.0625 per
                  unit, which we refer to as the "series D-4 preferred
                  distribution preference".

               o  The series E-1 preferred units entitle their holder to a
                  preferential distribution at the annual rate of (a) $3.00 per
                  unit for distributions paid in respect of the period from the
                  date of issuance through, but excluding, the first anniversary
                  of that date, (b) $3.125 per unit for distributions paid in
                  respect of the period from the first anniversary of the date
                  of issuance through, but excluding, the second anniversary of
                  that date, (c) $3.25 per unit for distributions paid in
                  respect of the period from the second anniversary of the date
                  of issuance through, but excluding, the seventh anniversary of
                  the date of issuance and (d) $3.375 per unit for distributions
                  paid in respect of any period thereafter. We refer to this
                  preferential distribution as the "series E-1 preferred
                  distribution preference".

               o  The class D units entitle their holder to a preferential
                  quarterly distribution of $0.50375 per unit, which we refer to
                  as the "class D distribution preference," until the operating
                  partnership has made four consecutive quarterly distributions
                  of at least $0.50375 per unit to the holders of the class A
                  units.

We sometimes refer to the series A preferred distribution preference, the series
B pass-through preferred distribution preference, the series C pass-through
preferred distribution

                                      -39-

preference, the series B-1 and B-2 preferred distribution preferences, the
series C-1 preferred distribution preference, the series D-1 preferred
distribution preference, the series D-2 preferred distribution preference, the
series D-3 preferred distribution preference, the series D-4 preferred
distribution preference, and the series E-1 preferred distribution preference as
the "preferred distribution preferences". We sometimes refer to the preferred
distribution preferences, and the class D distribution preference together as
the "distribution preferences".

         The value of each common unit, regardless of its class, equates to one
common share of Vornado. Preferred units do not have a value equating to one
common share, but have the liquidation preferences and conversion prices for
conversion into class A units or terms for redemption for cash or corresponding
preferred shares that are established in the partnership agreement.

         The partnership agreement provides that the operating partnership will
make distributions when, as and if declared by Vornado in the order of
preference provided for in the partnership agreement. The order of preference in
the partnership agreement provides that distributions will be paid first to
Vornado as necessary to enable Vornado to pay REIT expenses. The partnership
agreement defines "REIT expenses" to mean:

               o  costs and expenses relating to the continuity of existence of
                  Vornado and any entity in which Vornado owns an equity
                  interest;

               o  costs and expenses relating to any offer or registration of
                  securities by Vornado;

               o  costs and expenses associated with preparing and filing
                  periodic reports of Vornado under Federal, state and local
                  laws, including SEC filings;

               o  costs and expenses associated with Vornado's compliance with
                  laws, rules and regulations applicable to it; and

               o  all other operating or administrative expenses incurred by
                  Vornado in the ordinary course of its business.

         After the operating partnership pays Vornado distributions as necessary
to enable Vornado to pay REIT expenses, distributions will be paid:

               o  first, to holders of any class of preferred units ranking
                  senior, as to distributions or redemption or voting rights, to
                  class D units;

               o  second, to holders of class D units for any accumulated and
                  unpaid class D distribution preferences and on an equal
                  priority to holders of preferred units not ranking senior to
                  the class D units for any accumulated and unpaid preferred
                  distribution preferences; and

                                       -40-

               o  third, to holders of class A units.

         The series A preferred units, series B pass-through preferred units,
and series C pass-through preferred units rank senior to the class D units. The
other series of preferred units do not rank senior to the class D units. See
"--Ranking of units" for more information about the relative priorities of the
various series and classes of units. Class D unit holders will also share in any
distribution per quarter to class A unit holders above $0.50375 per unit.

         Before the automatic conversion of class D units to class A units as
described under "--Ranking of units" below, Vornado will be permitted to cause
the operating partnership to make a distribution to holders of class A units of
cash up to an aggregate maximum amount of $878,912 representing any funds from
operations that could have been and were not distributed to holders of class A
units (without requiring proportional distributions to holders of class D units)
during the twelve calendar quarters preceding the quarter in which the
distribution is made.

RANKING OF UNITS

         The series A preferred units, series B pass-through preferred units,
and series C pass-through preferred units rank senior to the class A units and
class D units with respect to the payment of distributions and amounts upon
liquidation, dissolution or winding up of the operating partnership. The series
A preferred units, series B pass-through preferred units, series C pass-through
preferred units, series B-1 convertible preferred units, series B-2 restricted
preferred units, series C-1 preferred units, series D-1 preferred units, series
D-2 preferred units, series D-3 preferred units, series D-4 preferred units,
series E-1 preferred units and any other units designated as "parity units" all
rank on a parity with each other, in each case with respect to the payment of
distributions and amounts upon liquidation, dissolution or winding up of the
operating partnership, without preference or priority one over the other, except
that:

               o  For so long as the class D units are outstanding, the series
                  B-1 convertible preferred units, series B-2 restricted
                  preferred units, series C-1 preferred units, series D-1
                  preferred units, series D-2 preferred units, series D-3
                  preferred units, series D-4 preferred units, and series E-1
                  preferred units will not rank senior to the class D units as
                  to preferential distributions or redemption or voting rights.
                  The class D units automatically will be converted into class A
                  units when all holders of class A units have received
                  quarterly distributions equal to $.50375 per unit per quarter
                  for four consecutive quarters.

The series of preferred units have the following liquidation preferences:

               o  $50.00 per Series A Preferred Unit, series B-1 convertible
                  preferred unit, series B-2 restricted preferred unit, series
                  C-1 preferred unit, series D-2 preferred unit, and series E-1
                  convertible preferred unit;

                                       -41-

               o  $25.00 per series B pass-through preferred unit; series C
                  pass-through preferred unit, series D-3 preferred unit, and
                  series D-4 preferred unit; and

               o  an amount per series D-1 preferred unit equal to the capital
                  account of the series D-1 preferred unit. The capital account
                  of the series D-1 preferred units is equal to an original
                  capital contribution of $25.00 per unit, adjusted from time to
                  time to reflect the operating partnership's income, gains,
                  losses and deductions that are allocated to the series D-1
                  preferred units and actual or deemed distributions to, or
                  capital contributions by, the holders of series D-1 preferred
                  units.

         Until the class D units are converted into class A units, the
partnership agreement will prohibit the operating partnership from issuing any
class of limited partnership interests ranking senior, as to distributions or
redemption or voting rights, to class D units, unless either:

               o  the new limited partnership interests are substantially
                  similar to the terms of securities issued by Vornado and the
                  proceeds of the issuance of those securities have been
                  contributed to the operating partnership; or

               o  the issuance of the new limited partnership interests has been
                  approved by the holders of a majority of the class D units
                  issued in 1997 and then outstanding, taken together as a
                  group.

         The operating partnership may create additional classes of parity units
or issue series of parity units without the consent of any holder of series A
preferred shares, series B preferred shares, or series C preferred shares.

REDEMPTION OR CONVERSION OF UNITS

         The holders of class A units, other than Vornado or any subsidiary of
Vornado, have the right to redeem their units for cash or, at Vornado's option,
common shares. See "Redemption of units" above for further information about
this right.

         The series A preferred units are redeemable at Vornado's option for
class A units at any time beginning on April 1, 2001, and are convertible at
Vornado's option into class A units at any time, provided that an equivalent
number of series A preferred shares are concurrently converted into common
shares by their holders. The number of class A units into which the series A
preferred units are redeemable or convertible is equal to the aggregate
liquidation preference of the series A preferred units being redeemed or
converted divided by their conversion price. The conversion price of the series
A preferred units is now $36.10 and may be adjusted from time to time to take
account of stock dividends and other transactions.

         The series B pass-through preferred units are redeemable at Vornado's
option for cash equal to $25.00 per unit and any accumulated and unpaid
distributions owing in respect of the

                                       -42-

series B pass-through preferred units at any time beginning on March 17, 2004,
provided that an equivalent number of series B preferred shares are concurrently
redeemed by Vornado.

         The series C pass-through preferred units are redeemable at Vornado's
option for cash equal to $25.00 per unit and any accumulated and unpaid
distributions owing in respect of the series C pass-through preferred units at
any time beginning on May 17, 2004, provided that an equivalent number of series
C preferred shares are concurrently redeemed by Vornado.

         The series B-1 convertible preferred units are redeemable at any time
beginning on January 1, 2008 at Vornado's option for a number of class A units
equal to the aggregate liquidation preference of the series B-1 convertible
preferred units of $50.00 per unit divided by the conversion price of the series
B-1 convertible preferred units of $54.7050. The series B-2 restricted preferred
units are redeemable at any time beginning on January 1, 2008 at Vornado's
option for cash of $50 per unit. The series B-1 convertible preferred units and
series B-2 restricted preferred units are convertible at any time at the option
of their holders in groups of two series B-1 convertible preferred units and one
series B-2 restricted preferred unit into a number of class A units equal to the
aggregate series B-1 and B-2 preferred liquidation preferences of the units
being converted divided by the conversion price of $54.7050.

         The series C-1 preferred units are perpetual and may be redeemed
without penalty in whole or in part by the operating partnership at any time
beginning on November 24, 2003 for 1.1431 class A units per series C-1 preferred
unit, subject to anti-dilution adjustments. Holders of series C-1 preferred
units have the right to convert all or a portion of their series C-1 preferred
units at any time into class A units at the same rate.

         The series D-1 preferred units are perpetual and may be redeemed
without penalty in whole or in part by the operating partnership at any time
beginning on November 12, 2003 for cash equal to $25.00 per unit and any
accumulated and unpaid distributions owing in respect of the series D-1 units
being redeemed. At any time beginning on November 12, 2008, or earlier upon the
occurrence of specified events, holders of series D-1 preferred units will have
the right to have their series D-1 preferred units redeemed by the operating
partnership for either:

               o  cash equal to $25.00 for each series D-1 preferred unit and
                  any accumulated and unpaid distributions owing in respect of
                  the series D-1 preferred units being redeemed; or

               o  at Vornado's option, one series D-1 8.5% cumulative redeemable
                  preferred share of beneficial interest, no par value, of
                  Vornado for each series D-1 preferred unit redeemed.

         The series D-2 preferred units are perpetual and may be redeemed
without penalty in whole or in part by the operating partnership at any time
beginning on May 27, 2004 for cash

                                       -43-

equal to $50.00 per unit and any accumulated and unpaid distributions owing in
respect of the series D-2 units being redeemed. At any time beginning on May 27,
2009, or earlier upon the occurrence of specified events, holders of series D-2
preferred units will have the right to have their series D-2 preferred units
redeemed by the operating partnership for either:

               o  cash equal to $50.00 for each series D-2 preferred unit and
                  any accumulated and unpaid distributions owing in respect of
                  the series D-2 preferred units being redeemed; or

               o  at Vornado's option, one series D-2 preferred share of Vornado
                  for each series D-2 preferred unit redeemed.

         The series D-3 preferred units are perpetual and may be redeemed
without penalty in whole or in part by the operating partnership at any time
beginning on September 3, 2004 for cash equal to $25.00 per unit and any
accumulated and unpaid distributions owing in respect of the series D-3 units
being redeemed. At any time beginning on September 3, 2009, or earlier upon the
occurrence of specified events, holders of series D-3 preferred units will have
the right to have their series D-3 preferred units redeemed by the operating
partnership for either:

               o  cash equal to $25.00 for each series D-3 preferred unit and
                  any accumulated and unpaid distributions owing in respect of
                  the series D-3 preferred units being redeemed; or

               o  at Vornado's option, one series D-3 referred share of Vornado
                  for each series D-3 preferred unit redeemed.

         The series D-4 preferred units are perpetual and may be redeemed
without penalty in whole or in part by the operating partnership at any time
beginning on September 3, 2004 for cash equal to $25.00 per unit and any
accumulated and unpaid distributions owing in respect of the series D-4 units
being redeemed. At any time beginning on September 3, 2009, or earlier upon the
occurrence of specified events, holders of series D-4 preferred units will have
the right to have their series D-4 preferred units redeemed by the operating
partnership for either:

               o  cash equal to $25.00 for each series D-4 preferred unit and
                  any accumulated and unpaid distributions owing in respect of
                  the series D-4 preferred units being redeemed; or

               o  at Vornado's option, one series D-4 preferred share of Vornado
                  for each series D-4 preferred unit redeemed.

         The series E-1 convertible preferred units are redeemable at any time
beginning on March 3, 2004 at Vornado's option for cash equal to $50.00 for each
series E-1 convertible

                                       -44-

preferred unit and any accumulated and unpaid distributions owing in respect of
the series E-1 convertible preferred units being redeemed. Commencing on May 1,
2000, holders of series E-1 convertible preferred units will have the right to
have their series E-1 convertible preferred units redeemed by the operating
partnership for either:

               o  a number of class A units equal to the aggregate liquidation
                  preferences of the series E-1 convertible preferred units
                  being converted divided by the conversion price of $44.00,
                  subject to customary antidilution adjustments; or

               o  at the holder's option, cash equal to that same number of
                  class A units multiplied by the value on the redemption date
                  of one common share.

FORMATION OF THE OPERATING PARTNERSHIP

         The operating partnership was formed as a limited partnership under the
Delaware Revised Uniform Limited Partnership Act on October 2, 1996. Vornado is
the sole general partner of, and owned approximately 86% of the common limited
partnership interest in, the operating partnership at September 30, 1999.

PURPOSES, BUSINESS AND MANAGEMENT OF THE OPERATING PARTNERSHIP

         The purpose of the operating partnership includes the conduct of any
business that may be lawfully conducted by a limited partnership formed under
the Delaware Revised Uniform Limited Partnership Act, except that the
partnership agreement requires the business of the operating partnership to be
conducted in a manner that will permit Vornado to be classified as a REIT under
Section 856 of the Internal Revenue Code, unless Vornado ceases to qualify as a
REIT for any reason. In furtherance of its business, the operating partnership
may enter into partnerships, joint ventures, limited liability companies or
similar arrangements and may own interests in any other entity engaged, directly
or indirectly, in any of the foregoing.

         Vornado, as the general partner of the operating partnership, has the
exclusive power and authority to conduct the business of the operating
partnership, except that the consent of the limited partners is required in some
limited circumstances discussed under "--Meetings and voting" below. No limited
partner may take part in the operation, management or control of the business of
the operating partnership by virtue of being a holder of units.

         In particular, the limited partners expressly acknowledge in the
partnership agreement that the general partner is acting on behalf of the
operating partnership and Vornado's shareholders collectively, and is under no
obligation to consider the tax consequences to, or other separate interests of,
limited partners when making decisions on behalf of the operating partnership.
Except as required by the lockup agreements, Vornado intends to make decisions
in its capacity as general partner of the operating partnership taking into
account the interests of Vornado and the operating partnership as a whole,
independent of the tax effects

                                       -45-

on the limited partners. See "--Borrowing by the operating partnership" below
for a discussion of the lockup agreements. Vornado and its trustees and officers
will have no liability to the operating partnership or to any partner or
assignee for any losses sustained, liabilities incurred or benefits not derived
as a result of errors in judgment or mistakes of fact or law or any act or
omission if Vornado acted in good faith.

ABILITY OF VORNADO TO ENGAGE IN OTHER BUSINESSES; CONFLICTS OF INTEREST

         Vornado generally may not conduct any business other than through the
operating partnership without the consent of the holders of a majority of the
common limited partnership interests, excluding the limited partnership
interests held by Vornado. Other persons including officers, trustees,
employees, agents and other affiliates of Vornado are not prohibited under the
partnership agreement from engaging in other business activities and are not
required to present any business opportunities to the operating partnership. In
addition, the partnership agreement does not prevent another person or entity
that acquires control of Vornado in the future from conducting other businesses
or owning other assets, even though those businesses or assets may be ones that
it would be in the best interests of the limited partners for the operating
partnership to own.

BORROWING BY THE OPERATING PARTNERSHIP

         Vornado is authorized to cause the operating partnership to borrow
money and to issue and guarantee debt as it deems necessary for the conduct of
the activities of the operating partnership. The operating partnership's debt
may be secured by mortgages, deeds of trust, liens or encumbrances on the
operating partnership's properties. Vornado also may cause the operating
partnership to borrow money to enable the operating partnership to make
distributions, including distributions in an amount sufficient to permit Vornado
to avoid the payment of any Federal income tax.

                  From time to time in connection with acquisitions of
properties or other assets in exchange for limited partner interests in the
operating partnership, Vornado and the operating partnership have entered into
contractual arrangements that impose restrictions on the operating partnership's
ability to sell, finance, refinance and, in some instances, pay down existing
financing on certain of the operating partnership's properties or other assets.
These arrangements are sometimes referred to as "lockup agreements" and include,
for example, arrangements in which the operating partnership agrees that it will
not sell the property or other assets in question for a period of years unless
the operating partnership also pays the contributing partner a portion of the
Federal income tax liability that will accrue to that partner as a result of the
sale. Arrangements of this kind may significantly reduce the operating
partnership's ability to sell, finance or repay indebtedness secured by the
subject properties or assets. Vornado expects to cause the operating partnership
to continue entering into transactions of this type in the future and may do so
without obtaining the consent of any partners in the operating partnership.

                                       -46-

REIMBURSEMENT OF VORNADO; TRANSACTIONS WITH VORNADO AND ITS AFFILIATES

         Vornado does not receive any compensation for its services as general
partner of the operating partnership. Vornado, however, as a partner in the
operating partnership, has the same right to allocations and distributions with
respect to the units it holds as other partners in the operating partnership
holding the same classes of units. In addition, the operating partnership
reimburses Vornado for all expenses it incurs relating to the ongoing operation
of Vornado and any other offering of additional partnership interests in the
operating partnership, securities of Vornado or rights, options, warrants or
convertible or exchangeable securities, including expenses in connection with
this registration of common shares for issuance in exchange for units if Vornado
assumes the obligation to redeem units and elects to redeem them for common
shares instead of cash when a limited partner in the operating partnership
exercises the right to redeem units. See "Redemption of units" above for further
information about the right to redeem units.

         Except as expressly permitted by the partnership agreement, the
operating partnership will not, directly or indirectly, sell, transfer or convey
any property to, or purchase any property from, or borrow funds from, or lend
funds to, any partner in the operating partnership or any affiliate of the
operating partnership or Vornado that is not also a subsidiary of the operating
partnership, except in a transaction that has been approved by a majority of the
disinterested trustees of Vornado, taking into account the fiduciary duties of
Vornado to the limited partners of the operating partnership.

LIABILITY OF VORNADO AND LIMITED PARTNERS

         Vornado, as general partner of the operating partnership, is liable for
all general recourse obligations of the operating partnership to the extent not
paid by the operating partnership. Vornado is not liable for the nonrecourse
obligations of the operating partnership.

         The limited partners in the operating partnership are not required to
make additional contributions to the operating partnership. Assuming that a
limited partner does not take part in the control of the business of the
operating partnership and otherwise complies with the provisions of the
partnership agreement, the liability of a limited partner for obligations of the
operating partnership under the partnership agreement and the Delaware Revised
Uniform Limited Partnership Act will be limited, with some exceptions, generally
to the loss of the limited partner's investment in the operating partnership
represented by his or her units. Under the Delaware Revised Uniform Limited
Partnership Act, a limited partner may not receive a distribution from the
operating partnership if, at the time of the distribution and after giving
effect to the distribution, the liabilities of the operating partnership, other
than liabilities to parties on account of their interests in the operating
partnership and liabilities for which recourse is limited to specified property
of the operating partnership, exceed the fair value of the operating
partnership's assets, other than the fair value of any property subject to
nonrecourse liabilities of the operating partnership, but only to the extent of
such liabilities. The Delaware Revised Uniform Limited Partnership Act provides
that a limited partner who

                                       -47-

receives a distribution knowing at the time that it violates the foregoing
prohibition is liable to the operating partnership for the amount of the
distribution. Unless otherwise agreed, a limited partner in the circumstances
described in the preceding sentence will not be liable for the return of the
distribution after the expiration of three years from the date of the
distribution.

         The operating partnership has qualified to conduct business in the
State of New York and may qualify in certain other jurisdictions. Maintenance of
limited liability may require compliance with legal requirements of those
jurisdictions and some other jurisdictions. Limitations on the liability of a
limited partner for the obligations of a limited partnership have not been
clearly established in many jurisdictions. Accordingly, if it were determined
that the right, or exercise of the right by the limited partners, to make some
amendments to the partnership agreement or to take other action under the
partnership agreement constituted "control" of the operating partnership's
business for the purposes of the statutes of any relevant jurisdiction, the
limited partners might be held personally liable for the operating partnership's
obligations.

EXCULPATION AND INDEMNIFICATION OF VORNADO

         The partnership agreement generally provides that Vornado, as general
partner of the operating partnership, will incur no liability to the operating
partnership or any limited partner for losses sustained, liabilities incurred or
benefits not derived as a result of errors in judgment or mistakes of fact or
law or any act or omission, if Vornado acted in good faith. In addition, Vornado
is not responsible for any misconduct or negligence on the part of its agents,
provided Vornado appointed those agents in good faith. Vornado may consult with
legal counsel, accountants, appraisers, management consultants, investment
bankers and other consultants and advisors, and any action it takes or omits to
take in reliance upon the opinion of those persons, as to matters that Vornado
reasonably believes to be within their professional or expert competence, will
be conclusively presumed to have been done or omitted in good faith and in
accordance with the opinion of those persons.

         The partnership agreement also provides for indemnification of Vornado,
the trustees and officers of Vornado and any other persons that Vornado may from
time to time designate against any and all losses, claims, damages, liabilities,
expenses, judgments, fines, settlements and other amounts incurred by an
indemnified person in connection with any proceeding and related to the
operating partnership or Vornado, the formation and operations of the operating
partnership or Vornado or the ownership of property by the operating partnership
or Vornado, unless it is established by a final determination of a court of
competent jurisdiction that:

               o  the act or omission of the indemnified person was material to
                  the matter giving rise to the proceeding and either was
                  committed in bad faith or was the result of active and
                  deliberate dishonesty;

                                       -48-

               o  the indemnified person actually received an improper personal
                  benefit in money, property or services; or

               o  in the case of any criminal proceeding, the indemnified person
                  had reasonable cause to believe that the act or omission was
                  unlawful.

SALES OF ASSETS

         Under the partnership agreement, Vornado generally has the exclusive
authority to determine whether, when and on what terms assets of the operating
partnership will be sold, as long as any sale of a property covered by the
lockup agreements complies with those provisions. The partnership agreement
prohibits Vornado from engaging in any merger, consolidation or other
combination with or into another person, sale of all or substantially all of its
assets or any reclassification, recapitalization or change of the terms of any
outstanding common shares unless, in connection with the transaction, all
limited partners other than Vornado and entities controlled by Vornado will have
the right to elect to receive, or will receive, for each unit an amount of cash,
securities or other property equal to the conversion factor multiplied by the
greatest amount of cash, securities or other property paid to a holder of shares
of beneficial interest of Vornado, if any, corresponding to that unit in
consideration of one share of that kind. We refer to transactions described in
the preceding sentence as "termination transactions". The conversion factor is
initially 1.0, but will be adjusted as necessary to prevent dilution or
inflation of the interests of limited partners that would result if Vornado were
to pay a dividend on its outstanding shares of beneficial interest in shares of
beneficial interest, subdivide its outstanding shares of beneficial interest or
combine its outstanding shares of beneficial interest into a smaller number of
shares, in each case without a corresponding issuance to, or redemption or
exchange of interests held by, limited partners in the operating partnership.

         See "--Borrowing by the operating partnership" above for information
about the lockup agreements, which limit our ability to sell some of our
properties.

REMOVAL OF THE GENERAL PARTNER; TRANSFER OF VORNADO'S INTERESTS

         The partnership agreement provides that the limited partners may not
remove Vornado as general partner of the operating partnership with or without
cause. In addition, the partnership agreement prohibits Vornado from engaging in
any termination transaction unless all limited partners other than Vornado and
entities controlled by Vornado will have the right in the termination
transaction to elect to receive, or will receive, for each unit an amount of
cash, securities or other property equal to the conversion factor multiplied by
the greatest amount of cash, securities or other property paid to a holder of
shares of beneficial interest of Vornado, if any, corresponding to that unit in
consideration of one share of Vornado. The lock-out provisions and the gross-up
provisions do not apply to a sale or other transfer by Vornado of its interests
as a partner in the operating partnership, but they would apply to transfers of

                                       -49-

assets of the operating partnership undertaken during the period when the lockup
agreements are in effect as part of any sale or other transfer by Vornado of its
interests as a partner in the operating partnership. See "--Borrowing by the
operating partnership" for a description of the restrictions on transfers of
assets under the lockup agreements.

         The partnership agreement does not prevent a transaction in which
another entity acquires control or all of the shares of Vornado and that other
entity owns assets and conducts businesses outside of the operating partnership.

RESTRICTIONS ON TRANSFERS OF UNITS BY LIMITED PARTNERS

         Before the expiration of the initial holding period with respect to his
or her units, a limited partner may not transfer any of his or her rights as a
limited partner without the consent of Vornado, which consent Vornado may
withhold in its sole discretion. The initial holding period expires on a date
specified in the partnership agreement or in a particular limited partner's
agreement accepting the partnership agreement. This date is August 5, 1999 with
respect to units that were issued in connection with our acquisition of a 60%
interest in a leasehold for an office building located at 20 Broad Street in
Manhattan, New York City; it is July 23, 1999 with respect to units that were
issued in connection with our acquisition of an office building located at 770
Broadway in Manhattan, New York City, on July 23, 1998; and it is January 29,
1999 with respect to units that were issued in connection with our acquisition
of the Westport Corporate Office Park located in Westport, Connecticut, on
January 29, 1998. Any attempted transfer in violation of this restriction will
have no force or effect. After the expiration of the initial holding period with
respect to his or her units, a limited partner, other than Vornado, some members
of the Mendik group and FW/Mendik REIT, will be permitted to transfer all or any
portion of his or her units without restriction, provided that the limited
partner obtains Vornado's prior written consent, which Vornado may withhold only
if it determines in its sole discretion exercised in good faith that the
transfer would cause the operating partnership or any or all of the partners
other than the partner seeking to make the transfer to incur tax liability. In
addition, limited partners other than Vornado or any subsidiary of Vornado will
be permitted to dispose of their units following the expiration of the initial
holding period by exercising their right to redeem units as described under
"Redemption of units" above.

         Any permitted transferee of units may become a substituted limited
partner only with the consent of Vornado, and Vornado may withhold its consent
in its sole and absolute discretion. If Vornado does not consent to the
admission of a transferee of units as a substituted limited partner, then the
transferee will succeed to the economic rights and benefits attributable to the
units, including the right to redeem units, but will not become a limited
partner or possess any other rights of limited partners, including the right to
vote.

                                      -50-

NO WITHDRAWAL BY LIMITED PARTNERS

         No limited partner has the right to withdraw from or reduce his or her
capital contribution to the operating partnership, except as a result of the
redemption, exchange or transfer of units under the terms of the partnership
agreement.

ISSUANCE OF LIMITED PARTNERSHIP INTERESTS

         Vornado is authorized, without the consent of the limited partners, to
cause the operating partnership to issue limited partnership interests to
Vornado, to the limited partners and to other persons for the consideration and
upon the terms and conditions that Vornado deems appropriate. The operating
partnership also may issue partnership interests in different series or classes.
See "--Ranking" above for a description of restrictions on the issuance of
units while the class D units remain outstanding. Units may be issued to Vornado
only if Vornado issues shares of beneficial interest and contributes to the
operating partnership the proceeds received by Vornado from the issuance of the
shares. Consideration for partnership interests may be cash or any property or
other assets permitted by the Delaware Revised Uniform Limited Partnership Act.
No limited partner has preemptive, preferential or similar rights with respect
to capital contributions to the operating partnership or the issuance or sale of
any partnership interests.

MEETINGS AND VOTING

         Meetings of the limited partners may be proposed and called only by
Vornado. Limited partners may vote either in person or by proxy at meetings. Any
action that is required or permitted to be taken by the limited partners may be
taken either at a meeting of the limited partners or without a meeting if
consents in writing stating the action so taken are signed by limited partners
owning not less than the minimum number of units that would be necessary to
authorize or take the action at a meeting of the limited partners at which all
limited partners entitled to vote on the action were present. On matters in
which limited partners are entitled to vote, each limited partner, including
Vornado to the extent it holds units, will have a vote equal to the number of
common units he or she holds. At this time, there is no voting preference among
the classes of common units. The preferred units have no voting rights, except
as required by law or the terms of a particular series of preferred units. A
transferee of units who has not been admitted as a substituted limited partner
with respect to his or her transferred units will have no voting rights with
respect to those Units, even if the transferee holds other units as to which he
or she has been admitted as a limited partner, and units owned by the transferee
will be deemed to be voted on any matter in the same proportion as all other
interests held by limited partners are voted. The partnership agreement does not
provide for annual meetings of the limited partners, and Vornado does not
anticipate calling such meetings.

                                       -51-

AMENDMENT OF THE PARTNERSHIP AGREEMENT

         Amendments to the partnership agreement may be proposed only by
Vornado. Vornado generally has the power, without the consent of any limited
partners, to amend the partnership agreement as may be required to reflect any
changes to the agreement that Vornado deems necessary or appropriate in its sole
discretion, provided that the amendment does not adversely affect or eliminate
any right granted to a limited partner that is protected by the special voting
provisions described below. Limitations on Vornado's power to amend the
partnership agreement are described below.

         The partnership agreement provides that it generally may not be amended
with respect to any partner adversely affected by the amendment without the
consent of that partner if the amendment would:

               o  convert a limited partner's interest into a general partner's
                  interest;

               o  modify the limited liability of a limited partner;

               o  amend Section 7.11.A, which prohibits Vornado from taking any
                  action in contravention of an express prohibition or
                  limitation in the partnership agreement without the written
                  consent of all partners adversely affected by the action or
                  any lower percentage of the limited partnership interests that
                  may be specifically provided for in the partnership agreement
                  or under the Delaware Revised Uniform Limited Partnership Act;

               o  amend Article V, which governs distributions, Article VI,
                  which governs allocations of income and loss for capital
                  account purposes, or Section 13.2A(3), which provides for
                  distributions, after payment of partnership debts, among
                  partners according to their capital accounts upon a winding up
                  of the operating partnership;

               o  amend Section 8.6, which provides redemption rights; or

               o  amend the provision being described in this paragraph.

         In addition, except with the consent of a majority of the common
limited partners, excluding Vornado and entities controlled by Vornado, Vornado
may not amend:

               o  Section 4.2.A, which authorizes issuance of additional limited
                  partnership interests;

               o  Section 5.1.C, which requires that if Vornado is not a REIT or
                  a publicly traded entity it must for each taxable year make
                  cash distributions equal to at least 95% of the operating
                  partnership's taxable income;

                                       -52-

               o  Section 7.5, which prohibits Vornado from conducting any
                  business other than in connection with the ownership of
                  interests in the operating partnership except with the consent
                  of a majority of the common limited partners, excluding
                  Vornado and any entity controlled by Vornado;

               o  Section 7.6, which limits the operating partnership's ability
                  to enter transactions with affiliates;

               o  Section 7.8, which establishes limits on Vornado's liabilities
                  to the operating partnership and the limited partners;

               o  Section 11.2, which limits Vornado's ability to transfer its
                  interests in the operating partnership;

               o  Section 13.1, which describes the manner and circumstances in
                  which the operating partnership will be dissolved;

               o  Section 14.1.C, which establishes the limitations on
                  amendments being described in this paragraph; or

               o  Section 14.2, which establishes the rules governing meetings
                  of partners.

         In addition, any amendment that would affect those lockup agreements
that are part of the partnership agreement requires the consent of 75% of the
limited partners benefited by those lockup agreements, with some exceptions. See
"Description of the units and the operating partnership--Borrowing by the
operating partnership" for information about the lockup agreements.

BOOKS AND REPORTS

         Vornado is required to keep the operating partnership's books and
records at the principal office of the operating partnership. The books of the
operating partnership are required to be maintained for financial and tax
reporting purposes on an accrual basis in accordance with generally accepted
accounting principles, which we refer to as "GAAP". The limited partners have
the right, with some limitations, to receive copies of the most recent annual
and quarterly reports filed with the SEC by Vornado, the operating partnership's
Federal, state and local income tax returns, a list of limited partners, the
partnership agreement and the partnership certificate and all amendments to the
partnership certificate. Vornado may keep confidential from the limited partners
any information that Vornado believes to be in the nature of trade secrets or
other information whose disclosure Vornado in good faith believes is not in the
best interests of the operating partnership or which the operating partnership
is required by law or by agreements with unaffiliated third parties to keep
confidential.

