UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-K

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

For the Fiscal Year Ended:

December 31, 2016

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

For the transition period from		to

Commission File Number:	001‑11954 (Vornado Realty Trust)
Commission File Number:	001‑34482 (Vornado Realty L.P.)

Vornado Realty Trust

Vornado Realty L.P.

(Exact name of Registrants as specified in its charter)

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

Vornado Realty L.P.	Delaware	13-3925979
	(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

(Registrants’ telephone number, including area code)

N/A

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

Securities registered pursuant to Section 12(b) of the Act:

Registrant	Title of Each Class	Name of Exchange on Which Registered
Vornado Realty Trust	Common Shares of beneficial interest, $.04 par value per share	New York Stock Exchange

	Cumulative Redeemable Preferred Shares of beneficial interest, no par value:

Vornado Realty Trust	6.625% Series G	New York Stock Exchange

Vornado Realty Trust	6.625% Series I	New York Stock Exchange

Vornado Realty Trust	5.70% Series K	New York Stock Exchange

Vornado Realty Trust	5.40% Series L	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

Registrant		Title of Each Class
Vornado Realty L.P.		Class A Units of Limited Partnership Interest

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Vornado Realty Trust: YES ☒ NO o Vornado Realty L.P.: YES ☐ NO ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Vornado Realty Trust: YES ☒ NO o Vornado Realty L.P.: YES ☐ NO ☒

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.

Vornado Realty Trust: YES ☒ NO o Vornado Realty L.P.: YES ☒ 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).

Vornado Realty Trust: YES ☒ NO o Vornado Realty L.P.: YES ☒ NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S‑K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10‑K or any amendment to this Form 10‑K. ☒

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.

Vornado Realty Trust:

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

Vornado Realty L.P.:

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Vornado Realty Trust: YES ☐ NO x Vornado Realty L.P.: YES ☐ NO ☒

The aggregate market value of the voting and non-voting common shares held by non-affiliates of Vornado Realty Trust, i.e. by persons other than officers and trustees of Vornado Realty Trust, was $17,294,426,000 at June 30, 2016.

As of December 31, 2016, there were 189,100,876 common shares of beneficial interest outstanding of Vornado Realty Trust.

There is no public market for the Class A units of limited partnership interest of Vornado Realty L.P. Based on the June 30, 2016 closing share price of Vornado Realty Trust’s common shares, which are issuable upon redemption of the Class A units, the aggregate market value of the Class A units held by non-affiliates of Vornado Realty L.P., i.e. by persons other than Vornado Realty Trust and its officers and trustees, was $984,737,000 at June 30, 2016.

Documents Incorporated by Reference

Part III : Portions of Proxy Statement for Annual Meeting of Vornado Realty Trust’s Shareholders to be held on May 18, 2017.

This Annual Report on Form 10-K omits financial statements required under Rule 3-09 of Regulation S-X, for Toys “R” Us, Inc. An amendment to this Annual Report on Form 10-K will be filed as soon as practicable following the availability of such financial statements.

EXPLANATORY NOTE

This report combines the Annual Reports on Form 10-K for the fiscal year ended December 31, 2016 of Vornado Realty Trust and Vornado Realty L.P. Unless stated otherwise or the context otherwise requires, references to “Vornado” refer to Vornado Realty Trust, a Maryland real estate investment trust (“REIT”), and references to the “Operating Partnership” refer to Vornado Realty L.P., a Delaware limited partnership. References to the “Company,” “we,” “us” and “our” mean collectively Vornado, the Operating Partnership and those entities/subsidiaries consolidated by Vornado.

The Operating Partnership is the entity through which we conduct substantially all of our business and own, either directly or through subsidiaries, substantially all of our assets. Vornado is the sole general partner and also a 93.7% limited partner of the Operating Partnership. As the sole general partner of the Operating Partnership, Vornado has exclusive control of the Operating Partnership’s day-to-day management.

Under the limited partnership agreement of the Operating Partnership, unitholders may present their Class A units for redemption at any time (subject to restrictions agreed upon at the time of issuance of the units that may restrict such right for a period of time). Class A units may be tendered for redemption to the Operating Partnership for cash; Vornado, at its option, may assume that obligation and pay the holder either cash or Vornado common shares on a one-for-one basis. Because the number of Vornado common shares outstanding at all times equals the number of Class A units owned by Vornado, the redemption value of each Class A unit is equivalent to the market value of one Vornado common share, and the quarterly distribution to a Class A unitholder is equal to the quarterly dividend paid to a Vornado common shareholder. This one-for-one exchange ratio is subject to specified adjustments to prevent dilution. Vornado generally expects that it will elect to issue its common shares in connection with each such presentation for redemption rather than having the Operating Partnership pay cash. With each such exchange or redemption, Vornado’s percentage ownership in the Operating Partnership will increase. In addition, whenever Vornado issues common shares other than to acquire Class A units of the Operating Partnership, Vornado must contribute any net proceeds it receives to the Operating Partnership and the Operating Partnership must issue to Vornado an equivalent number of Class A units of the Operating Partnership. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.

The Company believes that combining the Annual Reports on Form 10-K of Vornado and the Operating Partnership into this single report provides the following benefits:

•	enhances investors’ understanding of Vornado and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
•	eliminates duplicative disclosure and provides a more streamlined and readable presentation because a substantial portion of the disclosure applies to both Vornado and the Operating Partnership; and
•	creates time and cost efficiencies in the preparation of one combined report instead of two separate reports.

The Company believes it is important to understand the few differences between Vornado and the Operating Partnership in the context of how Vornado and the Operating Partnership operate as a consolidated company. The financial results of the Operating Partnership are consolidated into the financial statements of Vornado. Vornado does not have any other significant assets, liabilities or operations, other than its investment in the Operating Partnership. The Operating Partnership, not Vornado, generally executes all significant business relationships other than transactions involving the securities of Vornado. The Operating Partnership holds substantially all of the assets of Vornado. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by Vornado, which are contributed to the capital of the Operating Partnership in exchange for Class A units of partnership in the Operating Partnership, as applicable, the Operating Partnership generates all remaining capital required by the Company’s business. These capital sources may include working capital, net cash provided by operating activities, borrowings under the revolving credit facility, the issuance of secured and unsecured debt and equity securities and proceeds received from the disposition of certain properties.

To help investors better understand the key differences between Vornado and the Operating Partnership, certain information for Vornado and the Operating Partnership in this report has been separated, as set forth below:

•	Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities;

•	Item 6. Selected Financial Data;

•	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations includes information specific to each entity, where applicable; and

•	Item 8. Financial Statements and Supplementary Data which includes the following specific disclosures for Vornado Realty Trust and Vornado Realty L.P.:
	•	Note 9. Redeemable Noncontrolling Interests/Redeemable Partnership Units
	•	Note 10. Shareholders’ Equity/Partners’ Capital
	•	Note 13. Stock-based Compensation
	•	Note 17. Income Per Share/Income Per Class A Unit
	•	Note 22. Summary of Quarterly Results (Unaudited)

This report also includes separate Part II, Item 9A. Controls and Procedures sections, separate Exhibit 12 computation of ratios, and separate Exhibits 31 and 32 certifications for each of Vornado and the Operating Partnership in order to establish that the requisite certifications have been made and that Vornado and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.

			INDEX

		Item	Financial Information:	Page Number

PART I.		1.	Business	7

		1A.	Risk Factors	11

		1B.	Unresolved Staff Comments	22

		2.	Properties	23

		3.	Legal Proceedings	33

		4.	Mine Safety Disclosures	33

PART II.		5.	Market for Registrant’s Common Equity, Related Stockholder Matters and
			Issuer Purchases of Equity Securities	34

		6.	Selected Financial Data	36

		7.	Management's Discussion and Analysis of Financial Condition and
			Results of Operations	39

		7A.	Quantitative and Qualitative Disclosures about Market Risk	94

		8.	Financial Statements and Supplementary Data	95

		9.	Changes in and Disagreements with Accountants on
			Accounting and Financial Disclosure	159

		9A.	Controls and Procedures	159

		9B.	Other Information	163

PART III.		10.	Directors, Executive Officers and Corporate Governance ⁽¹⁾	163

		11.	Executive Compensation ⁽¹⁾	164

		12.	Security Ownership of Certain Beneficial Owners and Management
			and Related Stockholder Matters ⁽¹⁾	164

		13.	Certain Relationships and Related Transactions, and Director Independence ⁽¹⁾	164

		14.	Principal Accounting Fees and Services ⁽¹⁾	164

PART IV.		15.	Exhibits, Financial Statement Schedules	165

Signatures				166


(1)	These items are omitted in whole or in part because Vornado, the Operating Partnership’s sole general partner, will file a definitive Proxy Statement pursuant to Regulation 14A under the Securities Exchange Act of 1934 with the Securities and Exchange Commission no later than 120 days after December 31, 2016, portions of which are incorporated by reference herein.

Forward-Looking Statements

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 future 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 Annual Report on Form 10‑K. We also note the following forward-looking statements: in the case of our development and redevelopment projects, the estimated completion date, estimated project cost and cost to complete; and estimates of future capital expenditures, dividends to common and preferred shareholders and operating partnership distributions. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Item 1A. Risk Factors” in this Annual Report on Form 10-K.

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 Annual Report on Form 10-K 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 Annual Report on Form 10-K.

PART I

ITEM 1. BUSINESS

Vornado is a fully‑integrated REIT and conducts its business through, and substantially all of its interests in properties are held by, the Operating Partnership, a Delaware limited 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. Vornado is the sole general partner of, and owned approximately 93.7% of the common limited partnership interest in the Operating Partnership at December 31, 2016.

On October 31, 2016, Vornado’s Board of Trustees approved the tax-free spin-off of our Washington, DC segment and we entered into a definitive agreement to merge it with the business and certain select assets of The JBG Companies (“JBG”), a Washington, DC real estate company. Steven Roth, the Chairman of the Board of Trustees and Chief Executive Officer of Vornado, will be Chairman of the Board of Trustees of the new company, which will be named JBG SMITH Properties. Mitchell Schear, President of our Washington, DC business, will be a member of the Board of Trustees of the new company. The pro rata distribution to Vornado common shareholders and Class A Operating Partnership unitholders is intended to be treated as a tax-free spin-off for U.S. federal income tax purposes. It is expected to be made on a pro rata 1:2 basis. The initial Form 10 registration statement relating to the spin-off and merger was filed with the SEC on January 23, 2017 and the distribution and combination are expected to be completed in the second quarter of 2017. The distribution and combination are subject to certain conditions, including the SEC declaring the Form 10 registration statement effective, filing and approval of the new company’s listing application, receipt of regulatory approvals and third party consents by each of the Company and JBG, and formal declaration of the distribution by Vornado’s Board of Trustees. The distribution and combination are not subject to a vote by Vornado’s shareholders or Operating Partnership unitholders. Vornado’s Board of Trustees has approved the transaction. JBG has obtained all requisite approvals from its investment funds for this transaction. There can be no assurance that this transaction will be completed.

We currently own all or portions of:

New York:

· 20.2 million square feet of Manhattan office space in 36 properties;

· 2.7 million square feet of Manhattan street retail space in 70 properties;

· 2,004 units in twelve residential properties;

· The 1,700 room Hotel Pennsylvania located on Seventh Avenue at 33rd Street in the heart of the Penn Plaza district;

· A 32.4 % interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns seven properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.3 million square foot Bloomberg, L.P. headquarters building;

Washington, DC:

· 11.1 million square feet of office space in 44 properties;

· 3,156 units in nine residential properties;

Other Real Estate and Related Investments:

· The 3.7 million square foot Mart (“theMART”) in Chicago;

· A 70 % controlling interest in 555 California Street, a three-building office complex in San Francisco’s financial district aggregating 1.8 million square feet, known as the Bank of America Center;

· A 25.0 % interest in Vornado Capital Partners, our real estate fund. We are the general partner and investment manager of the fund;

· A 32.5 % interest in Toys “R” Us, Inc. (“Toys”); and

· Other real estate and other investments.

OBJECTIVES AND STRATEGY

Our business objective is to maximize Vornado shareholder value. We intend to achieve this objective by continuing to pursue our investment philosophy and execute 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, where we believe there is a high likelihood of capital appreciation;

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

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

· developing and redeveloping our existing properties to increase returns and maximize value; and

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

We expect to finance our growth, acquisitions and investments using internally generated funds, proceeds from 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 these securities in the future.

ACQUISITIONS

There were no significant acquisitions during 2016.

DISPOSITIONS

On May 27, 2016, we sold a 47% ownership interest in 7 West 34th Street for net proceeds of $127.4 million.

On August 24, 2016, the Skyline properties, located in Fairfax, Virginia, were placed in receivership. On December 21, 2016, the final disposition of the Skyline properties was completed by the receiver. In connection therewith, the Skyline properties’ assets (approximately $236.5 million) and liabilities (approximately $724.4 million), were removed from our consolidated balance sheet which resulted in a net gain of $487.9 million. There was no taxable income related to this transaction.

On December 19, 2016, we sold a 20% ownership interest in Fairfax Square for $15.5 million.

FINANCINGS

We completed the following financing transactions during 2016:

· $900 million refinancing of 280 Park Avenue (50% owned);

· $700 million refinancing of 770 Broadway for net proceeds of approximately $330 million;

· $675 million refinancing of theMART for net proceeds of approximately $124 million;

· $400 million refinancing of 350 Park Avenue for net proceeds of approximately $111 million;

· $300 million refinancing of One Park Avenue (55% owned);

· $300 million financing of 7 West 34th Street (53% owned as of May 27, 2016);

· $273 million refinancing of The Warner Building (55% owned);

· $ 80 million refinancing of 50-70 West 93rd Street (49.9% owned); and

· $247 million redemption of all of the outstanding 6.875% Series J cumulative redeemable preferred shares

We also extended one of our two $1.25 billion unsecured revolving credit facilities to February 2021 with two six-month extension options, lowering the interest rate from LIBOR plus 115 basis points to LIBOR plus 100 basis points. The facility fee remains unchanged at 20 basis points.

DEVELOPMENT AND REDEVELOPMENT EXPENDITURES

We are constructing a residential condominium tower containing 397,000 salable square feet on our 220 Central Park South development site. The incremental development cost of this project is estimated to be approximately $1.3 billion, of which $609,420,000 has been expended as of December 31, 2016.

We are developing a 173,000 square foot Class-A office building at 512 West 22nd Street, along the western edge of the High Line in the West Chelsea submarket of Manhattan (55.0% owned). The incremental development cost of this project is estimated to be approximately $130,000,000, of which our share is $72,000,000. As of December 31, 2016, $30,143,000 has been expended, of which our share is $16,579,000.

We are developing a 170,000 square foot office and retail building at 61 Ninth Avenue, located on the southwest corner of Ninth Avenue and 15th Street in the West Chelsea submarket of Manhattan. In February 2016, the venture purchased an adjacent five story loft building and air rights in exchange for a 10% common and preferred equity interest in the venture valued at $19,400,000, which reduced our ownership interest to 45.1% from 50.1%. On December 21, 2016, the venture obtained a $90,000,000 construction loan. The loan matures in December 2020 with two six-month extension options. The interest rate is LIBOR plus 3.05%. As of December 31, 2016, there was nothing drawn on this loan. The incremental development cost of this project is estimated to be approximately $150,000,000, of which our share is $68,000,000. As of December 31, 2016, $38,499,000 has been expended, of which our share is $17,363,000.

We are developing a 34,000 square foot office and retail building at 606 Broadway, located on the northeast corner of Broadway and Houston Street in Manhattan (50.0% owned). At closing, the joint venture obtained a $65,000,000 construction loan, of which approximately $25,800,000 was outstanding as of December 31, 2016. The loan, which bears interest at LIBOR plus 3.00% (3.66% at December 31, 2016), matures in May 2019 with two one-year extension options. The venture’s incremental development cost of this project is estimated to be approximately $60,000,000, of which our share is $30,000,000. As of December 31, 2016 , $20,833,000 has been expended, of which our share is $10,417,000.

We are in the process of demolishing two adjacent Washington, DC office properties, 1726 M Street and 1150 17th Street, and will replace them in the future with a new 335,000 square foot Class A office building, to be addressed 1700 M Street. The incremental development cost of the project is estimated to be approximately $170,000,000, of which $10,500,000 has been expended as of December 31, 2016.

In September 2016, a joint venture between the Related Companies and Vornado was designated by New York State to redevelop the historic Farley Post Office building. The building will include a new Moynihan Train Hall and approximately 850,000 rentable square feet of office space and ancillary train hall retail. The joint venture will enter into a 99-year, triple-net lease and make a $230,000,000 contribution towards the construction of the train hall. Total costs for the redevelopment of the office and retail space are yet to be determined.

We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan, including, in particular, the Penn Plaza District.

There can be no assurance that any of our development or redevelopment projects will commence, or if commenced, be completed, or completed on schedule or within budget.

SEGMENT DATA

We operate in the following business segments: New York and Washington, DC. Financial information related to these business segments for the years ended December 31, 2016, 2015 and 2014 is set forth in Note 23 – Segment Information to our consolidated financial statements in this Annual Report on Form 10-K.

SEASONALITY

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 New York and Washington, DC segments have historically experienced higher utility costs in the first and third quarters of the year.

tenants ACCOUNTING FOR over 10% of revenues

None of our tenants accounted for more than 10% of total revenues in any of the years ended December 31, 2016, 2015 and 2014 .

Certain Activities

We do not base our acquisitions and investments on specific allocations by type of property. We have historically held our properties for long‑term investment; however, it is possible that properties in our portfolio may be sold when circumstances warrant. Further, we have not adopted a policy that limits the amount or percentage of assets which could be invested in a specific property or property type. While we may seek the vote of our shareholders in connection with any particular material transaction, generally our activities are reviewed and may be modified from time to time by Vornado’s Board of Trustees without the vote of our shareholders or Operating Partnership unitholders.

Employees

As of December 31, 2016, we have approximately 4,225 employees, of which 284 are corporate staff. The New York segment has 3,265 employees, including 2,634 employees of Building Maintenance Services LLC, a wholly owned subsidiary, which provides cleaning, security and engineering services primarily to our New York and Washington, DC properties and 459 employees at the Hotel Pennsylvania. The Washington, DC segment and theMART properties have 456 and 220 employees, respectively. The foregoing does not include employees of partially owned entities.

principal executive offices

Our principal executive offices are located at 888 Seventh Avenue, New York, New York 10019; telephone (212) 894‑7000.

MATERIALS AVAILABLE ON OUR WEBSITE

Copies of our Annual Report on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K, and amendments to those reports, as well as Reports on Forms 3, 4 and 5 regarding officers, trustees or 10% beneficial owners, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934 are available free of charge through our website (www.vno.com) as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission. Also available on our website are copies of our Audit Committee Charter, Compensation Committee Charter, Corporate Governance and Nominating Committee Charter, Code of Business Conduct and Ethics and Corporate Governance Guidelines. In the event of any changes to these charters or the code or guidelines, changed copies will also be made available on our website. Copies of these documents are also available directly from us free of charge. Our website also includes other financial information, including certain non-GAAP financial measures, none of which is a part of this Annual Report on Form 10-K. Copies of our filings under the Securities Exchange Act of 1934 are also available free of charge from us, upon request.

ITEM 1A. RISK FACTORS

Material factors that may adversely affect our business, operations and financial condition are summarized below. We refer to the equity and debt securities of both Vornado and the Operating Partnership as our “securities” and the investors who own shares or units, or both, as our “equity holders.” The risks and uncertainties described herein may not be the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. See “Forward-Looking Statements” contained herein on page 6.

Real Estate Investments’ Value and Income Fluctuate Due to Various Factors.

The value of real estate fluctuates depending on conditions in the general economy and the real estate business. These conditions may also adversely impact our revenues and cash flows.

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

· global, national, regional and local economic conditions;

· competition from other available space;

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

· how well we manage our properties;

· the development and/or redevelopment of our properties;

· changes in market rental rates;

· the timing and costs associated with property improvements and rentals;

· whether we are able to pass all or portions of any increases in operating costs through to tenants;

· changes in real estate taxes and other expenses;

· whether tenants and users such as customers and shoppers consider a property attractive;

· changes in space utilization by our tenants due to technology, economic conditions and business environment;

· the financial condition of our tenants, including the extent of tenant bankruptcies or defaults;

· availability of financing on acceptable terms or at all;

· inflation or deflation;

· fluctuations in interest rates;

· our ability to obtain adequate insurance;

· changes in zoning laws and taxation;

· government regulation;

· consequences of any armed conflict involving, or terrorist attacks against, the United States or individual acts of violence in public spaces including retail centers;

· potential liability under environmental or other laws or regulations;

· natural disasters;

· general competitive factors; and

· climate changes.

The rents or sales proceeds we receive and the occupancy levels at our properties may decline as a result of adverse changes in any of these factors. If rental revenues, sales proceeds and/or occupancy levels decline, we generally would expect to have less cash available to pay indebtedness and for distribution to equity holders. In addition, some of our major expenses, including mortgage payments, real estate taxes and maintenance costs generally do not decline when the related rents decline.

Capital markets and economic conditions can materially affect our liquidity, financial condition and results of operations as well as the value of our debt and equity securities.

There are many factors that can affect the value of our debt and equity securities, including the state of the capital markets and the economy. Demand for office and retail space may decline nationwide, as it did in 2008 and 2009 due to the economic downturn, bankruptcies, downsizing, layoffs and cost cutting. Government action or inaction may adversely affect the state of the capital markets. The cost and availability of credit may be adversely affected by illiquid credit markets and wider credit spreads, which may adversely affect our liquidity and financial condition, including our results of operations, and the liquidity and financial condition of our tenants. Our inability or the inability of our tenants to timely refinance maturing liabilities and access the capital markets to meet liquidity needs may materially affect our financial condition and results of operations and the value of our securities.

Real estate is a competitive business.

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, sales prices, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the global, national, regional and local economies, the financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends.

We depend on leasing space to tenants on economically favorable terms and collecting rent from tenants who may not be able to pay.

Our financial results depend significantly on leasing space in our properties to tenants on economically favorable terms. In addition, because a majority of our income comes from renting of real property, our income, funds available to pay indebtedness and funds available for distribution to equity holders will decrease if a significant number of our tenants cannot pay their rent or if we are not able to maintain occupancy levels on favorable terms. If a tenant does not pay its rent, we may not be able to enforce our rights as landlord without delays and may incur substantial legal costs. During periods of economic adversity, there may be an increase in the number of tenants that cannot pay their rent and an increase in vacancy rates.

We may be unable to renew leases or relet space as leases expire.

When our tenants decide not to renew their leases upon their expiration, we may not be able to relet the space. Even if tenants do renew or we can relet the space, the terms of renewal or reletting, taking into account among other things, the cost of improvements to the property and leasing commissions, may be less favorable than the terms in the expired leases. In addition, changes in space utilization by our tenants may impact our ability to renew or relet space without the need to incur substantial costs in renovating or redesigning the internal configuration of the relevant property. If we are unable to promptly renew the leases or relet the space at similar rates or if we incur substantial costs in renewing or reletting the space, our cash flow and ability to service debt obligations and pay dividends and distributions to equity holders could be adversely affected.

Bankruptcy or insolvency of tenants may decrease our revenue, net income and available cash.

From time to time, some of our tenants have declared bankruptcy, and other tenants may declare bankruptcy or become insolvent in the future. The bankruptcy or insolvency of a major tenant could cause us to suffer lower revenues and operational difficulties, including leasing the remainder of the property. As a result, the bankruptcy or insolvency of a major tenant could result in decreased revenue, net income and funds available to pay our indebtedness or make distributions to equity holders.

We may incur significant costs to comply with environmental laws and environmental contamination may impair our ability to lease and/or sell real estate.

Our operations and properties are subject to various federal, state and local laws and regulations concerning the protection of the environment, including air and water quality, hazardous or toxic substances and health and safety. Under some environmental laws, a current or previous owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances released at a property. The owner or operator may also be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred by those parties because of the contamination. These laws often impose liability without regard to whether the owner or operator knew of the release of the substances or caused the release. The presence of contamination or the failure to remediate contamination may impair our ability to sell or lease real estate or to borrow using the real estate as collateral. Other laws and regulations govern indoor and outdoor air quality including those that can require the abatement or removal of asbestos-containing materials in the event of damage, demolition, renovation or remodeling and also govern emissions of and exposure to asbestos fibers in the air. The maintenance and removal of lead paint and certain electrical equipment containing polychlorinated biphenyls (PCBs) are also regulated by federal and state laws. We are also subject to risks associated with human exposure to chemical or biological contaminants such as molds, pollens, viruses and bacteria which, above certain levels, can be alleged to be connected to allergic or other health effects and symptoms in susceptible individuals. Our predecessor companies may be subject to similar liabilities for activities of those companies in the past. We could incur fines for environmental compliance and be held liable for the costs of remedial action with respect to the foregoing regulated substances or related claims arising out of environmental contamination or human exposure to contamination at or from our properties.

Each of our properties has been subject to varying degrees of environmental assessment. To date, these environmental assessments have not revealed any environmental condition material to our business. However, identification of new compliance concerns or undiscovered areas of contamination, changes in the extent or known scope of contamination, human exposure to contamination or changes in clean-up or compliance requirements could result in significant costs to us.

In addition, we may become subject to costs or taxes, or increases therein, associated with natural resource or energy usage (such as a “carbon tax”). These costs or taxes could increase our operating costs and decrease the cash available to pay our obligations or distribute to equity holders.

We face risks associated with our tenants being designated “Prohibited Persons” by the Office of Foreign Assets Control and similar requirements.

Pursuant to Executive Order 13224 and other laws, the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”) maintains a list of persons designated as terrorists or who are otherwise blocked or banned (“Prohibited Persons”) from conducting business or engaging in transactions in the United States and thereby restricts our doing business with such persons. In addition, our leases, loans and other agreements may require us to comply with OFAC and related requirements, and any failure to do so may result in a breach of such agreements . If a tenant or other party with whom we conduct business is placed on the OFAC list or is otherwise a party with whom we are prohibited from doing business, we may be required to terminate the lease or other agreement. Any such termination could result in a loss of revenue or otherwise negatively affect our financial results and cash flows.

Our business and operations would suffer in the event of system failures.

Despite system redundancy, the implementation of security measures and the existence of a disaster recovery plan for our internal information technology systems, our systems are vulnerable to damages from any number of sources, including computer viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures. Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business. We may also incur additional costs to remedy damages caused by such disruptions.

The occurrence of cyber incidents, or a deficiency in our cyber security, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships or reputation, all of which could negatively impact our financial results.

We face risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to e-mails, persons who access our systems from inside or outside our organization, and other significant disruptions of our IT networks and related systems. The risk of a security breach or disruption, particularly through cyber attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations (including managing our building systems) and, in some cases, may be critical to the operations of certain of our tenants. Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed to not be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.

A security breach or other significant disruption involving our IT networks and related systems could disrupt the proper functioning of our networks and systems and therefore our operations and/or those of certain of our tenants; result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us or which could expose us to damage claims by third-parties for disruptive, destructive or otherwise harmful purposes and outcomes; result in our inability to maintain the building systems relied upon by our tenants for the efficient use of their leased space; require significant management attention and resources to remedy any damages that result; subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements; or damage our reputation among our tenants and investors generally. Any or all of the foregoing could have a material adverse effect on our results of operations, financial condition and cash flows.

Some of our potential losses may not be covered by insurance.

We maintain general liability insurance with limits of $300,000,000 per occurrence and per property, and all risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake. Our California properties have earthquake insurance with coverage of $180,000,000 per occurrence and in the annual aggregate, subject to a deductible in the amount of 5% of the value of the affected property. We maintain coverage for terrorism acts with limits of $4.0 billion per occurrence and in the aggregate, and $2.0 billion per occurrence and in the aggregate for terrorism involving nuclear, biological, chemical and radiological (“NBCR”) terrorism events, as defined by Terrorism Risk Insurance Program Reauthorization Act of 2015, which expires in December 2020.

Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a portion of all risk property and rental value insurance and a portion of our earthquake insurance coverage, and as a direct insurer for coverage for acts of terrorism including NBCR acts. 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. For NBCR acts, PPIC is responsible for a deductible of $1,622,000 ($1,976,000 for 2017) and 16% (17% for 2017) of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss. We are ultimately responsible for any loss incurred 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 the future.

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

Compliance or failure to comply with the Americans with Disabilities Act or other safety regulations and requirements could result in substantial costs.

The Americans with Disabilities Act (“ADA”) generally requires that public buildings, including our properties, meet certain federal requirements related to access and use by disabled persons. Noncompliance could result in the imposition of fines by the federal government or the award of damages to private litigants and/or legal fees to their counsel. From time to time persons have asserted claims against us with respect to some of our properties under the ADA, but to date such claims have not resulted in any material expense or liability. If, under the ADA, we are required to make substantial alterations and capital expenditures in one or more of our properties, including the removal of access barriers, it could adversely affect our financial condition and results of operations, as well as the amount of cash available for distribution to equity holders.

Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements. If we fail to comply with these requirements, we could incur fines or private damage awards. We do not know whether existing requirements will change or whether compliance with future requirements will require significant unanticipated expenditures that will affect our cash flow and results of operations.

OUR INVESTMENTS ARE CONCENTRATED CURRENTLY IN THE NEW YORK CITY METROPOLITAN AREA AND WASHINGTON, DC/NORTHERN VIRGINIA AREA AND CIRCUMSTANCES AFFECTING THESE AREAS GENERALLY COULD ADVERSELY AFFECT OUR BUSINESS. UPON COMPLETION OF OUR PROPOSED SPIN-OFF OF OUR WASHINGTON, DC SEGMENT, OUR BUSINESS AND INVESTMENTS WILL BE LESS DIVERSIFIED AND MORE CONCENTRATED IN THE NEW YORK CITY METROPOLITAN AREA.

A significant portion of our properties are located currently in the New York City/New Jersey metropolitan area and Washington, DC/Northern Virginia area and are affected by the economic cycles and risks inherent to those areas.

In 2016, approximately 91% of our EBITDA, as adjusted, came from properties located in the New York City metropolitan area and the Washington, DC/Northern Virginia area. We may continue to concentrate a significant portion of our future acquisitions in these areas or in other geographic real estate markets in the United States or abroad. Real estate markets are subject to economic downturns and we cannot predict how economic conditions will impact these markets in either the short or long term. Declines in the economy or declines in real estate markets in these areas could hurt our financial performance and the value of our properties. In addition to the factors affecting the national economic condition generally, the factors affecting economic conditions in these regions include:

· financial performance and productivity of the media, advertising, financial, technology, retail, insurance and real estate industries;

· with respect to our Washington, DC segment, space needs of, and budgetary constraints affecting, the United States Government, including the effect of a deficit reduction plan and/or base closures and repositioning under the Defense Base Closure and Realignment Act of 2005, as amended;

· business layoffs or downsizing;

· industry slowdowns;

· relocations of businesses;

· changing demographics;

· increased telecommuting and use of alternative work places;

· changes in the number of domestic and international tourists to our markets (including, as a result of changes in the relative strengths of world currencies);

· infrastructure quality; and

· any oversupply of, or reduced demand for, real estate.

Assuming we complete the spin-off of our Washington, DC segment as expected, our real estate investments will be more concentrated in New York City and less diversified than prior to the spin-off. After giving effect to the spin-off and assuming it was completed as of January 1, 2016, 89% of our EBITDA, as adjusted, came from properties located in the New York City metropolitan area.

It is impossible for us to assess the future effects of trends in the economic and investment climates of the geographic areas in which we concentrate, and more generally of the United States, or the real estate markets in these areas. Local, national or global economic downturns, would negatively affect our businesses and profitability.

Terrorist attacks, such as those of September 11, 2001 in New York City and the Washington, DC area, may adversely affect the value of our properties and our ability to generate cash flow.

We have significant investments in large metropolitan areas, including the New York, Washington, DC, Chicago and San Francisco metropolitan areas. In response to a terrorist attack or the perceived threat of terrorism, tenants in these areas may choose to relocate their businesses to less populated, lower-profile areas of the United States that may be perceived to be less likely targets of future terrorist activity and fewer customers may choose to patronize businesses in these areas. This, in turn, would trigger a decrease in the demand for space in these areas, which could increase vacancies in our properties and force us to lease space on less favorable terms. As a result, the value of our properties and the level of our revenues and cash flows could decline materially.

Natural disasters and the effects of climate change could have a concentrated impact on the areas where we operate and could adversely impact our results.

Our investments are concentrated in the New York, Washington, DC, Chicago and San Francisco metropolitan areas. Natural disasters, including earthquakes, storms and hurricanes, could impact our properties in these and other areas in which we operate. Potentially adverse consequences of “global warming” could similarly have an impact on our properties. As a result, we could become subject to significant losses and/or repair costs that may or may not be fully covered by insurance and to the risk of business interruption. The incurrence of these losses, costs or business interruptions may adversely affect our operating and financial results.

We May Acquire or Sell Assets or Entities or Develop Properties. Our Failure or Inability to Consummate These Transactions or Manage the Results of These Transactions Could Adversely Affect Our Operations and Financial Results.

We may acquire, develop or redevelop real estate and acquire related companies and this may create risks.

We may acquire, develop or redevelop properties or acquire real estate related companies when we believe doing so is consistent with our business strategy. We may not succeed in (i) developing, redeveloping or acquiring real estate and real estate related companies; (ii) completing these activities on time or within budget; and (iii) leasing or selling developed, redeveloped or acquired properties at amounts sufficient to cover our costs. Competition in these activities could also significantly increase our costs. Difficulties in integrating acquisitions may prove costly or time-consuming and could divert management’s attention. Acquisitions or developments in new markets or industries where we do not have the same level of market knowledge may result in weaker than anticipated performance. We may also abandon acquisition or development opportunities that we have begun pursuing and consequently fail to recover expenses already incurred. Furthermore, we may be exposed to the liabilities of properties or companies acquired, some of which we may not be aware of at the time of acquisition.

From time to time we have made, and in the future we may seek to make, one or more material acquisitions. The announcement of such a material acquisition may result in a rapid and significant decline in the price of our securities.

We are continuously looking at material transactions that we believe will maximize shareholder value. However, an announcement by us of one or more significant acquisitions could result in a quick and significant decline in the price of our securities.

It may be difficult to buy and sell real estate quickly, which may limit our flexibility.

Real estate investments are relatively difficult to buy and sell quickly. Consequently, we may have limited ability to vary our portfolio promptly in response to changes in economic or other conditions.

We may not be permitted to dispose of certain properties or pay down the debt associated with those properties when we might otherwise desire to do so without incurring additional costs. In addition, when we dispose of or sell assets, we may not be able to reinvest the sales proceeds and earn similar returns.

As part of an acquisition of a property, or a portfolio of properties, we may agree, and in the past have agreed, not to dispose of the acquired properties or reduce the mortgage indebtedness for a long-term period, unless we pay certain of the resulting tax costs of the seller. These agreements could result in us holding on to properties that we would otherwise sell and not pay down or refinance. In addition, when we dispose of or sell assets, we may not be able to reinvest the sales proceeds and earn returns similar to those generated by the assets that were sold.

From time to time we have made, and in the future we may seek to make, investments in companies over which we do not have sole control. Some of these companies operate in industries with different risks than investing and operating real estate.

From time to time we have made, and in the future we may seek to make, investments in companies that we may not control, including, but not limited to, Alexander’s, Inc. (“Alexander’s”), Toys “R” Us, Inc. (“Toys”), Lexington Realty Trust (“Lexington”), Urban Edge Properties (“UE”), Pennsylvania Real Estate Investment Trust (“PREIT”), and other equity and loan investments. Although these businesses generally have a significant real estate component, some of them operate in businesses that are different from investing and operating real estate, including operating or managing toy stores. Consequently, we are subject to operating and financial risks of those industries and to the risks associated with lack of control, such as having differing objectives than our partners or the entities in which we invest, or becoming involved in disputes, or competing directly or indirectly with these partners or entities. In addition, we rely on the internal controls and financial reporting controls of these entities and their failure to maintain effectiveness or comply with applicable standards may adversely affect us.

We are subject to risks that affect the general and New York City retail environments.

Certain of our properties are Manhattan street retail properties. As such, these properties are affected by the general and New York City retail environments, including the level of consumer spending and consumer confidence, change in relative strengths of world currencies, the threat of terrorism, increasing competition from retailers, outlet malls, retail websites and catalog companies and the impact of technological change upon the retail environment generally. These factors could adversely affect the financial condition of our retail tenants and the willingness of retailers to lease space in our retail locations, and in turn, adversely affect us.

Our investment in Toys has in the past and may in the future result in increased seasonality and volatility in our reported earnings.

We carry our Toys investment at zero. As a result, we no longer record our equity in Toys' income or loss. Because Toys is a retailer, its operations subject us to the risks of a retail company that are different than those presented by our other lines of business. The business of Toys is highly seasonal and substantially all of Toys net income is generated in its fourth quarter. It is possible that the value of Toys may increase and we could again resume recording our equity in Toys' income or loss, which would increase the seasonality and volatility of our reported earnings.

Our decision to dispose of real estate assets would change the holding period assumption in our valuation analyses, which could result in material impairment losses and adversely affect our financial results.

We evaluate real estate assets for impairment based on the projected cash flow of the asset over our anticipated holding period. If we change our intended holding period, due to our intention to sell or otherwise dispose of an asset, then under accounting principles generally accepted in the United States of America, we must reevaluate whether that asset is impaired. Depending on the carrying value of the property at the time we change our intention and the amount that we estimate we would receive on disposal, we may record an impairment loss that would adversely affect our financial results. This loss could be material to our results of operations in the period that it is recognized.

We invest in marketable equity securities. The value of these investments may decline as a result of operating performance or economic or market conditions.

We invest in marketable equity securities of publicly-traded companies, such as Lexington. As of December 31, 2016, our marketable securities have an aggregate carrying amount of $203,704,000, at market. Significant declines in the value of these investments due to, among other reasons, operating performance or economic or market conditions, may result in the recognition of impairment losses which could be material.

We may be unable to achieve some or all of the benefits that we expect to achieve from the spin-off.

Although we believe that separating our Washington, DC segment will provide benefits to us and our shareholders, the spin-off may not provide such results on the scope or scale we anticipate, and neither we nor JBG SMITH may realize the intended benefits of the spin-off. In addition, we will incur one-time costs in connection with the spin-off that may exceed our estimates and negate some of the benefits we expect to achieve. Further, if the proposed spin-off is completed, our operational and financial profile will change upon the separation of the Washington, DC segment from us. As a result, our diversification of revenue sources will diminish, and our results of operations, cash flows, working capital, and financing requirements may be subject to increased volatility.

Our Organizational and Financial Structure Gives Rise to Operational and Financial Risks.

We may not be able to obtain capital to make investments.

We depend primarily on external financing to fund the growth of our business. This is because one of the requirements of the Internal Revenue Code of 1986, as amended, for a REIT is that it distributes 90% of its taxable income, excluding net capital gains, to its shareholders. This, in turn, requires the Operating Partnership to make distributions to its unitholders. There is a separate requirement to distribute net capital gains or pay a corporate level tax in lieu thereof. Our access to debt or equity financing depends on the willingness of third parties to lend or make equity investments and on conditions in the capital markets generally. Although we believe that we will be able to finance any investments we may wish to make in the foreseeable future, there can be no assurance that new financing will be available or available on acceptable terms. For information about our available sources of funds, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and the notes to the consolidated financial statements in this Annual Report on Form 10-K.

We depend on dividends and distributions from our direct and indirect subsidiaries. The creditors and preferred equity holders of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or distributions to us.

Substantially all of Vornado’s assets are held through its Operating Partnership that holds substantially all of its properties and assets through subsidiaries. The Operating Partnership’s cash flow is dependent on cash distributions to it by its subsidiaries, and in turn, substantially all of Vornado’s cash flow is dependent on cash distributions to it by the Operating Partnership. The creditors of each of Vornado’s direct and indirect subsidiaries are entitled to payment of that subsidiary’s obligations to them, when due and payable, before distributions may be made by that subsidiary to its equity holders. Thus, the Operating Partnership’s ability to make distributions to its equity holders depends on its subsidiaries’ ability first to satisfy their obligations to their creditors and then to make distributions to the Operating Partnership. Likewise, Vornado’s ability to pay dividends to its holders of common and preferred shares depends on the Operating Partnership’s ability first to satisfy its obligations to its creditors and make distributions payable to holders of preferred units and then to make distributions to Vornado.

Furthermore, the holders of preferred units of the Operating Partnership are entitled to receive preferred distributions before payment of distributions to the Operating Partnership’s equity holders, including Vornado. Thus, Vornado’s ability to pay cash dividends to its equity holders and satisfy its debt obligations depends on the Operating Partnership’s ability first to satisfy its obligations to its creditors and make distributions to holders of its preferred units and then to its equity holders, including Vornado. As of December 31, 2016, there were four series of preferred units of the Operating Partnership not held by Vornado with a total liquidation value of $56,047,000.

In addition, Vornado’s participation in any distribution of the assets of any of its direct or indirect subsidiaries upon the liquidation, reorganization or insolvency, is only after the claims of the creditors, including trade creditors and preferred equity holders, are satisfied.

We have a substantial amount of indebtedness that could affect our future operations.

As of December 31, 2016, our consolidated mortgages and unsecured indebtedness, excluding related premium, discount and deferred financing costs, net, totaled $10.7 billion. We are subject to the risks normally associated with debt financing, including the risk that our cash flow from operations will be insufficient to meet required debt service. Our debt service costs generally will not be reduced if developments at the property, such as the entry of new competitors or the loss of major tenants, cause a reduction in the income from the property. Should such events occur, our operations may be adversely affected. If a property is mortgaged to secure payment of indebtedness and income from such property is insufficient to pay that indebtedness, the property could be foreclosed upon by the mortgagee resulting in a loss of income and a decline in our total asset value.

We have outstanding debt, and the amount of debt and its cost may increase and refinancing may not be available on acceptable terms.

We rely on both secured and unsecured, variable rate and non-variable rate debt to finance acquisitions and development activities and for working capital. If we are unable to obtain debt financing or refinance existing indebtedness upon maturity, our financial condition and results of operations would likely be adversely affected. In addition, the cost of our existing debt may increase, especially in the case of a rising interest rate environment, and we may not be able to refinance our existing debt in sufficient amounts or on acceptable terms. If the cost or amount of our indebtedness increases or we cannot refinance our debt in sufficient amounts or on acceptable terms, we are at risk of credit ratings downgrades and default on our obligations that could adversely affect our financial condition and results of operations.

Covenants in our debt instruments could adversely affect our financial condition and our acquisitions and development activities.

The mortgages on our properties contain customary covenants such as those that limit our ability, without the prior consent of the lender, to further mortgage the applicable property or to discontinue insurance coverage. Our unsecured indebtedness and debt that we may obtain in the future may contain customary restrictions, requirements and other limitations on our ability to incur indebtedness, including covenants that limit our ability to incur debt based upon the level of our ratio of total debt to total assets, our ratio of secured debt to total assets, our ratio of EBITDA to interest expense, and fixed charges, and that require us to maintain a certain level of unencumbered assets to unsecured debt. Our ability to borrow is subject to compliance with these and other covenants. In addition, failure to comply with our covenants could cause a default under the applicable debt instrument, and we may then be required to repay such debt with capital from other sources or give possession of a secured property to the lender. Under those circumstances, other sources of capital may not be available to us, or may be available only on unattractive terms.

A downgrade in our credit ratings could materially adversely affect our business and financial condition.

Our credit rating and the credit ratings assigned to our debt securities and our preferred shares could change based upon, among other things, our results of operations and financial condition. These ratings are subject to ongoing evaluation by credit rating agencies, and any rating could be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant such action. Moreover, these credit ratings are not recommendations to buy, sell or hold our common shares or any other securities. If any of the credit rating agencies that have rated our securities downgrades or lowers its credit rating, or if any credit rating agency indicates that it has placed any such rating on a “watch list” for a possible downgrading or lowering, or otherwise indicates that its outlook for that rating is negative, such action could have a material adverse effect on our costs and availability of funding, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows, the trading/redemption price of our securities, and our ability to satisfy our debt service obligations and to pay dividends and distributions to our equity holders.

Vornado may fail to qualify or remain qualified as a REIT and may be required to pay income taxes at corporate rates.

Although we believe that Vornado will remain organized and will continue to operate so as to qualify as a REIT for federal income tax purposes, Vornado may fail to remain so qualified. Qualifications are governed by highly technical and complex provisions of the Internal Revenue Code for which there are only limited judicial or administrative interpretations and depend on various facts and circumstances that are not entirely within our control. In addition, legislation, new regulations, administrative interpretations or court decisions may significantly change the relevant tax laws and/or the federal income tax consequences of qualifying as a REIT. If, with respect to any taxable year, Vornado fails to maintain its qualification as a REIT and does not qualify under statutory relief provisions, Vornado could not deduct distributions to shareholders in computing our taxable income and would have to pay federal income tax on its taxable income at regular corporate rates. The federal income tax payable would include any applicable alternative minimum tax. If Vornado had to pay federal income tax, the amount of money available to distribute to equity holders and pay its indebtedness would be reduced for the year or years involved, and Vornado would not be required to make distributions to shareholders in that taxable year and in future years until it was able to qualify as a REIT. In addition, Vornado would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost, unless Vornado were entitled to relief under the relevant statutory provisions.

We face possible adverse changes in tax laws, which may result in an increase in our tax liability.

From time to time changes in state and local tax laws or regulations are enacted, which may result in an increase in our tax liability. The shortfall in tax revenues for states and municipalities in recent years may lead to an increase in the frequency and size of such changes. If such changes occur, we may be required to pay additional taxes on our assets or income. These increased tax costs could adversely affect our financial condition and results of operations and the amount of cash available for payment of dividends and distributions.

Loss of our key personnel could harm our operations and adversely affect the value of our common shares and Operating Partnership Class A units.

We are dependent on the efforts of Steven Roth, the Chairman of the Board of Trustees and Chief Executive Officer of Vornado. While we believe that we could find a replacement for him and other key personnel, the loss of their services could harm our operations and adversely affect the value of our securities.

Vornado’s charter documents and applicable law may hinder any attempt to acquire us.

Vornado’s Amended and Restated Declaration of Trust (the “declaration of trust”) sets limits on the ownership of its shares.

