UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended:

June 30, 2010

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

For the transition period from:

Commission File Number:

001-11954

VORNADO REALTY TRUST

(Exact name of registrant as specified in its charter)

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

888 Seventh Avenue, New York, New York		10019
(Address of principal executive offices)		(Zip Code)

(212) 894-7000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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

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

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

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

As of June 30, 2010, 182,290,243 of the registrant’s common shares of beneficial interest are outstanding.


Part I.		Financial Information:	Page Number

	Item 1.	Financial Statements:

		Consolidated Balance Sheets (Unaudited) as of
		June 30, 2010 and December 31, 2009	3

		Consolidated Statements of Income (Unaudited) for the
		Three and Six Months Ended June 30, 2010 and 2009	4

		Consolidated Statements of Changes in Equity (Unaudited)
		for the Six Months Ended June 30, 2010 and 2009	5

		Consolidated Statements of Cash Flows (Unaudited)
		for the Six Months Ended June 30, 2010 and 2009	6

		Notes to Consolidated Financial Statements (Unaudited)	8

		Report of Independent Registered Public Accounting Firm	33

	Item 2.	Management's Discussion and Analysis of Financial
		Condition and Results of Operations	34

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	67

	Item 4.	Controls and Procedures	68


Part II.		Other Information:

	Item 1.	Legal Proceedings	69

	Item 1A.	Risk Factors	70

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70

	Item 3.	Defaults Upon Senior Securities	70

	Item 5.	Other Information	70

	Item 6.	Exhibits	70

Signatures			71

Exhibit Index			72

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VORNADO REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

(Amounts in thousands, except share and per share amounts)			June 30,		December 31,
ASSETS			2010		2009
Real estate, at cost:
	Land		$	4,617,946	$	4,606,065
	Buildings and improvements			13,055,659		12,902,086
	Development costs and construction in progress			214,804		313,310
	Leasehold improvements and equipment			130,929		128,056
		Total		18,019,338		17,949,517
	Less accumulated depreciation and amortization			(2,683,233)		(2,494,441)
Real estate, net				15,336,105		15,455,076
Cash and cash equivalents				652,121		535,479
Short-term investments				-		40,000
Restricted cash				139,562		293,950
Marketable securities				305,292		380,652
Accounts receivable, net of allowance for doubtful accounts of $52,810 and $46,708				157,725		157,325
Investments in partially owned entities, including Alexander's of $198,318 and $193,174				833,884		799,832
Investments in Toys "R" Us				495,800		409,453
Mezzanine loans receivable, net of allowance of $192,638 and $190,738				136,857		203,286
Receivable arising from the straight-lining of rents, net of allowance of $5,150 and $4,680				718,809		681,526
Deferred leasing and financing costs, net of accumulated amortization of $204,656 and $183,224				330,789		311,825
Due from officers				13,182		13,150
Other assets				770,751		903,918
			$	19,890,877	$	20,185,472

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Notes and mortgages payable			$	8,400,599	$	8,445,766
Senior unsecured notes				1,224,866		711,716
Exchangeable senior debentures				487,685		484,457
Convertible senior debentures				404,850		445,458
Revolving credit facility debt				152,218		852,218
Accounts payable and accrued expenses				458,628		475,242
Deferred credit				652,449		682,384
Deferred compensation plan				83,787		80,443
Deferred tax liabilities				17,704		17,842
Other liabilities				98,265		88,912
	Total liabilities			11,981,051		12,284,438
Commitments and contingencies
Redeemable noncontrolling interests:
	Class A units - 13,857,608 and 13,892,313 units outstanding			1,010,913		971,628
	Series D cumulative redeemable preferred units - 10,400,000 and 11,200,000 units outstanding			260,000		280,000
		Total redeemable noncontrolling interests		1,270,913		1,251,628
Vornado shareholders' equity:
	Preferred shares of beneficial interest: no par value per share; authorized 110,000,000
		shares; issued and outstanding 33,949,284 and 33,952,324 shares		823,534		823,686
	Common shares of beneficial interest: $.04 par value per share; authorized,
		250,000,000 shares; issued and outstanding 182,290,243 and 181,214,161 shares		7,262		7,218
	Additional capital			6,944,410		6,961,007
	Earnings less than distributions			(1,581,176)		(1,577,591)
	Accumulated other comprehensive income			37,597		28,449
		Total Vornado shareholder's equity		6,231,627		6,242,769
Noncontrolling interest in consolidated subsidiaries				407,286		406,637
	Total equity			6,638,913		6,649,406
			$	19,890,877	$	20,185,472
See notes to the consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

		For the Three				For the Six
		Months Ended June 30,				Months Ended June 30,
		2010		2009		2010		2009
(Amounts in thousands, except per share amounts)
REVENUES:
	Property rentals	$	575,776	$	554,516	$	1,136,726	$	1,104,303
	Tenant expense reimbursements		88,080		83,375		181,001		181,404
	Fee and other income		32,249		35,899		74,709		66,649
Total revenues			696,105		673,790		1,392,436		1,352,356
EXPENSES:
	Operating		267,925		269,711		546,980		548,609
	Depreciation and amortization		135,265		136,686		271,089		268,342
	General and administrative		49,582		49,632		98,312		128,697
	Litigation loss accrual and acquisition costs		1,930		-		11,986		-
Total expenses			454,702		456,029		928,367		945,648
Operating income			241,403		217,761		464,069		406,708
Income applicable to Alexander's			7,066		6,614		13,526		24,747
(Loss) income applicable to Toys "R" Us			(21,004)		(327)		104,866		96,820
(Loss) income from partially owned entities			(2,614)		(22,797)		2,270		(30,340)
Interest and other investment income (loss), net			3,876		(98,153)		18,584		(84,094)
Interest and debt expense (including amortization of deferred
	financing costs of $4,543 and $4,313 in each three-month
	period, respectively, and $8,969 and $8,732 in each six-month
	period, respectively)		(149,887)		(159,063)		(289,622)		(316,823)
Net (loss) gain on early extinguishment of debt			(1,072)		17,684		(1,072)		23,589
Net gains on disposition of wholly owned and partially owned
	assets other than depreciable real estate		4,382		-		7,687		-
Income (loss) before income taxes			82,150		(38,281)		320,308		120,607
Income tax expense			(4,939)		(5,457)		(10,553)		(10,506)
Income (loss) from continuing operations			77,211		(43,738)		309,755		110,101
Income from discontinued operations			-		3,363		-		5,955
Net income (loss)			77,211		(40,375)		309,755		116,056
Net (income) loss attributable to noncontrolling interests, including
	unit distributions		(5,105)		2,740		(23,097)		(13,581)
Net income (loss) attributable to Vornado			72,106		(37,635)		286,658		102,475
Preferred share dividends			(14,266)		(14,269)		(28,533)		(28,538)
NET INCOME (LOSS) attributable to common shareholders		$	57,840	$	(51,904)	$	258,125	$	73,937

INCOME (LOSS) PER COMMON SHARE - BASIC:
	Income (loss) from continuing operations, net	$	0.32	$	(0.32)	$	1.42	$	0.41
	Income from discontinued operations, net		-		0.02		-		0.04
	Net income (loss) per common share	$	0.32	$	(0.30)	$	1.42	$	0.45
	Weighted average shares		182,027		171,530		181,786		164,009

INCOME (LOSS) PER COMMON SHARE - DILUTED:
	Income (loss) from continuing operations, net	$	0.31	$	(0.32)	$	1.41	$	0.41
	Income from discontinued operations, net		-		0.02		-		0.04
	Net income (loss) per common share	$	0.31	$	(0.30)	$	1.41	$	0.45
	Weighted average shares		183,644		171,530		183,598		165,183

DIVIDENDS PER COMMON SHARE		$	0.65	$	0.95	$	1.30	$	1.90

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
															Accumulated
(Amounts in thousands)													Earnings		Other		Non-
			Preferred Shares				Common Shares				Additional		Less Than		Comprehensive		controlling		Total
			Shares		Amount		Shares		Amount		Capital		Distributions		Income (Loss)		Interests		Equity
Balance, December 31, 2008				33,954	$	823,807		155,286	$	6,195	$	6,025,976	$	(1,047,340)	$	(6,899)	$	412,913	$	6,214,652
Net income (loss)				-		-		-		-		-		102,475		-		(3,700)		98,775
Dividends paid on common
	shares			-		-		4,849		194		188,792		(315,159)		-		-		(126,173)
Dividends paid on preferred
	shares			-		-		-		-		-		(28,540)		-		-		(28,540)
Proceeds from the issuance of
	common shares			-		-		17,250		690		709,536		-		-		-		710,226
Conversion of Series A
	preferred shares to common
	shares			(2)		(89)		2		-		89		-		-		-		-
Deferred compensation shares
	and options			-		-		-		2		9,967		-		-		-		9,969
Common shares issued:
	Upon redemption of Class A
		Operating Partnership units,
		at redemption value		-		-		1,167		46		49,944		-		-		-		49,990
	Under employees' share
		option plan		-		-		8		(14)		548		(351)		-		-		183
Change in unrealized net gain
	or loss on securities
	available-for-sale			-		-		-		-		-		-		(12,213)		-		(12,213)
Our share of partially owned
	entities OCI adjustments			-		-		-		-		-		-		(16,556)		-		(16,556)
Voluntary surrender of equity
	awards on March 31, 2009			-		-		-		-		32,588		-		-		-		32,588
Adjustments to redeemable
	Class A Operating Partnership
	units			-		-		-		-		194,183		-		-		-		194,183
Other				-		-		-		-		(646)		6		(183)		(4,086)		(4,909)
Balance, June 30, 2009				33,952	$	823,718		178,562	$	7,113	$	7,210,977	$	(1,288,909)	$	(35,851)	$	405,127	$	7,122,175


Balance, December 31, 2009				33,952	$	823,686		181,214	$	7,218	$	6,961,007	$	(1,577,591)	$	28,449	$	406,637	$	6,649,406
Net income				-		-		-		-		-		286,658		-		1,194		287,852
Dividends paid on common
	shares			-		-		-		-		-		(236,279)		-		-		(236,279)
Dividends paid on preferred
	shares			-		-		-		-		-		(28,533)		-		-		(28,533)
Conversion of Series A
	preferred shares to common
	shares			(3)		(152)		4		-		152		-		-		-		-
Deferred compensation shares
	and options			-		-		17		1		3,905		-		-		-		3,906
Common shares issued:
	Upon redemption of Class A
		Operating Partnership units,
		at redemption value		-		-		495		20		35,691		-		-		-		35,711
	Under employees' share
		option plan		-		-		548		22		8,989		(25,433)		-		-		(16,422)
	Under dividend reinvestment
		plan		-		-		12		1		801		-		-		-		802
Change in unrealized net gain
	or loss on securities
	available-for-sale			-		-		-		-		-		-		25,531		-		25,531
Our share of partially owned
	entities OCI adjustments			-		-		-		-		-		-		(15,965)		-		(15,965)
Adjustments to redeemable
	Class A Operating Partnership
	units			-		-		-		-		(66,075)		-		-		-		(66,075)
Other				-		-		-		-		(60)		2		(418)		(545)		(1,021)
Balance, June 30, 2010				33,949	$	823,534		182,290	$	7,262	$	6,944,410	$	(1,581,176)	$	37,597	$	407,286	$	6,638,913


See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

			For the Six Months Ended
			June 30,
			2010		2009
(Amounts in thousands)
Cash Flows from Operating Activities:
Net income			$	309,755	$	116,056
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization (including amortization of deferred financing costs)			280,058		277,806
	Equity in income of partially owned entities, including Alexander’s and Toys “R” Us			(114,664)		(91,227)
	Straight-lining of rental income			(38,557)		(53,002)
	Amortization of below market leases, net			(32,209)		(37,542)
	Distributions of income from partially owned entities			18,517		15,131
	Other non-cash adjustments			17,007		25,069
	Litigation loss accrual			10,056		-
	Net gain on dispositions of assets other than depreciable real estate			(7,687)		-
	Net gain resulting from Lexington Realty Trust’s March 2010 stock issuance			(5,998)		-
	Net loss (gain) on early extinguishment of debt			1,072		(23,589)
	Mezzanine loans loss accrual			6,900		122,738
	Write-off of unamortized costs from the voluntary surrender of equity awards			-		32,588
	Changes in operating assets and liabilities:
		Accounts receivable, net		(400)		15,654
		Other assets		53,598		(17,773)
		Accounts payable and accrued expenses		23,576		7,715
		Other liabilities		11,341		(10,185)
Net cash provided by operating activities				532,365		379,439
Cash Flows from Investing Activities:
	Restricted cash			133,888		60,786
	Proceeds from sales of, and return of investment in, marketable securities			122,956		9,115
	Proceeds from repayment of mezzanine loans receivable			105,061		45,472
	Additions to real estate			(68,925)		(84,750)
	Development costs and construction in progress			(68,499)		(267,124)
	Proceeds from sales of real estate and related investments			49,544		43,873
	Investments in mezzanine loans receivable and other			(48,339)		-
	Investments in partially owned entities			(41,920)		(25,712)
	Proceeds from maturing short-term investments			40,000		-
	Deposits in connection with real estate acquisitions			(15,128)		991
	Purchases of marketable securities			(13,917)		(11,597)
	Distributions of capital from partially owned entities			12,638		9,636
Net cash provided by (used in) investing activities				207,359		(219,310)

See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

CONSOLIDATED STATEMENT OF CASH FLOWS - CONTINUED
(UNAUDITED)

		For the Six Months Ended
		June 30,
		2010		2009
(Amounts in thousands)
Cash Flows from Financing Activities:
	Repayments of borrowings	$	(1,197,525)	$	(644,011)
	Proceeds from borrowings		901,040		520,137
	Dividends paid on common shares		(236,279)		(126,174)
	Dividends paid on preferred shares		(28,533)		(28,540)
	Distributions to noncontrolling interests		(27,665)		(20,931)
	Repurchase of shares related to stock compensation agreements and related tax wit h holdings		(15,396)		(522)
	Purchases of outstanding preferred units		(13,000)		(24,331)
	Debt issuance costs		(5,724)		(4,338)
	Proceeds from issuance of common shares		-		710,226
Net cash (used in) provided by financing activities			(623,082)		381,516
Net increase in cash and cash equivalents			116,642		541,645
Cash and cash equivalents at beginning of period			535,479		1,526,853
Cash and cash equivalents at end of period		$	652,121	$	2,068,498


Supplemental Disclosure of Cash Flow Information:
	Cash payments for interests (including capitalized interest of $875 and $10,078)	$	270,997	$	321,065
	Cash payments for income taxes	$	3,861	$	3,840


Non-Cash Transactions:
	Adjustments to redeemable Class A Operating Partnership units	$	(66,075)	$	194,183
	Conversion of Class A Operating Partnership units to common shares, at redemption value		35,711		49,990
	Unrealized net gain (loss) on sale of securities available for sale		25,531		(12,213)
	Extinguishment of a liability in connection with the acquisition of real estate		20,500		-
	Dividends paid in common shares		-		188,986
	Unit distributions paid in Class A units		-		16,280


See notes to consolidated financial statements (unaudited).

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

1. Organization

Vornado Realty Trust (“Vornado”) is a fully‑integrated real estate investment trust (“REIT”) and conducts its business through Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”). Vornado is the sole general partner of, and owned approximately 92.5% of the common limited partnership interest in the Operating Partnership at June 30, 2010. All references to “we,” “us,” “our,” the “Company” and “Vornado” refer to Vornado Realty Trust and its consolidated subsidiaries, including the Operating Partnership.

Substantially all of Vornado’s assets are held through subsidiaries of the Operating Partnership. Accordingly, Vornado’s cash flow and ability to pay dividends to its shareholders is dependent upon the cash flow of the Operating Partnership and the ability of its direct and indirect subsidiaries to first satisfy their obligations to creditors.

On July 8, 2010, we completed the first closing of Vornado Capital Partners, L.P., our real estate investment fund (the “Fund”) with initial equity commitments of $550,000,000, of which we committed $200,000,000. We expect to raise an additional $450,000,000 bringing total commitments to $1 billion. We serve as the general partner and investment manager of the Fund and it will be our exclusive investment vehicle during its three-year investment period for all investments that fit within the Fund’s investment parameters. The Fund’s investment parameters include debt, equity and other interests in real estate, and excludes (i) investments in vacant land and ground-up development; (ii) investments acquired by merger or primarily for our securities or properties; (iii) properties which can be combined with or relate to our existing properties; (iv) securities of commercial mortgage loan servicers and investments derived from any such investments; (v) non-controlling interests in equity and debt securities; and (vi) investments located outside of North America. The Fund has a term of eight years from the final closing date. In the six months ended June 30, 2010, we expensed $2,730,000 of Fund organization costs, which is included as a component of “general and administrative” expenses on our consolidated statement of income, and expect to incur additional expenses of approximately $3,700,000 in the third quarter of 2010.

2. Basis of Presentation

The accompanying consolidated financial statements are unaudited and include the accounts of Vornado, and the Operating Partnership and its consolidated partially owned entities. All intercompany amounts have been eliminated. In our opinion, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. We have made estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Reports on Form 10-K and Form 10-K/A for the year ended December 31, 2009, as filed with the SEC. The results of operations for the three and six months ended June 30, 2010 are not necessarily indicative of the operating results for the full year.

3. Recently Issued Accounting Literature

On January 21, 2010, the Financial Accounting Standards Board (“FASB”) issued an update to Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures , adding new requirements for disclosures about transfers into and out of Levels 1 and 2 fair value measurements and additional disclosures about the activity within Level 3 fair value measurements. The application of this guidance on January 1, 2010 did not have a material effect on our consolidated financial statements.

In June 2009, the FASB issued an update to ASC 810, Consolidation , which modifies the existing quantitative guidance used in determining the primary beneficiary of a variable interest entity (“VIE”) by requiring entities to qualitatively assess whether an enterprise is a primary beneficiary, based on whether the entity has (i) power over the significant activities of the VIE, and (ii) an obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. The adoption of this guidance on January 1, 2010 did not have a material effect on our consolidated financial statements.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

4. Investments in Partially Owned Entities

Toys “R” Us (“Toys”)

As of June 30, 2010, we own 32.7% of Toys. The business of Toys is highly seasonal. Historically, Toys’ fourth quarter net income accounts for more than 80% of its fiscal year net income. We account for our investment in Toys under the equity method and record our 32.7% share of Toys net income or loss on a one-quarter lag basis because Toys’ fiscal year ends on the Saturday nearest January 31, and our fiscal year ends on December 31. As of June 30, 2010, the carrying amount of our investment in Toys does not differ materially from our share of the equity in the net assets of Toys on a purchase accounting basis.

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

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

(Amounts in thousands)						Balance as of
Balance Sheet:						May 1, 2010		October 31, 2009
	Assets					$	11,410,000	$	12,589,000
	Liabilities						9,877,000		11,198,000
	Noncontrolling interests						-		112,000
	Toys “R” Us, Inc. equity						1,533,000		1,279,000

		For the Three				For the Six
		Months Ended				Months Ended
Income Statement:		May 1, 2010		May 2, 2009		May 1, 2010		May 2, 2009
	Total revenues	$	2,608,000	$	2,477,000	$	8,465,000	$	7,938,000
	Net (loss) income attributable to Toys	$	(71,000)	$	(50,000)	$	308,000	$	242,000

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

As of June 30, 2010, we own 32.4% of the outstanding common stock of Alexander’s. We manage, lease and develop Alexander’s properties pursuant to agreements which expire in March of each year and are automatically renewable. As of June 30, 2010, Alexander’s owed us $58,817,000 in fees under these agreements.

Based on Alexander’s June 30, 2010 closing share price of $302.92, the market value (“fair value” pursuant to ASC 820) of our investment in Alexander’s is $501,050,000, or $302,732,000 in excess of the June 30, 2010 carrying amount on our consolidated balance sheet. As of June 30, 2010, the carrying amount of our investment in Alexander’s, excluding amounts owed to us, exceeds our share of the equity in the net assets of Alexander’s by approximately $60,169,000. The majority of this basis difference resulted from the excess of our purchase price for the Alexander’s common stock acquired over the book value of Alexander’s net assets. Substantially all of this basis difference was allocated, based on our estimates of the fair values of Alexander’s assets and liabilities, to the real estate (land and buildings). The basis difference related to the buildings is being amortized over their estimated useful lives as an adjustment to our equity in net income of Alexander’s. This amortization is not material to our share of equity in Alexander’s net income or loss. The basis difference related to the land will be recognized upon disposition of our investment.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

4. Investments in Partially Owned Entities - continued

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

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

(Amounts in thousands)						Balance as of
Balance Sheet:						June 30, 2010		December 31, 2009
	Assets					$	1,696,000	$	1,704,000
	Liabilities						1,363,000		1,389,000
	Noncontrolling interests						3,000		2,000
	Stockholders' equity						330,000		313,000

		For the Three				For the Six
		Months Ended				Months Ended
Income Statement:		June 30, 2010		June 30, 2009		June 30, 2010		June 30, 2009
	Total revenues	$	59,000	$	55,000	$	118,000	$	108,000
	Net income attributable to Alexander’s	$	15,000	$	13,000	$	31,000	$	59,000

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

As of June 30, 2010, we own 18,468,969 Lexington common shares, or approximately 13.8% of Lexington’s common equity. We account for our investment in Lexington on the equity method because we believe we have the ability to exercise significant influence over Lexington’s operating and financial policies, based on, among other factors, our representation on Lexington’s Board of Trustees and the level of our ownership in Lexington as compared to other shareholders. We record our pro rata share of Lexington’s net income or loss on a one-quarter lag basis because we file our consolidated financial statements on Form 10-K and 10-Q prior to the time that Lexington files its financial statements.

Based on Lexington’s June 30, 2010 closing share price of $6.01, the market value (“fair value” pursuant to ASC 820) of our investment in Lexington was $110,999,000, or $55,355,000 in excess of the June 30, 2010 carrying amount on our consolidated balance sheet. As of June 30, 2010, the carrying amount of our investment in Lexington was less than our share of the equity in the net assets of Lexington by approximately $71,885,000. This basis difference resulted primarily from $107,882,000 of non-cash impairment charges recognized during 2008, partially offset by purchase accounting for our acquisition of an additional 8,000,000 common shares of Lexington in October 2008, of which the majority relates to our estimate of the fair values of Lexington’s real estate (land and buildings) as compared to the carrying amounts in Lexington’s consolidated financial statements. The basis difference related to the buildings is being amortized over their estimated useful lives as an adjustment to our equity in net income or loss of Lexington. This amortization is not material to our share of equity in Lexington’s net income or loss. The basis difference attributable to the land will be recognized upon disposition of our investment. Below is a summary of Lexington’s latest available financial information:

(Amounts in thousands)						Balance as of
Balance Sheet:						March 31, 2010		September 30, 2009
	Assets					$	3,537,000	$	3,702,000
	Liabilities						2,199,000		2,344,000
	Noncontrolling interests						86,000		94,000
	Shareholders’ equity						1,252,000		1,264,000

		For the Three Months				For the Six Months
		Ended March 31,				Ended March 31,
Income Statement:		2010		2009		2010		2009
	Total revenues	$	89,000	$	93,000	$	179,000	$	192,000
	Net loss attributable to Lexington	$	(27,000)	$	(65,000)	$	(73,000)	$	(79,000)

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

4. Investments in Partially Owned Entities - continued

	The carrying amount of our investments in partially owned entities and income (loss) recognized from such investments are as follows:

									Balance as of
(Amounts in thousands)									June 30,			December 31,
Investments:									2010			2009
Toys									$	495,800		$	409,453

Alexander’s									$	198,318		$	193,174
Partially owned office buildings										158,063			158,444
India real estate ventures										124,607			93,322
Lexington										55,644			55,106
Other equity method investments										297,252			299,786
									$	833,884		$	799,832


				For the Three Months					For the Six Months
(Amounts in thousands)				Ended June 30,					Ended June 30,
Our Share of Net (Loss) Income:				2010		2009			2010			2009
Toys:
	32.7% share of:
			Equity in net (loss) income before income taxes	$	(47,314)	$	(25,854)		$	126,236		$	122,531
			Income tax benefit (expense)		24,123		9,634			(25,587)			(43,457)
			Equity in net (loss) income		(23,191)		(16,220)			100,649			79,074
			Non-cash purchase price accounting adjustments		-		13,946			-			13,946
	Interest and other income				2,187		1,947			4,217			3,800
				$	(21,004)	$	(327)		$	104,866		$	96,820
Alexander’s:
	32.4% share of:
		Equity in net income before reversal of stock
			appreciation rights compensation expense	$	4,920	$	3,767		$	8,697		$	7,622
		Reversal of stock appreciation rights
			compensation expense		-		-			-			11,105
		Equity in net income			4,920		3,767			8,697			18,727
	Management and leasing fees				2,092		2,199			4,170			4,092
	Development fees				54		648			659			1,928
				$	7,066	$	6,614		$	13,526		$	24,747

Lexington – 13.8% share in 2010 and 16.1%
	share in 2009 of equity in net (loss) income			$	(428)	$	(6,876)	⁽¹⁾	$	5,617	⁽²⁾	$	(9,915)	⁽¹⁾

India real estate ventures – 4% to 36.5% range in our
	share of equity in net income (loss)				606		(784)			2,257			(921)

Other, net ⁽³⁾					(2,792)		(15,137)	⁽⁴⁾		(5,604)			(19,504)	⁽⁴⁾
				$	(2,614)	$	(22,797)		$	2,270		$	(30,340)
___________________________________

(1)			Includes $4,580 for our share of impairment losses recorded by Lexington.