                                       -53-

         Vornado will furnish to each limited partner, no later than the date on
which Vornado mails its annual report to its shareholders, an annual report
containing financial statements of the operating partnership, or of Vornado, if
Vornado prepares consolidated financial statements including the operating
partnership, for each fiscal year, presented in accordance with GAAP. The
financial statements will be audited by a nationally recognized firm of
independent public accountants selected by Vornado. In addition, if and to the
extent that Vornado mails quarterly reports to its shareholders, Vornado will
furnish to each limited partner, no later than the date on which Vornado mails
the quarterly reports to its shareholders, a report containing unaudited
financial statements of the operating partnership, or of Vornado, if the reports
are prepared on a consolidated basis, as of the last day of the quarter and any
other information that may be required by applicable law or regulation or that
Vornado deems appropriate.

         Vornado will use reasonable efforts to furnish to each limited partner,
within 90 days after the close of each taxable year, the tax information
reasonably required by the limited partners for Federal and state income tax
reporting purposes.

POWER OF ATTORNEY

         Under the terms of the partnership agreement, each limited partner and
each assignee appoints Vornado, any liquidator, and the authorized officers and
attorneys-in-fact of each, as the limited partner's or assignee's
attorney-in-fact to do the following:

               o  to execute, swear to, acknowledge, deliver, file and record in
                  the appropriate public offices (a) all certificates, documents
                  and other instruments including, among other things, the
                  partnership agreement and the certificate of limited
                  partnership and all amendments or restatements of the
                  certificate of limited partnership that Vornado or any
                  liquidator deems appropriate or necessary to form, qualify or
                  maintain the existence of the operating partnership as a
                  limited partnership in the State of Delaware and in all other
                  jurisdictions in which the operating partnership may conduct
                  business or own property, (b) all instruments that Vornado or
                  any liquidator deems appropriate or necessary to reflect any
                  amendment or restatement of the partnership agreement in
                  accordance with its terms, (c) all conveyances and other
                  instruments that Vornado or any liquidator deems appropriate
                  or necessary to reflect the dissolution and liquidation of the
                  operating partnership under the terms of the partnership
                  agreement, (d) all instruments relating to the admission,
                  withdrawal, removal or substitution of any partner, any
                  transfer of units or the capital contribution of any partner
                  and (e) all certificates, documents and other instruments
                  relating to the determination of the rights, preferences and
                  privileges of partnership interests; and

               o  to execute, swear to, acknowledge and file all ballots,
                  consents, approvals, waivers, certificates and other
                  instruments appropriate or necessary, in the sole and absolute
                  discretion of Vornado or any liquidator, to make, evidence,
                  give,

                                       -54-

               o  confirm or ratify any vote, consent, approval, agreement or
                  other action which is made or given by the partners under the
                  partnership agreement or is consistent with the terms of the
                  partnership agreement or appropriate or necessary, in the sole
                  discretion of Vornado or any liquidator, to effectuate the
                  terms or intent of the partnership agreement.

The partnership agreement provides that this power of attorney is irrevocable,
will survive the subsequent incapacity of any limited partner and the transfer
of all or any portion of the limited partner's or assignee's units and will
extend to the limited partner's or assignee's heirs, successors, assigns and
personal representatives.

DISSOLUTION, WINDING UP AND TERMINATION

         The operating partnership will continue until December 31, 2095, as
this date may be extended by the General Partner in its sole discretion, unless
sooner dissolved and terminated. The operating partnership will be dissolved
before the expiration of its term, and its affairs wound up upon the occurrence
of the earliest of:

               o  the withdrawal of Vornado as general partner without the
                  permitted transfer of Vornado's interest to a successor
                  general partner, except in some limited circumstances;

               o  the sale of all or substantially all of the operating
                  partnership's assets and properties, subject to the lockup
                  agreements during the period when the lockup agreements are in
                  effect;

               o  the entry of a decree of judicial dissolution of the operating
                  partnership under the provisions of the Delaware Revised
                  Uniform Limited Partnership Act;

               o  the entry of a final non-appealable order for relief in a
                  bankruptcy proceeding of the general partner, or the entry of
                  a final non-appealable judgment ruling that the general
                  partner is bankrupt or insolvent, except that, in either of
                  these cases, in some circumstances the limited partners other
                  than Vornado may vote to continue the operating partnership
                  and substitute a new general partner in place of Vornado); or

               o  on or after December 31, 2046, on election by Vornado, in its
                  sole and absolute discretion.

Upon dissolution, Vornado, as general partner, or any liquidator will proceed to
liquidate the assets of the operating partnership and apply the proceeds from
the liquidation in the order of priority provided in the partnership agreement.

                                      -55-

               COMPARISON OF OWNERSHIP OF UNITS AND COMMON SHARES

        The information below highlights a number of the significant differences
and similarities between the operating partnership and Vornado relating to,
among other things, form of organization, investment objectives, policies and
restrictions, asset diversification, capitalization, management structure,
duties, liability, exculpation and indemnification of the general partner and
the trustees and investor voting and other rights. These comparisons are
intended to assist you in understanding how your investment will be changed if
you redeem your units and Vornado exercises its right to assume the operating
partnership's obligation with respect to the redemption and to acquire the units
in exchange for common shares. See "Redemption of units" for a description of
your right to have your units redeemed and Vornado's right to redeem the units
for common shares instead of cash. THE DISCUSSION BELOW IS ONLY A SUMMARY OF
THESE MATTERS, AND YOU SHOULD CAREFULLY REVIEW THE BALANCE OF THIS PROSPECTUS
FOR ADDITIONAL IMPORTANT INFORMATION.

                        FORM OF ORGANIZATION AND PURPOSE

                           THE OPERATING PARTNERSHIP

        The operating partnership is a limited partnership organized under the
laws of the State of Delaware. The operating partnership owns interests in
office building properties, shopping center properties, cold storage facilities,
trade showroom properties, industrial/warehouse properties and various other
properties and investments. See "Vornado and the operating partnership" for
further information about the operating partnership's assets. The operating
partnership may also invest in other types of real estate and in any geographic
areas that Vornado deems appropriate. Vornado conducts the business of the
operating partnership in a manner intended to permit Vornado to be classified as
a REIT under the Internal Revenue Code.

                                    VORNADO

        Vornado is a Maryland real estate investment trust organized under Title
8 of the Corporations and Associations Article of the Annotated Code of
Maryland, as amended. We refer to Title 8 as the "Maryland REIT law". Although
Vornado currently intends to continue to qualify as a REIT under the Internal
Revenue Code and to operate as a self-administered REIT, Vornado is not under
any contractual obligation to continue to qualify as a REIT and Vornado may not
continue to maintain this qualification or mode of operation in the future.
Although Vornado has no intention of ceasing to qualify as a REIT, some other
real estate companies that previously operated as REITs have chosen to cease to
qualify as REITs. Except as otherwise permitted in the partnership agreement,
Vornado is obligated to conduct its activities through the operating
partnership. Vornado is the sole general partner of the operating partnership.

                                      -56-

                              NATURE OF INVESTMENT

                            THE OPERATING PARTNERSHIP

        The units constitute equity interests entitling each limited partner in
the operating partnership to his or her proportional share of cash distributions
made to the limited partners in the operating partnership, consistent with the
class preferences provided for in the partnership agreement. See "Description of
units--Distributions" for further information about distributions to limited
partners.

        The units entitle their holders to participate in the growth and income
of the operating partnership. The partnership agreement grants Vornado
discretion to determine the frequency and amount of distributions by the
operating partnership. The operating partnership and thus Vornado generally
expect to retain and reinvest proceeds of any sale of property and refinancings,
except in some limited circumstances. Thus, limited partners in the operating
partnership will not be able to realize upon their investments through
distributions of sale and refinancing proceeds. Instead, limited partners will
be able to realize upon their investments primarily by redeeming units and, if
Vornado issues common shares in exchange for redeemed units, by subsequently
selling the common shares.

                                    VORNADO

        The common shares constitute equity interests in Vornado. Vornado is
entitled to receive its proportionate share of distributions made by the
operating partnership with respect to the class A units owned by it. Each holder
of common shares of Vornado is entitled to his or her proportionate share of any
dividends or distributions paid with respect to those common shares, and these
distributions will generally match distributions made in respect of class A
units. The dividends payable to holders of common shares are not fixed in amount
and are only paid if, when and as authorized by the Board of Trustees and
declared by Vornado out of assets legally available to pay dividends. If any
preferred shares are at the time outstanding, dividends on the common shares and
other distributions, including purchases by Vornado of common shares, may be
made only if full cumulative dividends have been declared and paid on the
outstanding preferred shares and there are no arrearages in any mandatory
sinking fund on outstanding preferred shares. To qualify as a REIT, Vornado must
distribute to its shareholders at least 95% of its taxable income excluding
capital gains, and corporate income tax will apply to any taxable income
including capital gains not distributed.

                                      -57-

                              LENGTH OF INVESTMENT

                           THE OPERATING PARTNERSHIP

        The operating partnership has a stated term expiring on December 31,
2095, which can be extended by Vornado in its sole discretion. The operating
partnership has no specific plans for disposition of its assets. To the extent
that the operating partnership sells or refinances its assets, the net proceeds
from the sale or refinancing generally will be retained by the operating
partnership for working capital and new investments rather than being
distributed to its partners, including Vornado, except that Vornado currently
expects that it generally will distribute the capital gains portion of proceeds
it receives from the sale of properties. The operating partnership constitutes a
vehicle for taking advantage of future investment opportunities that may be
available in the real estate market.

        The operating partnership generally will reinvest the proceeds of asset
dispositions, if any, in new properties or other appropriate investments
consistent with its investment objectives. After the expiration of the
applicable holding period with respect to their units, limited partners in the
operating partnership are entitled to exercise the right to have their units
redeemed either for common shares or for cash, at the option of Vornado.

                                    VORNADO

        Vornado has a perpetual term and intends to continue its operations for
an indefinite time period. Under the declaration of trust, the dissolution of
Vornado must be approved at any meeting of shareholders called for that purpose
by the affirmative vote of the holders of not less than a majority of "shares",
as defined in the declaration of trust, outstanding. Vornado has an indirect
interest in the properties and property service businesses owned by the
operating partnership.

        Shareholders of Vornado are expected to realize liquidity of their
investments by the trading of the common shares on the NYSE.

                                      -58-

                                   LIQUIDITY

                           THE OPERATING PARTNERSHIP

        Units are not registered under the Securities Act or any state
securities laws and therefore may not be sold, pledged, hypothecated or
otherwise transferred unless first registered under the Securities Act and any
applicable state securities laws, or unless an exemption from registration is
available. Units also may not be sold or otherwise transferred unless the other
transfer restrictions discussed below have been satisfied. Vornado and the
operating partnership do not intend to register the units under the Securities
Act or any state securities laws.

        Limited partners in the operating partnership may not transfer any of
their rights as limited partners without the consent of Vornado, and Vornado may
withhold its consent in its sole discretion if it determines that the transfer
would cause any or all of the limited partners other than the limited partner
seeking to transfer his or her rights to incur tax liability as a result of the
transfer. Limited partners in the operating partnership may, after the
expiration of the applicable holding period with respect to their units,
transfer beneficial interests in units without the consent of Vornado as general
partner of the operating partnership, if they comply with restrictions designed
to avoid violations of any Federal or state securities laws. A transferee of
units has no right to become a substituted limited partner without the consent
of Vornado, which Vornado may withhold in its sole and absolute discretion.
Limited partners will have the right, upon the expiration of the initial holding
period, to elect to have their units redeemed by the operating partnership. Upon
redemption of units, a limited partner will receive cash or, at the election of
Vornado, common shares of Vornado in exchange for the redeemed units.

                                    VORNADO

        Any common shares issued in exchange for redeemed units will be
registered under the Securities Act and freely transferable, as long as the
shareholder complies with the ownership limits in the declaration of trust.
Vornado's common shares are currently listed on the NYSE under the ticker symbol
of "VNO" and have been so listed by Vornado and its predecessor for over 35
years. The future breadth and strength of this secondary market will depend,
among other things, upon the number of common shares outstanding, Vornado's
financial results and prospects, the general interest in Vornado's and other
real estate investments, and Vornado's dividend yield compared to that of other
debt and equity securities.

                                      -59-

                          POTENTIAL DILUTION OF RIGHTS

                           THE OPERATING PARTNERSHIP

        Vornado as general partner of the operating partnership is authorized,
in its sole discretion and without limited partner approval, to cause the
operating partnership to issue additional limited partnership interests and
other equity securities for any partnership purpose at any time to Vornado, the
limited partners or other persons on terms established by Vornado. Until all
class D units have been converted into class A units, the partnership agreement
will prohibit the operating partnership from issuing any class of limited
partnership interests ranking senior as to distributions or redemption or voting
rights to class D units, unless either:

            o  the newly issued limited partnership interests are substantially
               similar to the terms of securities issued by Vornado and the
               proceeds of the issuance of the Vornado securities have been
               contributed to the operating partnership; or

            o  the issuance of the limited partnership interests has been
               approved by the holders of a majority of the class D units issued
               in 1997 and then outstanding.

        The interests with respect to cash available for distribution of the
limited partners in the operating partnership may be diluted if Vornado, in its
sole discretion, causes the operating partnership to issue additional units or
other equity securities.

                                    VORNADO

        The Board of Trustees of Vornado may, in its discretion, authorize the
issuance of additional common shares and other equity securities of Vornado,
including one or more classes or series of common or preferred shares of
beneficial interest, with the voting rights, dividend or interest rates,
preferences, subordinations, conversion or redemption prices or rights, maturity
dates, distribution, exchange or liquidation rights or other rights that the
Board of Trustees may specify at the time. The issuance of additional shares of
either common shares or other similar equity securities may result in the
dilution of the interests of the shareholders. As permitted by the Maryland REIT
Law, the declaration of trust contains a provision permitting the Board of
Trustees, without any action by the shareholders of Vornado, to amend the
declaration of trust to increase or decrease the aggregate number of shares of
beneficial interest or the number of shares of any class of shares of beneficial
interest that Vornado has authority to issue. Under the declaration of trust,
holders of common shares do not have any preemptive rights to subscribe to any
securities of Vornado.

                                      -60-

                               MANAGEMENT CONTROL

                           THE OPERATING PARTNERSHIP

        All management powers over the business and affairs of the operating
partnership are vested in Vornado as the general partner of the operating
partnership, and no limited partner of the operating partnership has any right
to participate in or exercise control or management power over the business and
affairs of the operating partnership, except as described under "Description of
Units--Borrowing by the operating partnership" and "--Sales of Assets". Vornado
may not be removed as general partner by the limited partners with or without
cause.

                                    VORNADO

        The Board of Trustees has exclusive control over the management of
Vornado's business and affairs, limited only by express restrictions on the
Board's control in the declaration of trust and bylaws, the partnership
agreement and applicable law. The Board of Trustees is classified into three
classes of trustees. At each annual meeting of the shareholders of Vornado, the
successors of the class of trustees whose terms expire at that meeting are
elected. The policies adopted by the Board of Trustees may be altered or
eliminated without a vote of the shareholders. Accordingly, except for their
vote in the elections of trustees, shareholders have no control over the
ordinary business policies of Vornado.

                                      -61-

        Because a portion of the Board of Trustees is elected each year by the
shareholders at Vornado's annual meeting, the shareholders have greater control
over the management of Vornado than the limited partners have over the operating
partnership.

                     DUTIES OF GENERAL PARTNER AND TRUSTEES

                           THE OPERATING PARTNERSHIP

        Under Delaware law, Vornado as the general partner of the operating
partnership is accountable to the operating partnership as a fiduciary and,
consequently, is required to exercise good faith and integrity in all of its
dealings with respect to partnership affairs. However, under the partnership
agreement, Vornado is expressly under no obligation to consider the separate
interests of the limited partners in deciding whether to cause the operating
partnership to take or decline to take any actions, and Vornado is not liable
for monetary damages for losses sustained, liabilities incurred or benefits not
derived by limited partners as a result of Vornado's decisions, provided that
the general partner has acted in good faith.

                                    VORNADO

        Under Maryland law, there is no statute specifying the duties of
trustees of a REIT like Vornado. However, counsel to Vornado believes that it is
likely that a Maryland court would refer to the Maryland General Corporation
Law, which requires directors of a Maryland corporation to perform their duties
in good faith, in a manner that they reasonably believe to be in the best
interests of the corporation and with the care of an ordinarily prudent person
in a like position under similar circumstances. The Maryland General Corporation
Law presumes that a director's standard of care has been satisfied.

                                      -62-

                    MANAGEMENT LIABILITY AND INDEMNIFICATION

                           THE OPERATING PARTNERSHIP

        As a matter of Delaware law, the general partner has liability for the
payment of the obligations and debts of the operating partnership unless
limitations upon this liability are stated in the document or instrument
evidencing the obligation. Under the partnership agreement, the operating
partnership has agreed to indemnify Vornado and any trustee or officer of
Vornado from and against all losses, claims, damages, liabilities, joint or
several, expenses including legal fees, fines, settlements and other amounts
incurred in connection with any actions relating to the operations of the
operating partnership as described in the partnership agreement in which Vornado
or any such trustee or officer is involved, unless:

            o  the act was in bad faith and was material to the action;

            o  the party seeking indemnification received an improper personal
               benefit; or

            o  in the case of any criminal proceeding, the party seeking
               indemnification had reasonable cause to believe the act was
               unlawful.

The reasonable expenses incurred by an indemnified party may be advanced by the
operating partnership before the final disposition of the proceeding upon
receipt by the operating partnership of an affirmation by the indemnified person
of his, her or its good faith belief that the standard of conduct necessary for
indemnification has been met and an undertaking by the indemnified person to
repay the amount if it is determined that this standard was not met.

                                    VORNADO

        The Maryland REIT law permits a Maryland real estate investment trust to
include in its declaration of trust a provision limiting the liability of its
trustees and officers to the trust and its shareholders for money damages except
for liability resulting from:

            o  actual receipt of any improper benefit or profit in money,
               property or services; or

            o  active and deliberate dishonesty material to the cause of action
               established by a final judgment.

The declaration of trust of Vornado contains a provision of this kind which
eliminates the liability of Vornado's trustees and officers to Vornado and its
shareholders to the maximum extent permitted by the Maryland REIT law.

        Vornado's declaration of trust authorizes it, to the extent permitted in
the bylaws, to indemnify, and to pay or reimburse reasonable expenses to, as
they are incurred by, each trustee or officer, including any person who, while a
trustee of Vornado, is or was serving at the request of Vornado as a director,
officer, partner, trustee, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise or employee
benefit plan, from all claims and liabilities to which the indemnified person
may become subject by reason of being or having been a trustee or officer.

        Vornado's bylaws require it to indemnify to the maximum extent permitted
by the Maryland REIT law:

                                       -63-

                                      VORNADO

            o  any present or former trustee or officer, including, without
               limitation, any individual who, while a trustee or officer and at
               the request of Vornado, serves or has served another corporation,
               partnership, joint venture, trust, employee benefit plan or any
               other enterprise as a director, officer, partner or trustee of
               that corporation, partnership, joint venture, trust, employee
               benefit plan or other enterprise, who has been successful, on the
               merits or otherwise, in the defense of a proceeding to which he
               was made a party by reason of that status, against reasonable
               expenses incurred by him in connection with the proceeding; and

            o  any present or former trustee or officer against any claim or
               liability to which that person may become subject by reason of
               that status unless it is established that (a) that person's act
               or omission was material to the cause of action giving rise to
               the proceeding and was committed in bad faith or was the result
               of active and deliberate dishonesty, (b) he or she actually
               received an improper personal benefit in money, property or
               services or (c) in the case of a criminal proceeding, he or she
               had reasonable cause to believe that his or her act or omission
               was unlawful.

In addition, Vornado's bylaws require Vornado to pay or reimburse, in accordance
with the Maryland REIT law, in advance of final disposition of a proceeding,
reasonable expenses incurred by a present or former trustee or officer made a
party to a proceeding by reason of that status provided that Vornado has
received

            o  a written affirmation by the trustee or officer of his good faith
               belief that he has met the applicable standard of conduct
               necessary for indemnification by Vornado as authorized by the
               bylaws; and

            o  a written undertaking by him or on his behalf to repay the amount
               paid or reimbursed by Vornado if it is ultimately determined that
               the applicable standard of conduct was not met.

                                       -64-

                                      VORNADO

Vornado's bylaws also:

            o  permit Vornado to provide indemnification and payment or
               reimbursement of expenses to a present or former trustee or
               officer who served a predecessor of Vornado in that capacity and
               to any employee or agent of Vornado or a predecessor of Vornado;

            o  provide that any indemnification or payment or reimbursement of
               the expenses permitted by the bylaws shall be furnished in
               accordance with the procedures provided for indemnification or
               payment or reimbursement of expenses, as the case may be, under
               Section 2-418 of the Maryland General Corporation Law for
               directors of Maryland corporations; and

            o  permit Vornado to provide any other and further indemnification
               or payment or reimbursement of expenses that may be permitted by
               the Maryland General Corporation Law for directors of Maryland
               corporations.

        The Maryland REIT law permits a Maryland real estate investment trust to
indemnify and advance expenses to its trustees and officers to the same extent
as permitted by the Maryland General Corporation Law for directors and officers
of Maryland corporations. The Maryland General Corporation Law permits a
corporation to indemnify its present and former directors and officers, among
others, against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by them in connection with any proceeding to which they may be
made a party by reason of their service in those or other capacities unless it
is established that:

            o  the act or omission of the director or officer was material to
               the matter giving rise to the proceeding and (a) was committed in
               bad faith or (b) was the result of active and deliberate
               dishonesty;

            o  the director or officer actually received an improper personal
               benefit in money, property or services; or

            o  in the case of any criminal proceeding, the director or officer
               had reasonable cause to believe that the act or omission was
               unlawful.

However, under the Maryland General Corporation Law, a Maryland corporation may
not indemnify for an adverse judgment in a suit by or in the right of the
corporation or for a judgment of liability on the basis that personal benefit
was improperly received, unless in either case a court orders indemnification
and then only for expenses. In addition, the Maryland General Corporation Law
permits a corporation to advance reasonable expenses to a director or officer
upon the corporation's receipt of:

            o  a written affirmation by the director or officer of his good
               faith belief that he has met the standard of conduct necessary
               for indemnification by the corporation; and

            o  a written undertaking by him or on his behalf to repay the amount
               paid or reimbursed by the corporation if it is ultimately
               determined that the standard of conduct was not met.

        Thus, the management of the operating partnership and Vornado have
substantially the same rights to indemnification.

                             LIABILITY OF INVESTORS

                           THE OPERATING PARTNERSHIP

        Under the partnership agreement and applicable state law, the liability
of the limited partners for the operating partnership's debts and obligations
generally is limited to the amount of their investments in the operating
partnership, together with their interest in the operating partnership's
undistributed income, if any.

                                    VORNADO

        Under the Maryland REIT law, shareholders are not personally liable for
the obligations of Vornado. The common shares, upon issuance, will be fully paid
and nonassessable.

Thus, the limited partners in the operating partnership and the shareholders of
        Vornado have substantially the same limited personal liability.

                                      -65-

                                 VOTING RIGHTS

                           THE OPERATING PARTNERSHIP

        Under the partnership agreement, the limited partners have limited
voting rights. The limited partners have the right to vote on any proposed
action of the general partner that would contravene any express prohibition or
limitation in the partnership agreement, and any such action requires unanimous
approval by the limited partners. The limited partners do not have the right to
vote on any proposed sale, exchange, transfer or disposal of all or
substantially all of the assets of the operating partnership, except as required
under the lock-out provisions. See "Description of units--Sales of assets". In
addition, the limited partners do not have the right to propose amendments to
the partnership agreement and their rights to vote on amendments are restricted
as described under the caption "Description of Units--Amendment of the
partnership agreement". Any amendment which requires the approval of the limited
partners may be approved by a majority of the limited partners, except that any
amendment which would change the limited liability of a limited partner, change
the voting requirements for specified actions or amendments under the
partnership agreement or change specified provisions in the partnership
agreement with respect to distributions and allocations or the right to redeem
units must be approved by each limited partner adversely affected by the
amendment. In addition, some series of preferred units have special voting
rights that require their consent for actions that would adversely affect their
preferences.

                                    VORNADO

        The business and affairs of Vornado are managed under the direction of
the Board of Trustees, which currently consists of seven members in classes
having three-year staggered terms of office. One class is elected by the
shareholders at each annual meeting of Vornado shareholders. Maryland law
requires that certain major corporate transactions, including most amendments to
the declaration of trust, may be consummated only with the approval of
shareholders.

        The declaration of trust permits any action which may be taken at a
meeting of shareholders to be taken without a meeting if a written consent to
the action is signed by holders of outstanding shares of beneficial interest
having not less than the minimum number of votes that would be necessary to
authorize or take the action at a meeting at which all shares entitled to vote
were present and voted.

        Vornado had 5,789,239 series A preferred shares, 3,400,000 series B
preferred shares, and 4,600,000 series C preferred shares issued and outstanding
as of September 30, 1999. The holders of preferred shares generally have no
right to vote, except that:

            o  if and whenever six quarterly dividends, whether or not
               consecutive, payable on either series of preferred shares are in
               arrears, which, with respect to any quarterly dividend, means
               that the dividend has not been paid in full, whether or not the
               dividend was earned or declared, the holders of that series will
               have the right, voting as a class, to elect two additional
               Trustees; and

            o  so long as any preferred shares are outstanding, the affirmative
               vote of at least two-thirds of the outstanding preferred shares
               and all other series of voting preferred shares, voting as a
               single class regardless of series, will be necessary to (a)
               amend, alter or repeal the declaration of trust so as to
               materially and adversely affect the voting powers, rights or
               preferences of the holders of the preferred share or (b)
               authorize, create or increase the authorized amount of any shares
               ranking prior to the preferred shares in the distribution of
               assets or any liquidation or in the payment of dividends.

The Board of Trustees has the power, however, to create additional classes of
parity and junior shares, increase the authorized number of parity and junior
shares, and issue additional series of parity and junior shares without the
consent of any holder of preferred shares.

                                      -66-

       AMENDMENT OF THE PARTNERSHIP AGREEMENT OR THE DECLARATION OF TRUST

                           THE OPERATING PARTNERSHIP

        Vornado generally has the power, without the consent of any limited
partners, to amend the partnership agreement as may be required to reflect any
changes that Vornado deems necessary or appropriate in its sole discretion,
provided that the amendment does not adversely affect or eliminate any right
granted to a limited partner that is protected by specified special voting
provisions. See "Description of Units--Amendment of the partnership agreement"
for further information about Vornado's power to amend the partnership agreement
and the limits on that power.

                                    VORNADO

        Under the Maryland REIT law and the declaration of trust, the trustees,
by a two-thirds vote, may at any time amend the declaration of trust, without
the approval of shareholders, to enable Vornado to qualify as a REIT under the
Internal Revenue Code or as a real estate investment trust under the Maryland
REIT law. As permitted by the Maryland REIT law, the declaration of trust
authorizes Vornado's Board of Trustees, without any action by the shareholders,
to amend the declaration of trust from time to time to increase or decrease the
aggregate number of shares of beneficial interest or the number of shares of
beneficial interest of any class that Vornado is authorized to issue. Except for
certain specified amendments which require the vote of the holders of two-thirds
of the outstanding shares, other amendments to the declaration of trust require
the vote of holders of a majority of the outstanding shares, as defined in the
declaration of trust.

                            REVIEW OF INVESTOR LISTS

                           THE OPERATING PARTNERSHIP

        Under the partnership agreement, limited partners in the operating
partnership, upon written demand with a statement of the purpose of the demand
and at the limited partner's expense, are entitled to obtain a current list of
the name and last known business, residence or mailing address of each limited
partner of the operating partnership.

                                    VORNADO

        Under the Maryland General Corporation Law, as applicable to REITs, one
or more shareholders holding of record for at least six months at least 5% of
the outstanding shares of beneficial interest of any class of a real estate
investment trust may, upon written request, inspect and copy during usual
business hours the share ledger of the real estate investment trust or, if the
real estate investment trust does not maintain an original or duplicate share
ledger at its principal office, obtain a verified list of shareholders, setting
forth their names and addresses and the number of shares of each class held by
each shareholder.

        Thus, the limited partners in the operating partnership and the
shareholders of Vornado have similar rights to inspect and, at their own
expense, make copies of investor lists, with some limitations.

                                      -67-

                          REVIEW OF BOOKS AND RECORDS

                           THE OPERATING PARTNERSHIP

        Under the partnership agreement, limited partners in the operating
partnership, upon written demand with a statement of the purpose of the demand
and at the limited partner's expense, are entitled to obtain a copy of the
operating partnership's Federal, state and local income tax returns, to obtain a
copy of the most recent annual and quarterly reports filed by Vornado with the
SEC and to obtain some other records and information as provided in the
partnership agreement. Limited partners in the operating partnership do not have
any right to inspect the books of the operating partnership.

                                    VORNADO

        Under the Maryland General Corporation Law, as applicable to REITs, any
shareholder or his agent may inspect and copy during normal business hours the
following real estate investment trust documents:

            o  bylaws;

            o  minutes of the proceedings of shareholders;

            o  annual statements of affairs; and

            o  voting trust agreements on file at the real estate investment
               trust's principal office.

In addition, one or more shareholders holding of record at least 5% of the
outstanding shares of beneficial interest of any class of a real estate
investment trust may, upon written request, inspect and copy during usual
business hours the books of account of the real estate investment trust.

                                      -68-

                         ISSUANCE OF ADDITIONAL EQUITY

                           THE OPERATING PARTNERSHIP

        The operating partnership is generally authorized to issue units and
other partnership interests, including partnership interests of different series
or classes, as determined by Vornado as the general partner in its sole
discretion. The operating partnership may issue units and other partnership
interests to Vornado, as long as these interests are issued in connection with a
comparable issuance of securities of Vornado and proceeds raised in connection
with the issuance of the Vornado securities are contributed to the operating
partnership. The terms of some series of preferred units limit Vornado's ability
to issue other series of units ranking prior to them.

                                    VORNADO

        The Board of Trustees may authorize the issuance, in its discretion, of
additional common shares and other equity securities of Vornado, including one
or more classes of common or preferred shares, with the preferences, conversion
or other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption that the Board of Trustees
may establish.

        The operating partnership and Vornado both have substantial flexibility
to raise equity through the sale of additional units, shares of beneficial
interest or other securities to finance the business and affairs of the
operating partnership.

                               BORROWING POLICIES

                           THE OPERATING PARTNERSHIP

        The operating partnership has no restrictions on borrowings, and Vornado
as general partner has full power and authority to borrow money on behalf of the
operating partnership. However, under the terms of the lockup provisions, the
operating partnership is limited in its ability to refinance the indebtedness
secured by some of its properties, unless affected limited partners are
compensated for adverse tax consequences in accordance with the lockup
agreements. See "Description of units and the operating partnership-Borrowing
by the operating partnership" for further information about the lockup
agreements.

                                    VORNADO

        Vornado is not restricted under its declaration of trust from borrowing.
However, under the partnership agreement, Vornado, as general partner, may not
issue debt securities or otherwise incur any debts unless it contributes the
proceeds from the incurrence of debts to the operating partnership. Therefore,
all indebtedness incurred by Vornado will be for the benefit of the operating
partnership.

                                      -69-

                             PERMITTED INVESTMENTS

                           THE OPERATING PARTNERSHIP

        The operating partnership's purpose is to conduct any business that may
be lawfully conducted by a Delaware limited partnership, provided that this
business is to be conducted in a manner that permits Vornado to be qualified as
a REIT unless Vornado ceases to qualify as a REIT for any reason. The operating
partnership is authorized to perform any and all acts for the furtherance of the
purposes and business of the operating partnership, including making
investments, provided that the Operating partnership may not take, or refrain
from taking, any action which, in the judgment of Vornado as general partner:

            o  could adversely affect the ability of the general partner to
               continue to qualify as a REIT;

            o  could subject the general partner to any additional taxes under
               Section 857 or Section 4981 of the Internal Revenue Code; or

            o  could violate any law or regulation of any governmental body.