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

The Maryland General Corporation Law (the “MGCL”) contains provisions that may reduce the likelihood of certain takeover transactions.

The MGCL imposes conditions and restrictions on certain “business combinations” (including, among other transactions, a merger, consolidation, share exchange, or, in certain circumstances, an asset transfer or issuance of equity securities) between a Maryland REIT and certain persons who beneficially own at least 10% of the corporation’s stock (an “interested shareholder”). Unless approved in advance by the board of trustees of the trust, or otherwise exempted by the statute, such a business combination is prohibited for a period of five years after the most recent date on which the interested shareholder became an interested shareholder. After such five-year period, a business combination with an interested shareholder must be: (a) recommended by the board of trustees of the trust, and (b) approved by the affirmative vote of at least (i) 80% of the trust’s outstanding shares entitled to vote and (ii) two-thirds of the trust’s outstanding shares entitled to vote which are not held by the interested shareholder with whom the business combination is to be effected, unless, among other things, the trust’s common shareholders receive a “fair price” (as defined by the statute) for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for his or her shares.

In approving a transaction, Vornado’s Board of Trustees may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the Board of Trustees. Vornado’s Board of Trustees has adopted a resolution exempting any business combination between Vornado and any trustee or officer of Vornado or its affiliates. As a result, any trustee or officer of Vornado or its affiliates may be able to enter into business combinations with Vornado that may not be in the best interest of our equity holders. With respect to business combinations with other persons, the business combination provisions of the MGCL may have the effect of delaying, deferring or preventing a change in control of Vornado or other transaction that might involve a premium price or otherwise be in the best interest of our equity holders. The business combination statute may discourage others from trying to acquire control of Vornado and increase the difficulty of consummating any offer.

Until 2019, Vornado has a classified Board of Trustees and that may reduce the likelihood of certain takeover transactions.

Vornado’s Board of Trustees is divided currently into three classes of trustees. Commencing this year, each class of trustees that is up for election will be elected for a one-year term with all trustees forming a single class elected annually commencing in 2019. Historically trustees of each class have been chosen for three-year staggered terms. Staggered terms of trustees may reduce the possibility of a tender offer or an attempt to change control of Vornado, even though a tender offer or change in control might be in the best interest of our equity holders.

Vornado may issue additional shares in a manner that could adversely affect the likelihood of certain takeover transactions.

Vornado’s declaration of trust authorizes the Board of Trustees to:

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

· classify or reclassify, in one or more series, any unissued preferred shares;

· set the preferences, rights and other terms of any classified or reclassified shares that Vornado issues; and

· increase, without shareholder approval, the number of shares of beneficial interest that Vornado may issue.

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

We may change our policies without obtaining the approval of our equity holders.

Our operating and financial policies, including our policies with respect to acquisitions of real estate or other companies, growth, operations, indebtedness, capitalization, dividends and distributions, are exclusively determined by Vornado’s Board of Trustees. Accordingly, our equity holders do not control these policies.

Our Ownership Structure and Related-Party Transactions May Give Rise to Conflicts of Interest.

Steven Roth and Interstate Properties may exercise substantial influence over us. They and some of Vornado’s other trustees and officers have interests or positions in other entities that may compete with us.

As of December 31, 2016, Interstate Properties, a New Jersey general partnership, and its partners owned an aggregate of approximately 7.1% of the common shares of Vornado and 26.3% of the common stock of Alexander’s, which is described below. Steven Roth, David Mandelbaum and Russell B. Wight, Jr. are the three partners of Interstate Properties. Mr. Roth is the Chairman of the Board of Trustees and Chief Executive Officer of Vornado, the managing general partner of Interstate Properties, and the Chairman of the Board of Directors and Chief Executive Officer of Alexander’s. Messrs. Wight and Mandelbaum are Trustees of Vornado and also Directors of Alexander’s.

Because of these overlapping interests, Mr. Roth and Interstate Properties and its partners may have substantial influence over Vornado, and therefore over the Operating Partnership, and on the outcome of any matters submitted to Vornado’s shareholders for approval. In addition, certain decisions concerning our operations or financial structure may present conflicts of interest among Messrs. Roth, Mandelbaum and Wight and Interstate Properties and our other equity holders. In addition, Mr. Roth, Interstate Properties and its partners, and Alexander’s currently and may in the future engage in a wide variety of activities in the real estate business which may result in conflicts of interest with respect to matters affecting us, such as which of these entities or persons, if any, may take advantage of potential business opportunities, the business focus of these entities, the types of properties and geographic locations in which these entities make investments, potential competition between business activities conducted, or sought to be conducted, competition for properties and tenants, possible corporate transactions such as acquisitions and other strategic decisions affecting the future of these entities.

We manage and lease the real estate assets of Interstate Properties under a management agreement for which we receive an annual fee equal to 4% of annual base rent and percentage rent. See Note 21 – Related Party Transactions to our consolidated financial statements in this Annual Report on Form 10-K for additional information.

There may be conflicts of interest between Alexander’s and us.

As of December 31, 2016, we owned 32.4% of the outstanding common stock of Alexander’s. Alexander’s is a REIT that has seven properties, which are located in the greater New York metropolitan area. In addition to the 2.3% that they indirectly own through Vornado, Interstate Properties, which is described above, and its partners owned 26.3% of the outstanding common stock of Alexander’s as of December 31, 2016. Mr. Roth is the Chairman of the Board of Trustees and Chief Executive Office of Vornado, the managing general partner of Interstate Properties, and the Chairman of the Board of Directors and Chief Executive Officer of Alexander’s. Messrs. Wight and Mandelbaum are Trustees of Vornado and also Directors of Alexander’s and general partners of Interstate Properties. Dr. Richard West is a Trustee of Vornado and a Director of Alexander’s. In addition, Joseph Macnow, our Executive Vice President – Finance and Chief Administrative Officer, is the Executive Vice President and Chief Financial Officer of Alexander’s, and Stephen W. Theriot, our Chief Financial Officer, is the Assistant Treasurer of Alexander’s.

We manage, develop and lease Alexander’s properties under management and development agreements and leasing agreements under which we receive annual fees from Alexander’s. See Note 21 – Related Party Transactions to our consolidated financial statements in this Annual Report on Form 10-K for additional information.

The Number of Shares of Vornado Realty Trust and the Market for Those Shares Give Rise to Various Risks.

The trading price of Vornado’s common shares has been volatile and may fluctuate.

The trading price of Vornado’s common shares has been volatile and may continue to fluctuate widely as a result of a number of factors, many of which are outside our control. In addition, the stock market is subject to fluctuations in the share prices and trading volumes that affect the market prices of the shares of many companies. These broad market fluctuations have in the past and may in the future adversely affect the market price of Vornado’s common shares and the redemption price of the Operating Partnership’s Class A units. Among those factors are:

· our financial condition and performance;

· the financial condition of our tenants, including the extent of tenant bankruptcies or defaults;

· actual or anticipated quarterly fluctuations in our operating results and financial condition;

· our dividend policy;

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

· uncertainty and volatility in the equity and credit markets;

· fluctuations in interest rates;

· changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs;

· failure to meet analysts’ revenue or earnings estimates;

· speculation in the press or investment community;

· strategic actions by us or our competitors, such as acquisitions or restructurings;

· the extent of institutional investor interest in us;

· the extent of short-selling of Vornado common shares and the shares of our competitors;

· fluctuations in the stock price and operating results of our competitors;

· general financial and economic market conditions and, in particular, developments related to market conditions for REITs and other real estate related companies;

· domestic and international economic factors unrelated to our performance; and

· all other risk factors addressed elsewhere in this Annual Report on the Form 10-K.

A significant decline in Vornado’s stock price could result in substantial losses for our equity holders.

Vornado has many shares available for future sale, which could hurt the market price of its shares and the redemption price of the Operating Partnership’s units.

The interests of equity holders could be diluted if we issue additional equity securities. As of December 31, 2016, Vornado had authorized but unissued, 60,899,124 common shares of beneficial interest, $.04 par value and 67,116,023 preferred shares of beneficial interest, no par value; of which 19,538,084 common shares are reserved for issuance upon redemption of Class A Operating Partnership units, convertible securities and employee stock options and 11,200,000 preferred shares are reserved for issuance upon redemption of preferred Operating Partnership units. Any shares not reserved may be issued from time to time in public or private offerings or in connection with acquisitions. In addition, common and preferred shares reserved may be sold upon issuance in the public market after registration under the Securities Act or under Rule 144 under the Securities Act or other available exemptions from registration. We cannot predict the effect that future sales of Vornado’s common and preferred shares or Operating Partnership Class A and preferred units will have on the market prices of our securities.

In addition, under Maryland law, Vornado’s Board of Trustees has the authority to increase the number of authorized shares without shareholder approval.

Item 1b. unresolved staff comments

There are no unresolved comments from the staff of the Securities Exchange Commission as of the date of this Annual Report on Form 10-K.

Item 2. Properties

We operate in two business segments: New York and Washington, DC . The following pages provide details of our real estate properties as of December 31, 2016.


						Square Feet
							Under
							Development
							or Not
NEW YORK SEGMENT		%		%			Available	Total
Property		Ownership	Type	Occupancy		In Service	for Lease	Property
One Penn Plaza (ground leased through 2098)		100.0%	Office/Retail	92.7%		2,522,000	-	2,522,000
1290 Avenue of the Americas		70.0%	Office/Retail	99.5%		2,110,000	-	2,110,000
Two Penn Plaza		100.0%	Office/Retail	98.9%		1,631,000	-	1,631,000
666 Fifth Avenue Office Condominium ⁽¹⁾		49.5%	Office/Retail	n/a		-	1,448,000	1,448,000
909 Third Avenue (ground leased through 2063)		100.0%	Office	100.0%		1,346,000	-	1,346,000
Independence Plaza, Tribeca
	(3 buildings) (1,327 units) ⁽¹⁾	50.1%	Retail/Residential	100.0%	⁽²⁾	1,245,000	12,000	1,257,000
280 Park Avenue ⁽¹⁾		50.0%	Office/Retail	92.3%		1,249,000	-	1,249,000
770 Broadway		100.0%	Office/Retail	98.3%		1,158,000	-	1,158,000
Eleven Penn Plaza		100.0%	Office/Retail	99.1%		1,151,000	-	1,151,000
90 Park Avenue		100.0%	Office/Retail	95.9%		959,000	-	959,000
One Park Avenue ⁽¹⁾		55.0%	Office/Retail	93.4%		949,000	-	949,000
888 Seventh Avenue (ground leased through 2067)		100.0%	Office/Retail	94.6%		885,000	-	885,000
100 West 33rd Street		100.0%	Office	98.2%		855,000	-	855,000
330 Madison Avenue ⁽¹⁾		25.0%	Office/Retail	89.1%		842,000	-	842,000
330 West 34th Street (ground leased through 2149)		100.0%	Office/Retail	87.2%		718,000	-	718,000
85 Tenth Avenue ⁽¹⁾		49.9%	Office/Retail	100.0%		626,000	-	626,000
650 Madison Avenue ⁽¹⁾		20.1%	Office/Retail	95.5%		552,000	40,000	592,000
350 Park Avenue		100.0%	Office/Retail	100.0%		571,000	-	571,000
150 East 58th Street		100.0%	Office/Retail	97.9%		545,000	-	545,000
7 West 34th Street		53.0%	Office/Retail	100.0%		479,000	-	479,000
33-00 Northern Boulevard (Center Building)		100.0%	Office	99.5%		471,000	-	471,000
595 Madison Avenue		100.0%	Office/Retail	97.3%		323,000	-	323,000
640 Fifth Avenue		100.0%	Office/Retail	91.8%		313,000	-	313,000
50-70 W 93rd Street (326 units) ⁽¹⁾		49.9%	Residential	95.4%		283,000	-	283,000
Manhattan Mall		100.0%	Retail	97.6%		256,000	-	256,000
40 Fulton Street		100.0%	Office/Retail	92.7%		250,000	-	250,000
4 Union Square South		100.0%	Retail	100.0%		206,000	-	206,000
260 Eleventh Avenue
	(ground leased through 2114)	100.0%	Office	100.0%		184,000	-	184,000
512 W 22nd Street ⁽¹⁾		55.0%	Office	n/a		-	173,000	173,000
61 Ninth Avenue (ground leased through 2115) ⁽¹⁾		45.1%	Office/Retail	n/a		-	170,000	170,000
825 Seventh Avenue ⁽¹⁾		51.2%	Office/Retail	100.0%		169,000	-	169,000
1540 Broadway		100.0%	Retail	100.0%		160,000	-	160,000
608 Fifth Avenue (ground leased through 2033)		100.0%	Office/Retail	96.6%		137,000	-	137,000
Paramus		100.0%	Office	94.7%		129,000	-	129,000
666 Fifth Avenue Retail Condominium		100.0%	Retail	100.0%		114,000	-	114,000
1535 Broadway
	(Marriott Marquis - retail and signage)
	(ground and building leased through 2032)	100.0%	Retail/Theatre	77.2%		108,000	-	108,000
57th Street (2 buildings) ⁽¹⁾		50.0%	Office/Retail	94.3%		103,000	-	103,000
689 Fifth Avenue		100.0%	Office/Retail	91.8%		100,000	-	100,000
478-486 Broadway (2 buildings) (10 units)		100.0%	Retail/Residential	100.0%	⁽²⁾	85,000	-	85,000
150 West 34th Street		100.0%	Retail	100.0%		78,000	-	78,000
510 Fifth Avenue		100.0%	Retail	100.0%		66,000	-	66,000
655 Fifth Avenue		92.5%	Retail	100.0%		57,000	-	57,000
155 Spring Street		100.0%	Retail	100.0%		50,000	-	50,000
3040 M Street		100.0%	Retail	86.7%		44,000	-	44,000
435 Seventh Avenue		100.0%	Retail	100.0%		43,000	-	43,000
692 Broadway		100.0%	Retail	100.0%		36,000	-	36,000
606 Broadway		50.0%	Office/Retail	n/a		-	34,000	34,000
697-703 Fifth Avenue (St. Regis - retail)		74.3%	Retail	100.0%		26,000	-	26,000
715 Lexington Avenue		100.0%	Retail	100.0%		23,000	-	23,000

Item 2. Properties - continued


						Square Feet
							Under
							Development
							or Not
NEW YORK SEGMENT - CONTINUED		%		%			Available	Total
Property		Ownership	Type	Occupancy		In Service	for Lease	Property
1131 Third Avenue		100.0%	Retail	100.0%		23,000	-	23,000
40 East 66th Street (5 units)		100.0%	Retail/Residential	100.0%	⁽²⁾	23,000	-	23,000
131-135 West 33rd Street		100.0%	Retail	100.0%		23,000	-	23,000
828-850 Madison Avenue		100.0%	Retail	100.0%		18,000	-	18,000
443 Broadway		100.0%	Retail	100.0%		16,000	-	16,000
484 Eighth Avenue		100.0%	Retail	n/a		-	16,000	16,000
334 Canal Street (4 units)		100.0%	Retail/Residential	-	⁽²⁾	15,000	-	15,000
304 Canal Street (4 units)		100.0%	Retail/Residential	n/a		-	13,000	13,000
677-679 Madison Avenue (8 units)		100.0%	Retail/Residential	100.0%	⁽²⁾	13,000	-	13,000
431 Seventh Avenue		100.0%	Retail	100.0%		10,000	-	10,000
138-142 West 32nd Street		100.0%	Retail	67.4%		8,000	-	8,000
148 Spring Street		100.0%	Retail	100.0%		7,000	-	7,000
150 Spring Street (1 unit)		100.0%	Retail/Residential	100.0%	⁽²⁾	7,000	-	7,000
966 Third Avenue		100.0%	Retail	100.0%		7,000	-	7,000
488 Eighth Avenue		100.0%	Retail	100.0%		6,000	-	6,000
267 West 34th Street		100.0%	Retail	100.0%		6,000	-	6,000
968 Third Avenue ⁽¹⁾		50.0%	Retail	100.0%		6,000	-	6,000
265 West 34th Street		100.0%	Retail	100.0%		3,000	-	3,000
486 Eighth Avenue		100.0%	Retail	n/a		-	3,000	3,000
137 West 33rd Street		100.0%	Retail	100.0%		3,000	-	3,000
Other (4 buildings) (34 units)		82.0%	Retail/Residential	97.7%	⁽²⁾	57,000	32,000	89,000

Hotel Pennsylvania		100.0%	Hotel	n/a		1,400,000	-	1,400,000

Alexander's, Inc.:
731 Lexington Avenue ⁽¹⁾		32.4%	Office/Retail	100.0%		1,063,000	-	1,063,000
Rego Park II, Queens ⁽¹⁾		32.4%	Retail	99.9%		609,000	-	609,000
Rego Park I, Queens ⁽¹⁾		32.4%	Retail	100.0%		343,000	-	343,000
The Alexander Apartment Tower, Queens
	(312 units) ⁽¹⁾	32.4%	Residential	98.1%		255,000		255,000
Flushing, Queens ⁽¹⁾		32.4%	Retail	100.0%		167,000	-	167,000
Paramus, New Jersey (30.3 acres
	ground leased through 2041) ⁽¹⁾	32.4%	Retail	100.0%		-	-	-
Rego Park III, Queens (3.2 acres) ⁽¹⁾		32.4%	n/a	n/a		-	-	-
Total New York Segment				96.5 %		28,295,000	1,941,000	30,236,000

Our Ownership Interest				96.5 %		22,442,000	967,000	23,409,000


See notes on page 26.

Item 2. Properties - continued


						Square Feet
							Under
							Development
							or Not
WASHINGTON, DC SEGMENT		%		%			Available	Total
Property		Ownership	Type	Occupancy		In Service	for Lease	Property
2011-2451 Crystal Drive (5 buildings)		100.0%	Office	89.7%		2,325,000	-	2,325,000
RiverHouse Apartments (3 buildings) (1,670 units)		100.0%	Residential	97.7%		1,802,000	-	1,802,000
S. Clark Street/12th Street (5 buildings)		100.0%	Office	83.2%		1,546,000	-	1,546,000
1550-1750 Crystal Drive/
	241-251 18th Street (4 buildings)	100.0%	Office	86.8%		1,452,000	30,000	1,482,000
1800, 1851 and 1901 South Bell Street (3 buildings)		100.0%	Office	100.0%		377,000	492,000	869,000
Rosslyn Plaza (4 buildings) ⁽¹⁾		46.2%	Office	64.0%		493,000	248,000	741,000
1825-1875 Connecticut Avenue, NW
	(Universal Buildings) (2 buildings)	100.0%	Office	99.0%		686,000	-	686,000
2200/2300 Clarendon Blvd (Courthouse Plaza)
	(ground leased through 2062) (2 buildings)	100.0%	Office	94.6%		639,000	-	639,000
1299 Pennsylvania Avenue, NW
	(Warner Building) ⁽¹⁾	55.0%	Office	92.4%		622,000	-	622,000
The Bartlett (699 units)		100.0%	Residential/Retail	100.0%	⁽²⁾	477,000	143,000	620,000
2100/2200 Crystal Drive (2 buildings)		100.0%	Office	73.0%		532,000	-	532,000
Commerce Executive (3 buildings)		100.0%	Office	94.1%		393,000	14,000	407,000
1501 K Street, NW ⁽¹⁾		5.0%	Office	91.5%		402,000	-	402,000
2101 L Street, NW		100.0%	Office	99.0%		380,000	-	380,000
1700 M Street		100.0%	Office	n/a		-	333,000	333,000
WestEnd25 (283 units)		100.0%	Residential	97.2%		273,000	-	273,000
220 20th Street (265 units)		100.0%	Residential	97.7%		269,000	-	269,000
Crystal City Hotel		100.0%	Residential	100.0%		266,000	-	266,000
Rosslyn Plaza (196 units) ⁽¹⁾		43.7%	Residential	96.9%		253,000	-	253,000
875 15th Street, NW (Bowen Building)		100.0%	Office	84.5%		231,000	-	231,000
1101 17th Street, NW ⁽¹⁾		55.0%	Office	99.4%		216,000	-	216,000
Democracy Plaza One
	(ground leased through 2084)	100.0%	Office	97.6%		214,000	-	214,000
1730 M Street, NW (ground leased through 2061)		100.0%	Office	92.3%		205,000	-	205,000
2221 South Clark Street (216 units)		100.0%	Residential/ Office	100.0%	⁽²⁾	171,000	-	171,000
2001 Jefferson Davis Highway		100.0%	Office	52.4%		162,000	-	162,000
223 23rd Street		100.0%	Office	n/a		-	147,000	147,000
Met Park/Warehouses		100.0%	Warehouses	100.0%		53,000	76,000	129,000
1399 New York Avenue, NW		100.0%	Office	75.2%		129,000	-	129,000
Crystal City Shops at 2100		100.0%	Office	94.6%		80,000	-	80,000
Crystal Drive Retail		100.0%	Retail	100.0%		57,000	-	57,000
Other (3 buildings)		100.0%	Other	100.0%		11,000	-	11,000
Total Washington, DC Segment				90.2%		14,716,000	1,483,000	16,199,000

Our Ownership Interest				90.5%		13,556,000	1,344,000	14,900,000


See notes on page 26.

Item 2. Properties - continued

Square Feet

Under

Development

or Not

OTHER

Available

Total

Property

Ownership

Type

Occupancy

In Service

for Lease

Property

theMART:

theMART, Chicago

100.0%

Office/Retail/Showroom

98.9%

3,652,000

Other (2 properties) ⁽¹⁾

50.0%

Retail

100.0%

19,000

Total theMART

98.9%

3,671,000

Our Ownership Interest

98.9%

3,662,000

555 California Street:

555 California Street

70.0%

Office

98.0%

1,505,000

315 Montgomery Street

70.0%

Office/Retail

55.6%

233,000

345 Montgomery Street

70.0%

Office/Retail

n/a

64,000

Total 555 California Street

92.4%

1,738,000

64,000

1,802,000

Our Ownership Interest

92.4%

1,217,000

45,000

1,262,000

Vornado Capital Partners Real Estate Fund ("the Fund") ⁽³⁾ :
800 Corporate Pointe, Culver City, CA (2 buildings)		100.0%	Office	96.0%		246,000	-	246,000
Crowne Plaza Times Square, NY		75.3%	Office/Retail/Hotel	68.8%		240,000	-	240,000
Lucida, 86th Street and Lexington Avenue, NY
	(ground leased through 2082) (39 units)	100.0%	Retail/Residential	100.0%	⁽²⁾	154,000	-	154,000
1100 Lincoln Road, Miami, FL		100.0%	Retail/Theatre	98.6%		128,000	-	128,000
11 East 68th Street Retail, NY		100.0%	Retail	100.0%		11,000	-	11,000
501 Broadway, NY		100.0%	Retail	100.0%		9,000	-	9,000
Total Real Estate Fund				89.8%		788,000	-	788,000

Our Ownership Interest				86.3%		216,000	-	216,000

Other:
Wayne Town Center, Wayne
	(ground leased through 2064)	100.0%	Retail	100.0%	644,000	12,000	656,000
Annapolis
	(ground leased through 2042)	100.0%	Retail	100.0%	128,000	-	128,000
Fashion Centre Mall ⁽⁴⁾		7.5%	Retail	96.9%	869,000	-	869,000
Washington Tower ⁽⁴⁾		7.5%	Office	100.0%	170,000	-	170,000
Total Other				98.5%	1,811,000	12,000	1,823,000

Our Ownership Interest				99.8%	850,000	12,000	862,000


(1)	Denotes property not consolidated in the accompanying consolidated financial statements and related financial data included in the Annual Report on
	Form 10-K.
(2)	Excludes residential occupancy statistics.
(3)	We own a 25% interest in the Fund. The ownership percentage in this section represents the Fund's ownership in the underlying assets.
(4)	Reclassified to Other from Washington, DC segment.

New York

As of December 31, 2016, our New York segment consisted of 28.3 million square feet in 86 properties. The 28.3 million square feet is comprised of 20.2 million square feet of office space in 36 properties, 2.7 million square feet of retail space in 70 properties, 2,004 units in twelve residential properties, the 1.4 million square foot Hotel Pennsylvania, and our 32.4% interest in Alexander’s, Inc. (“Alexander’s”), which owns seven properties in the greater New York metropolitan area. The New York segment also includes 11 garages totaling 1.7 million square feet (4,970 spaces) which are managed by, or leased to, third parties.

New York lease terms generally range from five to seven years for smaller tenants to as long as 20 years for major tenants, and may provide for extension options at market rates. Leases typically provide for periodic step‑ups in rent over the term of the lease and pass through to tenants their share of increases in real estate taxes and operating expenses over a base year. Electricity is provided to tenants on a sub-metered basis or included in rent based on surveys and adjusted for subsequent utility rate increases. Leases also typically provide for free rent and tenant improvement allowances for all or a portion of the tenant’s initial construction costs of its premises.

As of December 31, 2016 , the occupancy rate for our New York segment was 96.5%.

Occupancy and weighted average annual rent per square foot (in service):


	Office:
				Vornado's Ownership Interest
								Weighted
			Total					Average Annual
			Property		Occupancy			Rent Per
		As of December 31,	Square Feet	Square Feet	Rate			Square Foot
		2016	20,227,000	16,962,000		96.3	%	$	68.90
		2015	21,288,000	17,412,000		96.3	%		66.62
		2014	20,154,000	16,408,000		96.9	%		65.34
		2013	18,744,000	15,303,000		96.4	%		62.20
		2012	18,319,000	15,338,000		95.6	%		60.45

	Retail:
				Vornado's Ownership Interest
								Weighted
			Total					Average Annual
			Property		Occupancy			Rent Per
		As of December 31,	Square Feet	Square Feet	Rate			Square Foot
		2016	2,672,000	2,464,000		97.1	%	$	213.85
		2015	2,641,000	2,408,000		96.2	%		202.85
		2014	2,469,000	2,162,000		96.5	%		173.19
		2013	2,349,000	2,116,000		97.4	%		162.92
		2012	2,171,000	2,001,000		96.8	%		148.71

Occupancy and average monthly rent per unit (in service):

	Residential:
						Vornado's Ownership Interest
							Occupancy			Average Monthly
		As of December 31,			Number of Units	Number of Units	Rate			Rent Per Unit
			2016	⁽¹⁾	2,004	977		95.7	%	$	3,576
			2015		1,711	886		95.0	%		3,495
			2014		1,678	855		95.2	%		3,146
			2013		1,672	847		94.8	%		2,920
			2012		1,673	847		96.5	%		2,770


		(1)	Includes The Alexander (32.4% ownership) from the date of stabilization in the third quarter of 2016.

NEW YORK – CONTINUED


Tenants accounting for 2% or more of revenues:

					Percentage of
					New York		Percentage
		Square Feet	2016		Total		of Total
	Tenant	Leased	Revenues		Revenues		Revenues
	IPG and affiliates	924,000	$	53,666,000	3.1	%	2.1	%
	Swatch Group USA	32,000		53,263,000	3.1	%	2.1	%
	AXA Equitable Life Insurance	481,000		40,955,000	2.4	%	1.6	%
	Macy's	646,000		40,886,000	2.4	%	1.6	%
	Neuberger Berman Group LLC	412,000		33,487,000	2.0	%	1.3	%

2016 rental revenue by tenants’ industry:

	Industry		Percentage
	Office:
		Financial Services	11%
		Real Estate	7%
		Communications	6%
		Family Apparel	6%
		Legal Services	5%
		Advertising/Marketing	5%
		Technology	4%
		Insurance	4%
		Publishing	3%
		Engineering, Architect & Surveying	3%
		Government	2%
		Banking	2%
		Home Entertainment & Electronics	2%
		Health Services	1%
		Pharmaceutical	1%
		Other	9%
			71%
	Retail:
		Family Apparel	7%
		Women's Apparel	6%
		Luxury Retail	6%
		Restaurants	2%
		Banking	2%
		Department Stores	2%
		Discount Stores	1%
		Other	3%
			29%

	Total		100%

NEW YORK – CONTINUED


Lease expirations as of December 31, 2016, assuming none of the tenants exercise renewal options:

					Percentage of		Weighted Average Annual
		Number of	Square Feet of		New York		Rent of Expiring Leases
Year		Expiring Leases	Expiring Leases		Square Feet		Total		Per Square Foot
Office:
Month to month		12	25,000		0.2	%	$	1,254,000	$	50.16
2017		72	489,000	⁽¹⁾	3.0	%		31,770,000		64.97	⁽¹⁾
2018		106	1,153,000	⁽²⁾	7.2	%		85,505,000		74.16
2019		95	826,000		5.1	%		57,322,000		69.40
2020		121	1,466,000		9.1	%		99,053,000		67.57
2021		124	1,242,000		7.7	%		86,776,000		69.87
2022		68	688,000		4.3	%		37,809,000		54.95
2023		57	1,725,000		10.7	%		132,048,000		76.55
2024		71	1,227,000		7.6	%		93,797,000		76.44
2025		40	742,000		4.6	%		53,343,000		71.89
2026		66	1,298,000		8.1	%		92,625,000		71.36
Retail:
Month to month		12	50,000		2.6	%	$	2,509,000	$	50.18
2017		14	28,000	⁽³⁾	1.4	%		13,374,000		477.64	⁽³⁾
2018		30	171,000		8.8	%		44,423,000		259.78
2019		26	202,000		10.4	%		34,039,000		168.51
2020		21	72,000		3.7	%		10,588,000		147.06
2021		16	52,000		2.7	%		10,283,000		197.75
2022		8	33,000		1.7	%		3,855,000		116.82
2023		14	81,000		4.2	%		20,523,000		253.37
2024		18	151,000		7.8	%		59,881,000		396.56
2025		12	38,000		2.0	%		18,428,000		484.95
2026		19	136,000		7.0	%		42,233,000		310.54


(1)	Based on current market conditions, we expect to re-lease this space at weighted average rents between $65 to $75 per square foot.
(2)	Excludes 492,000 square feet leased at 909 Third Avenue to the U.S. Post Office through 2038 (including four 5-year renewal options) for which the annual escalated rent is $11.70 per square foot.
(3)	Based on current market conditions, we expect to re-lease this space at weighted average rents between $550 to $600 per square foot.

Alexander’s

As of December 31, 2016, we own 32.4% of the outstanding common stock of Alexander’s, which owns seven properties in the greater New York metropolitan area aggregating 2.4 million square feet, including 731 Lexington Avenue, the 1.3 million square foot Bloomberg L.P. headquarters building. Alexander’s had $1.05 billion of outstanding debt, net at December 31, 2016, of which our pro rata share was $341.0 million, none of which is recourse to us.

Hotel Pennsylvania

We own the Hotel Pennsylvania which is located in New York City on Seventh Avenue at 33rd Street in the heart of the Penn Plaza district and consists of a hotel portion containing 1,000,000 square feet of hotel space with 1,700 rooms and a commercial portion containing 400,000 square feet of retail and office space.

		Year Ended December 31,
		2016			2015			2014			2013			2012
Hotel Pennsylvania:
	Average occupancy rate		84.7	%		90.7	%		92.0	%		93.4	%		89.1	%
	Average daily rate	$	134.38		$	147.46		$	162.01		$	158.01		$	152.79
	Revenue per available room	$	113.84		$	133.69		$	149.04		$	147.63		$	136.21

Washington, DC

On August 24, 2016, the Skyline properties, located in Fairfax, Virginia, were placed in receivership. On December 21, 2016, the final disposition of the Skyline properties was completed by the receiver. In connection therewith, the Skyline properties’ assets (approximately $236,535,000) and liabilities (approximately $724,412,000), were removed from our consolidated balance sheet which resulted in a net gain of $487,877,000. There was no taxable income related to this transaction.

On December 19, 2016, we completed the sale of our 20 % interest in Fairfax Square to our joint venture partner for $ 15,500,000 , which resulted in a net gain of approximately $ 15,302,000 .

Washington, DC – CONTINUED

As of December 31, 2016, our Washington, DC segment consisted of 58 properties aggregating 14.7 million square feet including 11.1 million square feet of office space in 44 properties, nine residential properties containing 3,156 units and a hotel property. The Washington, DC segment also includes 45 garages totaling approximately 7.0 million square feet (22,110 spaces) which are managed by, or leased to, third parties.

Washington, DC office lease terms generally range from five to seven years for smaller tenants to as long as 15 years for major tenants, and may provide for extension options at either pre-negotiated or market rates. Leases typically provide for periodic step-ups in rent over the term of the lease and pass through to tenants, the tenants’ share of increases in real estate taxes and certain property operating expenses over a base year. Periodic step-ups in rent are usually based upon fixed percentage increases. Leases also typically provide for free rent and tenant improvement allowances for all or a portion of the tenant’s initial construction costs of its premises.

As of December 31, 2016, the occupancy rate for our Washington DC segment was 90.5%, and 22.4% of the occupied space was leased to various agencies of the U.S. Government.

Occupancy and weighted average annual rent per square foot (in service):

	Office:
				Vornado's Ownership Interest
								Weighted
			Total					Average Annual
			Property		Occupancy			Rent Per
		As of December 31,	Square Feet	Square Feet	Rate			Square Foot
		2016	11,141,000	10,123,000		88.3	%	$	44.05
		2015	11,592,000	10,597,000		90.1	%		43.99
		2014	11,635,000	10,620,000		87.3	%		44.03
		2013	11,753,000	10,686,000		85.2	%		44.03
		2012	11,665,000	10,538,000		86.2	%		42.91

Occupancy and average monthly rent per unit (in service):

	Residential:			Vornado's Ownership Interest
			Number of	Number of	Occupancy			Average Monthly
		As of December 31,	Units	Units	Rate			Rent Per Unit
		2016	3,156	3,046		97.8	%	$	2,064
		2015	2,630	2,520		96.4	%		2,044
		2014	2,414	2,304		97.4	%		2,053
		2013	2,414	2,304		96.3	%		2,075
		2012	2,414	2,304		97.9	%		2,122



Tenants accounting for 2% or more of revenues:

					Percentage of		Percentage
		Square Feet	2016		Washington, DC		of Total
	Tenant	Leased	Revenues		Total Revenues		Revenues
	U.S. Government	2,748,000	$	79,185,000	15.3	%	3.4	%
	Family Health International	323,000		15,199,000	2.9	%	0.7	%
	Arlington County	241,000		11,388,000	2.2	%	0.5	%

WASHINGTON, DC – CONTINUED


2016 rental revenue by tenants’ industry:

	Industry	Percentage
	U.S. Government	21%
	Government Contractors	13%
	Membership Organizations	9%
	Legal Services	5%
	Real Estate	4%
	Business Services	4%
	Management Consulting Services	3%
	State and Local Government	3%
	Health Services	2%
	Food	2%
	Computer and Data Processing	2%
	Education	1%
	Television Broadcasting	1%
	Manufacturing	1%
	Other	29%
		100%

Lease expirations as of December 31, 2016, assuming none of the tenants exercise renewal options:

					Percentage of		Weighted Average Annual
		Number of	Square Feet of		Washington, DC		Rent of Expiring Leases
Year		Expiring Leases	Expiring Leases		Square Feet		Total		Per Square Foot
Month to month		32	93,000		1.1	%	$	2,516,000	$	27.05
2017		108	955,000	⁽¹⁾	11.5	%		36,265,000		37.97	⁽¹⁾
2018		105	943,000		11.3	%		43,658,000		46.30
2019		94	1,143,000		13.7	%		51,492,000		45.05
2020		85	845,000		10.1	%		42,980,000		50.86
2021		60	793,000		9.5	%		35,331,000		44.55
2022		59	1,149,000		13.8	%		52,207,000		45.44
2023		20	225,000		2.7	%		10,202,000		45.34
2024		35	377,000		4.5	%		15,840,000		42.02
2025		26	319,000		3.8	%		12,685,000		39.76
2026		16	192,000		2.3	%		9,154,000		47.68


(1)	Based on current market conditions, we expect to re-lease this space at weighted average rents between $38 to $42 per square foot.

OTHER INVESTMENTS

theMART

As of December 31, 2016, we own the 3.7 million square foot theMART in Chicago, whose largest tenant is Motorola Mobility at 609,000 square feet, the lease of which is guaranteed by Google. theMART is encumbered by a $675,000,000 mortgage loan that bears interest at a fixed rate of 2.70% and matures in September 2021. As of December 31, 2016, theMART had an occupancy rate of 98.9% and a weighted average annual rent per square foot of $40.39.

555 California Street

As of December 31, 2016, we own a 70% controlling interest in a three-building office complex containing 1.8 million square feet, known as the Bank of America Center, located at California and Montgomery Streets in San Francisco’s financial district (“555 California Street”). 555 California Street is encumbered by a $579,795,000 mortgage loan that bears interest at a fixed rate of 5.10% and matures in September 2021. As of December 31, 2016, 555 California Street had an occupancy rate of 92.4% and a weighted average annual rent per square foot of $68.43.

Vornado Capital Partners Real Estate Fund (the “Fund”) and Crowne Plaza Times Square Hotel Joint Venture (the “Crowne Plaza Joint Venture”)

As of December 31, 2016 , we own a 25.0% interest in the Fund which currently has six investments, one of which is the Crowne Plaza Times Square Hotel in which we also own an additional interest through a joint venture. We are the general partner and investment manager of the Fund. As of December 31, 2016, these six investments are carried on our consolidated balance sheet at an aggregate fair value of $462,132,000, including the Crowne Plaza Joint Venture. As of December 31, 2016, our share of unfunded commitments was $34,422,000.

ITEM 3. LEGAL PROCEEDINGS

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 is not expected to have a material adverse effect on our financial position, results of operations or cash flows.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related STOCKholder Matters and issuer purchases of equity securities

Vornado’s common shares are traded on the New York Stock Exchange under the symbol “VNO.”

Quarterly high and low sales prices of Vornado’s common shares and dividends paid per common share for the years ended December 31, 2016 and 2015 were as follows:

		Year Ended						Year Ended
		December 31, 2016						December 31, 2015
Quarter		High		Low		Dividends		High			Low		Dividends

1st		$	99.97	$	78.91	$	0.63	$	126.62	⁽¹⁾	$	104.11	$	0.63
2nd			100.13		90.13		0.63		113.12			94.55		0.63
3rd			108.69		97.18		0.63		98.96			84.60		0.63
4th			105.91		86.35		0.63		103.41			89.32		0.63


(1)	Achieved on January 15, 2015, prior to the spin-off of Urban Edge Properties (NYSE: UE).

As of February 1, 2017, there were 1,051 holders of record of Vornado common shares.

There is no established trading market for Class A units of the Operating Partnership. As of February 1, 2017, there were 997 Class A unitholders of record.

Recent Sales of Unregistered Securities

During 2016, the Operating Partnership issued 491,920 Class A units in connection with equity awards issued pursuant to Vornado’s omnibus share plan, including with respect to grants of restricted Vornado common shares and restricted units of the Operating Partnership and upon conversion, surrender or exchange of the Operating Partnership’s units or Vornado stock options, and consideration received included $8,540,019 in cash proceeds. Such units were issued in reliance on an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended.

Information relating to compensation plans under which Vornado’s equity securities are authorized for issuance is set forth under Part III, Item 12 of this Annual Report on Form 10-K and such information is incorporated by reference herein.

Recent Purchases of Equity Securities

In December 2016, we received 2,755 Vornado common shares at a weighted average price of $103.62 per share as payment for the exercise price of certain employees’ stock options.

Performance Graph

The following graph is a comparison of the five-year cumulative return of Vornado’s common shares, the Standard & Poor’s 500 Index (the “S&P 500 Index”) and the National Association of Real Estate Investment Trusts’ (“NAREIT”) All Equity Index, a peer group index. The graph assumes that $100 was invested on December 31, 2011 in our common shares, the S&P 500 Index and the NAREIT All Equity Index and that all dividends were reinvested without the payment of any commissions. There can be no assurance that the performance of our shares will continue in line with the same or similar trends depicted in the graph below.


	2011		2012		2013		2014		2015		2016
Vornado Realty Trust	$	100	$	109	$	125	$	171	$	163	$	174
S&P 500 Index		100		116		154		175		177		198
The NAREIT All Equity Index		100		120		123		158		162		176

ITEM 6. SELECTED FINANCIAL DATA

*Vornado Realty Trust*

(Amounts in thousands, except per share amounts)		Year Ended December 31,
		2016		2015			2014		2013		2012
Operating Data:
Revenues:
	Property rentals	$	2,103,728	$	2,076,586		$	1,911,487	$	1,880,405	$	1,771,264
	Tenant expense reimbursements		260,667		260,976			245,819		226,831		207,149
	Cleveland Medical Mart development project		-		-			-		36,369		235,234
	Fee and other income		141,807		164,705			155,206		155,571		119,077
Total revenues			2,506,202		2,502,267			2,312,512		2,299,176		2,332,724
Expenses:
	Operating		1,024,336		1,011,249			953,611		928,565		891,637
	Depreciation and amortization		565,059		542,952			481,303		461,627		435,545
	General and administrative		179,279		175,307			169,270		177,366		167,194
	Cleveland Medical Mart development project		-		-			-		32,210		226,619
	Skyline properties impairment loss		160,700		-			-		-		-
	Acquisition and transaction related costs		26,037		12,511			18,435		24,857		17,386
Total expenses			1,955,411		1,742,019			1,622,619		1,624,625		1,738,381
Operating income			550,791		760,248			689,893		674,551		594,343
(Loss) income from real estate fund investments			(23,602)		74,081			163,034		102,898		63,936
Income (loss) from partially owned entities			165,389		(12,630)			(59,861)		(340,882)		421,668
Interest and other investment income (loss), net			29,546		26,978			38,752		(24,887)		(261,200)
Interest and debt expense			(402,674)		(378,025)			(412,755)		(425,782)		(431,235)
Net gain on extinguishment of Skyline properties debt			487,877		-			-		-		-
Net gain on disposition of wholly owned and partially
	owned assets		175,735		251,821			13,568		2,030		4,856
Income (loss) before income taxes			983,062		722,473			432,631		(12,072)		392,368
Income tax (expense) benefit			(8,312)		84,695			(9,281)		8,717		(8,132)
Income (loss) from continuing operations			974,750		807,168			423,350		(3,355)		384,236
Income from discontinued operations			7,172		52,262			585,676		568,095		310,305
Net income			981,922		859,430			1,009,026		564,740		694,541
Less net income attributable to noncontrolling interests in:
	Consolidated subsidiaries		(21,351)		(55,765)			(96,561)		(63,952)		(32,018)
	Operating Partnership		(53,654)		(43,231)			(47,613)		(24,817)		(45,263)
Net income attributable to Vornado			906,917		760,434			864,852		475,971		617,260
Preferred share dividends			(75,903)		(80,578)			(81,464)		(82,807)		(76,937)
Preferred unit and share redemptions			(7,408)		-			-		(1,130)		8,948
Net income attributable to common shareholders		$	823,606	$	679,856		$	783,388	$	392,034	$	549,271

Per Share Data:
	Income (loss) from continuing operations, net - basic	$	4.32	$	3.35		$	1.23	$	(0.75)	$	1.37
	Income (loss) from continuing operations, net - diluted		4.30		3.33			1.22		(0.75)		1.37
	Net income per common share - basic		4.36		3.61			4.18		2.10		2.95
	Net income per common share - diluted		4.34		3.59			4.15		2.09		2.94
	Dividends per common share		2.52		2.52	⁽¹⁾		2.92		2.92		3.76	⁽²⁾

Balance Sheet Data:
	Total assets	$	20,814,847	$	21,143,293		$	21,157,980	$	20,018,210	$	21,978,802
	Real estate, at cost		18,339,958		18,090,137			16,822,358		15,392,968		15,287,078
	Accumulated depreciation and amortization		(3,513,574)		(3,418,267)			(3,161,633)		(2,829,862)		(2,524,718)
	Debt, net		10,611,685		11,091,010			9,530,337		8,708,414		9,714,819
	Total equity		7,618,496		7,476,078			7,489,382		7,594,744		7,904,144


(1)	Post spin-off of Urban Edge Properties (NYSE: UE) on January 15, 2015.
(2)	Includes a special long-term capital gain dividend of $1.00 per share.

ITEM 6. SELECTED FINANCIAL DATA - CONTINUED

*Vornado Realty Trust*

(Amounts in thousands)				Year Ended December 31,
				2016		2015		2014		2013		2012
Other Data:
Funds From Operations ("FFO") ⁽¹⁾ :
	Net income attributable to common shareholders			$	823,606	$	679,856	$	783,388	$	392,034	$	549,271

	FFO adjustments:
	Depreciation and amortization of real property			$	531,620	$	514,085	$	517,493	$	501,753	$	504,407
	Net gains on sale of real estate				(177,023)		(289,117)		(507,192)		(411,593)		(245,799)
	Real estate impairment losses				160,700		256		26,518		37,170		129,964
	Proportionate share of adjustments to equity in net income
		(loss) of partially owned entities to arrive at FFO:
			Depreciation and amortization of real property		154,795		143,960		117,766		157,270		154,680
			Net gains on sale of real estate		(2,853)		(4,513)		(11,580)		(465)		(241,602)
			Real estate impairment losses		6,328		16,758		-		6,552		11,673
			Income tax effect of above adjustments		-		-		(7,287)		(26,703)		(27,493)
					673,567		381,429		135,718		263,984		285,830
	Noncontrolling interests' share of above adjustments				(41,267)		(22,342)		(8,073)		(15,089)		(16,649)
	FFO adjustments, net			$	632,300	$	359,087	$	127,645	$	248,895	$	269,181

	FFO attributable to common shareholders			$	1,455,906	$	1,038,943	$	911,033	$	640,929	$	818,452
	Convertible preferred share dividends				86		92		97		108		113
	Earnings allocated to Out-Performance Plan units				1,591		-		-		-		-
FFO attributable to common shareholders plus assumed
	conversions ⁽¹⁾			$	1,457,583	$	1,039,035	$	911,130	$	641,037	$	818,565

(1) 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, real estate impairment losses, depreciation and amortization expense from real estate assets and other specified non-cash items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are non-GAAP financial measures 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.