(2)			Includes a $5,998 net gain resulting from Lexington’s March 2010 stock issuance.

(3)			Represents equity in net income or loss of partially owned office buildings in New York and Washington, DC, the Monmouth Mall, Verde Realty Operating Partnership, 85 10th Avenue Associates and others.

(4)			Includes $7,650 of expense for our share of the Downtown Crossing, Boston lease termination payment.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

4. Investments in Partially Owned Entities - continued

Below is a summary of the debt of our partially owned entities as of June 30, 2010 and December 31, 2009, none of which is recourse to us.

			100% of
			Partially Owned Entities’ Debt at
(Amounts in thousands)			June 30,		December 31,
			2010		2009
Toys (32.7% interest) (as of May 1, 2010 and October 31, 2009, respectively):
	10.75% senior unsecured notes, due 2017 (Face value – $950,000)		$	926,970	$	925,931
	8.50% senior unsecured notes, due 2017 (Face value $725,000)			715,098		-
	$2.0 billion credit facility, due 2012, LIBOR plus 1.00% – 4.25%			-		418,777
	$800 million secured term loan facility, due 2012, LIBOR plus 4.25% (4.60% at
		June 30, 2010)		798,255		797,911
	Senior U.K. real estate facility, due 2013, with interest at 5.02%			536,167		578,982
	7.625% bonds, due 2011 (Face value – $500,000)			493,220		490,613
	7.875% senior notes, due 2013 (Face value – $400,000)			383,673		381,293
	7.375% senior notes, due 2018 (Face value – $400,000)			341,202		338,989
	$181 million unsecured term loan facility, due 2013, LIBOR plus 5.00% (5.35% at
		June 30, 2010)		180,529		180,456
	4.51% Spanish real estate facility, due 2013			172,004		191,436
	Japan borrowings, due 2011			171,550		168,720
	Japan bank loans, due 2011 – 2014, 1.20% – 2.85%			161,155		172,902
	6.84% Junior U.K. real estate facility, due 2013			94,076		101,861
	4.51% French real estate facility, due 2013			82,978		92,353
	8.750% debentures, due 2021 (Face value – $22,000)			21,038		21,022
	Mortgage loan, due 2010, LIBOR plus 1.30%			-		800,000
	European and Australian asset-based revolving credit facility, due 2012, LIBOR/EURIBOR
		plus 4.00%		-		102,760
	Other			149,508		136,206
				5,227,423		5,900,212
Alexander’s (32.4% interest):
	731 Lexington Avenue mortgage note payable collateralized by the office space, due in
		February 2014, with interest at 5.33% (prepayable without penalty after December 2013)		357,419		362,989
	731 Lexington Avenue mortgage note payable, collateralized by the retail space, due in
		July 2015, with interest at 4.93% (prepayable without penalty after December 2013)		320,000		320,000
	Rego Park construction loan payable, due in December 2010, LIBOR plus 1.20% (1.55% at
		June 30, 2010)		282,615		266,411
	Kings Plaza Regional Shopping Center mortgage note payable, due in June 2011, with interest at
		7.46% (prepayable without penalty after December 2010)		153,540		183,319
	Rego Park mortgage note payable, due in March 2012 (prepayable without penalty)			78,246		78,246
	Paramus mortgage note payable, due in October 2011, with interest at 5.92% (prepayable
		without penalty)		68,000		68,000
				1,259,820		1,278,965
	Lexington (13.8% interest) (as of March 31, 2010 and September 30, 2009, respectively)
		Mortgage loans collateralized by Lexington’s real estate, due from 2010 to 2037, with a
		weighted average interest rate of 5.78% at March 31, 2010 (various prepayment terms)		2,002,650		2,132,253

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

4. Investments in Partially Owned Entities - continued
			100% of
			Partially Owned Entities’ Debt at
			June 30,		December 31,
(Amounts in thousands)			2010		2009
Partially owned office buildings:
	330 Madison Avenue (25% interest) $150,000 mortgage note payable, due in June 2015,		$	150,000	$	150,000
		LIBOR plus 1.50% (1.87% at June 30, 2010)	$	150,000	$	150,000
	Kaempfer Properties (2.5% and 5.0% interests in two partnerships) mortgage notes
		payable, collateralized by the partnerships’ real estate, due 2011, with a weighted
		average interest rate of 5.85% at June 30, 2010 (various prepayment terms)		140,444		141,547
	100 Van Ness, San Francisco office complex (9% interest) up to $132 million construction
		loan payable, due in July 2013, LIBOR plus 2.75% (3.10% at June 30, 2010)
		with an interest rate floor of 6.50%		85,249		85,249
	Fairfax Square (20% interest) mortgage note payable, due in December 2014,
		with interest at 7.00% (prepayable without penalty after July 2014)		72,138		72,500
	Rosslyn Plaza (46% interest) mortgage note payable, due in December 2011,
		LIBOR plus 1.00% (1.34% at June 30, 2010)		56,680		56,680
	330 West 34th Street (34.8% interest) mortgage note payable, collateralized by land, due in July
		2022, with interest at 5.71%; we obtained a fee interest in the land upon foreclosure
		of our $9,041 mezzanine loan		50,150		-
	West 57th Street (50% interest) mortgage note payable, due in February 2014,
		with interest at 4.94% (prepayable without penalty)		23,086		29,000
	825 Seventh Avenue (50% interest) mortgage note payable, due in October 2014,
		with interest at 8.07% (prepayable without penalty after April 2014)		20,794		20,773
India Real Estate Ventures:
	TCG Urban Infrastructure Holdings (25% interest) mortgage notes payable, collateralized
		by the entity’s real estate, due from 2010 to 2022, with a weighted average interest rate
		of 12.78% at June 30, 2010 (various prepayment terms)		189,031		178,553
	India Property Fund L.P. (36.5% interest) revolving credit facility, repaid upon
		maturity in March 2010		-		77,000
Verde Realty Operating Partnership (8.3% interest) mortgage notes payable,
	collateralized by the partnerships’ real estate, due from 2010 to 2025, with a weighted
	average interest rate of 5.85% at June 30, 2010 (various prepayment terms)			582,982		607,089
Green Courte Real Estate Partners, LLC (8.3% interest) (as of March 31, 2010
	and September 30, 2009), mortgage notes payable, collateralized by the partnerships’
	real estate, due from 2010 to 2018, with a weighted average interest rate of 5.29% at
	June 30, 2010 (various prepayment terms)			303,263		304,481
Waterfront Associates, LLC (2.5% interest) construction and land loan up to $250 million
	payable, due in September 2011 with a six month extension option, LIBOR
	plus 2.00% - 3.50% (2.56% at June 30, 2010)			209,606		183,742
Monmouth Mall (50% interest) mortgage note payable, due in September 2015,
	with interest at 5.44% (prepayable without penalty after July 2015)			165,000		165,000
San Jose, California (45% interest) construction loan, due in March 2013,
	LIBOR plus 4.00% (4.38% at June 30, 2010)			130,215		132,570
Wells/Kinzie Garage (50% interest) mortgage note payable, due in December 2013,
	with interest at 6.87%			14,576		14,657
Orleans Hubbard Garage (50% interest) mortgage note payable, due in December 2013,
	with interest at 6.87%			10,045		10,101
Other				431,784		425,717

Based on our ownership interest in the partially owned entities above, our pro rata share of the debt of these partially owned entities was $2,844,923,000 and $3,149,640,000 as of June 30, 2010 and December 31, 2009, respectively.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

5. Marketable Securities

The carrying amount of marketable securities on our consolidated balance sheets and their corresponding fair values at June 30, 2010 and December 31, 2009 are as follows:

		As of June 30, 2010				As of December 31, 2009
		Carrying		Fair		Carrying		Fair
(Amounts in thousands)		Amount		Value		Amount		Value
	Marketable equity securities - available for sale	$	104,712	$	104,712	$	79,925	$	79,925
	Debt securities ⁽¹⁾		200,580		200,580		300,727		319,393
		$	305,292	$	305,292	$	380,652	$	399,318


(1)	In the three months ended June 30, 2010, we sold certain of our investments in debt securities that were classified as “held-to-maturity,” for an aggregate of $122,294 in cash and recognized a $3,774 net gain, which is included as a component of “net gains on disposition of wholly owned and partially owned assets other than depreciable real estate” on our consolidated statement of income. In connection therewith, we reclassified $184,697 of investments in debt securities that were previously classified as “held-to-maturity” to “available for sale” and recorded a $14,135 unrealized gain, which is included as a component of “accumulated other comprehensive income” on our consolidated balance sheet.

At June 30, 2010 and December 31, 2009, we had $37,175,000 and $13,026,000, respectively, of gross unrealized gains. There were no unrealized losses at June 30, 2010 and $1,223,000 of gross unrealized losses at December 31, 2009.

6. Mezzanine Loans Receivable

The following is a summary of our investments in mezzanine loans as of June 30, 2010 and December 31, 2009.

				Interest Rate
(Amounts in thousands)				as of	Carrying Amount as of
Mezzanine Loans Receivable:			Maturity	June 30, 2010	June 30, 2010		December 31, 2009
	Riley HoldCo Corp. ⁽¹⁾		02/15	10.00%	$	74,437	$	74,437
	Tharaldson Lodging Companies		04/11	4.65%		72,856		74,701
	280 Park Avenue		06/16	10.25%		70,352		73,750
	Equinox ⁽²⁾		n/a	n/a		-		97,968
	Other, net		11/11-8/15	1.45% - 8.95%		111,850		73,168
						329,495		394,024
	Valuation allowance ⁽³⁾					(192,638)		(190,738)
					$	136,857	$	203,286


(1)		On July 29, 2010, as part of LNR Property Corporation’s (“LNR”) recapitalization, we acquired a 26.2% equity interest in LNR for a new investment of $116,000 in cash and conversion into equity of our mezzanine loan made to LNR’s parent, Riley HoldCo Corp. At June 30, 2010, the carrying amount of the loan was $15,000, after a $52,537 loss accrual recognized in 2009 and $6,900 in the current quarter. LNR is the industry leading servicer and special servicer of commercial mortgage loans and CMBS and a diversified real estate, investment, finance and management company. We will account for our investment in LNR on the equity method from the date of the recapitalization.

(2)		In January 2010, Equinox prepaid the entire balance of this loan which was scheduled to mature in February 2013. We received $99,314, including accrued interest, for our 50% interest in the loan which we acquired in 2006 for $57,500.

(3)		Represents loan loss accruals on certain mezzanine loans based on our estimate of the net realizable value of each loan. Our estimates are based on the present value of expected cash flows, discounted at each loan’s effective interest rate, or if a loan is collateralized, based on the fair value of the underlying collateral, adjusted for estimated costs to sell. The excess of the carrying amount over the net realizable value of a loan is recognized as a reduction of “interest and other investment income (loss), net” in our consolidated statements of income.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

7. Identified Intangible Assets and Intangible Liabilities

The following summarizes our identified intangible assets (primarily acquired above-market leases) and intangible liabilities (primarily acquired below-market leases) as of June 30, 2010 and December 31, 2009.

	Balance as of
	June 30,		December 31,
(Amounts in thousands)	2010		2009
Identified intangible assets (included in other assets):
Gross amount	$	742,453	$	755,467
Accumulated amortization		(338,372)		(312,957)
Net	$	404,081	$	442,510
Identified intangible liabilities (included in deferred credit):
Gross amount	$	928,349	$	942,968
Accumulated amortization		(331,657)		(309,476)
Net	$	596,692	$	633,492

Amortization of acquired below-market leases, net of acquired above-market leases resulted in an increase to rental income of $16,302,000 and $19,560,000 for the three months ended June 30, 2010 and 2009, respectively, and $32,209,000 and $37,542,000 for the six months ended June 30, 2010 and 2009, respectively. Estimated annual amortization of acquired below-market leases, net of acquired above-market leases for each of the five succeeding years commencing January 1, 2011 is as follows:

(Amounts in thousands)
2011	$	58,657
2012		54,359
2013		46,429
2014		40,471
2015		37,608

Amortization of all other identified intangible assets (a component of depreciation and amortization expense) was $15,814,000 and $17,778,000 for the three months ended June 30, 2010 and 2009, respectively, and $30,728,000 and $33,564,000 for the six months ended June 30, 2010 and 2009, respectively. Estimated annual amortization of all other identified intangible assets including acquired in-place leases, customer relationships, and third party contracts for each of the five succeeding years commencing January 1, 2011 is as follows:

(Amounts in thousands)
2011	$	51,724
2012		46,397
2013		38,908
2014		20,099
2015		14,993

We are a tenant under ground leases for certain properties. Amortization of these acquired below-market leases, net of above-market leases resulted in an increase to rent expense of $509,000 and $533,000 for the three months ended June 30, 2010 and 2009, respectively and $1,018,000 and $1,066,000 for the six months ended June 30, 2010 and 2009, respectively. Estimated annual amortization of these below-market leases, net of above-market leases for each of the five succeeding years commencing January 1, 2011 is as follows:

(Amounts in thousands)
2011	$	2,036
2012		2,036
2013		2,036
2014		2,036
2015		2,036

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

8. Debt

The following is a summary of our debt:

					Interest
	(Amounts in thousands)				Rate at	Balance at
					June 30,	June 30,		December 31,
	Notes and mortgages payable:			Maturity (1)	2010	2010		2009
	Fixed rate:
		New York Office:
			350 Park Avenue	01/12	5.48%	$	430,000	$	430,000
			1290 Avenue of the Americas	01/13	5.97%		429,417		434,643
			770 Broadway	03/16	5.65%		353,000		353,000
			888 Seventh Avenue	01/16	5.71%		318,554		318,554
			Two Penn Plaza	02/11	4.97%		279,932		282,492
			909 Third Avenue	04/15	5.64%		208,862		210,660
			Eleven Penn Plaza	12/11	5.20%		201,241		203,198

		Washington, DC Office:
			Skyline Place	02/17	5.74%		678,000		678,000
			Warner Building	05/16	6.26%		292,700		292,700
			River House Apartments	04/15	5.43%		195,546		195,546
			1215 Clark Street, 200 12th Street and 251 18th Street	01/25	7.09%		112,297		113,267
			Bowen Building	06/16	6.14%		115,022		115,022
			Universal Buildings	04/14	6.36%		104,854		106,630
			Reston Executive I, II, and III	01/13	5.57%		93,000		93,000
			2011 Crystal Drive	08/17	7.30%		81,845		82,178
			1550 and 1750 Crystal Drive	11/14	7.08%		80,638		81,822
			1235 Clark Street	07/12	6.75%		52,786		53,252
			2231 Crystal Drive	08/13	7.08%		47,465		48,533
			1750 Pennsylvania Avenue	06/12	7.26%		45,507		45,877
			241 18th Street	10/10	6.82%		45,097		45,609
			1225 Clark Street	08/13	7.08%		28,391		28,925
			1800, 1851 and 1901 South Bell Street	12/11	6.91%		14,821		19,338
			1101 17th, 1140 Connecticut, 1730 M and 1150 17th Street ⁽²⁾	n/a	n/a		-		85,910

		Retail:
			Springfield Mall (including present value of purchase option) ⁽³⁾	10/12-04/13	9.01%		245,254		242,583
			Montehiedra Town Center	07/16	6.04%		120,000		120,000
			Broadway Mall	07/13	5.30%		91,419		92,601
			828-850 Madison Avenue Condominium	06/18	5.29%		80,000		80,000
			Las Catalinas Mall	11/13	6.97%		58,534		59,304
			Other ⁽⁴⁾	12/10-05/36	4.75%-10.70%		156,003		156,709

		Merchandise Mart:
			Merchandise Mart	12/16	5.57%		550,000		550,000
			High Point Complex ⁽⁵⁾	09/16	10.35%		220,456		217,815
			Boston Design Center	09/15	5.02%		69,105		69,667
			Washington Design Center	11/11	6.95%		43,849		44,247

		Other:
			555 California Street	09/11	5.79%		639,754		664,117
			Industrial Warehouses	10/11	6.95%		24,622		24,813
	Total fixed rate notes and mortgages payable				6.12%	$	6,507,971	$	6,640,012
	___________________
			See notes on page 18.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

8. Debt - continued
					Interest
(Amounts in thousands)					Rate at	Balance at
				Spread over	June 30,	June 30,		December 31,
Notes and mortgages payable:			Maturity (1)	LIBOR	2010	2010		2009
Variable rate:
	New York Office:
		Manhattan Mall	02/12	L+55	0.90%	$	232,000	$	232,000
		866 UN Plaza	05/11	L+40	0.88%		44,978		44,978
	Washington, DC Office:
		2101 L Street	02/13	L+120	1.53%		150,000		150,000
		West End 25 (construction loan)	02/11	L+130	1.65%		93,998		85,735
		1101 17th, 1140 Connecticut, 1730 M and
		1150 17th Street ⁽²⁾	06/14	L+140	1.94%		84,966		-
		220 20th Street (construction loan)	01/11	L+115	1.60%		81,239		75,629
		River House Apartments	04/18	n/a ⁽⁶⁾	1.67%		64,000		64,000
		2200/2300 Clarendon Boulevard	01/15	L+75	1.10%		62,204		65,133
	Retail:
		Green Acres Mall	02/13	L+140	1.74%		335,000		335,000
		Bergen Town Center (construction loan)	03/13	L+150	1.84%		261,903		261,903
		Beverly Connection ⁽⁷⁾	07/12	L+350 ⁽⁷⁾	5.00%		100,000		100,000
		4 Union Square South	04/14	L+325	3.62%		75,000		75,000
		435 Seventh Avenue ⁽⁸⁾	08/14	L+300 ⁽⁸⁾	5.00%		52,000		52,000
		Other	11/12	L+375	4.11%		22,612		22,758
	Other:
		220 Central Park South	11/10	L+235–L+245	2.74%		123,750		123,750
		Other ⁽⁹⁾	09/10-02/12	Various	1.85%-4.00%		108,978		117,868
	Total variable rate notes and mortgages payable				2.09%		1,892,628		1,805,754
	Total notes and mortgages payable				5.21%	$	8,400,599	$	8,445,766

Senior unsecured notes:
	Senior unsecured notes due 2015 ⁽¹⁰⁾		04/15		4.25%	$	499,214	$	-
	Senior unsecured notes due 2039 ⁽¹¹⁾		10/39		7.88%		460,000		446,134
	Senior unsecured notes due 2010		12/10		4.75%		148,292		148,240
	Senior unsecured notes due 2011		02/11		5.60%		117,360		117,342
	Total senior unsecured notes				5.80%	$	1,224,866	$	711,716

3.88% exchangeable senior debentures due 2025
	(see page 19)		04/12		5.32%	$	487,685	$	484,457

Convertible senior debentures: (see page 19)
	3.63% due 2026 ⁽¹²⁾		11/11		5.32%		383,338		424,207
	2.85% due 2027		04/12		5.45%		21,512		21,251
	Total convertible senior debentures ⁽¹³⁾				5.33%	$	404,850	$	445,458

Unsecured revolving credit facilities:
	$1.595 billion unsecured revolving credit facility		09/12	L+55	0.88%	$	152,218	$	427,218
	$.965 billion unsecured revolving credit facility
		($21,947 reserved for outstanding letters of credit)	06/11	L+55	-		-		425,000
	Total unsecured revolving credit facilities				0.88%	$	152,218	$	852,218
___________________________
	See notes on the following page.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

8. Debt - continued

Notes to preceding tabular information (Amounts in thousands):

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

(2) On June 1, 2010, we refinanced this loan in the same amount. The new loan, which is guaranteed by the Operating Partnership, has a rate of LIBOR plus 1.40% (1.94% at June 30, 2010) and matures in June 2011, with three one-year extension options.

(3) In the fourth quarter of 2009, we requested that the Springfield Mall mortgage loan with a principal balance of $163,554 be placed with the special servicer. In March 2010, we received notice from the special servicer that the loan was in default. We are in negotiations with the special servicer; there can be no assurance as to the timing and ultimate resolution of these negotiations.

(4) In March 2010, we requested that the mortgage loan on a California retail property with a principal balance of $17,540 be placed with the special servicer. We have not made debt service payments since March and are in default. We are in negotiations with the special servicer; there can be no assurance as to the timing and ultimate resolution of these negotiations.

(5) In March 2010, we requested that the High Point Complex mortgage loan be placed with the special servicer. We have not made debt service payments since March and are in default. We are in negotiations with the special servicer; there can be no assurance as to the timing and ultimate resolution of these negotiations.

(6) This loan bears interest at the Freddie Mac Reference Note Rate plus 1.53%.

(7) This loan has a LIBOR floor of 1.50%.

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

(9) In June 2010, we extended the maturity date of a $50,000 construction loan to February 2011, with a one-year extension option. In addition, in July 2010, we extended the maturity date of a $36,000 loan which had matured in October 2009, to September 2010, and are in negotiations to further extend this loan.

(10) On March 26, 2010, we completed a public offering of $500,000 aggregate principal amount of 4.25% senior unsecured notes due April 1, 2015. Interest on the notes is payable semi-annually on April 1 and October 1, commencing on October 1, 2010. The notes were sold at 99.834% of their face amount to yield 4.287%. The notes can be redeemed without penalty beginning January 1, 2015. We retained net proceeds of approximately $496,000.

(11) These notes may be redeemed at our option in whole or in part beginning on October 1, 2014, at a price equal to the principal amount plus accrued interest. In the quarter ended March 31, 2010, we reclassified $13,866 of deferred financing costs to “deferred leasing and financing costs” on our consolidated balance sheet.

(12) In the second quarter of 2010, we purchased $45,251 aggregate face amount ($44,170 aggregate carrying amount) of our convertible senior debentures for $45,242 in cash, resulting in a net loss of $1,072.

(13) The net proceeds from the offering of these debentures were contributed to the Operating Partnership in the form of an inter-company loan and the Operating Partnership fully and unconditionally guaranteed payment of these debentures. There are no restrictions which limit the Operating Partnership from making distributions to Vornado and Vornado has no independent assets or operations outside of the Operating Partnership.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

8. Debt - continued

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

			$1.4 Billion Convertible				$1 Billion Convertible				$500 Million Exchangeable
(Amounts in thousands, except per share amounts)			Senior Debentures				Senior Debentures				Senior Debentures
			June 30,		December 31,		June 30,		December 31,		June 30,		December 31,
Balance Sheet:			2010		2009		2010		2009		2010		2009
	Principal amount of debt component		$	22,479	$	22,479	$	392,046	$	437,297	$	499,982	$	499,982
	Unamortized discount			(967)		(1,228)		(8,708)		(13,090)		(12,297)		(15,525)
	Carrying amount of debt component		$	21,512	$	21,251	$	383,338	$	424,207	$	487,685	$	484,457
	Carrying amount of equity component		$	2,104	$	2,104	$	21,027	$	23,457	$	32,301	$	32,301
	Effective interest rate			5.45%		5.45%		5.32%		5.32%		5.32%		5.32%
	Maturity date (period through which
		discount is being amortized)		4/1/12				11/15/11				4/15/12
	Conversion price per share, as adjusted		$	157.18			$	148.46			$	87.17
	Number of shares on which the
		aggregate consideration to be
		delivered upon conversion is
		determined		- ⁽¹⁾				- ⁽¹⁾				5,736
__________________

(1)		Pursuant to the provisions of ASC 470-20, we are required to disclose the conversion price and the number of shares on which the aggregate consideration to be delivered upon conversion is determined (principal plus excess value). Our convertible senior debentures require that upon conversion, the entire principal amount is to be settled in cash, and at our option, any excess value above the principal amount may be settled in cash or common shares. Based on the June 30, 2010 closing share price of our common shares and the conversion prices in the table above, there was no excess value; accordingly, no common shares would be issued if these securities were settled on this date. The number of common shares on which the aggregate consideration that would be delivered upon conversion is 143 and 2,641 common shares, respectively.