The operating partnership may take any action or inaction described in the
preceding sentence only with Vornado's specific consent.

                                    VORNADO

        Under its declaration of trust, Vornado may engage in any lawful
activity permitted by the Maryland REIT law. Under the partnership agreement,
Vornado, as general partner, agrees that it will not, directly or indirectly,
enter into or conduct any business other than in connection with the ownership,
acquisition and disposition of partnership interests in the operating
partnership except with the consent of a majority of the holders of common units
other than Vornado.

Vornado is also permitted to acquire, directly or indirectly, up to a 1%
interest in any partnership or limited liability company at least ninety-nine
percent (99%) of whose equity is owned by the operating partnership.

        Vornado and the operating partnership may invest in any types of real
estate and geographic areas that Vornado deems appropriate. Subject to
restrictions relating to the protection of Vornado's REIT status, the operating
partnership may perform all acts necessary for the furtherance of the operating
partnership's business, including diversifying its portfolio to protect the
value of its assets or as a prudent hedge against the risk of having too many of
its investments limited to a single asset group or in a particular region of the
country. Vornado, as general partner of the operating partnership, generally may
not conduct any business other than through the operating partnership without
the consent of the holders of a majority of the common limited partnership
interests, not including the limited partnership interests held by Vornado in
its capacity as a limited partner in the operating partnership.

                                      -70-

                         OTHER INVESTMENT RESTRICTIONS

                           THE OPERATING PARTNERSHIP

        Other than restrictions precluding investments by the operating
partnership that would adversely affect the qualification of Vornado as a REIT
and restrictions on transactions with affiliates, the partnership agreement does
not generally restrict the operating partnership's authority to make
investments, lend operating partnership funds or reinvest the operating
partnership's cash flow and net sale or refinancing proceeds.

                                    VORNADO

        Vornado's declaration of trust authorizes Vornado to enter into any
contract or transaction of any kind, including the purchase or sale of property,
with any person, including any trustee, officer, employee or agent of Vornado,
whether or not any of them has a financial interest in the transaction.

                                      -71-

                        FEDERAL INCOME TAX CONSIDERATIONS

         This section summarizes the taxation of Vornado and the material
Federal income tax consequences to holders of the common shares for your general
information only. It is not tax advice. The tax treatment of a holder of common
shares will vary depending upon the holder's particular situation, and this
discussion addresses only holders that hold common shares as capital assets and
does not deal with all aspects of taxation that may be relevant to particular
holders in light of their personal investment or tax circumstances. This section
also does not deal with all aspects of taxation that may be relevant to certain
types of holders to which special provisions of the Federal income tax laws
apply, including:

               o  broker-dealers;

               o  traders in securities that elect to mark-to-market;

               o  banks;

               o  tax-exempt organizations;

               o  certain insurance companies;

               o  persons liable for the alternative minimum tax;

               o  persons that hold securities that are a hedge, that are hedged
                  against currency risks or that are part of a straddle or
                  conversion transaction; and

               o  persons whose functional currency is not the U.S. dollar.

This summary is based on the Internal Revenue Code, its legislative history,
existing and proposed regulations under the Internal Revenue Code, published
rulings and court decisions. This summary describes the provisions of these
sources of law only as they are currently in effect. All of these sources of law
may change at any time, and any change in the law may apply retroactively.

         WE URGE YOU TO CONSULT WITH YOUR OWN TAX ADVISORS REGARDING THE TAX
CONSEQUENCES TO YOU OF ACQUIRING, OWNING AND SELLING COMMON SHARES, INCLUDING
THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF ACQUIRING, OWNING AND
SELLING COMMON SHARES IN YOUR PARTICULAR CIRCUMSTANCES AND POTENTIAL CHANGES IN
APPLICABLE LAWS.

                                      -72-

TAXATION OF VORNADO AS A REIT

         In the opinion of Sullivan & Cromwell, commencing with its taxable year
ended December 31, 1993, Vornado has been organized and operated in conformity
with the requirements for qualification and taxation as a REIT under the
Internal Revenue Code, and Vornado's proposed method of operation will enable it
to continue to meet the requirements for qualification and taxation as a REIT
under the Code. Investors should be aware, however, that opinions of counsel are
not binding upon the Internal Revenue Service or any court.

         In providing its opinion, Sullivan & Cromwell is relying

               o  as to certain factual matters upon the statements and
                  representations contained in certificates provided to Sullivan
                  & Cromwell by Vornado and Two Penn Plaza, REIT, Inc.;

               o  without independent investigation, as to certain factual
                  matters upon the statements and representations contained in
                  the certificate provided to Sullivan & Cromwell by
                  Alexander's; and

               o  without independent investigation, upon the opinion of
                  Shearman & Sterling concerning the qualification of
                  Alexander's as a REIT for each taxable year commencing with
                  its taxable year ending December 31, 1995.

         In providing its opinion regarding the qualification of Alexander's as
a REIT for Federal income tax purposes, Shearman & Sterling is relying, as to
certain factual matters, upon representations received from Alexander's.

         Vornado's qualification as a REIT will depend upon the continuing
satisfaction by Vornado and, given Vornado's current ownership interest in
Alexander's and Two Penn, by Alexander's and Two Penn, of the requirements of
the Internal Revenue Code relating to qualification for REIT status. Some of
these requirements depend upon actual operating results, distribution levels,
diversity of stock ownership, asset composition, source of income and
recordkeeping. Accordingly, while Vornado intends to continue to qualify to be
taxed as a REIT, the actual results of Vornado's, Two Penn's or Alexander's
operations for any particular year might not satisfy these requirements. Neither
Sullivan & Cromwell nor Shearman & Sterling will monitor the compliance of
Vornado, Two Penn or Alexander's with the requirements for REIT qualification on
an ongoing basis.

         The sections of the Internal Revenue Code applicable to REITs are
highly technical and complex. The following discussion summarizes material
aspects of these sections of the Internal Revenue Code.

         As a REIT, Vornado generally will not have to pay Federal corporate
income taxes on its net income that it currently distributes to shareholders.
This treatment substantially

                                      -73-

eliminates the "double taxation" at the corporate and shareholder levels that
generally results from investment in a regular corporation.

         However, Vornado will have to pay federal income tax as follows.

               o  First, Vornado will have to pay tax at regular corporate rates
                  on any undistributed real estate investment trust taxable
                  income, including undistributed net capital gains.

               o  Second, under certain circumstances, Vornado may have to pay
                  the alternative minimum tax on its items of tax preference.

               o  Third, if Vornado has (a) net income from the sale or other
                  disposition of foreclosure property, as defined in the
                  Internal Revenue Code, which is held primarily for sale to
                  customers in the ordinary course of business or (b) other
                  non-qualifying income from foreclosure property, it will have
                  to pay tax at the highest corporate rate on that income.

               o  Fourth, if Vornado has net income from "prohibited
                  transactions", as defined in the Internal Revenue Code,
                  Vornado will have to pay a 100% tax on that income. Prohibited
                  transactions are, in general, certain sales or other
                  dispositions of property, other than foreclosure property,
                  held primarily for sale to customers in the ordinary course of
                  business.

               o  Fifth, if Vornado should fail to satisfy the 75% gross income
                  test or the 95% gross income test, as discussed below under
                  "-- Requirements for qualification -- Income tests", but has
                  nonetheless maintained its qualification as a REIT because
                  Vornado has satisfied some other requirements, it will have to
                  pay a 100% tax on an amount equal to (a) the gross income
                  attributable to the greater of the amount by which Vornado
                  fails the 75% or 95% test, multiplied by (b) a fraction
                  intended to reflect Vornado's profitability.

               o  Sixth, if Vornado should fail to distribute during each
                  calendar year at least the sum of (a) 85% of its real estate
                  investment trust ordinary income for that year, (b) 95% of its
                  real estate investment trust capital gain net income for that
                  year and (c) any undistributed taxable income from prior
                  periods, Vornado would have to pay a 4% excise tax on the
                  excess of that required distribution over the amounts actually
                  distributed.

               o  Seventh, if during the 10-year period beginning on the first
                  day of the first taxable year for which Vornado qualified as a
                  REIT, Vornado recognizes gain on the disposition of any asset
                  held by Vornado as of the beginning of that period, then,

                                      -74-

                  to the extent of the excess of (a) fair market value of that
                  asset as of the beginning of that period over (b) Vornado's
                  adjusted basis in that asset as of the beginning of that
                  period, Vornado will have to pay tax on that gain at the
                  highest regular corporate rate under Treasury regulations that
                  have not yet been promulgated. We refer to the excess of fair
                  market value over adjusted basis described in the preceding
                  sentence as "built-in gain".

                  Notwithstanding the taxation of built-in gain described in the
                  preceding paragraph of this bullet point, Vornado will not
                  have to pay tax on recognized built-in gain with respect to
                  assets held as of the first day of the 10-year period
                  beginning on the first day of the first taxable year for which
                  Vornado qualified as a REIT, to the extent that the aggregate
                  amount of that recognized built-in gain exceeds the net
                  aggregate amount of Vornado's unrealized built-in gain as of
                  the first day of that period.

               o  Eighth, if Vornado acquires any asset from a C corporation in
                  certain transactions in which Vornado must adopt the basis of
                  the asset or any other property in the hands of the C
                  corporation as the basis of the asset in the hands of Vornado,
                  and Vornado recognizes gain on the disposition of that asset
                  during the 10-year period beginning on the date on which
                  Vornado acquired that asset, then, under the Treasury
                  regulations that have not yet been issued and to the extent of
                  the built-in gain, Vornado will have to pay tax on that gain
                  at the highest regular corporate rate. A C corporation means
                  generally a corporation that has to pay full corporate-level
                  tax.

REQUIREMENTS FOR QUALIFICATION

    The Internal Revenue Code defines a REIT as a corporation, trust or
association

               o  which is managed by one or more trustees or directors;

               o  the beneficial ownership of which is evidenced by transferable
                  shares, or by transferable certificates of beneficial
                  interest;

               o  which would otherwise be taxable as a domestic corporation,
                  but for Sections 856 through 859 of the Code;

               o  which is neither a financial institution nor an insurance
                  company to which certain provisions of the Code apply;

               o  the beneficial ownership of which is held by 100 or more
                  persons;

                                      -75-

               o  during the last half of each taxable year, not more than 50%
                  in value of the outstanding stock of which is owned, directly
                  or constructively, by five or fewer individuals, as defined in
                  the Internal Revenue Code to include certain entities; and

               o  which meets certain other tests, described below, regarding
                  the nature of its income and assets.

The Internal Revenue Code provides that the conditions described in the first
through fourth bullet points above must be met during the entire taxable year
and that the condition described in the fifth bullet point above must be met
during at least 335 days of a taxable year of 12 months, or during a
proportionate part of a taxable year of less than 12 months.

         Vornado has satisfied the conditions described in the first through
fifth bullet points of the preceding paragraph and believes that it has also
satisfied the condition described in the sixth bullet point of the preceding
paragraph. In addition, Vornado's declaration of trust provides for restrictions
regarding the ownership and transfer of Vornado's shares of beneficial interest.
These restrictions are intended to assist Vornado in continuing to satisfy the
share ownership requirements described in the fifth and sixth bullet points of
the preceding paragraph. The ownership and transfer restrictions pertaining to
the common shares are described above under the heading "Description of common
shares -- Restrictions on ownership of common shares".

         Vornado owns a number of wholly-owned subsidiaries. Internal Revenue
Code Section 856(i) provides that a corporation which is a "qualified REIT
subsidiary", as defined in the Code, will not be treated as a separate
corporation, and all assets, liabilities, and items of income, deduction, and
credit of a qualified REIT subsidiary will be treated as assets, liabilities and
items of these kinds of the REIT. Thus, in applying the requirements described
in this section, Vornado's qualified REIT subsidiaries will be ignored, and all
assets, liabilities and items of income, deduction, and credit of such
subsidiaries will be treated as assets, liabilities and items of these kinds of
Vornado. Vornado believes that all of its wholly-owned subsidiaries are
qualified REIT subsidiaries.

         If a REIT is a partner in a partnership, Treasury regulations provide
that the REIT will be deemed to own its proportionate share of the assets of the
partnership and will be deemed to be entitled to the income of the partnership
attributable to that share. In addition, the character of the assets and gross
income of the partnership will retain the same character in the hands of the
REIT for purposes of Section 856 of the Internal Revenue Code, including
satisfying the gross income tests and the asset tests. Thus, Vornado's
proportionate share of the assets, liabilities and items of income of any
partnership in which Vornado is a partner, including the operating partnership,
will be treated as assets, liabilities and items of income of Vornado for
purposes of applying the requirements described in this section. Thus, actions
taken by

                                      -76-

partnerships in which Vornado owns an interest either directly or through one or
more tiers of partnerships or qualified REIT subsidiaries, can affect Vornado's
ability to satisfy the REIT income and assets tests and the determination of
whether Vornado has net income from prohibited transactions. See the fourth
bullet point on page 74 for a discussion of prohibited transactions.

         INCOME TESTS. In order to maintain its qualification as a REIT, Vornado
annually must satisfy three gross income requirements.

               o  First, Vornado must derive at least 75% of its gross income,
                  excluding gross income from prohibited transactions, for each
                  taxable year directly or indirectly from investments relating
                  to real property or mortgages on real property, including
                  "rents from real property", as defined in the Internal Revenue
                  Code, or from certain types of temporary investments. Rents
                  from real property generally include expenses of Vornado that
                  are paid or reimbursed by tenants.

               o  Second, at least 95% of Vornado's gross income, excluding
                  gross income from prohibited transactions, for each taxable
                  year must be derived from real property investments as
                  described in the preceding bullet point, dividends, interest
                  and gain from the sale or disposition of stock or securities,
                  or from any combination of these types of source.

               o  Third, for its taxable years before 1998, short-term gain from
                  the sale or other disposition of stock or securities, gain
                  from prohibited transactions and gain on the sale or other
                  disposition of real property held for less than four years,
                  apart from involuntary conversions and sales of foreclosure
                  property, must represent less than 30% of Vornado's gross
                  income, including gross income from prohibited transactions,
                  for each of these taxable years.

         Rents that Vornado receives will qualify as rents from real property in
satisfying the gross income requirements for a REIT described above only if the
rents satisfy several conditions.

               o  First, the amount of rent must not be based in whole or in
                  part on the income or profits of any person. However, an
                  amount received or accrued generally will not be excluded from
                  rents from real property solely because it is based on a fixed
                  percentage or percentages of receipts or sales.

               o  Second, the Internal Revenue Code provides that rents received
                  from a tenant will not qualify as rents from real property in
                  satisfying the gross income tests if the REIT, directly or
                  under the applicable attribution rules, owns a 10% or greater

                                      -77-

                  interest in that tenant. We refer to a tenant in which Vornado
                  owns a 10% or greater interest as a "related party tenant".

               o  Third, if rent attributable to personal property leased in
                  connection with a lease of real property is greater than 15%
                  of the total rent received under the lease, then the portion
                  of rent attributable to the personal property will not qualify
                  as rents from real property.

               o  Finally, for rents received to qualify as rents from real
                  property, the REIT generally must not operate or manage the
                  property or furnish or render services to the tenants of the
                  property, other than through an independent contractor from
                  whom the REIT derives no revenue. However, Vornado may
                  directly perform certain services that landlords usually or
                  customarily render when renting space for occupancy only or
                  that are not considered rendered to the occupant of the
                  property.

Vornado does not derive significant rents from related party tenants. Vornado
also does not and will not derive rental income attributable to personal
property, other than personal property leased in connection with the lease of
real property, the amount of which is less than 15% of the total rent received
under the lease.

         Vornado directly performs services for some of its tenants. Vornado
does not believe that the provision of these services will cause its gross
income attributable to these tenants to fail to be treated as rents from real
property. If Vornado were to provide services to a tenant that are other than
those landlords usually or customarily provide when renting space for occupancy
only, amounts received or accrued by Vornado for any of these services will not
be treated as rents from real property for purposes of the REIT gross income
tests. However, the amounts received or accrued for these services will not
cause other amounts received with respect to the property to fail to be treated
as rents from real property unless the amounts treated as received in respect of
the services, together with amounts received for certain management services,
exceeds 1% of all amounts received or accrued by Vornado during the taxable year
with respect to the property. If the sum of the amounts received in respect of
the services to tenants and management services described in the preceding
sentence exceeds the 1% threshold, then all amounts received or accrued by
Vornado with respect to the property will not qualify as rents from real
property, even if Vornado provides the impermissible services to some, but not
all, of the tenants of the property.

         The term "interest" generally does not include any amount received or
accrued, directly or indirectly, if the determination of that amount depends in
whole or in part on the income or profits of any person. However, an amount
received or accrued generally will not be excluded from the term interest solely
because it is based on a fixed percentage or percentages of receipts or sales.

                                      -78-

         If Vornado fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it may nevertheless qualify as a REIT for that year
if it satisfies the requirements of other provisions of the Internal Revenue
Code that allow relief from disqualification as a REIT. These relief provisions
will generally be available if

               o  Vornado's failure to meet the income tests was due to
                  reasonable cause and not due to willful neglect;

               o  Vornado attaches a schedule of the sources of its income to
                  its Federal income tax return; and

               o  any incorrect information on the schedule was not due to fraud
                  with intent to evade tax.

Vornado might not be entitled to the benefit of these relief provisions,
however. As discussed in the fifth bullet point on page 74, even if these
relief provisions apply, Vornado would have to pay a tax on the excess income.

         ASSET TESTS. Vornado, at the close of each quarter of its taxable year,
must also satisfy three tests relating to the nature of its assets.

               o  First, at least 75% of the value of Vornado's total assets
                  must be represented by real estate assets, including (a) real
                  estate assets held by Vornado's qualified REIT subsidiaries,
                  Vornado's allocable share of real estate assets held by
                  partnerships in which Vornado owns an interest and stock
                  issued by another REIT, (b) for a period of one year from the
                  date of Vornado's receipt of proceeds of an offering of its
                  shares of beneficial interest or debt with a term of at least
                  five years, stock or debt instruments purchased with these
                  proceeds and (c) cash, cash items and government securities.

               o  Second, not more than 25% of Vornado's total assets may be
                  represented by securities other than those in the 75% asset
                  class.

               o  Third, of the investments included in the 25% asset class, the
                  value of any one issuer's securities, other than securities
                  issued by another REIT, owned by Vornado may not exceed 5% of
                  the value of Vornado's total assets and Vornado may not own
                  more than 10% of any one issuer's outstanding voting
                  securities.

         Since March 2, 1995, Vornado has owned more than 10% of the voting
securities of Alexander's. Since April of 1997, Vornado's ownership of
Alexander's has been through the operating partnership rather than direct.
Vornado's ownership interest in Alexander's will not cause Vornado to fail to
satisfy the asset tests for REIT status so long as Alexander's qualified

                                      -79-

as a REIT for each of taxable years beginning with its taxable year ending
December 31, 1995 and continues to so qualify. In the opinion of Shearman &
Sterling, commencing with Alexander's taxable year ended December 31, 1995,
Alexander's has been organized and operated in conformity with the requirements
for qualification and taxation as a REIT under the Internal Revenue Code, and
its proposed method of operation will enable it to continue to meet the
requirements for qualification and taxation as a REIT under the Internal Revenue
Code. In providing its opinion, Shearman & Sterling is relying upon
representations received from Alexander's.

         Since April of 1997, Vornado has also owned, through the operating
partnership, more than 10% of the voting securities of Two Penn. Vornado's
indirect ownership interest in Two Penn will not cause Vornado to fail to
satisfy the asset tests for REIT status so long as Two Penn qualifies as a REIT
for its first taxable year and each subsequent taxable year. Vornado believes
that Two Penn will also qualify.

         In order to ensure compliance with the 95% gross income test described
in the second bullet point on page 77, Vornado transferred certain contract
rights and obligations to VMC, a New Jersey corporation, in return for all of
VMC's nonvoting preferred stock. Since April of 1997, the operating partnership
has held this stock. This stock entitles its holder to 95% of the dividends paid
by VMC. Vornado does not believe that its indirect ownership of this stock will
adversely affect its ability to satisfy the asset tests described above.

         Vornado also owns, through the operating partnership, nonvoting shares
in a number of corporations. Vornado does not believe that the characteristics
or value of these shares will cause Vornado to fail to satisfy the REIT asset
tests described above.

         ANNUAL DISTRIBUTION REQUIREMENTS. Vornado, in order to qualify as a
REIT, is required to distribute dividends, other than capital gain dividends, to
its shareholders in an amount at least equal to (1) the sum of (a) 95% of
Vornado's "real estate investment trust taxable income", computed without regard
to the dividends paid deduction and Vornado's net capital gain, and (b) 95% of
the net after-tax income, if any, from foreclosure property minus (2) the sum of
certain items of non-cash income.

         In addition, if Vornado disposes of any asset within 10 years of
acquiring it, Vornado will be required, under Treasury regulations which the
Treasury has not yet promulgated, to distribute at least 95% of the after-tax
built-in gain, if any, recognized on the disposition of the asset.

         These distributions must be paid in the taxable year to which they
relate, or in the following taxable year if declared before Vornado timely files
its tax return for the year to which they relate and if paid on or before the
first regular dividend payment after the declaration.

                                      -80-

         To the extent that Vornado does not distribute all of its net capital
gain or distributes at least 95%, but less than 100%, of its real estate
investment trust taxable income, as adjusted, it will have to pay tax on those
amounts at regular ordinary and capital gain corporate tax rates. Furthermore,
if Vornado fails to distribute during each calendar year at least the sum of (a)
85% of its ordinary income for that year, (b) 95% of its capital gain net income
for that year, and (c) any undistributed taxable income from prior periods,
Vornado would have to pay a 4% excise tax on the excess of the required
distribution over the amounts actually distributed.

         Vornado intends to satisfy the annual distribution requirements.

         From time to time, Vornado may not have sufficient cash or other liquid
assets to meet the 95% distribution requirement due to timing differences
between (a) when Vornado actually receives income and when it actually pays
deductible expenses and (b) when Vornado includes the income and deducts the
expenses in arriving at its taxable income. If timing differences of this kind
occur, in order to meet the 95% distribution requirement, Vornado may find it
necessary to arrange for short-term, or possibly long-term, borrowings or to pay
dividends in the form of taxable stock dividends.

         Under certain circumstances, Vornado may be able to rectify a failure
to meet the distribution requirement for a year by paying "deficiency dividends"
to shareholders in a later year, which may be included in Vornado's deduction
for dividends paid for the earlier year. Thus, Vornado may be able to avoid
being taxed on amounts distributed as deficiency dividends; however, Vornado
will be required to pay interest based upon the amount of any deduction taken
for deficiency dividends.

  FAILURE TO QUALIFY AS A REIT

         If Vornado fails to qualify for taxation as a REIT in any taxable year,
and the relief provisions do not apply, Vornado will have to pay tax, including
any applicable alternative minimum tax, on its taxable income at regular
corporate rates. Vornado will not be able to deduct distributions to
shareholders in any year in which it fails to qualify, nor will Vornado be
required to make distributions to shareholders. In this event, to the extent of
current and accumulated earnings and profits, all distributions to shareholders
will be taxable as ordinary income and corporate distributees may be eligible
for the dividends received deduction if they satisfy the relevant provisions of
the Internal Revenue Code. Unless entitled to relief under specific statutory
provisions, Vornado will also be disqualified from taxation as a REIT for the
four taxable years following the year during which qualification was lost.
Vornado might not be entitled to the statutory relief described in this
paragraph in all circumstances.

RECENT TAX PROPOSALS

                                      -81-

         A number of recent legislative proposals could affect the way Vornado
conducts its business. At this time it is unclear whether these proposals will
be enacted into law and, if enacted into law, the exact form these proposals
would take and the effect that they would have upon Vornado's operations.

TAXATION OF HOLDERS OF COMMON SHARES

  U.S. SHAREHOLDERS

         As used in this section, the term "U.S. shareholder" means a holder of
common shares who, for United States Federal income tax purposes, is

               o  a citizen or resident of the United States;

               o  a corporation organized under the laws of the United States or
                  any State;

               o  an estate whose income is subject to United States Federal
                  income taxation regardless of its source; or

               o  a trust if a United States court is able to exercise primary
                  supervision over administration of the trust and one or more
                  United States persons have authority to control all
                  substantial decisions of the trust.

         As long as Vornado qualifies as a REIT, distributions made by Vornado
out of its current or accumulated earnings and profits, and not designated as
capital gain dividends, will constitute dividends taxable to its taxable U.S.
shareholders as ordinary income. Distributions of this kind will not be eligible
for the dividends received deduction in the case of U.S. shareholders that are
corporations. Distributions made by Vornado that Vornado properly designates as
capital gain dividends will be taxable to U.S. shareholders as gain from the
sale of a capital asset held for more than one year, to the extent that they do
not exceed Vornado's actual net capital gain for the taxable year, without
regard to the period for which a U.S. shareholder has held his shares. Thus,
with certain limitations, capital gains dividends received by an individual U.S.
shareholder may be eligible for 20% or 25% capital gains rates of taxation. U.S.
shareholders that are corporations may, however, be required to treat up to 20%
of certain capital gain dividends as ordinary income.

         To the extent that Vornado makes distributions, not designated as
capital gain dividends, in excess of its current and accumulated earnings and
profits, these distributions will be treated first as a tax-free return of
capital to each U.S. shareholder. Thus, these distributions will reduce the
adjusted basis which the U.S. shareholder has in his shares for tax purposes by
the amount of the distribution, but not below zero. Distributions in excess of a
U.S. shareholder's adjusted basis in his shares will be taxable as capital
gains, provided that

                                      -82-

the shares have been held as a capital asset. For purposes of determining the
portion of distributions on separate classes of shares that will be treated as
dividends for Federal income tax purposes, current and accumulated earnings and
profits will be allocated to distributions resulting from priority rights of
preferred shares before being allocated to other distributions.

         Dividends authorized by Vornado in October, November, or December of
any year and payable to a shareholder of record on a specified date in any of
these months will be treated as both paid by Vornado and received by the
shareholder on December 31 of that year, provided that Vornado actually pays the
dividend on or before January 31 of the following calendar year. Shareholders
may not include in their own income tax returns any net operating losses or
capital losses of Vornado.

         U.S. shareholders holding shares at the close of Vornado's taxable year
will be required to include, in computing their long-term capital gains for the
taxable year in which the last day of Vornado's taxable year falls, the amount
that Vornado designates in a written notice mailed to its shareholders. Vornado
may not designate amounts in excess of Vornado's undistributed net capital gain
for the taxable year. Each U.S. shareholder required to include the designated
amount in determining the shareholder's long-term capital gains will be deemed
to have paid, in the taxable year of the inclusion, the tax paid by Vornado in
respect of the undistributed net capital gains. U.S. shareholders to whom these
rules apply will be allowed a credit or a refund, as the case may be, for the
tax they are deemed to have paid. U.S. shareholders will increase their basis in
their shares by the difference between the amount of the includible gains and
the tax deemed paid by the shareholder in respect of these gains.

         Distributions made by Vornado and gain arising from a U.S.
shareholder's sale or exchange of shares will not be treated as passive activity
income. As a result, U.S. shareholders generally will not be able to apply any
passive losses against that income or gain.

         When a U.S. shareholder sells or otherwise disposes of shares, the
shareholder will recognize gain or loss for Federal income tax purposes in an
amount equal to the difference between (a) the amount of cash and the fair
market value of any property received on the sale or other disposition, and (b)
the holder's adjusted basis in the shares for tax purposes. This gain or loss
will be capital gain or loss if the U.S. shareholder has held the shares as a
capital asset. The gain or loss will be long-term gain or loss if the U.S.
shareholder has held the shares for more than one year. A maximum tax rate of
20% generally applies to long-term capital gain of an individual U.S.
shareholder. In general, any loss recognized by a U.S. shareholder when the
shareholder sells or otherwise disposes of shares of Vornado that the
shareholder has held for six months or less, after applying certain holding
period rules, will be treated as a long-term capital loss, to the extent of
distributions received by the shareholder from Vornado which were required to be
treated as long-term capital gains.

                                      -83-

         BACKUP WITHHOLDING. Vornado will report to its U.S. shareholders and
the IRS the amount of dividends paid during each calendar year, and the amount
of tax withheld, if any. Under the backup withholding rules, backup withholding
at the rate of 31% may apply to a shareholder with respect to dividends paid
unless the holder (a) is a corporation or comes within certain other exempt
categories and, when required, demonstrates this fact, or (b) provides a
taxpayer identification number, certifies as to no loss of exemption from backup
withholding, and otherwise complies with applicable requirements of the backup
withholding rules. The IRS may also impose penalties on a U.S. shareholder that
does not provide Vornado with his correct taxpayer identification number. A
shareholder may credit any amount paid as backup withholding against the
shareholder's income tax liability. In addition, Vornado may be required to
withhold a portion of capital gain distributions to any shareholders who fail to
certify their non-foreign status to Vornado.

         TAXATION OF TAX-EXEMPT SHAREHOLDERS. The IRS has ruled that amounts
distributed as dividends by a REIT generally do not constitute unrelated
business taxable income when received by a tax-exempt entity. Based on that
ruling, provided that a tax-exempt shareholder is not one of the types of entity
described in the next paragraph and has not held its shares as "debt financed
property" within the meaning of the Internal Revenue Code and the shares are not
otherwise used in a trade or business, the dividend income from shares will not
be unrelated business taxable income to a tax-exempt shareholder. Similarly,
income from the sale of shares will not constitute unrelated business taxable
income unless the tax-exempt shareholder has held the shares as "debt financed
property" within the meaning of the Internal Revenue Code or has used the shares
in a trade or business.

         Income from an investment in Vornado's shares will constitute unrelated
business taxable income for tax-exempt shareholders that are social clubs,
voluntary employee benefit associations, supplemental unemployment benefit
trusts, and qualified group legal services plans exempt from Federal income
taxation under the applicable subsections of Section 501(c) of the Internal
Revenue Code, unless the organization is able to properly deduct amounts set
aside or placed in reserve for certain purposes so as to offset the income
generated by its shares. Prospective investors of the types described in the
preceding sentence should consult their own tax advisors concerning these "set
aside" and reserve requirements.

         Notwithstanding the foregoing, however, a portion of the dividends paid
by a "pension-held REIT" will be treated as unrelated business taxable income to
any trust which

                o  is described in Section 401(a) of the Internal Revenue Code;

                o  is tax exempt under Section 501(a) of the Code; and

                o  holds more than 10% (by value) of the equity interests in the
                   REIT.

                                      -84-

Tax-exempt pension, profit-sharing and stock bonus funds that are described in
Section 401(a) of the Internal Revenue Code are referred to below as "qualified
trusts".  A REIT is a "pension-held REIT" if

               o  it would not have qualified as a REIT but for the fact that
                  Section 856(h)(3) of the Internal Revenue Code provides that
                  stock owned by qualified trusts will be treated, for purposes
                  of the "not closely held" requirement, as owned by the
                  beneficiaries of the trust (rather than by the trust itself);
                  and

               o  either (a) at least one qualified trust holds more than 25% by
                  value of the interests in the REIT or (b) one or more
                  qualified trusts, each of which owns more than 10% by value of
                  the interests in the REIT, hold in the aggregate more than 50%
                  by value of the interests in the REIT.

The percentage of any REIT dividend treated as unrelated business taxable income
is equal to the ratio of (a) the gross income of the REIT from unrelated trades
or businesses, determined as though the REIT were a qualified trust, less direct
expenses related to this gross income, to (b) the total gross income of the
REIT, less direct expenses related to the total gross income. A de minimis
exception applies where this percentage is less than 5% for any year. Vornado
does not expect to be classified as a pension-held REIT.

         The rules described above under the heading "-- U.S. shareholders"
concerning the inclusion of Vornado's designated undistributed net capital gains
in the income of its shareholders will apply to tax-exempt entities. Thus,
tax-exempt entities will be allowed a credit or refund of the tax deemed paid by
these entities in respect of the includible gains.