ITEM 6. SELECTED FINANCIAL DATA

*Vornado Realty L.P.*

(Amounts in thousands, except per unit amounts)		Year Ended December 31,
		2016		2015			2014		2013		2012
Operating Data:
Revenues:
	Property rentals	$	2,103,728	$	2,076,586		$	1,911,487	$	1,880,405	$	1,771,264
	Tenant expense reimbursements		260,667		260,976			245,819		226,831		207,149
	Cleveland Medical Mart development project		-		-			-		36,369		235,234
	Fee and other income		141,807		164,705			155,206		155,571		119,077
Total revenues			2,506,202		2,502,267			2,312,512		2,299,176		2,332,724
Expenses:
	Operating		1,024,336		1,011,249			953,611		928,565		891,637
	Depreciation and amortization		565,059		542,952			481,303		461,627		435,545
	General and administrative		179,279		175,307			169,270		177,366		167,194
	Cleveland Medical Mart development project		-		-			-		32,210		226,619
	Skyline properties impairment loss		160,700		-			-		-		-
	Acquisition and transaction related costs		26,037		12,511			18,435		24,857		17,386
Total expenses			1,955,411		1,742,019			1,622,619		1,624,625		1,738,381
Operating income			550,791		760,248			689,893		674,551		594,343
(Loss) income from real estate fund investments			(23,602)		74,081			163,034		102,898		63,936
Income (loss) from partially owned entities			165,389		(12,630)			(59,861)		(340,882)		421,668
Interest and other investment income (loss), net			29,546		26,978			38,752		(24,887)		(261,200)
Interest and debt expense			(402,674)		(378,025)			(412,755)		(425,782)		(431,235)
Net gain on extinguishment of Skyline properties debt			487,877		-			-		-		-
Net gain on disposition of wholly owned and partially
	owned assets		175,735		251,821			13,568		2,030		4,856
Income (loss) before income taxes			983,062		722,473			432,631		(12,072)		392,368
Income tax (expense) benefit			(8,312)		84,695			(9,281)		8,717		(8,132)
Income (loss) from continuing operations			974,750		807,168			423,350		(3,355)		384,236
Income from discontinued operations			7,172		52,262			585,676		568,095		310,305
Net income			981,922		859,430			1,009,026		564,740		694,541
Less net income attributable to noncontrolling interests in
	consolidated subsidiaries		(21,351)		(55,765)			(96,561)		(63,952)		(32,018)
Net income attributable to Vornado Realty L.P.			960,571		803,665			912,465		500,788		662,523
Preferred unit distributions			(76,097)		(80,736)			(81,514)		(83,965)		(86,873)
Preferred unit redemptions			(7,408)		-			-		(1,130)		8,948
Net income attributable to Class A unitholders		$	877,066	$	722,929		$	830,951	$	415,693	$	584,598

Per Unit Data:
	Income (loss) from continuing operations, net - basic	$	4.32	$	3.35		$	1.22	$	(0.79)	$	1.37
	Income (loss) from continuing operations, net - diluted		4.29		3.31			1.21		(0.78)		1.37
	Net income per Class A unit - basic		4.36		3.61			4.17		2.09		2.95
	Net income per Class A unit - diluted		4.32		3.57			4.14		2.08		2.93
	Distributions per Class A unit		2.52		2.52	⁽¹⁾		2.92		2.92		3.76	⁽²⁾

Balance Sheet Data:
	Total assets	$	20,814,847	$	21,143,293		$	21,157,980	$	20,018,210	$	21,978,802
	Real estate, at cost		18,339,958		18,090,137			16,822,358		15,392,968		15,287,078
	Accumulated depreciation and amortization		(3,513,574)		(3,418,267)			(3,161,633)		(2,829,862)		(2,524,718)
	Debt, net		10,611,685		11,091,010			9,530,337		8,708,414		9,714,819
	Total equity		7,618,496		7,476,078			7,489,382		7,594,744		7,904,144


(1)	Post spin-off of Urban Edge Properties (NYSE: UE) on January 15, 2015.
(2)	Includes a special long-term capital gain distribution of $1.00 per unit.



ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
	OF OPERATIONS


				Page Number
	Overview			40
	Overview - Leasing activity			47
	Critical Accounting Policies			51
	Net Income and EBITDA by Segment for the Years Ended
		December 31, 2016, 2015 and 2014		54
	Results of Operations:
		Year Ended December 31, 2016 Compared to December 31, 2015		58
		Year Ended December 31, 2015 Compared to December 31, 2014		65
	Supplemental Information:
		Net Income and EBITDA by Segment for the Three Months Ended
			December 31, 2016 and 2015	72
		Three Months Ended December 31, 2016 Compared to December 31, 2015		76
		Three Months Ended December 31, 2016 Compared to September 30, 2016		78
	Related Party Transactions			80
	Liquidity and Capital Resources			81
		Financing Activities and Contractual Obligations		82
		Certain Future Cash Requirements		84
		Cash Flows for the Year Ended December 31, 2016		87
		Cash Flows for the Year Ended December 31, 2015		89
		Cash Flows for the Year Ended December 31, 2014		91
	Funds From Operations for the Three Months and Years Ended
		December 31, 2016 and 2015		93

Overview

Vornado Realty Trust (“Vornado”) is a fully‑integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”). Accordingly, Vornado’s cash flow and ability to pay 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. Vornado is the sole general partner of, and owned approximately 93.7 % of the common limited partnership interest in the Operating Partnership as of December 31, 2016. All references to the “Company,” “we,” “us” and “our” mean collectively Vornado, the Operating Partnership and those entities/subsidiaries consolidated by Vornado.

We own and operate office and retail properties with large concentrations in the New York City metropolitan area and in the Washington, DC/Northern Virginia area. In addition, we have a 32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns seven properties in the greater New York metropolitan area, a 32.5% interest in Toys “R” Us, Inc. (“Toys”) as well as interests in other real estate and related investments.

Our business objective is to maximize Vornado shareholder value, which we measure by the total return provided to our shareholders. Below is a table comparing Vornado’s performance to the FTSE NAREIT Office Index (“Office REIT”) and the MSCI US REIT Index (“MSCI”) for the following periods ended December 31, 2016:

		Total Return ⁽¹⁾
		Vornado	Office REIT	MSCI
	Three-month	3.9%	0.6%	(3.0%)
	One-year	7.3%	13.2%	8.6%
	Three-year	40.6%	42.8%	45.2%
	Five-year	76.0%	72.1%	75.2%
	Ten-year	36.9%	31.0%	62.3%


(1)	Past performance is not necessarily indicative of future performance.

O verview – continued

We intend to achieve this objective by continuing to pursue our investment philosophy and execute 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, where we believe there is a high likelihood of capital appreciation;

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

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

· developing and redeveloping our existing properties to increase returns and maximize value; and

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

Vornado Realty Trust

Year Ended December 31, 2016 Financial Results Summary

Net income attributable to common shareholders for the year ended December 31, 2016 was $823,606,000, or $4.34 per diluted share, compared to $679,856,000, or $3.59 per diluted share, for the year ended December 31, 2015. The years ended December 31, 2016 and 2015 include certain items that impact net income attributable to common shareholders, which are listed in the table on the following page. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased net income attributable to common shareholders by $569,725,000 and $369,455,000, or $3.00 and $1.95 per diluted share, for the years ended December 31, 2016 and 2015, respectively.

Funds From Operations attributable to common shareholders plus assumed conversions (“FFO”) for the year ended December 31, 2016 was $1,457,583,000, or $7.66 per diluted share, compared to $1,039,035,000, or $5.48 per diluted share, for the year ended December 31, 2015. The years ended December 31, 2016 and 2015 include certain items that impact FFO, which are listed in the table on page 43. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO by $570,780,000 and $138,158,000, or $3.00 and $0.73 per diluted share, for the years ended December 31, 2016 and 2015, respectively.

Net income as adjusted and FFO as adjusted for the year ended December 31, 2016 include $41,373,000, or $0.20 per diluted share, for our 33.0% share of a non-cash unrealized loss and related reduction in our carried interest accrual, resulting from the fourth quarter mark-to-market fair value adjustment of our real estate funds’ investment in the Crowne Plaza Times Square Hotel.

O verview – continued

Vornado Realty Trust – continued

Quarter Ended December 31, 2016 Financial Results Summary

Net income attributable to common shareholders for the quarter ended December 31, 2016 was $651,181,000, or $3.43 per diluted share, compared to $230,742,000, or $1.22 per diluted share, for the prior year’s quarter. The quarters ended December 31, 2016 and 2015 include certain items that impact net income attributable to common shareholders, which are listed in the table below. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased net income attributable to common shareholders by $594,473,000 and $144,301,000, or $3.13 and $0.76 per diluted share, for the quarters ended December 31, 2016 and 2015, respectively.

FFO for the quarter ended December 31, 2016 was $797,734,000, or $4.20 per diluted share, compared to $259,528,000, or $1.37 per diluted share, for the prior year’s quarter. The quarters ended December 31, 2016 and 2015 include certain items that impact FFO, which are listed in the table on the following page. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO by $582,996,000 and $21,469,000, or $3.07 and $0.11 per diluted share, for the quarters ended December 31, 2016 and 2015, respectively.

Net income as adjusted and FFO as adjusted for the quarter ended December 31, 2016 include $41,373,000, or $0.20 per diluted share, for our 33.0% share of a non-cash unrealized loss and related reduction in our carried interest accrual, resulting from the fourth quarter mark-to-market fair value adjustment of our real estate funds’ investment in the Crowne Plaza Times Square Hotel.

(Amounts in thousands)			For the Year Ended				For the Three Months Ended
			December 31,				December 31,
			2016		2015		2016		2015
Certain items that impact net income attributable to common shareholders:
	Net gain on extinguishment of Skyline properties debt		$	487,877	$	-	$	487,877	$	-
	Income from the repayment of our investments in 85 Tenth Avenue
	loans and preferred equity			160,843		-		160,843		-
	Skyline properties impairment loss			(160,700)		-		-		-
	Net gains on sale of real estate			159,511		255,964		-		142,693
	Acquisition and transaction related costs			(26,037)		(12,511)		(14,743)		(4,951)
	Net gain on sale of our 20% interest in Fairfax Square			15,302		-		15,302		-
	Default interest on Skyline properties mortgage loan			(7,823)		-		(2,480)		-
	Preferred share issuance costs (Series J redemption)			(7,408)		-		-		-
	Net income (loss) from discontinued operations and sold properties			1,730		32,419		(117)		13,943
	Net gains on sale of residential condominiums			714		6,724		-		4,231
	Reversal of allowance for deferred tax assets (re: taxable REIT
	subsidiary's ability to utilize NOLs)			-		90,030		-		-
	Net gain on sale of our interest in Monmouth Mall			-		33,153		-		-
	Our share of partially owned entities:
		Real estate impairment losses		(20,290)		(21,260)		(14,754)		(4,141)
		Net gains on sale of real estate		2,854		4,513		13		-
	Other			183		3,004		208		1,671
				606,756		392,036		632,149		153,446
Noncontrolling interests' share of above adjustments				(37,031)		(22,581)		(37,676)		(9,145)
Certain items that impact net income attributable to common shareholders, net			$	569,725	$	369,455	$	594,473	$	144,301

O verview – continued

Vornado Realty Trust – continued

(Amounts in thousands)			For the Year Ended				For the Three Months Ended
			December 31,				December 31,
			2016		2015		2016		2015
Certain items that impact FFO:
	Net gain on extinguishment of Skyline properties debt		$	487,877	$	-	$	487,877	$	-
	Income from the repayment of our investments in 85 Tenth Avenue
	loans and preferred equity			160,843		-		160,843		-
	Acquisition and transaction related costs			(26,037)		(12,511)		(14,743)		(4,951)
	FFO from discontinued operations and sold properties			11,923		64,263		2,202		22,137
	Default interest on Skyline properties mortgage loan			(7,823)		-		(2,480)		-
	Preferred share issuance costs (Series J redemption)			(7,408)		-		-		-
	Net gains on sale of residential condominiums			714		6,724		-		4,231
	Reversal of allowance for deferred tax assets (re: taxable REIT
	subsidiary's ability to utilize NOLs)			-		90,030		-		-
	Our share of partially owned entities:
		Real estate impairment losses		(13,962)		(4,502)		(13,962)		-
	Other			183		3,004		208		1,671
				606,310		147,008		619,945		23,088
Noncontrolling interests' share of above adjustments				(35,530)		(8,850)		(36,949)		(1,619)
Certain items that impact FFO, net			$	570,780	$	138,158	$	582,996	$	21,469

Vornado Realty L.P.

Year Ended December 31, 2016 Financial Results Summary

Net income attributable to Class A unitholders for the year ended December 31, 2016 was $877,066,000, or $4.32 per diluted Class A unit, compared to $722,929,000, or $3.57 per diluted Class A unit, for the year ended December 31, 2015. The year ended December 31, 2016 and 2015 include certain items that impact net income attributable to Class A unitholders which are listed in the table on the following page. The aggregate of these items increased net income attributable to Class A unitholders by $606,756,000, or $3.00 per diluted Class A unit, and $392,036,000, or $1.95 per diluted Class A unit, for the years ended December 31, 2016 and 2015, respectively.

Net income as adjusted for the year ended December 31, 2016 includes $41,373,000, or $0.20 per diluted Class A unit, for our 33.0% share of a non-cash unrealized loss and related reduction in our carried interest accrual, resulting from the fourth quarter mark-to-market fair value adjustment of our real estate funds’ investment in the Crowne Plaza Times Square Hotel.

Quarter Ended December 31, 2016 Financial Results Summary

Net income attributable to Class A unitholders for the quarter ended December 31, 2016 was $693,377,000, or $3.43 per diluted Class A unit, compared to $245,735,000, or $1.21 per diluted Class A unit, for the prior year’s quarter. The quarters ended December 31, 2016 and 2015 include certain items that impact net income attributable to Class A unitholders, which are listed in the table on the following page. The aggregate of these items increased net income attributable to Class A unitholders by $632,149,000, or $3.13 per diluted Class A unit, and $153,446,000, or $0.76 per diluted Class A unit, for the quarters ended December 31, 2016 and 2015, respectively.

Net income, as adjusted for the quarter ended December 31, 2016 includes $41,373,000, or $0.20 per diluted Class A unit, for our 33.0% share of a non-cash unrealized loss and related reduction in our carried interest accrual, resulting from the fourth quarter mark-to-market fair value adjustment of our real estate funds’ investment in the Crowne Plaza Times Square Hotel.

O verview – continued

Vornado Realty L.P. – continued

(Amounts in thousands)			For the Year Ended				For the Three Months Ended
			December 31,				December 31,
			2016		2015		2016		2015
Certain items that impact net income attributable to Class A unitholders:
	Net gain on extinguishment of Skyline properties debt		$	487,877	$	-	$	487,877	$	-
	Income from the repayment of our investments in 85 Tenth Avenue
	loans and preferred equity			160,843		-		160,843		-
	Skyline properties impairment loss			(160,700)		-		-		-
	Net gains on sale of real estate			159,511		255,964		-		142,693
	Acquisition and transaction related costs			(26,037)		(12,511)		(14,743)		(4,951)
	Net gain on sale of our 20% interest in Fairfax Square			15,302		-		15,302		-
	Default interest on Skyline properties mortgage loan			(7,823)		-		(2,480)		-
	Preferred unit issuance costs (Series J redemption)			(7,408)		-		-		-
	Net income (loss) from discontinued operations and sold properties			1,730		32,419		(117)		13,943
	Net gains on sale of residential condominiums			714		6,724		-		4,231
	Reversal of allowance for deferred tax assets (re: taxable REIT
	subsidiary's ability to utilize NOLs)			-		90,030		-		-
	Net gain on sale of our interest in Monmouth Mall			-		33,153		-		-
	Our share of partially owned entities:
		Real estate impairment losses		(20,290)		(21,260)		(14,754)		(4,141)
		Net gains on sale of real estate		2,854		4,513		13		-
	Other			183		3,004		208		1,671
Certain items that impact net income attributable to Class A unitholders			$	606,756	$	392,036	$	632,149	$	153,446

Vornado Realty Trust and Vornado Realty L.P.

Same Store EBITDA and Cash Basis Same Store EBITDA

The percentage increase (decrease) in same store Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and cash basis same store EBITDA of our operating segments are summarized below.

		New York			Washington, DC
Same store EBITDA % increase (decrease):
	Year ended December 31, 2016 vs. December 31, 2015	6.3	%	⁽¹⁾	2.8	%
	Year ended December 31, 2015 vs. December 31, 2014	1.5	%	⁽²⁾	(0.1	%)
	Three months ended December 31, 2016 vs. December 31, 2015	7.8	%	⁽³⁾	2.3	%
	Three months ended December 31, 2016 vs. September 30, 2016	4.1	%	⁽⁴⁾	(3.7	%)

Cash basis same store EBITDA % increase (decrease):
	Year ended December 31, 2016 vs. December 31, 2015	8.6	%	⁽¹⁾	3.8	%
	Year ended December 31, 2015 vs. December 31, 2014	0.3	%	⁽²⁾	(4.5	%)
	Three months ended December 31, 2016 vs. December 31, 2015	17.6	%	⁽³⁾	4.4	%
	Three months ended December 31, 2016 vs. September 30, 2016	8.2	%	⁽⁴⁾	(2.3	%)


(1)	Excluding Hotel Pennsylvania, same store EBITDA increased by 7.7% and by 10.3% on a cash basis.
(2)	Excluding Hotel Pennsylvania, same store EBITDA increased by 2.4% and by 1.3% on a cash basis.
(3)	Excluding Hotel Pennsylvania, same store EBITDA increased by 9.2% and by 19.8% on a cash basis.
(4)	Excluding Hotel Pennsylvania, same store EBITDA increased by 3.6% and by 7.6% on a cash basis.

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.

O verview – continued

Washington, DC Segment

Excluding the Skyline Properties which were disposed of on December 21, 2016, our Washington, DC segment EBITDA as adjusted was $290,500,000 for the year ended December 31, 2016, which is flat to 2015 as a result of an increase in EBITDA from the core business of $3,100,000, offset by a decline in EBITDA from properties taken out-of-service of $3,100,000. These results are slightly ahead of the guidance we published for 2016.

We expect to complete the spin-off of our Washington, DC segment in the second quarter of 2017. We expect that Washington, DC’s EBITDA as adjusted during the first half of 2017 will be lower than the first half of 2016 by approximately $1,000,000 to $5,000,000, comprised of:

(i) core business approximately $2,000,000 to $6,000,000 higher than 2016, offset by,

(ii) reduction in EBITDA of approximately $6,000,000 to $8,000,000 from 1700 M Street, 1800 South Bell and 1750 Crystal Drive being taken out-of-service for redevelopment.

Investments

On March 17, 2016, we entered into a joint venture, in which we own a 33.3 % interest, which owns a $ 150,000 ,000 mezzanine loan with an interest rate of LIBOR plus 8.88 % and an initial maturity date in November 2016 , with two three-month extension options. On November 9, 2016, the mezzanine loan was extended to May 2017 with an interest rate of LIBOR plus 9.42 % ( 10.08 % at December 31, 2016) during the extension period. As of December 31, 2016, the joint venture has fully funded its commitments. The joint venture’s investment is subordinate to $ 350,000 ,000 of third party debt. We account for our investment in the joint venture under the equity method.

On May 20, 2016, we contributed $ 19,650 ,000 for a 50.0 % equity interest in a joint venture that will develop 606 Broadway, a 34 ,000 square foot office and retail building, located on Houston Street in Manhattan. The development cost of this project is estimated to be approximately $ 104,000 ,000. At closing, the joint venture obtained a $ 65,000 ,000 construction loan, of which approximately $ 25,800 ,000 was outstanding at December 31, 2016. The loan, which bears interest at LIBOR plus 3.00 % ( 3.66 % at December 31, 2016), matures in May 2019 with two one-year extension options. Because this joint venture is a VIE and we determined we are the primary beneficiary, we consolidate the accounts of this joint venture from the date of our investment.

Dispositions

On May 27, 2016, we sold a 47% ownership interest in 7 West 34th Street, a 479,000 square foot Manhattan office building leased to Amazon, and retained the remaining 53% interest. This transaction was based on a property value of approximately $561,000,000 or $1,176 per square foot. We received net proceeds of $127,382,000 from the sale and realized a net gain of $203,324,000, of which $159,511,000 was recognized in the second quarter of 2016 and is included in “net gain on disposition of wholly owned and partially owned assets” in our consolidated statements of income. The remaining net gain of $43,813,000 has been deferred until our guarantee of payment of loan principal and interest is removed or the loan is repaid. We realized a net tax gain of $90,017,000. We continue to manage and lease the property. We share control over major decisions with our joint venture partner. Accordingly, this property is accounted for under the equity method from the date of sale.

On December 19, 2016, we completed the sale of our 20 % interest in Fairfax Square to our joint venture partner for $ 15,500,000 , which resulted in a net gain of approximately $ 15,302,000 .

On August 24, 2016, the Skyline properties, located in Fairfax, Virginia, were placed in receivership. On December 21, 2016, the final disposition of the Skyline properties was completed by the receiver. In connection therewith, the Skyline properties’ assets (approximately $236,535,000) and liabilities (approximately $724,412,000), were removed from our consolidated balance sheet which resulted in a net gain of $487,877,000. There was no taxable income related to this transaction.

O verview – continued

Financings

Unsecured Revolving Credit Facility

On November 7, 2016, we extended one of our two $ 1.25 billion unsecured revolving credit facilities from June 2017 to February 2021 with two six-month extension options. The interest rate on the extended facility was lowered from LIBOR plus 115 basis points to LIBOR plus 100 basis points. The facility fee remains unchanged at 20 basis points.

Secured Debt

On February 8, 2016, we completed a $ 700,000 ,000 refinancing of 770 Broadway, a 1,158 ,000 square foot Manhattan office building. The five-year loan is interest only at LIBOR plus 1.75 % ( 2.40 % at December 31, 2016), which was swapped for four and a half years to a fixed rate of 2.56%. The Company realized net proceeds of approximately $ 330,000 ,000. The property was previously encumbered by a 5.65 %, $ 353,000 ,000 mortgage which was scheduled to mature in March 2016 .

On May 16, 2016, we completed a $300,000,000 recourse financing of 7 West 34th Street. The ten-year loan is interest only at a fixed rate of 3.65% and matures in June 2026.

On September 6, 2016, we completed a $ 675,000,000 refinancing of theMART, a 3,652,000 square foot commercial building in Chicago. The five-year loan is interest only and has a fixed rate of 2.70 %. The Company realized net proceeds of approximately $ 124,000,000 . The property was previously encumbered by a 5.57 %, $ 550,000,000 mortgage which was scheduled to mature in December 2016 .

On December 2, 2016, we completed a $ 400,000,000 refinancing of 350 Park Avenue, a 571,000 square foot Manhattan office building. The ten-year loan is interest only and has a fixed rate of 3.92 %. The Company realized net proceeds of approximately $ 111,000,000 . The property was previously encumbered by a 3.75 %, $ 284,000,000 mortgage which was scheduled to mature in January 2017 .

Preferred Securities

On September 1, 2016, we redeemed all of the outstanding 6.875 % Series J cumulative redeemable preferred shares/units at their redemption price of $ 25.00 per share/unit, or $ 246,250 ,000 in the aggregate, plus accrued and unpaid dividends/distributions through the date of redemption. In connection therewith, we expensed $ 7,408 ,000 of issuance costs, which reduced net income attributable to common shareholders and net income attributable to Class A unitholders in the twelve months ended December 31, 2016. These costs had been initially recorded as a reduction of shareholders’ equity and partners’ capital.

Overview - continued

Leasing Activity

The leasing activity and related statistics in the tables below are based on leases signed during the period and are not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Second generation relet space represents square footage that has not been vacant for more than nine months and tenant improvements and leasing commissions are based on our share of square feet leased during the period.

(Square feet in thousands)					New York Office
							Long Island City		New York		Washington, DC
					Manhattan		(Center Building)		Retail		Office
Quarter Ended December 31, 2016:
	Total square feet leased					609		17		10		329
	Our share of square feet leased					432		17		10		311
		Initial rent ⁽¹⁾			$	78.29	$	35.41	$	906.91	$	41.59
		Weighted average lease term (years)				7.8		9.8		9.8		4.6
		Second generation relet space:
			Square feet			358		-		7		272
			GAAP basis:
				Straight-line rent ⁽²⁾	$	77.10	$	-	$	178.19	$	40.43
				Prior straight-line rent	$	71.95	$	-	$	164.21	$	39.11
				Percentage increase		7.2%		-		8.5%		3.4%
				Percentage increase inclusive of 3 square
				foot Dyson lease at 640 Fifth ⁽³⁾						515.6%
			Cash basis:
				Initial rent ⁽¹⁾	$	77.16	$	-	$	160.47	$	41.91
				Prior escalated rent	$	72.41	$	-	$	170.45	$	41.12
				Percentage increase (decrease)		6.6%		-		(5.9%)		1.9%
				Percentage increase inclusive of 3 square
				foot Dyson lease at 640 Fifth ⁽³⁾						396.4%
		Tenant improvements and leasing commissions:
			Per square foot		$	73.69	$	75.81	$	813.04	$	23.20
			Per square foot per annum:		$	9.45	$	7.74	$	82.96	$	5.04
				Percentage of initial rent		12.1%		21.8%		9.1%		12.1%

(Square feet in thousands)					New York Office
							Long Island City		New York		Washington, DC
					Manhattan		(Center Building)		Retail		Office
Year Ended December 31, 2016:
	Total square feet leased					1,939		302		111		1,427
	Our share of square feet leased					1,541		302		90		1,350
		Initial rent ⁽¹⁾			$	78.97	$	39.84	$	285.17	$	40.41
		Weighted average lease term (years)				9.3		6.0		9.1		4.2
		Second generation relet space:
			Square feet			1,382		285		69		1,072
			GAAP basis:
				Straight-line rent ⁽²⁾	$	78.30	$	38.68	$	204.95	$	38.56
				Prior straight-line rent	$	66.15	$	28.69	$	166.14	$	39.53
				Percentage increase (decrease)		18.4%		34.8%		23.4%		(2.5%)
				Percentage increase inclusive of 3 square
				foot Dyson lease at 640 Fifth ⁽³⁾						94.9%
			Cash basis:
				Initial rent ⁽¹⁾	$	78.37	$	40.10	$	194.35	$	41.08
				Prior escalated rent	$	68.03	$	30.53	$	173.70	$	42.47
				Percentage increase (decrease)		15.2%		31.4%		11.9%		(3.3%)
				Percentage increase inclusive of 3 square
				foot Dyson lease at 640 Fifth ⁽³⁾						70.1%
		Tenant improvements and leasing commissions:
			Per square foot		$	72.81	$	21.66	$	184.74	$	19.62
			Per square foot per annum:		$	7.83	$	3.61	$	20.30	$	4.67
				Percentage of initial rent		9.9%		9.1%		7.1%		11.6%


See notes on the following page.

Overview - continued

Leasing Activity - continued

(Square feet in thousands)					New York				Washington, DC
					Office		Retail		Office
Year Ended December 31, 2015:
	Total square feet leased					2,276		91		1,987
	Our share of square feet leased:					1,838		82		1,847
		Initial rent ⁽¹⁾			$	78.55	$	917.59	$	40.20
		Weighted average lease term (years)				9.2		13.7		8.6
		Second generation relet space:
			Square feet			1,297		74		1,322
			GAAP basis:
				Straight-line rent ⁽²⁾	$	77.03	$	1,056.66	$	39.57	⁽⁴⁾
				Prior straight-line rent	$	62.73	$	529.31	$	43.08	⁽⁴⁾
				Percentage increase (decrease)		22.8%		99.6%		(8.2%)	⁽⁴⁾
			Cash basis:
				Initial rent ⁽¹⁾	$	78.89	$	907.49	$	40.12	⁽⁴⁾
				Prior escalated rent	$	66.21	$	364.56	$	43.99	⁽⁴⁾
				Percentage increase (decrease)		19.1%		148.9%		(8.8%)	⁽⁴⁾
		Tenant improvements and leasing commissions:
			Per square foot		$	69.36	$	688.42	$	55.14
			Per square foot per annum:		$	7.54	$	50.25	$	6.41
				Percentage of initial rent		9.6%		5.5%		15.9%


(1)	Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Most leases include free rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot but are included in the GAAP basis straight-line rent per square foot.
(2)	Represents the GAAP basis weighted average rent per square foot that is recognized over the term of the respective leases, and includes the effect of free rent and periodic step-ups in rent.
(3)	The Dyson lease was signed after this space had been vacant for greater than nine months and therefore, by company policy, does not qualify as "second generation" relet space.
(4)	Excluding 371 square feet of leasing activity with the U.S. Marshals Service (of which 293 square feet is second generation relet space), the initial rent and prior escalated rent on a GAAP basis was $42.30 and $43.89 per square foot, respectively (3.6% decrease), and the initial rent and prior escalated rent on a cash basis was $42.43 and $43.96 per square foot, respectively (3.5% decrease).

Overview - continued

Square footage (in service) and Occupancy as of December 31, 2016:

(Square feet in thousands)			Square Feet (in service)
		Number of	Total	Our
		properties	Portfolio	Share	Occupancy %
New York:
	Office	36	20,227	16,962	96.3%
	Retail	70	2,672	2,464	97.1%
	Residential - 1,692 units	11	1,559	826	95.7%
	Alexander's, including 312 residential units	7	2,437	790	99.8%
	Hotel Pennsylvania	1	1,400	1,400
			28,295	22,442	96.5%

Washington, DC:
	Office	44	11,141	10,123	88.3%
	Residential - 3,156 units	9	3,245	3,103	97.8%
	Other	5	330	330	100.0%
			14,716	13,556	90.5%

Other:
	theMART	3	3,671	3,662	98.9%
	555 California Street	3	1,738	1,217	92.4%
	Other	4	1,811	850	99.8%
			7,220	5,729

Total square feet at December 31, 2016			50,231	41,727

Overview - continued

Square footage (in service) and Occupancy as of December 31, 2015:

(Square feet in thousands)			Square Feet (in service)
		Number of	Total	Our
		properties	Portfolio	Share	Occupancy %
New York:
	Office	35	21,288	17,412	96.3%
	Retail	65	2,641	2,408	96.2%
	Residential - 1,711 units	11	1,561	827	95.0%
	Alexander's, including 296 residential units	7	2,419	784	99.7%
	Hotel Pennsylvania	1	1,400	1,400
			29,309	22,831	96.4%

Washington, DC:
	Office	44	11,592	10,597	90.1%
	Residential - 2,630 units	9	2,808	2,666	96.4%
	Other	5	386	386	100.0%
			14,786	13,649	91.6%

Other:
	theMART	3	3,658	3,649	98.5%
	555 California Street	3	1,736	1,215	93.3%
	Other	4	1,749	837	99.8%
			7,143	5,701

Total square feet at December 31, 2015			51,238	42,181

Critical Accounting Policies

In preparing the consolidated financial statements we have made estimates and assumptions that affect the reported amounts of 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. Set forth below is a summary of the accounting policies that we believe are critical to the preparation of our consolidated financial statements. The summary should be read in conjunction with the more complete discussion of our accounting policies included in Note 2 – Basis of Presentation and Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K.

Real Estate

Real estate is carried at cost, net of accumulated depreciation and amortization. Betterments, major renewals and certain costs directly related to the improvement and leasing of real estate are capitalized. Maintenance and repairs are expensed as incurred. For redevelopment of existing operating properties, the net book value of the existing property under redevelopment plus the cost for the construction and improvements incurred in connection with the redevelopment are capitalized to the extent the capitalized costs of the property do not exceed the estimated fair value of the redeveloped property when complete. If the cost of the redeveloped property, including the net book value of the existing property, exceeds the estimated fair value of redeveloped property, the excess is charged to expense. Depreciation is recognized on a straight-line basis over estimated useful lives which range from 7 to 40 years. Tenant allowances are amortized on a straight-line basis over the lives of the related leases, which approximate the useful lives of the assets.

Upon the acquisition of real estate that meets the criteria of a business under ASU 2017-01, we assess the fair value of acquired assets (including land, buildings and improvements, identified intangibles, such as acquired above and below-market leases, acquired in-place leases and tenant relationships) and acquired liabilities and we allocate the purchase price based on these assessments. We assess fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including historical operating results, known trends, and market/economic conditions. We record acquired intangible assets (including acquired above-market leases, acquired in-place leases and tenant relationships) and acquired intangible liabilities (including below–market leases) at their estimated fair value separate and apart from goodwill. We amortize identified intangibles that have finite lives over the period they are expected to contribute directly or indirectly to the future cash flows of the property or business acquired.

As of December 31, 2016 and 2015, the carrying amounts of real estate, net of accumulated depreciation, were $14.8 billion and $14.7 billion, respectively. As of December 31, 2016 and 2015, the carrying amounts of identified intangible assets (including acquired above-market leases, tenant relationships and acquired in-place leases) were $192,731,000 and $227,901,000, respectively, and the carrying amounts of identified intangible liabilities, a component of “deferred revenue” on our consolidated balance sheets, were $263,786,000 and $318,148,000, respectively.

Our properties, including any related intangible assets, are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undiscounted basis. An impairment loss is measured based on the excess of the property’s carrying amount over its estimated fair value. Impairment analyses are based on our current plans, intended holding periods and available market information at the time the analyses are prepared. If our estimates of the projected future cash flows, anticipated holding periods, or market conditions change, our evaluation of impairment losses may be different and such differences could be material to our consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. Plans to hold properties over longer periods decrease the likelihood of recording impairment losses.

Critical Accounting Policies – continued

Partially Owned Entities

We consolidate entities in which we have a controlling financial interest. In determining whether we have a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity (“VIE”) and whether we are the primary beneficiary. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. We generally do not control a partially owned entity if the entity is not considered a VIE and the approval of all of the partners/members is contractually required with respect to major decisions, such as operating and capital budgets, the sale, exchange or other disposition of real property, the hiring of a chief executive officer, the commencement, compromise or settlement of any lawsuit, legal proceeding or arbitration or the placement of new or additional financing secured by assets of the venture. We account for investments under the equity method when the requirements for consolidation are not met, and we have significant influence over the operations of the investee. Equity method investments are initially recorded at cost and subsequently adjusted for our share of net income or loss and cash contributions and distributions each period. Investments that do not qualify for consolidation or equity method accounting are accounted for on the cost method.

Investments in partially owned entities are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is measured based on the excess of the carrying amount of an investment over its estimated fair value. Impairment analyses are based on current plans, intended holding periods and available information at the time the analyses are prepared. The ultimate realization of our investments in partially owned entities is dependent on a number of factors, including the performance of each investment and market conditions. If our estimates of the projected future cash flows, the nature of development activities for properties for which such activities are planned and the estimated fair value of the investment change based on market conditions or otherwise, our evaluation of impairment losses may be different and such differences could be material to our consolidated financial statements. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results.

As of December 31, 2016 and 2015, the carrying amounts of investments in partially owned entities were $1.4 billion and $1.6 billion, respectively.

Allowance for Doubtful Accounts

We periodically evaluate the collectability of amounts due from tenants and maintain an allowance for doubtful accounts ($10,920,000 and $11,908,000 as of December 31, 2016 and 2015, respectively) for estimated losses resulting from the inability of tenants to make required payments under the lease agreements. We also maintain an allowance for receivables arising from the straight-lining of rents ($2,227,000 and $2,751,000 as of December 31, 2016 and 2015, respectively). This receivable arises from earnings recognized in excess of amounts currently due under the lease agreements. Management exercises judgment in establishing these allowances and considers payment history and current credit status in developing these estimates. These estimates may differ from actual results, which could be material to our consolidated financial statements.

Critical Accounting Policies – continued

Revenue Recognition

We have the following revenue sources and revenue recognition policies:

· Base Rent — income arising from tenant leases. These rents are recognized over the non-cancelable term of the related leases on a straight-line basis which includes the effects of rent steps and rent abatements under the leases. We commence rental revenue recognition when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease.

· Percentage Rent — income arising from retail tenant leases that is contingent upon tenant sales exceeding defined thresholds. These rents are recognized only after the contingency has been removed (i.e., when tenant sales thresholds have been achieved).

· Hotel Revenue — income arising from the operation of the Hotel Pennsylvania which consists of rooms revenue, food and beverage revenue, and banquet revenue. Income is recognized when rooms are occupied. Food and beverage and banquet revenue are recognized when the services have been rendered.

· Trade Shows Revenue — income arising from the operation of trade shows, including rentals of booths. This revenue is recognized when the trade shows have occurred.

· Expense Reimbursements — revenue arising from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property. This revenue is recognized in the same periods as the expenses are incurred.

· Management, Leasing and Other Fees — income arising from contractual agreements with third parties or with partially owned entities. This revenue is recognized as the related services are performed under the respective agreements.

Before we recognize revenue, we assess, among other things, its collectability. If our assessment of the collectability of revenue changes, the impact on our consolidated financial statements could be material.

Income Taxes

Vornado operates in a manner intended to enable it to continue to qualify as a Real Estate Investment Trust (“REIT”) under Sections 856-860 of the Internal Revenue Code of 1986, as amended. Under those sections, a REIT which distributes at least 90% of its REIT taxable income as a dividend to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. Vornado distributes to its shareholders 100% of its taxable income and therefore, no provision for Federal income taxes is required. If Vornado fails to distribute the required amount of income to its shareholders, or fails to meet other REIT requirements, it may fail to qualify as a REIT which may result in substantial adverse tax consequences.

Recent Accounting Pronouncements

See Note 2 – Basis of Presentation and Significant Accounting Policies to our consolidated financial statements in this Annual Report on Form 10-K for a discussion concerning recent accounting pronouncements.

Net Income and EBITDA by Segment for the Years Ended December 31, 2016, 2015 and 2014

Below is a summary of net income and a reconciliation of net income to EBITDA ⁽¹⁾ by segment for the years ended December 31, 2016 and 2015.

(Amounts in thousands)		For the Year Ended December 31, 2016
			Total		New York			Washington, DC			Other
Total revenues			$	2,506,202	$	1,713,374		$	518,117		$	274,711
Total expenses				1,955,411		1,093,587			528,863			332,961
Operating income (loss)				550,791		619,787			(10,746)			(58,250)
Income (loss) from partially owned entities				165,389		(2,379)			(7,227)			174,995
Loss from real estate fund investments				(23,602)		-			-			(23,602)
Interest and other investment income (loss), net				29,546		5,093			(2)			24,455
Interest and debt expense				(402,674)		(216,685)			(72,434)			(113,555)
Net gain on extinguishment of Skyline properties debt				487,877		-			487,877			-
Net gain on disposition of wholly owned and partially
	owned assets			175,735		159,511			15,302			922
Income before income taxes				983,062		565,327			412,770			4,965
Income tax expense				(8,312)		(5,508)			(1,083)			(1,721)
Income from continuing operations				974,750		559,819			411,687			3,244
Income from discontinued operations				7,172		-			-			7,172
Net income				981,922		559,819			411,687			10,416
Less net income attributable to noncontrolling interests
	in consolidated subsidiaries			(21,351)		(13,558)			-			(7,793)
Net income attributable to the Operating Partnership				960,571		546,261			411,687			2,623
Interest and debt expense ⁽²⁾				507,362		280,563			81,723			145,076
Depreciation and amortization ⁽²⁾				694,214		435,961			158,720			99,533
Income tax expense ⁽²⁾				11,838		5,911			2,979			2,948
EBITDA ⁽¹⁾			$	2,173,985	$	1,268,696	⁽³⁾	$	655,109	⁽⁴⁾	$	250,180	⁽⁵⁾

(Amounts in thousands)		For the Year Ended December 31, 2015
			Total		New York			Washington, DC			Other
Total revenues			$	2,502,267	$	1,695,925		$	532,812		$	273,530
Total expenses				1,742,019		1,032,015			390,921			319,083
Operating income (loss)				760,248		663,910			141,891			(45,553)
(Loss) income from partially owned entities				(12,630)		655			(6,020)			(7,265)
Income from real estate fund investments				74,081		-			-			74,081
Interest and other investment income (loss), net				26,978		7,722			(262)			19,518
Interest and debt expense				(378,025)		(194,278)			(68,727)			(115,020)
Net gain on disposition of wholly owned and partially
	owned assets			251,821		142,693			102,404			6,724
Income (loss) before income taxes				722,473		620,702			169,286			(67,515)
Income tax benefit (expense)				84,695		(4,379)			(317)			89,391
Income from continuing operations				807,168		616,323			168,969			21,876
Income from discontinued operations				52,262		-			-			52,262
Net income				859,430		616,323			168,969			74,138
Less net income attributable to noncontrolling interests
	in consolidated subsidiaries			(55,765)		(13,022)			-			(42,743)
Net income attributable to the Operating Partnership				803,665		603,301			168,969			31,395
Interest and debt expense ⁽²⁾				469,843		248,724			80,795			140,324
Depreciation and amortization ⁽²⁾				664,637		394,028			178,021			92,588
Income tax (benefit) expense ⁽²⁾				(85,379)		4,766			(1,610)			(88,535)
EBITDA ⁽¹⁾			$	1,852,766	$	1,250,819	⁽³⁾	$	426,175	⁽⁴⁾	$	175,772	⁽⁵⁾

____________________________

See notes on pages 56 and 57.

Net Income and EBITDA by Segment for the Years Ended December 31, 2016, 2015 and 2014 - continued

Below is a summary of net income and a reconciliation of net income to EBITDA ⁽¹⁾ by segment for the year ended December 31, 2014.

(Amounts in thousands)		For the Year Ended December 31, 2014
			Total		New York			Washington, DC			Other
Total revenues			$	2,312,512	$	1,520,845		$	537,151		$	254,516
Total expenses				1,622,619		946,466			358,019			318,134
Operating income (loss)				689,893		574,379			179,132			(63,618)
(Loss) income from partially owned entities				(59,861)		20,701			(4,767)			(75,795)
Income from real estate fund investments				163,034		-			-			163,034
Interest and other investment income, net				38,752		6,711			183			31,858
Interest and debt expense				(412,755)		(183,427)			(75,395)			(153,933)
Net gain on disposition of wholly owned and partially
	owned assets			13,568		-			-			13,568
Income (loss) before income taxes				432,631		418,364			99,153			(84,886)
Income tax expense				(9,281)		(4,305)			(242)			(4,734)
Income (loss) from continuing operations				423,350		414,059			98,911			(89,620)
Income from discontinued operations				585,676		463,163			-			122,513
Net income				1,009,026		877,222			98,911			32,893
Less net income attributable to noncontrolling interests
	in consolidated subsidiaries			(96,561)		(8,626)			-			(87,935)
Net income (loss) attributable to the Operating Partnership				912,465		868,596			98,911			(55,042)
Interest and debt expense ⁽²⁾				654,398		241,959			87,778			324,661
Depreciation and amortization ⁽²⁾				685,973		324,239			144,124			217,610
Income tax expense ⁽²⁾				24,248		4,395			288			19,565
EBITDA ⁽¹⁾			$	2,277,084	$	1,439,189	⁽³⁾	$	331,101	⁽⁴⁾	$	506,794	⁽⁵⁾

____________________________

See notes on the following pages.

Net Income and EBITDA by Segment for the Years Ended December 31, 2016, 2015 and 2014 - continued

Notes to preceding tabular information:

(1)	We calculate EBITDA on an Operating Partnership basis which is before allocation to the noncontrolling interest of the Operating Partnership. We consider EBITDA a non-GAAP financial 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. Our 7.5% interest in Fashion Centre Mall/Washington Tower will not be included in the spin-off of our Washington, DC segment and have been reclassified to Other. The prior year's presentation has been conformed to the current year.

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

(3)	The elements of "New York" EBITDA are summarized below.

	(Amounts in thousands)			For the Year Ended December 31,
				2016		2015		2014
	Office			$	805,708	$	804,272	$	1,063,355
	Retail				381,739		358,379		281,428
	Residential				25,060		22,266		21,907
	Alexander's				46,182		42,858		41,746
	Hotel Pennsylvania				10,007		23,044		30,753
		Total New York EBITDA			1,268,696		1,250,819		1,439,189
	Certain items that impact EBITDA:
		Net gains on sale of real estate			(159,511)		(142,693)		(440,537)
		EBITDA from discontinued operations and sold properties			(3,120)		(35,985)		(39,743)
		Other			-		(1,300)		(171)
		Certain items that impact EBITDA			(162,631)		(179,978)		(480,451)
			Total New York EBITDA, as adjusted	$	1,106,065	$	1,070,841	$	958,738

(4)	The elements of "Washington, DC" EBITDA are summarized below.

	(Amounts in thousands)			For the Year Ended December 31,
				2016		2015		2014
	Office, excluding the Skyline properties			$	260,436	$	359,063	$	260,270
	Skyline properties				348,016		26,325		29,250
		Total Office			608,452		385,388		289,520
	Residential				46,657		40,787		41,581
		Total Washington, DC EBITDA			655,109		426,175		331,101
	Certain items that impact EBITDA:
		Net gain on extinguishment of Skyline properties debt			(487,877)		-		-
		Skyline properties impairment loss			160,700		-		-
		EBITDA from discontinued operations and sold properties			(22,131)		(33,605)		(38,876)
		Net gains on sale of real estate and a land parcel			(15,302)		(102,404)		(1,800)
		Other			-		405		-
		Certain items that impact EBITDA			(364,610)		(135,604)		(40,676)
			Total Washington, DC EBITDA, as adjusted	$	290,499	$	290,571	$	290,425

Net Income and EBITDA by Segment for the Years Ended December 31, 2016, 2015 and 2014 - continued

Notes to preceding tabular information:

(5)	The elements of "Other" EBITDA are summarized below.

	(Amounts in thousands)		For the Year Ended December 31,
			2016		2015			2014
	Our share of real estate fund investments:
		Income before net realized/unrealized (loss) gain	$	8,607	$	8,611	$	8,056
		Net realized/unrealized (loss) gain		(16,270)		14,657		37,535
		Carried interest		(13,379)		10,696		24,715
	Total (loss) income from real estate fund investments			(21,042)		33,964		70,306
	theMART (including trade shows)			91,845		79,159		79,636
	555 California Street			45,827		49,975		48,844
	India real estate ventures			3,685		3,933		6,434
	Our share of Toys ^(a)			2,000		2,500		103,632
	Other investments			77,240		42,436		21,385
				199,555		211,967		330,237
	Corporate general and administrative expenses ^(b)(c)			(100,594)		(106,416)		(94,929)
	Investment income and other, net ^(b)			22,501		26,385		31,665
	Income from the repayment of our investments in 85 Tenth Avenue loans
		and preferred equity		160,843		-		-
	Acquisition and transaction related costs			(26,062)		(12,511)		(16,392)
	Our share of impairment losses on India real estate ventures			(13,962)		(14,806)		(5,771)
	Discontinued operations ^(d)			7,185		28,314		245,679
	Net gains on sale of real estate			714		44,390		26,568
	Impairment loss and loan loss reserve on investment in Suffolk Downs			-		(1,551)		(10,263)
		Total Other	$	250,180	$	175,772	$	506,794


	(a)	As a result of our investment being reduced to zero, we suspended equity method accounting in 2014. The year ended December 31, 2014 includes an impairment loss of $75,196.
	(b)	The amounts in these captions (for this table only) exclude the results of the mark-to-market of our deferred compensation plan of $5,213, $111, and $11,557 of income, respectively.
	(c)	The year ended December 31, 2015 includes a cumulative catch up of $4,542 from the acceleration of recognition of compensation expense related to the modification of the 2012-2014 Out-Performance Plans.
	(d)	The years ended December 31, 2015 and 2014 include $22,684 and $14,956, respectively, of transaction costs related to the spin-off of our strip shopping centers and malls.