		Three Months Ended				Six Months Ended
(Amounts in thousands)		June 30,				June 30,
Income Statement:		2010		2009		2010		2009
$1.4 Billion Convertible Senior Debentures:
	Coupon interest	$	160	$	9,660	$	320	$	19,512
	Discount amortization – original issue		23		1,305		46		2,631
	Discount amortization – ASC 470-20 implementation		107		6,111		215		12,316
		$	290	$	17,076	$	581	$	34,459

$1 Billion Convertible Senior Debentures:
	Coupon interest	$	3,842	$	8,856	$	7,805	$	17,826
	Discount amortization – original issue		447		959		903		1,936
	Discount amortization – ASC 470-20 implementation		1,198		2,567		2,416		5,180
		$	5,487	$	12,382	$	11,124	$	24,942

$500 Million Exchangeable Senior Debentures:
	Coupon interest	$	4,844	$	4,844	$	9,688	$	9,688
	Discount amortization – original issue		384		375		762		733
	Discount amortization – ASC 470-20 implementation		1,241		1,215		2,466		2,375
		$	6,469	$	6,434	$	12,916	$	12,796

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

9. Redeemable Noncontrolling Interests

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

(Amounts in thousands)
Balance at December 31, 2008	$	1,177,978
Net income		17,281
Distributions		(20,931)
Conversion of Class A redeemable units into common shares, at redemption value		(49,990)
Adjustment to carry Class A redeemable units at redemption value		(194,183)
Other, net		5,944
Balance at June 30, 2009	$	936,099


Balance at December 31, 2009	$	1,251,628
Net income		21,903
Distributions		(27,338)
Conversion of Class A redeemable units into common shares, at redemption value		(35,711)
Adjustment to carry Class A redeemable units at redemption value		66,075
Redemption of Series D-12 redeemable units		(13,000)
Other, net		7,356
Balance at June 30, 2010	$	1,270,913

As of June 30, 2010 and December 31, 2009, the aggregate redemption value of our Class A operating partnership units was $1,010,913,000 and $971,628,000, respectively.

Redeemable noncontrolling interests exclude our Series G convertible preferred units and Series D-13 cumulative redeemable preferred units, as they are accounted for as liabilities in accordance with ASC 480, Distinguishing Liabilities and Equity , because of their possible settlement by issuing a variable number of Vornado common shares. Accordingly the fair value of these units is included as a component of “other liabilities” on our consolidated balance sheets and aggregated $61,122,000 and $60,271,000 as of June 30, 2010 and December 31, 2009, respectively.

In March and May of 2010, we redeemed 246,153 and 553,847 Series D-12 cumulative redeemable preferred units, respectively, for $16.25 per unit in cash, or $13,000,000 in the aggregate. In connection with these redemptions, we recognized a $6,972,000 net gain, of which $4,818,000 was recognized in the second quarter of 2010. Such gain is included as a component of “net income attributable to noncontrolling interests, including unit distributions,” on our consolidated statement of income.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

10. Fair Value Measurements

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

Financial Assets and Liabilities Measured at Fair Value

Financial assets and liabilities that are measured at fair value in our consolidated financial statements consist primarily of (i) marketable securities, (ii) the assets of our deferred compensation plan, which are primarily marketable equity securities and equity investments in limited partnerships, (iii) short-term investments (CDARS classified as available-for-sale) and (iv) mandatorily redeemable instruments (Series G convertible preferred units and Series D-13 cumulative redeemable preferred units). The tables below aggregate the fair values of financial assets and liabilities by the levels in the fair value hierarchy at June 30, 2010 and December 31, 2009, respectively.

			As of June 30, 2010
(Amounts in thousands)			Total		Level 1		Level 2		Level 3
	Marketable securities		$	305,292	$	305,292	$	-	$	-
	Deferred compensation plan assets (included in other assets)			83,787		40,189		-		43,598
		Total assets	$	389,079	$	345,481	$	-	$	43,598

	Mandatorily redeemable instruments (included in other liabilities)		$	61,122	$	61,122	$	-	$	-

			As of December 31, 2009
(Amounts in thousands)			Total		Level 1		Level 2		Level 3
	Marketable equity securities		$	79,925	$	79,925	$	-	$	-
	Deferred compensation plan assets (included in other assets)			80,443		40,854		-		39,589
	Short-term investments			40,000		40,000		-		-
		Total assets	$	200,368	$	160,779	$	-	$	39,589

	Mandatorily redeemable instruments (included in other liabilities)		$	60,271	$	60,271	$	-	$	-

The fair value of Level 3 “deferred compensation plan assets” represents equity investments in certain limited partnerships. The tables below summarize the changes in these assets for the three and six months ended June 30, 2010 and 2009, respectively.

	For the Three Months Ended				For the Six Months Ended
(Amounts in thousands)	2010		2009		2010		2009
Beginning balance	$	43,263	$	32,426	$	39,589	$	34,176
Total realized/unrealized gains		41		2,806		1,149		1,310
Purchases, sales, other settlements and issuances, net		294		936		2,860		682
Ending balance	$	43,598	$	36,168	$	43,598	$	36,168

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

10. Fair Value Measurements - continued

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value in our consolidated financial statements include mezzanine loans receivable and debt. Estimates of the fair values of these instruments are based on our assessments of available market information and valuation methodologies, including discounted cash flow analyses. The table below summarizes the carrying amounts and fair values of these financial instruments as of June 30, 2010 and December 31, 2009.

			As of June 30, 2010				As of December 31, 2009
			Carrying		Fair		Carrying		Fair
(Amounts in thousands)			Amount		Value		Amount		Value
	Mezzanine loans receivable		$	136,857	$	128,591	$	203,286	$	192,612
	Debt:
		Notes and mortgages payable	$	8,400,599	$	8,236,755	$	8,445,766	$	7,858,873
		Senior unsecured notes		1,224,866		1,228,601		711,716		718,302
		Exchangeable senior debentures		487,685		537,481		484,457		547,480
		Convertible senior debentures		404,850		414,497		445,458		461,275
		Revolving credit facility debt		152,218		152,218		852,218		852,218
			$	10,670,218	$	10,569,552	$	10,939,615	$	10,438,148

11. Discontinued Operations

The table below sets forth the combined results of operations of assets related to discontinued operations for the three and six months ended June 30, 2010 and 2009 and includes the operating results of 1999 K Street, which was sold on September 1, 2009 and 15 other retail properties, which were sold during 2009.

	For the Three Months				For the Six Months
(Amounts in thousands)	Ended June 30,				Ended June 30,
	2010		2009		2010		2009
Total revenues	$	-	$	5,042	$	-	$	8,490
Total expenses		-		1,679		-		2,535
Income from discontinued operations	$	-	$	3,363	$	-	$	5,955

12. Fee and Other Income

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

	For The Three Months				For The Six Months
(Amounts in thousands)	Ended June 30,				Ended June 30,
	2010		2009		2010		2009
Tenant cleaning fees	$	13,468	$	12,420	$	27,120	$	25,192
Management and leasing fees		3,380		3,017		12,520		5,418
Lease termination fees		2,841		1,124		9,276		2,748
Other income		12,560		19,338		25,793		33,291
	$	32,249	$	35,899	$	74,709	$	66,649

Fee and other income above includes management fee income from Interstate Properties, a related party, of $192,000 and $183,000 for the three months ended June 30, 2010 and 2009, respectively, and $392,000 and $381,000 for the six months ended June 30, 2010 and 2009, respectively. The above table excludes fee income from partially owned entities, which is included in income from partially owned entities (see Note 4 – Investments in Partially Owned Entities).

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

13. Stock-based Compensation

On May 13, 2010, our shareholders approved the 2010 Omnibus Share Plan (the “Plan’), which replaces the 2002 Omnibus Share Plan. Under the Plan, the Compensation Committee of the Board (the “Committee”) may grant eligible participants awards of stock options, stock appreciation rights, performance shares, restricted shares and other stock-based awards and operating partnership units, certain of which may provide for dividends or dividend equivalents and voting rights prior to vesting. Awards may be granted up to a maximum of 6,000,000 shares, if all awards granted are Full Value Awards, as defined, and up to 12,000,000 shares, if all of the awards granted are Not Full Value Awards, as defined. Full Value Awards are awards of securities, such as restricted shares, that, if all vesting requirements are met, do not require the payment of an exercise price or strike price to acquire the securities. Not Full Value Awards are awards of securities, such as options, that do require the payment of an exercise price or strike price. This means, for example, if the Committee were to award only restricted shares, it could award up to 6,000,000 restricted shares. On the other hand, if the Committee were to award only stock options, it could award options to purchase up to 12,000,000 shares (at the applicable exercise price). The Committee may also issue any combination of awards under the Plan, with reductions in availability of future awards made in accordance with the above limitations.

We account for all stock-based compensation in accordance ASC 718, Compensation – Stock Compensation . Stock-based compensation expense for the three and six months ended June 30, 2010 and 2009 consists of stock option awards, restricted stock awards, Operating Partnership unit awards and out-performance plan awards. Stock-based compensation expense was $8,480,000 and $5,651,000 in the quarter ended June 30, 2010 and 2009, respectively, and $14,957,000 and $15,900,000 in the six months ended June 30, 2010 and 2009, respectively.

On March 31, 2009, our nine most senior executives voluntarily surrendered their 2007 and 2008 stock option awards and their 2008 out-performance plan awards. Accordingly, we recognized $32,588,000 of expense in the first quarter of 2009 representing the unamortized portion of these awards, which is included as a component of “general and administrative” expense on our consolidated statement of income.

14. Interest and Other Investment Income (Loss), Net

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

(Amounts in thousands)		For the Three Months				For the Six Months
		Ended June 30,				Ended June 30,
		2010		2009		2010		2009
Dividends and interest on marketable securities		$	7,377	$	6,095	$	14,622	$	12,513
Mezzanine loans receivable loss accrual			(6,900)		(122,738)		(6,900)		(122,738)
Interest on mezzanine loans			2,325		9,780		5,040		20,104
Mark-to-market of investments in our deferred compensation plan ⁽¹⁾			(986)		6,210		1,777		416
Other, net			2,060		2,500		4,045		5,611
		$	3,876	$	(98,153)	$	18,584	$	(84,094)
__________________________

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

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

15. Income Per Share

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

			For the Three Months				For the Six Months
(Amounts in thousands, except per share amounts)			Ended June 30,				Ended June 30,
			2010		2009		2010		2009
Numerator:
	Income (loss) from continuing operations, net of income
		attributable to noncontrolling interests	$	72,106	$	(40,998)	$	286,658	$	96,520
	Income from discontinued operations, net of income attributable to
		noncontrolling interests		-		3,363		-		5,955
	Net income (loss) attributable to Vornado			72,106		(37,635)		286,658		102,475
	Preferred share dividends			(14,266)		(14,269)		(28,533)		(28,538)
	Net income (loss) attributable to common shareholders			57,840		(51,904)		258,125		73,937
	Earnings allocated to unvested participating securities			(29)		(55)		(49)		(110)
	Numerator for basic income (loss) per share			57,811		(51,959)		258,076		73,827
	Impact of assumed conversions:
		Convertible pref e rred share dividends		-		-		81		-
	Numerator for diluted income (loss) per share		$	57,811	$	(51,959)	$	258,157	$	73,827

Denominator:
	Denominator for basic income (loss) per share –			182,027		171,530		181,786		164,009
		weighted average shares
	Effect of dilutive securities ^(1):
		Employee stock options and restricted share awards		1,617		-		1,741		1,174
		Convertible preferred shares		-		-		71		-
	Denominator for diluted income (loss) per share –
		weighted average shares and assumed conversions		183,644		171,530		183,598		165,183

INCOME (LOSS) PER COMMON SHARE – BASIC:
	Income (loss) from continuing operations, net		$	0.32	$	(0.32)	$	1.42	$	0.41
	Income from discontinued operations, net			-		0.02		-		0.04
	Net income (loss) per common share		$	0.32	$	(0.30)	$	1.42	$	0.45

INCOME (LOSS) PER COMMON SHARE – DILUTED:
	Income (loss) from continuing operations, net		$	0.31	$	(0.32)	$	1.41	$	0.41
	Income from discontinued operations, net			-		0.02		-		0.04
	Net income (loss) per common share		$	0.31	$	(0.30)	$	1.41	$	0.45


(1)		The effect of dilutive securities above excludes anti-dilutive weighted average common share equivalents. Accordingly the three months ended June 30, 2010 and 2009 exclude 20,075 and 22,729 weighted average common share equivalents, respectively, and the six months ended June 30, 2010 and 2009 exclude 19,941 and 21,551 weighted average common share equivalents, respectively.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

16. Comprehensive Income (Loss)

	For The Three Months				For The Six Months
(Amounts in thousands)	Ended June 30,				Ended June 30,
	2010		2009		2010		2009
Net income (loss)	$	77,211	$	(40,375)	$	309,755	$	116,056
Other comprehensive income (loss)		7,644		10,946		9,148		(28,952)
Comprehensive income (loss)		84,855		(29,429)		318,903		87,104
Less: Comprehensive income (loss) attributable to noncontrolling interests		5,640		(1,853)		23,737		11,236
Comprehensive income (loss) attributable to Vornado	$	79,215	$	(27,576)	$	295,166	$	75,868

Substantially all of other comprehensive income (loss) for the three and six months ended June 30, 2010 and 2009 relates to income or loss from the mark-to-market of marketable securities classified as available-for-sale and our share of other comprehensive income or loss of partially owned entities.

17. Retirement Plan

In the first quarter of 2009, we finalized the termination of the Merchandise Mart Properties Pension Plan, which resulted in a $2,800,000 pension settlement expense that is included as a component of “general and administrative” expense on our consolidated statement of income.

18. Subsequent Event

On July 29, 2010, as part of LNR Property Corporation’s (“LNR”) recapitalization, we acquired a 26.2% equity interest in LNR for a new investment of $116,000,000 in cash and conversion into equity of our mezzanine loan made to LNR’s parent, Riley HoldCo Corp. At June 30, 2010, the carrying amount of the loan was $15,000,000, after a $52,537,000 loss accrual recognized in 2009 and $6,900,000 in the current quarter. LNR is the industry leading servicer and special servicer of commercial mortgage loans and CMBS and a diversified real estate, investment, finance and management company. We will account for our investment in LNR on the equity method from the date of the recapitalization.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

19. Commitments and Contingencies

Insurance

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

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

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

Our debt instruments, consisting of mortgage loans secured by our properties which are non-recourse to us, senior unsecured notes, exchangeable senior debentures, convertible senior debentures and revolving credit agreements contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. Further, if lenders insist on greater coverage than we are able to obtain it could adversely affect our ability to finance and/or refinance our properties and expand our portfolio.

Other Commitments and Contingencies

Our mortgage loans are non-recourse to us. However, in certain cases we have provided guarantees or master leased tenant space. These guarantees and master leases terminate either upon the satisfaction of specified circumstances or repayment of the underlying loans. As of June 30, 2010, the aggregate dollar amount of these guarantees and master leases is approximately $254,042,000.

At June 30, 2010, $21,947,000 of letters of credit were outstanding under one of our revolving credit facilities. Our credit facilities contain financial covenants that require us to maintain minimum interest coverage and maximum debt to market capitalization ratios, and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB. Our credit facilities also contain customary conditions precedent to borrowing, including representations and warranties and also contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal.

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

We are committed to fund additional capital to certain of our partially owned entities aggregating approximately $217,800,000, of which $200,000,000 is committed to our real estate Fund.

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

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

19. Commitments and Contingencies - continued

Litigation

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

On January 8, 2003, Stop & Shop filed a complaint with the United States District Court for the District of New Jersey (“USDC-NJ”) claiming that we had no right to reallocate and therefore continue to collect the $5,000,000 of annual rent from Stop & Shop pursuant to the Master Agreement and Guaranty, because of the expiration of the East Brunswick, Jersey City, Middletown, Union and Woodbridge leases to which the $5,000,000 of additional rent was previously allocated. Stop & Shop asserted that a prior order of the Bankruptcy Court for the Southern District of New York dated February 6, 2001, as modified on appeal to the District Court for the Southern District of New York on February 13, 2001, froze our right to reallocate which effectively terminated our right to collect the additional rent from Stop & Shop. On March 3, 2003, after we moved to dismiss for lack of jurisdiction, Stop & Shop voluntarily withdrew its complaint. On March 26, 2003, Stop & Shop filed a new complaint in New York State Supreme Court, asserting substantially the same claims as in its USDC-NJ complaint. We removed the action to the United States District Court for the Southern District of New York. In January 2005 that court remanded the action to the New York State Supreme Court. On February 14, 2005, we served an answer in which we asserted a counterclaim seeking a judgment for all the unpaid additional rent accruing through the date of the judgment and a declaration that Stop & Shop will continue to be liable for the additional rent as long as any of the leases subject to the Master Agreement and Guaranty remain in effect. On May 17, 2005, we filed a motion for summary judgment. On July 15, 2005, Stop & Shop opposed our motion and filed a cross-motion for summary judgment. On December 13, 2005, the Court issued its decision denying the motions for summary judgment. Both parties appealed the Court’s decision and on December 14, 2006, the Appellate Court division issued a decision affirming the Court’s decision. On January 16, 2007, we filed a motion for the reconsideration of one aspect of the Appellate Court’s decision which was denied on March 13, 2007. Discovery is now complete. On October 19, 2009, Stop & Shop filed a motion for leave to amend its pleadings to assert new claims for relief, including a claim for damages in an unspecified amount, and an additional affirmative defense. On April 26, 2010, Stop and Shop’s motion was denied. We anticipate that a trial date will be set for some time in 2010. We intend to continue to vigorously pursue our claims against Stop & Shop. In our opinion, after consultation with legal counsel, the outcome of such matters will not have a material effect on our financial condition, results of operations or cash flows.

On May 24, 2007, we acquired a 70% controlling interest in 1290 Avenue of the Americas and the 555 California Street complex. Our 70% interest was acquired through the purchase of all of the shares of a group of foreign companies that own, through U.S. entities, the 1% sole general partnership interest and a 69% limited partnership interest in the partnerships that own the two properties. The remaining 30% limited partnership interest is owned by Donald J. Trump. In August 2005, Mr. Trump brought a lawsuit in the New York State Supreme Court against, among others, the general partners of the partnerships referred to above relating to a dispute over the sale of properties located on the former Penn Central rail yards between West 59th and 72nd Streets in Manhattan which were formerly owned by the partnerships. In decisions issued in 2006, 2007 and 2009, the New York State Supreme Court dismissed all of Mr. Trump’s claims, and those decisions were affirmed by the Appellate Division. Mr. Trump cannot further appeal those decisions. In April 2010, Mr. Trump notified us of his intent to file a new suit claiming, among other things, that the limited partnerships should be dissolved. On April 29, 2010, we filed a motion for declaratory judgment in New York courts seeking to dispose of this claim. In June 2010, our motion was granted and a final judgment was entered that disposed of Mr. Trump’s claims with prejudice.

In July 2005, we acquired H Street Building Corporation (“H Street”) which has a subsidiary that owns, among other things, a 50% tenancy in common interest in land located in Arlington County, Virginia, known as "Pentagon Row," leased to two tenants, Street Retail, Inc. and Post Apartment Homes, L.P. In April 2007, H Street acquired the remaining 50% interest in that fee. On September 25, 2008, both tenants filed suit against us and the former owners claiming the right of first offer to purchase the fee interest, damages in excess of $75,000,000 and punitive damages. In April 2010, the Trial Court entered judgment in favor of the tenants, that we sell the land to the tenants for a net sales price of $14,992,000, representing the Trial Court’s allocation of our purchase price for H Street. The request for damages and punitive damages was denied. We have filed a notice of appeal and the Trial Court’s judgment is stayed pending the appeal. As a result of the Trial Court’s decision, we recorded a $10,056,000 loss accrual in the three months ended March 31, 2010, primarily representing previously recognized rental income.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

20. Segment Information

Below is a summary of net income and a reconciliation of net income to EBITDA ⁽¹⁾ by segment for the three and six months ended June 30, 2010 and 2009.


(Amounts in thousands)			For the Three Months Ended June 30, 2010
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other ⁽³⁾
Property rentals				$	541,839	$	195,248	$	146,059	$	97,000	$	60,932	$	-	$	42,600
Straight-line rents:
	Contractual rent increases				12,824		6,387		1,626		3,672		847		-		292
	Amortization of free rent				4,811		868		(687)		4,134		(59)		-		555
Amortization of acquired below-
		market leases, net			16,302		9,134		615		4,957		15		-		1,581
Total rentals					575,776		211,637		147,613		109,763		61,735		-		45,028
Tenant expense reimbursements					88,080		32,431		13,376		36,073		3,937		-		2,263
Fee and other income:
	Tenant cleaning fees				13,468		20,639		-		-		-		-		(7,171)
	Management and leasing fees				3,380		1,393		2,384		321		19		-		(737)
	Lease termination fees				2,841		2,297		82		428		34		-		-
	Other				12,560		4,513		5,055		1,063		784		-		1,145
Total revenues					696,105		272,910		168,510		147,648		66,509		-		40,528
Operating expenses					267,925		111,055		52,052		56,604		31,812		-		16,402
Depreciation and amortization					135,265		44,271		36,533		27,714		12,674		-		14,073
General and administrative					49,582		4,767		6,200		6,827		7,181		-		24,607
Litigation loss accrual and acquisition
	costs				1,930		-		-		-		-		-		1,930
Total expenses					454,702		160,093		94,785		91,145		51,667		-		57,012
Operating income (loss)					241,403		112,817		73,725		56,503		14,842		-		(16,484)
Income applicable to Alexander's					7,066		195		-		198		-		-		6,673
Loss applicable to Toys					(21,004)		-		-		-		-		(21,004)		-
(Loss) income from partially owned
	entities				(2,614)		1,142		188		931		55		-		(4,930)
Interest and other investment
	income, net				3,876		163		23		186		12		-		3,492
Interest and debt expense					(149,887)		(33,047)		(34,304)		(21,000)		(16,255)		-		(45,281)
Net loss on early extinguishment of
	debt				(1,072)		-		-		-		-		-		(1,072)
Net gain on disposition of wholly
	owned and partially owned assets
	other than depreciable real estate				4,382		-		-		-		(31)		-		4,413
Income (loss) before income taxes					82,150		81,270		39,632		36,818		(1,377)		(21,004)		(53,189)
Income tax (expense) benefit					(4,939)		(335)		620		-		(402)		-		(4,822)
Net income (loss)					77,211		80,935		40,252		36,818		(1,779)		(21,004)		(58,011)
Net (income) loss attributable to
	noncontrolling interests, including
	unit distributions				(5,105)		(2,556)		-		256		-		-		(2,805)
Net income (loss) attributable to
	Vornado				72,106		78,379		40,252		37,074		(1,779)		(21,004)		(60,816)
Interest and debt expense ⁽²⁾					207,512		31,595		34,943		22,526		16,478		42,093		59,877
Depreciation and amortization ⁽²⁾					184,103		42,736		39,694		28,500		12,785		34,444		25,944
Income tax (benefit) expense ⁽²⁾					(19,140)		335		(617)		-		402		(24,123)		4,863
EBITDA ⁽¹⁾				$	444,581	$	153,045	$	114,272	$	88,100	$	27,886	$	31,410	$	29,868