  NON-U.S. SHAREHOLDERS

         The rules governing U.S. Federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships and other foreign
shareholders, which we call "non-U.S. shareholders", are complex. The following
discussion is only a limited summary of these rules. Prospective non-U.S.
shareholders should consult with their own tax advisors to determine the impact
of U.S. Federal, state and local income tax laws with regard to an investment in
shares, including any reporting requirements.

         ORDINARY DIVIDENDS. Distributions, other than distributions that are
treated as attributable to gain from sales or exchanges by Vornado of U.S. real
property interests, as discussed below, and other than distributions designated
by Vornado as capital gain dividends, will be treated as ordinary income to the
extent that they are made out of current or accumulated earnings and profits of
Vornado. A withholding tax equal to 30% of the gross amount of the distribution
will ordinarily apply to distributions of this kind to non-U.S. shareholders,
unless an applicable tax treaty reduces that tax. However, if income

                                      -85-

from the investment in the shares is treated as effectively connected with the
non-U.S. shareholder's conduct of a U.S. trade or business, tax at graduated
rates will generally apply to the non-U.S. shareholder in the same manner as
U.S. shareholders are taxed with respect to dividends, and the 30% branch
profits tax may also apply if the shareholder is a foreign corporation. Vornado
expects to withhold U.S. tax at the rate of 30% on the gross amount of any
dividends, other than dividends treated as attributable to gain from sales or
exchanges of U.S. real property interests and capital gain dividends, paid to a
non-U.S. shareholder, unless (a) a lower treaty rate applies and the required
form evidencing eligibility for that reduced rate is filed with Vornado or the
appropriate withholding agent or (b) the non-U.S. shareholder files an IRS Form
4224 or a successor form with Vornado or the appropriate withholding agent
claiming that the distributions are effectively connected with the non-U.S.
shareholder's conduct of a U.S. trade or business.

         Distributions to a non-U.S. shareholder that are designated by Vornado
at the time of distribution as capital gain dividends which are not attributable
to or treated as attributable to the disposition by Vornado of a U.S. real
property interest generally will not be subject to U.S. Federal income taxation,
except as described below.

         RETURN OF CAPITAL. Distributions in excess of Vornado's current and
accumulated earnings and profits, which are not treated as attributable to the
gain from Vornado's disposition of a U.S. real property interest, will not be
taxable to a non-U.S. shareholder to the extent that they do not exceed the
adjusted basis of the non-U.S. shareholder's shares. Distributions of this kind
will instead reduce the adjusted basis of the shares. To the extent that
distributions of this kind exceed the adjusted basis of a non-U.S. shareholder's
shares, they will give rise to tax liability if the non-U.S. shareholder
otherwise would have to pay tax on any gain from the sale or disposition of its
shares, as described below. If it cannot be determined at the time a
distribution is made whether the distribution will be in excess of current and
accumulated earnings and profits, withholding will apply to the distribution at
the rate applicable to dividends. However, the non-U.S. shareholder may seek a
refund of these amounts from the IRS if it is subsequently determined that the
distribution was, in fact, in excess of current accumulated earnings and profits
of Vornado.

         CAPITAL GAIN DIVIDENDS. For any year in which Vornado qualifies as a
REIT, distributions that are attributable to gain from sales or exchanges by
Vornado of U.S. real property interests will be taxed to a non-U.S. shareholder
under the provisions of the Foreign Investment in Real Property Tax Act of 1980,
as amended. Under this statute, these distributions are taxed to a non-U.S.
shareholder as if the gain were effectively connected with a U.S. business.
Thus, non-U.S. shareholders will be taxed on the distributions at the normal
capital gain rates applicable to U.S. shareholders, subject to any applicable
alternative minimum tax and special alternative minimum tax in the case of
nonresident alien individuals. Vornado is required by applicable Treasury
regulations under this statute to withhold 35% of any distribution that Vornado
could designate as a capital gain dividend. However, if Vornado

                                      -86-

designates as a capital gain dividend a distribution made before the day Vornado
actually effects the designation, then although the distribution may be taxable
to a non-U.S. shareholder, withholding does not apply to the distribution under
this statute. Rather, Vornado must effect the 35% withholding from distributions
made on and after the date of the designation, until the distributions so
withheld equal the amount of the prior distribution designated as a capital gain
dividend. The non-U.S. shareholder may credit the amount withheld against its
U.S. tax liability.

         SALES OF SHARES. Gain recognized by a non-U.S. shareholder upon a sale
or exchange of common shares generally will not be taxed under the Foreign
Investment in Real Property Tax Act if Vornado is a "domestically controlled
REIT", defined generally as a REIT, less than 50% in value of whose stock is and
was held directly or indirectly by foreign persons at all times during a
specified testing period. Vornado believes that it is and will continue to be a
domestically controlled REIT, and, therefore, that taxation under this statute
generally will not apply to the sale of Vornado shares. However, gain to which
this statute does not apply will be taxable to a non-U.S. shareholder if
investment in the shares is treated as effectively connected with the non-U.S.
shareholder's U.S. trade or business. In this case, the same treatment will
apply to the non-U.S. shareholder as to U.S. shareholders with respect to the
gain. In addition, gain to which the Foreign Investment in Real Property Tax Act
does not apply will be taxable to a non-U.S. shareholder if the non-U.S.
shareholder is a nonresident alien individual who was present in the United
States for 183 days or more during the taxable year and has a "tax home" in the
United States, or maintains an office or a fixed place of business in the United
States to which the gain is attributable. In this case, a 30% tax will apply to
the nonresident alien individual's capital gains. A similar rule will apply to
capital gain dividends to which this statute does not apply.

         If Vornado were not a domestically-controlled REIT, tax under the
Foreign Investment in Real Property Tax Act would apply to a non-U.S.
shareholder's sale of shares only if the selling non-U.S. shareholder owned more
than 5% of the class of shares sold at any time during a specified period. This
period is generally the shorter of the period that the non-U.S. shareholder
owned the shares sold or the five-year period ending on the date when the
shareholder disposed of the shares. If tax under this statute applies to the
gain on the sale of shares, the same treatment would apply to the non-U.S.
shareholder as to U.S. shareholders with respect to the gain, subject to any
applicable alternative minimum tax and a special alternative minimum tax in the
case of nonresident alien individuals.

         TREATY BENEFITS. Under current Treasury regulations, dividends paid to
an address in a country outside the United States are generally presumed to be
paid to a resident of that country for purposes of determining whether the
withholding discussed above applies and whether a tax treaty rate applies.
Shareholders that are partnerships or entities that are similarly fiscally
transparent for Federal income tax purposes, and persons holding shares

                                      -87-

through such entities, may not be able to claim benefits under U.S. tax
treaties. Shareholders of these kinds should consult a tax advisor.

         Under recently issued Treasury regulations that are effective for
payments made after December 31, 2000, however, a non-U.S. shareholder who
wishes to claim the benefit of an applicable treaty rate would be required to
satisfy applicable certification requirements. In addition, under these
regulations, in the case of shares held by a foreign partnership, (x) the
certification requirement would generally apply to the partners in the
partnership and (y) the partnership would be required to provide certain
information, including a United States taxpayer identification number. These
regulations provide look-through rules in the case of tiered partnerships.

OTHER TAX CONSEQUENCES

         State or local taxation may apply to Vornado and its shareholders in
various state or local jurisdictions, including those in which it or they
transact business or reside. The state and local tax treatment of Vornado and
its shareholders may not conform to the Federal income tax consequences
discussed above. Consequently, prospective shareholders should consult their own
tax advisors regarding the effect of state and local tax laws on an investment
in Vornado.

                                      -88-

                              PLAN OF DISTRIBUTION

         This prospectus relates to the possible issuance by Vornado of up to
483,347 shares, if, and to the extent that, Vornado elects to issue common
shares to holders of up to 483,347 units, upon the tender of the units for
redemption.

         Vornado will not receive any cash proceeds from the issuance of the
common shares to holders of units upon receiving a notice of redemption. Vornado
will acquire one unit from a redeeming partner, in exchange for each common
share that Vornado issues. Consequently, with each redemption, Vornado's
interest in the operating partnership will increase.

         All costs, expenses and fees in connection with the registration of the
common shares will be borne by Vornado.

                                     EXPERTS

         The consolidated financial statements and the related consolidated
financial statement schedules incorporated in this prospectus by reference from
Vornado's Annual Report on Form 10-K for the year ended December 31, 1998, and
the statement of revenues and certain expenses of 888 7th Avenue for the year
ended December 31, 1997 incorporated in this prospectus by reference from
Vornado's Current Report on Form 8-K/A, dated August 12, 1998 and filed with the
SEC on February 24, 1999, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports, which are incorporated herein
by reference, and have been so incorporated in reliance upon the reports of
such firm given upon their authority as experts in accounting and auditing.

         The statement of revenues and certain expenses of 689 Fifth Avenue for
the year ended December 31, 1997, incorporated in this prospectus by reference
from Vornado's Current Report on Form 8-K, dated August 12, 1998 and filed with
the SEC on February 12, 1999, has been audited by Friedman Alpren & Green LLP,
independent auditors, as stated in their report which is incorporated by
reference, and has been so incorporated in reliance upon the report of that firm
given upon their authority as experts in accounting and auditing.

         The statement of income and expense of certain properties of Market
Square Limited Partnership for the year ended December 31, 1997, incorporated
in this prospectus by reference from Vornado's Current Report on Form 8-K, dated
August 12, 1998 and filed with the SEC on February 12, 1999, has been audited by
Sharrard, McGee & Co. P.A., independent certified public accountants, as stated
in their report which is incorporated by reference, and has been so incorporated
in reliance upon the report of that firm given upon their authority as experts
in accounting and auditing.

         The consolidated balance sheets of Mendik Real Estate Limited
Partnership and consolidated venture as of December 31, 1997 and 1996, and the
related consolidated

                                      -89-

statements of operations, partners' capital (deficit), and cash flows for each
of the years in the three-year period ended December 31, 1997, incorporated in
this prospectus by reference from Vornado's Current Report on Form 8-K, dated
August 12, 1998 and filed with the SEC on February 12, 1999, have been audited
by KPMG LLP, independent auditors, as stated in their report, which is
incorporated in this prospectus by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.

                          VALIDITY OF THE COMMON SHARES

         The validity of the common shares issued under this prospectus will be
passed upon for Vornado by Ballard Spahr Andrews & Ingersoll, LLP, Baltimore,
Maryland, Maryland counsel to Vornado.

                                      -90-

                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.  Other Expenses of Issuance and Distribution.

         The estimated expenses in connection with the issuance and distribution
of the securities being registered, other than Underwriting Compensation, are as
follows:

                                                                           
SEC registration fee                                                           $  4,078
Printing and engraving expenses                                                $ 50,000
Legal fees and disbursements                                                   $100,000
Accounting fees and disbursements                                              $ 50,000
Transfer Agent's and Depositary's fees and disbursements                       $ 25,000
Blue Sky fees and expenses                                                     $ 15,000
Miscellaneous (including listing fees)                                         $ 25,000
                                                                              ---------
      Total                                                                    $269,078

ITEM 15. Indemnification of Trustees and Officers.

         Title 8 of the Corporations and Associations Article of the Annotated
Code of Maryland, as amended ("Title 8"), permits a Maryland real estate
investment trust to include in its declaration of trust a provision limiting the
liability of its trustees and officers to the trust and its shareholders for
money damages except for liability resulting from (i) actual receipt of an
improper benefit or profit in money, property or services or (ii) active and
deliberate dishonesty established by a final judgment as being material to the
cause of action. Vornado's Declaration of Trust includes such a provision
eliminating such liability to the maximum extent permitted by Title 8.

         Vornado's Declaration of Trust authorizes it to indemnify, and to pay
or reimburse reasonable expenses to, as such expenses are incurred by, each
trustee or officer (including any person who, while a trustee of Vornado, is or
was serving at the request of Vornado as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation, partnership, joint
venture, trust, other enterprise or employee benefit plan) from all claims and
liabilities to which such person may become subject by reason of his being or
having been a trustee, officer, employee or agent.

         Vornado's Bylaws require it to indemnify (a) any trustee or officer or
any former trustee or officer (including and without limitation, any individual
who, while a trustee or officer and at the request of Vornado, serves or has
served another corporation, partnership, joint venture, trust, employee benefit
plan or any other enterprise as a director, officer, partner or trustee of such
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) who has been successful, on the merits or otherwise, in the defense
of a proceeding to which he was made a party by reason of such status, against
reasonable expenses incurred by him

                                      II-1

in connection with the proceeding and (b) any present or former trustee or
officer against any claim or liability to which he may become subject by reason
of such status unless it is established that (i) his act or omission was
material to the matter giving rise to the proceeding and was committed in bad
faith or was the result of active and deliberate dishonesty, (ii) he actually
received an improper personal benefit in money, property or services or (iii) in
the case of a criminal proceeding, he had reasonable cause to believe that his
act or omission was unlawful. In addition, Vornado's Bylaws require it to pay or
reimburse, in advance of final disposition of a proceeding, reasonable expenses
incurred by a present or former trustee or officer made a party to a proceeding
by reason of such status upon Vornado's receipt of (i) a written affirmation by
the trustee or officer of his good faith belief that he has met the applicable
standard of conduct necessary for indemnification by Vornado and (ii) a written
undertaking by him or on his behalf to repay the amount paid or reimbursed by
Vornado if it shall ultimately be determined that the applicable standard of
conduct was not met. Vornado's Bylaws also (i) permit Vornado to provide
indemnification and payment or reimbursement of expenses to a present or former
trustee or officer who served a predecessor of Vornado in such capacity and to
any employee or agent of Vornado or a predecessor of Vornado, (ii) provide that
any indemnification or payment or reimbursement of the expenses permitted by the
Bylaws shall be furnished in accordance with the procedures provided for
indemnification or payment or reimbursement of expenses, as the case may be,
under Section 2-418 of the Maryland General Corporation Law (the "MGCL") for
directors of Maryland corporations and (iii) permit Vornado to provide such
other and further indemnification or payment or reimbursement of expenses as may
be permitted by the MGCL, as in effect from time to time, for directors of
Maryland corporations.

         Title 8 permits a Maryland real estate investment trust to indemnify
and advance expenses to its trustees, officers, employees and agents to the same
extent as permitted by the MGCL for directors and officers of Maryland
corporations. The MGCL permits a corporation to indemnify its present and former
directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with
any proceeding to which they may be made a party by reason of their service in
those or other capacities unless it is established that (a) the act or omission
of the director or officer was material to the matter giving rise to the
proceeding and (i) was committed in bad faith or (ii) was the result of active
and deliberate dishonesty, (b) the director or officer actually received an
improper personal benefit in money, property or services or (c) in the case of
any criminal proceeding, the director or officer had reasonable cause to believe
that the act or omission was unlawful. However, under the MGCL, a Maryland
corporation may not indemnify for an adverse judgment in a suit by or in the
right of the corporation or for a judgment of liability on the basis that
personal benefit was improperly received, unless in either case a court orders
indemnification and then only for expenses. In addition, the MGCL permits a
corporation to advance reasonable expenses to a director or officer upon the
corporation's receipt of (a) a written affirmation by the director or officer of
his good faith belief that he has met the standard of conduct necessary for
indemnification by the corporation and (b) a written undertaking by him or on
his behalf to repay the amount paid or reimbursed by the corporation if it shall
ultimately be determined that the standard of conduct was not met.

                                      II-2

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to trustees, officers and controlling persons of Vornado
pursuant to the foregoing provisions or otherwise, Vornado has been advised
that, although the validity and scope of the governing statute has not been
tested in court, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In addition, indemnification may be limited by
state securities laws.

         The Second Amended and Restated Agreement of Limited Partnership, dated
as of October 20, 1997, as amended (the "Partnership Agreement"), of the
Operating partnership provides, generally, for the indemnification of an
"Indemnitee" against losses, claims, damages, liabilities, expenses (including,
without limitation, attorneys' fees and other legal fees and expenses),
judgments, fines, settlements and other amounts that relate to the operations of
the Operating partnership unless it is established that (i) the act or omission
of the Indemnitee was material and either was committed in bad faith or pursuant
to active and deliberate dishonesty, (ii) the Indemnitee actually received an
improper personal benefit in money, property or services or (iii) in the case of
any criminal proceeding, the Indemnitee had reasonable cause to believe that the
act or omission was unlawful. For this purpose, the term "Indemnitee" includes
(i) any person made a party to a proceeding by reason of its status as (A) the
general partner of the Operating partnership, (B) a limited partner of the
Operating partnership or (C) an officer of the Operating partnership or a
trustee, officer or shareholder of Vornado and (ii) such other persons
(including affiliates of Vornado or the Operating partnership) as Vornado may
designate from time to time in its discretion. Any such indemnification will be
made only out of assets of the Operating partnership, and in no event may an
Indemnitee subject the limited partners of the Operating partnership to personal
liability by reason of the indemnification provisions in the Partnership
Agreement.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to officers, trustees or controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the Operating
partnership has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy and, therefore,
unenforceable. The Operating partnership has purchased liability insurance for
the purpose of providing a source of funds to pay the indemnification described
above.

         Pursuant to the registration rights agreements between Vornado and the
holders of units redeemable for the shares registered hereunder, Vornado agrees
to indemnify each Unit holder named therein and each person, if any, who
controls such holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (and the officers, directors, shareholders,
partners, employees, agents and representatives of certain of the foregoing
persons) (i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which the Redemption Shares
were registered under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to

                                      II-3

make the statements therein not misleading or arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; (ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of Vornado;
and (iii) against any and all expenses whatsoever, as incurred, reasonably
incurred in investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, in each case whether or not a party, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue statement
or omission; provided, however, that such indemnity does not apply to any Unit
holder with respect to any loss, liability, claim, damage or expense to the
extent arising out of (A) any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to Vornado by such Unit holder expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto), or (B) such Unit holder's failure to deliver
an amended or supplemental Prospectus if such loss, liability, claim, damage or
expense would not have arisen had such delivery occurred.

         Pursuant to the registration rights agreements between Vornado and the
holders of units redeemable for the shares registered hereunder, each of the
Unit holders named therein (and each of their permitted assignees) agrees to
indemnify Vornado, and each of its trustees/directors and officers and each
person, if any, who controls Vornado within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (i) against any and all loss,
liability, claim, damage and expense whatsoever, as incurred, arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto) pursuant to
which the Redemption Shares were registered under the Securities Act, or the
omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (ii) against any and
all loss, liability, claim, damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such settlement
is effected with the written consent of such Unit holder; and (iii) against any
and all expenses whatsoever, as incurred, reasonably incurred in investigating,
preparing or defending against any litigation, or investigation or

                                      II-4

proceeding by any governmental agency or body, commenced or threatened, in each
case whether or not a party, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission;
provided, however, that such indemnity shall only apply with respect to any
loss, liability, claim, damage or expense to the extent arising out of (A) any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to Vornado by
such Unit holder expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto),
or (with respect to certain of such indemnified Unit holders) (B) such Unit
holder's failure to deliver an amended or supplemental Prospectus if such loss,
liability, claim, damage or expense would not have arisen had such delivery
occurred. A Unit holder and any permitted assignee shall not be required to
indemnify Vornado, its officers/trustees, directors or control persons with
respect to any amount in excess of the amount of the total proceeds to such Unit
holder or permitted assignee, as the case may be, from sales of the Redemption
Shares of such Unit holder under the Registration Statement, and no Unit holder
shall be liable under the indemnification provision for any statements or
omissions of any other Unit holder.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to officers/trustees, directors or controlling
persons of the registrant pursuant to the foregoing provisions or otherwise, the
Company has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy and, therefore,
unenforceable. The Company has purchased liability insurance for the purpose of
providing a source of funds to pay the indemnification described above.

                                      II-5

ITEM 16.  Exhibits.

        Exhibit No.                                  EXHIBIT
        -----------                                  -------
                          
            3.1              Amended and Restated Declaration of Trust of
                             Vornado Realty Trust, as amended on April 3, 1997
                             (incorporated by reference to Exhibit 3.1 of
                             Vornado's Registration Statement on Form S-8 (File
                             No. 333-29011), filed on July 12, 1997)

            3.2              Articles of Amendment of Declaration of Trust of
                             Vornado Realty Trust, as filed with the State
                             Department of Assessments and Taxation of Maryland
                             on April 22, 1998 (incorporated by reference to
                             Exhibit 3.1 of Vornado's Current Report on Form 8-K
                             dated April 22, 1998 (File No. 1-11954), filed on
                             April 28, 1998)

            3.3              Articles Supplementary to Declaration of Trust of
                             Vornado Realty Trust with respect to the Series D-1
                             Preferred Shares, dated November 12, 1998, as filed
                             with the State Department of Assessments and
                             Taxation of Maryland on November 25, 1998
                             (incorporated by reference to Exhibit 3.1 of
                             Vornado's Current Report on Form 8-K dated November
                             12, 1998 (File No. 1-11954), filed on November 30,
                             1998)

            3.4              Articles Supplementary to Declaration of Trust of
                             Vornado Realty Trust with respect to the Series D-1
                             Preferred Shares, dated December 22, 1998, as filed
                             with the State Department of Assessments and
                             Taxation of Maryland on January 12, 1999
                             (incorporated by reference to Exhibit 3.2 of
                             Vornado's Current Report on Form 8-K/A, dated
                             November 12, 1998 (File No. 1-11954), filed on
                             February 9, 1999)

            3.5              Articles Supplementary to Declaration of Trust of
                             Vornado Realty Trust with respect to the Series D-2
                             Preferred Shares, dated as of May 27, 1999, as
                             filed with the State Department of Assessments and
                             Taxation of Maryland on May 27, 1999 (incorporated
                             by reference to Exhibit 3.1 of Vornado's Current
                             Report on Form 8-K, dated May 27, 1999 (File No.
                             1-11954), filed July 7, 1999)

            3.6              Articles Supplementary to Declaration of Trust of
                             Vornado Realty Trust with respect to the Series D-3
                             Preferred Shares, dated September 3, 1999
                             (incorporated by reference to Exhibit 3.1 of
                             Vornado's Current Report on Form 8-K, dated
                             September 3 (File No. 1-11954), filed on October
                             25, 1999)

                                       II-6

        Exhibit No.                             EXHIBIT
        -----------                             -------
                          
            3.7              Articles Supplementary to Declaration of Trust of
                             Vornado Realty Trust with respect to the Series D-4
                             Preferred Shares, dated September 3, 1999
                             (incorporated by reference to Exhibit 3.2 of
                             Vornado's Current Report on Form 8-K, dated
                             September 3 (File No. 1-11954), filed on October
                             25, 1999)

            3.8              Articles Supplementary to Declaration of Trust of
                             Vornado Realty with respect to the Series B
                             Cumulative Redeemable Shares of Beneficial Interest
                             (incorporated by reference to Exhibit 3.3 of
                             Vornado's Current Report on Form 8-K, dated March
                             3, 1999 (File No. 1-11954), filed on March 17,
                             1999)

            3.9              Articles Supplementary to Declaration of Trust of
                             Vornado Realty Trust with respect to the Series C
                             Preferred Shares (incorporated by reference to
                             Exhibit 3.7 of Vornado's Registration Statement on
                             Form 8-A (File No. 1-11954), filed on May 19, 1999)

            3.10             By-laws of Vornado, as amended on April 28, 1997
                             (incorporated by reference to Exhibit 3(b) of
                             Vornado's Quarterly Report on Form 10-Q for the
                             period ended March 31, 1997 (File No. 1-11954),
                             filed on May 14, 1997)

            3.11             Second Amended and Restated Agreement of Limited
                             Partnership of the Operating partnership, dated as
                             of October 20, 1997 (the "Partnership Agreement")
                             (incorporated by reference to Exhibit 3.4 of
                             Vornado's Annual Report on Form 10-K for the year
                             ended December 31, 1997 (File No. 1-11954), filed
                             on March 31, 1998)

            3.12             Amendment, dated as of December 16, 1997, to the
                             Partnership Agreement (incorporated by reference
                             to Exhibit 3.5 of Vornado's Annual Report on
                             Form 10-K for the year ended December 31, 1997
                             (File No. 1-11954), filed on March 31, 1998)

            3.13             Second Amendment, dated as of April 1, 1998, to the
                             Partnership Agreement (incorporated by reference to
                             Exhibit 3.5 of Vornado's Registration Statement on
                             Form S-3 (File No. 333-50095), filed on April 14,
                             1998)

            3.14             Third Amendment, dated as of November 12, 1998, to
                             the Partnership Agreement (incorporated by
                             reference to Exhibit 3.2 of Vornado's Current
                             Report on Form 8-K, dated November 12, 1998 (File
                             No. 1-11954), filed on November 30, 1998)

                                       II-7

        Exhibit No.                                EXHIBIT
        -----------                                -------
                          
            3.15             Fourth Amendment to the Partnership Agreement,
                             dated as of November 30, 1998 (incorporated by
                             reference to Exhibit 3.1 of Vornado's Current
                             Report on Form 8-K, dated December 1, 1998 (File
                             No. 1-11954), filed on February 9, 1999)

            3.16             Exhibit A to the Partnership Agreement, dated as of
                             December 22, 1998 (incorporated by reference to
                             Exhibit 3.4 of Vornado's Current Report on Form
                             8-K/A, dated November 12, 1998 (File No. 1-11954),
                             filed on February 9, 1999)

            3.17             Fifth Amendment to the Partnership Agreement, dated
                             as of March 3, 1999 (incorporated by reference to
                             Exhibit 3.1 of Vornado's Current Report on Form
                             8-K, dated March 3, 1999 (File No. 1-11954), filed
                             on March 17, 1999)

            3.18             Sixth Amendment to the Partnership Agreement, dated
                             as of March 17, 1999 (incorporated by reference to
                             Exhibit 3.2 of Vornado's Current Report on Form
                             8-K, dated May 27, 1999 (File No. 1-11954), filed
                             on July 7, 1999)

            3.19             Seventh Amendment to the Partnership Agreement,
                             dated as of May 20, 1999 (incorporated by reference
                             to Exhibit 3.3 of Vornado's Current Report on Form
                             8-K, dated May 27, 1999 (File No. 1-11954), filed
                             on July 7, 1999)

            3.20             Eighth Amendment to the Partnership Agreement,
                             dated as of May 27, 1999 (incorporated by reference
                             to Exhibit 3.4 of Vornado's Current Report on Form
                             8-K, dated May 27, 1999 (File No. 1-11954), filed
                             on July 7, 1999)

            3.21             Ninth Amendment to the Partnership Agreement, dated
                             as of September 3, 1999 (incorporated by reference
                             to Exhibit 3.4 of Vornado's Current Report on Form
                             8-K, dated September 3 (File No. 1-11954), filed on
                             October 25, 1999)

            3.22             Tenth Amendment to the Partnership Agreement, dated
                             as of September 3, 1999 (incorporated by reference
                             to Exhibit 3.5 of Vornado's Current Report on Form
                             8-K, dated September 3 (File No. 1-11954), filed
                             on October 25, 1999)

            4.1              Instruments defining the rights of security holders
                             (see Exhibits 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7,
                             3.8, 3.9 and 3.10 of this registration statement)

                                       II-8

        Exhibit No.                                EXHIBIT
        -----------                                -------
                          
            4.2              Specimen share certificate evidencing Vornado's
                             Series B Cumulative Redeemable Shares of Beneficial
                             Interest (incorporated by reference to Exhibit 4.2
                             of Vornado's Registration Statement on Form 8-A
                             (File No. 1-11954, filed on March 15, 1999)

            4.3              Specimen certificate evidencing Vornado's common
                             shares of beneficial interest, par value $.04 per
                             share (incorporated by reference to Exhibit 4.1 of
                             Amendment No. 1 to Vornado's Registration Statement
                             on Form S-3 (File No. 33-62395), filed on October
                             26, 1995)

            4.4              Specimen certificate evidencing Vornado's $3.25
                             Series A Preferred Shares of Beneficial Interest,
                             liquidation preference $50.00 per share
                             (incorporated by reference to Exhibit 4.2 of
                             Vornado's Current Report on Form 8-K, dated April
                             3, 1997 (File No. 1-11954), filed on April 8, 1998)

            4.5              Specimen certificate evidencing Vornado's 8.5%
                             Series C Cumulative Redeemable Preferred Shares of
                             Beneficial Interest, liquidation preference $25.00
                             per share, no par value (incorporated by reference
                             to Exhibit 4.2 of Vornado's Registration Statement
                             on Form 8-A (File No. 1-11954), filed on May 19,
                             1999)

             5               Opinion of Ballard Spahr Andrews & Ingersoll, LLP

            8.1              Tax opinion of Sullivan & Cromwell

            8.2              Tax opinion of Shearman & Sterling

           10.1              Registration Rights Agreement, dated as of August
                             5, 1998, between Vornado and the Unit Holders named
                             therein

           10.2              Registration Rights Agreement, dated as of July 23,
                             1998, between Vornado and the Unit Holders named
                             therein.

            23.1             Consent of Ballard Spahr Andrews & Ingersoll, LLP
                             (included in its opinion filed as Exhibit 5)

            23.2             Consent of Sullivan & Cromwell (included in its
                             opinion filed as Exhibit 8.1)

            23.3             Consent of Shearman & Sterling (included in its
                             opinion filed as Exhibit 8.2)

            23.4             Consent of Deloitte & Touche LLP

            23.5             Consent of Friedman Alpren & Green LLP

            23.6             Consent of Sharrard, McGee & Co., P.A.

            23.7             Consent of KPMG LLP

                                       II-9

        Exhibit No.                              EXHIBIT
        -----------                              -------
                          
            24               Powers of Attorney (included on pages II-11 to II-12)

Item 17.  Undertakings.

         (a) The undersigned registrant hereby undertakes:

                  (1) To file, during any period in which offers or sales are
         being made, a post-effective amendment to this registration statement;

                           (i) To include any prospectus required by Section
                  10(a)(3) of the Securities Act of 1933;

                           (ii) To reflect in the prospectus any facts or events
                  arising after the effective date of the registration statement
                  (or the most recent post-effective amendment thereof) which,
                  individually or in the aggregate, represent a fundamental
                  change in the information set forth in the registration
                  statement. Notwithstanding the foregoing, any increase or
                  decrease in volume of securities offered (if the total dollar
                  value of securities offered would not exceed that which was
                  registered) and any deviation from the low or high end of the
                  estimated maximum offering range may be reflected in the form
                  of prospectus filed with the Commission pursuant to Rule
                  424(b) if, in the aggregate, the changes in volume and price
                  represent no more than a 20 percent change in the maximum
                  aggregate offering price set forth in the "Calculation of
                  Registration Fee" table in the effective registration
                  statement.

                           (iii) To include any material information with
                  respect to the plan of distribution not previously disclosed
                  in the registration statement or any material change to such
                  information in the registration statement;

         provided, however, that paragraphs (1) (i) and (1) (ii) do not apply if
         the information required to be included in a post-effective amendment
         by those paragraphs is contained in periodic reports filed with or
         furnished to the Commission by the registrant pursuant to Section 13 or
         Section 5(d) of the Securities Exchange Act of 1934 that are
         incorporated by reference in the registration statement.

                  (2) That, for the purpose of determining any liability under
         the Securities Act of 1933, each such posteffective amendment shall be
         deemed to be a new registration statement relating to the securities
         offered therein, and the offering of such securities at that time shall
         be deemed to be the initial bona fide offering thereof.

                                      II-10

                  (3) To remove from registration by means of a post-effective
         amendment any of the securities being registered which remain unsold at
         the termination of the offering.

         (b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

         (c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise
(other than insurance), the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than insurance
payments and the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrants in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

                                      II-11

                        SIGNATURES AND POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Steven Roth, Michael D. Fascitelli,
Joseph Macnow and Irwin Goldberg, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capabilities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

         Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

                                       VORNADO REALTY TRUST,
                                       a Maryland real estate investment trust

                                       By: /s/ Steven Roth
                                           -------------------------------------
                                           Chairman of the Board of
                                           Trustees
                                           (Principal Executive Officer)

                SIGNATURE                                      TITLE                               DATE
                ---------                                      -----                               ----

/s/ Steven Roth                             Chairman of the Board of Trustees
- ----------------------------------------    (Principal Executive Officer)                  October 25, 1999
Steven Roth

/s/ Michael D. Fascitelli                   President and Trustee                          October 25, 1999
- ----------------------------------------
Michael D. Fascitelli

/s/ Irwin Goldberg                          Vice President--Chief Financial                October 25, 1999
- ----------------------------------------    Officer (Principal Financial and
Irwin Goldberg                              Accounting Officer)

/s/ David Mandelbaum                        Trustee                                        October 25, 1999
- ----------------------------------------
David Mandelbaum

/s/ Stanley Simon                           Trustee                                        October 25, 1999
- ----------------------------------------
Stanley Simon

/s/ Ronald Targan                           Trustee                                        October 25, 1999
- ----------------------------------------
Ronald Targan

/s/ Richard West                            Trustee                                        October 25, 1999
- -----------------------------------------
Richard West

/s/ Russell Wight, Jr.                      Trustee                                        October 25, 1999
- ------------------------------------------
Russell Wight, Jr.