EBITDA by Region

Below is a summary of the percentages of EBITDA by geographic region, excluding gains on sale of real estate, non-cash impairment losses, and operations of sold properties.

		For the Year Ended December 31,
		2016	2015	2014
Region:
	New York City metropolitan area	72%	72%	70%
	Washington, DC/Northern Virginia area	19%	20%	21%
	Chicago, IL	6%	5%	6%
	San Francisco, CA	3%	3%	3%
		100%	100%	100%

Results of Operations – Year Ended December 31, 2016 Compared to December 31, 2015

Revenues

Our revenues, which consist of property rentals (including hotel and trade show revenues), tenant expense reimbursements, and fee and other income, were $2,506,202,000 in the year ended December 31, 2016, compared to $2,502,267,000 in the prior year, an increase of $3,935,000. Below are the details of the increase (decrease) by segment:

(Amounts in thousands)
Increase (decrease) due to:		Total		New York			Washington, DC			Other
Property rentals:
	Acquisitions, dispositions and other	$	(48,446)	$	(33,841)	⁽¹⁾	$	(14,605)	⁽²⁾	$	-
	Development and redevelopment		2,151		(150)			(195)			2,496
	Hotel Pennsylvania		(12,837)		(12,837)	⁽³⁾		-			-
	Trade shows		(852)		-			-			(852)
	Same store operations		87,126		77,676			6,622			2,828
			27,142		30,848			(8,178)			4,472

Tenant expense reimbursements:
	Acquisitions, dispositions and other		(5,074)		(4,698)			(377)			1
	Development and redevelopment		244		(3)			(796)			1,043
	Same store operations		4,521		10,170			(1,960)			(3,689)
			(309)		5,469			(3,133)			(2,645)

Fee and other income:
	BMS cleaning fees		(3,193)		(3,233)			-			40
	Management and leasing fees		4,060		1,105			2,023			932
	Lease termination fees		(16,717)		(13,878)	⁽⁴⁾		(3,118)			279
	Other income		(7,048)		(2,862)			(2,289)			(1,897)
			(22,898)		(18,868)			(3,384)			(646)

Total increase (decrease) in revenues		$	3,935	$	17,449		$	(14,695)		$	1,181


(1)	Primarily due to (i) $20,515 from the write-off of New York office straight-line rents recorded in 2016, (ii) $18,014 from the disposition of 20 Broad Street and (iii) $14,238 of income in 2015 from the acceleration of amortization of acquired below-market lease liabilities at 697-703 Fifth Avenue (St. Regis - retail), partially offset by asset acquisitions.
(2)	Primarily from the disposition of 1750 Pennsylvania Avenue and higher vacancies at the Skyline properties. On December 21, 2016, the disposition of the Skyline properties was completed by the receiver.
(3)	Average occupancy and revenue per available room were 84.7% and $113.84, respectively, for 2016 as compared to 90.7% and $133.69, respectively, for 2015.
(4)	Primarily from a lease termination fee received from a tenant at 20 Broad Street in the fourth quarter of 2015.

Results of Operations – Year Ended December 31, 2016 Compared to December 31, 2015 - continued

Expenses

Our expenses, which consist primarily of operating (including hotel and trade show expenses), depreciation and amortization and general and administrative expenses, were $1,955,411,000 in the year ended December 31, 2016, compared to $1,742,019,000 in the prior year, an increase of $213,392,000. Below are the details of the increase by segment:

(Amounts in thousands)
Increase (decrease) due to:			Total		New York		Washington, DC			Other
Operating:
	Acquisitions, dispositions and other		$	(3,098)	$	2,527	$	(5,625)	⁽¹⁾	$	-
	Development and redevelopment			(701)		(99)		(2,090)			1,488
	Non-reimbursable expenses, including
		bad-debt reserves		(1,975)		(2,296)		551			(230)
	Hotel Pennsylvania			322		322		-			-
	Trade shows			456		-		-			456
	BMS expenses			(3,019)		(3,152)		-			133
	Same store operations			21,102		25,224		(159)			(3,963)
				13,087		22,526		(7,323)			(2,116)

Depreciation and amortization:
	Acquisitions, dispositions and other			(4,077)		3,229		(7,306)	⁽¹⁾		-
	Development and redevelopment			(22,207)		(296)		(23,232)	⁽²⁾		1,321
	Same store operations			48,391		35,275		11,425			1,691
				22,107		38,208		(19,113)			3,012

General and administrative:
	Mark-to-market of deferred compensation
		plan liability		5,102		-		-			5,102	⁽³⁾
	Same store operations			(1,130)		838		3,678			(5,646)	⁽⁴⁾
				3,972		838		3,678			(544)

Skyline properties impairment loss				160,700		-		160,700	⁽⁵⁾		-

Acquisition and transaction related costs				13,526		-		-			13,526

Total increase in expenses			$	213,392	$	61,572	$	137,942		$	13,878



(1)	Primarily from the disposition of 1750 Pennsylvania Avenue and higher vacancies at the Skyline properties. On December 21, 2016, the disposition of the Skyline properties was completed by the receiver.
(2)	Primarily due to the demolition of two adjacent office properties, 1726 M Street and 1150 17th Street.
(3)	This increase 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, net” on our consolidated statements of income.
(4)	Results primarily from the acceleration of the recognition of compensation expense in 2015 of $4,542 related to 2012-2014 Out-Performance Plans due to the modification of the vesting criteria of awards such that they fully vest at age 65.
(5)	On March 15, 2016, we notified the servicer of the $678,000 non-recourse mortgage loan on the Skyline properties in Virginia that cash flow will be insufficient to service the debt and pay other property related costs and expenses and that we were not willing to fund additional cash shortfalls. Accordingly, at our request, the loan was transferred to the special servicer. Consequently, based on the shortened holding period for the underlying assets, we concluded that the excess of carrying amount over our estimate of fair value was not recoverable and recognized a $160,700 non-cash impairment loss in the first quarter of 2016.

Results of Operations – Year Ended December 31, 2016 Compared to December 31, 2015 - continued

(Loss) Income from Real Estate Fund Investments

Below are the components of the (loss) income from our real estate fund investments for the years ended December 31, 2016 and 2015.

(Amounts in thousands)		For the Year Ended December 31,
		2016		2015
Net investment income		$	17,053	$	16,329
Net realized gain on exited investments			14,761		26,036
Previously recorded unrealized gain on exited investment			(14,254)		(23,279)
Net unrealized (loss) gain on held investments			(41,162)		54,995
(Loss) income from real estate fund investments			(23,602)		74,081
Less loss (income) attributable to noncontrolling interests in consolidated subsidiaries			2,560		(40,117)
(Loss) income from real estate fund investments attributable to the Operating Partnership ⁽¹⁾			(21,042)		33,964
Less loss (income) attributable to noncontrolling interests in the Operating Partnership			1,270		(2,011)
(Loss) income from real estate fund investments attributable to Vornado		$	(19,772)	$	31,953


(1)	Excludes $3,831, and $2,939 of management and leasing fees in the years ended December 31, 2016 and 2015, respectively, which are included as a component of "fee and other income" on our consolidated statements of income.

Income (Loss) from Partially Owned Entities

Summarized below are the components of income (loss) from partially owned entities for the years ended December 31, 2016 and 2015.

(Amounts in thousands)		Percentage
		Ownership at	For the Year Ended December 31,
		December 31, 2016	2016		2015
Equity in Net Income (Loss):
85 Tenth Avenue ⁽¹⁾		49.9%	$	178,072	$	(1,015)
Alexander's		32.4%		34,240		31,078
Partially owned office buildings ⁽²⁾		Various		(42,100)		(23,556)
India real estate ventures ⁽³⁾		4.1%-36.5%		(18,122)		(18,746)
Urban Edge Properties ("UE")		5.4%		5,839		4,394
PREIT		8.0%		(5,213)		(7,450)
Toys ⁽⁴⁾		32.5%		2,000		2,500
Other investments ⁽⁵⁾		Various		10,673		165
			$	165,389	$	(12,630)


(1)	On December 1, 2016, the owner of 85 Tenth Avenue completed a 10-year, 4.55% $625,000 refinancing of the property and we received net proceeds of $191,779 in repayment of our existing loans and preferred equity investments. We recognized $160,843 of income as a result of this transaction.
(2)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue, 512 West 22nd Street and others. In 2016 and 2015, we recognized net losses of $47,000 and $39,600, respectively, from our 666 Fifth Avenue (Office) joint venture as a result of our share of depreciation expense. In addition, in 2015 we recognized our $12,800 share of a write-off of a below-market lease liability related to a tenant vacating at 650 Madison Avenue.
(3)	Includes non-cash impairment losses of $13,962 and $14,806, respectively.
(4)	Represents management fees earned and received from our investment in Toys.
(5)	Includes interests in Independence Plaza, Fashion Centre Mall/Washington Tower, 50-70 West 93rd Street and others.

Results of Operations – Year Ended December 31, 2016 Compared to December 31, 2015 - continued

Interest and Other Investment Income, net

Interest and other investment income, net was $29,546,000 in the year ended December 31, 2016, compared to $26,978,000 in the prior year, an increase of $2,568,000. This increase resulted primarily from an increase 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).

Interest and Debt Expense

Interest and debt expense was $402,674,000 in the year ended December 31, 2016, compared to $378,025,000 in the prior year, an increase of $24,649,000. This increase was primarily due to (i) $23,205,000 of higher interest expense from the full year effect of 2015 financings of the St. Regis Retail, 150 West 34th Street, 100 West 33rd Street, and from the $375,000,000 drawn on our $750,000,000 delayed draw term loan, (ii) $10,208,000 of lower capitalized interest, and (iii) $7,823,000 of default interest on our Skyline properties mortgage loan, partially offset by (iv) $13,127,000 of interest savings from the re-financings of 888 7th Avenue and 770 Broadway and (v) $4,177,000 of interest savings from the repayment of the Bowen Building loan.

Net Gain on Extinguishment of Skyline Properties Debt

I n the year ended December 31, 2016, upon the final disposition of the Skyline properties, all assets (approximately $236,535,000) and liabilities (approximately $724,412,000), were removed from our consolidated balance sheet which resulted in a net gain of $487,877,000.

Net Gain on Disposition of Wholly Owned and Partially Owned Assets

The net gain of $175,735,000 i n the year ended December 31, 2016, consists primarily of a $159,511,000 net gain on sale of our 47% ownership interest in 7 West 34th Street and a $15,302,000 net gain on sale of our 20% ownership interest in Fairfax Square. The net gain of $251,821,000 in the prior year , consists of a $142,693,000 net gain on sale of 20 Broad Street, a $102,404,000 net gain on sale of 1750 Pennsylvania Avenue and $6,724,000 from the sale of residential condominiums.

Income Tax (Expense) Benefit

In the year ended December 31, 2016, we had an income tax expense of $8,312,000, compared to a benefit of $84,695,000 in the prior year, an increase in expense of $93,007,000. This increase in expense resulted primarily from the prior year reversal of $90,030,000 of valuation allowances against certain of our deferred tax assets, as we concluded that it was more-likely-than-not that we will generate sufficient taxable income from the sale of 220 Central Park South residential condominium units to realize the deferred tax assets.

Income from Discontinued Operations

We have reclassified the revenues and expenses of our strip shopping center and mall business which was spun off to UE on January 15, 2015 and other related retail assets that were sold or are currently held for sale to “income from discontinued operations” and the related assets and liabilities to “assets related to discontinued operations” and “liabilities related to discontinued operations” for all the periods presented in the accompanying financial statements. The table below sets forth the combined results of assets related to discontinued operations for the years ended December 31, 2016 and 2015.

(Amounts in thousands)	For the Year Ended December 31,
	2016		2015
Total revenues	$	3,998	$	27,831
Total expenses		1,435		17,651
		2,563		10,180
Net gains on sale of real estate and a lease position		5,074		65,396
Impairment losses		(465)		(256)
UE spin-off transaction related costs		-		(22,972)
Pretax income from discontinued operations		7,172		52,348
Income tax expense		-		(86)
Income from discontinued operations	$	7,172	$	52,262

Results of Operations – Year Ended December 31, 2016 Compared to December 31, 2015 - continued

Net Income Attributable to Noncontrolling Interests in Consolidated Subsidiaries

Net income attributable to noncontrolling interests in consolidated subsidiaries was $21,351,000 in the year ended December 31, 2016, compared to $55,765,000 in the prior year, a decrease of $34,414,000. This decrease resulted primarily from lower net income allocated to the noncontrolling interests of our real estate fund investments.

Net Income Attributable to Noncontrolling Interests in the Operating Partnership (Vornado Realty Trust)

Net income attributable to noncontrolling interests in the Operating Partnership was $53,654,000 in the year ended December 31, 2016, compared to $43,231,000 in the prior year, an increase of $10,423,000. This increase resulted primarily from higher net income subject to allocation to unitholders.

Preferred Share Dividends of Vornado Realty Trust

Preferred share dividends were $75,903,000 in the year ended December 31, 2016, compared to $80,578,000 in the prior year, a decrease of $4,675,000. This decrease resulted primarily from the redemption of the 6.875% Series J cumulative redeemable preferred shares on September 1, 2016.

Preferred Unit Distributions of Vornado Realty L.P.

Preferred unit distributions were $76,097,000 in the year ended December 31, 2016, compared to $80,736,000 in the prior year, a decrease of $4,639,000. This decrease resulted primarily from the redemption of the 6.875% Series J cumulative redeemable preferred units on September 1, 2016.

Preferred Share Issuance Costs

In the year ended December 31, 2016, we recognized a $7,408,000 expense in connection with the write-off of issuance costs upon redeeming all of the outstanding 6.875% Series J cumulative redeemable preferred shares on September 1, 2016.

Results of Operations – Year Ended December 31, 2016 Compared to December 31, 2015 - 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 also present same store EBITDA on a cash basis (which excludes income from the straight-lining of rents, amortization of acquired below-market leases, net of above-market leases and other non-cash adjustments). We present these non-GAAP financial 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 is the reconciliation of EBITDA to same store EBITDA for each of our segments for the year ended December 31, 2016, compared to the year ended December 31, 2015.

(Amounts in thousands)			New York			Washington, DC
EBITDA for the year ended December 31, 2016			$	1,268,696		$	655,109
	Add-back:
		Non-property level overhead expenses included above		35,864			29,729
	Less EBITDA from:
		Acquisitions		(24,809)			-
		Dispositions, including net gains on sale		(159,498)			(525,223)
		Properties taken out-of-service for redevelopment		(26,816)			(3,118)
		Other non-operating expenses		6,568			159,860
Same store EBITDA for the year ended December 31, 2016			$	1,100,005		$	316,357

EBITDA for the year ended December 31, 2015			$	1,250,819		$	426,175
	Add-back:
		Non-property level overhead expenses included above		35,026			26,051
	Less EBITDA from:
		Acquisitions		(2,840)			-
		Dispositions, including net gains on sale		(173,843)			(135,929)
		Properties taken out-of-service for redevelopment		(21,171)			(2,851)
		Other non-operating income		(52,762)			(5,746)
Same store EBITDA for the year ended December 31, 2015			$	1,035,229		$	307,700

Increase in same store EBITDA -
	Year ended December 31, 2016 vs. December 31, 2015		$	64,776	⁽¹⁾	$	8,657	⁽³⁾

% increase in same store EBITDA				6.3%	⁽²⁾		2.8%


(1)	The $64,776 increase in New York same store EBITDA resulted primarily from increases in Office and Retail EBITDA of $43,187 and $33,360, respectively, partially offset by a decrease in Hotel Pennsylvania EBITDA of $13,037. The Office and Retail EBITDA increases resulted primarily from higher rents, including signage, partially offset by lower management and leasing fees and higher operating expenses, net of reimbursements.
(2)	Excluding Hotel Pennsylvania, same store EBITDA increased by 7.7%.
(3)	The $8,657 increase in Washington, DC same store EBITDA resulted primarily from higher rental revenue of $8,542, higher management and leasing fees of $2,023, partially offset by higher net operating expenses of $2,351.

Results of Operations – Year Ended December 31, 2016 Compared to December 31, 2015 - continued

Reconciliation of Same Store EBITDA to Cash basis Same Store EBITDA

(Amounts in thousands)		New York			Washington, DC
Same store EBITDA for the year ended December 31, 2016		$	1,100,005		$	316,357
Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(170,920)			(19,446)
Cash basis same store EBITDA for the year ended December 31, 2016		$	929,085		$	296,911

Same store EBITDA for the year ended December 31, 2015		$	1,035,229		$	307,700
Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(179,403)			(21,641)
Cash basis same store EBITDA for the year ended December 31, 2015		$	855,826		$	286,059

Increase in cash basis same store EBITDA -
	Year ended December 31, 2016 vs. December 31, 2015	$	73,259		$	10,852

% increase in cash basis same store EBITDA			8.6%	⁽¹⁾		3.8%


(1)	Excluding Hotel Pennsylvania, same store EBITDA increased by 10.3% on a cash basis.

Results of Operations – Year Ended December 31, 2015 Compared to December 31, 2014

Revenues

Our revenues, which consist of property rentals (including hotel and trade show revenues), tenant expense reimbursements, and fee and other income, were $2,502,267,000 in the year ended December 31, 2015, compared to $2,312,512,000 in the year ended December 31, 2014, an increase of $189,755,000. Below are the details of the increase (decrease) by segment:

(Amounts in thousands)
Increase (decrease) due to:		Total		New York			Washington, DC		Other
Property rentals:
	Acquisitions, dispositions and other	$	57,430	$	62,316	⁽¹⁾	$	(4,886)	$	-
	Development and redevelopment		55,559		52,547	⁽²⁾		142		2,870
	Hotel Pennsylvania		(6,501)		(6,501)			-		-
	Trade shows		2,195		-			-		2,195
	Same store operations		56,416		46,024			2,616		7,776
			165,099		154,386			(2,128)		12,841

Tenant expense reimbursements:
	Acquisitions, dispositions and other		4,521		5,098	⁽¹⁾		(577)		-
	Development and redevelopment		2,863		2,904	⁽²⁾		(41)		-
	Same store operations		7,773		4,046			57		3,670
			15,157		12,048			(561)		3,670

Fee and other income:
	BMS cleaning fees		(3,545)		(4,271)			-		726
	Management and leasing fees		(3,089)		(2,509)			(480)		(100)
	Lease termination fees		10,307		12,207			(1,900)		-
	Other income		5,826		3,219			730		1,877
			9,499		8,646			(1,650)		2,503

Total increase (decrease) in revenues		$	189,755	$	175,080		$	(4,339)	$	19,014



(1)	Includes the acquisitions of 33-00 Northern Boulevard (Center Building), 260 Eleventh Avenue, 697-703 Fifth Avenue (St. Regis - retail) and 150 West 34th Street.
(2)	Primarily 330 West 34th Street, 7 West 34th Street and 1535 Broadway (Marriott Marquis - retail and signage).

Results of Operations – Year Ended December 31, 2015 Compared to December 31, 2014 - continued

Expenses

Our expenses, which consist primarily of operating (including hotel and trade show expenses), depreciation and amortization and general and administrative expenses, were $1,742,019,000 in the year ended December 31, 2015, compared to $1,622,619,000 in the year ended December 31, 2014, an increase of $119,400,000. Below are the details of the increase by segment:

(Amounts in thousands)
Increase (decrease) due to:			Total		New York			Washington, DC		Other
Operating:
	Acquisitions, dispositions and other		$	9,518	$	11,729	⁽¹⁾	$	(2,211)	$	-
	Development and redevelopment			19,761		14,289	⁽²⁾		1,449		4,023
	Non-reimbursable expenses, including
		bad-debt reserves		(3,397)		(3,026)			(538)		167
	Hotel Pennsylvania			915		915			-		-
	Trade shows			249		-			-		249
	BMS expenses			(2,963)		(4,229)			-		1,266
	Same store operations			33,555		22,718			2,061		8,776
				57,638		42,396			761		14,481

Depreciation and amortization:
	Acquisitions, dispositions and other			34,960		34,816	⁽¹⁾		144		-
	Development and redevelopment			17,014		(6,120)	⁽²⁾		30,599		(7,465)
	Same store operations			9,675		7,910			2,686		(921)
				61,649		36,606			33,429		(8,386)

General and administrative:
	Mark-to-market of deferred compensation
		plan liability		(11,446)		-			-		(11,446)	⁽³⁾
	Same store operations			17,483		6,547	⁽⁴⁾		(1,288)		12,224	⁽⁵⁾
				6,037		6,547			(1,288)		778

Acquisition and transaction related costs				(5,924)		-			-		(5,924)

Total increase in expenses			$	119,400	$	85,549		$	32,902	$	949


(1)	Includes the acquisitions of 33-00 Northern Boulevard (Center Building), 260 Eleventh Avenue, 697-703 Fifth Avenue (St. Regis - retail) and 150 West 34th Street.
(2)	Primarily 330 West 34th Street, 7 West 34th Street and 1535 Broadway (Marriott Marquis - retail and signage).
(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, net” on our consolidated statements of income.
(4)	Results primarily from (i) the acceleration of the recognition of compensation expense of $1,555 related to 2013-2015 Out-Performance Plans due to the modification of the vesting criteria of awards such that they fully vest at age 65, and (ii) higher payroll and related costs.
(5)	Results primarily from (i) the acceleration of the recognition of compensation expense of $6,217 related to 2013-2015 Out-Performance Plans due to the modification of the vesting criteria of awards such that they fully vest at age 65, (ii) higher payroll and related costs of $2,900 and (iii) higher professional fees and other of $2,400.

Results of Operations – Year Ended December 31, 2015 Compared to December 31, 2014 - continued

Income from Real Estate Fund Investments

Below are the components of the income from our real estate fund investments for the years ended December 31, 2015 and 2014.

(Amounts in thousands)		For the Year Ended December 31,
		2015		2014
Net investment income		$	16,329	$	12,895
Net realized gain on exited investments			26,036		126,653
Previously recorded unrealized gain on exited investment			(23,279)		(50,316)
Net unrealized gain on held investments			54,995		73,802
Income from real estate fund investments			74,081		163,034
Less income attributable to noncontrolling interests in consolidated subsidiaries			(40,117)		(92,728)
Income from real estate fund investments attributable to the Operating Partnership			33,964		70,306
Less income attributable to noncontrolling interests in the Operating Partnership			(2,011)		(4,047)
Income from real estate fund investments attributable to Vornado ⁽¹⁾		$	31,953	$	66,259


(1)	Excludes $2,939, and $2,562 of management and leasing fees in the years ended December 31, 2015 and 2014, respectively, which are included as a component of "fee and other income" on our consolidated statements of income.

Loss from Partially Owned Entities

Summarized below are the components of loss from partially owned entities for the years ended December 31, 2015 and 2014.

(Amounts in thousands)		Percentage
		Ownership at	For the Year Ended December 31,
		December 31, 2015	2015		2014
Equity in Net (Loss) Income:
Alexander's		32.4%	$	31,078	$	30,009
Partially owned office buildings ⁽¹⁾		Various		(24,571)		(6,138)
India real estate ventures ⁽²⁾		4.1%-36.5%		(18,746)		(8,309)
PREIT		8.0%		(7,450)		-
UE		5.4%		4,394		-
Toys ⁽³⁾		32.5%		2,500		(73,556)
Other investments ⁽⁴⁾		Various		165		(1,867)
			$	(12,630)	$	(59,861)


(1)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue, 85 Tenth Avenue, 512 West 22nd Street and others. In 2015, we recognized net losses of $39,600 from our 666 Fifth Avenue (Office) joint venture as a result of our share of depreciation expense. Also in 2015, we recognized our $12,800 share of a write-off of a below-market lease liability related to a tenant vacating at 650 Madison Avenue. In 2014, we recognized our $14,500 share of accelerated depreciation from our West 57th Street joint ventures in connection with the change in estimated useful life of those properties.
(2)	Includes non-cash impairment losses of $14,806 and $5,771, respectively.
(3)	For the year ended December 31, 2015, we recognized net income of $2,500 from our investment in Toys, representing management fees earned and received, compared to a net loss of $73,556 for the year ended December 31, 2014, which was primarily due to a $75,196 non-cash impairment loss.
(4)	Includes interests in Independence Plaza, Fashion Centre Mall/Washington Tower, 50-70 West 93rd Street and others. In 2014, we recognized a $10,263 non-cash charge comprised of a $5,959 impairment loss and a $4,304 loan loss reserve on our equity and debt investments in Suffolk Downs.

Results of Operations – Year Ended December 31, 2015 Compared to December 31, 2014 - continued

Interest and Other Investment Income, net

Interest and other investment income, net, was $26,978,000 in the year ended December 31, 2015, compared to $38,752,000 in the year ended December 31, 2014, a decrease of $11,774,000. This decrease resulted primarily from a decrease 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).

Interest and Debt Expense

Interest and debt expense was $378,025,000 in the year ended December 31, 2015, compared to $412,755,000 in the year ended December 31, 2014, a decrease of $34,730,000. This decrease was primarily due to (i) $26,652,000 of interest savings from the redemption of the $445,000,000 principal amount of the outstanding 7.875% senior unsecured notes during the fourth quarter of 2014, (ii) $21,375,000 of interest savings from the redemption of the $500,000,000 principal amount of the outstanding 4.25% senior unsecured notes on January 1, 2015, partially offset by (iii) $5,297,000 of interest expense from the issuance of $450,000,000 of 2.50% senior unsecured notes in June 2014, (iv) $5,182,000 of interest expense from the current year’s financings of 150 West 34th Street and the Center Building, and (v) $3,481,000 of lower capitalized interest.

Net Gain on Disposition of Wholly Owned and Partially Owned Assets

The net gain of $ 251,821,000 in year ended December 31, 2015, consists of a $142,693,000 net gain on sale of 20 Broad Street, a $102,404,000 net gain on sale of 1750 Pennsylvania Avenue and $6,724,000 from the sale of residential condominiums. The net gain of $ 13,568,000 in the year ended December 31, 2014 is from the sale of residential condominiums and a land parcel.

Income Tax Benefit (Expense)

In the year ended December 31, 2015, we had an income tax benefit of $84,695,000, compared to an expense of $9,281,000 in the year ended December 31, 2014, a decrease in expense of $93,976,000. This decrease in expense resulted primarily from the reversal of the valuation allowances against certain of our deferred tax assets, as we concluded that it was more-likely than not that we will generate sufficient taxable income from the sale of 220 Central Park South residential condominium units to realize the deferred tax assets.

Results of Operations – Year Ended December 31, 2015 Compared to December 31, 2014 - continued

Income from Discontinued Operations

The table below sets forth the combined results of operations of assets related to discontinued operations for the years ended December 31, 2015 and 2014.

(Amounts in thousands)	For the Year Ended December 31,
	2015		2014
Total revenues	$	27,831	$	395,786
Total expenses		17,651		274,107
		10,180		121,679
Net gains on sales of real estate		65,396		507,192
UE spin-off transaction related costs		(22,972)		(14,956)
Impairment losses		(256)		(26,518)
Pretax income from discontinued operations		52,348		587,397
Income tax expense		(86)		(1,721)
Income from discontinued operations	$	52,262	$	585,676

Net Income Attributable to Noncontrolling Interests in Consolidated Subsidiaries

Net income attributable to noncontrolling interests in consolidated subsidiaries was $55,765 ,000 in the year ended December 31, 2015, compared to $96,561,000 in the year ended December 31, 2014, a decrease of $40,796,000. This decrease resulted primarily from lower net income allocated to the noncontrolling interests, including noncontrolling interests of our real estate fund investments.

Net Income Attributable to Noncontrolling Interests in the Operating Partnership (Vornado Realty Trust)

Net income attributable to noncontrolling interests in the Operating Partnership was $43,231 ,000 in the year ended December 31, 2015, compared to $47,613,000 in the year ended December 31, 2014, a decrease of $4,382 ,000 . This decrease resulted primarily from lower net income subject to allocation to unitholders.

Preferred Share Dividends of Vornado Realty Trust

Preferred share dividends were $80,578,000 in the year ended December 31, 2015, compared to $81,464 ,000 in the year ended December 31, 2014, a decrease of $886,000.

Preferred Unit Distributions of Vornado Realty L.P.

Preferred unit distributions were $80,736,000 in the year ended December 31, 2015, compared to $81,514 ,000 in the year ended December 31, 2014, a decrease of $778,000.

Results of Operations – Year Ended December 31, 2015 Compared to December 31, 2014 - continued

Same Store EBITDA

Below is the reconciliation of EBITDA to same store EBITDA for each of our segments for the year ended December 31, 2015, compared to the year ended December 31, 2014.

(Amounts in thousands)			New York			Washington, DC
EBITDA for the year ended December 31, 2015			$	1,250,819		$	426,175
	Add-back:
		Non-property level overhead expenses included above		35,026			26,051
	Less EBITDA from:
		Acquisitions		(61,369)			-
		Dispositions, including net gains on sale		(169,362)			(135,930)
		Properties taken out-of-service for redevelopment		(71,705)			2,271
		Other non-operating income		(17,692)			(5,746)
Same store EBITDA for the year ended December 31, 2015			$	965,717		$	312,821

EBITDA for the year ended December 31, 2014			$	1,439,189		$	331,101
	Add-back:
		Non-property level overhead expenses included above		28,479			27,339
	Less EBITDA from:
		Acquisitions		(4,141)			-
		Dispositions, including net gains on sale		(476,465)			(40,478)
		Properties taken out-of-service for redevelopment		(26,832)			621
		Other non-operating income		(8,815)			(5,446)
Same store EBITDA for the year ended December 31, 2014			$	951,415		$	313,137

Increase (decrease) in same store EBITDA -
	Year ended December 31, 2015 vs. December 31, 2014		$	14,302	⁽¹⁾	$	(316)	⁽³⁾

% increase (decrease) in same store EBITDA				1.5%	⁽²⁾		(0.1%)


(1)	The $14,302 increase in New York same store EBITDA resulted primarily from increases in Office and Retail EBITDA of $13,688 and $6,519, respectively, partially offset by a decrease in Hotel Pennsylvania EBITDA of $7,709. The Office and Retail EBITDA increases resulted primarily from higher rents, including signage, partially offset by lower management and leasing fees and higher net operating expenses.
(2)	Excluding Hotel Pennsylvania, same store EBITDA increased by 2.4%.
(3)	The $316 decrease in Washington, DC same store EBITDA resulted primarily from higher net operating expenses of $2,629 and lower fee and other income of $715, partially offset by higher rental revenue of $3,162.

Results of Operations – Year Ended December 31, 2015 Compared to December 31, 2014 - continued

Reconciliation of Same Store EBITDA to Cash basis Same Store EBITDA

(Amounts in thousands)		New York			Washington, DC
Same store EBITDA for the year ended December 31, 2015		$	965,717		$	312,821
Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(131,561)			(19,726)
Cash basis same store EBITDA for the year ended December 31, 2015		$	834,156		$	293,095

Same store EBITDA for the year ended December 31, 2014		$	951,415		$	313,137
Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(119,842)			(6,358)
Cash basis same store EBITDA for the year ended December 31, 2014		$	831,573		$	306,779

Increase (decrease) in cash basis same store EBITDA -
	Year ended December 31, 2015 vs. December 31, 2014	$	2,583		$	(13,684)

% increase (decrease) in cash basis same store EBITDA			0.3%	⁽¹⁾		(4.5%)


(1)	Excluding Hotel Pennsylvania, same store EBITDA increased by 1.3% on a cash basis.

Supplemental Information

Net Income and EBITDA by Segment for the Three Months Ended December 31, 2016 and 2015

Below is a summary of net income and a reconciliation of net income to EBITDA ⁽¹⁾ by segment for the three months ended December 31, 2016.


(Amounts in thousands)		For the Three Months Ended December 31, 2016
			Total		New York			Washington, DC			Other
Total revenues			$	638,260	$	443,910		$	128,191		$	66,159
Total expenses				463,156		275,168			92,436			95,552
Operating income (loss)				175,104		168,742			35,755			(29,393)
Income (loss) from partially owned entities				164,860		2,764			(1,097)			163,193
Loss from real estate fund investments				(52,352)		-			-			(52,352)
Interest and other investment income (loss), net				9,284		1,409			(143)			8,018
Interest and debt expense				(98,244)		(54,492)			(18,038)			(25,714)
Net gain on extinguishment of Skyline properties debt				487,877		-			487,877			-
Net gain on disposition of wholly owned and partially owned
	owned assets			15,510		-			15,302			208
Income before income taxes				702,039		118,423			519,656			63,960
Income tax benefit (expense)				1,493		(1,377)			(199)			3,069
Income from continuing operations				703,532		117,046			519,457			67,029
Income from discontinued operations				1,012		-			-			1,012
Net income				704,544		117,046			519,457			68,041
Less net loss (income) attributable to noncontrolling interests
	in consolidated subsidiaries			5,010		(3,747)			-			8,757
Net income attributable to the Operating Partnership				709,554		113,299			519,457			76,798
Interest and debt expense ⁽²⁾				130,464		71,880			19,934			38,650
Depreciation and amortization ⁽²⁾				173,071		104,513			41,007			27,551
Income tax (benefit) expense ⁽²⁾				(1,229)		1,487			199			(2,915)
EBITDA ⁽¹⁾			$	1,011,860	$	291,179	⁽³⁾	$	580,597	⁽⁴⁾	$	140,084	⁽⁵⁾

_________________________

See notes on pages 74 and 75.

Supplemental Information – continued

Net Income and EBITDA by Segment for the Three Months Ended December 31, 2016 and 2015 – continued

Below is a summary of net income and a reconciliation of net income to EBITDA ⁽¹⁾ by segment for the three months ended December 31, 2015.


(Amounts in thousands)		For the Three Months Ended December 31, 2015
			Total		New York			Washington, DC			Other
Total revenues			$	651,581	$	452,717		$	131,284		$	67,580
Total expenses				443,878		265,152			97,149			81,577
Operating income (loss)				207,703		187,565			34,135			(13,997)
Loss from partially owned entities				(3,921)		(868)			(1,713)			(1,340)
Income from real estate fund investments				21,959		-			-			21,959
Interest and other investment income (loss), net				7,360		2,080			(322)			5,602
Interest and debt expense				(98,915)		(51,274)			(16,504)			(31,137)
Net gain on disposition of wholly owned and partially
	owned assets			146,924		142,693			-			4,231
Income (loss) before income taxes				281,110		280,196			15,596			(14,682)
Income tax benefit (expense)				450		(1,194)			(238)			1,882
Income (loss) from continuing operations				281,560		279,002			15,358			(12,800)
Income from discontinued operations				1,984		-			-			1,984
Net income (loss)				283,544		279,002			15,358			(10,816)
Less net income attributable to noncontrolling interests
	in consolidated subsidiaries			(17,395)		(6,382)			-			(11,013)
Net income (loss) attributable to the Operating Partnership				266,149		272,620			15,358			(21,829)
Interest and debt expense ⁽²⁾				121,118		64,347			19,574			37,197
Depreciation and amortization ⁽²⁾				170,733		105,131			42,601			23,001
Income tax (benefit) expense ⁽²⁾				(30)		1,398			246			(1,674)
EBITDA ⁽¹⁾			$	557,970	$	443,496	⁽³⁾	$	77,779	⁽⁴⁾	$	36,695	⁽⁵⁾

_________________________

See notes on the following pages.

Supplemental Information – continued

Net Income and EBITDA by Segment for the Three Months Ended December 31, 2016 and 2015 - continued

Notes to preceding tabular information:

(1)	We calculate EBITDA on an Operating Partnership basis which is before allocation to the noncontrolling interest of the Operating Partnership. We consider EBITDA a non-GAAP financial 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. Our 7.5% interest in Fashion Centre Mall/Washington Tower will not be included in the spin-off of our Washington, DC segment and have been reclassified to Other. The prior year's presentation has been conformed to the current year.

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

(3)	The elements of "New York" EBITDA are summarized below.

	(Amounts in thousands)			For the Three Months Ended December 31,
				2016		2015
	Office			$	170,469	$	323,765
	Retail				97,528		93,319
	Residential				6,160		6,011
	Alexander's				11,302		11,708
	Hotel Pennsylvania				5,720		8,693
		Total New York EBITDA			291,179		443,496
	Certain items that impact EBITDA:
		Net gains on sale of 20 Broad Street			-		(142,693)
		EBITDA from discontinued operations and sold properties			-		(18,734)
		Certain items that impact EBITDA			-		(161,427)
			Total New York EBITDA, as adjusted	$	291,179	$	282,069

(4)	The elements of "Washington, DC" EBITDA are summarized below.

	(Amounts in thousands)			For the Three Months Ended December 31,
				2016		2015
	Office, excluding the Skyline properties			$	74,242	$	61,661
	Skyline properties				492,964		5,712
		Total Office			567,206		67,373
	Residential				13,391		10,406
		Total Washington, DC EBITDA			580,597		77,779
	Certain items that impact EBITDA:
		Net gain on extinguishment of Skyline properties debt			(487,877)		-
		Net gains on sale of Fairfax Square			(15,302)		-
		EBITDA from discontinued operations and sold properties			(5,333)		(6,110)
		Other			-		405
		Certain items that impact EBITDA			(508,512)		(5,705)
			Total Washington, DC EBITDA, as adjusted	$	72,085	$	72,074

Supplemental Information – continued

Net Income and EBITDA by Segment for the Three Months Ended December 31, 2016 and 2015 - continued

Notes to preceding tabular information:

(5)	The elements of "Other" EBITDA are summarized below.

	(Amounts in thousands)		For the Three Months Ended December 31,
				2016		2015
	Our share of real estate fund investments:
		Income before net realized/unrealized (loss) gain	$	2,298	$	1,732
		Net realized/unrealized (loss) gain		(19,603)		5,115
		Carried interest		(17,399)		4,448
	Total (loss) income from real estate fund investments			(34,704)		11,295
	theMART (including trade shows)			21,156		16,930
	555 California Street			10,690		11,738
	India real estate ventures			1,100		1,704
	Our share of Toys			500		500
	Other investments			29,238		13,466
				27,980		55,633
	Corporate general and administrative expenses ^(a)			(24,230)		(24,373)
	Investment income and other, net ^(a)			3,184		5,110
	Income from the repayment of our investments in 85 Tenth Avenue loans and preferred equity			160,843		-
	Acquisition and transaction related costs			(14,743)		(4,951)
	Our share of impairment losses on India real estate ventures			(13,962)		-
	Discontinued operations			1,012		2,001
	Net gain on sale of real estate			-		4,231
	Impairment loss on loan loss reserve on investment in Suffolk Downs			-		(956)
		Total Other	$	140,084	$	36,695


	(a)	The amounts in these captions (for this table only) exclude the results of the mark-to-market of our deferred compensation plan of $2,588 and $438 income for the three months ended December 31, 2016 and 2015, respectively.

EBITDA by Region

Below is a summary of the percentages of EBITDA by geographic region, excluding gains on sale of real estate, non-cash impairment losses, and operations of sold properties.

		For the Three Months Ended December 31,
		2016	2015
Region:
	New York City metropolitan area	74%	74%
	Washington, DC/Northern Virginia area	18%	19%
	Chicago, IL	5%	4%
	San Francisco, CA	3%	3%
		100%	100%

Supplemental Information – continued

Three Months Ended December 31, 2016 Compared to December 31, 2015

Same Store EBITDA

Below is the reconciliation of EBITDA to same store EBITDA for each of our segments for the three months ended December 31, 2016, compared to the three months ended December 31, 2015.

(Amounts in thousands)			New York			Washington, DC
EBITDA for the three months ended December 31, 2016			$	291,179		$	580,597
	Add-back:
		Non-property level overhead expenses included above		8,307			7,612
	Less EBITDA from:
		Acquisitions		(2,159)			-
		Dispositions, including net gains on sale		(106)			(508,494)
		Properties taken out-of-service for redevelopment		(6,871)			(1,530)
		Other non-operating (income) expenses		(212)			23
Same store EBITDA for the three months ended December 31, 2016			$	290,138		$	78,208

EBITDA for the three months ended December 31, 2015			$	443,496		$	77,779
	Add-back:
		Non-property level overhead expenses included above		6,788			7,553
	Less EBITDA from:
		Acquisitions		(239)			-
		Dispositions, including net gains on sale		(161,312)			(6,039)
		Properties taken out-of-service for redevelopment		(5,041)			(415)
		Other non-operating income		(14,560)			(2,451)
Same store EBITDA for the three months ended December 31, 2015			$	269,132		$	76,427

Increase in GAAP basis same store EBITDA -
	Three months ended December 31, 2016 vs. December 31, 2015		$	21,006		$	1,781

% increase in same store EBITDA				7.8%	⁽¹⁾		2.3%


(1)	Excluding Hotel Pennsylvania, same store EBITDA increased by 9.2%.

Supplemental Information – continued

Three Months Ended December 31, 2016 Compared to December 31, 2015 - continued

Reconciliation of Same Store EBITDA to Cash basis Same Store EBITDA

(Amounts in thousands)		New York			Washington, DC
Same store EBITDA for the three months ended December 31, 2016		$	290,138		$	78,208
Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(35,746)			(4,235)
Cash basis same store EBITDA for the three months ended
	December 31, 2016	$	254,392		$	73,973

Same store EBITDA for the three months ended December 31, 2015		$	269,132		$	76,427
Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(52,852)			(5,546)
Cash basis same store EBITDA for the three months ended
	December 31, 2015	$	216,280		$	70,881

Increase in cash basis same store EBITDA -
	Three months ended December 31, 2016 vs. December 31, 2015	$	38,112		$	3,092

% increase in cash basis same store EBITDA			17.6%	⁽¹⁾		4.4%


(1)	Excluding Hotel Pennsylvania, same store EBITDA increased by 19.8% on a cash basis.

Supplemental Information – continued

Three Months Ended December 31, 2016 Compared to September 30, 2016

Below is the reconciliation of Net Income to EBITDA for the three months ended September 30, 2016.

(Amounts in thousands)	New York		Washington, DC
Net income attributable to Vornado for the three months ended September 30, 2016	$	96,403	$	24,107
Interest and debt expense		66,314		20,565
Depreciation and amortization		111,731		36,637
Income tax expense		2,445		310
EBITDA for the three months ended September 30, 2016	$	276,893	$	81,619

Below is the reconciliation of EBITDA to same store EBITDA for each of our segments for the three months ended December 31, 2016, compared to the three months ended September 30, 2016.

(Amounts in thousands)			New York			Washington, DC
EBITDA for the three months ended December 31, 2016			$	291,179		$	580,597
	Add-back:
		Non-property level overhead expenses included above		8,307			7,612
	Less EBITDA from:
		Acquisitions		-			-
		Dispositions, including net gains on sale		(106)			(508,494)
		Properties taken out-of-service for redevelopment		(7,583)			(1,530)
		Other non-operating (income) expenses		(282)			23
Same store EBITDA for the three months ended December 31, 2016			$	291,515		$	78,208

EBITDA for the three months ended September 30, 2016			$	276,893		$	81,619
	Add-back:
		Non-property level overhead expenses included above		9,783			6,858
	Less EBITDA from:
		Acquisitions		-			-
		Dispositions, including net gains on sale		(51)			(5,085)
		Properties taken out-of-service for redevelopment		(7,966)			(1,581)
		Other non-operating expenses (income)		1,286			(563)
Same store EBITDA for the three months ended September 30, 2016			$	279,945		$	81,248

Increase (decrease) in same store EBITDA -
	Three months ended December 31, 2016 vs. September 30, 2016		$	11,570		$	(3,040)

% increase (decrease) in same store EBITDA				4.1%	⁽¹⁾		(3.7%)


(1)	Excluding Hotel Pennsylvania, same store EBITDA increased by 3.6%.

Supplemental Information – continued

Three Months Ended December 31, 2016 Compared to September 30, 2016 - continued

Reconciliation of Same Store EBITDA to Cash Basis Same Store EBITDA

(Amounts in thousands)		New York			Washington, DC
Same store EBITDA for the three months ended December 31, 2016		$	291,515		$	78,208
Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(36,201)			(4,235)
Cash basis same store EBITDA for the three months ended
	December 31, 2016	$	255,314		$	73,973

Same store EBITDA for the three months ended September 30, 2016		$	279,945		$	81,248
Less: Adjustments for straight line rents, amortization of acquired
	below-market leases, net, and other non-cash adjustments		(43,938)			(5,505)
Cash basis same store EBITDA for the three months ended
	September 30, 2016	$	236,007		$	75,743

Increase (decrease) in cash basis same store EBITDA -
	Three months ended December 31, 2016 vs. September 30, 2016	$	19,307		$	(1,770)

% increase (decrease) in cash basis same store EBITDA			8.2%	⁽¹⁾		(2.3%)


(1)	Excluding Hotel Pennsylvania, same store EBITDA increased by 7.6% on a cash basis.

Related Party Transactions

Alexander’s, Inc.

We own 32.4% of Alexander’s. Steven Roth, the Chairman of Vornado’s Board of Trustees and its Chief Executive Officer is also the Chairman of the Board and Chief Executive Officer of Alexander’s. We provide various services to Alexander’s in accordance with management, development and leasing agreements. These agreements are described in Note 5 - Investments in Partially Owned Entities to our consolidated financial statements in this Annual Report on Form 10-K.