See notes on page 32.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

20. Segment Information – continued


(Amounts in thousands)			For the Three Months Ended June 30, 2009
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other ⁽³⁾
Property rentals				$	512,696	$	190,226	$	133,424	$	89,083	$	60,954	$	-	$	39,009
Straight-line rents:
	Contractual rent increases				13,297		7,474		3,156		2,161		652		-		(146)
	Amortization of free rent				8,963		767		3,645		4,109		271		-		171
Amortization of acquired below-
		market leases, net			19,560		9,885		946		8,267		12		-		450
Total rentals					554,516		208,352		141,171		103,620		61,889		-		39,484
Tenant expense reimbursements					83,375		32,092		14,514		30,148		4,512		-		2,109
Fee and other income:
	Tenant cleaning fees				12,420		17,818		-		-		-		-		(5,398)
	Management and leasing fees				3,017		999		1,987		413		(43)		-		(339)
	Lease termination fees				1,124		256		700		100		68		-		-
	Other				19,338		5,358		4,712		1,189		1,525		-		6,554
Total revenues					673,790		264,875		163,084		135,470		67,951		-		42,410
Operating expenses					269,711		109,646		54,514		53,419		34,470		-		17,662
Depreciation and amortization					136,686		43,153		34,186		28,784		13,767		-		16,796
General and administrative					49,632		4,531		5,560		6,393		6,930		-		26,218
Total expenses					456,029		157,330		94,260		88,596		55,167		-		60,676
Operating income (loss)					217,761		107,545		68,824		46,874		12,784		-		(18,266)
Income applicable to Alexander's					6,614		193		-		262		-		-		6,159
Loss applicable to Toys					(327)		-		-		-		-		(327)		-
(Loss) income from partially owned
	entities				(22,797)		1,252		2,044		794		35		-		(26,922)
Interest and other investment (loss)
	income, net				(98,153)		240		179		(198)		41		-		(98,415)
Interest and debt expense					(159,063)		(33,356)		(31,109)		(22,609)		(12,964)		-		(59,025)
Net gain on early extinguishment of
	debt				17,684		-		-		-		-		-		17,684
(Loss) income before income taxes					(38,281)		75,874		39,938		25,123		(104)		(327)		(178,785)
Income tax expense					(5,457)		(260)		(755)		(111)		(665)		-		(3,666)
(Loss) income from continuing
	operations				(43,738)		75,614		39,183		25,012		(769)		(327)		(182,451)
Income from discontinued operations					3,363		-		2,184		1,179		-		-		-
Net (loss) income					(40,375)		75,614		41,367		26,191		(769)		(327)		(182,451)
Net loss (income) attributable to
	noncontrolling interests, including
	unit distributions				2,740		(1,744)		-		497		-		-		3,987
Net (loss) income attributable to
	Vornado				(37,635)		73,870		41,367		26,688		(769)		(327)		(178,464)
Interest and debt expense ⁽²⁾					197,512		31,675		32,237		24,459		13,190		15,578		80,373
Depreciation and amortization ⁽²⁾					181,528		41,969		35,904		29,625		13,883		31,754		28,393
Income tax (benefit) expense ⁽²⁾					(3,784)		260		761		111		665		(9,634)		4,053
EBITDA ⁽¹⁾				$	337,621	$	147,774	$	110,269	$	80,883	$	26,969	$	37,371	$	(65,645)

See notes on page 32.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

20. Segment Information – continued


(Amounts in thousands)			For the Six Months Ended June 30, 2010
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other ⁽³⁾
Property rentals				$	1,065,960	$	387,852	$	285,939	$	192,764	$	122,376	$	-	$	77,029
Straight-line rents:
	Contractual rent increases				26,324		13,280		3,823		7,508		1,230		-		483
	Amortization of free rent				12,233		1,769		1,770		6,674		1,055		-		965
Amortization of acquired below-
		market leases, net			32,209		18,339		1,347		9,498		(106)		-		3,131
Total rentals					1,136,726		421,240		292,879		216,444		124,555		-		81,608
Tenant expense reimbursements					181,001		65,683		29,126		73,716		8,024		-		4,452
Fee and other income:
	Tenant cleaning fees				27,120		41,057		-		-		-		-		(13,937)
	Management and leasing fees				12,520		2,850		10,480		545		33		-		(1,388)
	Lease termination fees				9,276		3,025		528		3,836		1,887		-		-
	Other				25,793		8,923		10,922		1,803		2,784		-		1,361
Total revenues					1,392,436		542,778		343,935		296,344		137,283		-		72,096
Operating expenses					546,980		226,104		108,715		110,178		71,031		-		30,952
Depreciation and amortization					271,089		87,978		73,216		55,695		26,029		-		28,171
General and administrative					98,312		9,346		12,097		13,832		14,411		-		48,626
Litigation loss accrual and acquisition
	costs				11,986		-		10,056		-		-		-		1,930
Total expenses					928,367		323,428		204,084		179,705		111,471		-		109,679
Operating income (loss)					464,069		219,350		139,851		116,639		25,812		-		(37,583)
Income applicable to Alexander's					13,526		388		-		409		-		-		12,729
Income applicable to Toys					104,866		-		-		-		-		104,866		-
Income (loss) from partially owned
	entities				2,270		2,252		(4)		2,111		231		-		(2,320)
Interest and other investment
	income, net				18,584		327		50		191		25		-		17,991
Interest and debt expense					(289,622)		(65,733)		(68,788)		(38,899)		(29,042)		-		(87,160)
Net loss on early extinguishment of
	debt				(1,072)		-		-		-		-		-		(1,072)
Net gain on disposition of wholly
	owned and partially owned assets
	other than depreciable real estate				7,687		-		-		-		765		-		6,922
Income (loss) before income taxes					320,308		156,584		71,109		80,451		(2,209)		104,866		(90,493)
Income tax expense					(10,553)		(809)		(100)		(35)		(596)		-		(9,013)
Net income (loss)					309,755		155,775		71,009		80,416		(2,805)		104,866		(99,506)
Net (income) loss attributable to
	noncontrolling interests, including
	unit distributions				(23,097)		(4,848)		-		498		-		-		(18,747)
Net income (loss) attributable to
	Vornado				286,658		150,927		71,009		80,914		(2,805)		104,866		(118,253)
Interest and debt expense ⁽²⁾					403,699		62,587		70,114		41,880		29,487		83,233		116,398
Depreciation and amortization ⁽²⁾					370,252		84,810		79,535		57,311		26,267		69,771		52,558
Income tax expense ⁽²⁾					36,566		809		107		35		655		25,587		9,373
EBITDA ⁽¹⁾				$	1,097,175	$	299,133	$	220,765	$	180,140	$	53,604	$	283,457	$	60,076

See notes on page 32.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

20. Segment Information – continued


(Amounts in thousands)			For the Six Months Ended June 30, 2009
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other ⁽³⁾
Property rentals				$	1,019,779	$	378,988	$	262,798	$	177,233	$	123,955	$	-	$	76,805
Straight-line rents:
	Contractual rent increases				26,793		14,189		5,775		5,615		1,271		-		(57)
	Amortization of free rent				20,189		2,307		7,069		10,417		293		-		103
Amortization of acquired below-
		market leases, net			37,542		19,808		2,048		13,536		41		-		2,109
Total rentals					1,104,303		415,292		277,690		206,801		125,560		-		78,960
Tenant expense reimbursements					181,404		67,249		33,044		67,216		9,831		-		4,064
Fee and other income:
	Tenant cleaning fees				25,192		34,590		-		-		-		-		(9,398)
	Management and leasing fees				5,418		2,094		3,952		691		14		-		(1,333)
	Lease termination fees				2,748		298		1,682		100		668		-		-
	Other				33,291		10,407		10,150		1,648		2,863		-		8,223
Total revenues					1,352,356		529,930		326,518		276,456		138,936		-		80,516
Operating expenses					548,609		223,190		111,490		106,199		73,665		-		34,065
Depreciation and amortization					268,342		87,263		69,909		51,790		27,146		-		32,234
General and administrative					128,697		13,693		14,469		18,144		17,894		-		64,497
Total expenses					945,648		324,146		195,868		176,133		118,705		-		130,796
Operating income (loss)					406,708		205,784		130,650		100,323		20,231		-		(50,280)
Income applicable to Alexander's					24,747		385		-		411		-		-		23,951
Income applicable to Toys					96,820		-		-		-		-		96,820		-
(Loss) income from partially owned
	entities				(30,340)		2,454		3,628		1,986		160		-		(38,568)
Interest and other investment (loss)
	income, net				(84,094)		522		319		53		71		-		(85,059)
Interest and debt expense					(316,823)		(66,474)		(61,954)		(44,778)		(25,800)		-		(117,817)
Net gain on early extinguishment of
	debt				23,589		-		-		769		-		-		22,820
Income (loss) before income taxes					120,607		142,671		72,643		58,764		(5,338)		96,820		(244,953)
Income tax expense					(10,506)		(260)		(1,188)		(277)		(908)		-		(7,873)
Income (loss) from continuing
	operations				110,101		142,411		71,455		58,487		(6,246)		96,820		(252,826)
Income from discontinued operations					5,955		-		4,012		1,943		-		-		-
Net income (loss)					116,056		142,411		75,467		60,430		(6,246)		96,820		(252,826)
Net (income) loss attributable to
	noncontrolling interests, including
	unit distributions				(13,581)		(3,621)		-		615		-		-		(10,575)
Net income (loss) attributable to
	Vornado				102,475		138,790		75,467		61,045		(6,246)		96,820		(263,401)
Interest and debt expense ⁽²⁾					399,689		63,113		63,838		47,518		26,248		50,761		148,211
Depreciation and amortization ⁽²⁾					361,118		84,730		73,147		53,695		27,431		67,011		55,104
Income tax expense ⁽²⁾					54,283		260		1,195		277		973		43,457		8,121
EBITDA ⁽¹⁾				$	917,565	$	286,893	$	213,647	$	162,535	$	48,406	$	258,049	$	(51,965)

See notes on the following page.

VORNADO REALTY TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

20. Segment Information - continued

Notes to preceding tabular information:

(1) EBITDA represents “Earnings Before Interest, Taxes, Depreciation and Amortization.” We consider EBITDA a supplemental measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on a multiple of EBITDA, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. EBITDA should not be considered a substitute for net income. EBITDA may not be comparable to similarly titled measures employed by other companies.

(2) Interest and debt expense, depreciation and amortization and income tax expense in the reconciliation of net income (loss) to EBITDA includes our share of these items from partially owned entities.

(3) The tables below provide information about EBITDA from certain investments that are included in the “other” column of the preceding EBITDA by segment reconciliations. The totals for each of the columns below agree to the total EBITDA for the “other” column in the preceding EBITDA by segment reconciliations.


			For the Three Months					For the Six Months
(Amounts in thousands)			Ended June 30,					Ended June 30,
				2010		2009		2010			2009
Alexander's			$	14,260	$	14,061		$	28,659		$	38,460
Lexington				11,435		6,603	⁽²⁾		29,283	⁽³⁾		16,992	⁽²⁾
555 California Street				11,136		10,157			22,624			21,795
Hotel Pennsylvania				6,616		3,617			6,169			4,224
Industrial warehouses				768		1,369			1,607			2,683
Other investments				8,423		(9,114)	⁽⁴⁾		20,157			(5,167)	⁽⁴⁾
				52,638		26,693			108,499			78,987
Corporate general and administrative expenses ⁽¹⁾				(20,642)		(16,564)			(39,956)			(38,032)
Investment income and other, net ⁽¹⁾				13,235		25,293			22,912			37,775
Net (income) loss attributable to noncontrolling interests, including
	unit distributions			(2,805)		3,987			(18,747)			(10,575)
Mezzanine loans receivable loss accrual				(6,900)		(122,738)			(6,900)			(122,738)
Real estate Fund organization costs				(2,656)		-			(2,730)			-
Costs of acquisitions not consummated				(1,930)		-			(1,930)			-
Net (loss) gain on early extinguishment of debt				(1,072)		17,684			(1,072)			22,820
Write-off of unamortized costs from the voluntary surrender of equity
	awards			-		-			-			(20,202)
			$	29,868	$	(65,645)		$	60,076		$	(51,965)


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

(2)		Includes $4,580 for our share of impairment losses recorded by Lexington.

(3)		Includes a $5,998 net gain resulting from Lexington's March 2010 stock issuance.

(4)		Includes $7,650 of expense for our share of the Downtown Crossing, Boston lease termination payment.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Trustees
Vornado Realty Trust
New York, New York

We have reviewed the accompanying consolidated balance sheet of Vornado Realty Trust (the "Company") as of June 30, 2010, and the related consolidated statements of income for the three-month and six-month periods ended June 30, 2010 and 2009, and of changes in equity and cash flows for the six-month periods ended June 30, 2010 and 2009. These interim financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

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

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Vornado Realty Trust as of December 31, 2009, and the related consolidated statements of income, changes in equity, and cash flows for the year then ended (not presented herein); and in our report dated February 23, 2010, we expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph relating to a change in method of accounting for debt with conversion options and noncontrolling interests in consolidated subsidiaries. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2009 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

August 3, 2010

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

Certain statements contained herein constitute forward‑looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Quarterly Report on Form 10‑Q. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2009. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or the date of any document incorporated by reference. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a discussion of our consolidated financial statements for the three and six months ended June 30, 2010. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Critical Accounting Policies

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2009 in Management’s Discussion and Analysis of Financial Condition. There have been no significant changes to our policies during 2010.

Overview

Business Objective and Operating Strategy

Our business objective is to maximize shareholder value, which we measure by the total return provided to our shareholders. Below is a table comparing our performance to the Morgan Stanley REIT Index (“RMS”) and the SNL REIT Index (“SNL”) for the following periods ending June 30, 2010:

		Total Return ⁽¹⁾
		Vornado	RMS	SNL
	One-year	67.1%	55.2%	55.2%
	Three-year	(26.2%)	(25.0%)	(22.4%)
	Five-year	9.2%	0.5%	3.9%
	Ten-year	241.8%	151.6%	164.7%


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

We intend to achieve our business objective by continuing to pursue our investment philosophy and executing our operating strategies through:

· Maintaining a superior team of operating and investment professionals and an entrepreneurial spirit;

· Investing in properties in select markets, such as New York City and Washington, DC, where we believe there
is a high likelihood of capital appreciation;

· Acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher rents;

· Investing in retail properties in select under-stored locations such as the New York City metropolitan area;

· Investing in fully-integrated operating companies that have a significant real estate component; and

· Developing and redeveloping our existing properties to increase returns and maximize value.

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

We have a large concentration of properties in the New York City metropolitan area and in the Washington, DC and Northern Virginia areas. We compete with a large number of real estate property owners and developers, some of which may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, attractiveness of location, the quality of the property and breadth and quality of services provided. Our success depends upon, among other factors, trends of the national, regional and local economies, financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation and population trends. See “Risk Factors” in Item 1A of our Annual Report on form 10-K for the year ended December 31, 2009 for additional information regarding these factors.

The economic recession and illiquidity and volatility in the financial and capital markets during 2008 and 2009 negatively affected substantially all businesses, including ours. Although signs of a recovery in 2010 have emerged, it is not possible for us to quantify the timing and impact of such a recovery, or lack thereof, on our future financial results.

Overview - continued

Quarter Ended June 30, 2010 Financial Results Summary

Net income attributable to common shareholders for the quarter ended June 30, 2010 was $57,840,000, or $0.31 per diluted share, compared to a net loss of $51,904,000, or $0.30 per diluted share, for the quarter ended June 30, 2009. Net loss for the quarter ended June 30, 2009 includes $500,000 for our share of net gains on sale of real estate. In addition, the quarters ended June 30, 2010 and 2009 include certain items that affect comparability which are listed in the table below. The aggregate of the net gains on sale of real estate and the items in the table below , net of amounts attributable to noncontrolling interests, decreased net income attributable to common shareholders for the quarter ended June 30, 2010 by $12,596,000, or $0.07 per diluted share and increased net loss attributable to common shareholders for the quarter ended June 30, 2009 by $91,516,000, or $0.53 per diluted share.

Funds from operations attributable to common shareholders plus assumed conversions (“FFO”) for the quarter ended June 30, 2010 was $204,772,000, or $1.11 per diluted share, compared to $93,515,000, or $0.54 per diluted share, for the prior year’s quarter. FFO for the quarters ended June 30, 2010 and 2009 include certain items that affect comparability which are listed in the table below. The aggregate of these items, net of amounts attributable to noncontrolling interests, decreased FFO for the quarter ended June 30, 2010 by $12,596,000, or $0.07 per diluted share and decreased FFO for the quarter ended June 30, 2009 by $92,700,000 or $0.54 per diluted share.

		For the Three Months
		Ended June 30,
(Amounts in thousands, except per share amounts		2010		2009
Items that affect comparability (income) expense:
	Mezzanine loans receivable loss accrual	$	6,900	$	122,738
	Default interest and fees accrued on three loans in special servicing		6,558		-
	Net gain on redemption of perpetual perferred units		(4,818)		-
	Real estate Fund organization costs		2,656		-
	Costs of acquisitions not consummated		1,930		-
	Net loss (gain) on early extinguishment of debt		1,072		(17,684)
	Other, net		(722)		(4,209)
			13,576		100,845
Noncontrolling interests’ share of above adjustments			(980)		(8,145)
Items that affect comparability, net		$	12,596	$	92,700

The percentage increase in GAAP basis and cash basis same store Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of our operating segments for the quarter ended June 30, 2010 over the quarter ended June 30, 2009 and the trailing quarter ended March 31, 2010 are summarized below.

			New York Office	Washington, DC Office		Merchandise Mart
Same Store EBITDA:			New York Office	Washington, DC Office	Retail	Merchandise Mart
	June 30, 2010 vs. June 30, 2009
		GAAP basis	2.2%	6.9 %	12.3%	2.6%
		Cash Basis	3.5%	13.2 %	12.7%	3.1%
	June 30, 2010 vs. March 31, 2010
		GAAP basis	3.6%	3.1 %	1.5%	19.1%	⁽¹⁾
		Cash Basis	4.8%	6.7 %	0.1%	22.1%	⁽¹⁾


(1)	Primarily from the timing of trade shows.

Overview – continued

Six Months Ended June 30, 2010 Financial Results Summary

Net income attributable to common shares for the six months ended June 30, 2010 was $258,125,000, or $1.41 per diluted share, compared to $73,937,000, or $0.45 per diluted share, for the six months ended June 30, 2009. Net income for the six months ended June 30, 2010 and 2009 include $307,000 and $673,000, respectively, for our share of net gains on sale of real estate. In addition, the six months ended June 30, 2010 and 2009 include certain items that affect comparability which are listed in the table below. The aggregate of the net gains on sale of real estate and the items in the table below, net of amounts attributable to noncontrolling interests, decreased net income attributable to common shareholders for the six months ended June 30, 2010 by $10,552,000, or $0.06 per diluted share and decreased net income attributable to common shareholders for the six months ended June 30, 2009 by $107,531,000, or $0.65 per diluted share.

FFO for the six months ended June 30, 2010 was $565,066,000, or $2.98 per diluted share, compared to $355,777,000, or $2.15 per diluted share, for the prior year’s six months. FFO for the six months ended June 30, 2010 and 2009 includes certain items that affect comparability which are listed in the table below. The aggregate of these items, net of amounts attributable to noncontrolling interests, decreased FFO for the six months ended June 30, 2010 by $10,861,000, or $0.06 per diluted share and decreased FFO for the six months ended June 30, 2009 by $108,194,000, or $0.66 per diluted share.

		For the Six Months
		Ended June 30,
(Amounts in thousands, except per share amounts		2010		2009
Items that affect comparability (income) expense:
	Litigation loss accrual and costs of acquisitions not consummated	$	11,986	$	-
	Net gain on redemption of perpetual preferred units		(6,972)		-
	Mezzanine loans receivable loss accrual		6,900		122,738
	Default interest and fees accrued on three loans in special servicing		6,558		-
	Net gain resulting from Lexington's March 2010 stock issuance		(5,998)		-
	Net gain on sale of condominiums		(3,149)		-
	Real estate Fund organization costs		2,730		-
	Net loss (gain) on early extinguishment of debt		1,072		(23,589)
	Write-off of unamortized costs from the voluntary surrender of equity awards		-		32,588
	Alexander's stock appreciation rights		-		(11,105)
	Other, net		(1,447)		(2,335)
			11,680		118,297
Noncontrolling interests’ share of above adjustments			(819)		(10,103)
Items that affect comparability, net		$	10,861	$	108,194

The percentage increase (decrease) in GAAP basis and cash basis same store EBITDA of our operating segments for the six months ended June 30, 2010 over the six months ended June 30, 2009 is summarized below.

			New York	Washington, DC		Merchandise
Same Store EBITDA:			Office	Office	Retail	Mart
	June 30, 2010 vs. June 30, 2009
		GAAP basis	1.7%	6. 5 %	7.8%	(1.0%)
		Cash Basis	2.7%	10.8 %	11.2%	(1.9%)

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

Overview - continued

The following table sets forth certain information for the properties we own directly or indirectly, including leasing activity. The leasing activity presented below is based on leases signed during the period and is not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Tenant improvements and leasing commissions are presented below based on square feet leased during the period, on a per square foot and per square foot per annum basis, based on weighted average lease terms and as a percentage of initial rent per square foot.

	(Square feet in thousands)			New York		Washington, DC				Merchandise Mart
As of June 30, 2010:				Office		Office		Retail ⁽³⁾		Office		Showroom
	Square feet (in service)				16,187		18,558		22,767		2,630		6,166
	Number of properties				28		84		164		8		8
	Occupancy rate				95.5%		95.0% ⁽²⁾		92.3%		91.1%		91.7%

Leasing Activity:
Quarter Ended June 30, 2010:
	Square feet				308		363		453		306		288
	Initial rent per square foot ⁽¹⁾			$	49.69	$	36.96	$	21.47	$	24.51	$	25.78
	Weighted average lease terms (years)				7.5		3.9		8.6		14.4		3.3
	Rent per square foot - relet space:
		Square feet			245		285		169		42		288
		Initial rent - cash basis ⁽¹⁾		$	49.64	$	37.25	$	16.54	$	25.37	$	25.78
		Prior escalated rent - cash basis		$	53.52	$	35.21	$	16.30	$	25.49	$	26.34
		Percentage (decrease) increase:
			Cash basis		(7.3%)		5.8%		1.5%		(0.5%)		(2.1%)
			GAAP Basis		(7.1%)		10.2%		9.0%		23.3%		0.2%
	Rent per square foot - vacant space:
		Square feet			63		78		284		264		-
		Initial rent ⁽¹⁾		$	49.90	$	35.89	$	24.40	$	24.37	$	-
	Tenant improvements and leasing
		commissions:
			Per square foot	$	55.70	$	15.24	$	10.69	$	92.52	$	3.46
			Per square foot per annum	$	7.46	$	3.91	$	1.25	$	6.43	$	1.05
			Percentage of initial rent		15.0%		10.6%		5.8%		26.2%		4.1%

Six Months Ended June 30, 2010:
	Square feet				614		723		731		308		770
	Initial rent per square foot ⁽¹⁾			$	47.27	$	38.39	$	21.29	$	24.48	$	24.74
	Weighted average lease terms (years)				7.3		3.8		8.1		14.3		4.0
	Rent per square foot - relet space:
		Square feet			478		522		282		44		770
		Initial rent - cash basis ⁽¹⁾		$	48.50	$	38.79	$	14.25	$	25.37	$	24.74
		Prior escalated rent - cash basis		$	52.56	$	35.87	$	13.62	$	25.49	$	26.34
		Percentage (decrease) increase:
			Cash basis		(7.7%)		8.1%		4.6%		(0.5%)		(6.1%)
			GAAP Basis		(7.5%)		13.0%		10.2%		23.3%		(0.8%)
	Rent per square foot - vacant space:
		Square feet			136		201		449		264		-
		Initial rent ⁽¹⁾		$	42.96	$	37.35	$	25.72	$	24.34	$	-
	Tenant improvements and leasing
		commissions:
			Per square foot	$	52.18	$	11.53	$	12.81	$	91.94	$	3.98
			Per square foot per annum	$	7.17	$	3.03	$	1.59	$	6.43	$	1.00
			Percentage of initial rent		15.2%		7.9%		7.5%		26.3%		4.0%


See notes on the following table .

Overview - continued



	(Square feet in thousands)				New York		Washington, DC				Merchandise Mart
					Office		Office		Retail ⁽³⁾		Office		Showroom
As of March 31, 2010:
	Square feet (in service)					16,175		18,530		22,684		2,470		6,301
	Number of properties					28		84		164		8		8
	Occupancy rate					95.3%		94.1% ⁽²⁾		91.2%		87.5%		89.1%

As of December 31, 2009:
	Square feet (in service)					16,173		18,560		22,553		2,464		6,301
	Number of properties					28		84		164		8		8
	Occupancy rate					95.5%		93.3% ⁽²⁾		91.6%		88.9%		88.4%

As of June 30, 2009:
	Square feet (in service)					16,154		18,073		21,925		2,430		6,337
	Number of properties					28		82		164		8		8
	Occupancy rate					96.1%		94.7% ⁽²⁾		91.3%		95.4%		90.2%



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

(2)		Excluding residential and other properties, occupancy rates for the office properties were as follows.
			June 30, 2010	94.8%
			March 31, 2010	94.6%
			December 31, 2009	94.6%
			June 30, 2009	95.1%

(3)		Mall sales per square foot, including partially owned malls, for the trailing twelve months ended June 30, 2010 and 2009 were $462 and $476,
			respectively.

Overview - continued

2010 Financing Activities:

On March 26, 2010, we completed a public offering of $500,000,000 aggregate principal amount of 4.25% senior unsecured notes due April 1, 2015. Interest on the notes is payable semi-annually on April 1 and October 1, commencing on October 1, 2010. The notes were sold at 99.834% of their face amount to yield 4.287%. The notes can be redeemed without penalty beginning January 1, 2015. We retained net proceeds of approximately $496,000,000.