                                      II-12

                                  EXHIBIT INDEX

       EXHIBIT NO.                                   EXHIBIT
       -----------                                   -------
                        
           3.1             Amended and Restated Declaration of Trust of Vornado
                           Realty Trust, as amended on April 3, 1997
                           (incorporated by reference to Exhibit 3.1 of
                           Vornado's Registration Statement on Form S-8 (File
                           No. 333-29011), filed on July 12, 1997)

           3.2             Articles of Amendment of Declaration of Trust of
                           Vornado Realty Trust, as filed with the State
                           Department of Assessments and Taxation of Maryland on
                           April 22, 1998 (incorporated by reference to Exhibit
                           3.1 of Vornado's Current Report on Form 8-K dated
                           April 22, 1998 (File No. 1-11954), filed on April 28,
                           1998)

           3.3             Articles Supplementary to Declaration of Trust of
                           Vornado Realty Trust with respect to the Series D-1
                           Preferred Shares, dated November 12, 1998, as filed
                           with the State Department of Assessments and Taxation
                           of Maryland on November 25, 1998 (incorporated by
                           reference to Exhibit 3.1 of Vornado's Current Report
                           on Form 8-K dated November 12, 1998 (File No.
                           1-11954), filed on November 30, 1998)

           3.4             Articles Supplementary to Declaration of Trust of
                           Vornado Realty Trust with respect to the Series D-1
                           Preferred Shares, dated December 22, 1998, as filed
                           with the State Department of Assessments and Taxation
                           of Maryland on January 12, 1999 (incorporated by
                           reference to Exhibit 3.2 of Vornado's Current Report
                           on Form 8-K/A, dated November 12, 1998 (File No.
                           1-11954), filed on February 9, 1999)

           3.5             Articles Supplementary to Declaration of Trust of
                           Vornado Realty Trust with respect to the Series D-2
                           Preferred Shares, dated as of May 27, 1999, as filed
                           with the State Department of Assessments and Taxation
                           of Maryland on May 27, 1999 (incorporated by
                           reference to Exhibit 3.1 of Vornado's Current Report
                           on Form 8-K, dated May 27, 1999 (File No. 1-11954),
                           filed July 7, 1999)

           3.6             Articles Supplementary to Declaration of Trust of
                           Vornado Realty Trust with respect to the Series D-3
                           Preferred Shares, dated September 3, 1999
                           (incorporated by reference to Exhibit 3.1 of
                           Vornado's Current Report on Form 8-K, dated September
                           3 (File No. 1-11954), filed on October 25, 1999)

                                      II-13

       EXHIBIT NO.                                 EXHIBIT
       -----------                                 -------
                        
           3.7             Articles Supplementary to Declaration of Trust of
                           Vornado Realty Trust with respect to the Series D-4
                           Preferred Shares, dated September 3, 1999
                           (incorporated by reference to Exhibit 3.2 of
                           Vornado's Current Report on Form 8-K, dated September
                           3 (File No. 1-11954), filed on October 25, 1999)

           3.8             Articles Supplementary to Declaration of Trust of
                           Vornado Realty with respect to the Series B
                           Cumulative Redeemable Shares of Beneficial Interest
                           (incorporated by reference to Exhibit 3.3 of
                           Vornado's Current Report on Form 8-K, dated March 3,
                           1999 (File No. 1-11954), filed on March 17, 1999)

           3.9             Articles Supplementary to Declaration of Trust of
                           Vornado Realty Trust with respect to the Series C
                           Preferred Shares (incorporated by reference to
                           Exhibit 3.7 of Vornado's Registration Statement on
                           Form 8-A (File No. 1-11954), filed on May 19, 1999)

          3.10             By-laws of Vornado, as amended on April 28, 1997
                           (incorporated by reference to Exhibit 3(b) of
                           Vornado's Quarterly Report on Form 10-Q for the
                           period ended March 31, 1997 (File No. 1-11954), filed
                           on May 14, 1997)

          3.11             Second Amended and Restated Agreement of Limited
                           Partnership of the Operating partnership, dated as of
                           October 20, 1997 (the "Partnership Agreement")
                           (incorporated by reference to Exhibit 3.4 of
                           Vornado's Annual Report on Form 10-K for the year
                           ended December 31, 1997 (File No. 1-11954), filed on
                           March 31, 1998)

          3.12             Amendment, dated as of December 16, 1997, to the
                           Partnership Agreement (incorporated by reference to
                           Exhibit 3.5 of Vornado's Annual Report on Form 10-K
                           for the year ended December 31, 1997 (File No.
                           1-11954), filed on March 31, 1998)

          3.13             Second Amendment, dated as of April 1, 1998, to the
                           Partnership Agreement (incorporated by reference to
                           Exhibit 3.5 of Vornado's Registration Statement on
                           Form S-3 (File No. 333-50095), filed on April 14,
                           1998)

          3.14             Third Amendment, dated as of November 12, 1998, to
                           the Partnership Agreement (incorporated by reference
                           to Exhibit 3.2 of Vornado's Current Report
                           on Form 8-K, dated November 12, 1998 (File No.
                           1-11954), filed on November 30, 1998)

                                      II-14

       EXHIBIT NO.                             EXHIBIT
       -----------                             -------

          3.15             Fourth Amendment to the Partnership Agreement, dated
                           as of November 30, 1998 (incorporated by reference to
                           Exhibit 3.1 of Vornado's Current Report on Form 8-K,
                           dated December 1, 1998 (File No. 1-11954), filed on
                           February 9, 1999)

          3.16             Exhibit A to the Partnership Agreement, dated as of
                           December 22, 1998 (incorporated by reference to
                           Exhibit 3.4 of Vornado's Current Report on Form
                           8-K/A, dated November 12, 1998 (File No. 1-11954),
                           filed on February 9, 1999)

          3.17             Fifth Amendment to the Partnership Agreement, dated
                           as of March 3, 1999 (incorporated by reference to
                           Exhibit 3.1 of Vornado's Current Report on Form 8-K,
                           dated March 3, 1999 (File No. 1-11954), filed on
                           March 17, 1999)

          3.18             Sixth Amendment to the Partnership Agreement, dated
                           as of March 17, 1999 (incorporated by reference to
                           Exhibit 3.2 of Vornado's Current Report on Form 8-K,
                           dated May 27, 1999 (File No. 1-11954), filed on July
                           7, 1999)

          3.19             Seventh Amendment to the Partnership Agreement, dated
                           as of May 20, 1999 (incorporated by reference to
                           Exhibit 3.3 of Vornado's Current Report on Form 8-K,
                           dated May 27, 1999 (File No. 1-11954), filed on
                           July 7, 1999)

          3.20             Eighth Amendment to the Partnership Agreement, dated
                           as of May 27, 1999 (incorporated by reference to
                           Exhibit 3.4 of Vornado's Current Report on Form 8-K,
                           dated May 27, 1999 (File No. 1-11954), filed on July
                           7, 1999)

          3.21             Ninth Amendment to the Partnership Agreement, dated
                           as of September 3, 1999 (incorporated by reference to
                           Exhibit 3.4 of Vornado's Current Report on Form 8-K,
                           dated September 3 (File No. 1-11954), filed on
                           October 25, 1999)

          3.22             Tenth Amendment the Partnership Agreement, dated as
                           of September 3, 1999 (incorporated by reference to
                           Exhibit 3.5 of Vornado's Current Report on Form 8-K,
                           dated September 3 (File No. 1-11954), filed on
                           October 25, 1999)

          4.1              Instruments defining the rights of security holders
                           (see Exhibits 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8,
                           3.9 and 3.10 of this registration statement)

          4.2              Specimen share certificate evidencing Vornado's
                           Series B Cumulative Redeemable Shares of Beneficial
                           Interest (incorporated by reference to Exhibit 4.2 of
                           Vornado's Registration Statement on Form 8-A (File
                           No. 1-11954, filed on March 15, 1999)

                                      II-15

       EXHIBIT NO.                                   EXHIBIT
       -----------                                   -------
                         
          4.3              Specimen certificate evidencing Vornado's common
                           shares of beneficial interest, par value $.04 per
                           share (incorporated by reference to Exhibit 4.1 of
                           Amendment No. 1 to Vornado's Registration Statement
                           on Form S-3 (File No. 33-62395), filed on October 26,
                           1995)

          4.4              Specimen certificate evidencing Vornado's $3.25
                           Series A Preferred Shares of Beneficial Interest,
                           liquidation preference $50.00 per share (incorporated
                           by reference to Exhibit 4.2 of Vornado's Current
                           Report on Form 8-K, dated April 3, 1997 (File No.
                           1-11954), filed on April 8, 1998)

          4.5              Specimen certificate evidencing Vornado's 8.5% Series
                           C Cumulative Redeemable Preferred Shares of
                           Beneficial Interest, liquidation preference $25.00
                           per share, no par value (incorporated by reference to
                           Exhibit 4.2 of Vornado's Registration Statement on
                           Form 8-A (File No. 1-11954), filed on May 19, 1999)

           5               Opinion of Ballard Spahr Andrews & Ingersoll, LLP

          8.1              Tax opinion of Sullivan & Cromwell

          8.2              Tax opinion of Shearman & Sterling

         10.1              Registration Rights Agreement, dated as of August 5,
                           1998, between Vornado and the Unit Holders named
                           therein

         10.2              Registration Rights Agreement, dated as of July 23,
                           1998, between Vornado and the Unit Holders named
                           therein.

         23.1              Consent of Ballard Spahr Andrews & Ingersoll, LLP
                           (included in its opinion filed as Exhibit 5)

         23.2              Consent of Sullivan & Cromwell (included in its
                           opinion filed as Exhibit 8.1)

         23.3              Consent of Shearman & Sterling (included in its
                           opinion filed as Exhibit 8.2)

         23.4              Consent of Deloitte & Touche LLP

         23.5              Consent of Friedman Alpren & Green LLP

         23.6              Consent of Sharrard, McGee & Co., P.A.

         23.7              Consent of KPMG LLP

          24               Powers of Attorney (included on pages II-11 to II-12)

                                      II-16

                          STATEMENT OF DIFFERENCES
                          ------------------------

The section symbol shall be expressed as ............................. 'SS'

                                                                       Exhibit 5

                                                                     FILE NUMBER
                                                                          875536

                                October 22, 1999

Vornado Realty Trust
Park 80 West, Plaza II
Saddle Brook, New Jersey 07663

                     Re: Registration Statement on Form S-3
                         ----------------------------------

Ladies and Gentlemen:

                  We have served as Maryland counsel to Vornado Realty Trust, a
Maryland real estate investment trust (the "Company"), in connection with
certain matters of Maryland law arising out of the registration of 483,347
common shares of beneficial interest, $.04 par value per share, of the Company
(the "Shares") covered by the Registration Statement filed with the Securities
and Exchange Commission (the "Commission"), pursuant to the Securities Act of
1933, as amended (the "1933 Act"), and the related form of prospectus included
therein, in the form in which it was transmitted by the Company to the
Commission under the 1933 Act (the "Registration Statement").

                  In connection with our representation of the Company, and as a
basis for the opinion hereinafter set forth, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of the following
documents (hereinafter collectively referred to as the "Documents"):

                  1. The Registration Statement;

                  2. The Amended and Restated Declaration of Trust of the
Company, as amended (the "Declaration of Trust"), certified as of a recent date
by the State Department of Assessments and Taxation of Maryland (the "SDAT");

                  3. The Bylaws of the Company, as amended (the "Bylaws"),
certified as of the date hereof by an officer of the Company;

Vornado Realty Trust
October 22, 1999
Page 2

                  4. Resolutions adopted by the Board of Trustees, or a duly
authorized committee thereof, of the Company relating to the issuance and
registration of the Shares (the "Resolutions"), certified as of the date hereof
by an officer of the Company;

                  5. A certificate of the SDAT as to the good standing of the
Company, dated as of a recent date;

                  6. A certificate executed by an officer of the Company, dated
as of the date hereof; and

                  7. Such other documents and matters as we have deemed
necessary or appropriate to express the opinion set forth in this letter,
subject to the assumptions, limitations and qualifications stated herein.

                  In expressing the opinion set forth below, we have assumed the
following:

                  1. Each individual executing any of the Documents, whether on
behalf of such individual or another person, is legally competent to do so.

                  2. Each individual executing any of the Documents on behalf of
a party (other than the Company) is duly authorized to do so.

                  3. Each of the parties (other than the Company) executing any
of the Documents has duly and validly executed and delivered each of the
Documents to which such party is a signatory, and such party's obligations set
forth therein are legal, valid and binding and are enforceable in accordance
with all stated terms.

                  4. All Documents submitted to us as originals are authentic.
The form and content of any Documents submitted to us as unexecuted drafts do
not differ in any respect relevant to this opinion from the form and content of
such Documents as executed and delivered. All Documents submitted to us as
certified or photostatic copies conform to the original documents. All
signatures on all such Documents are genuine. All public records reviewed or
relied upon by us or on our behalf are true and complete. All statements and
information contained in the Documents are true and complete. There has been no
oral or written modification of or amendment to any of the Documents,

Vornado Realty Trust
October 22, 1999
Page 3

and there has been no waiver of any provision of any of the Documents, by action
or omission of the parties or otherwise.

                  5. The Shares will not be issued or transferred in violation
of any restriction or limitation contained in the Declaration of Trust.

                  Based upon the foregoing, and subject to the assumptions,
limitations and qualifications stated herein, it is our opinion that:

                  1. The Company is a real estate investment trust duly formed
and existing under and by virtue of the laws of the State of Maryland and is in
good standing with the SDAT.

                  2. The Shares have been duly authorized for issuance and, when
and if issued and delivered against payment therefor in the manner described in
the Registration Statement and the Resolutions, will be (assuming that the sum
of (i) all shares of beneficial interest issued as of the date hereof, (ii) any
shares of beneficial interest issued between the date hereof and any date on
which the Shares are actually issued (not including the Shares) and (iii) the
Shares will not exceed the total number of shares of beneficial interest that
the Company is then authorized to issue) validly issued, fully paid and
nonassessable.

                  The foregoing opinion is limited to the substantive laws of
the State of Maryland and we do not express any opinion herein concerning any
other law. We express no opinion as to the applicability or effect of any
federal or state securities laws, including the securities laws of the State of
Maryland, or as to federal or state laws regarding fraudulent transfers. To the
extent that any matter as to which our opinion is expressed herein would be
governed by any jurisdiction other than the State of Maryland, we do not express
any opinion on such matter.

                  We assume no obligation to supplement this opinion if any
applicable law changes after the date hereof or if we become aware of any fact
that might change the opinion expressed herein after the date hereof.

                  This opinion is being furnished to you solely for submission
to the Commission as an exhibit to the Registration Statement and, accordingly,
may not be relied upon by, quoted in any manner to, or delivered to any other
person or entity without, in each instance, our prior written consent.

Vornado Realty Trust
October 22, 1999
Page 4

                  We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of the name of our firm therein. In
giving this consent, we do not admit that we are within the category of persons
whose consent is required by Section 7 of the 1933 Act.

                                    Very truly yours,

                                    /s/ Ballard Spahr Andrews &
                                    Ingersoll, LLP

                      [LETTERHEAD OF SULLIVAN & CROMWELL]

                                                                     EXHIBIT 8.1

                                                                October 25, 1999

Vornado Realty Trust,
   Park 80 West, Plaza II,
      Saddle Brook, New Jersey 07663.

Dear Sirs:

         We have acted as your counsel in connection with the registration on
the Registration Statement on Form S-3 under the Securities Act of 1933, as
amended (the "Securities Act"), of 483,347 shares of common stock, par value
$.04 per share, of Vornado Realty Trust ("Vornado").

                  In rendering this opinion, we have reviewed such documents as
we have considered necessary or appropriate. In addition, in rendering this
opinion, we have relied (i) as to certain factual matters upon the statements
and representations contained in the certificates provided to us by Vornado and
Two Penn Plaza REIT, Inc. ("Two Penn"), each dated October 25, 1999 (attached as
Exhibits A and B and, collectively, the "Vornado Certificates"), (ii) without
independent investigation, as to certain factual matters upon the statements and
representations contained in the certificate provided to us by Alexander's, Inc.
("Alexander's") dated October 25, 1999 (attached as Exhibit C and, together with
the Vornado Certificates, the "Certificates") and (iii) without independent
investigation,

Vornado Realty Trust                                                         -2-

upon the opinion of Shearman & Sterling, dated October 25, 1999, concerning the
qualification of Alexander's as a real estate investment trust (a "REIT") for
federal income tax purposes for each taxable year commencing with its taxable
year ending December 31, 1995 (attached as Exhibit D, the "Shearman & Sterling
Opinion"). We understand that, in providing its Certificates, Vornado is relying
upon certificates, dated October 25, 1999, provided to it by David R. Greenbaum.

                  In rendering this opinion we have also assumed, with your
approval, that (I) the statements and representations made in the Certificates
are true and correct, (II) the Certificates have been executed by appropriate
and authorized officers of Vornado, Two Penn and Alexander's and (III) the
assumptions and conditions underlying the Shearman & Sterling Opinion are true
and correct.

                  Based on the foregoing and in reliance thereon and subject
thereto and on an analysis of the Code, Treasury Regulations thereunder,
judicial authority and current administrative rulings and such other laws and
facts as we have deemed relevant and necessary, we hereby confirm our opinion
that commencing with its taxable year ending December 31, 1993, Vornado has been
organized in conformity with the requirements for qualification as a REIT under
the Code, and its proposed method of operation will enable it to satisfy the
requirements for qualification and taxation as a REIT. This opinion represents
our legal judgement, but it has no binding effect or official status of any
kind, and no assurance can be given that contrary positions may not be taken by
the Internal Revenue Service or a court.

Vornado Realty Trust                                                         -3-

                  Vornado's qualification as a REIT will depend upon the
continuing satisfaction by Vornado and, given Vornado's current ownership
interest in Alexander's and Two Penn, by each of Alexander's and Two Penn, of
the requirements of the Code relating to qualification for REIT status, which
requirements include those that are dependent upon actual operating results,
distribution levels, diversity of stock ownership, asset composition, source of
income and recordkeeping. We do not undertake to monitor whether any of Vornado,
Alexander's or Two Penn actually has satisfied or will satisfy the various REIT
qualification tests.

                  We hereby consent to the filing with the Securities and
Exchange Commission of this letter as an exhibit to the Prospectus included in
the Registration Statement on Form S-3 and the reference to us therein under the
caption "Federal Income Tax Considerations". In giving such consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act.

                                                         Very truly yours,

                                                         /s/ Sullivan & Cromwell

                              Vornado Realty Trust
                             Park 80 West, Plaza II
                         Saddle Brook, New Jersey 07663

                                                                October 25, 1999

Sullivan & Cromwell
125 Broad Street
New York, New York 10004

Ladies and Gentlemen:

         The undersigned officer of Vornado Realty Trust ("Vornado") hereby
certifies on behalf of Vornado that, after due inquiry, he has made the factual
representations set forth below and affirms as of the date hereof the accuracy
of such representations. Vornado acknowledges and understands that Sullivan &
Cromwell will be relying upon the accuracy of this certificate and these
representations in rendering an opinion regarding Vornado's qualification for
federal income tax purposes as a real estate investment trust (a "REIT"). In
providing this certificate the undersigned officer is relying upon a
certificate, dated October 25, 1999 received from David R. Greenbaum.

         1. Each of Vornado, its wholly-owned subsidiaries and Vornado Realty
L.P. have operated and will operate in accordance with (i) its organizational
document and (ii) the laws of the jurisdiction in which it is organized.

         2. Vornado is and will continue to be managed by one or more trustees.

         3. Vornado uses and will continue to use the calendar year as its
accounting period for federal income tax purposes.

         4. Vornado has made a timely election, pursuant to Section 856(c)(1) of
the Internal Revenue Code of 1986, as amended (the "Code"), to be taxed as a
REIT commencing with its taxable year ending December 31, 1993 and such election
has not been terminated or revoked.

Sullivan & Cromwell                                                          -2-

         5. As of December 31, 1993, Vornado had distributed all "earnings and
profits" (as determined for federal income tax purposes) which had been
accumulated in taxable periods prior to 1993. Vornado has had and will have, as
of the close of each taxable year subsequent to the taxable year ending December
31, 1993, no undistributed earnings and profits accumulated in any non-REIT
year.

         6. For at least 335 days of its 1993 taxable year and for each taxable
year thereafter, 100 or more persons have beneficially owned shares of
beneficial interest in Vornado ("Shares").

         7. At no time during the last half of any taxable year following its
first taxable year was more than 50 percent (as determined by reference to
value) of Vornado's outstanding Shares, owned, directly or constructively, by
five or fewer individuals (as defined in Section 542(a)(2), as modified by
Section 856(h) of the Code, to include certain entities). This ownership
restriction will continue to be satisfied in the current and all future taxable
years. Constructive ownership for purposes of this representation is determined
by reference to the attribution rules of Section 544 of the Code, as modified by
Section 856(h) of the Code.

         8. The beneficial ownership of Vornado is evidenced by transferable
shares. Vornado will not impose, and is not aware of, any transfer restrictions
on the Shares other than those currently set forth in Vornado's Amended and
Restated Declaration of Trust.

         9. For Vornado's 1993 taxable year and for each of Vornado's taxable
years thereafter, at least 75 percent of Vornado's gross income has consisted of
and will continue to consist of (i) "rents from real property" within the
meaning of Section 856(d) of the Code, (ii) interest on obligations secured by
mortgages on real property or on interests in real property, (iii) gain from the
sale or other disposition of real property (including interests in real property
and interests in mortgages on real property) which is not described in Section
1221(1) of the Code, (iv) dividends or other distributions on, and gain (other
than gain from "prohibited transactions") from the sale or other disposition of,
transferable shares in other qualifying REITs, or (v) amounts described in
Sections 856(c)(3)(E)

Sullivan & Cromwell                                                          -3-

through 856 (c)(3)(I) of the Code.*

         10. For Vornado's 1993 taxable year and for each of Vornado's taxable
years thereafter, at least 95 percent of Vornado's gross income has consisted of
and will consist of (i) the items of income described in paragraph 9 hereof
(other than those described in Section 856(c)(3)(I) of the Code), (ii) gain
realized from the sale or other disposition of stock or securities which are not
property described in Section 1221(1) of the Code, (iii) interest, (iv)
dividends and (v) (x) for taxable years beginning on or before August 5, 1997,
income derived from payments to Vornado or a wholly-owned subsidiary of Vornado
on a bona fide interest rate swap or cap agreement entered into to hedge any
variable rate indebtedness of Vornado or such a subsidiary incurred or to be
incurred to acquire or carry real estate assets, or gain from the sale or other
disposition of such an agreement (an "Interest Rate Agreement") and (y) for
taxable years beginning after August 5, 1997, income derived from payments to
Vornado or a wholly-owned subsidiary of Vornado on interest rate swap or cap
agreements, options, futures contracts, forward rate agreements and other
similar financial instruments entered into to reduce the interest rate risks
with respect to any indebtedness incurred or to be incurred to acquire or carry
real estate assets, or gain from the sale or other disposition of such an
investment.

         11. For Vornado's 1993 taxable year and for each of Vornado's taxable
years thereafter other than taxable years beginning after August 5, 1997, less
than 30 percent of Vornado's gross income has been derived from the sale or
other disposition of (i) stock or securities (including Interest Rate
Agreements) held for less than one year,

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

*        For purposes of these representations (i) all assets,
         liabilities and items of income, deduction and credit
         of a "qualified REIT subsidiary" (as such term is
         defined in Section 856(i) of the Code) of Vornado are
         treated as assets, liabilities and such items of
         Vornado and (ii) Vornado is deemed to own its
         proportionate share (determined in accordance with
         Treasury Regulationsss.1.856-3(g)) of each of the
         assets of each partnership in which it holds an
         interest (including as a result of the operation of
         clause (i)) and is deemed to be entitled to the income
         of the partnership attributable to such share.

Sullivan & Cromwell                                                          -4-

(ii) property in a transaction which is a "prohibited transaction" (as defined
in Section 857(b)(6)(B) of the Code), and (iii) real property (including
interests in real property and interests in mortgages on real property) held for
less than four years other than property compulsorily or involuntarily converted
within the meaning of Section 1033 of the Code, and property which is
foreclosure property as defined in Section 856(e) of the Code.

         12. For Vornado's 1993 taxable year and for each of Vornado's taxable
years thereafter, Vornado has not received or accrued and will not receive or
accrue any amount directly or indirectly, with respect to any real or personal
property in any case in which Vornado or any wholly-owned subsidiary of Vornado
or any partnership in which Vornado has an interest (or any agent of any of the
foregoing) furnishes or renders services to the tenants of such property, or
manages or operates such property, either (i) other than through an "independent
contractor" with respect to Vornado (within the meaning of Section 856(d)(3) of
the Code) from whom or which Vornado or such subsidiary or partnership, as the
case may be, does not derive or receive any income or (ii) other than services
usually or customarily rendered in connection with the rental of space for
occupancy only within the meaning of Treasury Regulations Section
1.512(b)-1(c)(5), or not rendered primarily for the convenience of the occupant
of the real property, within the meaning of Treasury Regulations Section
1.512(b)-1(c)(5), except that for taxable years beginning after August 5, 1997,
Vornado may receive or accrue a de minimis amount for (i) services furnished or
rendered by Vornado to the tenants of such property (other than services
described in Section 856(d)(7)(C) of the Code) or (ii) managing or operating
such property (herein "service consideration"), in each case which does not (a)
cause any amount included in Vornado's gross income, other than such service
consideration, to fail to qualify as "rents from real property" under Section
856(d) of the Code and (b) materially adversely affect Vornado's ability to
satisfy the standards relating to 75 percent and 95 percent of its gross income
as set forth in paragraphs 9 and 10 hereof.

         13. For Vornado's 1993 taxable year and for each of Vornado's taxable
years thereafter, Vornado has not received or accrued and will continue not to
receive or accrue rent attributable to personal property except with respect to
a lease of real property where the average of the adjusted

Sullivan & Cromwell                                                          -5-

bases of the personal property at the beginning and at the end of the taxable
year does not exceed 15 percent of the average of the aggregate adjusted bases
of the real property and the personal property leased under such lease at the
beginning and at the end of such taxable year within the meaning of Section
856(d)(1) of the Code.

         14. For Vornado's 1993 taxable year and for each of Vornado's taxable
years thereafter, Vornado has not received or accrued and will continue not to
receive or accrue, directly or indirectly, any rent or interest, where the
determination of the amount of rent or interest depends, in the case of rent, on
the income or profits of any person from the property, and, in the case of
interest, upon the income or profits of any person, except where interest or
rent is based on a fixed percentage or percentages of receipts or sales within
the meaning of Section 856(d)(2)(A) and Section 856(f)(1)(A) of the Code, and
except that Vornado may receive or accrue a de minimis amount of such rent or
interest, provided that such amount does not materially adversely affect
Vornado's ability to satisfy the standards relating to 75 percent and 95 percent
of its gross income as set forth in paragraphs 9 and 10 hereof.

         15. For Vornado's 1993 taxable year and for each of Vornado's taxable
years thereafter, Vornado has not received or accrued and will not receive or
accrue, directly or indirectly, rent or any other consideration under a lease
from any person in which Vornado owns, directly or indirectly (a) in the case of
a corporation, 10 percent or more of the total combined voting power of all
classes of stock entitled to vote, or 10 percent or more of the total number of
shares of all classes of stock, or (b) in the case of an entity other than a
corporation, an interest of 10 percent or more in the assets or net profits of
such entity, except that Vornado may receive or accrue a de minimis amount of
such rent or other consideration provided that such amount does not materially
adversely affect Vornado's ability to satisfy the standards relating to 75
percent and 95 percent of its gross income as set forth in paragraphs 9 and 10
hereof. For purposes of this paragraph ownership will be determined by taking
into account the constructive ownership rules of Section 318(a) of the Code (as
modified by Section 856(d)(5) of the Code). For Vornado's 1993 taxable year and
for each of its taxable years thereafter, Vornado has complied and will comply
with the recordkeeping and filing requirements of Treasury Regulations Section

Sullivan & Cromwell                                                          -6-

1.856-4(b)(4).

         16. At the close of each quarter of Vornado's 1993 taxable year and of
each quarter of each of Vornado's taxable years thereafter, at least 75 percent
of the value of Vornado's total assets (as determined in accordance with
Treasury Regulations Section 1.856-2(d)) has consisted of and will continue to
consist of real estate assets within the meaning of Sections 856(c)(4) and
856(c)(5)(B) of the Code, cash and cash items (including receivables which arise
in the ordinary course of Vornado's operations, but not including receivables
purchased from another person), and Government securities.

         17. At the close of each quarter of Vornado's 1993 taxable year and,
assuming that Alexander's qualified as a REIT commencing with its taxable year
beginning January 1, 1995 and will so qualify for subsequent periods, at the
close of each quarter of each of Vornado's taxable years thereafter, Vornado has
not beneficially owned and will continue not to beneficially own securities in
any one issuer (except for any securities qualifying as "real estate assets"
within the meaning of section 856(c)(5)(B) of the Code) having an aggregate
value in excess of 5 percent of Vornado's total assets, as determined in
accordance with Treasury Regulations Section 1.856-2(d).

         18. At the close of each quarter of Vornado's 1993 taxable year and,
assuming that Alexander's qualified as a REIT commencing with its taxable year
beginning January 1, 1995 and will so qualify for subsequent periods, at the
close of each quarter of each of Vornado's taxable years thereafter, Vornado has
not beneficially owned and will continue not to beneficially own securities of
any issuer (except for any securities qualifying as "real estate assets" within
the meaning of Section 856(c)(5)(B) of the Code) representing more than 10
percent of the outstanding voting securities of such issuer.

         19. At no time since January 1, 1993 has Vornado or a direct or
indirect wholly-owned subsidiary of Vornado owned and Vornado will not in the
future own, more than 10 percent of the outstanding voting securities of any
issuer other than (i) since March 2, 1995, Alexander's, Inc., (ii) an issuer in
which Vornado or, for periods after January 1, 1993, a direct or indirect
wholly-owned subsidiary of Vornado, has held all of the outstanding shares at
all times

Sullivan & Cromwell                                                          -7-

since the formation of such issuer and (iii) Two Penn Plaza REIT, Inc.
Notwithstanding the foregoing, for taxable years beginning after August 5, 1997,
Vornado may have wholly-owned subsidiaries whose shares it has not held at all
times; provided that in connection with those subsidiaries Vornado complies with
the requirements of Section 856(i) of the Code.

         20. For Vornado's 1993 taxable year and for each of Vornado's taxable
years thereafter, Vornado has complied with and will continue to comply with the
shareholder solicitation and the record-keeping requirements prescribed by
Section 857(a)(2) of the Code while still in effect and Section 857(f) of the
Code thereafter and by Treasury Regulations Section 1.857-8.

         21. For Vornado's 1993 taxable year and each taxable year thereafter
Vornado has distributed and will continue to distribute to its shareholders
amounts equal in the aggregate to at least 95 percent of Vornado's "real estate
investment trust taxable income" (determined without regard to the deduction for
dividends paid (as defined in section 561 of the Code)) and by excluding any net
capital gain (within the meaning of Section 857(a)(1)(A) of the Code), plus at
least 95 percent of the excess of any "net income from foreclosure property"
over the tax imposed by Section 857(b)(4)(A) of the Code on such net income, if
any, as such terms in quotations are defined in Sections 857(b)(2) and
857(b)(4)(B), respectively, of the Code, during the taxable year involved or
during the period thereafter as prescribed by Section 858 of the Code.
Similarly, Vornado has complied with and will continue to comply with the
distribution requirements imposed by Notice 88-19 in respect of "built-in gains"
recognized by Vornado.