Urban Edge Properties

We own 5.4% of UE. During 2015, we provided transition services to UE, primarily for information technology, human resources, tax and financial planning. In 2016, we continue to provide UE transition services for information technology and human resources. UE is providing us with leasing, development and property management services for certain of our retail properties including the retail assets of Alexander’s. Fees to UE for servicing the retail assets of Alexander’s are similar to the fees that we are receiving from Alexander’s as described in Note 5 - Investments in Partially Owned Entities to our consolidated financial statements in this Annual Report on Form 10-K.

Interstate Properties (“Interstate”)

Interstate is a general partnership in which Mr. Roth is the managing general partner. David Mandelbaum and Russell B. Wight, Jr., Trustees of Vornado and Directors of Alexander’s, are Interstate’s two other general partners. As of December 31, 2016, Interstate and its partners beneficially owned an aggregate of approximately 7.1% of the common shares of beneficial interest of Vornado and 26.3% of Alexander’s common stock.

We manage and lease the real estate assets of Interstate pursuant to a management agreement for which we receive an annual fee equal to 4% of annual base rent and percentage rent. The management agreement has a term of one year and is automatically renewable unless terminated by either of the parties on 60 days’ notice at the end of the term. We believe, based upon comparable fees charged by other real estate companies, that the management agreement terms are fair to us. We earned $521,000, $541,000, and $535,000 of management fees under the agreement for the years ended December 31, 2016, 2015 and 2014, respectively.

Liquidity and Capital Resources

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

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 may require funding from borrowings and/or equity offerings.

We may from time to time purchase or retire outstanding preferred shares and 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.

Dividends

On January 18, 2017, Vornado declared a quarterly common dividend of $0.71 per share (an indicated annual rate of $2.84 per common share). This dividend, if continued for all of 2017, would require Vornado to pay out approximately $537,000,000 of cash for common share dividends. In addition, during 2017, Vornado expects to pay approximately $65,000,000 of cash dividends on outstanding preferred shares and approximately $35,000,000 of cash distributions to unitholders of the Operating Partnership.

Liquidity and Capital Resources – continued

Financing Activities and Contractual Obligations

We have an effective shelf registration for the offering of our equity and debt securities that is not limited in amount due to our status as a “well-known seasoned issuer.” We have issued senior unsecured notes from a shelf registration statement that contain financial covenants that restrict our ability to incur debt, and that require us to maintain a level of unencumbered assets based on the level of our secured debt. Our unsecured revolving 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 unsecured revolving credit facilities also contain customary conditions precedent to borrowing, including representations and warranties, and contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal. As of December 31, 2016, we are in compliance with all of the financial covenants required by our senior unsecured notes and our unsecured revolving credit facilities.

As of December 31, 2016, we had $1,501,027,000 of cash and cash equivalents and $2,364,523,000 of borrowing capacity under our unsecured revolving credit facilities, net of outstanding borrowings and letters of credit of $115,630,000 and $19,847,000, respectively. A summary of our consolidated debt as of December 31, 2016 and 2015 is presented below.

(Amounts in thousands)			2016			2015
					Weighted			Weighted
			December 31,		Average	December 31,		Average
Consolidated debt:			Balance		Interest Rate	Balance		Interest Rate
	Variable rate		$	3,765,054	2.40%	$	3,995,704	2.00%
	Fixed rate			6,949,873	3.82%		7,206,634	4.21%
		Total		10,714,927	3.32%		11,202,338	3.42%
	Deferred financing costs, net and other			(103,242)			(111,328)
		Total, net	$	10,611,685		$	11,091,010

During 2017 and 2018, $118,585,000 and $209,208,000, respectively, of our outstanding debt matures; we may refinance this maturing debt as it comes due or choose to repay it using cash and cash equivalents or our unsecured revolving credit facilities. We may also refinance or prepay other outstanding debt depending 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.

Below is a schedule of our contractual obligations and commitments at December 31, 2016.

(Amounts in thousands)					Less than
Contractual cash obligations (principal and interest ⁽¹⁾ ):			Total		1 Year		1 – 3 Years		3 – 5 Years		Thereafter
	Notes and mortgages payable		$	10,829,548	$	476,269	$	2,357,201	$	5,446,252	$	2,549,826
	Operating leases			1,791,440		34,871		71,222		73,352		1,611,995
	Purchase obligations, primarily construction commitments			771,850		477,074		294,776		-		-
	Unsecured revolving credit facilities			118,231		27		118,204		-		-
	Senior unsecured notes due 2022			500,833		20,000		40,000		40,000		400,833
	Senior unsecured notes due 2019			489,375		11,250		472,500		5,625		-
	Capital lease obligations			372,379		12,508		25,016		25,016		309,839
	Unsecured term loan			392,915		8,888		384,027		-		-
		Total contractual cash obligations	$	15,266,571	$	1,040,887	$	3,762,946	$	5,590,245	$	4,872,493

Commitments:
	Capital commitments to partially owned entities		$	173,311	$	173,311	$	-	$	-	$	-
	Standby letters of credit			19,847		19,847		-		-		-
		Total commitments	$	193,158	$	193,158	$	-	$	-	$	-


(1)	Interest on variable rate debt is computed using rates in effect at December 31, 2016.

Liquidity and Capital Resources – continued

Financing Activities and Contractual Obligations – continued

Details of 2016 financing activities are provided in the “Overview” of Management’s Discussion and Analysis of Financial Conditions and Results of Operations. Details of 2015 financing activities are discussed below.

Secured Debt

On April 1, 2015, we completed a $308,000,000 refinancing of RiverHouse Apartments, a three building, 1,670 unit rental complex located in Arlington, VA. The loan is interest only at LIBOR plus 1.28% and matures in 2025. We realized net proceeds of approximately $43,000,000. The property was previously encumbered by a 5.43%, $195,000,000 mortgage which was scheduled to mature in April 2015 and a $64,000,000 mortgage at LIBOR plus 1.53% which was scheduled to mature in 2018.

On June 2, 2015, we completed a $205,000,000 financing in connection with the acquisition of 150 West 34th Street. The loan bears interest at LIBOR plus 2.25% and matures in 2018 with two one-year extension options.

On July 28, 2015, we completed a $580,000,000 refinancing of 100 West 33rd Street, a 1.1 million square foot property comprised of 855,000 square feet of office space and the 256,000 square foot Manhattan Mall. The loan is interest only at LIBOR plus 1.65% and matures in July 2020. We realized net proceeds of approximately $242,000,000.

On September 22, 2015, we upsized the loan on our 220 Central Park South development by $350,000,000 to $950,000,000. The interest rate on the loan is LIBOR plus 2.00% and the final maturity date is 2020. In connection with the upsizing, the standby commitment for a $500,000,000 mezzanine loan for this development has been terminated by payment of a $15,000,000 contractual termination fee, which was capitalized as a component of “development costs and construction in progress” on our consolidated balance sheet as of December 31, 2015.

On December 11, 2015, we completed a $375,000,000 refinancing of 888 Seventh Avenue, a 882,000 square foot Manhattan office building. The five-year loan is interest only at LIBOR plus 1.60% which was swapped for the term of the loan to a fixed rate of 3.15% and matures in December 2020. We realized net proceeds of approximately $49,000,000.

On December 21, 2015, we completed a $450,000,000 financing of the retail condominium of the St. Regis Hotel and the adjacent retail town house located on Fifth Avenue at 55th Street. The loan matures in December 2020, with two one-year extension options. The loan is interest only at LIBOR plus 1.80% for the first three years, LIBOR plus 1.90% for years four and five, and LIBOR plus 2.00% during the extension periods. We own a 74.3% controlling interest in the joint venture which owns the property.

Senior Unsecured Notes

On January 1, 2015, we redeemed all of the $500,000,000 principal amount of our outstanding 4.25% senior unsecured notes, which were scheduled to mature on April 1, 2015, at a redemption price of 100% of the principal amount plus accrued interest through December 31, 2014.

Unsecured Term Loan

On October 30, 2015, we entered into an unsecured delayed-draw term loan facility in the maximum amount of $750,000,000. The facility matures in October 2018 with two one-year extension options. The interest rate is LIBOR plus 1.15% with a fee of 0.20% per annum on the unused portion. At closing, we drew $187,500,000. The facility provides that the maximum amount available is twice the amount outstanding on April 29, 2016, limited to $750,000,000, and all draws must be made by October 2017. This facility, together with the $950,000,000 development loan mentioned above, provides the funding for our 220 Central Park South development.

Liquidity and Capital Resources – continued

Financing Activities and Contractual Obligations – continued

Acquisitions and Investments

On January 20, 2015, we co-invested with the Vornado Capital Partners Real Estate Fund (“Fund”) and one of the Fund’s limited partners to buy out the Fund’s joint venture partner’s 57.1% interest in the Crowne Plaza Times Square Hotel. The purchase price for the 57.1% interest was approximately $95,000,000 (our share $39,000,000) which valued the property at approximately $480,000,000. The property is encumbered by a $310,000,000 mortgage loan bearing interest at LIBOR plus 2.80% and maturing in December 2018 with a one-year extension option. Our aggregate ownership interest in the property increased to 33% from 11%.

On March 18, 2015, we acquired the Center Building, a 437,000 square foot office building, located at 33-00 Northern Boulevard in Long Island City, New York, for $142,000,000, including the assumption of an existing $62,000,000, 4.43% mortgage maturing in October 2018.

On June 2, 2015, we completed the acquisition of 150 West 34th Street, a 78,000 square foot retail property leased to Old Navy through May 2019, and 226,000 square feet of additional zoning air rights, for approximately $355,000,000. At closing we completed a $205,000,000 financing of the property.

On June 24, 2015, we entered into a joint venture, in which we own a 55% interest, to develop a 173,000 square foot Class-A office building, located along the western edge of the High Line at 512 West 22nd Street. The development cost of this project is approximately $235,000,000. The development commenced during the fourth quarter of 2015 and is expected to be completed in 2018. We account for our investment in the joint venture under the equity method.

On July 31, 2015, we acquired 260 Eleventh Avenue, a 235,000 square foot office property leased to the City of New York through 2021 with two five-year renewal options, a 10,000 square foot parking lot and additional air rights. The transaction is structured as a 99-year ground lease with an option to purchase the land for $110,000,000. The $3,900,000 annual ground rent and the purchase option price escalate annually at the lesser of 1.5% or CPI. The buildings were purchased for 813,900 newly issued Operating Partnership units valued at approximately $80,000,000.

On September 25, 2015, we acquired 265 West 34th Street, a 1,700 square foot retail property and 15,200 square feet of additional zoning air rights, for approximately $28,500,000.

Certain Future Cash Requirements

Capital Expenditures

The following table summarizes anticipated 2017 capital expenditures.

(Amounts in millions, except square foot data)		Total		New York		Washington, DC		Other ⁽¹⁾
Expenditures to maintain assets		$	168.8	$	99.0	$	29.0	$	40.8
Tenant improvements			121.0		53.0		50.0		18.0
Leasing commissions			38.1		22.0		13.0		3.1
	Total capital expenditures and leasing commissions	$	327.9	$	174.0	$	92.0	$	61.9

Square feet budgeted to be leased (in thousands)					1,000		1,217
Weighted average lease term (years)					10		8
Tenant improvements and leasing commissions:
	Per square foot			$	75.00	$	51.35
	Per square foot per annum			$	7.50	$	6.50


(1)	Primarily theMART and 555 California Street.

The table above excludes anticipated capital expenditures of each of our partially owned non-consolidated subsidiaries, as these entities fund their capital expenditures without additional equity contributions from us.

Liquidity and Capital Resources – continued

Development and Redevelopment Expenditures

We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan, including, in particular, the Penn Plaza District.

There can be no assurance that any of our development or redevelopment projects will commence, or if commenced, be completed, or completed on schedule or within budget.

Liquidity and Capital Resources – continued

Insurance

Other Commitments and Contingencies

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.

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 December 31, 2016, the aggregate dollar amount of these guarantees and master leases is approximately $737,000,000.

As of December 31, 2016, $19,847,000 of letters of credit were outstanding under one of our unsecured revolving credit facilities. Our unsecured revolving 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 unsecured revolving 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.

As of December 31, 2016, we expect to fund additional capital to certain of our partially owned entities aggregating approximately $173,000,000, which includes our share of the commitments of the Farley Post Office redevelopment joint venture.

As of December 31, 2016, we have construction commitments aggregating $653,940,000.

Liquidity and Capital Resources – continued

Cash Flows for the Year Ended December 31, 2016

Our cash and cash equivalents were $1,501,027,000 at December 31, 2016, a $334,680,000 decrease from the balance at December 31, 2015. Our consolidated outstanding debt, net was $10,611,685,000 at December 31, 2016, a $479,325,000 decrease from the balance at December 31, 2015. As of December 31, 2016 and December 31, 2015, $115,630,000 and $550,000,000, respectively, was outstanding under our revolving credit facilities. During 2017 and 2018, $118,585,000 and $209,208,000, respectively, of our outstanding debt matures; we may refinance this maturing debt as it comes due or choose to repay it.

Net Cash Provided by Operating Activities

Cash flows provided by operating activities of $1,000,667,000 was comprised of (i) net income of $981,922,000, (ii) distributions of income from partially owned entities of $217,468,000, (iii) return of capital from real estate fund investments of $71,888,000, partially offset by (iv) $197,568,000 of non-cash adjustments, which include depreciation and amortization expense, net gain on extinguishment of Skyline properties debt, net gain on the disposition of wholly owned and partially owned assets, equity in net income from partially owned entities, real estate impairment losses, the effect of straight-lining of rental income, amortization of below-market leases, net realized and unrealized loss on real estate fund investments and net gains on sale of real estate and other, and (v) the net change in operating assets and liabilities of $73,043,000.

Net Cash Used in Investing Activities

Net cash used in investing activities of $889,193,000 was primarily comprised of (i) $606,565,000 of development costs and construction in progress, (ii) $387,545,000 of additions to real estate, (iii) $127,608,000 of investments in partially owned entities, (iv) $61,464,000 of acquisitions of real estate and other, (v) $42,000,000 due to the net deconsolidation of 7 West 34th Street, (vi) $11,700,000 of investments in loans receivable and other, and (vii) $4,379,000 in purchases of marketable securities, partially offset by (viii) $193,967,000 of capital distributions from partially owned entities, (ix) $153,534,000 of proceeds from sales of real estate and related investments, (x) $3,937,000 of proceeds from the sale of marketable securities, and (xi) $585,000 of changes in restricted cash.

Net Cash Used in Financing Activities

Net cash used in financing activities of Vornado Realty Trust of $446,154,000 was comprised of (i) $1,894,990,000 for the repayments of borrowings, (ii) $475,961,000 of dividends paid on common shares, (iii) $246,250,000 for the redemption of preferred shares, (iv) $130,590,000 of distributions to noncontrolling interests, (v) $80,137,000 of dividends paid on preferred shares, (vi) $42,157,000 of debt issuance and other costs, and (vii) $186,000 for the repurchase of shares related to stock compensation agreements and related tax withholdings and other, partially offset by (viii) $2,403,898,000 of proceeds from borrowings, (ix) $11,950,000 of contributions from noncontrolling interests and (x) $8,269,000 of proceeds received from the exercise of employee share options.

Net cash used in financing activities of the Operating Partnership of $446,154,000 was comprised of (i) $1,894,990,000 for the repayments of borrowings, (ii) $475,961,000 of distributions to Vornado, (iii) $246,250,000 for the redemption of preferred units, (iv) $130,590,000 of distributions to redeemable security holders and noncontrolling interests in consolidated subsidiaries, (v) $80,137,000 of distributions to preferred unitholders, (vi) $42,157,000 of debt issuance and other costs, and (vii) $186,000 for the repurchase of Class A units related to equity compensation agreements and related tax withholdings and other, partially offset by (viii) $2,403,898,000 of proceeds from borrowings, (ix) $11,950,000 of contributions from noncontrolling interests in consolidated subsidiaries and (x) $8,269,000 of proceeds received from the exercise of Vornado stock options.

Liquidity and Capital Resources – continued

Capital Expenditures for the Year Ended December 31, 2016

Capital expenditures consist of expenditures to maintain assets, tenant improvement allowances and leasing commissions. Recurring capital expenditures 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 to lease space that has been vacant for more than nine months and 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.

Below is a summary of capital expenditures, leasing commissions and a reconciliation of total expenditures on an accrual basis to the cash expended in the year ended December 31, 2016.

(Amounts in thousands)		Total		New York		Washington, DC		Other
Expenditures to maintain assets		$	114,031	$	67,239	$	24,745	$	22,047
Tenant improvements			86,630		63,995		12,712		9,923
Leasing commissions			38,938		32,475		4,067		2,396
Non-recurring capital expenditures			55,636		41,322		8,725		5,589
Total capital expenditures and leasing commissions (accrual basis)			295,235		205,031		50,249		39,955
Adjustments to reconcile to cash basis:
	Expenditures in the current year applicable to prior periods		268,101		159,144		71,935		37,022
	Expenditures to be made in future periods for the current period		(117,910)		(100,151)		(16,357)		(1,402)
Total capital expenditures and leasing commissions (cash basis)		$	445,426	$	264,024	$	105,827	$	75,575

Tenant improvements and leasing commissions:
	Per square foot per annum	$	7.15	$	7.98	$	4.67	$	n/a
	Percentage of initial rent		11.0%		9.7%		11.6%		n/a

Development and Redevelopment Expenditures for the Year Ended December 31, 2016

Development and redevelopment expenditures consist of all hard and soft costs associated with the development or redevelopment of a property, including capitalized interest, debt and operating costs until the property is substantially completed and ready for its intended use. Our development project budgets below include initial leasing costs, which are reflected as non-recurring capital expenditures in the table above.

Below is a summary of development and redevelopment expenditures incurred in the year ended December 31, 2016. These expenditures include interest of $34,097,000, payroll of $12,516,000, and other soft costs (primarily architectural and engineering fees, permits, real estate taxes and professional fees) aggregating $46,995,000, that were capitalized in connection with the development and redevelopment of these projects.

(Amounts in thousands)	Total		New York		Washington, DC		Other
220 Central Park South	$	303,974	$	-	$	-	$	303,974
The Bartlett		67,580		-		67,580		-
640 Fifth Avenue		46,282		46,282		-		-
90 Park Avenue		33,308		33,308		-		-
theMART		24,788		-		-		24,788
2221 South Clark Street (residential conversion)		15,939		-		15,939		-
Penn Plaza		11,904		11,904		-		-
Wayne Towne Center		8,461		-		-		8,461
330 West 34th Street		5,492		5,492		-		-
Other		88,837		21,217		56,863		10,757
	$	606,565	$	118,203	$	140,382	$	347,980

Liquidity and Capital Resources – continued

Cash Flows for the Year Ended December 31, 2015

Our cash and cash equivalents were $1,835,707,000 at December 31, 2015, a $637,230,000 increase over the balance at December 31, 2014. Our consolidated outstanding debt, net was $11,091,010,000 at December 31, 2015, a $1,560,673,000 increase over the balance at December 31, 2014.

Net Cash Provided by Operating Activities

Cash flows provided by operating activities of $672,150,000 was comprised of (i) net income of $859,430,000, (ii) return of capital from real estate fund investments of $91,458,000, and (iii) distributions of income from partially owned entities of $65,018,000, partially offset by (iv) $81,654,000 of non-cash adjustments, which include depreciation and amortization expense, the reversal of allowance for deferred tax assets, the effect of straight-lining of rental income, equity in net loss from partially owned entities and net gains on sale of real estate and other, and (v) the net change in operating assets and liabilities of $262,102,000 (including $95,010,000 related to real estate fund investments).

Net Cash Used in Investing Activities

Net cash used in investing activities of $678,746,000 was comprised of (i) $490,819,000 of development costs and construction in progress, (ii) $478,215,000 of acquisitions of real estate and other, (iii) $301,413,000 of additions to real estate, (iv) $235,439,000 of investments in partially owned entities, and (v) $1,000,000 of investment in loans receivable and other, partially offset by (vi) $573,303,000 of proceeds from sales of real estate and related investments, (vii) $200,229,000 of changes in restricted cash, (viii) $37,818,000 of capital distributions from partially owned entities, and (ix) $16,790,000 of proceeds from sales and repayment of mezzanine loans receivable and other.

Net Cash Provided by Financing Activities

Net cash provided by financing activities of Vornado Realty Trust of $643,826,000 was comprised of (i) $4,468,872,000 of proceeds from borrowings, (ii) $51,975,000 of contributions from noncontrolling interests, and (iii) $16,779,000 of proceeds received from exercise of employee share options, partially offset by (iv) $2,936,578,000 for the repayments of borrowings, (v) $474,751,000 of dividends paid on common shares, (vi) $225,000,000 of distributions in connection with the spin-off of UE, (vii) $102,866,000 of distributions to noncontrolling interests, (viii) $80,578,000 of dividends paid on preferred shares, (ix) $66,554,000 of debt issuance and other costs, and (x) $7,473,000 for the repurchase of shares related to stock compensation agreements and related tax withholdings and other.

Net cash provided by financing activities of the Operating Partnership of $643,826,000 was comprised of (i) $4,468,872,000 of proceeds from borrowings, (ii) $51,975,000 of contributions from noncontrolling interests in consolidated subsidiaries, and (iii) $16,779,000 of proceeds received from exercise of Vornado stock options, partially offset by (iv) $2,936,578,000 for the repayments of borrowings, (v) $474,751,000 of distributions to Vornado, (vi) $225,000,000 of distributions in connection with the spin-off of UE, (vii) $102,866,000 of distributions to redeemable security holders and noncontrolling interests in consolidated subsidiaries, (viii) $80,578,000 of distributions to preferred unitholders, (ix) $66,554,000 of debt issuance and other costs, and (x) $7,473,000 for the repurchase of Class A units related to stock compensation agreements and related tax withholdings and other.

Liquidity and Capital Resources – continued

Capital Expenditures for the Year Ended December 31, 2015

Below is a summary of capital expenditures, leasing commissions and a reconciliation of total expenditures on an accrual basis to the cash expended in the year ended December 31, 2015.

(Amounts in thousands)		Total		New York		Washington, DC		Other
Expenditures to maintain assets		$	125,215	$	57,752	$	25,589	$	41,874
Tenant improvements			153,696		68,869		51,497		33,330
Leasing commissions			50,081		35,099		6,761		8,221
Non-recurring capital expenditures			116,875		81,240		34,428		1,207
Total capital expenditures and leasing commissions (accrual basis)			445,867		242,960		118,275		84,632
Adjustments to reconcile to cash basis:
	Expenditures in the current year applicable to prior periods		156,753		93,105		35,805		27,843
	Expenditures to be made in future periods for the current period		(222,469)		(118,911)		(73,227)		(30,331)
Total capital expenditures and leasing commissions (cash basis)		$	380,151	$	217,154	$	80,853	$	82,144

Tenant improvements and leasing commissions:
	Per square foot per annum	$	8.43	$	10.20	$	6.41	$	n/a
	Percentage of initial rent		10.8%		8.9%		15.9%		n/a

Development and Redevelopment Expenditures for the Year Ended December 31, 2015

Below is a summary of development and redevelopment expenditures incurred in the year ended December 31, 2015. These expenditures include interest of $59,305,000, payroll of $6,077,000, and other soft costs (primarily architectural and engineering fees, permits, real estate taxes and professional fees) aggregating $90,922,000, that were capitalized in connection with the development and redevelopment of these projects.


(Amounts in thousands)	Total		New York		Washington, DC		Other
220 Central Park South	$	158,014	$	-	$	-	$	158,014
The Bartlett		103,878		-		103,878		-
330 West 34th Street		32,613		32,613		-		-
90 Park Avenue		29,937		29,937		-		-
2221 South Clark Street (residential conversion)		23,711		-		23,711		-
Marriott Marquis Times Square - retail and signage		21,929		21,929		-		-
Wayne Towne Center		20,633		-		-		20,633
640 Fifth Avenue		17,899		17,899		-		-
Penn Plaza		17,701		17,701		-		-
251 18th Street		5,897		-		5,897		-
S. Clark Street/12th Street		4,579		-		4,579		-
1700 M Street		2,695		-		2,695		-
Other		51,333		8,100		27,525		15,708
	$	490,819	$	128,179	$	168,285	$	194,355

Liquidity and Capital Resources – continued

Cash Flows for the Year Ended December 31, 2014

Our cash and cash equivalents were $1,198,477,000 at December 31, 2014, a $615,187,000 decrease over the balance at December 31, 2013. Our consolidated outstanding debt was $9,530,337,000 at December 31, 2014, a $821,923,000 increase from the balance at December 31, 2013.

Net Cash Provided by Operating Activities

Cash flows provided by operating activities of $1,135,310,000 was comprised of (i) net income of $1,009,026,000, (ii) return of capital from real estate fund investments of $215,676,000, and (iii) distributions of income from partially owned entities of $96,286,000, partially offset by (iv) $89,536,000 of non-cash adjustments, which include depreciation and amortization expense, the effect of straight-lining of rental income, equity in net loss from partially owned entities and net gains on sale of real estate and other, and (v) the net change in operating assets and liabilities of $96,142,000, including $3,392,000 related to real estate fund investments.

Net Cash Used in Investing Activities

Net cash used in investing activities of $574,465,000 was comprised of (i) $544,187,000 of development costs and construction in progress, (ii) $279,206,000 of additions to real estate, (iii) $211,354,000 of acquisitions of real estate and other, (iv) $120,639,000 of investments in partially owned entities, and (v) $30,175,000 of investments in loans receivable and other, partially offset by (vi) $388,776,000 of proceeds from sales of real estate and related investments, (vii) $99,464,000 of changes in restricted cash, (viii) $96,913,000 of proceeds from sales and repayments of mortgages and mezzanine loans receivable and other, and (ix) $25,943,000 of capital distributions from partially owned entities.

Net Cash Provided by Financing Activities

Net cash provided by financing activities of Vornado Realty Trust of $54,342,000 was comprised of (i) $2,428,285,000 of proceeds from borrowings, (ii) $30,295,000 of contributions from noncontrolling interests, and (iii) $19,245,000 of proceeds received from exercise of employee share options, partially offset by (iv) $1,312,258,000 for the repayments of borrowings, (v) $547,831,000 of dividends paid on common shares, (vi) $220,895,000 of distributions to noncontrolling interests, (vii) purchase of marketable securities in connection with the defeasance of mortgage payable of $198,884,000, (viii) $81,468,000 of dividends paid on preferred shares, (ix) $58,336,000 of debt issuance and other costs, and (x) $3,811,000 for the repurchase of shares related to stock compensation agreements and related tax withholdings and other.

Net cash provided by financing activities of the Operating Partnership of $54,342,000 was comprised of (i) $2,428,285,000 of proceeds from borrowings, (ii) $30,295,000 of contributions from noncontrolling interests in consolidated subsidiaries, and (iii) $19,245,000 of proceeds received from exercise of Vornado stock options, partially offset by (iv) $1,312,258,000 for the repayments of borrowings, (v) $547,831,000 of distributions to Vornado, (vi) $220,895,000 of distributions to redeemable security holders and noncontrolling interests in consolidated subsidiaries, (vii) purchase of marketable securities in connection with the defeasance of mortgage payable of $198,884,000, (viii) $81,468,000 of distributions to preferred unitholders, (ix) $58,336,000 of debt issuance and other costs, and (x) $3,811,000 for the repurchase of Class A units related to stock compensation agreements and related tax withholdings and other.

Liquidity and Capital Resources – continued

Capital Expenditures for the Year Ended December 31, 2014

Below is a summary of capital expenditures, leasing commissions and a reconciliation of total expenditures on an accrual basis to the cash expended in the year ended December 31, 2014.

(Amounts in thousands)		Total		New York		Washington, DC		Other
Expenditures to maintain assets		$	107,728	$	48,518	$	23,425	$	35,785
Tenant improvements			205,037		143,007		37,842		24,188
Leasing commissions			79,636		66,369		5,857		7,410
Non-recurring capital expenditures			122,330		64,423		37,798		20,109
Total capital expenditures and leasing commissions (accrual basis)			514,731		322,317		104,922		87,492
Adjustments to reconcile to cash basis:
	Expenditures in the current year applicable to prior periods		140,490		67,577		45,084		27,829
	Expenditures to be made in future periods for the current period		(313,746)		(205,258)		(63,283)		(45,205)
Total capital expenditures and leasing commissions (cash basis)		$	341,475	$	184,636	$	86,723	$	70,116

Tenant improvements and leasing commissions:
	Per square foot per annum	$	6.53	$	6.82	$	5.70	$	n/a
	Percentage of initial rent		10.3%		9.1%		14.8%		n/a

Development and Redevelopment Expenditures for the Year Ended December 31, 2014

Below is a summary of development and redevelopment expenditures incurred in the year ended December 31, 2014. These expenditures include interest of $62,787,000, payroll of $7,319,000, and other soft costs (primarily architectural and engineering fees, permits, real estate taxes and professional fees) aggregating $67,939,000, that were capitalized in connection with the development and redevelopment of these projects.

(Amounts in thousands)	Total		New York		Washington, DC		Other
Springfield Mall	$	127,467	$	-	$	-	$	127,467
Marriott Marquis Times Square - retail and signage		112,390		112,390		-		-
220 Central Park South		78,059		-		-		78,059
330 West 34th Street		41,592		41,592		-		-
The Bartlett		38,163		-		38,163		-
608 Fifth Avenue		20,377		20,377		-		-
Wayne Towne Center		19,740		-		-		19,740
7 West 34th Street		11,555		11,555		-		-
Other		94,844		27,892		45,482		21,470
	$	544,187	$	213,806	$	83,645	$	246,736

Funds From Operations (“FFO”)

Vornado Realty Trust

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, real estate impairment losses, depreciation and amortization expense from real estate assets and other specified non-cash items, including the pro rata share of such adjustments of unconsolidated subsidiaries. FFO and FFO per diluted share are non-GAAP financial measures 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.

FFO attributable to common shareholders plus assumed conversions was $1,457,583,000, or $7.66 per diluted share for the year ended December 31, 2016, compared to $1,039,035,000, or $5.48 per diluted share for the year ended December 31, 2015. FFO attributable to common shareholders plus assumed conversions was $797,734,000, or $4.20 per diluted share for the three months ended December 31, 2016, compared to $259,528,000, or $1.37 per diluted share for the three months ended December 31, 2015. Details of certain items that impact FFO are discussed in the financial results summary of our “Overview.”

(Amounts in thousands, except per share amounts)			For the Year Ended				For the Three Months Ended
			December 31,				December 31,
			2016		2015		2016		2015
Reconciliation of our net income to FFO:
Net income attributable to common shareholders			$	823,606	$	679,856	$	651,181	$	230,742
	Per diluted share		$	4.34	$	3.59	$	3.43	$	1.22

FFO adjustments:
Depreciation and amortization of real property			$	531,620	$	514,085	$	133,389	$	131,910
Net gains on sale of real estate				(177,023)		(289,117)		(15,302)		(142,693)
Real estate impairment losses				160,700		256		-		-
Proportionate share of adjustments to equity in net income (loss) of
	partially owned entities to arrive at FFO:
		Depreciation and amortization of real property		154,795		143,960		37,160		37,275
		Net gains on sale of real estate		(2,853)		(4,513)		(12)		-
		Real estate impairment losses		6,328		16,758		792		4,141
				673,567		381,429		156,027		30,633
Noncontrolling interests' share of above adjustments				(41,267)		(22,342)		(9,495)		(1,869)
FFO adjustments, net			$	632,300	$	359,087	$	146,532	$	28,764

FFO attributable to common shareholders			$	1,455,906	$	1,038,943	$	797,713	$	259,506
Convertible preferred share dividends				86		92		21		22
Earnings allocated to Out-Performance Plan units				1,591		-		-		-
FFO attributable to common shareholders plus assumed conversions			$	1,457,583	$	1,039,035	$	797,734	$	259,528
	Per diluted share		$	7.66	$	5.48	$	4.20	$	1.37

Reconciliation of Weighted Average Shares
Weighted average common shares outstanding		188,837	188,353	189,013	188,537
Effect of dilutive securities:
	Employee stock options and restricted share awards	1,064	1,166	1,055	1,107
	Convertible preferred shares	42	45	40	44
	Out-Performance Plan units	230	-	-	-
Denominator for FFO per diluted share		190,173	189,564	190,108	189,688

ITEM 7A. 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)			2016					2015
					Weighted	Effect of 1%				Weighted
			December 31,		Average	Change In		December 31,		Average
			Balance		Interest Rate	Base Rates		Balance		Interest Rate
Consolidated debt:
	Variable rate		$	3,765,054	2.40%	$	37,651	$	3,995,704	2.00%
	Fixed rate			6,949,873	3.82%		-		7,206,634	4.21%
			$	10,714,927	3.32%		37,651	$	11,202,338	3.42%
Pro rata share of debt of non-consolidated
	entities (non-recourse):
	Variable rate – excluding Toys "R" Us, Inc.		$	1,109,376	2.49%		11,094	$	485,160	1.97%
	Variable rate – Toys "R" Us, Inc.			1,162,072	6.05%		11,621		1,164,893	6.61%
	Fixed rate (including $671,181 and $661,513
		of Toys "R" Us, Inc. debt in 2016 and 2015)		2,791,249	6.09%		-		2,782,025	6.37%
			$	5,062,697	5.30%		22,715	$	4,432,078	5.95%
Noncontrolling interests’ share of
	consolidated subsidiaries						(1,393)
Total change in annual net income attributable to
	the Operating Partnership						58,973
Noncontrolling interests’ share of
	the Operating Partnership						(3,676)
Total change in annual net income attributable to
	Vornado					$	55,297
Total change in annual net income attributable to
	the Operating Partnership per diluted
	Class A unit					$	0.29
Total change in annual net income attributable to
	Vornado per diluted share					$	0.29

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 December 31, 2016, we have an interest rate swap on a $412,000,000 mortgage loan that swapped the rate from LIBOR plus 1.65% (2.27% at December 31, 2016) to a fixed rate of 4.78% through March 2018 and an interest swap on a $375,000,000 mortgage loan on 888 Seventh Avenue that swapped the rate from LIBOR plus 1.60% (2.22% at December 31, 2016) to a fixed rate of 3.15% through December 2020.

In connection with the $700,000,000 refinancing of 770 Broadway, we entered into an interest rate swap from LIBOR plus 1.75% (2.40% at December 31, 2016) to a fixed rate of 2.56% through September 2020.

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 December 31, 2016, the estimated fair value of our consolidated debt was $10,746,000,000.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

		Page
		Number
*Vornado Realty Trust*

	Report of Independent Registered Public Accounting Firm	96

	Consolidated Balance Sheets at December 31, 2016 and 2015	97

	Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014	98

	Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014	99

	Consolidated Statements of Changes in Equity for the years ended December 31, 2016, 2015 and 2014	100

	Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014	103

*Vornado Realty L.P.*

	Report of Independent Registered Public Accounting Firm	105

	Consolidated Balance Sheets at December 31, 2016 and 2015	106

	Consolidated Statements of Income for the years ended December 31, 2016, 2015 and 2014	107

	Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014	108

	Consolidated Statements of Changes in Equity for the years ended December 31, 2016, 2015 and 2014	109

	Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014	112


	Notes to Consolidated Financial Statements	114

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Trustees

Vornado Realty Trust

New York, New York

We have audited the accompanying consolidated balance sheets of Vornado Realty Trust (the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Vornado Realty Trust at December 31, 2016 and 2015, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal Control— Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 13, 2017 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

February 13, 2017

VORNADO REALTY TRUST

CONSOLIDATED BALANCE SHEETS


(Amounts in thousands, except unit, share and per share amounts)			December 31, 2016		December 31, 2015
ASSETS
Real estate, at cost:
	Land		$	4,065,142	$	4,164,799
	Buildings and improvements			12,727,980		12,582,671
	Development costs and construction in progress			1,430,276		1,226,637
	Leasehold improvements and equipment			116,560		116,030
		Total		18,339,958		18,090,137
	Less accumulated depreciation and amortization			(3,513,574)		(3,418,267)
Real estate, net				14,826,384		14,671,870
Cash and cash equivalents				1,501,027		1,835,707
Restricted cash				98,295		107,799
Marketable securities				203,704		150,997
Tenant and other receivables, net of allowance for doubtful accounts of $10,920 and $11,908				94,467		98,062
Investments in partially owned entities				1,428,019		1,550,422
Real estate fund investments				462,132		574,761
Receivable arising from the straight-lining of rents, net of allowance of $2,227 and $2,751				1,032,736		931,245
Deferred leasing costs, net of accumulated amortization of $228,862 and $218,239				454,345		480,421
Identified intangible assets, net of accumulated amortization of $207,330 and $187,360				192,731		227,901
Assets related to discontinued operations				5,570		37,020
Other assets				515,437		477,088
			$	20,814,847	$	21,143,293

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgages payable, net			$	9,278,263	$	9,513,713
Senior unsecured notes, net				845,577		844,159
Unsecured revolving credit facilities				115,630		550,000
Unsecured term loan, net				372,215		183,138
Accounts payable and accrued expenses				458,694		443,955
Deferred revenue				287,846		346,119
Deferred compensation plan				121,374		117,475
Liabilities related to discontinued operations				2,870		12,470
Other liabilities				435,436		426,965
	Total liabilities			11,917,905		12,437,994
Commitments and contingencies
Redeemable noncontrolling interests:
	Class A units - 12,197,162 and 12,242,820 units outstanding			1,273,018		1,223,793
	Series D cumulative redeemable preferred units - 177,101 units outstanding			5,428		5,428
		Total redeemable noncontrolling interests		1,278,446		1,229,221
Vornado shareholders' equity:
	Preferred shares of beneficial interest: no par value per share; authorized 110,000,000
		shares; issued and outstanding 42,824,829 and 52,676,629 shares		1,038,055		1,276,954
	Common shares of beneficial interest: $.04 par value per share; authorized
		250,000,000 shares; issued and outstanding 189,100,876 and 188,576,853 shares		7,542		7,521
	Additional capital			7,153,332		7,132,979
	Earnings less than distributions			(1,419,382)		(1,766,780)
	Accumulated other comprehensive income			118,972		46,921
		Total Vornado shareholders' equity		6,898,519		6,697,595
Noncontrolling interests in consolidated subsidiaries				719,977		778,483
	Total equity			7,618,496		7,476,078
			$	20,814,847	$	21,143,293

See notes to the consolidated financial statements.

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF INCOME


(Amounts in thousands, except per share amounts)			Year Ended December 31,
			2016		2015		2014

REVENUES:
	Property rentals		$	2,103,728	$	2,076,586	$	1,911,487
	Tenant expense reimbursements			260,667		260,976		245,819
	Fee and other income			141,807		164,705		155,206
Total revenues				2,506,202		2,502,267		2,312,512
EXPENSES:
	Operating			1,024,336		1,011,249		953,611
	Depreciation and amortization			565,059		542,952		481,303
	General and administrative			179,279		175,307		169,270
	Skyline properties impairment loss			160,700		-		-
	Acquisition and transaction related costs			26,037		12,511		18,435
Total expenses				1,955,411		1,742,019		1,622,619
Operating income				550,791		760,248		689,893
(Loss) income from real estate fund investments				(23,602)		74,081		163,034
Income (loss) from partially owned entities				165,389		(12,630)		(59,861)
Interest and other investment income, net				29,546		26,978		38,752
Interest and debt expense				(402,674)		(378,025)		(412,755)
Net gain on extinguishment of Skyline properties debt				487,877		-		-
Net gain on disposition of wholly owned and partially owned assets				175,735		251,821		13,568
Income before income taxes				983,062		722,473		432,631
Income tax (expense) benefit				(8,312)		84,695		(9,281)
Income from continuing operations				974,750		807,168		423,350
Income from discontinued operations				7,172		52,262		585,676
Net income				981,922		859,430		1,009,026
Less net income attributable to noncontrolling interests in:
	Consolidated subsidiaries			(21,351)		(55,765)		(96,561)
	Operating Partnership			(53,654)		(43,231)		(47,613)
Net income attributable to Vornado				906,917		760,434		864,852
Preferred share dividends				(75,903)		(80,578)		(81,464)
Preferred share issuance costs (Series J redemption)				(7,408)		-		-
NET INCOME attributable to common shareholders			$	823,606	$	679,856	$	783,388


INCOME PER COMMON SHARE - BASIC:
		Income from continuing operations, net	$	4.32	$	3.35	$	1.23
		Income from discontinued operations, net		0.04		0.26		2.95
		Net income per common share	$	4.36	$	3.61	$	4.18
		Weighted average shares outstanding		188,837		188,353		187,572

INCOME PER COMMON SHARE - DILUTED:
		Income from continuing operations, net	$	4.30	$	3.33	$	1.22
		Income from discontinued operations, net		0.04		0.26		2.93
		Net income per common share	$	4.34	$	3.59	$	4.15
		Weighted average shares outstanding		190,173		189,564		188,690

See notes to consolidated financial statements.

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(Amounts in thousands)			Year Ended December 31,
			2016		2015		2014
Net income			$	981,922	$	859,430	$	1,009,026
Other comprehensive income (loss):
	Increase (reduction) in unrealized net gain on available-for-sale securities			52,057		(55,326)		14,465
	Pro rata share of other comprehensive (loss) income of
		nonconsolidated subsidiaries		(2,739)		(327)		2,509
	Increase in value of interest rate swap and other			27,432		6,441		6,079
Comprehensive income				1,058,672		810,218		1,032,079
Less comprehensive income attributable to noncontrolling interests				(79,704)		(96,130)		(145,497)
Comprehensive income attributable to Vornado			$	978,968	$	714,088	$	886,582


See notes to consolidated financial statements.

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


(Amounts in thousands)																	Non-
															Accumulated		controlling
													Earnings		Other		Interests in
			Preferred Shares				Common Shares				Additional		Less Than		Comprehensive		Consolidated		Total
			Shares		Amount		Shares		Amount		Capital		Distributions		Income (Loss)		Subsidiaries		Equity
Balance, December 31, 2015				52,677	$	1,276,954		188,577	$	7,521	$	7,132,979	$	(1,766,780)	$	46,921	$	778,483	$	7,476,078
Net income attributable to Vornado				-		-		-		-		-		906,917		-		-		906,917
Net income attributable to
	noncontrolling interests in
	consolidated subsidiaries			-		-		-		-		-		-		-		21,351		21,351
Dividends on common shares				-		-		-		-		-		(475,961)		-		-		(475,961)
Dividends on preferred shares				-		-		-		-		-		(75,903)		-		-		(75,903)
Redemption of Series J
	preferred shares			(9,850)		(238,842)		-		-		-		(7,408)		-		-		(246,250)
Common shares issued:
	Upon redemption of Class A
		units, at redemption value		-		-		376		15		36,495		-		-		-		36,510
	Under employees' share
		option plan		-		-		123		5		6,820		-		-		-		6,825
	Under dividend reinvestment plan			-		-		16		1		1,443		-		-		-		1,444
Contributions				-		-		-		-		-		-		-		19,749		19,749
Distributions:
	Real estate fund investments			-		-		-		-		-		-		-		(62,444)		(62,444)
	Other			-		-		-		-		-		-		-		(36,804)		(36,804)
Conversion of Series A preferred
	shares to common shares			(2)		(56)		3		-		56		-		-		-		-
Deferred compensation shares
	and options			-		-		7		-		1,788		(186)		-		-		1,602
Increase in unrealized net gain on
	available-for-sale securities			-		-		-		-		-		-		52,057		-		52,057
Pro rata share of other
	comprehensive loss of
	nonconsolidated subsidiaries			-		-		-		-		-		-		(2,739)		-		(2,739)
Increase in value of interest rate
	swap			-		-		-		-		-		-		27,434		-		27,434
Adjustments to carry redeemable
	Class A units at redemption value			-		-		-		-		(26,251)		-		-		-		(26,251)
Redeemable noncontrolling interests'
	share of above adjustments			-		-		-		-		-		-		(4,699)		-		(4,699)
Other				-		(1)		(1)		-		2		(61)		(2)		(358)		(420)
Balance, December 31, 2016				42,825	$	1,038,055		189,101	$	7,542	$	7,153,332	$	(1,419,382)	$	118,972	$	719,977	$	7,618,496


See notes to consolidated financial statements.

100

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


(Amounts in thousands)																	Non-
															Accumulated		controlling
													Earnings		Other		Interests in
			Preferred Shares				Common Shares				Additional		Less Than		Comprehensive		Consolidated		Total
			Shares		Amount		Shares		Amount		Capital		Distributions		Income (Loss)		Subsidiaries		Equity
Balance, December 31, 2014				52,679	$	1,277,026		187,887	$	7,493	$	6,873,025	$	(1,505,385)	$	93,267	$	743,956	$	7,489,382
Net income attributable to Vornado				-		-		-		-		-		760,434		-		-		760,434
Net income attributable to
	noncontrolling interests in
	consolidated subsidiaries			-		-		-		-		-		-		-		55,765		55,765
Distribution of Urban Edge
	Properties			-		-		-		-		-		(464,262)		-		(341)		(464,603)
Dividends on common shares				-		-		-		-		-		(474,751)		-		-		(474,751)
Dividends on preferred shares				-		-		-		-		-		(80,578)		-		-		(80,578)
Common shares issued:
	Upon redemption of Class A
		units, at redemption value		-		-		452		18		48,212		-		-		-		48,230
	Under employees' share
		option plan		-		-		214		9		15,332		(2,579)		-		-		12,762
	Under dividend reinvestment plan			-		-		14		1		1,437		-		-		-		1,438
Contributions:
	Real estate fund investments			-		-		-		-		-		-		-		51,725		51,725
	Other			-		-		-		-		-		-		-		250		250
Distributions:
	Real estate fund investments			-		-		-		-		-		-		-		(72,114)		(72,114)
	Other			-		-		-		-		-		-		-		(525)		(525)
Conversion of Series A preferred
	shares to common shares			(2)		(72)		4		1		71		-		-		-		-
Deferred compensation shares
	and options			-		-		6		1		2,438		(359)		-		-		2,080
Reduction in unrealized net gain on
	available-for-sale securities			-		-		-		-		-		-		(55,326)		-		(55,326)
Pro rata share of other
	comprehensive loss of
	nonconsolidated subsidiaries			-		-		-		-		-		-		(327)		-		(327)
Increase in value of interest rate
	swap			-		-		-		-		-		-		6,435		-		6,435
Adjustments to carry redeemable
	Class A units at redemption value			-		-		-		-		192,464		-		-		-		192,464
Redeemable noncontrolling interests'
	share of above adjustments			-		-		-		-		-		-		2,866		-		2,866
Other				-		-		-		(2)		-		700		6		(233)		471
Balance, December 31, 2015				52,677	$	1,276,954		188,577	$	7,521	$	7,132,979	$	(1,766,780)	$	46,921	$	778,483	$	7,476,078


See notes to consolidated financial statements.