On June 1, 2010, we refinanced a cross-collateralized loan of approximately $85,000,000, secured by 1101 17 ^th , 1140 Connecticut, 1730 M and 1150 17 ^th Streets, in Washington, DC. The new loan, which is guaranteed by the Operating Partnership, has a rate of LIBOR plus 1.40% (1.94% at June 30, 2010) and matures in June 2011, with three one-year extension options.

In the second quarter of 2010, we purchased $45,251,000 aggregate face amount ($44,170,000 aggregate carrying amount) of our convertible senior debentures for $45,242,000 in cash, resulting in net loss of $1,072,000.

In June 2010, we extended the maturity date of a $50,000,000 construction loan to February 2011, with a one-year extension option. In addition, in July 2010, we extended the maturity date of a $36,000,000 loan which had matured in October 2009, to September 2010, and are in negotiations to further extend this loan.

Recently Issued Accounting Literature

Net Income and EBITDA by Segment for the Three Months Ended June 30, 2010 and 2009

Below is a summary of net income and a reconciliation of net income to EBITDA ⁽¹⁾ by segment for the three months ended June 30, 2010 and 2009.


(Amounts in thousands)			For the Three Months Ended June 30, 2010
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other ⁽³⁾
Property rentals				$	541,839	$	195,248	$	146,059	$	97,000	$	60,932	$	-	$	42,600
Straight-line rents:
	Contractual rent increases				12,824		6,387		1,626		3,672		847		-		292
	Amortization of free rent				4,811		868		(687)		4,134		(59)		-		555
Amortization of acquired below-
		market leases, net			16,302		9,134		615		4,957		15		-		1,581
Total rentals					575,776		211,637		147,613		109,763		61,735		-		45,028
Tenant expense reimbursements					88,080		32,431		13,376		36,073		3,937		-		2,263
Fee and other income:
	Tenant cleaning fees				13,468		20,639		-		-		-		-		(7,171)
	Management and leasing fees				3,380		1,393		2,384		321		19		-		(737)
	Lease termination fees				2,841		2,297		82		428		34		-		-
	Other				12,560		4,513		5,055		1,063		784		-		1,145
Total revenues					696,105		272,910		168,510		147,648		66,509		-		40,528
Operating expenses					267,925		111,055		52,052		56,604		31,812		-		16,402
Depreciation and amortization					135,265		44,271		36,533		27,714		12,674		-		14,073
General and administrative					49,582		4,767		6,200		6,827		7,181		-		24,607
Litigation loss accrual and acquisition
	costs				1,930		-		-		-		-		-		1,930
Total expenses					454,702		160,093		94,785		91,145		51,667		-		57,012
Operating income (loss)					241,403		112,817		73,725		56,503		14,842		-		(16,484)
Income applicable to Alexander's					7,066		195		-		198		-		-		6,673
Loss applicable to Toys					(21,004)		-		-		-		-		(21,004)		-
(Loss) income from partially owned
	entities				(2,614)		1,142		188		931		55		-		(4,930)
Interest and other investment
	income, net				3,876		163		23		186		12		-		3,492
Interest and debt expense					(149,887)		(33,047)		(34,304)		(21,000)		(16,255)		-		(45,281)
Net loss on early extinguishment of
	debt				(1,072)		-		-		-		-		-		(1,072)
Net gain on disposition of wholly
	owned and partially owned assets
	other than depreciable real estate				4,382		-		-		-		(31)		-		4,413
Income (loss) before income taxes					82,150		81,270		39,632		36,818		(1,377)		(21,004)		(53,189)
Income tax (expense) benefit					(4,939)		(335)		620		-		(402)		-		(4,822)
Net income (loss)					77,211		80,935		40,252		36,818		(1,779)		(21,004)		(58,011)
Net (income) loss attributable to
	noncontrolling interests, including
	unit distributions				(5,105)		(2,556)		-		256		-		-		(2,805)
Net income (loss) attributable to
	Vornado				72,106		78,379		40,252		37,074		(1,779)		(21,004)		(60,816)
Interest and debt expense ⁽²⁾					207,512		31,595		34,943		22,526		16,478		42,093		59,877
Depreciation and amortization ⁽²⁾					184,103		42,736		39,694		28,500		12,785		34,444		25,944
Income tax (benefit) expense ⁽²⁾					(19,140)		335		(617)		-		402		(24,123)		4,863
EBITDA ⁽¹⁾				$	444,581	$	153,045	$	114,272	$	88,100	$	27,886	$	31,410	$	29,868

See notes on page 43.

Net Income and EBITDA by Segment for the Three Months Ended June 30, 2010 and 2009 - continued


(Amounts in thousands)			For the Three Months Ended June 30, 2009
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other ⁽³⁾
Property rentals				$	512,696	$	190,226	$	133,424	$	89,083	$	60,954	$	-	$	39,009
Straight-line rents:
	Contractual rent increases				13,297		7,474		3,156		2,161		652		-		(146)
	Amortization of free rent				8,963		767		3,645		4,109		271		-		171
Amortization of acquired below-
		market leases, net			19,560		9,885		946		8,267		12		-		450
Total rentals					554,516		208,352		141,171		103,620		61,889		-		39,484
Tenant expense reimbursements					83,375		32,092		14,514		30,148		4,512		-		2,109
Fee and other income:
	Tenant cleaning fees				12,420		17,818		-		-		-		-		(5,398)
	Management and leasing fees				3,017		999		1,987		413		(43)		-		(339)
	Lease termination fees				1,124		256		700		100		68		-		-
	Other				19,338		5,358		4,712		1,189		1,525		-		6,554
Total revenues					673,790		264,875		163,084		135,470		67,951		-		42,410
Operating expenses					269,711		109,646		54,514		53,419		34,470		-		17,662
Depreciation and amortization					136,686		43,153		34,186		28,784		13,767		-		16,796
General and administrative					49,632		4,531		5,560		6,393		6,930		-		26,218
Total expenses					456,029		157,330		94,260		88,596		55,167		-		60,676
Operating income (loss)					217,761		107,545		68,824		46,874		12,784		-		(18,266)
Income applicable to Alexander's					6,614		193		-		262		-		-		6,159
Loss applicable to Toys					(327)		-		-		-		-		(327)		-
(Loss) income from partially owned
	entities				(22,797)		1,252		2,044		794		35		-		(26,922)
Interest and other investment (loss)
	income, net				(98,153)		240		179		(198)		41		-		(98,415)
Interest and debt expense					(159,063)		(33,356)		(31,109)		(22,609)		(12,964)		-		(59,025)
Net gain on early extinguishment of
	debt				17,684		-		-		-		-		-		17,684
(Loss) income before income taxes					(38,281)		75,874		39,938		25,123		(104)		(327)		(178,785)
Income tax expense					(5,457)		(260)		(755)		(111)		(665)		-		(3,666)
(Loss) income from continuing
	operations				(43,738)		75,614		39,183		25,012		(769)		(327)		(182,451)
Income from discontinued operations					3,363		-		2,184		1,179		-		-		-
Net (loss) income					(40,375)		75,614		41,367		26,191		(769)		(327)		(182,451)
Net loss (income) attributable to
	noncontrolling interests, including
	unit distributions				2,740		(1,744)		-		497		-		-		3,987
Net (loss) income attributable to
	Vornado				(37,635)		73,870		41,367		26,688		(769)		(327)		(178,464)
Interest and debt expense ⁽²⁾					197,512		31,675		32,237		24,459		13,190		15,578		80,373
Depreciation and amortization ⁽²⁾					181,528		41,969		35,904		29,625		13,883		31,754		28,393
Income tax (benefit) expense ⁽²⁾					(3,784)		260		761		111		665		(9,634)		4,053
EBITDA ⁽¹⁾				$	337,621	$	147,774	$	110,269	$	80,883	$	26,969	$	37,371	$	(65,645)

See notes on the following page.

Net Income and EBITDA by Segment for the Three Months Ended June 30, 2010 and 2009 - continued

Notes to preceding tabular information:


		For the Three Months
(Amounts in thousands)		Ended June 30,
			2010		2009
Alexander's		$	14,260	$	14,061
Lexington			11,435		6,603	⁽²⁾
555 California Street			11,136		10,157
Hotel Pennsylvania			6,616		3,617
Industrial warehouses			768		1,369
Other investments			8,423		(9,114)	⁽³⁾
			52,638		26,693
Corporate general and administrative expenses ⁽¹⁾			(20,642)		(16,564)
Investment income and other, net ⁽¹⁾			13,235		25,293
Net (income) loss attributable to noncontrolling interests, including unit distributions			(2,805)		3,987
Mezzanine loans receivable loss accrual			(6,900)		(122,738)
Real estate Fund organization costs			(2,656)		-
Costs of acquisitions not consummated			(1,930)		-
Net (loss) gain on early extinguishment of debt			(1,072)		17,684
		$	29,868	$	(65,645)


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

(2)	Includes $4,580 for our share of impairment losses recorded by Lexington.

(3)	Includes $7,650 of expense for our share of the Downtown Crossing, Boston lease termination payment.

Results of Operations – Three Months Ended June 30, 2010 Compared to June 30, 2009

Revenues

Our revenues, which consist of property rentals, tenant expense reimbursements, hotel revenues, trade shows revenues, amortization of acquired below-market leases, net of above-market leases and fee income, were $696,105,000 for the quarter ended June 30, 2010, compared to $673,790,000 in the prior year’s quarter, an increase of $22,315,000. Below are the details of the increase (decrease) by segment:

(Amounts in thousands)

					New York		Washington, DC				Merchandise
Increase (decrease) due to:			Total		Office		Office		Retail		Mart		Other
Property rentals:
	Acquisitions and other		$	(2,097)	$	-	$	(904)	$	(1,193)	$	-	$	-
	Development/redevelopment			3,746		-		2,533		1,213		-		-
	Amortization of acquired below-market
		leases, net		(3,258)		(751)		(331)		(3,310)		3		1,131
	Hotel Pennsylvania			5,369		-		-		-		-		5,369	⁽¹⁾
	Trade shows			2,021		-		-		-		2,021		-
	Leasing activity (see page 38)			15,479		4,036		5,144		9,433		(2,178)		(956)
Increase (decrease) in property rentals				21,260		3,285		6,442		6,143		(154)		5,544

Tenant expense reimbursements:
	Acquisitions/development			689		-		39		650		-		-
	Operations			4,016		339		(1,177)		5,275		(575)		154
Increase (decrease) in tenant expense
	reimbursements			4,705		339		(1,138)		5,925		(575)		154

Fee and other income:
	Lease cancellation fee income			1,717		2,041		(618)		328		(34)		-
	Management and leasing fees			363		394		397		(92)		62		(398)
	BMS cleaning fees			1,048		2,821		-		-		-		(1,773)	⁽²⁾
	Other			(6,778)		(845)		343		(126)		(741)		(5,409)	⁽³⁾
(Decrease) increase in fee and other income				(3,650)		4,411		122		110		(713)		(7,580)

Total increase (decrease) in revenues			$	22,315	$	8,035	$	5,426	$	12,178	$	(1,442)	$	(1,882)



(1)		Primarily due to higher REVPAR.

(2)		Primarily from the elimination of inter-company fees from operating segments upon consolidation. See note (2) on page 45.

(3)		Primarily due to $5,402 of income in the prior year, resulting from the termination of a lease with a partially owned entity.

Results of Operations – Three Months Ended June 30, 2010 Compared to June 30, 2009 - continued

Expenses

Our expenses, which consist primarily of operating, depreciation and amortization and general and administrative expenses, were $454,702,000 for the quarter ended June 30, 2010, compared to $456,029,000 in the prior year’s quarter, a decrease of $1,327,000. Below are the details of the (decrease) increase by segment:

(Amounts in thousands)

					New York			Washington, DC				Merchandise
(Decrease) increase due to:			Total		Office			Office		Retail		Mart		Other
Operating:
	Acquisitions and other		$	(4,102)	$	(2,144)		$	(136)	$	(1,822)	$	-	$	-
	Development/redevelopment			424		-			1,082		(658)		-		-
	Hotel activity			3,259		-			-		-		-		3,259
	Trade shows activity			1,408		-			-		-		1,408		-
	Operations			(2,775)		3,553	⁽¹⁾		(3,408)		5,665		(4,066)		(4,519)	⁽²⁾
	(Decrease) increase in operating expenses			(1,786)		1,409			(2,462)		3,185		(2,658)		(1,260)

Depreciation and amortization:
	Acquisitions/development			(99)		-			109		(208)		-		-
	Operations (due to additions to buildings
		and improvements)		(1,322)		1,118			2,238		(862)		(1,093)		(2,723)
	(Decrease) increase in depreciation and
		amortization		(1,421)		1,118			2,347		(1,070)		(1,093)		(2,723)

General and administrative:
	Mark-to-market of deferred compensation
		plan liability ⁽³⁾		(7,196)		-			-		-		-		(7,196)
	Real estate Fund organization costs			2,656		-			-		-		-		2,656
	Operations			4,490		236			640		434		251		2,929	⁽⁴⁾
	(Decrease) increase in general and administrative			(50)		236			640		434		251		(1,611)

Litigation loss accrual and acquisition costs				1,930		-			-		-		-		1,930

Total (decrease) increase in expenses			$	(1,327)	$	2,763		$	525	$	2,549	$	(3,500)	$	(3,664)



(1)		Results from a $2,742 increase in BMS operating expenses and a $2,017 increase in reimbursable operating expenses, partially offset by a $1,206 decrease in non-reimbursable operating expenses.

(2)		Primarily from the elimination of inter-company fees from operating segments upon consolidation. See note (2) on page 44.

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

(4)		Primarily from higher stock-based compensation expense as a result of awards granted in March 2010.

Results of Operations – Three Months Ended June 30, 2010 Compared to June 30, 2009 - continued

Income Applicable to Alexander’s

Our 32.4% share of Alexander’s net income (comprised of our share of Alexander’s net income, management, leasing, and development fees) was $7,066,000 for the three months ended June 30, 2010, compared to $6,614,000 in the prior year’s quarter, an increase of $452,000.

(Loss) Income Applicable to Toys

During the quarter ended June 30, 2010, we recognized a net loss of $21,004,000 from our investment in Toys, comprised of $23,191,000 for our 32.7% share of Toys’ net loss ($47,314,000 before our share of Toys’ income tax benefit) and $2,187,000 of interest and other income.

During the quarter ended June 30, 2009, we recognized a net loss of $327,000 from our investment in Toys, comprised of (i) $16,220,000 for our 32.7% share of Toys’ net loss ($25,854,000 before our share of Toys’ income tax benefit), partially offset by (ii) $13,946,000 for our share of income from previously recognized deferred financing cost amortization expense, which we initially recorded as a reduction of the basis of our investment in Toys, and (iii) $1,947,000 of interest and other income.

(Loss) Income from Partially Owned Entities

Summarized below are the components of loss from partially owned entities for the three months ended June 30, 2010 and 2009.


		For the Three Months Ended
		June 30,
(Amounts in thousands)		2010		2009
Equity in Net (Loss) Income:
Lexington - 13.8% share in 2010 and 16.1% share in 2009 of equity in net loss		$	(428)	$	(6,876)	⁽¹⁾

India real estate ventures - 4% to 36.5% range in our share of equity in net income (loss)			606		(784)

Other, net ⁽²⁾			(2,792)		(15,137)	⁽³⁾
		$	(2,614)	$	(22,797)


(1)	Includes $4,580 for our share of impairment losses recorded by Lexington.

(2)	Represents equity in net income or loss of partially owned office buildings in New York and Washington, DC, the Monmouth Mall, Verde Realty Operating Partnership, 85 10th Avenue Associates and others.

(3)	Includes $7,650 of expense for our share of Downtown Crossing, Boston lease termination payment.

Results of Operations – Three Months Ended June 30, 2010 Compared to June 30, 2009 - continued

Interest and Other Investment Income (Loss), net

Interest and other investment income (loss), net (comprised of interest income on mezzanine loans receivable, other interest income and dividend income) was income of $3,876,000 for the three months ended June 30, 2010, compared to a loss of $98,153,000 in the prior year’s quarter, an increase in income of $102,029,000. This increase resulted from:


(Amounts in thousands)
Mezzanine loans receivable loss accrual ($6,900 in this quarter compared to $122,738 in the prior
	year's quarter)	$	115,838
Lower average mezzanine loan investments ($137,260 in this quarter compared to $459,682 in the
	prior year's quarter)		(7,455)
Decrease in the value of investments in our deferred compensation plan (offset by a corresponding
	decrease in the liability for plan assets in general and administrative expenses)		(7,196)
Lower average yields on investments (0.1% in this quarter compared to 0.4% in the prior year's
	quarter)		(1,552)
Increase in dividends and interest on marketable securities			1,282
Other, net			1,112
		$	102,029

Interest and Debt Expense

Interest and debt expense was $149,887,000 for the three months ended June 30, 2010, compared to $159,063,000 in the prior year’s quarter, a decrease of $9,176,000. This decrease was primarily due to savings of (i) $24,727,000 from the acquisition and retirement of an aggregate of $2.1 billion of our convertible senior debentures and senior unsecured notes in 2009 and (ii) $7,903,000 from the repayment of $400,000,000 of cross-collateralized debt secured by our portfolio of 42 strip shopping centers, partially offset by (iii) $14,411,000 of interest from the issuance of $460,000,000 of senior unsecured notes in September 2009 and $500,000,000 of senior unsecured notes in March 2010, (iv) $6,558,000 of default interest and fees accrued on three loans that are currently in special servicing and (v) $2,527,000 from new financings and refinancings.

Net (Loss) Gain on Early Extinguishment of Debt

In the three months ended June 30, 2010, we recognized a $1,072,000 net loss on the early extinguishment of debt, compared to a $17,684,000 net gain in the prior year’s quarter. The current year’s loss resulted from the purchase of $45,251,000 aggregate face amount ($44,170,000 aggregate carrying amount) of our convertible senior debentures for $45,242,000 in cash. The prior year’s gain resulted primarily from the acquisition and retirement of our convertible senior debentures.

Net Gains on Disposition of Wholly Owned and Partially Owned Assets Other Than Depreciable Real Estate

Net gains on disposition of wholly owned and partially owned assets other than depreciable real estate was $4,382,000 in the three months ended June 30, 2010 and was primarily comprised of net gains on sale of marketable securities.

Income Tax Expense

Income tax expense was $4,939,000 in the three months ended June 30, 2010, compared to $5,457,000 in the prior year’s quarter, a decrease of $518,000.

Results of Operations – Three Months Ended June 30, 2010 Compared to June 30, 2009 - continued

Discontinued Operations

The table below sets forth the combined results of operations of assets related to discontinued operations for the three months ended June 30, 2010 and 2009 and include the operating results of 1999 K Street, which was sold on September 1, 2009 and 15 other retail properties, which were sold during 2009.


	For the Three Months Ended
	June 30,
(Amounts in thousands)	2010		2009

Total revenues	$	-	$	5,042
Total expenses		-		1,679
Income from discontinued operations	$	-	$	3,363

		.

Net (Income) Loss Attributable to Noncontrolling Interests, Including Unit Distributions

In the three months ended June 30, 2010, we recorded $5,105,000 of net income attributable to noncontrolling interests, compared to a net loss of $2,740,000 in the prior year’s quarter. Net income and net loss attributable to noncontrolling interests for the three months ended June 30, 2010 and 2009, respectively, is comprised of (i) allocations of income and loss to redeemable noncontrolling interests of $4,451,000 and $4,358,000, respectively, (ii) net income and net loss attributable to noncontrolling interests in consolidated subsidiaries of $981,000 and $3,200,000, respectively, (iii) preferred unit distributions of the Operating Partnership of $4,491,000 and $4,818,000, respectively and (iv) a net gain of $4,818,000 on the redemption of the remaining portion of the Series D-12 perpetual preferred units in the current period. The increase of $8,809,000 in allocations of income to redeemable noncontrolling interests resulted primarily from higher net income subject to allocation to unitholders.

Preferred Share Dividends

Preferred share dividends were $14,266,000 for the three months ended June 30, 2010, compared to $14,269,000 for the prior year’s quarter.

Results of Operations – Three Months Ended June 30, 2010 Compared to June 30, 2009 - continued

Same Store EBITDA

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

Below are the same store EBITDA results on a GAAP and cash basis for each of our segments for the three months ended June 30, 2010, compared to the three months ended June 30, 2009.

			New York		Washington, DC				Merchandise
(Amounts in thousands)			Office		Office		Retail		Mart
EBITDA for the three months ended June 30, 2010			$	153,045	$	114,272	$	88,100	$	27,886
	Add-back: non-property level overhead
		expenses included above		4,767		6,200		6,827		7,181
	Less: EBITDA from acquisitions, dispositions
		and other non-operating income or expenses		(2,314)		(1,874)		(3,616)		(879)
GAAP basis same store EBITDA for the three months
		ended June 30, 2010		155,498		118,598		91,311		34,188
	Less: Adjustments for straight-line rents,
		amortization of below-market leases, net and other
		non-cash adjustments		(14,622)		(586)		(10,623)		(803)
Cash basis same store EBITDA for the three months
		ended June 30, 2010	$	140,876	$	118,012	$	80,688	$	33,385


EBITDA for the three months ended June 30, 2009			$	147,774	$	110,269	$	80,883	$	26,969
	Add-back: non-property level overhead
		expenses included above		4,531		5,560		6,393		6,930
	Less: EBITDA from acquisitions, dispositions
		and other non-operating income or expenses		(119)		(4,862)		(5,946)		(582)
GAAP basis same store EBITDA for the three months
		ended June 30, 2009		152,186		110,967		81,330		33,317
	Less: Adjustments for straight-line rents,
		amortization of below-market leases, net and other
		non-cash adjustments		(16,080)		(6,754)		(9,747)		(935)
Cash basis same store EBITDA for the three months
		ended June 30, 2009	$	136,106	$	104,213	$	71,583	$	32,382


Increase in GAAP basis same store EBITDA for
		the three months ended June 30, 2010 over the
		three months ended June 30, 2009	$	3,312	$	7,631	$	9,981	$	871

Increase in Cash basis same store EBITDA for
		the three months ended June 30, 2010 over the
		three months ended June 30, 2009	$	4,770	$	13,799	$	9,105	$	1,003


% increase in GAAP basis same store EBITDA				2.2%		6.9%		12.3%		2.6%

% increase in Cash basis same store EBITDA				3.5%		13.2%		12.7%		3.1%

Net Income and EBITDA by Segment for the Six Months Ended June 30, 2010 and 2009

Below is a summary of net income and a reconciliation of net income to EBITDA ⁽¹⁾ by segment for the six months ended June 30, 2010 and 2009.


(Amounts in thousands)			For the Six Months Ended June 30, 2010
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other ⁽³⁾
Property rentals				$	1,065,960	$	387,852	$	285,939	$	192,764	$	122,376	$	-	$	77,029
Straight-line rents:
	Contractual rent increases				26,324		13,280		3,823		7,508		1,230		-		483
	Amortization of free rent				12,233		1,769		1,770		6,674		1,055		-		965
Amortization of acquired below-
		market leases, net			32,209		18,339		1,347		9,498		(106)		-		3,131
Total rentals					1,136,726		421,240		292,879		216,444		124,555		-		81,608
Tenant expense reimbursements					181,001		65,683		29,126		73,716		8,024		-		4,452
Fee and other income:
	Tenant cleaning fees				27,120		41,057		-		-		-		-		(13,937)
	Management and leasing fees				12,520		2,850		10,480		545		33		-		(1,388)
	Lease termination fees				9,276		3,025		528		3,836		1,887		-		-
	Other				25,793		8,923		10,922		1,803		2,784		-		1,361
Total revenues					1,392,436		542,778		343,935		296,344		137,283		-		72,096
Operating expenses					546,980		226,104		108,715		110,178		71,031		-		30,952
Depreciation and amortization					271,089		87,978		73,216		55,695		26,029		-		28,171
General and administrative					98,312		9,346		12,097		13,832		14,411		-		48,626
Litigation loss accrual and acquisition
	costs				11,986		-		10,056		-		-		-		1,930
Total expenses					928,367		323,428		204,084		179,705		111,471		-		109,679
Operating income (loss)					464,069		219,350		139,851		116,639		25,812		-		(37,583)
Income applicable to Alexander's					13,526		388		-		409		-		-		12,729
Income applicable to Toys					104,866		-		-		-		-		104,866		-
Income (loss) from partially owned
	entities				2,270		2,252		(4)		2,111		231		-		(2,320)
Interest and other investment
	income, net				18,584		327		50		191		25		-		17,991
Interest and debt expense					(289,622)		(65,733)		(68,788)		(38,899)		(29,042)		-		(87,160)
Net loss on early extinguishment of
	debt				(1,072)		-		-		-		-		-		(1,072)
Net gain on disposition of wholly
	owned and partially owned assets
	other than depreciable real estate				7,687		-		-		-		765		-		6,922
Income (loss) before income taxes					320,308		156,584		71,109		80,451		(2,209)		104,866		(90,493)
Income tax expense					(10,553)		(809)		(100)		(35)		(596)		-		(9,013)
Net income (loss)					309,755		155,775		71,009		80,416		(2,805)		104,866		(99,506)
Net (income) loss attributable to
	noncontrolling interests, including
	unit distributions				(23,097)		(4,848)		-		498		-		-		(18,747)
Net income (loss) attributable to
	Vornado				286,658		150,927		71,009		80,914		(2,805)		104,866		(118,253)
Interest and debt expense ⁽²⁾					403,699		62,587		70,114		41,880		29,487		83,233		116,398
Depreciation and amortization ⁽²⁾					370,252		84,810		79,535		57,311		26,267		69,771		52,558
Income tax expense ⁽²⁾					36,566		809		107		35		655		25,587		9,373
EBITDA ⁽¹⁾				$	1,097,175	$	299,133	$	220,765	$	180,140	$	53,604	$	283,457	$	60,076

See notes on page 52.