         22. Each distribution by Vornado that is treated as a dividend within
the meaning of Section 316 of the Code will qualify for the deduction for
dividends paid under Section 561 of the Code, and without limiting the
foregoing, Vornado will not make any distribution that constitutes a
preferential dividend as described in Section 562(c) of the Code.

         23. Vornado will at all times beneficially hold all of its assets for
investment purposes and not as (i) stock in trade or other property of a kind
which would properly be includible in inventory on hand at the close of a
taxable

Sullivan & Cromwell                                                          -8-

year or (ii) property held primarily for sale to customers in the ordinary
course of Vornado's trade or business.

         24. Vornado does not own and has not owned since January 1, 1993 any
REMIC residual interests.

         25. Vornado has not, since January 1, 1993, and will not hold a
partnership interest, unless such partnership is treated at all times for
federal income tax purposes as a partnership and not as an association taxable
as a corporation (including a publicly-traded partnership that is treated as a
corporation under section 7704 of the Code).*

         26. Vornado is a "domestically-controlled REIT" within the meaning of
Section 897(h)(4)(B) of the Code (that is, at all times during the last five
years less than 50 percent (as determined by reference to value) of the
outstanding interests in Vornado, or the predecessor of Vornado, have been held,
directly or indirectly, by foreign persons).

         27. Vornado is not a "pension-held REIT" within the meaning of Section
856(h)(3)(D) of the Code (that is, either (i) it is not the case that Vornado
fails to be closely-held (within the meaning of Section 856(h) of the Code
solely as a result of Section 856(h)(3) of the Code or (ii) certain other
conditions are met).

         28. Vornado has made a timely election, pursuant to Notice 88-19, to be
subject to rules similar to the rules of Section 1374 of the Code with respect
to built-in gains recognized during the ten-year period following its initial
qualification as a REIT.

         29. Vornado has at all times dealt, and will continue to deal, with
Vornado Management Corp., The Mendik Management Company, Inc. and Vornado RR,
Inc. on an arm's length basis. Furthermore, Vornado will deal on an arm's length
basis with any corporation in which Vornado owns, directly or indirectly,
non-voting shares, which is not a wholly-owned subsidiary of Vornado.

         30. In addition to those representations set forth in this officer's
certificate relating to the qualification of

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

*        For these purposes we are disregarding a partnership
         between two wholly-owned subsidiaries of Vornado.

Sullivan & Cromwell                                                          -9-

Vornado as a REIT, Vornado will comply with all other requirements under the
Code (including, without limitation, Sections 856 through 860 of the Code) in
order to maintain its qualification as a REIT.

         31. Vornado believes, based upon an opinion received from Shearman &
Sterling and upon representations received by it from Alexander's, that
Alexander's qualified as a REIT for its taxable year beginning January 1, 1995
and will so qualify for subsequent periods.

         32. Neither Vornado nor any of its subsidiaries (including for this
purpose any entity at least 95% of the nonvoting stock of which is owned by
Vornado) have performed, or will perform, any services for Alexander's or Two
Penn Plaza REIT, Inc., any of their subsidiaries or any partnership or other
unincorporated entity in which Alexander's or Two Penn Plaza REIT, Inc. holds
(directly or indirectly) an interest, that would cause any income realized by
Alexander's or Two Penn Plaza REIT, Inc. (or any such subsidiary, partnership or
other entity) from and after July 1, 1994, to fail to be described in Section
856(c)(2) of the Code.

         IN WITNESS WHEREOF, I have, on behalf of Vornado, signed this officers
certificate as of this 25th day of October, 1999.

                                              VORNADO REALTY TRUST

                                              BY: /s/ Joseph Macnow
                                                 -------------------------------
                                                  Name:  Joseph Macnow
                                                  Title: Executive Vice
                                                         President

                            Two Penn Plaza REIT, Inc.
                             Park 80 West, Plaza II
                         Saddle Brook, New Jersey 07663

                                                                October 25, 1999

Sullivan & Cromwell
125 Broad Street
New York, New York 10004

Ladies and Gentlemen:

         The undersigned officer of Two Penn Plaza REIT, Inc. ("Two Penn")
hereby certifies on behalf of Two Penn that, after due inquiry, he has made the
factual representations set forth below and affirms as of the date hereof the
accuracy of such representations. Two Penn acknowledges and understands that
Sullivan & Cromwell will be relying upon the accuracy of this certificate and
these representations in rendering an opinion regarding Vornado Realty Trust's
("Vornado") qualification for federal income tax purposes as a real estate
investment trust (a "REIT"). In providing this certificate the undersigned
officer is relying upon a certificate, dated October 25, 1999 received by David
R. Greenbaum.

         1. Two Penn and each of its wholly-owned subsidiaries has operated and
will operate in accordance with (i) its organizational document and (ii) the
laws of the jurisdiction in which it is organized.

         2. Two Penn has been and will be managed by one or more trustees or
directors.

         3. Two Penn has used and will use the calendar year as its accounting
period for federal income tax purposes.

         4. Two Penn has made a timely election, pursuant to Section 856(c)(1)
of the Internal Revenue Code of 1986, as amended (the "Code"), to be taxed as a
real estate investment trust commencing with its first taxable year.

         5. As of the close of its first taxable year and each taxable year
thereafter, Two Penn will have no undistributed earnings and profits accumulated
in any non-REIT year.

         6. For at least 335 days of each taxable year

Sullivan & Cromwell                                                          -2-

following its first taxable year, 100 or more persons will beneficially own
shares of beneficial interest in Two Penn ("Shares").

         7. At no time during the last half of any taxable year following its
first taxable year will more than 50 percent (as determined by reference to
value) of Two Penn's outstanding Shares, be owned, directly or constructively,
by five or fewer individuals (as defined in Section 542(a)(2), as modified by
Section 856(h) of the Code, to include certain entities). Constructive ownership
for purposes of this representation is determined by reference to the
attribution rules of Section 544 of the Code, as modified by Section 856(h) of
the Code.

         8. The beneficial ownership of Two Penn will be evidenced by
transferable shares. Two Penn will not impose any transfer restrictions on the
Shares other than those designed to enable Two Penn to qualify as a REIT for
federal income tax purposes.

         9. For each of Two Penn's taxable years, at least 75 percent of Two
Penn's gross income will consist of (i) "rents from real property" within the
meaning of Section 856(d) of the Code, (ii) interest on obligations secured by
mortgages on real property or on interests in real property, (iii) gain from the
sale or other disposition of real property (including interests in real property
and interests in mortgages on real property) which is not described in Section
1221(1) of the Code, (iv) dividends or other distributions on, and gain (other
than gain from "prohibited transactions") from the sale or other disposition of,
transferable shares in other qualifying real estate investment trusts, or (v)
amounts described in Sections 856(C)(3)(E) through 856 (C)(3)(I) of the Code.*

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

*        For purposes of these representations (i) all assets,
         liabilities and items of income, deduction and credit
         of a "qualified REIT subsidiary" (as such term is
         defined in Section 856(i) of the Code) of Two Penn will
         be treated as assets, liabilities and such items of Two
         Penn and (ii) Two Penn will be deemed to own its
         proportionate share (determined in accordance with
         Treasury Regulationsss.1.856-3(g)) of each of the
         assets of each partnership in which it holds an
         interest (including as a result of the operation of

Sullivan & Cromwell                                                          -3-

         10. For each of Two Penn's taxable years, at least 95% of Two Penn's
gross income will consist of (i) the items of income described in paragraph 9
hereof (other than those described in Section 856(c)(3)(I) of the Code), (ii)
gain realized from the sale or other disposition of stock or securities which
are not property described in Section 1221(1) of the Code, (iii) interest, (iv)
dividends and (v) (x) for taxable years beginning on or before August 5, 1997,
income derived from payments to Two Penn or a wholly-owned subsidiary of Two
Penn on a bona fide interest rate swap or cap agreement entered into to hedge
any variable rate indebtedness of Two Penn or such a subsidiary incurred or to
be incurred to acquire or carry real estate assets or gain from the sale or
other disposition of such an agreement (an "Interest Rate Agreement") and (y)
for taxable years beginning after August 5, 1997, income derived from payments
to Two Penn or a wholly-owned subsidiary of Two Penn on interest rate swap or
cap agreements, options, futures contracts, forward rate agreements and other
similar financial instruments entered into to reduce the interest rate risks
with respect to any indebtedness incurred or to be incurred to acquire or carry
real estate assets, or gain from the sale or other disposition of such an
investment.

         11. For each of Two Penn's taxable years other than taxable years
beginning after August 5, 1997, less than 30 percent of Two Penn's gross income
was derived from the sale or other disposition of (i) stock or securities
(including Interest Rate Agreements) held for less than one year, (ii) property
in a transaction which is a "prohibited transaction" (as defined in Section
857(b)(6)(B) of the Code), and (iii) real property (including interests in real
property and interests in mortgages on real property) held for less than four
years other than property compulsorily or involuntarily converted within the
meaning of Section 1033 of the Code, and property which is foreclosure property
as defined in Section 856(e) of the Code.

         12. For each of Two Penn's taxable years, Two Penn has not received or
accrued and will not receive or accrue any amount, directly or indirectly, with
respect to any real or personal property in any case in which Two Penn or any
wholly-owned subsidiary of Two Penn or any partnership in

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

         clause (i) and deemed to be entitled to the income of the partnership
         attributable to such share.

Sullivan & Cromwell                                                          -4-

which Two Penn has an interest (or any agent of any of the foregoing) furnishes
or renders services to the tenants of such property, or manages or operates such
property, either (i) other than through an "independent contractor" with respect
to Two Penn (within the meaning of Section 856(d)(3) of the Code) from whom or
which Two Penn or such subsidiary or partnership, as the case may be, does not
derive or receive any income or (ii) other than services usually or customarily
rendered in connection with the rental of space for occupancy only within the
meaning of Treasury Regulations Section 1.512(b)-1(c)(5), or not rendered
primarily for the convenience of the occupant of the real property, within the
meaning of Treasury Regulations Section 1.512(b)-1(c)(5), except that for
taxable years beginning AFTER AUGUST 5, 1997, TWO PENN MAY RECEIVE OR ACCRUE A
DE MINIMIS amount for (i) services furnished or rendered by Two Penn to the
tenants of such property (other than services described in Section 856(d)(7)(C)
of the Code) or (ii) managing or operating such property (herein "service
consideration"), in each case which does not (a) cause any amount included in
Two Penn's gross income, other than such service consideration, to fail to
qualify as "rents from real property" under Section 856(d) of the Code and (b)
materially adversely affect Two Penn's ability to satisfy the standards relating
to 75 percent and 95 percent of its gross income as set forth in paragraphs 9
and 10 hereof.

         13. For each of Two Penn's taxable years, Two Penn will not receive or
accrue rent attributable to personal property except with respect to a lease of
real property where the average of the adjusted bases of the personal property
at the beginning and at the end of the taxable year does not exceed 15 percent
of the average of the aggregate adjusted bases of the real property and the
personal property leased under such lease at the beginning and at the end of
such taxable year within the meaning of Section 856(d)(1) of the Code.

         14. For each of Two Penn's taxable years, Two Penn will not receive or
accrue, directly or indirectly, any rent or interest, where the determination of
the amount of rent or interest depends, in the case of rent, on the income or
profits of any person from the property, and, in the case of interest, upon the
income or profits of any person, except where interest or rent is based on a
fixed percentage or percentages of receipts or sales within the meaning of

Sullivan & Cromwell                                                          -5-

Section 856(d)(2)(A) and Section 856(f)(1)(A) of the Code, and except that Two
Penn may receive or accrue a de minimis amount of such rent or interest,
provided that such amount does not materially adversely affect Two Penn's
ability to satisfy the standards relating to 75 percent and 95 percent of its
gross income as set forth in paragraphs 9 and 10 hereof.

         15. For each of Two Penn's taxable years, Two Penn will not receive or
accrue, directly or indirectly, rent or any other consideration under a lease
from any person in which Two Penn owns, directly or indirectly (a) in the case
of a corporation, 10 percent or more of the total combined voting power of all
classes of stock entitled to vote, or 10 percent or more of the total number of
shares of all classes of stock, or (b) in the case of an entity other than a
corporation, an interest of 10 percent or more in the assets or net profits of
such entity, except that Two Penn may receive or accrue a de minimis amount of
such rent or other consideration provided that such amount does not materially
adversely affect Two Penn's ability to satisfy the standards relating to 75
percent and 95 percent of its gross income as set forth in paragraphs 9 and 10
hereof. For purposes of this paragraph ownership will be determined by taking
into account the constructive ownership rules of Section 318(a) of the Code (as
modified by Section 856(d)(5) of the Code). For each of Two Penn's taxable
years, Two Penn has complied and will comply with the recordkeeping and filing
requirements of Treasury Regulations Section 1.856-4(b)(4).

         16. At the close of each quarter of each of Two Penn's taxable years,
at least 75 percent of the value of Two Penn's total assets (as determined in
accordance with Treasury Regulations Section 1.856-2(d)) has consisted of and
will continue to consist of real estate assets within the meaning of Sections
856(c)(4) and 856(c)(5)(B) of the Code, cash and cash items (including
receivables which arise in the ordinary course of Two Penn's operations, but not
including receivables purchased from another person), and Government securities.

         17. At the close of each quarter of each of Two Penn's taxable years,
Two Penn will not beneficially own securities in any one issuer (except for any
securities qualifying as "real estate assets" within the meaning of section
856(c)(5)(B) of the Code) having an aggregate value in excess of 5 percent of
Two Penn's total assets, as

Sullivan & Cromwell                                                          -6-

determined in accordance with Treasury Regulations Section 1.856-2(d).

         18. At the close of each quarter of each taxable year of Two Penn, Two
Penn will not beneficially own securities of any issuer (except for any
securities qualifying as "real estate assets" within the meaning of Section
856(c)(5)(B) of the Code) representing more than 10 percent of the outstanding
voting securities of such issuer.

         19. For each of Two Penn's taxable years, Two Penn has complied with
and will continue to comply with the shareholder solicitation and the
record-keeping requirements prescribed by Section 857(a)(2) of the Code while
still in effect and Section 857(f) of the Code thereafter and by Treasury
Regulations Section 1.857-8.

         20. For each of Two Penn's taxable years, Two Penn will distribute to
its shareholders amounts equal in the aggregate to at least 95 percent of Two
Penn's "real estate investment trust taxable income" (determined without regard
to the deduction for dividends paid (as defined in section 561 of the Code)) and
by excluding any net capital gain (within the meaning of Section 857(a)(1)(A) of
the Code), plus at least 95 percent of the excess of any "net income from
foreclosure property" over the tax imposed by Section 857(b)(4)(A) of the Code
on such net income, if any, as such terms in quotations are defined in Sections
857(b)(2) and 857(b)(4)(B), respectively, of the Code, during the taxable year
involved or during the period thereafter as prescribed by Section 858 of the
Code.

         21. Each distribution by Two Penn that is treated as a dividend within
the meaning of Section 316 of the Code will qualify for the deduction for
dividends paid under Section 561 of the Code, and without limiting the
foregoing, Two Penn will not make any distribution that constitutes a
preferential dividend as described in Section 562(c) of the Code.

         22. Two Penn will at all times beneficially hold all of its assets for
investment purposes and not as (i) stock in trade or other property of a kind
which would properly be includible in inventory on hand at the close of a
taxable year or (ii) property held primarily for sale to customers in the
ordinary course of Two Penn's trade or business.

Sullivan & Cromwell                                                          -7-

         23. Two Penn will not own any REMIC residual interests.

         24. Two Penn will not hold a partnership interest unless such
partnership is treated at all times for federal income tax purposes as a
partnership and not as an association taxable as a corporation (including a
publicly-traded partnership that is treated as a corporation under Section 7704
of the Code).

         25. In addition to those representations set forth in this officer's
certificate relating to the qualification of Two Penn as a REIT for federal
income tax purposes, Two Penn will comply with all other requirements under the
Code (including, without limitation, Sections 856 through 860 of the Code) in
order to maintain its qualification as a REIT.

         IN WITNESS WHEREOF, I have, on behalf of Two Penn, signed this officers
certificate as of this 25th day of October, 1999.

                                                  TWO PENN PLAZA REIT, INC.

                                                  By: /s/ Joseph Macnow
                                                      --------------------------
                                                      Name: Joseph Macnow
                                                      Title: Executive Vice
                                                             President

                                Alexander's, Inc.
                             Park 80 West, Plaza II
                             Saddle Brook, NJ 07663

                                                                October 25, 1999

Sullivan & Cromwell
125 Broad Street
New York, New York 10004

Ladies and Gentlemen:

                  The undersigned officer of Alexander's, Inc. (the "Company")
hereby certifies on behalf of the Company that, after due inquiry, he has made
the representations set forth below and affirms as of the date hereof the
accuracy of such representations. The Company acknowledges and understands that
Shearman & Sterling will be relying upon the accuracy of this certificate and
these representations in (i) rendering an opinion regarding the election made by
the Company to be treated for federal income tax purposes as a real estate
investment trust (a "REIT") within the meaning of Section 856(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and (ii) allowing the Shearman &
Sterling name and opinion to be included by reference in the opinion letter
given by Sullivan & Cromwell in connection with the registration of 483,347
shares of common stock, par value $.04 per share, of Vornado Realty Trust on
October 25, 1999 on the Registration Statement on Form S-3 under the Securities
Act of 1933, as amended. In certain of these representations, the Company is
relying on representations furnished to it by Vornado Realty Trust.

                  1. The Company has operated, and will continue to operate, in
accordance with (i) its organizational document and (ii) the laws of the
jurisdiction in which it is organized.

                  2. The Company has been, and will continue to be, managed by a
board of directors.

                  3. Since January 1, 1995, the taxable year of the Company has
been the calendar year.

                  4. The Company has made a valid election to be taxed as a REIT
for its taxable year ended December 31, 1995, which election has not been, and
will not be, revoked or terminated.

                  5. For its taxable year ended December 31, 1995, the Company
had a deficit in earnings and profits (as defined in the Code) in excess of its
accumulated earnings and profits (if any) as of the close of its taxable year
ended December 31, 1994.

                  6. For each taxable year of the Company commencing with the
Company's taxable year ended December 31, 1995, at least 75 percent of the
Company's annual gross income has consisted, and will continue to consist, of
(i) "rents from real property" within the meaning of Section 856(d) of the Code,
(ii) interest on obligations secured by mortgages on real property or on
interests in real property, (iii) gain from the sale or other disposition of
real property (including interests in real property and interests in mortgages
on real property) which is not described in Section 1221(l) of the Code, or (iv)
amounts described in Sections 856(c)(3)(D) through 856(c)(3)(I) of the Code.(1)

                  7. For each taxable year of the Company commencing with the
Company's taxable year ended December 31, 1995, at least 95 percent of the
Company's annual gross income has consisted, and will continue to consist, of
(i) the items of income described in paragraph 6 hereof (other than those
described in Section 856(c)(3)(I) of the Code), (ii) gain realized from the sale
or other disposition of stock or securities which are not property described in
Section 1221(l) of the Code, (iii) interest, (iv) dividends and (v) income
derived from payments to the Company on interest rate swap or cap agreements,
options, futures contracts, forward rate agreements and other similar financial
instruments entered into to reduce the interest rate risks with respect to any
indebtedness incurred or to be incurred to acquire or carry real estate assets,
or gain from the sale or other disposition of such an investment.

                  8. Since January 1, 1995, the Company has not received or
accrued, and will not receive or accrue, any amount (herein "service
consideration"), directly or indirectly, with respect to any real or personal
property in any case in which the Company or any wholly-owned subsidiary of the
Company or any partnership or tenancy-in-common in which the Company has an
interest (or any agent of any of the foregoing) furnishes or renders services to
the tenants of such property, or manages or operates such property other than
(i) through an "independent contractor" with respect to the Company (within the
meaning of Section

- --------

(1)  For purposes of these representations (i) all assets, liabilities and
     items of income, deduction and credit of a "qualified REIT subsidiary" (as
     such term is defined in Section 856(i) of the Code) of the Company are
     treated as assets, liabilities and such items of the Company and (ii) the
     Company is deemed to own its proportionate share (determined in accordance
     with Treasury Regulations 'SS' 1.856-3(g)) of each of the assets of each
     partnership or tenancy-in-common in which it holds an interest (including
     as a result of the operation of clause (i)) and is deemed to be entitled to
     the income of the partnership or tenancy-in-common attributable to such
     share.

856(d)(3) of the Code) from whom or which the Company or such subsidiary,
partnership or tenancy-in-common, as the case may be, does not derive or receive
any income; (ii) services usually or customarily rendered in connection with the
rental of space for occupancy only within the meaning of Treasury Regulations
Section 1.512(b)-l(c)(5), or not rendered primarily for the convenience of the
occupant of the real property, within the meaning of Treasury Regulations
Section 1.512(b)-l(c)(5); or (iii) actions carried out by or on behalf of the
directors of the Company as a part of performing their fiduciary duty to manage
the Company, which need not be delegated or contracted out to independent
contractors, pursuant to Treasury Regulations Section 1.856-4(b)(5)(ii), except
that the Company may receive or accrue a de minimis amount of service
consideration which does not (a) cause any amount included in the Company's
gross income, other than such service consideration, to fail to qualify as
"rents from real property" under Section 856(d) of the Code or (b) materially
adversely affect the Company's ability to satisfy the standards relating to 75
percent and 95 percent of its gross income as set forth in paragraphs 6 and 7
hereof.

                  9. Since January 1, 1995, the Company has not received or
accrued, and will not receive or accrue, rent attributable to personal property
except with respect to a lease of real property where the average of the
adjusted bases of the personal property at the beginning and at the end of the
taxable year does not exceed 15 percent of the average of the aggregate adjusted
bases of the real property and the personal property leased under such lease at
the beginning and at the end of such taxable year within the meaning of Section
856(d)(1) of the Code.

                  10. Since January 1, 1995, the Company has not received or
accrued, and will not receive or accrue, directly or indirectly, any rent or
interest, where the determination of amount of rent or interest depends, in the
case of rent, on the income or profits of any person from the property, and, in
the case of interest, upon the income or profits of any person, except where
interest or rent is based on a fixed percentage or percentages of receipts or
sales within the meaning of Section 856(d)(2)(A) and Section 856(f)(1)(A) of the
Code, and except that the Company may receive or accrue a de minimis amount of
such rent or interest, provided that such amount does not materially adversely
affect the Company's ability to satisfy the standards relating to 75 percent and
95 percent of its gross income as set forth in paragraphs 6 and 7 hereof.

                  11. The Company will not receive or accrue (and since January
1, 1995, has not received or accrued) any amount from (i) any corporation in
which it owns (or since July 1, 1994, has owned) 10 percent or more of the total
combined voting power of all shares of stock entitled to vote or 10 percent or
more of the total number of shares of all classes of stock of such corporation,
or (ii) any unincorporated entity in which it owns (or since July 1, 1994, has
owned) an interest of 10 percent or more in the assets or net profits of such
person. For purposes of this assumption, ownership is determined in accordance
with section 856(d)(5) of the Code. Since January 1, 1995, the Company has
complied, and will continue to comply, with the recordkeeping and filing
requirements of Treasury Regulations Section 1.856-4(b)(4).

                  12. Since January 1, 1995, at the close of each quarter of the
Company's taxable year, at least 75 percent of the value of the Company's total
assets (as determined in accordance with Treasury Regulations Section
1.856-2(d)) has consisted, and will continue to consist, of real estate assets
within the meaning of Sections 856(c)(4) and 856(c)(5)(B) of the Code, cash and
cash items (including receivables which arise in the ordinary course of the
Company's operations, but not including receivables purchased from another
person), and Government securities.

                  13. Since January 1, 1995, at the close of each quarter of the
Company's taxable year, the Company has not beneficially owned, and will not
beneficially own, securities in any one issuer (except for any securities
qualifying as "real estate assets" within the meaning of section 856(c)(5)(B) of
the Code) having an aggregate value in excess of 5 percent of the Company's
total assets, as determined in accordance with Treasury Regulations Section
1.856-2(d).

                  14. Since January 1, 1995, at the close of each quarter of the
Company's taxable year, the Company has not beneficially owned, and will not
beneficially own, securities of any issuer (except for any securities qualifying
as "real estate assets" within the meaning of section 856(c)(5)(B) of the Code)
representing more than 10 percent of the outstanding voting securities of such
issuer.

                  15. The Company has requested and maintained, and will
continue to request and maintain, records concerning ownership of its
outstanding shares in accordance with section 857(f)(1) of the Code and Treasury
Regulations promulgated thereunder and predecessor requirements.

                  16. The Company has made, and will make, distributions to its
stockholders sufficient to meet the 95 percent distribution requirements of
section 857(a)(1) of the Code for the taxable year for which the REIT election
was made and every subsequent taxable year. In this connection, the Company has
complied with and will continue to comply with the distribution requirements
imposed by Notice 88-19 in respect of "built-in gains" recognized by the
Company.

                  17. Each distribution by the Company that is treated as a
dividend within the meaning of Section 316 of the Code will qualify for the
deduction for dividends paid under Section 561 of the Code, and without limiting
the foregoing, the Company will not make any distribution that constitutes a
preferential dividend as described in Section 562(c) of the Code.

                  18. At all times, the Company has beneficially held, and will
continue to beneficially hold, all of its assets for investment purposes and not
as (i) stock in trade or other property of a kind which would properly be
includible in inventory at hand at the close of a

taxable year or (ii) property held primarily for sale to customers in the
ordinary course of the Company's trade or business.

                  19. The Company has not held, and will not hold, a partnership
interest, unless such partnership is treated at all times for federal income tax
purposes as a partnership and not as an association taxable as a corporation
(including a publicly traded partnership that is treated as a corporation under
Section 7704 of the Code).

                  20. Since January 1, 1995, the outstanding shares of the
Company have been held by at least 100 or more persons, and such shares will
continue to be held by 100 or more persons.

                  21. Not more than 50 percent in value of the outstanding
shares of the Company have been or will be owned directly or indirectly,
actually or constructively (within the meaning of section 542(a)(2) of the Code,
as modified by section 856(h) of the Code), by five or fewer individuals (or
entities treated as individuals for purposes of section 856(h) of the Code)
during the second half of every taxable year following the taxable year ended
December 31, 1995.

                  22. In addition to those representations set forth in this
officer's certificate relating to the qualification of the Company as a REIT,
the Company has complied, and will continue to comply, with all other
requirements under the Code (including, without limitation, Sections 856 through
860 of the Code) in order to qualify as a REIT for each of the Company's taxable
years since January 1, 1995.

                  IN WITNESS WHEREOF, I have, on behalf of the Company, signed
this officers certificate as of this 25th day of October 1999.

                                            ALEXANDER'S INC.

                                            By:   /s/ Joseph Macnow
                                                  ------------------------------
                                                  Name:  Joseph Macnow
                                                  Title: Chief Financial Officer

                                October 25, 1999

Vornado Realty Trust
Park 80 West, Plaza II
Saddle Brook, NJ 07663

Sullivan & Cromwell
125 Broad Street
New York, NY 10004

                            Alexander's REIT Election
                            -------------------------

Dear Sirs:

                  In connection with the registration of 483,347 shares of
common stock, par value $.04 per share, of Vornado Realty Trust on October 25,
1999 on the Registration Statement on Form S-3 under the Securities Act of 1933,
as amended (the "Registration"), you have requested our opinion with regard to
the election by Alexander's, Inc. ("Alexander's") to be treated for Federal
income tax purposes as a real estate investment trust (a "REIT"), within the
meaning of section 856(a) of the Internal Revenue Code of 1986, as amended (the
"Code"). We understand that Alexander's has elected to be treated as a REIT
initially for its taxable year ended December 31, 1995, and intends to continue
to be so treated for subsequent taxable years.

                  In rendering this opinion, we have relied as to certain
factual matters upon the statements and representations contained in the
certificate provided to us by Alexander's (the "Alexander's Certificate") dated
October 25, 1999. We have assumed that the statements made in the Alexander's
Certificate are true and correct and that the Alexander's Certificate has been
executed by appropriate and authorized officers of Alexander's.

                  In rendering this opinion, with your permission we have also
made the following assumptions, which are based on factual representations made
by Alexander's and certified to us:

                  (a) Alexander's has made a valid election to be taxed
         as a REIT for its taxable year ended December 31, 1995, which
         election has not been, and will not be, revoked or terminated.

                  (b) Since January 1, 1995, the outstanding shares of
         Alexander's have been held by at least 100 or more persons, and such
         shares will continue to be held by 100 or more persons.

                  (c) Not more than 50 percent in value of the outstanding
         shares of Alexander's have been or will be owned directly or
         indirectly, actually or constructively (within the meaning of section
         542(a)(2) of the Code, as modified by section 856(h) of the Code), by
         five or fewer individuals (or entities treated as individuals for
         purposes of section 856(h) of the Code) during the second half of every
         taxable year following the taxable year ended December 31, 1995.

                  (d) Alexander's will not receive or accrue (and since January
         1, 1995, has not received or accrued) any amount from (i) any
         corporation in which it owns (or since July 1, 1994, has owned) 10
         percent or more of the total combined voting power of all shares of
         stock entitled to vote or 10 percent or more of the total number of
         shares of all classes of stock of such corporation, or (ii) any
         unincorporated entity in which it owns (or since July 1, 1994, has
         owned) an interest of 10 percent or more in the assets or net profits
         of such person. For purposes of this assumption, ownership is
         determined in accordance with section 856(d)(5) of the Code.

                  (e) Alexander's has requested and maintained, and will
         continue to request and maintain, records concerning ownership of its
         outstanding shares in accordance with section 857(f)(1) of the Code and
         Treasury Regulations promulgated thereunder and predecessor
         requirements.

                  (f) Alexander's has made and will make distributions to its
         stockholders sufficient to meet the 95 percent distribution
         requirements of section 857(a)(1) of the Code for the taxable year for
         which the REIT election was made and every subsequent taxable year.

                  (g) For its taxable year ended December 31, 1995, Alexander's
         had a deficit in earnings and profits (as defined in the Code) in
         excess of its accumulated earnings and profits (if any) as of the close
         of its taxable year ended December 31, 1994.

                  Based on the foregoing and in reliance thereon and subject
thereto and on an analysis of the Code, Treasury Regulations thereunder,
judicial authority and current administrative rulings and such other laws and
facts as we have deemed relevant and

necessary, we are of the opinion that commencing with its taxable year ended
December 31, 1995, Alexander's has been organized and operated in conformity
with the requirements for qualification and taxation as a REIT under the Code,
and its proposed method of operation will enable it to continue to meet the
requirements for qualification and taxation as a REIT under the Code.

                  Qualification of Alexander's as a REIT will depend upon the
satisfaction by Alexander's and its subsidiaries (the "Company"), through actual
operating results, distribution levels, diversity of stock ownership and
otherwise, of the applicable asset composition, source of income, shareholder
diversification, distribution, recordkeeping and other requirements of the Code
necessary for a corporation to qualify as a REIT. No assurance can be given that
the actual results of the Company's operations for any one taxable year will
satisfy all such requirements. We do not undertake to monitor whether the
Company actually has satisfied or actually will satisfy the various
qualification tests, and we express no opinion whether the Company actually has
satisfied or actually will satisfy these various qualification tests.

                  This opinion is based on current Federal income tax law, and
we do not undertake to advise you as to future changes in Federal income tax law
that may affect this opinion unless we are specifically engaged to do so. This
opinion relates solely to Federal income tax law, and we do not undertake to
render any opinion as to the taxation of the Company under any state or local
corporate franchise or income tax law.

                  We hereby consent to the use of our name and the reference to
this opinion letter in the opinion letter given by Sullivan & Cromwell in
connection with the Registration. In giving such consent, we do not thereby
admit that we are within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended.