101

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED


(Amounts in thousands)																	Non-
															Accumulated		controlling
													Earnings		Other		Interests in
			Preferred Shares				Common Shares				Additional		Less Than		Comprehensive		Consolidated		Total
			Shares		Amount		Shares		Amount		Capital		Distributions		Income (Loss)		Subsidiaries		Equity
Balance, December 31, 2013				52,683	$	1,277,225		187,285	$	7,469	$	7,143,840	$	(1,734,839)	$	71,537	$	829,512	$	7,594,744
Net income attributable to Vornado				-		-		-		-		-		864,852		-		-		864,852
Net income attributable to
	noncontrolling interests in
	consolidated subsidiaries			-		-		-		-		-		-		-		96,561		96,561
Dividends on common shares				-		-		-		-		-		(547,831)		-		-		(547,831)
Dividends on preferred shares				-		-		-		-		-		(81,464)		-		-		(81,464)
Common shares issued:
	Upon redemption of Class A
		units, at redemption value		-		-		271		11		27,262		-		-		-		27,273
	Under employees' share
		option plan		-		-		304		12		17,428		(3,393)		-		-		14,047
	Under dividend reinvestment plan			-		-		17		1		1,803		-		-		-		1,804
Contributions:
	Real estate fund investments			-		-		-		-		-		-		-		5,297		5,297
	Other			-		-		-		-		-		-		-		32,998		32,998
Distributions:
	Real estate fund investments			-		-		-		-		-		-		-		(182,964)		(182,964)
	Other			-		-		-		-		-		-		-		(4,463)		(4,463)
Transfer of noncontrolling interest
	in real estate fund investments			-		-		-		-		-		-		-		(33,028)		(33,028)
Conversion of Series A preferred
	shares to common shares			(4)		(193)		5		-		193		-		-		-		-
Deferred compensation shares
	and options			-		-		5		-		5,852		(340)		-		-		5,512
Increase in unrealized net gain on
	available-for-sale securities			-		-		-		-		-		-		14,465		-		14,465
Pro rata share of other
	comprehensive income of
	nonconsolidated subsidiaries			-		-		-		-		-		-		2,509		-		2,509
Increase in value of interest rate
	swap			-		-		-		-		-		-		6,079		-		6,079
Adjustments to carry redeemable
	Class A units at redemption value			-		-		-		-		(315,276)		-		-		-		(315,276)
Redeemable noncontrolling interests'
	share of above adjustments			-		-		-		-		-		-		(1,323)		-		(1,323)
Other				-		(6)		-		-		(8,077)		(2,370)		-		43		(10,410)
Balance, December 31, 2014				52,679	$	1,277,026		187,887	$	7,493	$	6,873,025	$	(1,505,385)	$	93,267	$	743,956	$	7,489,382


See notes to consolidated financial statements.

102

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)			Year Ended December 31,
			2016		2015		2014
Cash Flows from Operating Activities:
Net income			$	981,922	$	859,430	$	1,009,026
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization (including amortization of deferred financing costs)			595,270		566,207		583,408
	Net gain on extinguishment of Skyline properties debt			(487,877)		-		-
	Distributions of income from partially owned entities			217,468		65,018		96,286
	Net gain on disposition of wholly owned and partially owned assets			(175,735)		(251,821)		(13,568)
	Equity in net (income) loss of partially owned entities			(165,389)		11,882		58,131
	Real estate impairment losses			161,165		256		26,518
	Straight-lining of rental income			(146,787)		(153,668)		(82,800)
	Return of capital from real estate fund investments			71,888		91,458		215,676
	Amortization of below-market leases, net			(53,202)		(79,053)		(46,786)
	Net realized and unrealized loss (gain) on real estate fund investments			40,655		(57,752)		(150,139)
	Other non-cash adjustments			39,406		37,721		37,303
	Net gains on sale of real estate and other			(5,074)		(65,396)		(507,192)
	Reversal of allowance for deferred tax assets			-		(90,030)		-
	Defeasance cost in connection with the refinancing of mortgage payable			-		-		5,589
	Changes in operating assets and liabilities:
		Real estate fund investments		-		(95,010)		(3,392)
		Tenant and other receivables, net		(7,459)		11,936		(8,282)
		Prepaid assets		(8,023)		(14,804)		(8,786)
		Other assets		(70,120)		(116,157)		(123,435)
		Accounts payable and accrued expenses		32,389		(33,747)		44,628
		Other liabilities		(19,830)		(14,320)		3,125
Net cash provided by operating activities				1,000,667		672,150		1,135,310

Cash Flows from Investing Activities:
	Development costs and construction in progress			(606,565)		(490,819)		(544,187)
	Additions to real estate			(387,545)		(301,413)		(279,206)
	Distributions of capital from partially owned entities			193,967		37,818		25,943
	Proceeds from sales of real estate and related investments			153,534		573,303		388,776
	Investments in partially owned entities			(127,608)		(235,439)		(120,639)
	Acquisitions of real estate and other			(61,464)		(478,215)		(211,354)
	Net deconsolidation of 7 West 34th Street			(42,000)		-		-
	Investments in loans receivable and other			(11,700)		(1,000)		(30,175)
	Purchases of marketable securities			(4,379)		-		-
	Proceeds from the sale of marketable securities			3,937		-		-
	Restricted cash			585		200,229		99,464
	Proceeds from sales and repayments of mortgage and mezzanine loans
		receivable and other		45		16,790		96,913
Net cash used in investing activities				(889,193)		(678,746)		(574,465)

See notes to consolidated financial statements.

103

VORNADO REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

(Amounts in thousands)			For the Year Ended December 31,
			2016		2015		2014
Cash Flows from Financing Activities:
	Proceeds from borrowings		$	2,403,898	$	4,468,872	$	2,428,285
	Repayments of borrowings			(1,894,990)		(2,936,578)		(1,312,258)
	Dividends paid on common shares			(475,961)		(474,751)		(547,831)
	Redemption of preferred shares			(246,250)		-		-
	Distributions to noncontrolling interests			(130,590)		(102,866)		(220,895)
	Dividends paid on preferred shares			(80,137)		(80,578)		(81,468)
	Debt issuance and other costs			(42,157)		(66,554)		(58,336)
	Contributions from noncontrolling interests			11,950		51,975		30,295
	Proceeds received from exercise of employee share options			8,269		16,779		19,245
	Repurchase of shares related to stock compensation agreements and related
		tax withholdings and other		(186)		(7,473)		(3,811)
	Cash included in the spin-off of Urban Edge Properties			-		(225,000)		-
	Purchase of marketable securities in connection with the defeasance of mortgage payable			-		-		(198,884)
Net cash (used in) provided by financing activities				(446,154)		643,826		54,342
Net (decrease) increase in cash and cash equivalents				(334,680)		637,230		615,187
Cash and cash equivalents at beginning of period				1,835,707		1,198,477		583,290
Cash and cash equivalents at end of period			$	1,501,027	$	1,835,707	$	1,198,477


Supplemental Disclosure of Cash Flow Information:
	Cash payments for interest, excluding capitalized interest of $29,584, $48,539, and $53,139		$	368,762	$	376,620	$	443,538
	Cash payments for income taxes		$	9,716	$	8,287	$	11,696

Non-Cash Investing and Financing Activities:
	Decrease in assets and liabilities resulting from the disposition of Skyline properties:
		Real estate, net	$	(189,284)	$	-	$	-
		Mortgages payable, net		(690,263)		-		-
	Decrease in assets and liabilities resulting from the deconsolidation of 7 West 34th Street:
		Real estate, net		(122,047)		-		-
		Mortgages payable, net		(290,418)		-		-
	Write-off of fully depreciated assets			(305,679)		(167,250)		(121,673)
	Accrued capital expenditures included in accounts payable and accrued expenses			120,564		122,711		100,528
	Change in unrealized net gain on securities available-for-sale			52,057		(55,326)		14,465
	Like-kind exchange of real estate:
		Acquisitions		29,639		80,269		606,816
		Dispositions		(29,639)		(213,621)		(630,352)
	Adjustments to carry redeemable Class A units at redemption value			(26,251)		192,464		(315,276)
	Non-cash distribution of Urban Edge Properties:
		Assets		-		1,709,256		-
		Liabilities		-		(1,469,659)		-
		Equity		-		(239,597)		-
	Transfer of interest in real estate to Pennsylvania Real Estate Investment Trust			-		(145,313)		-
	Class A units in connection with acquisition			-		80,000		-
	Financing assumed in acquisitions			-		62,000		-
	Marketable securities transferred in connection with the defeasance of mortgage payable			-		-		198,884
	Defeasance of mortgage payable			-		-		(193,406)
	Elimination of a mortgage and mezzanine loan asset and liability			-		-		59,375
	Transfer of interest in real estate fund to an unconsolidated joint venture			-		-		(58,564)
	Transfer of noncontrolling interest in real estate fund			-		-		(33,028)
	Beverly Connection seller financing			-		-		13,620

See notes to consolidated financial statements.

104

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Partners

Vornado Realty L.P.

New York, New York

We have audited the accompanying consolidated balance sheets of Vornado Realty L.P. and consolidated subsidiaries (the “Partnership”) as of December 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and financial statement schedules are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Vornado Realty L.P. and consolidated subsidiaries at December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Partnership’s internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal Control— Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 13, 2017 expressed an unqualified opinion on the Partnership’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

February 13, 2017

105

VORNADO REALTY L.P.

CONSOLIDATED BALANCE SHEETS


(Amounts in thousands, except unit amounts)			December 31, 2016		December 31, 2015
ASSETS
Real estate, at cost:
	Land		$	4,065,142	$	4,164,799
	Buildings and improvements			12,727,980		12,582,671
	Development costs and construction in progress			1,430,276		1,226,637
	Leasehold improvements and equipment			116,560		116,030
		Total		18,339,958		18,090,137
	Less accumulated depreciation and amortization			(3,513,574)		(3,418,267)
Real estate, net				14,826,384		14,671,870
Cash and cash equivalents				1,501,027		1,835,707
Restricted cash				98,295		107,799
Marketable securities				203,704		150,997
Tenant and other receivables, net of allowance for doubtful accounts of $10,920 and $11,908				94,467		98,062
Investments in partially owned entities				1,428,019		1,550,422
Real estate fund investments				462,132		574,761
Receivable arising from the straight-lining of rents, net of allowance of $2,227 and $2,751				1,032,736		931,245
Deferred leasing costs, net of accumulated amortization of $228,862 and $218,239				454,345		480,421
Identified intangible assets, net of accumulated amortization of $207,330 and $187,360				192,731		227,901
Assets related to discontinued operations				5,570		37,020
Other assets				515,437		477,088
			$	20,814,847	$	21,143,293

LIABILITIES, REDEEMABLE PARTNERSHIP UNITS AND EQUITY
Mortgages payable, net			$	9,278,263	$	9,513,713
Senior unsecured notes, net				845,577		844,159
Unsecured revolving credit facilities				115,630		550,000
Unsecured term loan, net				372,215		183,138
Accounts payable and accrued expenses				458,694		443,955
Deferred revenue				287,846		346,119
Deferred compensation plan				121,374		117,475
Liabilities related to discontinued operations				2,870		12,470
Other liabilities				435,436		426,965
	Total liabilities			11,917,905		12,437,994
Commitments and contingencies
Redeemable partnership units:
	Class A units - 12,197,162 and 12,242,820 units outstanding			1,273,018		1,223,793
	Series D cumulative redeemable preferred units - 177,101 units outstanding			5,428		5,428
		Total redeemable partnership units		1,278,446		1,229,221
Equity:
	Partners' capital			8,198,929		8,417,454
	Earnings less than distributions			(1,419,382)		(1,766,780)
	Accumulated other comprehensive income			118,972		46,921
		Total Vornado Realty L.P. equity		6,898,519		6,697,595
Noncontrolling interests in consolidated subsidiaries				719,977		778,483
	Total equity			7,618,496		7,476,078
			$	20,814,847	$	21,143,293

See notes to the consolidated financial statements.

106

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF INCOME


(Amounts in thousands, except per unit amounts)			Year Ended December 31,
			2016		2015		2014

REVENUES:
	Property rentals		$	2,103,728	$	2,076,586	$	1,911,487
	Tenant expense reimbursements			260,667		260,976		245,819
	Fee and other income			141,807		164,705		155,206
Total revenues				2,506,202		2,502,267		2,312,512
EXPENSES:
	Operating			1,024,336		1,011,249		953,611
	Depreciation and amortization			565,059		542,952		481,303
	General and administrative			179,279		175,307		169,270
	Skyline properties impairment loss			160,700		-		-
	Acquisition and transaction related costs			26,037		12,511		18,435
Total expenses				1,955,411		1,742,019		1,622,619
Operating income				550,791		760,248		689,893
(Loss) income from real estate fund investments				(23,602)		74,081		163,034
Income (loss) from partially owned entities				165,389		(12,630)		(59,861)
Interest and other investment income, net				29,546		26,978		38,752
Interest and debt expense				(402,674)		(378,025)		(412,755)
Net gain on extinguishment of Skyline properties debt				487,877		-		-
Net gain on disposition of wholly owned and partially owned assets				175,735		251,821		13,568
Income before income taxes				983,062		722,473		432,631
Income tax (expense) benefit				(8,312)		84,695		(9,281)
Income from continuing operations				974,750		807,168		423,350
Income from discontinued operations				7,172		52,262		585,676
Net income				981,922		859,430		1,009,026
Less net income attributable to noncontrolling interests in consolidated
	subsidiaries			(21,351)		(55,765)		(96,561)
Net income attributable to Vornado Realty L.P.				960,571		803,665		912,465
Preferred unit distributions				(76,097)		(80,736)		(81,514)
Preferred unit issuance costs (Series J redemption)				(7,408)		-		-
NET INCOME attributable to Class A unitholders			$	877,066	$	722,929	$	830,951


INCOME PER CLASS A UNIT - BASIC:
		Income from continuing operations, net	$	4.32	$	3.35	$	1.22
		Income from discontinued operations, net		0.04		0.26		2.95
		Net income per Class A unit	$	4.36	$	3.61	$	4.17
		Weighted average units outstanding		200,350		199,309		198,213

INCOME PER CLASS A UNIT - DILUTED:
		Income from continuing operations, net	$	4.29	$	3.31	$	1.21
		Income from discontinued operations, net		0.03		0.26		2.93
		Net income per Class A unit	$	4.32	$	3.57	$	4.14
		Weighted average units outstanding		202,017		201,158		199,813

See notes to consolidated financial statements.

107

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(Amounts in thousands)			Year Ended December 31,
			2016		2015		2014
Net income			$	981,922	$	859,430	$	1,009,026
Other comprehensive income (loss):
	Increase (reduction) in unrealized net gain on available-for-sale securities			52,057		(55,326)		14,465
	Pro rata share of other comprehensive (loss) income of
		nonconsolidated subsidiaries		(2,739)		(327)		2,509
	Increase in value of interest rate swap and other			27,432		6,441		6,079
Comprehensive income				1,058,672		810,218		1,032,079
Less comprehensive income attributable to noncontrolling interests				(21,351)		(55,765)		(96,561)
Comprehensive income attributable to Vornado Realty L.P.			$	1,037,321	$	754,453	$	935,518


See notes to consolidated financial statements.

108

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


(Amounts in thousands)															Non-
													Accumulated		controlling
							Class A Units				Earnings		Other		Interests in
			Preferred Units				Owned by Vornado				Less Than		Comprehensive		Consolidated		Total
			Units		Amount		Units		Amount		Distributions		Income (Loss)		Subsidiaries		Equity
Balance, December 31, 2015				52,677	$	1,276,954		188,577	$	7,140,500	$	(1,766,780)	$	46,921	$	778,483	$	7,476,078
Net income attributable to Vornado Realty L.P.				-		-		-		-		960,571		-		-		960,571
Net income attributable to redeemable
	partnership units			-		-		-		-		(53,654)		-		-		(53,654)
Net income attributable to noncontrolling
	interests in consolidated subsidiaries			-		-		-		-		-		-		21,351		21,351
Distributions to Vornado				-		-		-		-		(475,961)		-		-		(475,961)
Distributions to preferred unitholders				-		-		-		-		(75,903)		-		-		(75,903)
Redemption of Series J preferred units				(9,850)		(238,842)		-		-		(7,408)		-		-		(246,250)
Class A Units issued to Vornado:
	Upon redemption of redeemable Class A
		units, at redemption value		-		-		376		36,510		-		-		-		36,510
	Under Vornado's employees' share option plan			-		-		123		6,825		-		-		-		6,825
	Under Vornado's dividend reinvestment plan			-		-		16		1,444		-		-		-		1,444
Contributions				-		-		-		-		-		-		19,749		19,749
Distributions:
	Real estate fund investments			-		-		-		-		-		-		(62,444)		(62,444)
	Other			-		-		-		-		-		-		(36,804)		(36,804)
Conversion of Series A preferred units to
	Class A units			(2)		(56)		3		56		-		-		-		-
Deferred compensation units and options				-		-		7		1,788		(186)		-		-		1,602
Increase in unrealized net gain on
	available-for-sale securities			-		-		-		-		-		52,057		-		52,057
Pro rata share of other comprehensive loss
	of nonconsolidated subsidiaries			-		-		-		-		-		(2,739)		-		(2,739)
Increase in value of interest rate swap				-		-		-		-		-		27,434		-		27,434
Adjustments to carry redeemable Class A
	units at redemption value			-		-		-		(26,251)		-		-		-		(26,251)
Redeemable partnership units' share of
	above adjustments			-		-		-		-		-		(4,699)		-		(4,699)
Other				-		(1)		(1)		2		(61)		(2)		(358)		(420)
Balance, December 31, 2016				42,825	$	1,038,055		189,101	$	7,160,874	$	(1,419,382)	$	118,972	$	719,977	$	7,618,496


See notes to consolidated financial statements.

109

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED


(Amounts in thousands)															Non-
													Accumulated		controlling
							Class A Units				Earnings		Other		Interests in
			Preferred Units				Owned by Vornado				Less Than		Comprehensive		Consolidated		Total
			Units		Amount		Units		Amount		Distributions		Income (Loss)		Subsidiaries		Equity
Balance, December 31, 2014				52,679	$	1,277,026		187,887	$	6,880,518	$	(1,505,385)	$	93,267	$	743,956	$	7,489,382
Net income attributable to Vornado Realty L.P.				-		-		-		-		803,665		-		-		803,665
Net income attributable to redeemable
	partnership units			-		-		-		-		(43,231)		-		-		(43,231)
Net income attributable to noncontrolling
	interests in consolidated subsidiaries			-		-		-		-		-		-		55,765		55,765
Distribution of Urban Edge Properties				-		-		-		-		(464,262)		-		(341)		(464,603)
Distributions to Vornado				-		-		-		-		(474,751)		-		-		(474,751)
Distributions to preferred unitholders				-		-		-		-		(80,578)		-		-		(80,578)
Class A Units issued to Vornado:
	Upon redemption of redeemable Class A
		units, at redemption value		-		-		452		48,230		-		-		-		48,230
	Under Vornado's employees' share option plan			-		-		214		15,341		(2,579)		-		-		12,762
	Under Vornado's dividend reinvestment plan			-		-		14		1,438		-		-		-		1,438
Contributions:
	Real estate fund investments			-		-		-		-		-		-		51,725		51,725
	Other			-		-		-		-		-		-		250		250
Distributions:
	Real estate fund investments			-		-		-		-		-		-		(72,114)		(72,114)
	Other			-		-		-		-		-		-		(525)		(525)
Conversion of Series A preferred units to
	Class A units			(2)		(72)		4		72		-		-		-		-
Deferred compensation units and options				-		-		6		2,439		(359)		-		-		2,080
Reduction in unrealized net gain on
	available-for-sale securities			-		-		-		-		-		(55,326)		-		(55,326)
Pro rata share of other comprehensive loss
	of nonconsolidated subsidiaries			-		-		-		-		-		(327)		-		(327)
Increase in value of interest rate swap				-		-		-		-		-		6,435		-		6,435
Adjustments to carry redeemable Class A
	units at redemption value			-		-		-		192,464		-		-		-		192,464
Redeemable partnership units' share of
	above adjustments			-		-		-		-		-		2,866		-		2,866
Other				-		-		-		(2)		700		6		(233)		471
Balance, December 31, 2015				52,677	$	1,276,954		188,577	$	7,140,500	$	(1,766,780)	$	46,921	$	778,483	$	7,476,078


See notes to consolidated financial statements.

110

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED


(Amounts in thousands)															Non-
													Accumulated		controlling
							Class A Units				Earnings		Other		Interests in
			Preferred Units				Owned by Vornado				Less Than		Comprehensive		Consolidated		Total
			Units		Amount		Units		Amount		Distributions		Income (Loss)		Subsidiaries		Equity
Balance, December 31, 2013				52,683	$	1,277,225		187,285	$	7,151,309	$	(1,734,839)	$	71,537	$	829,512	$	7,594,744
Net income attributable to Vornado Realty L.P.				-		-		-		-		912,465		-		-		912,465
Net income attributable to redeemable
	partnership units			-		-		-		-		(47,613)		-		-		(47,613)
Net income attributable to noncontrolling
	interests in consolidated subsidiaries			-		-		-		-		-		-		96,561		96,561
Distributions to Vornado				-		-		-		-		(547,831)		-		-		(547,831)
Distributions to preferred unitholders				-		-		-		-		(81,464)		-		-		(81,464)
Class A Units issued to Vornado
	Upon redemption of redeemable Class A
		units, at redemption value		-		-		271		27,273		-		-		-		27,273
	Under Vornado's employees' share option plan			-		-		304		17,440		(3,393)		-		-		14,047
	Under Vornado's dividend reinvestment plan			-		-		17		1,804		-		-		-		1,804
Contributions:
	Real estate fund investments			-		-		-		-		-		-		5,297		5,297
	Other			-		-		-		-		-		-		32,998		32,998
Distributions:
	Real estate fund investments			-		-		-		-		-		-		(182,964)		(182,964)
	Other			-		-		-		-		-		-		(4,463)		(4,463)
Transfer of noncontrolling interest in real estate
	fund investments			-		-		-		-		-		-		(33,028)		(33,028)
Conversion of Series A preferred units to
	Class A units			(4)		(193)		5		193		-		-		-		-
Deferred compensation units and options				-		-		5		5,852		(340)		-		-		5,512
Increase in unrealized net gain on
	available-for-sale securities			-		-		-		-		-		14,465		-		14,465
Pro rata share of other comprehensive income
	of nonconsolidated subsidiaries			-		-		-		-		-		2,509		-		2,509
Increase in value of interest rate swap				-		-		-		-		-		6,079		-		6,079
Adjustments to carry redeemable Class A
	units at redemption value			-		-		-		(315,276)		-		-		-		(315,276)
Redeemable partnership units' share of
	above adjustments			-		-		-		-		-		(1,323)		-		(1,323)
Other				-		(6)		-		(8,077)		(2,370)		-		43		(10,410)
Balance, December 31, 2014				52,679	$	1,277,026		187,887	$	6,880,518	$	(1,505,385)	$	93,267	$	743,956	$	7,489,382


See notes to consolidated financial statements.

111

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)			Year Ended December 31,
			2016		2015		2014
Cash Flows from Operating Activities:
Net income			$	981,922	$	859,430	$	1,009,026
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization (including amortization of deferred financing costs)			595,270		566,207		583,408
	Net gain on extinguishment of Skyline properties debt			(487,877)		-		-
	Distributions of income from partially owned entities			217,468		65,018		96,286
	Net gain on disposition of wholly owned and partially owned assets			(175,735)		(251,821)		(13,568)
	Equity in net (income) loss of partially owned entities			(165,389)		11,882		58,131
	Real estate impairment losses			161,165		256		26,518
	Straight-lining of rental income			(146,787)		(153,668)		(82,800)
	Return of capital from real estate fund investments			71,888		91,458		215,676
	Amortization of below-market leases, net			(53,202)		(79,053)		(46,786)
	Net realized and unrealized loss (gain) on real estate fund investments			40,655		(57,752)		(150,139)
	Other non-cash adjustments			39,406		37,721		37,303
	Net gains on sale of real estate and other			(5,074)		(65,396)		(507,192)
	Reversal of allowance for deferred tax assets			-		(90,030)		-
	Defeasance cost in connection with the refinancing of mortgage payable			-		-		5,589
	Changes in operating assets and liabilities:
		Real estate fund investments		-		(95,010)		(3,392)
		Tenant and other receivables, net		(7,459)		11,936		(8,282)
		Prepaid assets		(8,023)		(14,804)		(8,786)
		Other assets		(70,120)		(116,157)		(123,435)
		Accounts payable and accrued expenses		32,389		(33,747)		44,628
		Other liabilities		(19,830)		(14,320)		3,125
Net cash provided by operating activities				1,000,667		672,150		1,135,310

Cash Flows from Investing Activities:
	Development costs and construction in progress			(606,565)		(490,819)		(544,187)
	Additions to real estate			(387,545)		(301,413)		(279,206)
	Distributions of capital from partially owned entities			193,967		37,818		25,943
	Proceeds from sales of real estate and related investments			153,534		573,303		388,776
	Investments in partially owned entities			(127,608)		(235,439)		(120,639)
	Acquisitions of real estate and other			(61,464)		(478,215)		(211,354)
	Net deconsolidation of 7 West 34th Street			(42,000)		-		-
	Investments in loans receivable and other			(11,700)		(1,000)		(30,175)
	Purchases of marketable securities			(4,379)		-		-
	Proceeds from the sale of marketable securities			3,937		-		-
	Restricted cash			585		200,229		99,464
	Proceeds from sales and repayments of mortgage and mezzanine loans
		receivable and other		45		16,790		96,913
Net cash used in investing activities				(889,193)		(678,746)		(574,465)

See notes to consolidated financial statements.

112

VORNADO REALTY L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

(Amounts in thousands)			For the Year Ended December 31,
			2016		2015		2014
Cash Flows from Financing Activities:
	Proceeds from borrowings		$	2,403,898	$	4,468,872	$	2,428,285
	Repayments of borrowings			(1,894,990)		(2,936,578)		(1,312,258)
	Distributions to Vornado			(475,961)		(474,751)		(547,831)
	Redemption of preferred units			(246,250)		-		-
	Distributions to redeemable security holders and noncontrolling interests in
		consolidated subsidiaries		(130,590)		(102,866)		(220,895)
	Distributions to preferred unitholders			(80,137)		(80,578)		(81,468)
	Debt issuance and other costs			(42,157)		(66,554)		(58,336)
	Contributions from noncontrolling interests in consolidated subsidiaries			11,950		51,975		30,295
	Proceeds received from exercise of Vornado stock options			8,269		16,779		19,245
	Repurchase of Class A units related to stock compensation agreements and related
		tax withholdings and other		(186)		(7,473)		(3,811)
	Cash included in the spin-off of Urban Edge Properties			-		(225,000)		-
	Purchase of marketable securities in connection with the defeasance of mortgage payable			-		-		(198,884)
Net cash (used in) provided by financing activities				(446,154)		643,826		54,342
Net (decrease) increase in cash and cash equivalents				(334,680)		637,230		615,187
Cash and cash equivalents at beginning of period				1,835,707		1,198,477		583,290
Cash and cash equivalents at end of period			$	1,501,027	$	1,835,707	$	1,198,477


Supplemental Disclosure of Cash Flow Information:
	Cash payments for interest, excluding capitalized interest of $29,584, $48,539, and $53,139		$	368,762	$	376,620	$	443,538
	Cash payments for income taxes		$	9,716	$	8,287	$	11,696

Non-Cash Investing and Financing Activities:
	Decrease in assets and liabilities resulting from the disposition of Skyline properties:
		Real estate, net	$	(189,284)	$	-	$	-
		Mortgages payable, net		(690,263)		-		-
	Decrease in assets and liabilities resulting from the deconsolidation of 7 West 34th Street:
		Real estate, net		(122,047)		-		-
		Mortgages payable, net		(290,418)		-		-
	Write-off of fully depreciated assets			(305,679)		(167,250)		(121,673)
	Accrued capital expenditures included in accounts payable and accrued expenses			120,564		122,711		100,528
	Change in unrealized net gain on securities available-for-sale			52,057		(55,326)		14,465
	Like-kind exchange of real estate:
		Acquisitions		29,639		80,269		606,816
		Dispositions		(29,639)		(213,621)		(630,352)
	Adjustments to carry redeemable Class A units at redemption value			(26,251)		192,464		(315,276)
	Non-cash distribution of Urban Edge Properties:
		Assets		-		1,709,256		-
		Liabilities		-		(1,469,659)		-
		Equity		-		(239,597)		-
	Transfer of interest in real estate to Pennsylvania Real Estate Investment Trust			-		(145,313)		-
	Class A units in connection with acquisition			-		80,000		-
	Financing assumed in acquisitions			-		62,000		-
	Marketable securities transferred in connection with the defeasance of mortgage payable			-		-		198,884
	Defeasance of mortgage payable			-		-		(193,406)
	Elimination of a mortgage and mezzanine loan asset and liability			-		-		59,375
	Transfer of interest in real estate fund to an unconsolidated joint venture			-		-		(58,564)
	Transfer of noncontrolling interest in real estate fund			-		-		(33,028)
	Beverly Connection seller financing			-		-		13,620

See notes to consolidated financial statements.

113

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Business

We currently own all or portions of:

New York:

· 20.2 million square feet of Manhattan office space in 36 properties;

· 2.7 million square feet of Manhattan street retail space in 70 properties;

· 2,004 units in twelve residential properties;

· The 1,700 room Hotel Pennsylvania located on Seventh Avenue at 33rd Street in the heart of the Penn Plaza district;

Washington, DC:

· 11.1 million square feet of office space in 44 properties;

· 3,156 units in nine residential properties;

Other Real Estate and Related Investments:

· The 3.7 million square foot Mart (“theMART”) in Chicago;

· A 25.0 % interest in Vornado Capital Partners, our real estate fund. We are the general partner and investment manager of the fund;

· A 32.5 % interest in Toys “R” Us, Inc. (“Toys”); and

· Other real estate and other investments.

114

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Vornado and the Operating Partnership and their consolidated subsidiaries. All inter-company amounts have been eliminated. Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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.

Recently Issued Accounting Literature

In May 2014, the Financial Accounting Standards Board (“ FASB”) issued an update ("ASU 2014-09") establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASU 2014-09 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. In August 2015, the FASB issued an update (“ASU 2015-14”) to ASC 606, Deferral of the Effective Date , which defers the adoption of ASU 2014-09 to interim and annual reporting periods in fiscal years that begin after December 15, 2017. In March 2016, the FASB issued an update (“ASU 2016-08”) to ASC 606, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies the implementation guidance on principal versus agent considerations in the new revenue recognition standard pursuant to ASU 2014-09. In April 2016, the FASB issued an update (“ASU 2016-10”) to ASC 606, Identifying Performance Obligations and Licensing , which clarifies guidance related to identifying performance obligations and licensing implementation guidance contained in ASU 2014-09. In May 2016, the FASB issued an update (“ASU 2016-12”) to ASC 606, Narrow-Scope Improvements and Practical Expedients , which amends certain aspects of the new revenue recognition standard pursuant to ASU 2014-09. We are permitted to use either the retrospective or the modified retrospective method when adopting these standards. We are evaluating the impact of the adoption of these standards on our consolidated financial statements and have not yet concluded on the method of adoption.

In June 2014, the FASB issued an update (“ASU 2014-12”) to ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). ASU 2014-12 requires an entity to treat performance targets that can be met after the requisite service period of a share based award has ended, as a performance condition that affects vesting. ASU 2014-12 is effective for interim and annual reporting periods in fiscal years that began after December 15, 2015. The adoption of this update as of January 1, 2016, did not have any impact on our consolidated financial statements.

In February 2015, the FASB issued an update (“ASU 2015-02”) Amendments to the Consolidation Analysis to ASC Topic 810, Consolidation . ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, and (iv) provide a scope exception for certain entities. ASU 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2015. The adoption of this update on January 1, 2016 resulted in the identification of additional VIEs, but did not have an impact on our consolidated financial statements other than additional disclosures (see Note 11 - Variable Interest Entities ) .

115

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. Basis of Presentation and Significant Accounting Policies – continued

Recently Issued Accounting Literature - continued

In January 2016, the FASB issued an update (“ASU 2016-01”) Recognition and Measurement of Financial Assets and Financial Liabilities to ASC Topic 825, Financial Instruments . ASU 2016-01 amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including the requirement to measure certain equity investments at fair value with changes in fair value recognized in net income. ASU 2016-01 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. We are currently evaluating the impact of the adoption of ASU 2016-01 on our consolidated financial statements.

In February 2016, the FASB issued (“ASU 2016-02”) Leases , which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. Lessees will recognize expense based on the effective interest method for finance leases or on a straight-line basis for operating leases. ASU 2016-02 will more significantly impact the accounting for leases in which we are a lessee. We have a number of ground leases for which we will be required to record a right-of-use asset and lease liability upon adoption of this standard. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements, including the timing of adopting this standard.

In March 2016, the FASB issued an update (“ASU 2016-09”) Improvements to Employee Share-Based Payment Accounting to ASC 718. ASU 2016-09 amends several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2016. We are currently evaluating the impact of the adoption of ASU 2016-09 on our consolidated financial statements.

In August 2016, the FASB issued an update (“ASU 2016-15”) Classification of Certain Cash Receipts and Cash Payments to ASC Topic 230, Statement of Cash Flows . ASU 2016-15 clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows to reduce diversity in practice with respect to (i) debt prepayment or debt extinguishment costs, (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interests in securitization transactions, and (viii) separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017, with early adoption permitted. The adoption of this update is not expected to have a significant impact on our consolidated financial statements.

In November 2016, the FASB issued an update (“ASU 2016-18”) Restricted Cash to ASC Topic 230, Statement of Cash Flows . ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Restricted cash and restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period balances on the statement of cash flows upon adoption of this standard. ASU 2016-18 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017, with early adoption permitted.

In January 2017, the FASB issued an update (“ASU 2017-01”) Clarifying the Definition of a Business to ASC Topic 805, Business Combinations . ASU 2017-01 provides a screen to determine when an asset acquired or group of assets acquired is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. ASU 2017-01 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. We have elected to early adopt this standard, effective as of October 1, 2016, for all future acquisitions. The adoption of this standard will result in less real estate acquisitions qualifying as businesses and, accordingly, acquisition costs for those acquisitions that are not businesses will be capitalized rather than expensed. There was no impact of the adoption of this standard in the fourth quarter of 2016, as there have been no acquisitions.

116

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. Basis of Presentation and Significant Accounting Policies - continued

Significant Accounting Policies

Real Estate: Real estate is carried at cost, net of accumulated depreciation and amortization. Betterments, major renewals and certain costs directly related to the improvement and leasing of real estate are capitalized. Maintenance and repairs are expensed as incurred. For redevelopment of existing operating properties, the net book value of the existing property under redevelopment plus the cost for the construction and improvements incurred in connection with the redevelopment are capitalized to the extent the capitalized costs of the property do not exceed the estimated fair value of the redeveloped property when complete. If the cost of the redeveloped property, including the net book value of the existing property, exceeds the estimated fair value of redeveloped property, the excess is charged to expense. Depreciation is recognized on a straight-line basis over estimated useful lives which range from 7 to 40 years. Tenant allowances are amortized on a straight-line basis over the lives of the related leases, which approximate the useful lives of the assets. Additions to real estate include interest and debt expense capitalized during construction of $ 34,097,000 and $ 59,305,000 for the years ended December 31, 2016 and 2015, respectively.

117

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. Basis of Presentation and Significant Accounting Policies – continued

Significant Accounting Policies – continued

Partially Owned Entities: We consolidate entities in which we have a controlling financial interest. In determining whether we have a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity (“VIE”) and whether we are the primary beneficiary. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. We generally do not control a partially owned entity if the entity is not considered a VIE and the approval of all of the partners/members is contractually required with respect to major decisions, such as operating and capital budgets, the sale, exchange or other disposition of real property, the hiring of a chief executive officer, the commencement, compromise or settlement of any lawsuit, legal proceeding or arbitration or the placement of new or additional financing secured by assets of the venture. We account for investments under the equity method when the requirements for consolidation are not met, and we have significant influence over the operations of the investee. Equity method investments are initially recorded at cost and subsequently adjusted for our share of net income or loss and cash contributions and distributions each period. Investments that do not qualify for consolidation or equity method accounting are accounted for on the cost method.

Cash and Cash Equivalents: Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less and are carried at cost, which approximates fair value due to their short-term maturities. The majority of our cash and cash equivalents consists of (i) deposits at major commercial banks, which may at times exceed the Federal Deposit Insurance Corporation limit, (ii) United States Treasury Bills, and (iii) Certificate of Deposits placed through an Account Registry Service (“CDARS”). To date, we have not experienced any losses on our invested cash.

Restricted Cash: Restricted cash consists of security deposits, cash restricted for the purposes of facilitating a Section 1031 Like-Kind exchange, cash restricted in connection with our deferred compensation plan and cash escrowed under loan agreements for debt service, real estate taxes, property insurance and capital improvements.

Allowance for Doubtful Accounts: We periodically evaluate the collectability of amounts due from tenants and maintain an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required payments under the lease agreements. We also maintain an allowance for receivables arising from the straight-lining of rents. These receivables arise from earnings recognized in excess of amounts currently due under the lease agreements. Management exercises judgment in establishing these allowances and considers payment history and current credit status in developing these estimates. As of December 31, 2016 and 2015, we had $10,920,000 and $11,908,000, respectively, in allowances for doubtful accounts. In addition, as of December 31, 2016 and 2015, we had $2,227,000 and $2,751,000, respectively, in allowances for receivables arising from the straight-lining of rents.

118

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. Basis of Presentation and Significant Accounting Policies – continued

Significant Accounting Policies – continued

Deferred Charges: Direct financing costs are deferred and amortized over the terms of the related agreements as a component of interest expense. Direct costs related to successful leasing activities are capitalized and amortized on a straight line basis over the lives of the related leases. All other deferred charges are amortized on a straight line basis, which approximates the effective interest rate method, in accordance with the terms of the agreements to which they relate.

Revenue Recognition: We have the following revenue sources and revenue recognition policies:

• Base Rent — income arising from tenant leases. These rents are recognized over the non-cancelable term of the related leases on a straight-line basis which includes the effects of rent steps and rent abatements under the leases. We commence rental revenue recognition when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. In addition, in circumstances where we provide a tenant improvement allowance for improvements that are owned by the tenant, we recognize the allowance as a reduction of rental revenue on a straight-line basis over the term of the lease.

• Percentage Rent — income arising from retail tenant leases that is contingent upon tenant sales exceeding defined thresholds. These rents are recognized only after the contingency has been removed (i.e., when tenant sales thresholds have been achieved).

• Hotel Revenue — income arising from the operation of the Hotel Pennsylvania which consists of rooms revenue, food and beverage revenue, and banquet revenue. Income is recognized when rooms are occupied. Food and beverage and banquet revenue is recognized when the services have been rendered.

• Trade Shows Revenue — income arising from the operation of trade shows, including rentals of booths. This revenue is recognized when the trade shows have occurred.

• Expense Reimbursements — revenue arising from tenant leases which provide for the recovery of all or a portion of the operating expenses and real estate taxes of the respective property. This revenue is recognized in the same periods as the expenses are incurred.

• Management, Leasing and Other Fees — income arising from contractual agreements with third parties or with partially owned entities. This revenue is recognized as the related services are performed under the respective agreements.

Derivative Instruments and Hedging Activities: ASC 815, Derivatives and Hedging , as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. As of December 31, 2016 and 2015, our derivative instruments consisted of two and one interest rate swaps, respectively. We record all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

For derivatives designated as fair value hedges, changes in the fair value of the derivative and the hedged item related to the hedged risk are recognized in earnings. For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (loss) (outside of earnings) and subsequently reclassified to earnings when the hedged transaction affects earnings, and the ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. We assess the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative hedging instrument with the changes in fair value or cash flows of the designated hedged item or transaction. For derivatives not designated as hedges, changes in fair value are recognized in earnings.

119

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. Basis of Presentation and Significant Accounting Policies – continued

Significant Accounting Policies – continued

Income Taxes: Vornado operates in a manner intended to enable it to continue to qualify as a REIT under Sections 856‑860 of the Internal Revenue Code of 1986, as amended. Under those sections, a REIT which distributes at least 90 % of its REIT taxable income as a dividend to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. Vornado distributes to its shareholders 100 % of its taxable income and therefore, no provision for Federal income taxes is required. Dividends distributed for the year ended December 31, 2016, were characterized, for federal income tax purposes, as 83.5 % ordinary income and 16.5 % long-term capital gain. Dividends distributed for the year ended December 31, 2015, were characterized, for federal income tax purposes, as long-term capital gain income. Dividends distributed for the year ended December 31, 2014, were characterized, for federal income tax purposes, as ordinary income.

The Operating Partnership’s partners are required to report their respective share of taxable income on their individual tax returns. We have elected to treat certain consolidated subsidiaries, and may in the future elect to treat newly formed subsidiaries, as taxable REIT subsidiaries pursuant to an amendment to the Internal Revenue Code that became effective January 1, 2001. Taxable REIT subsidiaries may participate in non-real estate related activities and/or perform non-customary services for tenants and are subject to Federal and State income tax at regular corporate tax rates. Our taxable REIT subsidiaries had a combined current income tax expense of approximately $ 7,946,000 , $ 8,322,000 and $ 10,777,000 for the years ended December 31, 2016, 2015 and 2014, respectively, and have immaterial differences between the financial reporting and tax basis of assets and liabilities.

At December 31, 2016 and 2015, our taxable REIT subsidiaries had deferred tax assets related to net operating loss carryforwards of $ 98,013,000 and $ 97,104,000 , respectively, which are included in “other assets” on our consolidated balance sheets. Prior to the quarter ended June 30, 2015, there was a full valuation allowance against these deferred tax assets because we had not determined that it is more-likely-than-not that we would use the net operating loss carryforwards to offset future taxable income. In our quarter ended June 30, 2015, based upon residential condominium unit sales, among other factors, we concluded that it was more-likely-than-not that we will generate sufficient taxable income to realize these deferred tax assets. Accordingly, we reversed $ 90,030 ,000 of the allowance for deferred tax assets and recognized an income tax benefit in our consolidated statements of income.

The following table reconciles net income attributable to Vornado common shareholders to estimated taxable income for the years ended December 31, 2016, 2015 and 2014.

(Amounts in thousands)			For the Year Ended December 31,
			2016		2015			2014
Net income attributable to Vornado common shareholders		$	823,606	$	679,856		$	783,388
Book to tax differences (unaudited):
	Net gain on extinguishment of Skyline properties debt		(457,970)		-			-
	Depreciation and amortization		302,092		227,297			219,403
	Impairment losses		170,332		20,281			34,670
	Earnings of partially owned entities		(149,094)		(5,299)			71,960
	Straight-line rent adjustments		(137,941)		(144,727)			(77,526)
	Sale of real estate and other capital transactions		(39,109)		320,326			(477,061)
	Vornado stock options		(3,593)		(8,278)			(9,566)
	Tangible Property Regulations		-		(575,618)	⁽¹⁾		-
	Other, net		9,121		(26,114)			(33,410)
Estimated taxable income (unaudited)		$	517,444	$	487,724		$	511,858


(1)	Represents one-time deductions pursuant to the implementation of the Tangible Property Regulations issued by the Internal Revenue Service.

The net basis of Vornado’s assets and liabilities for tax reporting purposes is approximately $ 3.7 billion lower than the amounts reported in Vornado’s consolidated balance sheet at December 31, 2016.

120

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. Real Estate Fund Investments

We are the general partner and investment manager of Vornado Capital Partners Real Estate Fund (the “Fund”) and own a 25.0 % interest in the Fund, which has an eight-year term and a three-year investment period that ended in July 2013 . During the investment period, the Fund was our exclusive investment vehicle for all investments that fit within its investment parameters, as defined. The Fund is accounted for under ASC 946, Financial Services – Investment Companies (“ASC 946”) and its investments are reported on its balance sheet at fair value, with changes in value each period recognized in earnings. We consolidate the accounts of the Fund into our consolidated financial statements, retaining the fair value basis of accounting.

We are also the general partner and investment manager of the Crowne Plaza Times Square Hotel Joint Venture (the “Crowne Plaza Joint Venture”) and own a 57.1 % interest in the joint venture which owns the 24.7 % interest in the Crowne Plaza Times Square Hotel not owned by the Fund. The Crowne Plaza Joint Venture is also accounted for under ASC 946 and we consolidate the accounts of the joint venture into our consolidated financial statements, retaining the fair value basis of accounting.

At December 31, 2016 , we had six real estate fund investments through the Fund and the Crowne Plaza Joint Venture with an aggregate fair value of $ 462,132 ,000, or $ 153,197 ,000 in excess of cost, and had remaining unfunded commitments of $ 117,907 ,000, of which our share was $ 34,422 ,000. At December 31, 2015, we had six real estate fund investments with an aggregate fair value of $ 574,761 ,000.

Below is a summary of income from the Fund and the Crowne Plaza Joint Venture for the years ended December 31, 2016 , 2015 and 2014.

(Amounts in thousands)		For the Year Ended December 31,
		2016		2015		2014
Net investment income		$	17,053	$	16,329	$	12,895
Net realized gain on exited investments			14,761		26,036		126,653
Previously recorded unrealized gain on exited investment			(14,254)		(23,279)		(50,316)
Net unrealized (loss) gain on held investments			(41,162)		54,995		73,802
(Loss) income from real estate fund investments			(23,602)		74,081		163,034
Less loss (income) attributable to noncontrolling interests in consolidated
	subsidiaries		2,560		(40,117)		(92,728)
(Loss) income from real estate fund investments attributable to the
	Operating Partnership ⁽¹⁾		(21,042)		33,964		70,306
Less loss (income) attributable to noncontrolling interests in the Operating
	Partnership		1,270		(2,011)		(4,047)
(Loss) income from real estate fund investments attributable to Vornado		$	(19,772)	$	31,953	$	66,259


(1)	Excludes $3,831, $2,939, and $2,562 of management and leasing fees in the years ended December 31, 2016, 2015 and 2014, respectively, which are included as a component of "fee and other income" on our consolidated statements of income.