Net Income and EBITDA by Segment for the Six Months Ended June 30, 2010 and 2009 - continued


(Amounts in thousands)			For the Six Months Ended June 30, 2009
						New York		Washington, DC				Merchandise
				Total		Office		Office		Retail		Mart		Toys		Other ⁽³⁾
Property rentals				$	1,019,779	$	378,988	$	262,798	$	177,233	$	123,955	$	-	$	76,805
Straight-line rents:
	Contractual rent increases				26,793		14,189		5,775		5,615		1,271		-		(57)
	Amortization of free rent				20,189		2,307		7,069		10,417		293		-		103
Amortization of acquired below-
		market leases, net			37,542		19,808		2,048		13,536		41		-		2,109
Total rentals					1,104,303		415,292		277,690		206,801		125,560		-		78,960
Tenant expense reimbursements					181,404		67,249		33,044		67,216		9,831		-		4,064
Fee and other income:
	Tenant cleaning fees				25,192		34,590		-		-		-		-		(9,398)
	Management and leasing fees				5,418		2,094		3,952		691		14		-		(1,333)
	Lease termination fees				2,748		298		1,682		100		668		-		-
	Other				33,291		10,407		10,150		1,648		2,863		-		8,223
Total revenues					1,352,356		529,930		326,518		276,456		138,936		-		80,516
Operating expenses					548,609		223,190		111,490		106,199		73,665		-		34,065
Depreciation and amortization					268,342		87,263		69,909		51,790		27,146		-		32,234
General and administrative					128,697		13,693		14,469		18,144		17,894		-		64,497
Total expenses					945,648		324,146		195,868		176,133		118,705		-		130,796
Operating income (loss)					406,708		205,784		130,650		100,323		20,231		-		(50,280)
Income applicable to Alexander's					24,747		385		-		411		-		-		23,951
Income applicable to Toys					96,820		-		-		-		-		96,820		-
(Loss) income from partially owned
	entities				(30,340)		2,454		3,628		1,986		160		-		(38,568)
Interest and other investment (loss)
	income, net				(84,094)		522		319		53		71		-		(85,059)
Interest and debt expense					(316,823)		(66,474)		(61,954)		(44,778)		(25,800)		-		(117,817)
Net gain on early extinguishment of
	debt				23,589		-		-		769		-		-		22,820
Income (loss) before income taxes					120,607		142,671		72,643		58,764		(5,338)		96,820		(244,953)
Income tax expense					(10,506)		(260)		(1,188)		(277)		(908)		-		(7,873)
Income (loss) from continuing
	operations				110,101		142,411		71,455		58,487		(6,246)		96,820		(252,826)
Income from discontinued operations					5,955		-		4,012		1,943		-		-		-
Net income (loss)					116,056		142,411		75,467		60,430		(6,246)		96,820		(252,826)
Net (income) loss attributable to
	noncontrolling interests, including
	unit distributions				(13,581)		(3,621)		-		615		-		-		(10,575)
Net income (loss) attributable to
	Vornado				102,475		138,790		75,467		61,045		(6,246)		96,820		(263,401)
Interest and debt expense ⁽²⁾					399,689		63,113		63,838		47,518		26,248		50,761		148,211
Depreciation and amortization ⁽²⁾					361,118		84,730		73,147		53,695		27,431		67,011		55,104
Income tax expense ⁽²⁾					54,283		260		1,195		277		973		43,457		8,121
EBITDA ⁽¹⁾				$	917,565	$	286,893	$	213,647	$	162,535	$	48,406	$	258,049	$	(51,965)

See notes on the following page.

Net Income and EBITDA by Segment for the Six Months Ended June 30, 2010 and 2009 - continued

Notes to preceding tabular information:

(2) Interest and debt expense, depreciation and amortization and income tax (benefit) expense in the reconciliation of our net income (loss) to EBITDA includes our share of these items from partially owned entities.


		For the Six Months
(Amounts in thousands)		Ended June 30,
			2010			2009
Lexington		$	29,283	⁽²⁾	$	16,992	⁽³⁾
Alexander's			28,659			38,460
555 California Street			22,624			21,795
Hotel Pennsylvania			6,169			4,224
Industrial warehouses			1,607			2,683
Other investments			20,157			(5,167)	⁽⁴⁾
			108,499			78,987
Corporate general and administrative expenses ⁽¹⁾			(39,956)			(38,032)
Investment income and other, net ⁽¹⁾			22,912			37,775
Net income attributable to noncontrolling interests, including unit distributions			(18,747)			(10,575)
Mezzanine loans receivable loss accrual			(6,900)			(122,738)
Real estate Fund organization costs			(2,730)			-
Costs of acquisitions not consummated			(1,930)			-
Net (loss) gain on early extinguishment of debt			(1,072)			22,820
Write-off of unamortized costs from the voluntary surrender of equity awards			-			(20,202)
		$	60,076		$	(51,965)


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

(2)	Includes a $5,998 net gain resulting from Lexington's March 2010 stock issuance.

(3)	Includes $4,580 for our share of impairment losses recorded by Lexington.

(4)	Includes $7,650 of expense for our share of the Downtown Crossing, Boston lease termination payment.

Results of Operations – Six Months Ended June 30, 2010 Compared to June 30, 2009

Revenues

Our revenues, which consist of property rentals, tenant expense reimbursements, hotel revenues, trade shows revenues, amortization of acquired below-market leases, net of above-market leases and fee income, were $1,392,436,000 for the six months ended June 30, 2010, compared to $1,352,356,000 in the prior year’s six months, an increase of $40,080,000. Below are the details of the increase (decrease) by segment:

(Amounts in thousands)

					New York		Washington, DC					Merchandise
Increase (decrease) due to:			Total		Office		Office			Retail		Mart		Other
Property rentals:
	Acquisitions and other		$	(176)	$	-	$	(904)		$	(288)	$	2,064	$	(1,048)
	Development/redevelopment			6,332		-		4,302			2,030		-		-
	Amortization of acquired below-market
		leases, net		(5,333)		(1,469)		(701)			(4,038)		(147)		1,022
	Hotel Pennsylvania			3,945		-		-			-		-		3,945	⁽¹⁾
	Trade shows			1,682		-		-			-		1,682		-
	Leasing activity (see page 38)			25,973		7,417		12,492			11,939		(4,604)		(1,271)
Increase (decrease) in property rentals				32,423		5,948		15,189			9,643		(1,005)		2,648

Tenant expense reimbursements:
	Acquisitions/development			707		-		(40)			996		-		(249)
	Operations			(1,110)		(1,566)		(3,878)			5,504		(1,807)		637
(Decrease) increase in tenant expense
	reimbursements			(403)		(1,566)		(3,918)			6,500		(1,807)		388

Fee and other income:
	Lease cancellation fee income			6,528		2,727		(1,154)			3,736		1,219		-
	Management and leasing fees			7,102		756		6,528	⁽²⁾		(146)		19		(55)
	BMS cleaning fees			1,928		6,467		-			-		-		(4,539)	⁽³⁾
	Other			(7,498)		(1,484)		772			155		(79)		(6,862)	⁽⁴⁾
Increase (decrease) in fee and other income				8,060		8,466		6,146			3,745		1,159		(11,456)

Total increase (decrease) in revenues			$	40,080	$	12,848	$	17,417		$	19,888	$	(1,653)	$	(8,420)



(1)		Primarily due to higher REVPAR.

(2)		Primarily from leasing fees in connection with our management of a development project.

(3)		Primarily from the elimination of inter-company fees from operating segments upon consolidation. See note (2) on page 54.

(4)		Primari l y due to $5,402 of income in the prior year, resulting from the termination of a lease with a partially owned entity.

Results of Operations – Six Months Ended June 30, 2010 Compared to June 30, 2009 - continued

Expenses

Our expenses, which consist primarily of operating, depreciation and amortization and general and administrative expenses, were $928,367,000 for the six months ended June 30, 2010, compared to $945,648,000 in the prior year’s six months, a decrease of $17,281,000. Below are the details of the (decrease) increase by segment:

(Amounts in thousands)

					New York			Washington, DC					Merchandise
(Decrease) increase due to:			Total		Office			Office			Retail		Mart			Other
Operating:
	Acquisitions and other		$	(3,875)	$	(3,666)		$	(136)		$	(1,147)	$	1,770		$	(696)
	Development/redevelopment			2,207		-			2,481			(274)		-			-
	Hotel activity			3,870		-			-			-		-			3,870
	Trade shows activity			1,118		-			-			-		1,118			-
	Operations			(4,949)		6,580	⁽¹⁾		(5,120)			5,400		(5,522)			(6,287)	⁽²⁾
	(Decrease) increase in operating expenses			(1,629)		2,914			(2,775)			3,979		(2,634)			(3,113)

Depreciation and amortization:
	Acquisitions/development			1,846		-			1,584			869		-			(607)
	Operations (due to additions to buildings
		and improvements)		901		715			1,723			3,036		(1,117)			(3,456)
	Increase (decrease) in depreciation and
		amortization		2,747		715			3,307			3,905		(1,117)			(4,063)

General and administrative:
	Write-off of unamortized costs from the
		voluntary surrender of equity awards ⁽³⁾		(32,588)		(3,451)			(3,131)			(4,793)		(1,011)			(20,202)
	Mark-to-market of deferred compensation
		plan liability ⁽⁴⁾		1,361		-			-			-		-			1,361
	Real estate Fund organization costs			2,730		-			-			-		-			2,730
	Operations			(1,888)		(896)			759			481		(2,472)	⁽⁵⁾		240
	Decrease in general and administrative			(30,385)		(4,347)			(2,372)			(4,312)		(3,483)			(15,871)

Litigation loss accrual and acquisition costs				11,986		-			10,056	⁽⁶⁾		-		-			1,930

Total (decrease) increase in expenses			$	(17,281)	$	(718)		$	8,216		$	3,572	$	(7,234)		$	(21,117)



(1)		Results from a $6,358 increase in BMS operating expenses.

(2)		Primarily from the elimination of inter-company fees from operating segments upon consolidation. See note (2) on page 53.

(3)		On March 31, 2009, our nine most senior executives voluntarily surrendered their 2007 and 2008 stock option awards and their 2008 out-performance plan awards. Accordingly, we recognized $32,588 of expense in the first quarter of 2009, representing the unamortized portion of these awards.

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

(5)		Primarily due to $2,800 of pension plan termination costs in 2009.

(6)		For additional information, see page 65.

Results of Operations – Six Months Ended June 30, 2010 Compared to June 30, 2009 - continued

Income Applicable to Alexander’s

Our 32.4% share of Alexander’s net income (comprised of our share of Alexander’s net income, management, leasing, and development fees) was $13,526,000 in the six months ended June 30, 2010, compared to $24,747,000 for the prior year’s six months, a decrease of $11,221,000. This decrease was primarily due to $11,105,000 of income for our share of the reversal of accrued stock appreciation rights compensation expense in the prior year.

Income Applicable to Toys

During the six months ended June 30, 2010, we recognized $104,866,000 of income from our investment in Toys, comprised of $100,649,000 for our 32.7% share of Toys’ net income ($126,236,000 before our share of Toys’ income tax expense) and $4,217,000 of interest and other income.

During the six months ended June 30, 2009, we recognized $96,820,000 of income from our investment in Toys, comprised of (i) $79,074,000 for our 32.7% share of Toys’ net income ($122,531,000 before our share of Toys’ income tax expense), (ii) $13,946,000 for our share of income from previously recognized deferred financing cost amortization expense, which we initially recorded as a reduction of the basis of our investment in Toys, and (iii) $3,800,000 of interest and other income.

Income (Loss) from Partially Owned Entities

Summarized below are the components of loss from partially owned entities for the six months ended June 30, 2010 and 2009.


		For the Six Months Ended
		June 30,
(Amounts in thousands)		2010			2009
Equity in Net Income (Loss):
Lexington - 13.8% share in 2010 and 16.1% share in 2009 of equity in		$	5,617	⁽¹⁾	$	(9,915)	⁽²⁾
	net income (loss)

India real estate ventures - 4% to 36.5% range in our share of equity in net income (loss)			2,257			(921)

Other, net ⁽³⁾			(5,604)			(19,504)	⁽⁴⁾
		$	2,270		$	(30,340)


(1)	Includes a $5,998 net gain resulting from Lexington's March 2010 stock issuance.

(2)	Includes a $4,580 for our share of impairment losses recorded by Lexington.

(3)	Represents our equity in net income or loss of partially owned office buildings in New York and Washington, DC, the Monmouth Mall, Verde Realty Operating Partnership, 85 10th Avenue Associates and others.

(4)	Includes $7,650 of expense for our share of Downtown Crossing, Boston lease termination payment.

Results of Operations – Six Months Ended June 30, 2010 Compared to June 30, 2009 - continued

Interest and Other Investment Income (Loss), net

Interest and other investment income (loss), net (comprised of interest income on mezzanine loans receivable, other interest income and dividend income) was income of $18,584,000 for the six months ended June 30, 2010, compared to a loss of $84,094,000 in the prior year’s six months, an increase in income of $102,678,000. This increase resulted from:


(Amounts in thousands)
Mezzanine loans receivable loss accrual ($6,900 in this year's six months compared to $122,738 in
	the prior year's six months)	$	115,838
Lower average mezzanine loan investments ($127,925 in this year's six months compared to $466,272
	in the prior year's six months)		(15,064)
Lower average yields on investments (0.2% in this year's six months compared to 0.5% in the prior
	year's six months)		(3,659)
Increase in dividends and interest on marketable securities			2,109
Increase in the value of investments in our deferred compensation plan (offset by a corresponding
	increase in the liability for plan assets in general and administrative expenses)		1,361
Other, net			2,093
		$	102,678

Interest and Debt Expense

Interest and debt expense was $289,622,000 for the six months ended June 30, 2010, compared to $316,823,000 in the prior year’s six months, a decrease of $27,201,000. This decrease was primarily due to savings of (i) $51,507,000 from the acquisition and retirement of an aggregate of $2.1 billion of our convertible senior debentures and senior unsecured notes in 2009 and (ii) $16,449,000 from the repayment of $400,000,000 of cross-collateralized debt secured by our portfolio of 42 strip shopping centers, partially offset by (iii) $23,764,000 of interest from the issuance of $460,000,000 of senior unsecured notes in September 2009 and $500,000,000 of a senior unsecured notes in March 2010, (iv) $9,158,000 of lower capitalized interest and (v) $6,558,000 of default interest and fees accrued on three loans that are currently in special servicing.

Net (Loss) Gain on Early Extinguishment of Debt

In the six months ended June 30, 2010, we recognized a $1,072,000 net loss on the early extinguishment of debt, compared to a $23,589,000 net gain in the prior year’s six months. The current year’s loss resulted from the purchase of $45,251,000 aggregate face amount ($44,170,000 aggregate carrying amount) of our convertible senior debentures for $45,242,000 in cash. The prior year’s gain resulted primarily from the acquisition and retirement of our convertible senior debentures.

Net Gains on Disposition of Wholly Owned and Partially Owned Assets Other Than Depreciable Real Estate

Net gains on disposition of wholly owned and partially owned assets other than depreciable real estate was $7,687,000 in the six months ended June 30, 2010 and was primarily comprised of net gains on the sale of marketable securities and net gains on sale of condominiums at our 40 East 66 ^th Street property.

Income Tax Expense

Income tax expense was $10,553,000 in the six months ended June 30, 2010, compared to $10,506,000 in the prior year’s six months.

Results of Operations – Six Months Ended June 30, 2010 Compared to June 30, 2009 - continued

Discontinued Operations

The table below sets forth the combined results of operations of assets related to discontinued operations for the six months ended June 30, 2010 and 2009 and include the operating results of 1999 K Street, which was sold on September 1, 2009 and 15 other retail properties, which were sold during 2009.


	For the Six Months Ended
	June 30,
(Amounts in thousands)	2010		2009

Total revenues	$	-	$	8,490
Total expenses		-		2,535
Income from discontinued operations	$	-	$	5,955

Net (Income) Loss Attributable to Noncontrolling Interests, Including Unit Distributions

In the six months ended June 30, 2010 and 2009, we recorded $23,097,000 and $13,581,000, respectively, of net income attributable to noncontrolling interests. Net income attributable to noncontrolling interests for the six months ended June 30, 2010 and 2009 is comprised of (i) allocations of income to redeemable noncontrolling interests of $19,666,000 and $7,644,000, respectively, (ii) net income and net loss attributable to noncontrolling interests in consolidated subsidiaries of $1,194,000 and $3,700,000, respectively, (iii) preferred unit distributions of the Operating Partnership of $9,209,000 and $9,637,000, respectively and (iv) a net gain of $6,972,000 on the redemption of all of the Series D-12 perpetual preferred units in the current year. The increase of $12,022,000 in allocations of income to redeemable noncontrolling interests resulted primarily from higher net income subject to allocation to unitholders.

Preferred Share Dividends

Preferred share dividends were $28,533,000 for the six months ended June 30, 2010, compared to $28,538,000 for the prior year’s six months.

Results of Operations – Six Months Ended June 30, 2010 Compared to June 30, 2009 - continued

Same Store EBITDA

Below are the same store EBITDA results on a GAAP and cash basis for each of our segments for the six months ended June 30, 2010, compared to the six months ended June 30, 2009.

			New York		Washington, DC				Merchandise
(Amounts in thousands)			Office		Office		Retail		Mart
EBITDA for the six months ended June 30, 2010			$	299,133	$	220,765	$	180,140	$	53,604
	Add-back: non-property level overhead
		expenses included above		9,346		12,097		13,832		14,411
	Less: EBITDA from acquisitions, dispositions
		and other non-operating income or expenses		(2,938)		758		(10,753)		(3,607)
GAAP basis same store EBITDA for the six months
		ended June 30, 2010		305,541		233,620		183,219		64,408
	Less: Adjustments for straight-line rents,
		amortization of below-market leases, net and other
		non-cash adjustments		(30,230)		(5,048)		(20,014)		(2,179)
Cash basis same store EBITDA for the six months
		ended June 30, 2010	$	275,311	$	228,572	$	163,205	$	62,229


EBITDA for the six months ended June 30, 2009			$	286,893	$	213,647	$	162,535	$	48,406
	Add-back: non-property level overhead
		expenses included above		13,693		14,469		18,144		17,894
	Less: EBITDA from acquisitions, dispositions
		and other non-operating income or expenses		(129)		(8,708)		(10,783)		(1,250)
GAAP basis same store EBITDA for the six months
		ended June 30, 2009		300,457		219,408		169,896		65,050
	Less: Adjustments for straight-line rents,
		amortization of below-market leases, net and other
		non-cash adjustments		(32,322)		(13,042)		(23,112)		(1,605)
Cash basis same store EBITDA for the six months
		ended June 30, 2009	$	268,135	$	206,366	$	146,784	$	63,445


Increase (decrease) in GAAP basis same store EBITDA for
		the six months ended June 30, 2010 over the
		six months ended June 30, 2009	$	5,084	$	14,212	$	13,323	$	(642)

Increase (decrease) in Cash basis same store EBITDA for
		the six months ended June 30, 2010 over the
		six months ended June 30, 2009	$	7,176	$	22,206	$	16,421	$	(1,216)


% increase (decrease) in GAAP basis same store EBITDA				1.7%		6.5%		7.8%		(1.0%)

% increase (decrease) in Cash basis same store EBITDA				2.7%		10.8%		11.2%		(1.9%)

SUPPLEMENTAL INFORMATION

Three Months Ended June 30, 2010 vs. Three Months Ended March 31, 2010

Our revenues and expenses are subject to seasonality during the year which impacts quarterly net earnings, cash flows and funds from operations, and therefore impacts comparisons of the current quarter to the previous quarter. The business of Toys is highly seasonal. Historically, Toys’ fourth quarter net income, which we record on a one-quarter lag basis in our first quarter, accounts for more than 80% of Toys’ fiscal year net income. The Office and Merchandise Mart segments have historically experienced higher utility costs in the first and third quarters of the year. The Merchandise Mart segment also has experienced higher earnings in the second and fourth quarters of the year due to major trade shows occurring in those quarters. The Retail segment revenue in the fourth quarter is typically higher due to the recognition of percentage rental income. Below are the same store EBITDA results on a GAAP and cash basis for each of our segments for the three months ended June 30, 2010, compared to the three months ended March 31, 2010.

			New York		Washington, DC				Merchandise
(Amounts in thousands)			Office		Office		Retail		Mart
EBITDA for the three months ended June 30, 2010			$	153,045	$	114,272	$	88,100	$	27,886
	Add-back: non-property level overhead expenses
		included above		4,767		6,200		6,827		7,181
	Less: EBITDA from acquisitions, dispositions
		and other non-operating income or expenses		(2,314)		(1,874)		(3,616)		86
GAAP basis same store EBITDA for the three months
	ended June 30, 2010			155,498		118,598		91,311		35,153
	Less: Adjustments for straight-line rents, amortization of
		below-market leases, net and other non-cash adjustments		(14,622)		(586)		(10,623)		(803)
Cash basis same store EBITDA for the three months
	ended June 30, 2010		$	140,876	$	118,012	$	80,688	$	34,350


EBITDA for the three months ended March 31, 2010 ⁽¹⁾			$	146,088	$	106,493	$	92,040	$	25,718
	Add-back: non-property level overhead expenses
		included above		4,579		5,897		7,005		7,230
	Less: EBITDA from acquisitions, dispositions
		and other non-operating income or expenses		(624)		2,630		(9,081)		(3,430)
GAAP basis same store EBITDA for the three months
	ended March 31, 2010			150,043		115,020		89,964		29,518
	Less: Adjustments for straight-line rents, amortization of
		below-market leases, net and other non-cash adjustments		(15,608)		(4,461)		(9,391)		(1,376)
Cash basis same store EBITDA for the three months
	ended March 31, 2010		$	134,435	$	110,559	$	80,573	$	28,142


Increase in GAAP basis same store EBITDA for
	the three months ended June 30, 2010 over the
	three months ended March 31, 2010		$	5,455	$	3,578	$	1,347	$	5,635

Increase in Cash basis same store EBITDA for
	the three months ended June 30, 2010 over the
	three months ended March 31, 2010		$	6,441	$	7,453	$	115	$	6,208


% increase in GAAP basis same store EBITDA				3.6%		3.1%		1.5%		19.1%

% increase in Cash basis same store EBITDA				4.8%		6.7%		0.1%		22.1%


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

			New York		Washington, DC				Merchandise
(Amounts in thousands)			Office		Office		Retail		Mart
Net income (loss) attributable to Vornado for the three months
	ended March 31, 2010		$	72,548	$	30,757	$	43,840	$	(1,026)
Interest and debt expense				30,992		35,171		19,354		13,009
Depreciation and amortization				42,074		39,841		28,811		13,482
Income tax expense				474		724		35		253
EBITDA for the three months ended March 31, 2010			$	146,088	$	106,493	$	92,040	$	25,718

LIQUIDITY AND CAPITAL RESOURCES

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

We have raised, and may continue to raise, capital for future real estate acquisitions through our real estate investment Fund. On July 8, 2010, we completed the first closing of the Fund with initial equity commitments of $550,000,000, of which we committed $200,000,000. We expect to raise an additional $450,000,000 bringing total commitments to $1 billion. We serve as the general partner and investment manager of the Fund and it will be our exclusive investment vehicle for all investments that fit within the Fund’s investment parameters during its three-year investment period.

