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

                                  SCHEDULE 13G

                   Under the Securities Exchange Act of 1934
                          (Amendment No.____________)*

                              Vornado Realty Trust
             -----------------------------------------------------
                                (Name of Issuer)

                           Convertible Preferred Stock
             -----------------------------------------------------
                         (Title of Class of Securities)

                                    929042208
             -----------------------------------------------------
                                 (CUSIP Number)

Check the following box if a fee is being paid with this statement [ ]. (A fee
is not required only if the filing person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).

*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).

                               Page 1 of 5 pages

CUSIP No. 929042208                   13G                      Page 2 of 5 Pages

- --------------------------------------------------------------------------------
   1   NAME OF REPORTING PERSON
       S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

       European Investors Inc.     13-3162003

- --------------------------------------------------------------------------------
   2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
                                                             (a)  [  ]
                                                             (b)  [  ]

- --------------------------------------------------------------------------------
   3   SEC USE ONLY

- --------------------------------------------------------------------------------
   4   CITIZENSHIP OR PLACE OF ORGANIZATION

       Delaware

- --------------------------------------------------------------------------------
   NUMBER OF      5    SOLE VOTING POWER
     SHARES            39,836
  BENEFICIALLY    --------------------------------------------------------------
    OWNED BY      6    SHARED VOTING POWER
      EACH             40,100
   REPORTING      --------------------------------------------------------------
     PERSON       7    SOLE DISPOSITIVE POWER
      WITH             54,836
                  --------------------------------------------------------------
                  8    SHARED DISPOSITIVE POWER
                       40,100

- --------------------------------------------------------------------------------
   9   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

       94,936

- --------------------------------------------------------------------------------
  10   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*

- --------------------------------------------------------------------------------
  11   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)

       1.63%

- --------------------------------------------------------------------------------
  12   TYPE OF REPORTING PERSON*

       IA

- --------------------------------------------------------------------------------
                      *SEE INSTRUCTION BEFORE FILLING OUT!

                               Page 2 of 5 pages

CUSIP No. 929042208                   13G                      Page 3 of 5 Pages

- --------------------------------------------------------------------------------
   1   NAME OF REPORTING PERSON
       S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

       EII Realty Securities Inc.  13-3750132
       A wholly-owned subsidiary of European Investors Inc.

- --------------------------------------------------------------------------------
   2   CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
                                                             (a)  [  ]
                                                             (b)  [  ]

- --------------------------------------------------------------------------------
   3   SEC USE ONLY

- --------------------------------------------------------------------------------
   4   CITIZENSHIP OR PLACE OF ORGANIZATION

       Delaware

- --------------------------------------------------------------------------------
   NUMBER OF      5    SOLE VOTING POWER
     SHARES            227,100
  BENEFICIALLY    --------------------------------------------------------------
    OWNED BY      6    SHARED VOTING POWER
      EACH             0
   REPORTING      --------------------------------------------------------------
     PERSON       7    SOLE DISPOSITIVE POWER
      WITH             276,300
                  --------------------------------------------------------------
                  8    SHARED DISPOSITIVE POWER
                       0

- --------------------------------------------------------------------------------
   9   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

       276,300

- --------------------------------------------------------------------------------
  10   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*

- --------------------------------------------------------------------------------
  11   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)

       4.77%

- --------------------------------------------------------------------------------
  12   TYPE OF REPORTING PERSON*

       IA

- --------------------------------------------------------------------------------
                      *SEE INSTRUCTION BEFORE FILLING OUT!

                               Page 3 of 5 pages

Item 1.     (a)   Name of Issuer:

            (b)   Address of Issuer's Principal Executive Offices:

Item 2.     (a)   Name of Person Filing:

            (b)   Address of Principal Business Office or, if none, Residence:

            (c)   Citizenship:

            (d)   Title of Class of Securities:

            (e)   CUSIP Number:

Item 3.     If this statement is filed pursuant to Rule 13d-1(b), or 13d-2(b),
            check whether the person filing is a:

            (a)   [ ]   Broker or Dealer registered under Section 15 of the Act

            (b)   [ ]   Bank as defined in section 3(a)(6) of the Act

            (c)   [ ]   Insurance Company as defined in section 3(a)(19) of the
                        Act

            (d)   [ ]   Investment Company registered under section 8 of the
                        Investment Company Act

            (e)   [ ]   Investment Adviser registered under section 203 of the
                        Investment Advisers Act of 1940

            (f)   [ ]   Employee Benefit Plan, Pension Fund which is subject
                        to the provisions of the Employee Retirement Income
                        Security Act of 1974 or Endowment Fund; see Section
                        240.13d-1(b)(1)(ii)(F)

            (g)   [ ]   Parent Holding Company, in accordance with Section
                        240.13d-1(b)(1)(ii)(G) (Note: See Item 7)

            (h)   [ ]   Group, in accordance with Section 240.13d-1(b)(1)(ii)(H)

Item 4.     Ownership.

            If the percent of the class owned, as of December 31 of the year
            covered by the statement, or as of the last day of any month
            described in Rule 13d-1(b)(2), if applicable, exceeds five percent,
            provide the following information as of that date and identify those
            shares which there is a right to acquire.

            (a)   Amount Beneficially Owned

            (b)   Percent of Class

                               Page 4 of 5 pages

Item 5.     Ownership of Five Percent or Less of a Class.

            Not Applicable.

Item 6.     Ownership of More Than Five Percent on Behalf of Another Person.

            Not Applicable.

Item 7.     Identification and Classification of the Subsidiary which Acquired
            the Security Being Reported on By the Parent Holding Company.

            Not Applicable.

Item 8.     Identification and Classification of Members of the Group.

            Not Applicable.

Item 9.     Notice of Dissolution of Group.

            Not Applicable.

Item 10.    Certification.

            By signing below I certify that, to the best of my knowledge and
            belief, the securities referred to above were acquired in the
            ordinary course of business and were not acquired for the purpose of
            and do not have the effect of changing or influencing the control of
            the issuer of such securities and were not acquired in connection
            with or as a participant in any transaction having such purposes or
            effect.

                                   Signature.

      After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

                                                            2/13/98             
                                              ----------------------------------
                                                             Date
                                                                     
                                                     /s/ David P. O'Connor
                                              ----------------------------------
                                                          Signature
                                            
                                                    David P. O'Connor, V.P.
                                              ----------------------------------
                                                          Name/Title

                               Page 5 of 5 pages