On March 25, 2015, the Fund completed the sale of 520 Broadway in Santa Monica, CA for $91,650,000. The Fund realized a $23,768,000 net gain over the holding period.

On January 20, 2015, we co-invested with the Fund and one of the Fund’s limited partners to buy out the Fund’s joint venture partner’s 57.1 % interest in the Crowne Plaza Times Square Hotel. The purchase price for the 57.1% interest was approximately $ 95,000 ,000 (our share $ 39,000 ,000) which valued the property at approximately $ 480,000,000 . The property is encumbered by a $ 310,000,000 mortgage loan bearing interest at LIBOR plus 2.80 % and maturing in December 2018 with a one-year extension option. Our aggregate ownership interest in the property increased to 33% from 11%.

On August 21, 2014, the Fund and its 50 % joint venture partner completed the sale of The Shops at Georgetown Park, a 305,000 square foot retail property, for $ 272,500,000 . From the inception of this investment through its disposition, the Fund realized a $ 51,124,000 net gain.

On June 26, 2014, the Fund sold its 64.7 % interest in One Park Avenue to a newly formed joint venture that we and an institutional investor own 55 % and 45 %, respectively. This transaction was based on a property value of $ 560,000,000 . From the inception of this investment through its disposition, the Fund realized a $ 75,529,000 net gain.

121

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. Marketable Securities

Our portfolio of marketable securities is comprised of equity securities that are classified as available-for-sale. Available-for-sale securities are presented on our consolidated balance sheets at fair value. Unrealized gains and losses resulting from the mark-to-market of these securities are included in “other comprehensive income (loss).” Realized gains and losses are recognized in earnings only upon the sale of the securities and are recorded based on the weighted average cost of such securities.

We evaluate our portfolio of marketable securities for impairment each reporting period. For each of the securities in our portfolio with unrealized losses, we review the underlying cause of the decline in value and the estimated recovery period, as well as the severity and duration of the decline. In our evaluation, we consider our ability and intent to hold these investments for a reasonable period of time sufficient for us to recover our cost basis. We also evaluate the near-term prospects for each of these investments in relation to the severity and duration of the decline.

	Below is a summary of our marketable securities portfolio as of December 31, 2016 and 2015.

(Amounts in thousands)		As of December 31, 2016						As of December 31, 2015
				GAAP		Unrealized				GAAP		Unrealized
		Fair Value		Cost		Gain		Fair Value		Cost		Gain
Equity securities:
	Lexington Realty Trust	$	199,465	$	72,549	$	126,916	$	147,752	$	72,549	$	75,203
	Other		4,239		650		3,589		3,245		-		3,245
		$	203,704	$	73,199	$	130,505	$	150,997	$	72,549	$	78,448

122

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. Investments in Partially Owned Entities

Alexander’s, Inc.

As of December 31, 2016, we own 1,654,068 Alexander’s common shares, or approximately 32.4% of Alexander’s common equity. We manage, develop and lease Alexander’s properties pursuant to agreements which expire in March of each year and are automatically renewable. As of December 31, 2016 and 2015, Alexander’s owed us an aggregate of $ 1,070 ,000 and $ 8,551 ,000, respectively, pursuant to such agreements.

As of December 31, 2016 the market value (“fair value” pursuant to ASC 820) of our investment in Alexander’s, based on Alexander’s December 31, 2016 closing share price of $ 426.87 , was $ 706,072 ,000, or $ 576,748 ,000 in excess of the carrying amount on our consolidated balance sheet. As of December 31, 2016, the carrying amount of our investment in Alexander’s exceeds our share of the equity in the net assets of Alexander’s by approximately $ 39,723 ,000. The majority of this basis difference resulted from the excess of our purchase price for the Alexander’s common stock acquired over the book value of Alexander’s net assets. Substantially all of this basis difference was allocated, based on our estimates of the fair values of Alexander’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation is not material to our share of equity in Alexander’s net income. The basis difference related to the land will be recognized upon disposition of our investment.

Management, Development and Leasing Agreements

We receive an annual fee for managing Alexander’s and all of its properties equal to the sum of (i) $ 2,800 ,000, (ii) 2 % of the gross revenue from the Rego Park II Shopping Center, (iii) $ 0.50 per square foot of the tenant-occupied office and retail space at 731 Lexington Avenue, and (iv) $ 297 ,000, escalating at 3 % per annum, for managing the common area of 731 Lexington Avenue. In addition, we are entitled to a development fee of 6 % of development costs, as defined.

We provide Alexander’s with leasing services for a fee of 3 % of rent for the first ten years of a lease term, 2 % of rent for the eleventh through twentieth year of a lease term and 1 % of rent for the twenty-first through thirtieth year of a lease term, subject to the payment of rents by Alexander’s tenants. In the event third-party real estate brokers are used, our fee increases by 1 % and we are responsible for the fees to the third-parties. We are also entitled to a commission upon the sale of any of Alexander’s assets equal to 3 % of gross proceeds, as defined, for asset sales less than $ 50,000 ,000, and 1 % of gross proceeds, as defined, for asset sales of $50,000,000 or more.

On December 22, 2014, the leasing agreements with Alexander’s were amended to eliminate the annual installment cap of $ 4,000,000 . In addition, Alexander’s repaid to us the outstanding balance of $ 40,353 ,000.

Other Agreements

Building Maintenance Services (“BMS”), our wholly-owned subsidiary, supervises (i) cleaning, engineering and security services at Alexander’s 731 Lexington Avenue property and (ii) security services at Alexander’s Rego Park I and Rego Park II properties. During the years ended December 31, 2016, 2015 and 2014, we recognized $ 2,583 ,000, $ 2,221 ,000 and $ 2,318 ,000 of income, respectively, for these services.

123

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. Investments in Partially Owned Entities – continued

Urban Edge Properties (“UE”) (NYSE: UE)

On January 15, 2015, we completed the spin-off of UE as a separate public company. As of December 31, 2016, we own 5,717,184 UE operating partnership units, representing a 5.4 % ownership interest in UE. We account for our investment in UE under the equity method and record our share of UE’s net income or loss on a one-quarter lag basis. As of December 31, 2016, the fair value of our investment in UE, based on UE’s December 31, 2016 closing share price of $ 27.51 , was $ 157,280 ,000, or $ 132,757 ,000 in excess of the carrying amount on our consolidated balance sheet. See Note 21 – Related Party Transactions for details of our relationship with UE.

Pennsylvania Real Estate Investment Trust (“PREIT”) (NYSE: PEI)

As of December 31, 2016, we own 6,250 ,000 PREIT operating partnership units, representing an 8.0 % interest in PREIT. We account for our investment in PREIT under the equity method and record our share of PREIT’s net income or loss on a one-quarter lag basis. As of December 31, 2016, the fair value of our investment in PREIT, based on PREIT’s December 31, 2016 closing share price of $ 18.96 , was $ 118,500 ,000, or $ 4,383 ,000 below the carrying amount on our consolidated balance sheet. As of December 31, 2016, the carrying amount of our investment in PREIT exceeds our share of the equity in the net assets of PREIT by approximately $ 63,750 ,000. The majority of this basis difference resulted from the excess of the fair value of the PREIT operating units received over our share of the book value of PREIT’s net assets. Substantially all of this basis difference was allocated, based on our estimates of the fair values of PREIT’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation is not material to our share of equity in PREIT’s net loss. The basis difference related to the land will be recognized upon disposition of our investment.

One Park Avenue

On March 7, 2016, the joint venture, in which we have a 55 % ownership interest, completed a $ 300,000 ,000 refinancing of One Park Avenue, a 949 ,000 square foot Manhattan office building. The loan matures in March 2021 and is interest only at LIBOR plus 1.75 % ( 2.40 % at December 31, 2016). The property was previously encumbered by a 4.995 %, $ 250,000 ,000 mortgage which matured in March 2016 .

Mezzanine Loan – New York

124

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. Investments in Partially Owned Entities – continued

The Warner Building

On May 6, 2016, the joint venture, in which we have a 55 % ownership interest, completed a $ 273,000,000 refinancing of The Warner Building, a 622,000 square foot Washington, DC office building. The loan matures in June 2023 , has a fixed rate of 3.65 %, is interest only for the first two years and amortizes based on a 30-year schedule beginning in year three. The property was previously encumbered by a 6.26 %, $ 293,000,000 mortgage which matured in May 2016 .

280 Park Avenue

On May 11, 2016, the joint venture, in which we have a 50 % ownership interest, completed a $ 900,000,000 refinancing of 280 Park Avenue, a 1,249,000 square foot Manhattan office building. The three-year loan with four one-year extensions is interest only at LIBOR plus 2.00 % ( 2.66 % at December 31, 2016). The property was previously encumbered by a 6.35 %, $ 721,000,000 mortgage which was scheduled to mature in June 2016 .

7 West 34th Street

On May 16, 2016, we completed a $ 300,000 ,000 recourse financing of 7 West 34th Street, a 479 ,000 square foot Manhattan office building leased to Amazon. The ten-year loan is interest only at a fixed rate of 3.65 % and matures in June 2026 . Subsequently, on May 27, 2016, we sold a 47 % ownership interest in this property and retained the remaining 53 % interest. This transaction was based on a property value of approximately $ 561,000 ,000 or $ 1,176 per square foot. We received net proceeds of $ 127,382 ,000 from the sale and realized a net gain of $ 203,324 ,000, of which $ 159,511 ,000 was recognized in the second quarter of 2016 and is included in “net gain on disposition of wholly owned and partially owned assets” in our consolidated statements of income. The remaining net gain of $ 43,813 ,000 has been deferred until our guarantee of payment of loan principal and interest is removed or the loan is repaid. We realized a net tax gain of $ 90,017 ,000. We continue to manage and lease the property. We share control over major decisions with our joint venture partner. Accordingly, this property is accounted for under the equity method from the date of sale.

606 Broadway

50-70 West 93rd Street

On August 3, 2016, the joint venture, in which we have 49.9 % ownership interest, completed an $ 80,000 ,000 refinancing of 50-70 West 93rd Street, a 326 unit Manhattan residential complex. The three-year loan with two one-year extensions is interest only at LIBOR plus 1.70 % ( 2.40 % at December 31, 2016). The property was previously encumbered by a $ 44,980 ,000 first mortgage at LIBOR plus 1.90 % and an $ 18,481 ,000 second mortgage at LIBOR plus 1.65 %, which were scheduled to mature in September 2016 .

125

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. Investments in Partially Owned Entities – continued

85 Tenth Avenue

In 2007, we made $ 50,000 ,000 of junior and senior mezzanine loans to the owner of 85 Tenth Avenue, a 626 ,000 square foot Manhattan office building. The loans were secured by equity interests in the property. In connection with the loans, we received the right to acquire a 49.9 % equity interest in the property upon repayment of the loans. Pursuant to ASC 310-10-25-14, we accounted for our investment as an investment in real estate under the equity method. In February 2013, through a joint venture with an affiliate of the owner of 85 Tenth Avenue, we invested an additional $ 14,583 ,000 in senior mezzanine loans. In August 2014, we made an $ 8,413,000 preferred equity investment in the owner of 85 Tenth Avenue, bringing our total cash investment in 85 Tenth Owner to $ 72,996,000 .

As of December 1, 2016, our share of the net losses of 85 Tenth Avenue reduced our basis to $ 30,936 ,000. On December 1, 2016, the owner of 85 Tenth Avenue completed a 10-year, 4.55 % $ 625,000 ,000 refinancing of the property and we received net proceeds of $ 191,779 ,000 in repayment of our existing loans and preferred equity investments. We recognized $ 160,843 ,000 of income and no tax gain as a result of this transaction. In conjunction with the repayment of the loans, we exercised our right to receive a 49.9 % interest in the property, which we are accounting for under the equity method.

Fairfax Square

On December 19, 2016, we completed the sale of our 20 % interest in Fairfax Square to our joint venture partner for $ 15,500,000 , which resulted in a net gain of approximately $ 15,302,000 .

Below is a summary of our investments in partially owned entities.

(Amounts in thousands)		Percentage
		Ownership at	As of December 31,
		December 31, 2016	2016		2015
Investments:
	Partially owned office buildings ⁽¹⁾	Various	$	797,205	$	947,883
	Alexander’s	32.4%		129,324		133,568
	PREIT	8.0%		122,883		133,375
	India real estate ventures	4.1%-36.5%		30,290		48,310
	UE	5.4%		24,523		25,351
	Other investments ⁽²⁾	Various		323,794		261,935
			$	1,428,019	$	1,550,422


(1)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue, 85 Tenth Avenue, 512 West 22nd Street and others.
(2)	Includes interests in Independence Plaza, Fashion Centre Mall/Washington Tower, 50-70 West 93rd Street and others.

126

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. Investments in Partially Owned Entities – continued

Below is a summary of our income (loss) from partially owned entities.

(Amounts in thousands)			Percentage
			Ownership at		For the Year Ended December 31,
			December 31, 2016		2016		2015		2014
Our Share of Net Income (Loss):
	85 Tenth Avenue (see page 126 for details):
		Income from the repayment of loans and preferred equity		49.9%	$	160,843	$	-	$	-
		Equity in net income (loss)				17,229		(1,015)		(6,231)
						178,072		(1,015)		(6,231)

	Alexander's:
		Equity in net income		32.4%		27,470		24,209		21,287
		Management, leasing and development fees				6,770		6,869		8,722
						34,240		31,078		30,009

	UE (see page 124 for details):
		Equity in net income		5.4%		5,003		2,430		-
		Management fees				836		1,964		-
						5,839		4,394		-

	Toys:
		Equity in net loss ⁽¹⁾		32.5%		-		-		(4,691)
		Non-cash impairment losses				-		-		(75,196)
		Management fees				2,000		2,500		6,331
						2,000		2,500		(73,556)

	Partially owned office buildings ⁽²⁾			Various		(42,100)		(23,556)		93

	India real estate ventures ⁽³⁾			4.1%-36.5%		(18,122)		(18,746)		(8,309)

	PREIT (see page 124 for details)			8.0%		(5,213)		(7,450)		-

	Other investments ⁽⁴⁾			Various		10,673		165		(1,867)

					$	165,389	$	(12,630)	$	(59,861)


(1)	Pursuant to Rule 4-08(g) of Regulation S-X, in 2014 Toys was considered a significant subsidiary where as in 2016 and 2015 it was not. For the twelve months ended November 1, 2014, Toys’ total revenue was $12,645,000 and net loss attributable to Toys was $343,000.
(2)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue, 512 West 22nd Street and others. In 2016 and 2015, we recognized net losses of $47,000 and $39,600, respectively, from our 666 Fifth Avenue (Office) joint venture as a result of our share of depreciation expense. In 2015, we recognized our $12,800 share of a write-off of a below-market lease liability related to a tenant vacating at 650 Madison Avenue. In 2014, we recognized our $14,500 share of accelerated depreciation from our West 57th Street joint ventures in connection with the change in estimated useful life of those properties.
(3)	Includes non-cash impairment losses of $13,962, $14,806 and $5,771, respectively.
(4)	Includes interests in Independence Plaza, Fashion Centre Mall/Washington Tower, 50-70 West 93rd Street and others. In 2014, we recognized a $10,263 non-cash charge comprised of a $5,959 impairment loss and a $4,304 loan loss reserve on our equity and debt investments in Suffolk Downs.

127

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. Investments in Partially Owned Entities – continued

Below is a summary of the debt of our partially owned entities as of December 31, 2016 and 2015, none of which is recourse to us.

(Amounts in thousands)			Percentage		Interest
			Ownership at		Rate at	100% Partially Owned Entities’
			December 31,		December 31,	Debt at December 31,
			2016	Maturity	2016	2016		2015
Toys:
	Notes, loans and mortgages payable		32.5%	2017-2021	7.28%	$	5,640,779	$	5,619,710

Partially owned office buildings ⁽¹⁾ ^:
	Mortgages payable		Various	2017-2026	4.43%		4,341,056		3,771,255

PREIT:
	Mortgages payable		8.0%	2017-2025	3.77%		1,747,543		1,852,270

UE:
	Mortgages payable		5.4%	2018-2034	4.19%		1,209,994		1,246,155

Alexander's:
	Mortgages payable		32.4%	2018-2022	2.01%		1,056,147		1,053,262

85 Tenth Avenue:
	Mortgages payable		49.9%	2026	4.55%		625,000		-

India Real Estate Ventures:
	TCG Urban Infrastructure Holdings mortgages
		payable	25.0%	2017-2033	11.98%		187,296		185,607

Other ⁽²⁾ ^:
	Mortgages payable		Various	2017-2023	4.20%		1,277,632		1,316,641


(1)	Includes 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue, 512 West 22nd Street and others.
(2)	Includes Independence Plaza, Fashion Centre Mall/Washington Tower, 50-70 West 93rd Street and others.

Based on our ownership interest in the partially owned entities above, our pro rata share of the debt of these partially owned entities, was $ 5,062,697,000 and $ 4,432,078,000 as of December 31, 2016 and 2015, respectively.

Summary of Condensed Combined Financial Information

The following is a summary of condensed combined financial information for all of our partially owned entities, including Toys and Alexander’s, as of December 31, 2016 and 2015 and for the years ended December 31, 2016, 2015 and 2014.

(Amounts in thousands)				Balance as of December 31,
				2016		2015
Balance Sheet:
	Assets			$	24,926,000	$	25,526,000
	Liabilities				21,357,000		21,162,000
	Noncontrolling interests				265,000		146,000
	Equity				3,305,000		4,218,000

(Amounts in thousands)		For the Year Ended December 31,
		2016		2015		2014
Income Statement:
	Total revenue	$	13,600,000	$	13,423,000	$	13,620,000
	Net loss		(65,000)		(224,000)		(434,000)

128

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. Dispositions

New York

On December 22, 2015, we completed the sale of 20 Broad Street, a 473,000 square foot office building in Manhattan for an aggregate consideration of $200,000,000. The total income from this transaction was approximately $157,000,000 comprised of approximately $142,000,000 from the gain on sale and $15,000,000 of lease termination income set forth in Note 14 – Fee and Other Income .

On December 18, 2014, we completed the sale of 1740 Broadway, a 601,000 square foot office building in Manhattan for $605,000,000. The sale resulted in net proceeds of approximately $580,000,000, after closing costs, and resulted in a financial statement gain of approximately $441,000,000. The tax gain of approximately $484,000,000, was deferred in like-kind exchanges, primarily for the acquisition of the St. Regis Fifth Avenue retail.

Washington, DC

On September 9, 2015, we completed the sale of 1750 Pennsylvania Avenue, NW, a 278,000 square foot office building in Washington, DC for $182,000,000, resulting in a net gain of approximately $102,000,000 which is included in “net gain on disposition of wholly owned and partially owned assets” on our consolidated statement of income. The tax gain of approximately $137,000,000 was deferred as part of a like-kind exchange. We are managing the property on behalf of the new owner.

Discontinued Operations

On January 15, 2015, we completed the spin-off of substantially all of our retail segment comprised of 79 strip shopping centers, three malls, a warehouse park and $225,000,000 of cash to UE. In addition, we completed the following retail property sales, substantially completing the exit of the retail strips and malls business.

On March 13, 2015, we sold our Geary Street, CA lease for $34,189,000, which resulted in a net gain of $21,376,000.

On March 31, 2015, we transferred the redeveloped Springfield Town Center, a 1,350,000 square foot mall located in Springfield, Fairfax County, Virginia, to PREIT in exchange for $485,313,000, comprised of $340,000,000 of cash and 6,250,000 of PREIT operating partnership units (valued at $145,313,000 or $23.25 per PREIT unit). The financial statement gain was $7,823,000, of which $7,192,000 was recognized in the first quarter of 2015 and the remaining $631,000 was deferred based on our ownership interest in PREIT. On March 31, 2018, we will be entitled to additional consideration of 50% of the increase in the value of Springfield Town Center, if any, over $465,000,000, calculated utilizing a 5.5% capitalization rate. In the first quarter of 2014, we recorded a non-cash impairment loss of $20,000,000 on Springfield Town Center which is included in “income from discontinued operations” on our consolidated statements of income.

On August 6, 2015, we sold our 50% interest in the Monmouth Mall in Eatontown, NJ to our joint venture partner for $38,000,000, valuing the property at approximately $229,000,000, which resulted in a net gain of $33,153,000.

On February 24, 2014, we completed the sale of Broadway Mall in Hicksville, Long Island, New York, for $94,000,000. The sale resulted in net proceeds of $92,174,000 after closing costs.

On July 8, 2014, we completed the sale of Beverly Connection, a 335,000 square foot power shopping center in Los Angeles, California, for $260,000,000, of which $239,000,000 was cash and $21,000,000 was 10-year mezzanine seller financing. The sale resulted in a net gain of $44,155,000.

In 2014, we also sold six strip shopping centers, in separate transactions, for an aggregate of $66,410,000 in cash, which resulted in a net gain aggregating $22,500,000.

129

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. Dispositions - continued

In accordance with the provisions of ASC 360, Property, Plant, and Equipment , we have reclassified the revenues and expenses of our strip shopping center and mall business which was spun off to UE on January 15, 2015 and other related retail assets that were sold or are currently held for sale to “income from discontinued operations” and the related assets and liabilities to “assets related to discontinued operations” and “liabilities related to discontinued operations” for all of the periods presented in the accompanying financial statements. The net gains resulting from the sale of these properties are included in “income from discontinued operations” on our consolidated statements of income. The tables below set forth the assets and liabilities related to discontinued operations at December 31, 2016 and 2015, and their combined results of operations for the years ended December 31, 2016, 2015 and 2014.

(Amounts in thousands)			Balance as of
			December 31, 2016		December 31, 2015
Assets related to discontinued operations:
Real estate, net			$	2,642	$	29,561
Other assets				2,928		7,459
			$	5,570	$	37,020

Liabilities related to discontinued operations:
Other liabilities			$	2,870	$	12,470

(Amounts in thousands)	For the Year Ended December 31,
	2016		2015		2014
Income from discontinued operations:
Total revenues	$	3,998	$	27,831	$	395,786
Total expenses		1,435		17,651		274,107
		2,563		10,180		121,679
Net gains on sale of real estate and a lease position		5,074		65,396		507,192
Impairment losses		(465)		(256)		(26,518)
UE spin-off transaction related costs		-		(22,972)		(14,956)
Pretax income from discontinued operations		7,172		52,348		587,397
Income tax expense		-		(86)		(1,721)
Income from discontinued operations	$	7,172	$	52,262	$	585,676

Cash flows related to discontinued operations:
Cash flows from operating activities	$	455	$	(33,462)	$	123,837
Cash flows from investing activities		2,785		346,865		(180,019)

130

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. Identified Intangible Assets and Liabilities

The following summarizes our identified intangible assets (primarily acquired above-market leases) and liabilities (primarily acquired below-market leases) as of December 31, 2016 and 2015.

(Amounts in thousands)	Balance as of December 31,
	2016		2015
Identified intangible assets:
Gross amount	$	400,061	$	415,261
Accumulated amortization		(207,330)		(187,360)
Net	$	192,731	$	227,901
Identified intangible liabilities (included in deferred revenue):
Gross amount	$	586,969	$	643,488
Accumulated amortization		(323,183)		(325,340)
Net	$	263,786	$	318,148

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an increase to rental income of $ 53,202 ,000, $ 78,749 ,000 and $ 37,516 ,000 for the years ended December 31, 2016, 2015 and 2014, 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, 2017 is as follows:

(Amounts in thousands)
2017	$	45,576
2018		44,346
2019		32,168
2020		23,343
2021		18,159

Amortization of all other identified intangible assets (a component of depreciation and amortization expense) was $ 29,543 ,000, $ 36,659 ,000 and $ 28,275 ,000 for the years ended December 31, 2016, 2015 and 2014, 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, 2017 is as follows:

(Amounts in thousands)
2017	$	24,456
2018		20,201
2019		15,863
2020		12,394
2021		11,177

We are a tenant under ground leases at certain properties. Amortization of these acquired below-market leases, net of above-market leases, resulted in an increase to rent expense of $ 1,832 ,000, $ 1,832 ,000, and $ 1,832 ,000 for the years ended December 31, 2016, 2015 and 2014. Estimated annual amortization of these below-market leases, net of above-market leases, for each of the five succeeding years commencing January 1, 2017 is as follows:

(Amounts in thousands)
2017	$	1,832
2018		1,832
2019		1,832
2020		1,832
2021		1,832

131

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. Debt

Unsecured Revolving Credit Facility

Secured Debt

On March 15, 2016, we notified the servicer of the $ 678,000 ,000 non-recourse mortgage loan on the Skyline properties located in Fairfax, Virginia, that cash flow will be insufficient to service the debt and pay other property related costs and expenses and that we were not willing to fund additional cash shortfalls. Accordingly, at our request, the loan was transferred to the special servicer. Consequently, based on the shortened holding period for the underlying assets, we concluded that the excess of carrying amount over our estimate of fair value was not recoverable and recognized a $ 160,700 ,000 non-cash impairment loss in the first quarter of 2016. The Company’s estimate of fair value was derived from a discounted cash flow model based upon market conditions and expectations of growth and utilized unobservable quantitative inputs including a capitalization rate of 8.0 % and a discount rate of 8.2 %. In the second quarter of 2016, cash flow became insufficient to service the debt and we ceased making debt service payments. Pursuant to the loan agreement, the loan was in default, and was subject to incremental default interest which increased the weighted average interest rate from 2.97 % to 4.51 % while the outstanding balance remains unpaid. For the year ended December 31, 2016, we recognized $ 7,823 ,000 of default interest expense. On August 24, 2016, the Skyline properties were placed in receivership. On December 21, 2016, the disposition of the Skyline properties was completed by the receiver. In connection therewith, the Skyline properties’ assets (approximately $ 236,535 ,000) and liabilities (approximately aggregating $ 724,412 ,000), were removed from our consolidated balance sheet which resulted in a net gain of $ 487,877 ,000. There was no taxable income related to this transaction.

132

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. Debt – continued

The following is a summary of our debt:

(Amounts in thousands)			Weighted Average
			Interest Rate at			Balance at December 31,
			December 31, 2016			2016		2015
Mortgages Payable:
	Fixed rate			3.84%	$	6,099,873	$	6,356,634
	Variable rate			2.49%		3,274,424		3,258,204
		Total		3.37%		9,374,297		9,614,838
	Deferred financing costs, net and other					(96,034)		(101,125)
		Total, net			$	9,278,263	$	9,513,713

Unsecured Debt:
	Senior unsecured notes			3.68%	$	850,000	$	850,000
	Deferred financing costs, net and other					(4,423)		(5,841)
		Senior unsecured notes, net				845,577		844,159

	Unsecured term loan			1.88%		375,000		187,500
	Deferred financing costs, net and other					(2,785)		(4,362)
		Unsecured term loan, net				372,215		183,138

	Unsecured revolving credit facilities			1.68%		115,630		550,000

		Total, net			$	1,333,422	$	1,577,297

The net carrying amount of properties collateralizing the mortgages payable amounted to $ 10.7 billion at December 31, 2016. As of December 31, 2016, the principal repayments required for the next five years and thereafter are as follows:

(Amounts in thousands)				Senior Unsecured
				Debt and Unsecured
				Revolving Credit
		Mortgages Payable		Facilities
Year Ending December 31,
2017	$	156,702	$	-
2018		1,389,341		490,630
2019		399,661		450,000
2020		1,882,443		-
2021		3,173,705		-
Thereafter		2,372,445		400,000

133

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. Redeemable Noncontrolling Interests/Redeemable Partnership Units

Redeemable noncontrolling interests on Vornado’s consolidated balance sheets and redeemable partnership units on the consolidated balance sheets of the Operating Partnership are primarily comprised of Class A Operating Partnership units held by third parties and 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 Vornado’s consolidated statements of changes in equity and to “partners’ capital” on the consolidated balance sheets of the Operating Partnership. Class A units may be tendered for redemption to the Operating Partnership for cash; Vornado, at its option, may assume that obligation and pay the holder either cash or Vornado common shares on a one-for-one basis. Because the number of Vornado common shares outstanding at all times equals the number of Class A units owned by Vornado, the redemption value of each Class A unit is equivalent to the market value of one Vornado common share, and the quarterly distribution to a Class A unitholder is equal to the quarterly dividend paid to a Vornado common shareholder.

Below are the details of redeemable noncontrolling interests/redeemable partnership units as of December 31, 2016 and 2015.

(Amounts in thousands, except units and										Preferred or
per unit amounts)		Balance as of				Units Outstanding at		Per Unit		Annual
		December 31,				December 31,		Liquidation		Distribution
Unit Series		2016			2015	2016	2015	Preference		Rate
Common:
	Class A units held by third parties	$	1,273,018	$	1,223,793	12,197,162	12,242,820		n/a	$	2.52

Perpetual Preferred/Redeemable Preferred ⁽¹⁾ :
	5.00% D-16 Cumulative Redeemable	$	1,000	$	1,000	1	1	$	1,000,000.00	$	50,000.00
	3.25% D-17 Cumulative Redeemable	$	4,428	$	4,428	177,100	177,100	$	25.00	$	0.8125


(1)	Holders may tender units for redemption to the Operating Partnership for cash at their stated redemption amount; Vornado, at its option, may assume that obligation and pay the holders either cash or Vornado preferred shares on a one-for-one basis. These units are redeemable at Vornado's option at any time.

Below is a table summarizing the activity of redeemable noncontrolling interests/redeemable partnership units.

	(Amounts in thousands)
	Balance at December 31, 2014	$	1,337,780
	Net income		43,231
	Other comprehensive loss		(2,866)
	Distributions		(30,263)
	Redemption of Class A units for Vornado common shares, at redemption value		(48,230)
	Adjustments to carry redeemable Class A units at redemption value		(192,464)
	Issuance of Class A units		80,000
	Issuance of Series D-17 Preferred Units		4,428
	Other, net		37,605
	Balance at December 31, 2015		1,229,221
	Net income		53,654
	Other comprehensive income		4,699
	Distributions		(31,342)
	Redemption of Class A units for Vornado common shares, at redemption value		(36,510)
	Adjustments to carry redeemable Class A units at redemption value		26,251
	Other, net		32,473
	Balance at December 31, 2016	$	1,278,446

134

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. Redeemable Noncontrolling Interests/Redeemable Partnership Units – continued

Redeemable noncontrolling interests/redeemable partnership units exclude our Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units, as they are accounted for as liabilities in accordance with ASC 480, Distinguishing Liabilities and Equity , because of their possible settlement by issuing a variable number of Vornado common shares. Accordingly, the fair value of these units is included as a component of “other liabilities” on our consolidated balance sheets and aggregated $ 50,561 ,000 as of December 31, 2016 and 2015, respectively. Changes in the value from period to period, if any, are charged to “interest and debt expense” on our consolidated statements of income.

10. Shareholders’ Equity/Partners’ Capital

Common Shares (Vornado Realty Trust)

As of December 31, 2016, there were 189,100,876 common shares outstanding. During 2016, we paid an aggregate of $ 475,961 ,000 of common dividends comprised of quarterly common dividends of $ 0.63 per share.

Class A Units (Vornado Realty L.P.)

As of December 31, 2016, there were 189,100,876 Class A units outstanding that were held by Vornado. These units are classified as “partners’ capital” on the consolidated balance sheets of the Operating Partnership. As of December 31, 2016, there were 12,197,162 Class A units outstanding, that were held by third parties. These units are classified outside of “partners’ capital” as “redeemable partnership units” on the consolidated balance sheets of the Operating Partnership (See Note 9 – Redeemable Noncontrolling Interests/Redeemable Partnership Units ). During 2016, the Operating Partnership paid an aggregate of $ 475,961 ,000 of distributions to Vornado comprised of quarterly common distributions of $ 0.63 per unit.

Preferred Share/Preferred Units

The following table sets forth the details of our preferred shares of beneficial interest and the preferred units of the Operating Partnership as of December 31, 2016 and 2015.

(Amounts in thousands, except share/unit and								Per		Annual
per share/per unit amounts)		Balance as of				Shares/Units Outstanding at		Share/Unit		Dividend/
		December 31,				December 31,		Liquidation		Distribution
Preferred Shares/Units		2016		2015		2016	2015	Preference		Rate ⁽¹⁾
Convertible Preferred:
	6.5% Series A: authorized 83,977 shares/units ⁽²⁾	$	1,264	$	1,321	24,829	26,629	$	50.00	$	3.25
Cumulative Redeemable Preferred:
	6.625% Series G: authorized 8,000,000 shares/units ⁽³⁾		193,135		193,135	8,000,000	8,000,000	$	25.00	$	1.65625
	6.625% Series I: authorized 10,800,000 shares/units ⁽³⁾		262,379		262,379	10,800,000	10,800,000	$	25.00	$	1.65625
	6.875% Series J: authorized 9,850,000 shares/units		-		238,842	-	9,850,000		n/a		n/a
	5.70% Series K: authorized 12,000,000 shares/units ⁽³⁾		290,971		290,971	12,000,000	12,000,000	$	25.00	$	1.425
	5.40% Series L: authorized 12,000,000 shares/units ⁽³⁾		290,306		290,306	12,000,000	12,000,000	$	25.00	$	1.35
		$	1,038,055	$	1,276,954	42,824,829	52,676,629


(1)	Dividends on preferred shares and distributions on preferred units are cumulative and are payable quarterly in arrears.
(2)	Redeemable at the option of Vornado under certain circumstances, at a redemption price of 1.5934 common shares/Class A units per Series A Preferred Share/Unit plus accrued and unpaid dividends/distributions through the date of redemption, or convertible at any time at the option of the holder for 1.5934 common shares/Class A units per Series A Preferred Share/Unit.
(3)	Redeemable at Vornado's option at a redemption price of $25.00 per share/unit, plus accrued and unpaid dividends/distributions through the date of redemption.

135

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. Shareholders’ Equity/Partners’ Capital – continued

Accumulated Other Comprehensive Income (Loss)

The following tables set forth the changes in accumulated other comprehensive income (loss) by component.

(Amounts in thousands)	For the Year Ended December 31, 2016
			Securities		Pro rata share of		Interest
			available-		nonconsolidated		rate
	Total		for-sale		subsidiaries' OCI		swap		Other
Balance as of December 31, 2015	$	46,921	$	78,448	$	(9,319)	$	(19,368)	$	(2,840)
Net current period OCI		72,051		52,057		(2,739)		27,434		(4,701)
Balance as of December 31, 2016	$	118,972	$	130,505	$	(12,058)	$	8,066	$	(7,541)

11. Variable Interest Entities (“VIEs”)

Unconsolidated VIEs

As of December 31, 2016 and 2015, we have several unconsolidated VIEs. We do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities does not give us power over decisions that significantly affect these entities’ economic performance. We account for our investment in these entities under the equity method (see Note 5 – Investments in Partially Owned Entities ). As of December 31, 2016 and 2015, the net carrying amount of our investments in these entities was $ 392,150,000 and $ 414,003,000 , respectively, and our maximum exposure to loss in these entities, is limited to our investments.

Consolidated VIEs

We adopted ASU 2015-02 on January 1, 2016 which resulted in the identification of several VIEs which, prior to the adoption of ASU 2015-02, were consolidated under the voting interest model. Vornado’s most significant consolidated VIEs are our Operating Partnership, real estate fund investments, and certain properties that have non-controlling interests. These entities are VIEs because the non-controlling interests do not have substantive kick-out or participating rights. We consolidate these entities because we control all significant business activities.

As of December 31, 2016, the total assets and liabilities of our consolidated VIEs, excluding the Operating Partnership, are $ 3,638,483,000 and $ 1,762,322,000 , respectively.

136

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. Fair Value Measurements

ASC 820 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 on a Recurring Basis

Financial assets and liabilities that are measured at fair value on our consolidated balance sheets consist of (i) marketable securities, (ii) real estate fund investments, (iii) the assets in our deferred compensation plan (for which there is a corresponding liability on our consolidated balance sheet), (iv) mandatorily redeemable instruments (Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units), and (v) interest rate swaps. The tables below aggregate the fair values of these financial assets and liabilities by their levels in the fair value hierarchy at December 31, 2016 and 2015, respectively.

(Amounts in thousands)		As of December 31, 2016
		Total		Level 1		Level 2		Level 3
Marketable securities		$	203,704	$	203,704	$	-	$	-
Real estate fund investments			462,132		-		-		462,132
Deferred compensation plan assets (included in other assets)			121,374		63,930		-		57,444
Interest rate swaps (included in other assets)			21,816		-		21,816		-
	Total assets	$	809,026	$	267,634	$	21,816	$	519,576

Mandatorily redeemable instruments (included in other liabilities)		$	50,561	$	50,561	$	-	$	-
Interest rate swap (included in other liabilities)			10,122		-		10,122		-
	Total liabilities	$	60,683	$	50,561	$	10,122	$	-

(Amounts in thousands)		As of December 31, 2015
		Total		Level 1		Level 2		Level 3
Marketable securities		$	150,997	$	150,997	$	-	$	-
Real estate fund investments			574,761		-		-		574,761
Deferred compensation plan assets (included in other assets)			117,475		58,289		-		59,186
	Total assets	$	843,233	$	209,286	$	-	$	633,947

Mandatorily redeemable instruments (included in other liabilities)		$	50,561	$	50,561	$	-	$	-
Interest rate swaps (included in other liabilities)			19,600		-		19,600		-
	Total liabilities	$	70,161	$	50,561	$	19,600	$	-

137

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. Fair Value Measurements - continued

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued

Real Estate Fund Investments

At December 31, 2016, we had six real estate fund investments with an aggregate fair value of $ 462,132,000 , or $ 153,197,000 in excess of cost. These investments are classified as Level 3. We use a discounted cash flow valuation technique to estimate the fair value of each of these investments, which is updated quarterly by personnel responsible for the management of each investment and reviewed by senior management at each reporting period. The discounted cash flow valuation technique requires us to estimate cash flows for each investment over the anticipated holding period, which currently ranges from 1.0 to 4.0 years. Cash flows are derived from property rental revenue (base rents plus reimbursements) less operating expenses, real estate taxes and capital and other costs, plus projected sales proceeds in the year of exit. Property rental revenue is based on leases currently in place and our estimates for future leasing activity, which are based on current market rents for similar space plus a projected growth factor. Similarly, estimated operating expenses and real estate taxes are based on amounts incurred in the current period plus a projected growth factor for future periods. Anticipated sales proceeds at the end of an investment’s expected holding period are determined based on the net cash flow of the investment in the year of exit, divided by a terminal capitalization rate, less estimated selling costs.

The fair value of each property is calculated by discounting the future cash flows (including the projected sales proceeds), using an appropriate discount rate and then reduced by the property’s outstanding debt, if any, to determine the fair value of the equity in each investment. Significant unobservable quantitative inputs used in determining the fair value of each investment include capitalization rates and discount rates. These rates are based on the location, type and nature of each property, and current and anticipated market conditions, industry publications and from the experience of our Acquisitions and Capital Markets departments. Significant unobservable quantitative inputs in the table below were utilized in determining the fair value of these real estate fund investments at December 31, 2016.

			Weighted Average
			(based on fair
Unobservable Quantitative Input		Range	value of investments)
	Discount rates	10.0% to 14.9%	12.6%
	Terminal capitalization rates	4.3% to 5.8%	5.3%

The above inputs are subject to change based on changes in economic and market conditions and/or changes in use or timing of exit. Changes in discount rates and terminal capitalization rates result in increases or decreases in the fair values of these investments. The discount rates encompass, among other things, uncertainties in the valuation models with respect to terminal capitalization rates and the amount and timing of cash flows. Therefore, a change in the fair value of these investments resulting from a change in the terminal capitalization rate, may be partially offset by a change in the discount rate. It is not possible for us to predict the effect of future economic or market conditions on our estimated fair values.

The table below summarizes the changes in the fair value of real estate fund investments that are classified as Level 3, for the years ended December 31, 2016 and 2015.

(Amounts in thousands)	For The Year Ended December 31,
	2016		2015
Beginning balance	$	574,761	$	513,973
Purchases		-		95,010
Dispositions/distributions		(71,888)		(91,450)
Net unrealized (loss) gain		(41,162)		54,995
Net realized gain		507		2,757
Other, net		(86)		(524)
Ending balance	$	462,132	$	574,761

138

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. Fair Value Measurements - continued

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued

Deferred Compensation Plan Assets

Deferred compensation plan assets that are classified as Level 3 consist of investments in limited partnerships and investment funds, which are managed by third parties. We receive quarterly financial reports from a third-party administrator, which are compiled from the quarterly reports provided to them from each limited partnership and investment fund. The quarterly reports provide net asset values on a fair value basis which are audited by independent public accounting firms on an annual basis. The third-party administrator does not adjust these values in determining our share of the net assets and we do not adjust these values when reported in our consolidated financial statements.

The table below summarizes the changes in the fair value of deferred compensation plan assets that are classified as Level 3, for the years ended December 31, 2016 and 2015.

(Amounts in thousands)	For The Year Ended December 31,
	2016		2015
Beginning balance	$	59,186	$	63,315
Purchases		5,355		9,062
Sales		(9,354)		(13,252)
Realized and unrealized gains (losses)		344		(501)
Other, net		1,913		562
Ending balance	$	57,444	$	59,186

Fair Value Measurements on a Nonrecurring Basis

There were no assets measured at fair value on a nonrecurring basis on our consolidated balance sheets at December 31, 2016 and 2015.

Financial Assets and Liabilities not Measured at Fair Value

Financial assets and liabilities that are not measured at fair value on our consolidated balance sheets include cash equivalents (primarily money market funds, which invest in obligations of the United States government), and our secured and unsecured debt. Estimates of the fair value of these instruments are determined by the standard practice of modeling the contractual cash flows required under the instrument and discounting them back to their present value at the appropriate current risk adjusted interest rate, which is provided by a third-party specialist. For floating rate debt, we use forward rates derived from observable market yield curves to project the expected cash flows we would be required to make under the instrument. The fair value of cash equivalents and borrowings under our unsecured revolving credit facilities and unsecured term loan are classified as Level 1. The fair value of our secured debt and senior unsecured debt are classified as Level 2. The table below summarizes the carrying amounts and estimated fair value of these financial instruments as of December 31, 2016 and 2015.

(Amounts in thousands)			As of December 31, 2016				As of December 31, 2015
			Carrying		Fair		Carrying		Fair
			Amount		Value		Amount		Value
Cash equivalents			$	1,307,105	$	1,307,000	$	1,295,980	$	1,296,000
Debt:
	Mortgages payable		$	9,374,297	$	9,356,000	$	9,614,838	$	9,306,000
	Senior unsecured notes			850,000		899,000		850,000		868,000
	Unsecured term loan			375,000		375,000		187,500		187,500
	Unsecured revolving credit facilities			115,630		116,000		550,000		550,000
		Total	$	10,714,927	$	10,746,000	$	11,202,338	$	10,911,500

139

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. Stock-based Compensation

Vornado’s 2010 Omnibus Share Plan (the “Plan”) provides the Compensation Committee of Vornado’s Board of Trustees (the “Committee”) the ability to grant incentive and non-qualified Vornado stock options, restricted stock, restricted Operating Partnership units and out-performance plan awards to certain of our employees and officers. Under the Plan, awards may be granted up to a maximum of 6,000,000 Vornado shares, if all awards granted are Full Value Awards, as defined, and up to 12,000,000 Vornado shares, if all of the awards granted are Not Full Value Awards, as defined, plus shares in respect of awards forfeited after May 2010 that were issued pursuant to Vornado’s 2002 Omnibus Share Plan. Full Value Awards are awards of securities, such as Vornado 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 Vornado stock options, that do require the payment of an exercise price or strike price. This means, for example, if the Committee were to award only Vornado restricted shares, it could award up to 6,000,000 Vornado restricted shares. On the other hand, if the Committee were to award only Vornado stock options, it could award options to purchase up to 12,000,000 Vornado common 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. As of December 31, 2016, Vornado has approximately 2,929,000 shares available for future grants under the Plan, if all awards granted are Full Value Awards, as defined.

In the years ended December 31, 2016, 2015 and 2014, we recognized an aggregate of $ 33,980,000 , $ 39,846,000 and $ 36,641,000 , respectively, of stock-based compensation expense, which is included as a component of “general and administrative” expenses on our consolidated statements of income. The year ended December 31, 2015 includes $ 7,834 ,000 from the acceleration of the recognition of compensation expense related to 2013-2015 Out-Performance Plans due to the modification of the vesting criteria of awards such that they will fully vest at age 65. The details of the various components of our stock-based compensation are discussed on the following pages.

140

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. Stock-based Compensation - continued

Out-Performance Plans (“the OPPs”)

OPPs are multi-year, performance-based equity compensation plans under which participants have the opportunity to earn a class of units (“OPP units”) of the Operating Partnership if, and only if, Vornado outperforms a predetermined total shareholder return (“TSR”) and/or outperform the market with respect to a relative TSR in any year during the requisite performance periods as described below. OPP units, if earned, become convertible into Class A units of the Operating Partnership (and ultimately into Vornado common shares) following vesting.

Awards under the 2014 OPP have been 99.5% earned. Awards under the 2015 and 2016 OPP may be earned if Vornado (i) achieves a TSR level greater than 7% per annum, or 21% over the three-year performance measurement periods (the “Absolute Component”), and/or (ii) achieves a TSR above that of the SNL US REIT Index (“Index”) over the three-year performance measurement periods (the “Relative Component”). To the extent awards would be earned under the Absolute Component of each of the OPPs, but Vornado underperforms the Index, such awards would be reduced (and potentially fully negated) based on the degree to which Vornado underperforms the Index. In certain circumstances, in the event Vornado outperforms the Index but awards would not otherwise be fully earned under the Absolute Component, awards may still be earned or increased under the Relative Component. To the extent awards would otherwise be earned under the Relative Component but Vornado fails to achieve at least a 6% per annum absolute TSR, such awards earned under the Relative Component would be reduced based on Vornado’s absolute TSR, with no awards being earned in the event Vornado’s TSR during the applicable measurement period is 0% or negative, irrespective of the degree to which Vornado may outperform the Index. Dividends on awards issued and distributions on awards earned accrue during the performance period.

If the designated performance objectives are achieved, OPP units are also subject to time-based vesting requirements. Awards earned under the OPPs vest 33.33% in each of years three, four and five. Vornado’s senior executive officers are required to hold earned 2016, 2015 and 2014 OPP awards (or related equity) for at least one year following vesting.