Cash Flows for the Six Months Ended June 30, 2010

Property rental income is our primary source of cash flow and is dependent upon the occupancy and rental rates of our properties. Other sources of liquidity to fund cash requirements include proceeds from debt financings, including mortgage loans, senior unsecured borrowings, and our revolving credit facilities; proceeds from the issuance of common and preferred equity; and asset sales. Our cash requirements include property operating expenses, capital improvements, tenant improvements, leasing commissions, distributions to common and preferred shareholders, as well as acquisition and development costs. Our cash and cash equivalents were $652,121,000 at June 30, 2010, a $116,642,000 increase over the balance at December 31, 2009. This increase resulted from $532,365,000 of net cash provided by operating activities and $207,359,000 of net cash provided by investing activities, partially offset by, $623,082,000 of net cash used in financing activities.

Our consolidated outstanding debt was $10,670,218,000 at June 30, 2010, a $269,397,000 decrease over the balance at December 31, 2009. This decrease was primarily due to net repayments of $700,000,000 under our revolving credit facilities, partially offset by the public offering of $500,000,000 of 4.25% senior unsecured notes in March 2010. During the remainder of 2010 and 2011, $373,000,000 and $1,981,000,000 of our outstanding debt matures, respectively. We may refinance such debt or choose to repay all or a portion, using existing cash balances or our revolving credit facilities.

Our share of debt of unconsolidated subsidiaries was $2,844,923,000 at June 30, 2010, a $304,717,000 decrease from the balance at December 31, 2009.

Cash flows provided by operating activities of $532,365,000 was comprised of (i) net income of $309,755,000, (ii) $115,978,000 of non-cash adjustments, including depreciation and amortization expense, the effect of straight-lining of rental income, equity in net income of partially owned entities, (iii) distributions of income from partially owned entities of $18,517,000, and (iv) the net change in operating assets and liabilities of $88,115,000.

Net cash provided by investing activities of $207,359,000 was comprised of (i) restricted cash of $133,888,000, (ii) proceeds from sales of marketable securities of $122,956,000, (iii) proceeds received from repayment of mezzanine loans receivable of $105,061,000, (iv) proceeds from the sale of real estate and related investments of $49,544,000, (v) proceeds from maturing short-term investments of $40,000,000 and (vi) distributions of capital from partially owned entities of $12,638,000, partially offset by (vii) additions to real estate of $68,925,000, (viii) development and redevelopment expenditures of $68,499,000, (ix) investments in mezzanine loans receivable and other of $48,339,000, (x) investments in partially owned entities of $41,920,000, (xi) deposits in connection with real estate acquisitions of $15,128,000, and (xii) purchases of marketable equity securities of $13,917,000.

Net cash used in financing activities of $623,082,000 was comprised of (i) proceeds from borrowings of $901,040,000, offset by, (ii) repayments of borrowings, including the purchase of our senior unsecured notes, of $1,197,525,000, (iii) dividends paid on common shares of $236,279,000, (iv) dividends paid on preferred shares of $28,533,000, (v) distributions to noncontrolling interests of $27,665,000, (vi) repurchase of shares related to stock compensation arrangements and related tax withholdings of $15,396,000, (vii) purchases of outstanding preferred units of $13,000,000 and (viii) debt issuance costs of $5,724,000.

LIQUIDITY AND CAPITAL RESOURCES - continued

Capital Expenditures

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

Below are the details of capital expenditures, leasing commissions and development and redevelopment expenditures and a reconciliation of total expenditures on an accrual basis to the cash expended in the six months ended June 30, 2010.

						New York		Washington, DC				Merchandise
(Amounts in thousands)				Total		Office		Office		Retail		Mart		Other
Capital Expenditures (accrual basis):
Expenditures to maintain assets				$	20,389	$	10,237	$	3,161	$	1,539	$	2,721	$	2,731
Tenant improvements					70,845		25,300		6,127		7,045		27,550		4,823
Leasing commissions					15,516		6,781		2,283		1,416		3,804		1,232
Non-recurring capital expenditures					3,985		-		-		898		-		3,087
Total capital expenditures and leasing
	commissions (accrual basis)				110,735		42,318		11,571		10,898		34,075		11,873
Adjustments to reconcile to cash basis:
		Expenditures in the current year
			applicable to prior periods		47,536		26,786		7,803		6,772		2,777		3,398
		Expenditures to be made in future
			periods for the current period		(73,756)		(22,985)		(7,149)		(9,278)		(28,644)		(5,700)
Total capital expenditures and leasing
	commissions (cash basis)			$	84,515	$	46,119	$	12,225	$	8,392	$	8,208	$	9,571

Tenant improvements and leasing commissions:
	Per square foot per annum			$	3.93	$	7.17	$	3.03	$	1.59	$	4.19	$	-
	Percentage of initial rent				12.5%		15.2%		7.9%		7.5%		17.0%		-



Development and Redevelopment
	Expenditures:
Wasserman Venture				$	10,275	$	-	$	-	$	-	$	-	$	10,275
West End 25					7,639		-		7,639		-		-		-
1540 Broadway					6,182		-		-		6,182		-		-
Green Acres Mall					6,085		-		-		6,085		-		-
Bergen Town Center					5,976		-		-		5,976		-		-
220 20th Street					3,794		-		3,794		-		-		-
Beverly Connection					3,184		-		-		3,184		-		-
North Bergen, New Jersey					3,078		-		-		3,078		-		-
Garfield, New Jersey					1,288		-		-		1,288		-		-
Poughkeepsie, New York					953		-		-		953		-		-
Other					20,045		3,742		7,758		2,999		824		4,722
				$	68,499	$	3,742	$	19,191	$	29,745	$	824	$	14,997

LIQUIDITY AND CAPITAL RESOURCES - continued

Cash Flows for the Six Months Ended June 30, 2009

Our cash and cash equivalents were $2,068,498,000 at June 30, 2009, a $541,645,000 increase over the balance at December 31, 2008. This increase resulted from $379,439,000 of net cash provided by operating activities and $381,516,000 of net cash provided by financing activities, partially offset by $219,310,000 of net cash used in investing activities.

Our consolidated outstanding debt was $11,652,801,000 at June 30, 2009, a $426,654,000 decrease from the balance at December 31, 2008. This decrease resulted primarily from the repurchase of a portion of our convertible senior debentures and senior unsecured notes during 2009. As of June 30, 2009 and December 31, 2008, $648,250,000 and $358,468,000, respectively, was outstanding under our revolving credit facilities.

Our share of debt of unconsolidated subsidiaries was $3,068,868,000 at June 30, 2009, a $127,717,000 decrease from the balance at December 31, 2008. This resulted primarily from a decrease in our share of Toys “R” Us outstanding debt.

Cash flows provided by operating activities of $379,439,000 was primarily comprised of (i) net income of $116,056,000, adjusted for $252,841,000 of non-cash adjustments, including depreciation and amortization expense, mezzanine loan loss accruals, the effect of straight-lining of rental income, equity in net income of partially owned entities and amortization of below market leases, net of above market leases, (ii) distributions of income from partially owned entities of $15,131,000, partially offset by (iii) the net change in operating assets and liabilities of $4,589,000.

Net cash used in investing activities of $219,310,000 was primarily comprised of (i) development and redevelopment expenditures of 267,124,000, (ii) investments in partially owned entities of $25,712,000, (iii) additions to real estate of $84,750,000, partially offset by, (iv) $60,786,000 of restricted cash and (v) $45,472,000 received from mezzanine loan receivables repayments.

Net cash provided by financing activities of $381,516,000 was primarily comprised of (i) $710,226,000 of proceeds from the issuance of common shares in April 2009, (ii) proceeds from borrowings of $520,137,000, partially offset by, (iii) repayments of borrowings of $644,011,000, (iv) dividends paid on common shares of $126,174,000, (v) distributions to noncontrolling interests of $20,931,000 and (vi) dividends paid on preferred shares of $28,540,000.

LIQUIDITY AND CAPITAL RESOURCES - continued

Capital Expenditures

						New York		Washington, DC				Merchandise
(Amounts in thousands)				Total		Office		Office		Retail		Mart		Other
Capital Expenditures (accrual basis):
Expenditures to maintain assets				$	15,274	$	7,564	$	3,561	$	843	$	3,306	$	-
Tenant improvements					34,078		18,765		13,369		429		1,515		-
Leasing commissions					10,243		6,138		3,925		180		-		-
Non-recurring capital expenditures					10,323		3,511		4,314		34		-		2,464
Total capital expenditures and leasing
	commissions (accrual basis)				69,918		35,978		25,169		1,486		4,821		2,464
Adjustments to reconcile to cash basis:
		Expenditures in the current year
			applicable to prior periods		53,373		17,135		30,092		2,885		3,344		(83)
		Expenditures to be made in future
			periods for the current period		(27,623)		(12,037)		(14,477)		(610)		(300)		(199)
Total capital expenditures and leasing
	commissions (cash basis)			$	95,668	$	41,076	$	40,784	$	3,761	$	7,865	$	2,182

Tenant improvements and leasing commissions:
	Per square foot per annum			$	2.60	$	5.51	$	3.39	$	0.14	$	0.90	$	-
	Percentage of initial rent				7.3%		10.4%		8.5%		0.8%		3.4%		-



Development and Redevelopment
	Expenditures:
West End 25				$	45,763	$	-	$	45,763	$	-	$	-	$	-
Bergen Town Center					39,215		-		-		39,215		-		-
220 20th Street					28,650		-		28,650		-		-		-
Wasserman Venture					25,776		-		-		-		-		25,776
Manhattan Mall					17,359		-		-		17,359		-		-
South Hills Mall					13,955		-		-		13,955		-		-
North Bergen, New Jersey					13,749		-		-		13,749		-		-
2101 L Street					12,397		-		12,397		-		-		-
1999 K Street					8,107		-		8,107		-		-		-
Other					62,153		7,903		14,492		24,560		4,014		11,184
				$	267,124	$	7,903	$	109,409	$	108,838	$	4,014	$	36,960

LIQUIDITY AND CAPITAL RESOURCES - continued

Insurance

Other Commitments and Contingencies

We are committed to fund additional capital to certain of our partially owned entities aggregating approximately $217,800,000, of which $200,000,000 is committed to our real estate Fund.

LIQUIDITY AND CAPITAL RESOURCES - continued

Litigation

FUNDS FROM OPERATIONS (“FFO”)

FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of depreciated real estate assets, depreciation and amortization expense from real estate assets, extraordinary items and other specified non-cash items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures employed by other companies. The calculations of both the numerator and denominator used in the computation of income per share are disclosed in footnote 15 – Income Per Share, in the notes to our consolidated financial statements on page 24 of this Quarterly Report on Form 10-Q.

FFO for the Three and Six Months Ended June 30, 2010, and 2009

FFO attributable to common shareholders plus assumed conversions for the three months ended June 30, 2010 was $204,772,000, or $1.11 per diluted share, compared to $93,515,000, or $0.54 per diluted share for the prior year’s quarter. FFO attributable to common shareholders plus assumed conversions for the six months ended June 30, 2010 was $565,066,000 or $2.98 per diluted share, compared to $355,777,000, or $2.15 per diluted share for the prior year’s six months. Details of certain items that affect comparability are discussed in the financial results summary of our “Overview.”

			For The Three				For The Six
(Amounts in thousands, except per share amounts)			Months Ended June 30,				Months Ended June 30,
Reconciliation of our net income (loss) to FFO:			2010		2009		2010		2009
Net income (loss) attributable to Vornado			$	72,106	$	(37,635)	$	286,658	$	102,475
Depreciation and amortization of real property				127,181		128,662		254,795		252,789
Proportionate share of adjustments to equity in net income of
	Toys, to arrive at FFO:
		Depreciation and amortization of real property		17,663		15,566		35,164		32,146
		Income tax effect of Toys' adjustments included above		(6,182)		(5,448)		(12,307)		(11,251)
Proportionate share of adjustments to equity in net income of
	partially owned entities, excluding Toys, to arrive at FFO:
		Depreciation and amortization of real property		19,533		19,348		39,074		33,956
		Net gains on sale of real estate		-		(500)		(307)		(673)
Noncontrolling interests' share of above adjustments				(11,303)		(12,209)		(22,474)		(25,212)
FFO				218,998		107,784		580,603		384,230
Preferred share dividends				(14,266)		(14,269)		(28,533)		(28,538)
FFO attributable to common shareholders				204,732		93,515		552,070		355,692
Interest on 3.875% exchangeable senior debentures				-		-		12,915		-
Convertible preferred dividends				40		-		81		85
FFO attributable to common shareholders plus assumed conversions			$	204,772	$	93,515	$	565,066	$	355,777

Reconciliation of Weighted Average Shares
	Weighted average common shares outstanding			182,027		171,530		181,786		164,009
	Effect of dilutive securities:
		3.875% exchangeable senior debentures		-		-		5,736		-
		Employee stock options and restricted share awards		1,617		1,371		1,741		1,174
		Convertible preferred shares		71		-		71		74
	Denominator for FFO per diluted share			183,715		172,901		189,334		165,257

FFO attributable to common shareholders plus assumed conversions per diluted share			$	1.11	$	0.54	$	2.98	$	2.15

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

(Amounts in thousands, except per share amounts)			As at June 30, 2010					As at December 31, 2009
					Weighted	Effect of 1%				Weighted
					Average	Change In				Average
Consolidated debt:			Balance		Interest Rate	Base Rates		Balance		Interest Rate
	Variable rate		$	2,044,846	2.00%	$	20,448	$	2,657,972		1.67%
	Fixed rate			8,625,372	5.99%		-		8,281,643		5.89%
			$	10,670,218	5.23%		20,448	$	10,939,615		4.86%
Pro-rata share of debt of non-
	consolidated entities (non-recourse):
Variable rate – excluding Toys			$	289,428	2.85%		2,894	$	331,980		2.87%
	Variable rate – Toys			425,439	4.65%		4,254		852,040		3.45%
	Fixed rate (including $1,285,497, and
		$1,077,919 of Toys debt in 2010 and 2009)		2,130,056	7.36%		-		1,965,620		7.16%
			$	2,844,923	6.49%		7,148	$	3,149,640		5.70%
Redeemable noncontrolling interests’ share of above							(1,987)
Total change in annual net income						$	25,609
Per share-diluted						$	0.14

We may utilize various financial instruments to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies, depending on our analysis of the interest rate environment and the costs and risks of such strategies. As of June 30, 2010, variable rate debt with an aggregate principal amount of $507,750,000 and a weighted average interest rate of 2.58% was subject to LIBOR caps. These caps are based on a notional amount of $507,750,000 and cap LIBOR at a weighted average rate of 5.39%.

Fair Value of Debt

The estimated fair value of our consolidated debt is calculated based on current market prices and discounted cash flows at the current rate at which similar loans would be made to borrowers with similar credit ratings for the remaining term of such debt. As of June 30, 2010, the estimated fair value of our consolidated debt was $10,569,552,000.

Item 4. Controls and Procedures

Disclosure Controls and Procedures: The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a‑15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2010, such disclosure controls and procedures were effective.

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

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 1A. Risk Factors

There were no material changes to the Risk Factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2009.

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

In the second quarter of 2010, we issued 29,782 common shares upon the redemption of Class A units of the Operating Partnership held by persons who received units, in private placements in earlier periods, in exchange for their interests in limited partnerships that owned real estate. The common shares were issued without registration under the Securities Act of 1933 in reliance on Section 4 (2) of that Act.

Information relating to compensation plans under which our equity securities are authorized for issuance is set forth under Part III, Item 12 of the Annual Report on Form 10-K for the year ended December 31, 2009, and such information is incorporated by reference herein.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibits required by Item 601 of Regulation S-K are filed herewith or incorporated herein by reference and are listed in the attached Exhibit Index.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		VORNADO REALTY TRUST
		(Registrant)




Date: August 3, 2010	By:	/s/ Joseph Macnow
		Joseph Macnow, Executive Vice President - Finance and Administration and Chief Financial Officer (duly authorized officer and principal financial and accounting officer)

	EXHIBIT INDEX

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

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

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

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

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

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

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

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

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

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

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

	3.12		-	Ninth Amendment to the Partnership Agreement, dated as of September 3, 1999 -		*
					Incorporated by reference to Exhibit 3.3 to Vornado Realty Trust’s Current Report on
					Form 8-K (File No. 001-11954), filed on October 25, 1999

	3.13		-	Tenth Amendment to the Partnership Agreement, dated as of September 3, 1999 -		*
					Incorporated by reference to Exhibit 3.4 to Vornado Realty Trust’s Current Report on
					Form 8-K (File No. 001-11954), filed on October 25, 1999


					_______________________
		*			Incorporated by reference.

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

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

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

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

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

3.19		-	Sixteenth Amendment to the Partnership Agreement, dated as of July 25, 2001 - Incorporated		*
				by reference to Exhibit 3.3 to Vornado Realty Trust’s Current Report on Form 8-K
				(File No. 001 11954), filed on October 12, 2001

3.20		-	Seventeenth Amendment to the Partnership Agreement, dated as of September 21, 2001 -		*
				Incorporated by reference to Exhibit 3.4 to Vornado Realty Trust’s Current Report on
				Form 8 K (File No. 001-11954), filed on October 12, 2001

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

3.22		-	Nineteenth Amendment to the Partnership Agreement, dated as of July 1, 2002 - Incorporated		*
				by reference to Exhibit 3.47 to Vornado Realty Trust’s Quarterly Report on Form 10-Q
				for the quarter ended June 30, 2002 (File No. 001-11954), filed on August 7, 2002

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

3.24		-	Twenty-First Amendment to the Partnership Agreement, dated as of July 31, 2003 -		*
				Incorporated by reference to Exhibit 3.47 to Vornado Realty Trust’s Quarterly Report
				on Form 10-Q for the quarter ended September 30, 2003 (File No. 001-11954), filed on
				November 7, 2003

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

			Certain instruments defining the rights of holders of long-term debt securities of Vornado
				Realty Trust and its subsidiaries are omitted pursuant to Item 601(b)(4)(iii) of Regulation
				S-K. Vornado Realty Trust hereby undertakes to furnish to the Securities and Exchange
				Commission, upon request, copies of any such instruments.
					*
10.1		-	Master Agreement and Guaranty, between Vornado, Inc. and Bradlees New Jersey, Inc. dated
				as of May 1, 1992 - Incorporated by reference to Vornado, Inc.’s Quarterly Report on
				Form 10-Q for the quarter ended March 31, 1992 (File No. 001-11954), filed May 8, 1992
					*
10.2		-	Registration Rights Agreement between Vornado, Inc. and Steven Roth, dated December 29,
				1992 - Incorporated by reference to Vornado Realty Trust’s Annual Report on Form 10-K
				for the year ended December 31, 1992 (File No. 001-11954), filed February 16, 1993
					*
10.3		-	Stock Pledge Agreement between Vornado, Inc. and Steven Roth dated December 29, 1992 -
				Incorporated by reference to Vornado, Inc.’s Annual Report on Form 10-K for the year
				ended December 31, 1992 (File No. 001-11954), filed February 16, 1993
					*
10.4	**	-	Management Agreement between Interstate Properties and Vornado, Inc. dated July 13, 1992
				- Incorporated by reference to Vornado, Inc.’s Annual Report on Form 10-K for the year
				ended December 31, 1992 (File No. 001-11954), filed February 16, 1993
				_______________________
	*			Incorporated by reference.
	**			Management contract or compensatory agreement.

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

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

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

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

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

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

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

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

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

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

10.15		-	59th Street Management and Development Agreement, dated as of July 3, 2002, by and		*
				between 731 Residential LLC, 731 Commercial LLC and Vornado Management Corp. -
				Incorporated by reference to Exhibit 10(i)(F)(2) to Alexander’s Inc.’s Quarterly Report
				for the quarter ended June 30, 2002 (File No. 001-06064), filed on August 7, 2002
				_______________________
	*			Incorporated by reference.
	**			Management contract or compensatory agreement.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

10.41	**	-	Vornado Realty Trust's 2010 Omnibus Share Plan

15.1		-	Letter regarding Unaudited Interim Financial Information

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

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

32.1		-	Section 1350 Certification of the Chief Executive Officer

32.2		-	Section 1350 Certification of the Chief Financial Officer

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

EXHIBIT 10.41

Vornado Reatly Trust

2010 Omnibus Share Plan

(As approved by shareholders on May 13, 2010)

Table of Contents

1.	Purpose ……………………………………………………………………………..	1
2.	Shares Available for Awards ………………………………………………………	1
3.	Administration ……………………………………………………………………..	3
4.	Eligibility …………………………………………………………………………..	3
5.	Awards …………………………………………………………………………….	3
6.	Stock Options ……………………………………………………………………...	4
7.	Stock Appreciation Rights …………………………………………………………	5
8.	Performance Shares ………………………………………………………………..	5
9.	Restricted Stock ……………………………………………………………………	6
10.	Other Stock-Based Awards ………………………………………………………..	6
11.	Operating Partnership Units ……………………………………………………….	8
12.	Award Agreements ………………………………………………………………...	9
13.	Withholding ………………………………………………………………..............	9
14.	Nontransferability ……………………………………………………………….....	9
15.	No Right to Employment …………………………………………………………..	10
16.	Adjustment of and Changes in Shares……………………………………………...	10
17.	Amendment………………………………………………………………...............	10
18.	Effective Date ………………………………………………………………...........	11

1. Purpose

The purpose of the 2010 Omnibus Share Plan of Vornado Realty Trust, as amended from time to time (the “Plan”), is to promote the financial interests of Vornado Realty Trust (the “Trust”), including its growth and performance, by encouraging employees of the Trust and its subsidiaries, including officers (together, the “Employees”), its non-employee trustees of the Trust and non-employee directors of its subsidiaries (together, the “Non-Employee Trustees”), and certain non-employee advisors and consultants that provide bona fide services to the Trust or its subsidiaries (together, the “Consultants”) to acquire an ownership position in the Trust, enhancing the ability of the Trust and its subsidiaries to attract and retain Employees, Non-Employee Trustees and Consultants of outstanding ability, and providing Employees, Non-Employee Trustees and Consultants with a way to acquire or increase their proprietary interest in the Trust’s success and to further align the interests of the Employees, Non-Employee Trustees and Consultants with shareholders of the Trust.

The Plan replaces the 2002 Omnibus Share Plan of Vornado Realty Trust, as amended (the “Predecessor Plan”), for awards granted on or after the Effective Date (as defined in Section 18 ). Awards may not be granted under the Predecessor Plan beginning on the Effective Date, but the adoption and effectiveness of the Plan will not affect the terms or conditions of any outstanding grants under the Predecessor Plan prior to the Effective Date.

2. Shares Available for Awards

Subject to the provisions of this Section 2 or any adjustment as provided in Section 16 , awards may be granted under the Plan with respect to 6,000,000 Share Equivalents (as defined below), which, in accordance with the share counting provisions of this Section 2, would result in the issuance of up to a maximum of 6,000,000 common shares, par value $.04, of beneficial interest in the Trust (the “Shares”) if all awards granted under the Plan were Full Value Awards (as defined below) and 12,000,000 Shares if all awards granted under the Plan were not Full Value Awards (which includes the number of Shares remaining under the Predecessor Plan as of March 15, 2010). No Participant (as defined in Section 3 ) who is an Employee shall be granted during any period of 12 consecutive months stock options, stock appreciation rights or any award intended to be “performance-based compensation” (as that term is used in Section 162(m) of the Internal Revenue Code) with respect to more than 12,000,000 Shares (subject to adjustment as provided in Section 16 ). The Shares issued under the Plan may be authorized and unissued Shares or treasury Shares, as the Trust may from time to time determine. Any Shares that are subject to awards that are not Full Value Awards shall be counted against the number of Share Equivalents available for the grant of awards under the Plan, as set forth in the first sentence of this Section 2 , as one-half Share Equivalent for every Share granted pursuant to an award; any Shares that are subject to awards that are Full Value Awards shall be counted as one Share Equivalent for every Share granted pursuant to an award. “Full Value Award” means an award under the Plan other than a stock option, stock appreciation right or other award that does not deliver to a Participant on the grant date of such award the full value of the underlying Shares. “Share Equivalent” shall be the measuring unit for purposes of the Plan to determine the number of Shares that may be subject to awards hereunder, which number of Shares shall not in any event exceed 12,000,000, subject to the provisions of this Section 2 or any adjustment as provided in Section 16 .