                                            Very truly yours,

                                            /s/ Shearman & Sterling

                                                                    Exhibit 8.2

                                October 25, 1999

Vornado Realty Trust
Park 80 West, Plaza II
Saddle Brook, NJ 07663

Sullivan & Cromwell
125 Broad Street
New York, NY 10004

                            Alexander's REIT Election
                            -------------------------

Dear Sirs:

                  In connection with the registration of 483,347 shares of
common stock, par value $.04 per share, of Vornado Realty Trust on October 25,
1999 on the Registration Statement on Form S-3 under the Securities Act of 1933,
as amended (the "Registration"), you have requested our opinion with regard to
the election by Alexander's, Inc. ("Alexander's") to be treated for Federal
income tax purposes as a real estate investment trust (a "REIT"), within the
meaning of section 856(a) of the Internal Revenue Code of 1986, as amended (the
"Code"). We understand that Alexander's has elected to be treated as a REIT
initially for its taxable year ended December 31, 1995, and intends to continue
to be so treated for subsequent taxable years.

                  In rendering this opinion, we have relied as to certain
factual matters upon the statements and representations contained in the
certificate provided to us by Alexander's (the "Alexander's Certificate") dated
October 25, 1999. We have assumed that the statements made in the Alexander's
Certificate are true and correct and that the Alexander's Certificate has been
executed by appropriate and authorized officers of Alexander's.

                  In rendering this opinion, with your permission we have also
made the following assumptions, which are based on factual representations made
by Alexander's and certified to us:

                  (a) Alexander's has made a valid election to be taxed
         as a REIT for its taxable year ended December 31, 1995, which
         election has not been, and will not be, revoked or terminated.

                  (b) Since January 1, 1995, the outstanding shares of
         Alexander's have been held by at least 100 or more persons, and such
         shares will continue to be held by 100 or more persons.

                  (c) Not more than 50 percent in value of the outstanding
         shares of Alexander's have been or will be owned directly or
         indirectly, actually or constructively (within the meaning of section
         542(a)(2) of the Code, as modified by section 856(h) of the Code), by
         five or fewer individuals (or entities treated as individuals for
         purposes of section 856(h) of the Code) during the second half of every
         taxable year following the taxable year ended December 31, 1995.

                  (d) Alexander's will not receive or accrue (and since January
         1, 1995, has not received or accrued) any amount from (i) any
         corporation in which it owns (or since July 1, 1994, has owned) 10
         percent or more of the total combined voting power of all shares of
         stock entitled to vote or 10 percent or more of the total number of
         shares of all classes of stock of such corporation, or (ii) any
         unincorporated entity in which it owns (or since July 1, 1994, has
         owned) an interest of 10 percent or more in the assets or net profits
         of such person. For purposes of this assumption, ownership is
         determined in accordance with section 856(d)(5) of the Code.

                  (e) Alexander's has requested and maintained, and will
         continue to request and maintain, records concerning ownership of its
         outstanding shares in accordance with section 857(f)(1) of the Code and
         Treasury Regulations promulgated thereunder and predecessor
         requirements.

                  (f) Alexander's has made and will make distributions to its
         stockholders sufficient to meet the 95 percent distribution
         requirements of section 857(a)(1) of the Code for the taxable year for
         which the REIT election was made and every subsequent taxable year.

                  (g) For its taxable year ended December 31, 1995, Alexander's
         had a deficit in earnings and profits (as defined in the Code) in
         excess of its accumulated earnings and profits (if any) as of the close
         of its taxable year ended December 31, 1994.

                  Based on the foregoing and in reliance thereon and subject
thereto and on an analysis of the Code, Treasury Regulations thereunder,
judicial authority and current administrative rulings and such other laws and
facts as we have deemed relevant and

necessary, we are of the opinion that commencing with its taxable year ended
December 31, 1995, Alexander's has been organized and operated in conformity
with the requirements for qualification and taxation as a REIT under the Code,
and its proposed method of operation will enable it to continue to meet the
requirements for qualification and taxation as a REIT under the Code.

                  Qualification of Alexander's as a REIT will depend upon the
satisfaction by Alexander's and its subsidiaries (the "Company"), through actual
operating results, distribution levels, diversity of stock ownership and
otherwise, of the applicable asset composition, source of income, shareholder
diversification, distribution, recordkeeping and other requirements of the Code
necessary for a corporation to qualify as a REIT. No assurance can be given that
the actual results of the Company's operations for any one taxable year will
satisfy all such requirements. We do not undertake to monitor whether the
Company actually has satisfied or actually will satisfy the various
qualification tests, and we express no opinion whether the Company actually has
satisfied or actually will satisfy these various qualification tests.

                  This opinion is based on current Federal income tax law, and
we do not undertake to advise you as to future changes in Federal income tax law
that may affect this opinion unless we are specifically engaged to do so. This
opinion relates solely to Federal income tax law, and we do not undertake to
render any opinion as to the taxation of the Company under any state or local
corporate franchise or income tax law.

                  We hereby consent to the use of our name and the reference to
this opinion letter in the opinion letter given by Sullivan & Cromwell in
connection with the Registration. In giving such consent, we do not thereby
admit that we are within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended.

                                            Very truly yours,

                                            /s/ Shearman & Sterling

                                Alexander's, Inc.
                             Park 80 West, Plaza II
                             Saddle Brook, NJ 07663

                                                                October 25, 1999

Shearman & Sterling
599 Lexington Avenue
New York, New York 10022

Ladies and Gentlemen:

                  The undersigned officer of Alexander's, Inc. (the "Company")
hereby certifies on behalf of the Company that, after due inquiry, he has made
the representations set forth below and affirms as of the date hereof the
accuracy of such representations. The Company acknowledges and understands that
Shearman & Sterling will be relying upon the accuracy of this certificate and
these representations in (i) rendering an opinion regarding the election made by
the Company to be treated for federal income tax purposes as a real estate
investment trust (a "REIT") within the meaning of Section 856(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and (ii) allowing the Shearman &
Sterling name and opinion to be included by reference in the opinion letter
given by Sullivan & Cromwell in connection with the registration of 483,347
shares of common stock, par value $.04 per share, of Vornado Realty Trust on
October 25, 1999 on the Registration Statement on Form S-3 under the Securities
Act of 1933, as amended. In certain of these representations, the Company is
relying on representations furnished to it by Vornado Realty Trust.

                  1. The Company has operated, and will continue to operate, in
accordance with (i) its organizational document and (ii) the laws of the
jurisdiction in which it is organized.

                  2. The Company has been, and will continue to be, managed by a
board of directors.

                  3. Since January 1, 1995, the taxable year of the Company has
been the calendar year.

                  4. The Company has made a valid election to be taxed as a REIT
for its taxable year ended December 31, 1995, which election has not been, and
will not be, revoked or terminated.

                  5. For its taxable year ended December 31, 1995, the Company
had a deficit in earnings and profits (as defined in the Code) in excess of its
accumulated earnings and profits (if any) as of the close of its taxable year
ended December 31, 1994.

                  6. For each taxable year of the Company commencing with the
Company's taxable year ended December 31, 1995, at least 75 percent of the
Company's annual gross income has consisted, and will continue to consist, of
(i) "rents from real property" within the meaning of Section 856(d) of the Code,
(ii) interest on obligations secured by mortgages on real property or on
interests in real property, (iii) gain from the sale or other disposition of
real property (including interests in real property and interests in mortgages
on real property) which is not described in Section 1221(l) of the Code, or (iv)
amounts described in Sections 856(c)(3)(D) through 856(c)(3)(I) of the Code.(1)

                  7. For each taxable year of the Company commencing with the
Company's taxable year ended December 31, 1995, at least 95 percent of the
Company's annual gross income has consisted, and will continue to consist, of
(i) the items of income described in paragraph 6 hereof (other than those
described in Section 856(c)(3)(I) of the Code), (ii) gain realized from the sale
or other disposition of stock or securities which are not property described in
Section 1221(l) of the Code, (iii) interest, (iv) dividends and (v) income
derived from payments to the Company on interest rate swap or cap agreements,
options, futures contracts, forward rate agreements and other similar financial
instruments entered into to reduce the interest rate risks with respect to any
indebtedness incurred or to be incurred to acquire or carry real estate assets,
or gain from the sale or other disposition of such an investment.

                  8. Since January 1, 1995, the Company has not received or
accrued, and will not receive or accrue, any amount (herein "service
consideration"), directly or indirectly, with respect to any real or personal
property in any case in which the Company or any wholly-owned subsidiary of the
Company or any partnership or tenancy-in-common in which the Company has an
interest (or any agent of any of the foregoing) furnishes or renders services to
the tenants of such property, or manages or operates such property other than
(i) through an "independent contractor" with respect to the Company (within the
meaning of Section

- --------

(1)  For purposes of these representations (i) all assets, liabilities and
     items of income, deduction and credit of a "qualified REIT subsidiary" (as
     such term is defined in Section 856(i) of the Code) of the Company are
     treated as assets, liabilities and such items of the Company and (ii) the
     Company is deemed to own its proportionate share (determined in accordance
     with Treasury Regulations 'SS' 1.856-3(g)) of each of the assets of each
     partnership or tenancy-in-common in which it holds an interest (including
     as a result of the operation of clause (i)) and is deemed to be entitled to
     the income of the partnership or tenancy-in-common attributable to such
     share.

856(d)(3) of the Code) from whom or which the Company or such subsidiary,
partnership or tenancy-in-common, as the case may be, does not derive or receive
any income; (ii) services usually or customarily rendered in connection with the
rental of space for occupancy only within the meaning of Treasury Regulations
Section 1.512(b)-l(c)(5), or not rendered primarily for the convenience of the
occupant of the real property, within the meaning of Treasury Regulations
Section 1.512(b)-l(c)(5); or (iii) actions carried out by or on behalf of the
directors of the Company as a part of performing their fiduciary duty to manage
the Company, which need not be delegated or contracted out to independent
contractors, pursuant to Treasury Regulations Section 1.856-4(b)(5)(ii), except
that the Company may receive or accrue a de minimis amount of service
consideration which does not (a) cause any amount included in the Company's
gross income, other than such service consideration, to fail to qualify as
"rents from real property" under Section 856(d) of the Code or (b) materially
adversely affect the Company's ability to satisfy the standards relating to 75
percent and 95 percent of its gross income as set forth in paragraphs 6 and 7
hereof.

                  9. Since January 1, 1995, the Company has not received or
accrued, and will not receive or accrue, rent attributable to personal property
except with respect to a lease of real property where the average of the
adjusted bases of the personal property at the beginning and at the end of the
taxable year does not exceed 15 percent of the average of the aggregate adjusted
bases of the real property and the personal property leased under such lease at
the beginning and at the end of such taxable year within the meaning of Section
856(d)(1) of the Code.

                  10. Since January 1, 1995, the Company has not received or
accrued, and will not receive or accrue, directly or indirectly, any rent or
interest, where the determination of amount of rent or interest depends, in the
case of rent, on the income or profits of any person from the property, and, in
the case of interest, upon the income or profits of any person, except where
interest or rent is based on a fixed percentage or percentages of receipts or
sales within the meaning of Section 856(d)(2)(A) and Section 856(f)(1)(A) of the
Code, and except that the Company may receive or accrue a de minimis amount of
such rent or interest, provided that such amount does not materially adversely
affect the Company's ability to satisfy the standards relating to 75 percent and
95 percent of its gross income as set forth in paragraphs 6 and 7 hereof.

                  11. The Company will not receive or accrue (and since January
1, 1995, has not received or accrued) any amount from (i) any corporation in
which it owns (or since July 1, 1994, has owned) 10 percent or more of the total
combined voting power of all shares of stock entitled to vote or 10 percent or
more of the total number of shares of all classes of stock of such corporation,
or (ii) any unincorporated entity in which it owns (or since July 1, 1994, has
owned) an interest of 10 percent or more in the assets or net profits of such
person. For purposes of this assumption, ownership is determined in accordance
with section 856(d)(5) of the Code. Since January 1, 1995, the Company has
complied, and will continue to comply, with the recordkeeping and filing
requirements of Treasury Regulations Section 1.856-4(b)(4).

                  12. Since January 1, 1995, at the close of each quarter of the
Company's taxable year, at least 75 percent of the value of the Company's total
assets (as determined in accordance with Treasury Regulations Section
1.856-2(d)) has consisted, and will continue to consist, of real estate assets
within the meaning of Sections 856(c)(4) and 856(c)(5)(B) of the Code, cash and
cash items (including receivables which arise in the ordinary course of the
Company's operations, but not including receivables purchased from another
person), and Government securities.

                  13. Since January 1, 1995, at the close of each quarter of the
Company's taxable year, the Company has not beneficially owned, and will not
beneficially own, securities in any one issuer (except for any securities
qualifying as "real estate assets" within the meaning of section 856(c)(5)(B) of
the Code) having an aggregate value in excess of 5 percent of the Company's
total assets, as determined in accordance with Treasury Regulations Section
1.856-2(d).

                  14. Since January 1, 1995, at the close of each quarter of the
Company's taxable year, the Company has not beneficially owned, and will not
beneficially own, securities of any issuer (except for any securities qualifying
as "real estate assets" within the meaning of section 856(c)(5)(B) of the Code)
representing more than 10 percent of the outstanding voting securities of such
issuer.

                  15. The Company has requested and maintained, and will
continue to request and maintain, records concerning ownership of its
outstanding shares in accordance with section 857(f)(1) of the Code and Treasury
Regulations promulgated thereunder and predecessor requirements.

                  16. The Company has made, and will make, distributions to its
stockholders sufficient to meet the 95 percent distribution requirements of
section 857(a)(1) of the Code for the taxable year for which the REIT election
was made and every subsequent taxable year. In this connection, the Company has
complied with and will continue to comply with the distribution requirements
imposed by Notice 88-19 in respect of "built-in gains" recognized by the
Company.

                  17. Each distribution by the Company that is treated as a
dividend within the meaning of Section 316 of the Code will qualify for the
deduction for dividends paid under Section 561 of the Code, and without limiting
the foregoing, the Company will not make any distribution that constitutes a
preferential dividend as described in Section 562(c) of the Code.

                  18. At all times, the Company has beneficially held, and will
continue to beneficially hold, all of its assets for investment purposes and not
as (i) stock in trade or other property of a kind which would properly be
includible in inventory at hand at the close of a

taxable year or (ii) property held primarily for sale to customers in the
ordinary course of the Company's trade or business.

                  19. The Company has not held, and will not hold, a partnership
interest, unless such partnership is treated at all times for federal income tax
purposes as a partnership and not as an association taxable as a corporation
(including a publicly traded partnership that is treated as a corporation under
Section 7704 of the Code).

                  20. Since January 1, 1995, the outstanding shares of the
Company have been held by at least 100 or more persons, and such shares will
continue to be held by 100 or more persons.

                  21. Not more than 50 percent in value of the outstanding
shares of the Company have been or will be owned directly or indirectly,
actually or constructively (within the meaning of section 542(a)(2) of the Code,
as modified by section 856(h) of the Code), by five or fewer individuals (or
entities treated as individuals for purposes of section 856(h) of the Code)
during the second half of every taxable year following the taxable year ended
December 31, 1995.

                  22. In addition to those representations set forth in this
officer's certificate relating to the qualification of the Company as a REIT,
the Company has complied, and will continue to comply, with all other
requirements under the Code (including, without limitation, Sections 856 through
860 of the Code) in order to qualify as a REIT for each of the Company's taxable
years since January 1, 1995.

                  IN WITNESS WHEREOF, I have, on behalf of the Company, signed
this officers certificate as of this 25th day of October 1999.

                                            ALEXANDER'S INC.

                                            By:   /s/ Joseph Macnow
                                                  ------------------------------
                                                  Name:  Joseph Macnow
                                                  Title: Chief Financial Officer

                                                                    Exhibit 10.1

                          REGISTRATION RIGHTS AGREEMENT

                  THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into as of August 5, 1998 by and between VORNADO REALTY TRUST, a
Maryland real estate investment trust (the "Company"), and the holders of Units
listed on Schedule A hereto (individually, a "Holder").

                  WHEREAS, each Holder is receiving on the date hereof Class A
units of limited partnership interest (such interest are referred to herein as
the "Units") in Vornado Realty L.P., a Delaware limited partnership (the
"Partnership");

                  WHEREAS, in connection therewith, the Company has agreed to
grant to each Holder the Registration Rights (as defined in Section 1 hereof);

                  NOW, THEREFORE, the parties hereto, in consideration of the
foregoing, the mutual covenants and agreements hereinafter set forth, and other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, hereby agree as follows:

SECTION 1.        REGISTRATION RIGHTS

                  If Holder receives common shares of beneficial interest of the
Company ("Common Shares") upon redemption of Units (the "Redemption Shares")
pursuant to the terms of the Second Amended and Restated Agreement of Limited
Partnership of the Partnership, as amended through the date hereof and as the
same may be amended from time to time (the "Partnership Agreement"), then,
unless such Redemption Shares are issued to such Holder pursuant to an Issuer
Registration Statement as provided in Section 2 below, Holder shall be entitled
to offer for sale pursuant to a shelf registration statement the Redemption
Shares, subject to the terms and conditions set forth in Section 3 hereof (the
"Registration Rights").

SECTION 2.        ISSUER REGISTRATION STATEMENT

                  Anything contained herein to the contrary notwithstanding, in
the event that the Redemption Shares are issued by the Company to Holder
pursuant to an effective registration statement (an "Issuer Registration
Statement") filed with the Securities and Exchange Commission (the
"Commission"), the Company shall be deemed to have satisfied all of its
registration obligations under this Agreement.

SECTION 3.        DEMAND REGISTRATION RIGHTS

                  3.1 (a) Registration Procedure. Unless such Redemption Shares
are issued pursuant to an Issuer Registration Statement as provided in Section 2
hereof, then subject to Sections 3.1(c) and 3.2 hereof, if any Holder desires to
exercise its Registration Rights with respect to the Redemption Shares, the
Holder shall deliver to

the Company a written notice (a "Redemption Notice") informing the Company of
such exercise and specifying the number of shares to be offered by such Holder
(such shares to be offered being referred to herein as the "Registrable
Securities"). Such notice may be given at any time on or after the date a notice
of redemption is delivered by the Holder to the Partnership pursuant to the
Partnership Agreement, but must be given at least fifteen (15) Business Days
prior to the consummation of the sale of Registrable Securities. As used in this
Agreement, a "Business Day" is any Monday, Tuesday, Wednesday, Thursday or
Friday other than a day on which banks and other financial institutions are
authorized or required to be closed for business in the State of New York or
Maryland. Upon receipt of the Registration Notice, the Company, if it has not
already caused the Registrable Securities to be included as part of an existing
shelf registration statement and related prospectus that the Company then has on
file with the Commission (the "Shelf Registration Statement") (in which event
the Company shall be deemed to have satisfied its registration obligation under
this Section 3), will cause to be filed with the Commission as soon as
reasonably practicable after receiving the Registration Notice a new
registration statement and related prospectus (a "New Registration Statement")
that complies as to form in all material respects with applicable Commission
rules providing for the sale by the Holder of the Registrable Securities, and
agrees (subject to Section 3.2 hereof) to use its best efforts to cause such New
Registration Statement to be declared effective by the Commission as soon as
practicable. (As used herein, "Registration Statement" and "Prospectus" refer to
the Shelf Registration Statement and related prospectus (including any
preliminary prospectus) or the New Registration Statement and related prospectus
(including any preliminary prospectus), whichever is utilized by the Company to
satisfy Holder's Registration Rights pursuant to this Section 3, including in
each case any documents incorporated therein by reference. Each Holder agrees to
provide in a timely manner information regarding the proposed distribution by
such Holder of the Registrable Securities and such other information reasonably
requested by the Company in connection with the preparation of and for inclusion
in the Registration Statement. The Company agrees (subject to Section 3.2
hereof) to use its best efforts to keep the Registration Statement effective
(including the preparation and filing of any amendments and supplements
necessary for that purpose) until the earlier of (i) the date on which Holder
consummates the sale of all of the Registrable Securities registered under the
Registration Statement, or (ii) the date on which all of the Registrable
Securities are eligible for sale pursuant to Rule 144(k) (or any successor
provision) or in a single transaction pursuant to Rule 144(e) (or any successor
provision) under the Securities Act of 1933, as amended (the "Act"). The Company
agrees to provide to Holder a reasonable number of copies of the final
Prospectus and any amendments or supplements thereto. Notwithstanding the
foregoing, the Company may at any time, in its sole discretion and prior to
receiving any Redemption Notice from any Holder, include all of Holder's
Redemption Shares or any portion thereof in any Shelf Registration Statement. In
connection with any Registration Statement utilized by the Company to satisfy
Holder's Registration Rights pursuant to this Section 3, Holder agrees that it
will respond within five (5) Business Days to any request by the Company to
provide or verify information regarding Holder or Holder's Registrable
Securities as may be required to be included in such Registration Statement
pursuant to the rules and regulations of the Commission.

                  (b) Offers and Sales. All offers and sales by a Holder under
the Registration Statement referred to in this Section 3 shall be completed
within the period

during which the Registration Statement is required to remain effective pursuant
to Section 3.1(a) of this Section 3, and upon expiration of such period Holder
will not offer or sell any Registrable Securities under the Registration
Statement. If directed by the Company, the Holder will return all undistributed
copies of the Prospectus in its possession upon the expiration of such period.

                  (c) Limitations on Registration Rights. Each exercise of a
Registration Right shall be with respect to a minimum of the lesser of (i) fifty
thousand (50,000) Common Shares or (ii) the total number of Redemption Shares
held by the exercising Holder at such time plus the number of Redemption Shares
that may be issued upon redemption of Units by Holder. The right of any Holder
to deliver a Registration Notice commences upon the first date the Holder is
permitted to redeem Units pursuant to the Partnership Agreement. The right of
any Holder to deliver a Registration Notice shall expire on the date on which
all of the Redemption Shares held by the Holder or issuable upon redemption of
Units held by the Holder are eligible for sale pursuant to Rule 144(k) (or any
successor provision) or in a single transaction pursuant to Rule 144(e) (or any
successor provision) under the Act. The Registration Rights granted pursuant to
this Section 3.1 may not be exercised in connection with any underwritten public
offering by the Company or by Holder without the prior written consent of the
Company.

                  3.2 Suspension of Offering. Upon any notice by the Company,
either before or after a Holder has delivered a Registration Notice, that a
negotiation or consummation of a transaction by the Company or any of its
subsidiaries is pending or an event has occurred, which negotiation,
consummation or event would require additional disclosure by the Company in the
Registration Statement of material information which the Company has a bona fide
business purpose for keeping confidential and the nondisclosure of which in the
Registration Statement might cause the Registration Statement to fail to comply
with applicable disclosure requirements (a "Materiality Notice"), Holder agrees
that it will immediately discontinue offers and sales of the Registrable
Securities under the Registration Statement until Holder receives copies of a
supplemented or amended Prospectus that corrects the misstatement(s) or
omission(s) referred to above and receives notice that any post-effective
amendment has become effective; provided, that the Company may delay, suspend or
withdraw the Registration Statement for such reason for no more than sixty (60)
days after delivery of the Materiality Notice at any one time. If so directed by
the Company, Holder will deliver to the Company all copies of the Prospectus
covering the Registrable Securities current at the time of receipt of any
Materiality Notice.

                  3.3 Qualification. The Company agrees to use its best efforts
to register or qualify the Registrable Securities by the time the applicable
Registration Statement is declared effective by the Commission under all
applicable state securities or "blue sky" laws of such jurisdictions as Holder
shall reasonably request in writing, to keep each such registration or
qualification effective during the period such Registration Statement is
required to be kept effective or during the period offers or sales are being
made by Holder after delivery of a Registration Notice to the Company, whichever
is shorter, and to do any and all other acts and things which may be reasonably
necessary or advisable to enable Holder to consummate the disposition in each
such jurisdiction of the Registrable Securities owned by Holder; provided,
however, that the Company shall not be required to (x) qualify generally to do
business in any jurisdiction or to register as a broker or dealer in such
jurisdiction where it would not otherwise be required to qualify

but for this Section 3.3, (y) subject itself to taxation in any such
jurisdiction, or (z) submit to the general service of process in any such
jurisdiction.

                  3.4 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder and each person, if any, who controls
any Holder within the meaning of Section 15 of the Securities Act or Section 20
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
follows:

                           (i) against any and all loss, liability, claim,
                  damage and expense whatsoever, as incurred, arising out of or
                  based upon any untrue statement or alleged untrue statement of
                  a material fact contained in any Registration Statement (or
                  any amendment thereto) pursuant to which the Registrable
                  Securities were registered under the Securities Act, including
                  all documents incorporated therein by reference, or the
                  omission or alleged omission therefrom of a material fact
                  required to be stated therein or necessary to make the
                  statements therein not misleading or arising out of or based
                  upon any untrue statement or alleged untrue statement of a
                  material fact contained in any Prospectus (or any amendment or
                  supplement thereto), including all documents incorporated
                  therein by reference, or the omission or alleged omission
                  therefrom of a material fact necessary in order to make the
                  statements therein, in the light of the circumstances under
                  which they were made, not misleading;

                           (ii) against any and all loss, liability, claim,
                  damage and expense whatsoever, as incurred, to the extent of
                  the aggregate amount paid in settlement of any litigation, or
                  investigation or proceeding by any governmental agency or
                  body, commenced or threatened, or of any claim whatsoever
                  based upon any such untrue statement or omission, or any such
                  alleged untrue statement or omission, if such settlement is
                  effected with the written consent of the Company; and

                           (iii) against any and all expense whatsoever, as
                  incurred (including reasonable fees and disbursements of
                  counsel), reasonably incurred in investigating, preparing or
                  defending against any litigation, or investigation or
                  proceeding by any governmental agency or body, commenced or
                  threatened, in each case whether or not a party, or any claim
                  whatsoever based upon any such untrue statement or omission,
                  or any such alleged untrue statement or omission, to the
                  extent that any such expense is not paid under subparagraph
                  (i) or (ii) above;

provided, however, that the indemnity provided pursuant to this Section 3.4 does
not apply to any Holder with respect to any loss, liability, claim, damage or
expense to the extent arising out of (A) any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Holder expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto), or (B) such Holder's failure to
deliver an amended or supplemented Prospectus if such loss, liability, claim,
damage or expense would not have arisen had such delivery occurred.

                  3.5 Indemnification by Holder. Each Holder (and each permitted
assignee of such Holder, on a several basis) agrees to indemnify and hold
harmless the Company, and each of its trustees/directors and officers (including
each trustee/director and officer of the Company who signed a Registration
Statement), and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, as
follows:

                           (i) against any and all loss, liability, claim,
                  damage and expense whatsoever, as incurred, arising out of or
                  based upon any untrue statement or alleged untrue statement of
                  a material fact contained in any Registration Statement (or
                  any amendment thereto) pursuant to which the Registrable
                  Securities were registered under the Securities Act, including
                  all documents incorporated therein by reference, or the
                  omission or alleged omission therefrom of a material fact
                  required to be stated therein or necessary to make the
                  statements therein not misleading or arising out of or based
                  upon any untrue statement or alleged untrue statement of a
                  material fact contained in any Prospectus (or any amendment or
                  supplement thereto), including all documents incorporated
                  therein by reference, or the omission or alleged omission
                  therefrom of a material fact necessary in order to make the
                  statements therein, in the light of the circumstances under
                  which they were made, not misleading;

                           (ii) against any and all loss, liability, claim,
                  damage and expense whatsoever, as incurred, to the extent of
                  the aggregate amount paid in settlement of any litigation, or
                  investigation or proceeding by any governmental agency or
                  body, commenced or threatened, or of any claim whatsoever
                  based upon any such untrue statement or omission, or any such
                  alleged untrue statement or omission, if such settlement is
                  effected with the written consent of Holder; and

                           (iii) against any and all expense whatsoever, as
                  incurred (including reasonable fees and disbursements of
                  counsel), reasonably incurred in investigating, preparing or
                  defending against any litigation, or investigation or
                  proceeding by any governmental agency or body, commenced or
                  threatened, in each case whether or not a party, or any claim
                  whatsoever based upon any such untrue statement or omission,
                  or any such alleged untrue statement or omission, to the
                  extent that any such expense is not paid under subparagraph
                  (i) or (ii) above;

provided, however, that the indemnity provided pursuant to this Section 3.5
shall only apply with respect to any loss, liability, claim, damage or expense
to the extent arising out of (A) any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by such Holder expressly for use in
the Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto), or (B) such Holder's failure to deliver an
amended or supplemental Prospectus if such loss, liability, claim, damage or
expense would not have arisen had such delivery occurred. Notwithstanding the
provisions of this Section 3.5, a Holder and any permitted assignee shall not be
required to indemnify the Company, its officers, trustees/directors or control

persons with respect to any amount in excess of the amount of the total proceeds
to such Holder or such permitted assignee, as the case may be, from sales of the
Registrable Securities of such Holder under the Registration Statement, and no
Holder shall be liable under Section 3.5 for any statements or omissions of any
other Holder.

                  3.6 Conduct of Indemnification Proceedings. An indemnified
party hereunder shall give reasonably prompt notice to the indemnifying party of
any action or proceeding commenced against it in respect of which indemnity may
be sought hereunder, but failure to so notify the indemnifying party (i) shall
not relieve it from any liability which it may have under the indemnity
agreement provided in Section 3.4 or 3.5 above, unless and to the extent it did
not otherwise learn of such action and the lack of notice by the indemnified
party results in the forfeiture by the indemnifying party of substantial rights
and defenses, and (ii) shall not, in any event, relieve the indemnifying party
from any obligations to the indemnified party other than the indemnification
obligation provided under Section 3.4 or 3.5 above. If the indemnifying party so
elects within a reasonable time after receipt of such notice, the indemnifying
party may assume the defense of such action or proceeding at such indemnifying
party's own expense with counsel chosen by the indemnifying party and approved
by the indemnified party, which approval shall not be unreasonably withheld;
provided, however, that the indemnifying party will not settle any such action
or proceeding without the written consent of the indemnified party unless, as a
condition to such settlement, the indemnifying party secures the unconditional
release of the indemnified party; and provided further, that if the indemnified
party reasonably determines that a conflict of interest exists where it is
advisable for the indemnified party to be represented by separate counsel or
that, upon advice of counsel, there may be legal defenses available to it which
are different from or in addition to those available to the indemnifying party,
then the indemnifying party shall not be entitled to assume such defense and the
indemnified party shall be entitled to separate counsel at the indemnifying
party's expense. If the indemnifying party is not entitled to assume the defense
of such action or proceeding as a result of the second proviso to the preceding
sentence, the indemnifying party's counsel shall be entitled to conduct the
indemnifying party's defense and counsel for the indemnified party shall be
entitled to conduct the defense of the indemnified party, it being understood
that both such counsel will cooperate with each other to conduct the defense of
such action or proceeding as efficiently as possible. If the indemnifying party
is not so entitled to assume the defense of such action or does not assume such
defense, after having received the notice referred to in the first sentence of
this paragraph, the indemnifying party will pay the reasonable fees and expenses
of counsel for the indemnified party. In such event, however, the indemnifying
party will not be liable for any settlement effected without the written consent
of the indemnifying party. If an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with this
paragraph, the indemnifying party shall not be liable for any fees and expenses
of counsel for the indemnified party incurred thereafter in connection with such
action or proceeding.

                  3.7 Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Sections 3.4 and 3.5 above is for any reason held to be unenforceable by the
indemnified party although applicable in accordance with its terms, the Company
and the relevant Holder shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
agreement incurred by the Company and the

Holder, (i) in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and the Holder on the other, in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative fault of but also the relative benefits to the
Company on the one hand and the Holder on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits to the indemnifying party and indemnified party shall be
determined by reference to, among other things, the total proceeds received by
the indemnifying party and indemnified party in connection with the offering to
which such losses, claims, damages, liabilities or expenses relate. The relative
fault of the indemnifying party and indemnified party shall be determined by
reference to, among other things, whether the action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, the indemnifying party or the indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action.

                  The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 3.7 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 3.7, a Holder shall
not be required to contribute any amount in excess of the amount of the total
proceeds to the Holder from sales of the Registrable Securities of such Holder
under the Registration Statement.

                  Notwithstanding the foregoing, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 3.7, each person, if any, who
controls a Holder within the meaning of Section 15 of the Securities Act shall
have the same rights to contribution as the Holder, and each trustee/director of
the Company, each officer of the Company who signed a Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act shall have the same rights to contribution as the Company.

SECTION 4.        EXPENSES

                  The Company shall pay all expenses incident to the performance
by it of its registration obligations under Sections 2 and 3, including (i) all
stock exchange, Commission and state securities registration, listing and filing
fees, (ii) all expenses incurred in connection with the preparation, printing
and distributing of any Issuer Registration Statement or Registration Statement
and Prospectus, and (iii) fees and disbursements of counsel for the Company and
of the independent public accountants of the Company. Each Holder shall be
responsible for the payment of any brokerage and sales commissions, fees and
disbursements of the Holder's counsel, accountants and other advisors, and any
transfer taxes relating to the sale or disposition of the Registrable Securities
by such Holder pursuant to Section 3 or otherwise.

SECTION 5.        RULE 144 COMPLIANCE

                  The Company covenants that it will use its best efforts to
timely file the reports required to be filed by the Company under the Securities
Act and the Exchange Act so as to enable each Holder to sell Registrable
Securities pursuant to Rule 144 under the Securities Act. In connection with any
sale, transfer or other disposition by any Holder of any Registrable Securities
pursuant to Rule 144 under the Securities Act, the Company shall cooperate with
the Holder to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any Securities
Act legend, and enable certificates for such Registrable Securities to be for
such number of shares and registered in such names as Holder may reasonably
request at least ten (10) Business Days prior to any sale of Registrable
Securities hereunder.

SECTION 6.        MISCELLANEOUS

                  6.1 Integration; Amendment. This Agreement constitutes the
entire agreement among the parties hereto with respect to the matters set forth
herein and supersedes and renders of no force and effect all prior oral or
written agreements, commitments and understandings among the parties with
respect to the matters set forth herein. Except as otherwise expressly provided
in this Agreement, no amendment, modification or discharge of this Agreement
shall be valid or binding unless set forth in writing and duly executed by the
Company and each Holder against whom such amendment, modification or discharge
is sought to be enforced.

                  6.2 Waivers. No waiver by a party hereto shall be effective
unless made in a written instrument duly executed by the party against whom such
waiver is sought to be enforced, and only to the extent set forth in such
instrument. Neither the waiver by any of the parties hereto of a breach or a
default under any of the provisions of this Agreement, nor the failure of any of
the parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder shall thereafter be
construed as a waiver of any subsequent breach or default of a similar nature,
or as a waiver of any such provisions, rights or privileges hereunder.

                  6.3 Assignment; Successors and Assigns. This Agreement and the
rights granted hereunder may not be assigned by any Holder without the written
consent of the Company; provided, however, that a Holder may assign its rights
and obligations hereunder, following at least ten (10) days' prior written
notice to the Company, (i) to the direct equity owners (e.g., partners or
members) or beneficiaries in connection with a distribution of such Holder's
Units to its equity owners or beneficiaries and (ii) to a permitted transferee
in connection with a transfer of such Holder's Units in accordance with the
terms of the Partnership Agreement, if, in the case of (i) and (ii) above, such
persons agree in writing to be bound by all of the provisions hereof. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of all of the parties hereto.

                  6.4 Burden and Benefit. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
executors, personal and legal representatives, successors and, subject to
Section 6.3 above, assigns.

                  6.5 Notices. All notices called for under this Agreement shall
be in writing and shall be deemed given upon receipt if delivered personally or
by facsimile transmission and followed promptly by mail, or mailed by registered
or certified mail (return receipt requested), postage prepaid, to the parties at
the addresses set forth opposite their names in Schedule A hereto, or to any
other address or addressee as any party entitled to receive notice under this
Agreement shall designate, from time to time, to others in the manner provided
in this Section 6.5 for the service of notices; provided, however, that notices
of a change of address shall be effective only upon receipt thereof. Any notice
delivered to the party hereto to whom it is addressed shall be deemed to have
been given and received on the day it was received; provided, however, that if
such day is not a Business Day then the notice shall be deemed to have been
given and received on the Business Day next following such day and if any party
rejects delivery of any notice attempted to be given hereunder, delivery shall
be deemed given on the date of such rejection. Any notice sent by facsimile
transmission shall be deemed to have been given and received on the Business Day
next following the transmission.

                  6.6 Specific Performance. The parties hereto acknowledge that
the obligations undertaken by them hereunder are unique and that there would be
no adequate remedy at law if any party fails to perform any of its obligations
hereunder, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled to (i)
compel specific performance of the obligations, covenants and agreements of any
other party under this Agreement in accordance with the terms and conditions of
this Agreement and (ii) obtain preliminary injunctive relief to secure specific
performance and to prevent a breach or contemplated breach of this Agreement in
any court of the United States or any State thereof having jurisdiction.

                  6.7 Governing Law. This Agreement, the rights and obligations
of the parties hereto, and any claims or disputes relating thereto, shall be
governed by and construed in accordance with the laws of the State of Maryland,
but not including the choice of law rules thereof.

                  6.8 Headings. Section and subsection headings contained in
this Agreement are inserted for convenience of reference only, shall not be
deemed to be a part of this Agreement for any purpose, and shall not in any way
define or affect the meaning, construction or scope of any of the provisions
hereof.

                  6.9 Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person or entity may require.

                  6.10 Execution in Counterparts. To facilitate execution, this
Agreement may be executed in as many counterparts as may be required. It shall
not be necessary that the signature of or on behalf of each party appears on
each counterpart, but it shall be sufficient that the signature of or on behalf
of each party appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of or on behalf of all of the
parties.

                  6.11 Severability. If fulfillment of any provision of this
Agreement, at the time such fulfillment shall be due, shall transcend the limit
of validity prescribed by law, then the obligation to be fulfilled shall be
reduced to the limit of such validity; and if any clause or provision contained
in this Agreement operates or would operate to invalidate this Agreement, in
whole or in part, then such clause or provision only shall be held ineffective,
as though not herein contained, and the remainder of this Agreement shall remain
operative and in full force and effect.

                  IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf as of the date first hereinabove set
forth.

                          The Company:          VORNADO REALTY TRUST

                                               By:    /s/ Irwin Goldberg
                                                      --------------------------
                                               Name:  Irwin Goldberg
                                               Title: Vice President - Chief
                                                      Financial Officer

                          Holders:

                                       MENDIK REALTY COMPANY, INC.

                                       By:      /s/ David R. Greenbaum
                                                ----------------------------
                                       Name:    David R. Greenbaum
                                                Title:   President

                                                /s/ Bernhard H. Mendik
                                                ---------------------------
                                                Bernard H. Mendik

                                                /s/ Davd R. Greenbaum
                                                ---------------------------
                                                David R. Greenbaum

                                                /s/ James D. Kuhn
                                                ---------------------------
                                                James D. Kuhn

                                                /s/ Robert Chambers
                                                ---------------------------
                                                Robert Chambers

                                                /s/ Shirely Dembner
                                                ---------------------------
                                                Shirley Dembner

                                                NANCY J. BATKIN 1998 TRUST u/a/d

     5/11/98

                                                By:      /s/ Susan Mendik
                                                ---------------------------
                                                Name:    Susan Mendik
                                                Title:   Trustee

                                                /s/ Susan Mendik
                                                ---------------------------
                                                Susan Mendik

                                                                    Exhibit 10.2

                          REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of July 23, 1998 by and between VORNADO REALTY TRUST, a Maryland real
estate investment trust (the "Company") having an office at Park 80 West, Plaza
II, Saddle Brook, New Jersey 07663, Attention: Joseph P. Macnow, and GOULD
INVESTORS, L.P., a Delaware limited partnership ("Holder") having an office at
66 Cutter Mill Road, Great Neck, New York 11021, Attention: Fred Gould.

          WHEREAS, Holder is receiving on the date hereof Class A units of
limited partnership interest ("Units") in Vornado Realty L.P., a Delaware
limited partnership (the "Partnership");

          WHEREAS, in connection therewith, the Company has agreed to grant to
Holder the Registration Rights (as defined in Section 1 hereof);

          NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, hereby agree as follows:

SECTION 1. REGISTRATION RIGHTS

          If Holder receives common shares of beneficial interest of the Company
("Common Shares") upon redemption of Units (the "Redemption Shares") pursuant to
the terms of the Second Amended and Restated Agreement of Limited Partnership of
the Partnership, as amended through the date hereof and from time to time (the
"Partnership Agreement"), then, unless such Redemption Shares are issued to such
Holder pursuant to an Issuer Registration Statement as provided in Section 2
below, Holder shall be entitled to offer for sale pursuant to a shelf
registration statement the Redemption Shares, subject to the terms and
conditions set forth in Section 3 hereof (the "Registration Rights").

SECTION 2. ISSUER REGISTRATION STATEMENT

          Anything contained herein to the contrary notwithstanding, in the
event that the Redemption Shares are issued by the Company to Holder pursuant to
an effective registration statement (an "Issuer Registration Statement") filed
with the Securities and Exchange Commission (the "Commission"), the Company
shall be deemed to have satisfied all of its registration obligations under this
Agreement.

SECTION 3. DEMAND REGISTRATION RIGHTS

          3.1 (a) Registration Procedure. Unless such Redemption Shares are
issued pursuant to an Issuer Registration Statement as provided in Section 2
hereof,

then subject to Sections 3.1(c) and 3.2 hereof, if Holder desires to exercise
its Registration Rights with respect to the Redemption Shares, Holder shall
deliver to the Company a written notice (a "Redemption Notice") informing the
Company of such exercise and specifying the number of shares to be offered by
such Holder (such shares to be offered being referred to herein as the
"Registrable Securities"). Such notice may be given at any time on or after the
date a notice of redemption is delivered by Holder to the Partnership pursuant
to the Partnership Agreement, but must be given at least thirty (30) Business
Days prior to the consummation of the sale of Registrable Securities. As used in
this Agreement, a "Business Day" is any Monday, Tuesday, Wednesday, Thursday or
Friday other than a day on which banks and other financial institutions are
authorized or required to be closed for business in the State of New York or
Maryland. Upon receipt of the Registration Notice, the Company, if it has not
already caused the Registrable Securities to be included as part of an existing
shelf registration statement and related prospectus that the Company then has on
file with the Commission (the "Shelf Registration Statement") (in which event
the Company shall be deemed to have satisfied its registration obligation under
this Section 3), will cause to be filed with the Commission as soon as
reasonably practicable after receiving the Registration Notice a new
registration statement and related prospectus (a "New Registration Statement")
that complies as to form in all material respects with applicable Commission
rules providing for the sale by Holder of the Registrable Securities, and agrees
(subject to Section 3.2 hereof) to use its best efforts to cause such New
Registration Statement to be declared effective by the Commission as soon as
practicable. (As used herein, "Registration Statement" and "Prospectus" refer to
the Shelf Registration Statement and related prospectus (including any
preliminary prospectus) or the New Registration Statement and related prospectus
(including any preliminary prospectus), whichever is utilized by the Company to
satisfy Holder's Registration Rights pursuant to this Section 3, including in
each case any documents incorporated therein by reference. Holder agrees to
provide in a timely manner information regarding the proposed distribution by
Holder of the Registrable Securities and such other information reasonably
requested by the Company in connection with the preparation of and for inclusion
in the Registration Statement. The Company agrees (subject to Section 3.2
hereof) to use its best efforts to keep the Registration Statement effective
(including the preparation and filing of any amendments and supplements
necessary for that purpose) until the earlier of (i) the date on which Holder
consummates the sale of all of the Registrable Securities registered under the
Registration Statement, or (ii) the date on which all of the Registrable
Securities are eligible for sale pursuant to Rule 144(k) (or any successor
provision) or in a single transaction pursuant to Rule 144(e) (or any successor
provision) under the Securities Act of 1933, as amended (the "Act"). The Company
agrees to provide to Holder a reasonable number of copies of the final
Prospectus and any amendments or supplements thereto. Notwithstanding the
foregoing, the Company may at any time, in its sole discretion and prior to
receiving any Redemption Notice from Holder, include all of Holder's Redemption
Shares or any portion thereof in any Shelf Registration Statement. In connection
with any Registration Statement utilized by the Company to satisfy Holder's
Registration Rights pursuant to this Section 3, Holder agrees that it will
respond within five (5) Business Days to any request by the Company to provide
or verify information regarding Holder or Holder's Registrable Securities as may
be required to be included in such Registration Statement pursuant to the rules
and regulations of the Commission.

          (b) Offers and Sales. All offers and sales by Holder under the
Registration Statement referred to in this Section 3 shall be completed within
the period during which the Registration Statement is required to remain
effective pursuant to Section 3.1(a) of this Section 3, and upon expiration of
such period Holder will not offer or sell any Registrable Securities under the
Registration Statement. If directed by the Company, Holder will return all
undistributed copies of the Prospectus in its possession upon the expiration of
such period.

          (c) Limitations on Registration Rights. Each exercise of a
Registration Right shall be with respect to a minimum of the lesser of (i) fifty
thousand (50,000) Common Shares or (ii) the total number of Redemption Shares
held by Holder at such time plus the number of Redemption Shares that may be
issued upon redemption of Units by Holder. The right of Holder to deliver a
Registration Notice commences upon the first date Holder is permitted to redeem
Units pursuant to the Partnership Agreement. The right of Holder to deliver a
Registration Notice shall expire on the date on which all of the Redemption
Shares held by Holder or issuable upon redemption of Units held by Holder are
eligible for sale pursuant to Rule 144(k) (or any successor provision) or in a
single transaction pursuant to Rule 144(e) (or any successor provision) under
the Act. The Registration Rights granted pursuant to this Section 3.1 may not be
exercised in connection with any underwritten public offering by the Company or
by Holder without the prior written consent of the Company.

          3.2 Suspension of Offering. Upon any notice by the Company, either
before or after Holder has delivered a Registration Notice, that a negotiation
or consummation of a transaction by the Company or any of its subsidiaries is
pending or an event has occurred, which negotiation, consummation or event would
require additional disclosure by the Company in the Registration Statement of
material information which the Company has a bona fide business purpose for
keeping confidential and the nondisclosure of which in the Registration
Statement might cause the Registration Statement to fail to comply with
applicable disclosure requirements (a "Materiality Notice"), Holder agrees that
it will immediately discontinue offers and sales of the Registrable Securities
under the Registration Statement until Holder receives copies of a supplemented
or amended Prospectus that corrects the misstatement(s) or omission(s) referred
to above and receives notice that any post-effective amendment has become
effective; provided, that the Company may delay, suspend or withdraw the
Registration Statement for such reason for no more than sixty (60) days after
delivery of the Materiality Notice at any one time. If so directed by the
Company, Holder will deliver to the Company all copies of the Prospectus
covering the Registrable Securities current at the time of receipt of any
Materiality Notice.

          3.3 Qualification. The Company agrees to use its best efforts to
register or qualify the Registrable Securities by the time the applicable
Registration Statement is declared effective by the Commission under all
applicable state securities or "blue sky" laws of such jurisdictions as Holder
shall reasonably request in writing, to keep each such registration or
qualification effective during the period such Registration Statement is
required to be kept effective or during the period offers or sales are being
made by Holder after delivery of a Registration Notice to the Company, whichever
is shorter, and to do any and all other acts and things which may be reasonably
necessary or advisable to enable Holder to consummate the disposition in each
such jurisdiction of the Registrable Securities owned by Holder; provided,
however, that the Company shall not

be required to (x) qualify  generally to do business in any  jurisdiction  or to
register as a broker or dealer in such jurisdiction where it would not otherwise
be required to qualify but for this Section 3.3, (y) subject  itself to taxation
in any such jurisdiction, or (z) submit to the general service of process in any
such jurisdiction.

          3.4 Indemnification by the Company. The Company agrees to indemnify
and hold harmless Holder and each person, if any, who controls Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as follows:

               (i) against any and all loss, liability, claim, damage and
          expense whatsoever, as incurred, arising out of or based upon any
          untrue statement or alleged untrue statement of a material fact
          contained in any Registration Statement (or any amendment thereto)
          pursuant to which the Registrable Securities were registered under the
          Securities Act, including all documents incorporated therein by
          reference, or the omission or alleged omission therefrom of a material
          fact required to be stated therein or necessary to make the statements
          therein not misleading or arising out of or based upon any untrue
          statement or alleged untrue statement of a material fact contained in
          any Prospectus (or any amendment or supplement thereto), including all
          documents incorporated therein by reference, or the omission or
          alleged omission therefrom of a material fact necessary in order to
          make the statements therein, in the light of the circumstances under
          which they were made, not misleading;

               (ii) against any and all loss, liability, claim, damage and
          expense whatsoever, as incurred, to the extent of the aggregate amount
          paid in settlement of any litigation, or investigation or proceeding
          by any governmental agency or body, commenced or threatened, or of any
          claim whatsoever based upon any such untrue statement or omission, or
          any such alleged untrue statement or omission, if such settlement is
          effected with the written consent of the Company; and

               (iii) against any and all expense whatsoever, as incurred
          (including reasonable fees and disbursements of counsel), reasonably
          incurred in investigating, preparing or defending against any
          litigation, or investigation or proceeding by any governmental agency
          or body, commenced or threatened, in each case whether or not a party,
          or any claim whatsoever based upon any such untrue statement or
          omission, or any such alleged untrue statement or omission, to the
          extent that any such expense is not paid under subparagraph (i) or
          (ii) above;

provided, however, that the indemnity provided pursuant to this Section 3.4 does
not apply to Holder with respect to any loss, liability, claim, damage or
expense to the extent arising out of (A) any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Holder expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto), or (B) such Holder's failure to
deliver an amended or supplemented Prospectus if such

loss, liability, claim, damage or expense would not have arisen had such
delivery occurred.

          3.5 Indemnification by Holder. Holder (and each permitted assignee of
Holder, on a several basis) agrees to indemnify and hold harmless the Company,
and each of its trustees/directors and officers (including each trustee/director
and officer of the Company who signed a Registration Statement), and each
person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, as follows:

               (i) against any and all loss, liability, claim, damage and
          expense whatsoever, as incurred, arising out of or based upon any
          untrue statement or alleged untrue statement of a material fact
          contained in any Registration Statement (or any amendment thereto)
          pursuant to which the Registrable Securities were registered under the
          Securities Act, including all documents incorporated therein by
          reference, or the omission or alleged omission therefrom of a material
          fact required to be stated therein or necessary to make the statements
          therein not misleading or arising out of or based upon any untrue
          statement or alleged untrue statement of a material fact contained in
          any Prospectus (or any amendment or supplement thereto), including all
          documents incorporated therein by reference, or the omission or
          alleged omission therefrom of a material fact necessary in order to
          make the statements therein, in the light of the circumstances under
          which they were made, not misleading;

               (ii) against any and all loss, liability, claim, damage and
          expense whatsoever, as incurred, to the extent of the aggregate amount
          paid in settlement of any litigation, or investigation or proceeding
          by any governmental agency or body, commenced or threatened, or of any
          claim whatsoever based upon any such untrue statement or omission, or
          any such alleged untrue statement or omission, if such settlement is
          effected with the written consent of Holder; and

               (iii) against any and all expense whatsoever, as incurred
          (including reasonable fees and disbursements of counsel), reasonably
          incurred in investigating, preparing or defending against any
          litigation, or investigation or proceeding by any governmental agency
          or body, commenced or threatened, in each case whether or not a party,
          or any claim whatsoever based upon any such untrue statement or
          omission, or any such alleged untrue statement or omission, to the
          extent that any such expense is not paid under subparagraph (i) or
          (ii) above;

provided, however, that the indemnity provided pursuant to this Section 3.5
shall only apply with respect to any loss, liability, claim, damage or expense
to the extent arising out of (A) any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
written information furnished to the Company by Holder expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto), or (B) Holder's failure to deliver an amended
or supplemental Prospectus if such loss, liability, claim,

damage or expense would not have arisen had such delivery occurred.
Notwithstanding the provisions of this Section 3.5, Holder and any permitted
assignee shall not be required to indemnify the Company, its officers,
trustees/directors or control persons with respect to any amount in excess of
the amount of the total proceeds to Holder or such permitted assignee, as the
case may be, from sales of the Registrable Securities of Holder under the
Registration Statement.

          3.6 Conduct of Indemnification Proceedings. An indemnified party
hereunder shall give reasonably prompt notice to the indemnifying party of any
action or proceeding commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify the indemnifying party (i) shall not
relieve it from any liability which it may have under the indemnity agreement
provided in Section 3.4 or 3.5 above, unless and to the extent it did not
otherwise learn of such action and the lack of notice by the indemnified party
results in the forfeiture by the indemnifying party of substantial rights and
defenses, and (ii) shall not, in any event, relieve the indemnifying party from
any obligations to the indemnified party other than the indemnification
obligation provided under Section 3.4 or 3.5 above. If the indemnifying party so
elects within a reasonable time after receipt of such notice, the indemnifying
party may assume the defense of such action or proceeding at such indemnifying
party's own expense with counsel chosen by the indemnifying party and approved
by the indemnified party, which approval shall not be unreasonably withheld;
provided, however, that the indemnifying party will not settle any such action
or proceeding without the written consent of the indemnified party unless, as a
condition to such settlement, the indemnifying party secures the unconditional
release of the indemnified party; and provided further, that if the indemnified
party reasonably determines that a conflict of interest exists where it is
advisable for the indemnified party to be represented by separate counsel or
that, upon advice of counsel, there may be legal defenses available to it which
are different from or in addition to those available to the indemnifying party,
then the indemnifying party shall not be entitled to assume such defense and the
indemnified party shall be entitled to separate counsel at the indemnifying
party's expense. If the indemnifying party is not entitled to assume the defense
of such action or proceeding as a result of the second proviso to the preceding
sentence, the indemnifying party's counsel shall be entitled to conduct the
indemnifying party's defense and counsel for the indemnified party shall be
entitled to conduct the defense of the indemnified party, it being understood
that both such counsel will cooperate with each other to conduct the defense of
such action or proceeding as efficiently as possible. If the indemnifying party
is not so entitled to assume the defense of such action or does not assume such
defense, after having received the notice referred to in the first sentence of
this paragraph, the indemnifying party will pay the reasonable fees and expenses
of counsel for the indemnified party. In such event, however, the indemnifying
party will not be liable for any settlement effected without the written consent
of the indemnifying party. If an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with this
paragraph, the indemnifying party shall not be liable for any fees and expenses
of counsel for the indemnified party incurred thereafter in connection with such
action or proceeding.

          3.7 Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Sections 3.4 and 3.5 above is for any reason held to be unenforceable by the
indemnified party although applicable in accordance with its terms, the Company
and Holder shall contribute to the

aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company and Holder, (i)
in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and Holder on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative fault of but also the relative benefits to the
Company on the one hand and Holder on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits to the indemnifying party and indemnified party shall be
determined by reference to, among other things, the total proceeds received by
the indemnifying party and indemnified party in connection with the offering to
which such losses, claims, damages, liabilities or expenses relate. The relative
fault of the indemnifying party and indemnified party shall be determined by
reference to, among other things, whether the action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, the indemnifying party or the indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action.

          The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 3.7 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 3.7, Holder shall not be required
to contribute any amount in excess of the amount of the total proceeds to Holder
from sales of the Registrable Securities of Holder under the Registration
Statement.

          Notwithstanding the foregoing, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 3.7, each person, if any, who
controls Holder within the meaning of Section 15 of the Securities Act shall
have the same rights to contribution as Holder, and each trustee/director of the
Company, each officer of the Company who signed a Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act shall have the same rights to contribution as the Company.

SECTION 4. EXPENSES

          The Company shall pay all expenses incident to the performance by it
of its registration obligations under Sections 2 and 3, including (i) all stock
exchange, Commission and state securities registration, listing and filing fees,
(ii) all expenses incurred in connection with the preparation, printing and
distributing of any Issuer Registration Statement or Registration Statement and
Prospectus, and (iii) fees and disbursements of counsel for the Company and of
the independent public accountants of the Company. Holder shall be responsible
for the payment of any brokerage and sales commissions, fees and disbursements
of Holder's counsel, accountants and other

advisors,  and any transfer  taxes  relating to the sale or  disposition  of the
Registrable Securities by Holder pursuant to Section 3 or otherwise.

SECTION 5. RULE 144 COMPLIANCE

          The Company covenants that it will use its best efforts to timely file
the reports required to be filed by the Company under the Securities Act and the
Exchange Act so as to enable Holder to sell Registrable Securities pursuant to
Rule 144 under the Securities Act. In connection with any sale, transfer or
other disposition by Holder of any Registrable Securities pursuant to Rule 144
under the Securities Act, the Company shall cooperate with Holder to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any Securities Act legend, and enable
certificates for such Registrable Securities to be for such number of shares and
registered in such names as Holder may reasonably request at least ten (10)
Business Days prior to any sale of Registrable Securities hereunder.

SECTION 6. MISCELLANEOUS

          6.1 Integration; Amendment. This Agreement constitutes the entire
agreement among the parties hereto with respect to the matters set forth herein
and supersedes and renders of no force and effect all prior oral or written
agreements, commitments and understandings among the parties with respect to the
matters set forth herein. Except as otherwise expressly provided in this
Agreement, no amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed by the Company
and Holder against whom such amendment, modification or discharge is sought to
be enforced.

          6.2 Waivers. No waiver by a party hereto shall be effective unless
made in a written instrument duly executed by the party against whom such waiver
is sought to be enforced, and only to the extent set forth in such instrument.
Neither the waiver by any of the parties hereto of a breach or a default under
any of the provisions of this Agreement, nor the failure of any of the parties,
on one or more occasions, to enforce any of the provisions of this Agreement or
to exercise any right or privilege hereunder shall thereafter be construed as a
waiver of any subsequent breach or default of a similar nature, or as a waiver
of any such provisions, rights or privileges hereunder.

          6.3 Assignment; Successors and Assigns. This Agreement and the rights
granted hereunder may not be assigned by Holder without the written consent of
the Company; provided, however, that Holder may assign its rights and
obligations hereunder, following at least ten (10) days' prior written notice to
the Company, (i) to the direct equity owners (e.g., partners or members) or
beneficiaries in connection with a distribution of Holder's Units to its equity
owners or beneficiaries and (ii) to a permitted transferee in connection with a
transfer of such Holder's Units in accordance with the terms of the Partnership
Agreement, if, in the case of (i) and (ii) above, such persons agree in writing
to be bound by all of the provisions hereof. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of all of
the parties hereto.

          6.4 Burden and Benefit. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, executors,
personal and legal representatives, successors and, subject to Section 6.3
above, assigns.

          6.5 Notices. All notices called for under this Agreement shall be in
writing and shall be deemed given upon receipt if delivered personally or by
facsimile transmission and followed promptly by mail, or mailed by registered or
certified mail (return receipt requested), postage prepaid, to the parties at
the addresses set forth above, or to any other address or addressee as any party
entitled to receive notice under this Agreement shall designate, from time to
time, to others in the manner provided in this Section 6.5 for the service of
notices; provided, however, that notices of a change of address shall be
effective only upon receipt thereof. Any notice delivered to the party hereto to
whom it is addressed shall be deemed to have been given and received on the day
it was received; provided, however, that if such day is not a Business Day then
the notice shall be deemed to have been given and received on the Business Day
next following such day and if any party rejects delivery of any notice
attempted to be given hereunder, delivery shall be deemed given on the date of
such rejection. Any notice sent by facsimile transmission shall be deemed to
have been given and received on the Business Day next following the
transmission.

          6.6 Specific Performance. The parties hereto acknowledge that the
obligations undertaken by them hereunder are unique and that there would be no
adequate remedy at law if any party fails to perform any of its obligations
hereunder, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled to (i)
compel specific performance of the obligations, covenants and agreements of any
other party under this Agreement in accordance with the terms and conditions of
this Agreement and (ii) obtain preliminary injunctive relief to secure specific
performance and to prevent a breach or contemplated breach of this Agreement in
any court of the United States or any State thereof having jurisdiction.

          6.7 Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of Maryland, but not
including the choice of law rules thereof.

          6.8 Headings. Section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.

          6.9 Pronouns. All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural, as the identity
of the person or entity may require.

          6.10 Execution in Counterparts. To facilitate execution, this
Agreement may be executed in as many counterparts as may be required. It shall
not be necessary that the signature of or on behalf of each party appears on
each counterpart, but it shall be sufficient that the signature of or on behalf
of each party appears on one or more of the counterparts. All counterparts shall
collectively constitute a single agreement. It shall

not be necessary in any proof of this Agreement to produce or account for more
than a number of counterparts containing the respective signatures of or on
behalf of all of the parties.

          6.11 Severability. If fulfillment of any provision of this Agreement,
at the time such fulfillment shall be due, shall transcend the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to the
limit of such validity; and if any clause or provision contained in this
Agreement operates or would operate to invalidate this Agreement, in whole or in
part, then such

clause  or  provision  only  shall be held  ineffective,  as though  not  herein
contained,  and the remainder of this  Agreement  shall remain  operative and in
full force and effect.

          IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed on its behalf as of the date first hereinabove set
forth.

                               VORNADO REALTY TRUST

                               By:    /s/ Michael Fascitelli
                                      ------------------------------------------
                               Name:  Michael Fascitelli
                               Title: President

                               GOULD INVESTORS, L.P.

                               By:    Georgetown Partners, Inc., general partner
                                      ------------------------------------------
                                      By:    /s/ Simeon Brinberg
                                             ----------------------
                                      Name:  Simeon Brinberg
                                      Title: Senior Vice President

                                                                    Exhibit 23.4

                          INDEPENDENT AUDITORS' CONSENT

     We consent to the incorporation by reference into this Registration
Statement of Vornado Realty Trust on Form S-3 of our report dated March 24,
1999, appearing in the Annual Report on Form 10-K of Vornado Realty Trust for
the year ended December 31, 1998, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.

/s/ Deloitte & Touche LLP

Parsippany, New Jersey
October 22, 1999

                          INDEPENDENT AUDITORS' CONSENT

     We consent to the incorporation by reference in this Registration Statement
of Vornado Realty Trust on Form S-3 of our report dated March 20, 1998 on the
statement of revenues and certain expenses of 888 7th Avenue, for the year ended
December 31, 1997, which report appears in the Form 8-K/A of Vornado Realty
Trust, dated August 12, 1998 and filed with the Securities and Exchange
Commission on February 24, 1999, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.

/s/ Deloitte & Touche LLP

New York, New York
October 22, 1999

                                                                    Exhibit 23.5

                     Consent of Friedman Alpren & Green LLP

                   [Letterhead of Friedman Alpren & Green LLP]

                          INDEPENDENT AUDITORS' CONSENT

     We consent to the incorporation by reference in this Registration Statement
of Vornado Realty Trust on Form S-3 of our report dated July 30, 1998 on the
statement of revenues and certain expenses of 689 Fifth Avenue, New York, New
York, for the year ended December 31, 1997, which report appears in the Form 8-K
of Vornado Realty Trust, dated August 12, 1998 and filed with the Securities and
Exchange Commission on February 12, 1999.

/s/ Friedman Alpren & Green LLP

New York, New York
October 21, 1999

                                                                    Exhibit 23.6

                     Consent of Sharrard, McGee & Co., P.A.

                   [Letterhead of Sharrard, McGee & Co., P.A.]

                          INDEPENDENT AUDITORS' CONSENT

     We consent to the incorporation by reference into this Registration
Statement of Vornado Realty Trust on Form S-3 of our report dated September 30,
1998 on the statement of income and expense of certain properties of Market
Square Limited Partnership for the year ended December 31, 1997 and our
compilation report dated November 12, 1998 on the statement of income and
expense of certain properties of Market Square Limited Partnership for the nine
months ended September 30, 1998 and 1997, which reports appear in the Form 8-K
of Vornado Realty Trust, dated August 12, 1998 and filed with the Securities and
Exchange Commission on February 12, 1999.

/s/ Sharrard, McGee & Co., P.A.

High Point, North Carolina
October 21, 1999

                                                                    Exhibit 23.7

                               Consent of KPMG LLP

                          INDEPENDENT AUDITORS' CONSENT

     We consent to the incorporation by reference into this Registration
Statement on Form S-3 of Vornado Realty Trust of our report dated March 20,
1998, with respect to the consolidated balance sheets of Mendik Real Estate
Limited Partnership and consolidated venture as of December 31, 1997 and 1996,
and the related consolidated statements of operations, partners' capital
(deficit), and cash flows for each of the years in the three-year period ended
December 31, 1997, which report is incorporated by reference in the Form 8-K of
Vornado Realty Trust, dated August 12, 1998 and filed with the Securities and
Exchange Commission on February 12, 1999, and to the reference to our firm under
the heading "Experts" in the Prospectus, which is part of this Registration
Statement.

/s/ KPMG LLP

Boston, Massachusetts
October 25, 1999