The Committee may, without affecting the number of Share Equivalents available pursuant to this Section 2, authorize the issuance or assumption of benefits under the Plan in connection with any merger, consolidation, acquisition of property or stock, reorganization or similar transaction upon such terms and conditions as it may deem appropriate, subject to compliance with Section 409A (as defined in Section 16 ) and any other applicable provisions of the Internal Revenue Code.

Shares subject to an award granted under the Plan that expires unexercised, that is forfeited, terminated or cancelled, in whole or in part, or is paid in cash in lieu of Shares, shall thereafter again be available for grant under the Plan; provided, however, that the number of Share Equivalents that shall again be available for the grant under the Plan shall be increased by one Share Equivalent for each Share that is subject to a Full Value Award at the time such Full Value Award expires or is forfeited, terminated or cancelled and by one-half Share Equivalent for each Share that is subject to an award that is not a Full Value Award at the time such award expires or is forfeited, terminated or cancelled. Awards that use Shares as a reference but that are paid or settled in whole or in part in cash shall not affect the number of Share Equivalents available under the Plan pursuant to this Section 2 to the extent paid in cash. The number of Share Equivalents available for the purpose of awards under the Plan shall be reduced by (i) one-half of the gross number of Shares for which stock options or stock appreciation rights are exercised, regardless of whether any of the Shares underlying such awards are not actually issued to the Participant as the result of a net settlement and (ii) one-half of any Shares withheld to satisfy any tax withholding obligation with respect to any award that is not a Full Value Award and one Share for each Share withheld to satisfy any tax withholding obligation with respect to any Full Value Award, as described further in Section 13 .

The maximum aggregate number of Share Equivalents that may be granted under the Plan, as set forth in this Section 2, shall be cumulatively increased from time to time by the number of Shares subject to, or acquired pursuant to, that portion of any award granted under the Predecessor Plan and outstanding as of the Effective Date that, on or after the Effective Date, expires unexercised, that is forfeited, terminated or cancelled, in whole or in part, or is paid in cash in lieu of Shares; provided , however , that the number of Share Equivalents that shall again be available for grant under the Plan shall be increased by one-half Share Equivalent for each Share that is subject to an award granted under the Predecessor Plan that would not have been a Full Value Award if granted under the Plan at the time such award expires or is forfeited, terminated or cancelled.

The maximum aggregate number of Shares that may be issued under the Plan pursuant to the exercise of incentive stock options within the meaning of Section 422 of the Internal Revenue Code shall not exceed 12,000,000 Shares (as adjusted pursuant to the provisions of Section 16 ).

3. Administration

The Plan shall be administered by the Compensation Committee (the “Committee”) of the Board of Trustees of the Trust. A majority of the Committee shall constitute a quorum, and the acts of a majority shall be the acts of the Committee. Notwithstanding anything to the contrary contained herein, the Board of Trustees may, in its sole discretion, at any time and from time to time, grant awards or administer the Plan. In any such case, the Board of Trustees will have all of the authority and responsibility granted to the Committee herein.

Subject to the provisions of the Plan, the Committee shall select the Employees, Non-Employee Trustees and Consultants who will be participants in the Plan (together, the “Participants”). The Committee shall (i) determine the type of awards to be made to Participants, determine the Shares or share units subject to awards, and (ii) have the authority to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any agreements entered into hereunder, and to make all other determinations necessary or advisable for the administration of the Plan, based on, among other things, information made available to the Committee by the management of the Trust. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any award in the manner and to the extent it shall deem desirable to carry it into effect. The determinations of the Committee in its administration of the Plan, as described herein, shall be final and conclusive.

4. Eligibility

All Employees who have demonstrated significant management potential or who have the capacity for contributing in a substantial measure to the successful performance of the Trust, as determined by the Committee, and Non-Employee Trustees and Consultants, as determined by the Committee, are eligible to be Participants in the Plan.

5. Awards

Awards under the Plan may consist of the following: stock options (either incentive stock options within the meaning of Section 422 of the Internal Revenue Code or non-qualified stock options), stock appreciation rights, performance shares, grants of restricted stock and other-stock based awards, including OP Units (as defined in Section 11 ). Awards of performance shares, restricted stock or share units and other-stock based awards may provide the Participant with dividends or dividend equivalents and voting rights prior to vesting (whether based on a period of time or based on attainment of specified performance conditions). Unless the Committee otherwise specifies in the award agreement, if dividends or dividend equivalent rights are granted, dividends and dividend equivalents shall be paid to the Participant at the same time as the Trust pays dividends to common shareholders (even if the Shares subject to the underlying award are held by the Trust) but not less than annually and not later than the fifteenth day of the third month following the end of the calendar year in which the dividends or dividend equivalents are credited (or, if later, the fifteenth day of the third month following the end of the calendar year in which the dividends or dividend equivalents are no longer subject to a “substantial risk of forfeiture” within the meaning of Section 409A (as defined in Section 16 )); provided , however , that dividend and dividend equivalent payments in the case of an award that is subject to performance vesting conditions shall be treated as unvested so long as such award remains unvested, and any such dividend and dividend equivalent payments that would otherwise have been paid during the vesting period shall instead be accumulated (and, if paid in cash, reinvested in additional Shares based on the Surrender Value of the Shares on the date of reinvestment) and paid within 30 days following the date on which such award is determined by the Committee to have satisfied such performance vesting conditions. Any dividends or dividend equivalents that are accumulated and paid after the date specified in the preceding sentence may be treated separately from the right to other amounts under the award.

Notwithstanding any other provision of the Plan to the contrary, Full Value Awards (a) that vest on the basis of the Participant’s continued employment or service shall be subject to a minimum vesting schedule of at least three years (with no more than one-third of the Shares subject thereto vesting earlier than a date 60 days prior to the first anniversary of the date on which such award is granted and on each of the next two anniversaries of such initial vesting date) and (b) that vest on the basis of the attainment of performance goals shall provide for a performance period that ends no earlier than 60 days prior to the first anniversary of the commencement of the period over which performance is evaluated; provided , however , that the foregoing limitations shall not preclude the acceleration of vesting of any such award upon the death, disability or retirement of the Participant or upon an actual change in control (and not, for example, the commencement of a tender offer for the Trust’s shares or shareholder approval of a transaction that, if consummated, would result in an actual change in control). Notwithstanding the foregoing, Full Value Awards with respect to 5% of the maximum aggregate number of Share Equivalents available for the purpose of awards under the Plan pursuant to Section 2 may be granted under the Plan to any one or more Participants without respect to such minimum vesting provisions.

6. Stock Options

The Committee shall establish the option price at the time each stock option is granted, which price shall not be less than 100% of the Fair Market Value (as defined below) of the Shares. Stock options shall be exercisable for such period as specified by the Committee but in no event may options be exercisable more than ten years after their date of grant. No stock option shall be exercisable earlier than a date 60 days prior to the first anniversary of the date on which such award is granted, except in the event of the Participant’s retirement, death or disability or an actual change in control. The option price of each Share as to which a stock option is exercised shall be paid in full at the time of such exercise. Such payment shall be made (i) in cash, (ii) by tender of Shares owned by the Participant valued at Surrender Value as of the date of exercise, (iii) to the extent approved by the Committee in its sole discretion, by surrender of all or part of the Shares issuable upon exercise of the option by the largest whole number of Shares with a Surrender Value that does not exceed the aggregate exercise price; provided, however, that the Trust shall accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole Shares to be issued, (iv) in such other consideration as the Committee deems appropriate, or (v) by a combination of cash, Shares and such other consideration.

For purposes of the Plan, (i) “Fair Market Value” means, with respect to a Share, the average of the high and the low prices reported for the Shares on the applicable date as reported on the New York Stock Exchange or, if not so reported, as determined in accordance with a valuation methodology approved by the Committee in a manner consistent with Section 409A, unless determined as otherwise specified herein and (ii) “Surrender Value” means, with respect to a Share, the closing price reported for the Shares on the applicable date as reported on the New York Stock Exchange or, if not so reported, as determined in accordance with a valuation methodology approved by the Committee in a manner consistent with Section 409A, unless determined as otherwise specified herein. For purposes of the grant of any award, the applicable date will be the trading day on which the award is granted or, if the date the award is granted is not a trading day, the trading day immediately prior to the date the award is granted. For purposes of the exercise of any award, the applicable date is the date a notice of exercise is received by the Trust or, if such date is not a trading day, the trading day immediately following the date a notice of exercise is received by the Trust.

7. Stock Appreciation Rights

Stock appreciation rights may be granted in tandem with a stock option, in addition to a stock option, or may be freestanding and unrelated to a stock option. Stock appreciation rights granted in tandem with or in addition to a stock option may be granted either at the same time as the stock option or at a later time. The Committee shall establish the grant price of each stock appreciation right granted at the time each such stock appreciation right is granted, which price shall not be less than 100% of the Fair Market Value of the Shares subject to such award. No stock appreciation right shall be exercisable earlier than a date 60 days prior to the first anniversary of the date on which such award is granted, except in the event of the Participant’s retirement, death or disability or an actual change in control, or later than 10 years from the grant date of such award. A stock appreciation right shall entitle the Participant to receive from the Trust an amount equal to the increase of the Fair Market Value of the Shares on the exercise of the stock appreciation right over the grant price. The Committee, in its sole discretion, shall determine whether the stock appreciation right shall be settled in cash, Shares or a combination of cash and Shares.

8. Performance Shares

Performance shares may be granted in the form of actual Shares or share units having a value equal to an identical number of Shares. In the event that a certificate is issued in respect of Shares subject to a grant of performance shares, such certificate shall be registered in the name of the Participant but shall be held by the Trust until the time the Shares subject to the grant of performance shares are earned. The performance conditions and the length of the performance period shall be determined by the Committee. The Committee, in its sole discretion, shall determine whether performance shares granted in the form of share units shall be paid in cash, Shares, or a combination of cash and Shares.

Notwithstanding anything to the contrary herein, performance shares granted under this Section 8 may, at the discretion of the Committee, be granted in a manner which is intended to be deductible by the Trust under Section 162(m) of the Internal Revenue Code. In such event, the Committee shall follow procedures substantially equivalent to those set forth in Section 10 for Performance-Based Awards (as defined in Section 10 ).

9. Restricted Stock

Restricted stock may be granted in the form of actual Shares or share units having a value equal to an identical number of Shares. In the event that a certificate is issued in respect of Shares subject to a grant of restricted stock, such certificate shall be registered in the name of the Participant but shall be held by the Trust until the end of the restricted period. The employment conditions and the length of the period for vesting of restricted stock shall be established by the Committee at time of grant. The Committee, in its sole discretion, shall determine whether restricted stock granted in the form of share units shall be paid in cash, Shares, or a combination of cash and Shares.

Notwithstanding anything to the contrary herein, restricted stock granted under this Section 9 may, at the discretion of the Committee, be granted in a manner which is intended to be deductible by the Trust under Section 162(m) of the Internal Revenue Code. In such event, the Committee shall follow procedures substantially equivalent to those set forth in Section 10 for Performance-Based Awards.

10. Other Stock-Based Awards

Other types of equity-based or equity-related awards (including the grant or offer for sale of unrestricted Shares and performance stock and performance units settled in shares or cash) may be granted under such terms and conditions as may be determined by the Committee in its sole discretion.

Notwithstanding anything to the contrary herein, any other stock-based awards may, at the discretion of the Committee, be granted in a manner that is intended to be deductible by the Trust under Section 162(m) of the Internal Revenue Code (a “Performance-Based Award”). In such event, the Committee shall follow the following procedures:

A Participant’s Performance-Based Award shall be determined based on the attainment of written objective performance goals approved by the Committee for a performance period generally of one year established by the Committee (i) while the outcome for that performance period is substantially uncertain and (ii) no more than 90 days after the commencement of the performance period to which the performance goal relates or, if less, the number of days which is equal to 25% of the relevant performance period. At the same time as the performance goals are established, the Committee will prescribe a formula to determine the amount of the Performance-Based Award that may be payable based upon the level of attainment of the performance goal during the performance period.

The performance goals shall be based on one or more of the following business criteria (either separately or in combination) with regard to the Trust (or a subsidiary, division, other operational unit or administrative department of the Trust): (i) pre-tax income, (ii) after-tax income, (iii) net income (meaning net income as reflected in the Trust’s financial reports for the applicable period, on an aggregate, diluted and/or per share basis), (iv) operating income, (v) cash flow, (vi) earnings per share, (vii) return on equity, (viii) return on invested capital or assets, (ix) cash and/or funds available for distribution, (x) appreciation in the Fair Market Value of Shares, (xi) return on investment, (xii) total return to shareholders, (xiii) net earnings growth, (xiv) stock appreciation (meaning an increase in the price or value of the Shares after the date of grant of an award and during the applicable period), (xv) related return ratios, (xvi) increase in revenues, (xvii) net earnings, (xviii) changes (or the absence of changes) in the per share or aggregate market price of the Shares, (xix) number of securities sold, (xx) earnings before any one or more of the following items: interest, taxes, depreciation or amortization for the applicable period, as reflected in the Trust’s financial reports for the applicable period, (xxi) total revenue growth (meaning the increase in total revenues after the date of grant of an award and during the applicable period, as reflected in the Trust’s financial reports for the applicable period), (xxii) total shareholder return, and (xxiii) funds from operations, as determined and reported by the Trust in its financial reports.

Performance criteria may be absolute amounts or percentages of amounts or may be relative to the performance of a peer group of real estate investment trusts or other corporations or indices.

Except as otherwise expressly provided, all financial terms are used as defined under Generally Accepted Accounting Principles (“GAAP”) and all determinations shall be made in accordance with GAAP, as applied by the Trust in the preparation of its periodic reports to shareholders.

In addition, the performance goals may be based upon the attainment of specified levels of Trust (or subsidiary, division, other operational unit or administrative department of the Trust) performance under one or more of the measures described above relative to the performance of other real estate investment trusts or the historic performance of the Trust. To the extent permitted by Section 162(m) of the Code, unless the Committee provides otherwise at the time of establishing the performance goals, for each fiscal year of the Trust, the Committee may (i) designate additional business criteria on which the performance goals may be based or (ii) provide for objectively determinable adjustments, modifications or amendments, as determined in accordance with GAAP, to any of the performance criteria described above for one or more of the items of gain, loss, profit or expense: (A) determined to be extraordinary or unusual in nature or infrequent in occurrence, (B) related to the disposal of a segment of a business, (C) related to a change in accounting principle under GAAP, (D) related to discontinued operations that do not qualify as a segment of business under GAAP, and (E) attributable to the business operations of any entity acquired by the Trust during the fiscal year.

Following the completion of each performance period, the Committee shall have the sole discretion to determine, based on information made available to the Committee by the management of the Trust, whether the applicable performance goals have been met with respect to a given Participant and, if they have, shall so certify and ascertain the amount of the applicable Performance-Based Award. No Performance-Based Awards will be paid for such performance period until such certification is made by the Committee. The amount of the Performance-Based Award actually paid to a given Participant may be less (but not more) than the amount determined by the applicable performance goal formula, at the discretion of the Committee. The amount of the Performance-Based Award determined by the Committee for a performance period shall be paid to the Participant at such time as determined by the Committee in its sole discretion, after the end of such performance period.

11. Operating Partnership Units

Awards may be granted under the Plan in the form of undivided fractional limited partnership interests in Vornado Realty L.P. (together with any successor entity, the “Operating Partnership”), a Delaware limited partnership, the entity through which the Trust conducts its business and an entity that has elected to be treated as a partnership for federal income tax purposes, of one or more classes (“OP Units”) established pursuant to the Operating Partnership’s agreement of limited partnership, as amended from time to time. Awards of OP Units shall be valued by reference to, or otherwise determined by reference to or based on, Shares. OP Units awarded under the Plan may be (1) convertible, exchangeable or redeemable for other limited partnership interests in the Operating Partnership (including OP Units of a different class or series) or Shares, or (2) valued by reference to the book value, fair value or performance of the Operating Partnership. Awards of OP Units are intended to qualify as “profits interests” within the meaning of IRS Revenue Procedure 93-27, as clarified by IRS Revenue Procedure 2001-43, with respect to a Participant in the Plan who is rendering services to or for the benefit of the Operating Partnership, including its subsidiaries.

For purposes of calculating the number of Shares underlying an award of OP Units relative to the total number of Share Equivalents available for issuance under the Plan, the Committee shall establish in good faith the maximum number of Shares to which a Participant receiving such award of OP Units may be entitled upon fulfillment of all applicable conditions set forth in the relevant award documentation, including vesting conditions, partnership capital account allocations, value accretion factors, conversion ratios, exchange ratios and other similar criteria. If and when any such conditions are no longer capable of being met, in whole or in part, the number of Shares underlying such awards of OP Units shall be reduced accordingly by the Committee, and the number of Share Equivalents shall be increased by one Share Equivalent for each Share so reduced. Awards of OP Units may be granted either alone or in addition to other awards granted under the Plan. The Committee shall determine the eligible Participants to whom, and the time or times at which, awards of OP Units shall be made; the number of OP Units to be awarded; the price, if any, to be paid by the Participant for the acquisition of such OP Units; and the restrictions and conditions applicable to such award of OP Units. Conditions may be based on continuing employment (or other service relationship), computation of financial metrics and/or achievement of pre-established performance goals and objectives, with related length of the service period for vesting, minimum or maximum performance thresholds, measurement procedures and length of the performance period to be established by the Committee at the time of grant, in its sole discretion. The Committee may allow awards of OP Units to be held through a limited partnership, or similar “look-through” entity, and the Committee may require such limited partnership or similar entity to impose restrictions on its partners or other beneficial owners that are not inconsistent with the provisions of this Section 11 . The provisions of the grant of OP Units need not be the same with respect to each Participant.

Notwithstanding Section 5 of the Plan, the award agreement or other award documentation in respect of an award of OP Units may provide that the recipient of an award under this Section 11 shall be entitled to receive, currently or on a deferred or contingent basis, dividends or dividend equivalents with respect to the number of Shares underlying the award or other distributions from the Operating Partnership prior to vesting (whether based on a period of time or based on attainment of specified performance conditions), as determined at the time of grant by the Committee, in its sole discretion, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional Shares or OP Units.

OP Units awarded under this Section 11 may be issued for no cash consideration.

12. Award Agreements

Each award under the Plan shall be evidenced by an agreement setting forth the terms and conditions, as determined by the Committee, which shall apply to such award, in addition to the terms and conditions specified in the Plan.

13. Withholding

The Trust shall have the right to deduct from any payment to be made pursuant to the Plan, or to require prior to the issuance or delivery of any Shares or the payment of cash under the Plan, any taxes required by law to be withheld therefrom. The Committee, in its sole discretion, may permit a Participant who is an employee of the Trust or its subsidiaries to elect to satisfy such withholding obligation by having the Trust retain the number of Shares whose Fair Market Value equals the minimum statutory amount of taxes required by applicable law to be withheld. Any fraction of a Share required to satisfy such obligation shall be disregarded, and the amount due shall instead be paid in cash to or by the Participant, as the case may be.

14. Nontransferability

No award under the Plan shall be assignable or transferable except by will or the laws of descent and distribution, and no right or interest of any Participant shall be subject to any lien, obligation or liability of the Participant. Notwithstanding the foregoing, the Committee may determine, at the time of grant or thereafter, that an award (other than stock options intended to be incentive stock options within the meaning of Section 422 of the Internal Revenue Code) is transferable by the Participant to such Participant’s immediate family members (or trusts, partnerships, or limited liability companies established for such immediate family members). For this purpose, immediate family member means, except as otherwise defined by the Committee, the Participant’s children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brothers and sisters), in-laws and persons related by reason of legal adoption. Such transferees may transfer an award only by will or the laws of descent or distribution. An award transferred pursuant to this Section 14 shall remain subject to the provisions of the Plan, and shall be subject to such other rules as the Committee shall determine. Upon transfer of a stock option, any related stock appreciation right shall be canceled. Except in the case of a holder’s incapacity, an award shall be exercisable only by the holder thereof.

15. No Right to Employment

No person shall have any claim or right to be granted an award, and the grant of an award shall not be construed as giving a Participant any right to continue his or her service to the Trust or its subsidiaries as an Employee, Non-Employee Trustee or Consultant. Further, the Trust and its subsidiaries expressly reserve the right at any time to dismiss a Participant free from any liability, or any claim under the Plan, except as provided herein or in any agreement entered into hereunder.

16. Adjustment of and Changes in Shares

In the event of any change in the outstanding Shares by reason of any share dividend or split, reverse split, recapitalization, merger, consolidation, spinoff, combination or exchange of Shares or other corporate change, or any distributions to common shareholders other than regular cash dividends, the Committee shall make such substitution or adjustment, if any, as it deems to be equitable, as to (i) the number of Share Equivalents for which awards may be granted under the Plan; (ii) the number or kind of Shares or other securities issued or reserved for issuance pursuant to outstanding awards, (iii) the individual Participant limitation set forth in Section 2 , and (iv) the number of Shares set forth in Section 2 that can be issued through incentive stock options within the meaning of Section 422 of the Internal Revenue Code; provided , however , that no such substitution or adjustment shall be required if the Committee determines that such action could cause an award to fail to satisfy the conditions of an applicable exception from the requirements of Section 409A of the Internal Revenue Code (“Section 409A”) or otherwise could subject a Participant to the additional tax imposed under Section 409A in respect of an outstanding award; and further provided that no Participant shall have the right to require the Committee to make any adjustment or substitution under this Section 16 or have any claim or right whatsoever against the Trust or any of its subsidiaries or affiliates or any of their respective trustees, directors, officer or employees in respect of any action taken or not taken under this Section 16 .

17. Amendment

The Committee may amend or terminate the Plan or any portion thereof from time to time, provided that no amendment shall be made without shareholder approval if such amendment (i) would increase the maximum aggregate number of Shares that may be issued under the Plan (other than pursuant to Section 16 ), (ii) would materially modify the requirements for participation in the Plan, (iii) would result in a material increase in the benefits accrued to Participants under the Plan, (iv) would reduce the exercise price of outstanding stock options or stock appreciation rights or cancel outstanding stock options or stock appreciation rights in exchange for cash, other awards or stock options or stock appreciation rights with an exercise price that is less than the exercise price of the original stock options or stock appreciation rights (other than pursuant to Section 16 ) or (v) requires shareholder approval to comply with any applicable laws, regulations or rules, including the rules of a securities exchange or self-regulatory agency.

18. Effective Date

The Plan was adopted on February 18, 2010 by the Board of Trustees, subject to the approval of the Compensation Committee, which was given on March 25, 2010 and subject to the approval by the shareholders of the Trust at the 2010 Annual Meeting on May 13, 2010, and shall be effective as of the date of the approval by the requisite shareholders of the Trust at the 2010 Annual Meeting (the “Effective Date”). If the Plan is not so approved by the requisite shareholders of the Trust, then the Plan will be null and void in its entirety and the Predecessor Plan will remain in full force and effect. Subject to earlier termination pursuant to Section 17 , the Plan shall have a term of ten years from the Effective Date; provided , however , that all awards made under the Plan before its termination, and the Committee’s authority to administer the terms of such awards, will remain in effect until such awards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable award agreements; provided , further , that no awards (other than a stock option or stock appreciation right) that are intended by the Committee to be “performance-based” under Section 162(m) of the Internal Revenue Code (including any Performance-Based Awards) shall be granted on or after the first shareholder meeting that occurs in the fifth year following the year in which shareholders of the Trust previously approved the performance criteria in Section 10 unless the performance criteria are reapproved (or other designated performance criteria are approved) by the shareholders of the Trust on or before such shareholder meeting.

EXHIBIT 15.1

August 3, 2010

Vornado Realty Trust

New York, New York

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of Vornado Realty Trust for the periods ended June 30, 2010 and 2009, as indicated in our report dated August 3, 2010; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, is incorporated by reference in the following registration statements of Vornado Realty Trust:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

/s/ Deloitte & Touche LLP

Parsippany, New Jersey

EXHIBIT 31.1

CERTIFICATION

I, Michael D. Fascitelli, certify that:

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

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

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

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

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

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

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

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

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

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

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

	August 3, 2010
	/s/ Michael D. Fascitelli
	Michael D. Fascitelli
	President and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION

I, Joseph Macnow, certify that:

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

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

	August 3, 2010
	/s/ Joseph Macnow
	Joseph Macnow
	Executive Vice President and Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION

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

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

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

The Quarterly Report on Form 10-Q for quarter ended June 30, 2010 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


August 3, 2010		/s/ Michael D. Fascitelli
	Name:	Michael D. Fascitelli
	Title:	President and Chief Executive Officer

EXHIBIT 32.2

CERTIFICATION

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

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


August 3, 2010		/s/ Joseph Macnow
	Name:	Joseph Macnow
	Title:	Executive Vice President and Chief Financial Officer