Below is the summary of the OPP units granted during the years December 31, 2016, 2015, and 2014.

				Percentage of
		Total Plan		Notional Amount		Grant Date
Plan Year		Notional Amount		Granted		Fair Value ⁽¹⁾		OPP Units Earned
2016		$	40,000,000		86.7%	$	11,800,000	To be determined in 2019
2015			40,000,000		84.5%		9,120,000	To be determined in 2018
2014			50,000,000		58.9%		8,202,000	297,495	⁽²⁾


(1)	Such amounts are being amortized into expense over a five-year period from the date of grant, using a graded vesting attribution model. In the years ended December 31, 2016, 2015 and 2014, we recognized $11,055,000, $15,531,000 and $6,185,000, respectively, of compensation expense related to OPPs. As of December 31, 2016, there was $5,752,000 of total unrecognized compensation cost related to the OPPs, which will be recognized over a weighted-average period of 1.7 years.
(2)	99.5% earned on January 10, 2017.

141

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. Stock-based Compensation - continued

Vornado Stock Options

Vornado stock options are granted at an exercise price equal to the average of the high and low market price of Vornado’s common shares on the NYSE on the date of grant, generally vest over four years and expire 10 years from the date of grant. Compensation expense related to Vornado stock option awards is recognized on a straight-line basis over the vesting period. In the years ended December 31, 2016, 2015 and 2014, we recognized $ 937,000 , $ 1,298,000 and $ 4,550,000 , respectively, of compensation expense related to Vornado stock options that vested during each year. As of December 31, 2016, there was $ 1,335,000 of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 1.7 years.

Below is a summary of Vornado’s stock option activity for the year ended December 31, 2016.

					Weighted-
			Weighted-		Average
			Average		Remaining	Aggregate
			Exercise		Contractual	Intrinsic
		Shares	Price		Term	Value
Outstanding at January 1, 2016		2,827,570	$	60.06
Granted		42,466		92.97
Exercised		(125,724)		56.44
Cancelled or expired		(11,768)		100.49
Outstanding at December 31, 2016		2,732,544	$	65.76	3.1	$	120,360,377
Options vested and expected to vest at
	December 31, 2016	2,737,594	$	60.66	4.1	$	118,170,212
Options exercisable at December 31, 2016		2,642,684	$	59.42	2.9	$	119,269,973

The fair value of each option grant is estimated on the date of grant using an option-pricing model with the following weighted-average assumptions for grants in the years ended December 31, 2016, 2015 and 2014.

	December 31,
	2016	2015	2014
Expected volatility	35.00 %	35.00 %	36.00 %
Expected life	5.0 years	5.0 years	5.0 years
Risk free interest rate	1.76 %	1.56 %	1.81 %
Expected dividend yield	3.20 %	3.30 %	4.10 %

The weighted average grant date fair value of options granted during the years ended December 31, 2016, 2015 and 2014 was $ 22.14 , $ 28.85 and $ 20.31 , respectively. Cash received from option exercises for the years ended December 31, 2016, 2015 and 2014 was $ 6,825,000 , $ 15,343,000 and $ 17,441,000 , respectively. The total intrinsic value of options exercised during the years ended December 31, 2016, 2015 and 2014 was $ 5,519,000 , $ 3,873,000 and $ 18,223,000 , respectively.

142

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. Stock-based Compensation - continued

Vornado Restricted Stock

Vornado restricted stock awards are granted at the average of the high and low market price of Vornado’s common shares on the NYSE on the date of grant and generally vest over four years. Compensation expense related to Vornado’s restricted stock awards is recognized on a straight-line basis over the vesting period. In the years ended December 31, 2016, 2015 and 2014, we recognized $ 851,000 , $ 837,000 and $ 1,303,000 , respectively, of compensation expense related to Vornado restricted stock awards that vested during each year. As of December 31, 2016, there was $ 1,337,000 of total unrecognized compensation cost related to unvested Vornado restricted stock, which is expected to be recognized over a weighted-average period of 1.7 years. Dividends paid on unvested Vornado restricted stock are charged directly to retained earnings and amounted to $ 56,000 , $ 58,000 and $ 88,000 for the years ended December 31, 2016, 2015 and 2014, respectively.

Below is a summary of Vornado’s restricted stock activity under the Plan for the year ended December 31, 2016.

		Weighted-Average
		Grant-Date
Unvested Shares	Shares	Fair Value
Unvested at January 1, 2016	19,592	$	91.09
Granted	9,973		92.97
Vested	(7,472)		85.80
Cancelled or expired	(1,086)		93.87
Unvested at December 31, 2016	21,007		93.72

Vornado restricted stock awards granted in 2016, 2015 and 2014 had a fair value of $ 927,000 , $ 906,000 and $ 1,048,000 , respectively. The fair value of restricted stock that vested during the years ended December 31, 2016, 2015 and 2014 was $ 641,000 , $ 882,000 and $ 1,174,000 , respectively.

Restricted Operating Partnership Units (“OP Units”)

OP Units are granted at the average of the high and low market price of Vornado’s common shares on the NYSE on the date of grant, vest ratably over four years and are subject to a taxable book-up event, as defined. Compensation expense related to OP Units is recognized ratably over the vesting period using a graded vesting attribution model. In the years ended December 31, 2016, 2015 and 2014, we recognized $ 21,136,000 , $ 22,180,000 and $ 24,603,000 , respectively, of compensation expense related to OP Units that vested during each year. As of December 31, 2016, there was $ 15,670,000 of total unrecognized compensation cost related to unvested OP Units, which is expected to be recognized over a weighted-average period of 1.6 years. Distributions paid on unvested OP Units are charged to “net income attributable to noncontrolling interests in the Operating Partnership” on Vornado’s consolidated statements of income and to “preferred unit distributions” on the Operating Partnership’s consolidated statements of income and amounted to $ 1,968,000 , $ 2,414,000 and $ 2,866,000 in the years ended December 31, 2016, 2015 and 2014, respectively.

Below is a summary of restricted OP unit activity under the Plan for the year ended December 31, 2016.

		Weighted-Average
		Grant-Date
Unvested Units	Units	Fair Value
Unvested at January 1, 2016	639,017	$	80.46
Granted	211,086		87.60
Vested	(289,515)		78.41
Cancelled or expired	(7,554)		92.01
Unvested at December 31, 2016	553,034		87.11

OP Units granted in 2016, 2015 and 2014 had a fair value of $ 18,492,000 , $ 20,293,000 and $ 19,669,000 , respectively. The fair value of OP Units that vested during the years ended December 31, 2016, 2015 and 2014 was $ 22,701,000 , $ 20,072,000 and $ 22,758,000 , respectively.

143

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. Fee and Other Income

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

(Amounts in thousands)		For the Year Ended December 31,
		2016		2015		2014
BMS cleaning fees		$	78,920	$	82,113	$	85,658
Management and leasing fees			20,891		16,831		19,905
Lease termination fees ⁽¹⁾			9,516		27,233		16,362
Other income			32,480		38,528		33,281
		$	141,807	$	164,705	$	155,206


(1)	The year ended December 31, 2015 includes $15,000 related to the New York Stock Exchange lease termination at 20 Broad Street.

The above table excludes fee income from partially owned entities, which is included in “income (loss) from partially owned entities” (see Note 5 – Investments in Partially Owned Entities ).

15. Interest and Other Investment Income, Net

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

(Amounts in thousands)		For the Year Ended December 31,
		2016		2015		2014
Dividends on marketable securities		$	13,135	$	12,836	$	12,707
Mark-to-market income of investments in our deferred compensation plan ⁽¹⁾			5,213		111		11,557
Interest on loans receivable			3,890		6,371		6,107
Other, net			7,308		7,660		8,381
		$	29,546	$	26,978	$	38,752


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

16. Interest and Debt Expense

The following table sets forth the details of our interest and debt expense.

(Amounts in thousands)	For the Year Ended December 31,
	2016		2015		2014
Interest expense	$	402,057	$	405,169	$	430,278
Amortization of deferred financing costs		34,714		32,161		45,263
Capitalized interest and debt expense		(34,097)		(59,305)		(62,786)
	$	402,674	$	378,025	$	412,755

144

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

17. Income Per Share/Income Per Class A Unit

Vornado Realty Trust

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 includes 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 dilutive share equivalents. Dilutive share equivalents may include our Series A convertible preferred shares, employee stock options and restricted stock awards.


(Amounts in thousands, except per share amounts)			Year Ended December 31,
			2016		2015		2014
Numerator:
	Income from continuing operations, net of income attributable to noncontrolling
		interests	$	900,185	$	711,240	$	312,700
	Income from discontinued operations, net of income attributable to noncontrolling
		interests		6,732		49,194		552,152
	Net income attributable to Vornado			906,917		760,434		864,852
	Preferred share dividends			(75,903)		(80,578)		(81,464)
	Preferred share issuance costs (Series J redemption)			(7,408)		-		-
	Net income attributable to common shareholders			823,606		679,856		783,388
	Earnings allocated to unvested participating securities			(96)		(81)		(125)
	Numerator for basic income per share			823,510		679,775		783,263
	Impact of assumed conversions:
		Convertible preferred share dividends		86		91		97
		Earnings allocated to Out-Performance Plan units		806		-		-
	Numerator for diluted income per share		$	824,402	$	679,866	$	783,360

Denominator:
	Denominator for basic income per share – weighted average shares			188,837		188,353		187,572
	Effect of dilutive securities ⁽¹⁾ :
		Employee stock options and restricted share awards		1,064		1,166		1,075
		Convertible preferred shares		42		45		43
		Out-Performance Plan units		230		-		-
	Denominator for diluted income per share – weighted average shares and
		assumed conversions		190,173		189,564		188,690

INCOME PER COMMON SHARE – BASIC:
	Income from continuing operations, net		$	4.32	$	3.35	$	1.23
	Income from discontinued operations, net			0.04		0.26		2.95
	Net income per common share		$	4.36	$	3.61	$	4.18

INCOME PER COMMON SHARE – DILUTED:
	Income from continuing operations, net		$	4.30	$	3.33	$	1.22
	Income from discontinued operations, net			0.04		0.26		2.93
	Net income per common share		$	4.34	$	3.59	$	4.15


(1)	The effect of dilutive securities in the years ended December 31, 2016, 2015 and 2014 excludes an aggregate of 12,022, 11,744 and 11,238 weighted average common share equivalents, respectively, as their effect was anti-dilutive.

145

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

17. Income Per Share/Income Per Class A Unit - continued

Vornado Realty L.P.

The following table provides a reconciliation of both net income and the number of Class A units used in the computation of (i) basic income per Class A unit - which includes the weighted average number of Class A units outstanding without regard to dilutive potential common units, and (ii) diluted income per Class A unit - which includes the weighted average common units and dilutive unit equivalents. Dilutive unit equivalents may include our Series A convertible preferred units, Vornado stock options and restricted unit awards.


(Amounts in thousands, except per unit amounts)			Year Ended December 31,
			2016		2015		2014
Numerator:
	Income from continuing operations, net of income attributable to noncontrolling
		interests	$	953,399	$	751,403	$	326,789
	Income from discontinued operations, net of income attributable to noncontrolling
		interests		7,172		52,262		585,676
	Net income attributable to Vornado Realty L.P.			960,571		803,665		912,465
	Preferred unit distributions			(76,097)		(80,736)		(81,514)
	Preferred unit issuance costs (Series J redemption)			(7,408)		-		-
	Net income attributable to Class A unitholders			877,066		722,929		830,951
	Earnings allocated to unvested participating securities			(4,177)		(4,092)		(4,260)
	Numerator for basic income per Class A unit			872,889		718,837		826,691
	Impact of assumed conversions:
		Convertible preferred unit distributions		86		92		97
	Numerator for diluted income per Class A unit		$	872,975	$	718,929	$	826,788

Denominator:
	Denominator for basic income per Class A unit – weighted average units			200,350		199,309		198,213
	Effect of dilutive securities ⁽¹⁾ :
		Vornado stock options and restricted unit awards		1,625		1,804		1,557
		Convertible preferred units		42		45		43
	Denominator for diluted income per Class A unit – weighted average units and
		assumed conversions		202,017		201,158		199,813

INCOME PER CLASS A UNIT – BASIC:
	Income from continuing operations, net		$	4.32	$	3.35	$	1.22
	Income from discontinued operations, net			0.04		0.26		2.95
	Net income per Class A unit		$	4.36	$	3.61	$	4.17

INCOME PER CLASS A UNIT – DILUTED:
	Income from continuing operations, net		$	4.29	$	3.31	$	1.21
	Income from discontinued operations, net			0.03		0.26		2.93
	Net income per Class A unit		$	4.32	$	3.57	$	4.14


(1)	The effect of dilutive securities in the years ended December 31, 2016, 2015 and 2014 excludes an aggregate of 178, 150 and 116 weighted average Class A unit equivalents, respectively, as their effect was anti-dilutive.

146

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

18. Leases

As lessor:

We lease space to tenants under operating leases. Most of the leases provide for the payment of fixed base rentals payable monthly in advance. Office building leases generally require the tenants to reimburse us for operating costs and real estate taxes above their base year costs. Certain leases provide for pass-through to tenants the tenant’s share of real estate taxes, insurance and maintenance. Certain leases also provide for the payment by the lessee of additional rent based on a percentage of the tenants’ sales. As of December 31, 2016, future base rental revenue under non-cancelable operating leases, excluding rents for leases with an original term of less than one year and rents resulting from the exercise of renewal options, are as follows:

(Amounts in thousands)
Year Ending December 31:
2017	$	1,738,779
2018		1,696,355
2019		1,570,197
2020		1,446,485
2021		1,342,749
Thereafter		7,340,929

These amounts do not include percentage rentals based on tenants’ sales. These percentage rents approximated $ 8,037 ,000, $ 5,760 ,000 and $ 6,343 ,000, for the years ended December 31, 2016, 2015 and 2014, respectively.

None of our tenants accounted for more than 10 % of total revenues in any of the years ended December 31, 2016, 2015 and 2014.

As lessee:

We are a tenant under operating leases for certain properties. These leases have terms that expire during the next thirty years. Future minimum lease payments under operating leases at December 31, 2016 are as follows:

(Amounts in thousands)
Year Ending December 31:
2017	$	34,871
2018		35,357
2019		35,865
2020		36,393
2021		36,959
Thereafter		1,611,995

Rent expense, a component of “operating expenses” on our consolidated statements of income, was $ 42,024 ,000, $ 38,887 ,000 and $ 36,315 ,000 for the years ended December 31, 2016, 2015 and 2014, respectively.

147

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

18. Leases - continued

1535 Broadway

We are a lessee under a long-term capital lease for the retail and signage components of the Marriott Marquis Times Square Hotel at 1535 Broadway. At inception of the lease in 2012, we recorded a $ 240,000 ,000 capital lease asset and liability on our consolidated balance sheet based on the present value of future minimum lease payments. The capital lease asset is being depreciated on a straight-line basis over the estimated life of the asset and the related expense is included in “depreciation and amortization” on our consolidated statements of income. During 2016, we substantially completed the redevelopment of the leased space, as required under the lease, at a total redevelopment cost of approximately $ 194,147 ,000. The lease contains a put/call purchase option under which the lessor may exercise its “put” on predetermined dates after March 31, 2018 and we may exercise our “call” at any time after July 30, 2027 and before January 3, 2032.

As of December 31, 2016, future minimum lease payments under this capital lease are as follows:

(Amounts in thousands)
Year Ending December 31:
2017	$	12,508
2018		12,508
2019		12,508
2020		12,508
2021		12,508
Thereafter		309,839
Total minimum obligations		372,379
Interest portion		(132,379)
Present value of net minimum payments	$	240,000

As of December 31, 2016, the gross carrying amount of the property leased under the capital lease was $ 434,147 ,000, which is a component of “buildings and improvements” on our consolidated balance sheets.

148

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

19. Multiemployer Benefit Plans

Our subsidiaries make contributions to certain multiemployer defined benefit plans (“Multiemployer Pension Plans”) and health plans (“Multiemployer Health Plans”) for our union represented employees, pursuant to the respective collective bargaining agreements.

Multiemployer Pension Plans

Multiemployer Pension Plans differ from single-employer pension plans in that (i) contributions to multiemployer plans may be used to provide benefits to employees of other participating employers and (ii) if other participating employers fail to make their contributions, each of our participating subsidiaries may be required to bear its then pro rata share of unfunded obligations. If a participating subsidiary withdraws from a plan in which it participates, it may be subject to a withdrawal liability. As of December 31, 2016, our subsidiaries’ participation in these plans was not significant to our consolidated financial statements.

In the years ended December 31, 2016, 2015 and 2014, our subsidiaries contributed $ 9,479,000 , $ 10,878,000 and $ 11,431,000 , respectively, towards Multiemployer Pension Plans, which is included as a component of “operating” expenses on our consolidated statements of income. Our subsidiaries’ contributions did not represent more than 5 % of total employer contributions in any of these plans for the years ended December 31, 2016, 2015 and 2014.

Multiemployer Health Plans

Multiemployer Health Plans in which our subsidiaries participate provide health benefits to eligible active and retired employees. In the years ended December 31, 2016, 2015 and 2014, our subsidiaries contributed $ 32,998,000 , $ 29,269,000 and $ 29,073,000 , respectively, towards these plans, which is included as a component of “operating” expenses on our consolidated statements of income.

20. Commitments and Contingencies

Insurance

We maintain general liability insurance with limits of $ 300,000 ,000 per occurrence and per property, and all risk property and rental value insurance with limits of $ 2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake. Our California properties have earthquake insurance with coverage of $ 180,000 ,000 per occurrence and in the annual aggregate, subject to a deductible in the amount of 5 % of the value of the affected property. We maintain coverage for terrorism acts with limits of $ 4.0 billion per occurrence and in the aggregate, and $ 2.0 billion per occurrence and in the aggregate for terrorism involving nuclear, biological, chemical and radiological (“NBCR”) terrorism events, as defined by Terrorism Risk Insurance Program Reauthorization Act of 2015, which expires in December 2020 .

Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a portion of all risk property and rental value insurance and a portion of our earthquake insurance coverage, and as a direct insurer for coverage for acts of terrorism including NBCR acts. 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. For NBCR acts, PPIC is responsible for a deductible of $ 1,622 ,000 ($ 1,976 ,000 for 2017) and 16 % ( 17 % for 2017) of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss. We are ultimately responsible for any loss incurred by PPIC.

149

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

20. Commitments and Contingencies - continued

Other Commitments and Contingencies

As of December 31, 2016, $ 19,847 ,000 of letters of credit was outstanding under one of our unsecured revolving credit facilities. Our unsecured revolving 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 unsecured revolving 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.

As of December 31, 2016, w e expect to fu nd additional capital to certain of our partially owned entities aggregating approximately $ 173,000 ,000, which includes our share of the commitments of the Farley Post Office redevelopment joint venture.

As of December 31, 2016, we have construction commitments aggregating $ 653,940 ,000.

150

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

21. Related Party Transactions

Alexander’s, Inc.

We own 32.4 % of Alexander’s. Steven Roth, the Chairman of Vornado’s Board of Trustee’s and its Chief Executive Officer is also the Chairman of the Board and Chief Executive Officer of Alexander’s. We provide various services to Alexander’s in accordance with management, development and leasing agreements. These agreements are described in Note 5 - Investments in Partially Owned Entities .

Urban Edge Properties

We own 5.4 % of UE. During 2015, we provided transition services to UE, primarily for information technology, human resources, tax and financial planning. In 2016, we continue to provide UE transition services for information technology and human resources. UE is providing us with leasing, development and property management services for certain of our retail properties including the retail assets of Alexander’s. Fees to UE for servicing the retail assets of Alexander’s are similar to the fees that we are receiving from Alexander’s as described in Note 5 - Investments in Partially Owned Entities .

Interstate Properties (“Interstate”)

Interstate is a general partnership in which Mr. Roth is the managing general partner. David Mandelbaum and Russell B. Wight, Jr., Trustees of Vornado and Directors of Alexander’s, are Interstate’s two other general partners. As of December 31, 2016, Interstate and its partners beneficially owned an aggregate of approximately 7.1 % of the common shares of beneficial interest of Vornado and 26.3 % of Alexander’s common stock.

We manage and lease the real estate assets of Interstate pursuant to a management agreement for which we receive an annual fee equal to 4 % of annual base rent and percentage rent. The management agreement has a term of one year and is automatically renewable unless terminated by either of the parties on 60 days’ notice at the end of the term. We believe, based upon comparable fees charged by other real estate companies, that the management agreement terms are fair to us. We earned $ 521,000 , $ 541,000 , and $ 535,000 of management fees under the agreement for the years ended December 31, 2016, 2015 and 2014, respectively.

151

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

22. Summary of Quarterly Results (Unaudited)

Vornado Realty Trust

The following summary represents the results of operations for each quarter in 2016 and 2015:

(Amounts in thousands, except per share amounts)				Net Income (Loss)
				Attributable		Net Income (Loss) Per
				to Common		Common Share (2)
		Revenues		Shareholders (1)		Basic		Diluted
2016
	December 31	$	638,260	$	651,181	$	3.44	$	3.43
	September 30		633,197		66,125		0.35		0.35
	June 30		621,708		220,463		1.17		1.16
	March 31		613,037		(114,163)		(0.61)		(0.61)

2015
	December 31	$	651,581	$	230,742	$	1.22	$	1.22
	September 30		627,596		198,870		1.05		1.05
	June 30		616,288		165,651		0.88		0.87
	March 31		606,802		84,593		0.45		0.45


(1)	Fluctuations among quarters resulted primarily from non-cash impairment losses, net gain on extinguishment of debt, net gains on sale of real estate and from seasonality of business operations.
(2)	The total for the year may differ from the sum of the quarters as a result of weighting.

Vornado Realty L.P.

The following summary represents the results of operations for each quarter in 2016 and 2015:

(Amounts in thousands, except per unit amounts)				Net Income (Loss)
				Attributable		Net Income (Loss)
				to Class A		Per Class A Unit (2)
		Revenues		Unitholders (1)		Basic		Diluted
2016
	December 31	$	638,260	$	693,377	$	3.44	$	3.43
	September 30		633,197		70,442		0.35		0.35
	June 30		621,708		234,945		1.17		1.16
	March 31		613,037		(121,698)		(0.61)		(0.61)

2015
	December 31	$	651,581	$	245,735	$	1.22	$	1.21
	September 30		627,596		211,526		1.05		1.05
	June 30		616,288		175,800		0.88		0.87
	March 31		606,802		89,868		0.45		0.44


(1)	Fluctuations among quarters resulted primarily from non-cash impairment losses, net gain on extinguishment of debt, net gains on sale of real estate and from seasonality of business operations.
(2)	The total for the year may differ from the sum of the quarters as a result of weighting.

152

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

23. Segment Information

Below is a summary of net income and a reconciliation of net income to EBITDA ⁽¹⁾ by segment for the year ended December 31, 2016.


(Amounts in thousands)		For the Year Ended December 31, 2016
			Total		New York			Washington, DC			Other
Total revenues			$	2,506,202	$	1,713,374		$	518,117		$	274,711
Total expenses				1,955,411		1,093,587			528,863			332,961
Operating income (loss)				550,791		619,787			(10,746)			(58,250)
Income (loss) from partially owned entities				165,389		(2,379)			(7,227)			174,995
Loss from real estate fund investments				(23,602)		-			-			(23,602)
Interest and other investment income (loss), net				29,546		5,093			(2)			24,455
Interest and debt expense				(402,674)		(216,685)			(72,434)			(113,555)
Net gain on extinguishment of Skyline properties debt				487,877		-			487,877			-
Net gain on disposition of wholly owned and partially
	owned assets			175,735		159,511			15,302			922
Income before income taxes				983,062		565,327			412,770			4,965
Income tax expense				(8,312)		(5,508)			(1,083)			(1,721)
Income from continuing operations				974,750		559,819			411,687			3,244
Income from discontinued operations				7,172		-			-			7,172
Net income				981,922		559,819			411,687			10,416
Less net income attributable to noncontrolling interests
	in consolidated subsidiaries			(21,351)		(13,558)			-			(7,793)
Net income attributable to the Operating Partnership				960,571		546,261			411,687			2,623
Interest and debt expense ⁽²⁾				507,362		280,563			81,723			145,076
Depreciation and amortization ⁽²⁾				694,214		435,961			158,720			99,533
Income tax expense ⁽²⁾				11,838		5,911			2,979			2,948
EBITDA ⁽¹⁾			$	2,173,985	$	1,268,696	⁽³⁾	$	655,109	⁽⁴⁾	$	250,180	⁽⁵⁾
Balance Sheet Data:
Real estate, at cost			$	18,339,958	$	10,787,730		$	4,152,138		$	3,400,090
Investments in partially owned entities				1,428,019		1,080,064			94,870			253,085
Total assets				20,814,847		13,312,116			3,645,525			3,857,206


See notes on pages 156 and 157.

153

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

23. Segment Information - continued

Below is a summary of net income and a reconciliation of net income to EBITDA ⁽¹⁾ by segment for the year ended December 31, 2015.

(Amounts in thousands)		For the Year Ended December 31, 2015
			Total		New York			Washington, DC			Other
Total revenues			$	2,502,267	$	1,695,925		$	532,812		$	273,530
Total expenses				1,742,019		1,032,015			390,921			319,083
Operating income (loss)				760,248		663,910			141,891			(45,553)
(Loss) income from partially owned entities				(12,630)		655			(6,020)			(7,265)
Income from real estate fund investments				74,081		-			-			74,081
Interest and other investment income (loss), net				26,978		7,722			(262)			19,518
Interest and debt expense				(378,025)		(194,278)			(68,727)			(115,020)
Net gain on disposition of wholly owned and partially
	owned assets			251,821		142,693			102,404			6,724
Income (loss) before income taxes				722,473		620,702			169,286			(67,515)
Income tax benefit (expense)				84,695		(4,379)			(317)			89,391
Income from continuing operations				807,168		616,323			168,969			21,876
Income from discontinued operations				52,262		-			-			52,262
Net income				859,430		616,323			168,969			74,138
Less net income attributable to noncontrolling interests
	in consolidated subsidiaries			(55,765)		(13,022)			-			(42,743)
Net income attributable to the Operating Partnership				803,665		603,301			168,969			31,395
Interest and debt expense ⁽²⁾				469,843		248,724			80,795			140,324
Depreciation and amortization ⁽²⁾				664,637		394,028			178,021			92,588
Income tax (benefit) expense ⁽²⁾				(85,379)		4,766			(1,610)			(88,535)
EBITDA ⁽¹⁾			$	1,852,766	$	1,250,819	⁽³⁾	$	426,175	⁽⁴⁾	$	175,772	⁽⁵⁾
Balance Sheet Data:
Real estate, at cost			$	18,090,137	$	10,577,078		$	4,544,842		$	2,968,217
Investments in partially owned entities				1,550,422		1,195,122			80,708			274,592
Total assets				21,143,293		12,257,774			4,517,092			4,368,427


See notes on pages 156 and 157.

154

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

23. Segment Information - continued

Below is a summary of net income and a reconciliation of net income to EBITDA ⁽¹⁾ by segment for the year ended December 31, 2014.

(Amounts in thousands)		For the Year Ended December 31, 2014
			Total		New York			Washington, DC			Other
Total revenues			$	2,312,512	$	1,520,845		$	537,151		$	254,516
Total expenses				1,622,619		946,466			358,019			318,134
Operating income (loss)				689,893		574,379			179,132			(63,618)
(Loss) income from partially owned entities				(59,861)		20,701			(4,767)			(75,795)
Income from real estate fund investments				163,034		-			-			163,034
Interest and other investment income, net				38,752		6,711			183			31,858
Interest and debt expense				(412,755)		(183,427)			(75,395)			(153,933)
Net gain on disposition of wholly owned and partially
	owned assets			13,568		-			-			13,568
Income (loss) before income taxes				432,631		418,364			99,153			(84,886)
Income tax expense				(9,281)		(4,305)			(242)			(4,734)
Income (loss) from continuing operations				423,350		414,059			98,911			(89,620)
Income from discontinued operations				585,676		463,163			-			122,513
Net income				1,009,026		877,222			98,911			32,893
Less net income attributable to noncontrolling interests
	in consolidated subsidiaries			(96,561)		(8,626)			-			(87,935)
Net income (loss) attributable to the Operating Partnership				912,465		868,596			98,911			(55,042)
Interest and debt expense ⁽²⁾				654,398		241,959			87,778			324,661
Depreciation and amortization ⁽²⁾				685,973		324,239			144,124			217,610
Income tax expense ⁽²⁾				24,248		4,395			288			19,565
EBITDA ⁽¹⁾			$	2,277,084	$	1,439,189	⁽³⁾	$	331,101	⁽⁴⁾	$	506,794	⁽⁵⁾
Balance Sheet Data:
Real estate, at cost			$	16,822,358	$	9,732,818		$	4,383,418		$	2,706,122
Investments in partially owned entities				1,240,489		1,036,130			83,428			120,931
Total assets				21,157,980		10,706,476			4,281,421			6,170,083


See notes on the following pages.

155

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

23. Segment Information – continued

Notes to preceding tabular information:

(1)	We calculate EBITDA on an Operating Partnership basis which is before allocation to the noncontrolling interest of the Operating Partnership. We consider EBITDA a non-GAAP financial 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. Our 7.5% interest in Fashion Centre Mall/Washington Tower will not be included in the spin-off of our Washington, DC segment and have been reclassified to Other. The prior year's presentation has been conformed to the current year.

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

(3)	The elements of "New York" EBITDA are summarized below.

	(Amounts in thousands)			For the Year Ended December 31,
				2016		2015		2014
	Office			$	805,708	$	804,272	$	1,063,355
	Retail				381,739		358,379		281,428
	Residential				25,060		22,266		21,907
	Alexander's				46,182		42,858		41,746
	Hotel Pennsylvania				10,007		23,044		30,753
		Total New York EBITDA			1,268,696		1,250,819		1,439,189
	Certain items that impact EBITDA:
		Net gains on sale of real estate			(159,511)		(142,693)		(440,537)
		EBITDA from discontinued operations and sold properties			(3,120)		(35,985)		(39,743)
		Other			-		(1,300)		(171)
		Certain items that impact EBITDA			(162,631)		(179,978)		(480,451)
			Total New York EBITDA, as adjusted	$	1,106,065	$	1,070,841	$	958,738

(4)	The elements of "Washington, DC" EBITDA are summarized below.

	(Amounts in thousands)			For the Year Ended December 31,
				2016		2015		2014
	Office, excluding the Skyline properties			$	260,436	$	359,063	$	260,270
	Skyline properties				348,016		26,325		29,250
		Total Office			608,452		385,388		289,520
	Residential				46,657		40,787		41,581
		Total Washington, DC EBITDA			655,109		426,175		331,101
	Certain items that impact EBITDA:
		Net gain on extinguishment of Skyline properties debt			(487,877)		-		-
		Skyline properties impairment loss			160,700		-		-
		EBITDA from discontinued operations and sold properties			(22,131)		(33,605)		(38,876)
		Net gains on sale of real estate and a land parcel			(15,302)		(102,404)		(1,800)
		Other			-		405		-
		Certain items that impact EBITDA			(364,610)		(135,604)		(40,676)
			Total Washington, DC EBITDA, as adjusted	$	290,499	$	290,571	$	290,425

156

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

23. Segment Information – continued

Notes to preceding tabular information:

(5)	The elements of "Other" EBITDA are summarized below.

	(Amounts in thousands)		For the Year Ended December 31,
			2016		2015			2014
	Our share of real estate fund investments:
		Income before net realized/unrealized (loss) gain	$	8,607	$	8,611	$	8,056
		Net realized/unrealized (loss) gain		(16,270)		14,657		37,535
		Carried interest		(13,379)		10,696		24,715
	Total (loss) income from real estate fund investments			(21,042)		33,964		70,306
	theMART (including trade shows)			91,845		79,159		79,636
	555 California Street			45,827		49,975		48,844
	India real estate ventures			3,685		3,933		6,434
	Our share of Toys ^(a)			2,000		2,500		103,632
	Other investments			77,240		42,436		21,385
				199,555		211,967		330,237
	Corporate general and administrative expenses ^(b)(c)			(100,594)		(106,416)		(94,929)
	Investment income and other, net ^(b)			22,501		26,385		31,665
	Income from the repayment of our investments in 85 Tenth Avenue loans
		and preferred equity		160,843		-		-
	Acquisition and transaction related costs			(26,062)		(12,511)		(16,392)
	Our share of impairment losses on India real estate ventures			(13,962)		(14,806)		(5,771)
	Discontinued operations ^(d)			7,185		28,314		245,679
	Net gains on sale of real estate			714		44,390		26,568
	Impairment loss and loan loss reserve on investment in Suffolk Downs			-		(1,551)		(10,263)
		Total Other	$	250,180	$	175,772	$	506,794


	(a)	As a result of our investment being reduced to zero, we suspended equity method accounting in 2014. The year ended December 31, 2014 includes an impairment loss of $75,196.
	(b)	The amounts in these captions (for this table only) exclude the results of the mark-to-market of our deferred compensation plan of $5,213, $111, and $11,557 of income, respectively.
	(c)	The year ended December 31, 2015 includes a cumulative catch up of $4,542 from the acceleration of recognition of compensation expense related to the modification of the 2012-2014 Out-Performance Plans.
	(d)	The years ended December 31, 2015 and 2014 include $22,684 and $14,956, respectively, of transaction costs related to the spin-off of our strip shopping centers and malls.

157

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

24. Subsequent Events

2017 Out-Performance Plan

On January 13, 2017, the Committee approved the 2017 Outperformance Plan, a multi-year, performance-based equity compensation plan (the “2017 OPP”). Awards under the 2017 OPP constitute awards under Vornado’s shareholder approved 2010 Omnibus Share Plan. Under the 2017 OPP, participants have the opportunity to earn compensation payable in the form of equity awards if, and only if, Vornado outperforms a predetermined total shareholder return (“TSR”) and/or outperform the market with respect to relative total TSR during a three-year performance period. Specifically, awards under our 2017 OPP may potentially be earned if Vornado (i) achieves a TSR level greater than 7% per annum, or 21% over the three-year performance period (the “Absolute Component”) and/or (ii) achieves a TSR above that of the SNL US REIT Index (the “Index”) over a three-year performance period (the “Relative Component”). To the extent awards would be earned under the Absolute Component but Vornado underperforms the Index, such awards earned under the Absolute Component would be reduced (and potentially fully negated) based on the degree to which Vornado underperforms the Index. In certain circumstances, in the event Vornado outperforms the Index but awards would not otherwise be earned under the Absolute Component, awards may still be earned under the Relative Component. Moreover, to the extent awards would otherwise be earned under the Relative Component but Vornado fails to achieve at least a 3% per annum absolute TSR level, such awards earned under the Relative Component would be reduced based on Vornado’s absolute TSR performance, with no awards being earned in the event Vornado’s TSR during the applicable measurement period is 0% or negative, irrespective of the degree to which it may outperform the Index. If the designated performance objectives are achieved, OPP Units are also subject to time-based vesting requirements; 33.33 % in each of years three, four and five. Dividend payments on awards issued accrue during the performance period and are paid to participants if, and only if, awards are ultimately earned based on the achievement of the designated performance objectives. In addition, all of Vornado’s senior executive officers are required to hold any earned OPP awards (or related equity) for at least one year following vesting.

158

ITEM 9. changes in and disagreements with accountants on accounting and financial disclosure

None.

ITEM 9A. Controls and procedures

Vornado Realty Trust

Disclosure Controls and Procedures: Our management, with the participation of Vornado’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our 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 Annual Report on Form 10-K. Based on such evaluation, Vornado’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.

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

Management’s Report on Internal Control over Financial Reporting

Management of Vornado Realty Trust, together with its consolidated subsidiaries (the “Company”), is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of Vornado’s principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.

As of December 31, 2016, management conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that our internal control over financial reporting as of December 31, 2016 was effective.

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures are being made only in accordance with authorizations of management and our trustees; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.

The effectiveness of our internal control over financial reporting as of December 31, 2016 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing on the following page, which expresses an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2016.

159

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Trustees

Vornado Realty Trust

New York, New York

We have audited the internal control over financial reporting of Vornado Realty Trust, together with its consolidated subsidiaries (the “Company”) as of December 31, 2016, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting . Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of trustees, management, and other personnel 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and trustees of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2016 of the Company and our report dated February 13, 2017 expressed an unqualified opinion on those financial statements and financial statement schedules.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

February 13, 2017

160

ITEM 9A. CONTROLS AND PROCEDURES - continued

Vornado Realty L.P.

Disclosure Controls and Procedures: Vornado Realty L.P.’s management, with the participation of Vornado’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our 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 Annual Report on Form 10-K. Based on such evaluation, Vornado’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.

Management’s Report on Internal Control over Financial Reporting

Management of Vornado Realty Trust, sole general partner of Vornado Realty L.P., together with Vornado Realty L.P.’s consolidated subsidiaries (the “Company”), is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of Vornado’s principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures are being made only in accordance with authorizations of management and Vornado’s trustees; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.

161

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Partners

Vornado Realty L.P.

New York, New York

We have audited the internal control over financial reporting of Vornado Realty L.P. and consolidated subsidiaries (the “Partnership”) as of December 31, 2016, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management of Vornado Realty Trust, sole general partner of the Partnership, is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting . Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of trustees, management, and other personnel 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and trustees of Vornado Realty Trust; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

In our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2016 of the Partnership and our report dated February 13, 2017 expressed an unqualified opinion on those financial statements and financial statement schedules.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

February 13, 2017

162

ITEM 9B. Other information

None.

PART III

ITEM 10. Directors, Executive Officers and Corporate Governance

Information relating to trustees of Vornado, the Operating Partnership’s sole general partner, including its audit committee and audit committee financial expert, will be contained in Vornado’s definitive Proxy Statement involving the election of Vornado’s trustees under the caption “Election of Trustees” which Vornado will file with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 not later than 120 days after December 31, 2016, and such information is incorporated herein by reference. Also incorporated herein by reference is the information under the caption “16(a) Beneficial Ownership Reporting Compliance” of the Proxy Statement.

The following is a list of the names, ages, principal occupations and positions with Vornado of the executive officers of Vornado and the positions held by such officers during the past five years. All executive officers of Vornado have terms of office that run until the next succeeding meeting of the Board of Trustees of Vornado following the Annual Meeting of Vornado’s Shareholders unless they are removed sooner by Vornado’s Board.

		PRINCIPAL OCCUPATION, POSITION AND OFFICE
Name	Age	(Current and during past five years with Vornado unless otherwise stated)

Steven Roth	75	Chairman of the Board; Chief Executive Officer since April 2013 and from May 1989 to May 2009; Managing General Partner of Interstate Properties, an owner of shopping centers and an investor in securities and partnerships; Chief Executive Officer of Alexander’s, Inc. since March 1995, a Director since 1989, and Chairman since May 2004.

Michael J. Franco	48	Executive Vice President - Chief Investment Officer since April 2015; Executive Vice President - Head of Acquisitions and Capital Markets since November 2010; Managing Director (2003-2010) and Executive Director (2001-2003) of the Real Estate Investing Group of Morgan Stanley.

David R. Greenbaum	65	President of the New York Division since April 1997 (date of our acquisition); President of Mendik Realty (the predecessor to the New York Office division) from 1990 until April 1997.

Joseph Macnow	71	Executive Vice President - Finance and Chief Administrative Officer since June 2013; Executive Vice President - Finance and Administration from January 1998 to June 2013, and Chief Financial Officer from March 2001 to June 2013; Executive Vice President and Chief Financial Officer of Alexander's, Inc. since August 1995.

Mitchell N. Schear	58	President of Vornado/Charles E. Smith L.P. (our Washington, DC division) since April 2003; President of the Kaempfer Company from 1998 to April 2003 (date acquired by us).

Stephen W. Theriot	57	Chief Financial Officer since June 2013; Assistant Treasurer of Alexander's, Inc. since May 2014; Partner at Deloitte & Touche LLP (1994 - 2013) and most recently, leader of its Northeast Real Estate practice (2011 - 2013).

Vornado, the Operating Partnership’s sole general partner, has adopted a Code of Business Conduct and Ethics that applies to, among others, Steven Roth, Vornado’s principal executive officer, and Stephen W. Theriot, Vornado’s principal financial and accounting officer. This Code is available on Vornado’s website at www.vno.com .

163

ITEM 11. Executive Compensation

Information relating to Vornado’s executive officer and trustee compensation will be contained in Vornado’s Proxy Statement referred to above in Item 10, “Directors, Executive Officers and Corporate Governance,” under the caption “Executive Compensation” and such information is incorporated herein by reference.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information relating to security ownership of certain beneficial owners and management and related stockholder matters will be contained in Vornado’s Proxy Statement referred to in Item 10, “Directors, Executive Officers and Corporate Governance,” under the caption “Principal Security Holders” and such information is incorporated herein by reference.

Equity compensation plan information

The following table provides information as of December 31, 2016 regarding Vornado’s equity compensation plans.

							Number of securities remaining
		Number of securities to be		Weighted-average			available for future issuance
		issued upon exercise of		exercise price of			under equity compensation plans
		outstanding options,		outstanding options,			(excluding securities reflected in
Plan Category		warrants and rights		warrants and rights			the second column)
Equity compensation plans approved
	by security holders	4,787,974	⁽¹⁾		$	65.76	2,928,899	⁽²⁾
Equity compensation awards not
	approved by security holders	-				-	-
Total		4,787,974			$	65.76	2,928,899


(1)	Includes an aggregate of 2,055,430 shares/units, comprised of (i) 21,007 restricted Vornado common shares, (ii) 693,567 restricted Operating Partnership units and (iii) 1,340,856 Out-Performance Plan units, which do not have an exercise price.
(2)	Based on awards being granted as "Full Value Awards," as defined. If we were to grant "Not Full Value Awards," as defined, the number of securities available for future grants would be 5,857,798.

ITEM 13. Certain Relationships and Related Transactions, and Director Independence

Information relating to certain relationships and related transactions, and director independence will be contained in Vornado’s Proxy Statement referred to in Item 10, “Directors, Executive Officers and Corporate Governance,” under the caption “Certain Relationships and Related Transactions” and such information is incorporated herein by reference.

ITEM 14. Principal Accounting Fees and Services

Information relating to principal accounting fees and services will be contained in Vornado’s Proxy Statement referred to in Item 10, “Directors, Executive Officers and Corporate Governance,” under the caption “Ratification of Selection of Independent Auditors” and such information is incorporated herein by reference.

164

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) The following documents are filed as part of this report:

1. The consolidated financial statements are set forth in Item 8 of this Annual Report on Form 10-K.

The following financial statement schedules should be read in conjunction with the financial statements included in Item 8 of this Annual Report on Form 10-K.

		Pages in this
		Annual Report
		on Form 10-K
	II--Valuation and Qualifying Accounts--years ended December 31, 2016, 2015 and 2014	168
	III--Real Estate and Accumulated Depreciation as of December 31, 2016	169

Schedules other than those listed above are omitted because they are not applicable or the information required is included in the consolidated financial statements or the notes thereto.

The following exhibits listed on the Exhibit Index, which is incorporated herein by reference, are filed with this Annual Report on Form 10-K.

Exhibit No.
2.1			Master Transaction Agreement, dated as of October 31, 2016, by and among Vornado Realty Trust, Vornado Realty L.P., JBG Properties, Inc., JBG/Operating Partners, L.P., certain affiliates of JBG Properties Inc. and JBG/Operating Partners set forth on Schedule A thereto, JBG SMITH Properties and JBG SMITH Properties LP
10.29			Amended and Restated Revolving Credit Agreement dated as of November 7, 2016, among Vornado Realty L.P. as Borrower,Vornado Realty Trust as General Partner, the Banks listed on the signature pages thereof, and JPMorgan Chase Bank N.A. as Administrative Agent for the Banks.
12.1			Computation of Ratios for Vornado Realty Trust
12.2			Computation of Ratios for Vornado Realty L.P.
21			Subsidiaries of Vornado Realty Trust and Vornado Realty L.P.
23.1			Consent of Independent Registered Public Accounting Firm for Vornado Realty Trust
23.2			Consent of Independent Registered Public Accounting Firm for Vornado Realty L.P.
31.1			Rule 13a-14 (a) Certification of Chief Executive Officer of Vornado Realty Trust
31.2			Rule 13a-14 (a) Certification of Chief Financial Officer of Vornado Realty Trust
31.3			Rule 13a-14 (a) Certification of Chief Executive Officer of Vornado Realty L.P.
31.4			Rule 13a-14 (a) Certification of Chief Financial Officer of Vornado Realty L.P.
32.1			Section 1350 Certification of the Chief Executive Officer of Vornado Realty Trust
32.2			Section 1350 Certification of the Chief Financial Officer of Vornado Realty Trust
32.3			Section 1350 Certification of the Chief Executive Officer of Vornado Realty L.P.
32.4			Section 1350 Certification of the Chief Financial Officer of Vornado Realty L.P.
101.INS			XBRL Instance Document of Vornado Realty Trust and Vornado Realty L.P.
101.SCH			XBRL Taxonomy Extension Schema of Vornado Realty Trust and Vornado Realty L.P.
101.CAL			XBRL Taxonomy Extension Calculation Linkbase of Vornado Realty Trust and Vornado Realty L.P.
101.DEF			XBRL Taxonomy Extension Definition Linkbase of Vornado Realty Trust and Vornado Realty L.P.
101.LAB			XBRL Taxonomy Extension Label Linkbase of Vornado Realty Trust and Vornado Realty L.P.
101.PRE			XBRL Taxonomy Extension Presentation Linkbase of Vornado Realty Trust and Vornado Realty L.P.

165

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: February 13, 2017	By:	/s/ Stephen W. Theriot
		Stephen W. Theriot, Chief Financial Officer (duly authorized officer and principal financial and accounting officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

	Signature	Title	Date

By:	/s/Steven Roth	Chairman of the Board of Trustees	February 13, 2017
	(Steven Roth)	and Chief Executive Officer

By:	/s/Candace K. Beinecke	Trustee	February 13, 2017
	(Candace K. Beinecke)

By:	/s/Michael D. Fascitelli	Trustee	February 13, 2017
	(Michael D. Fascitelli)

By:	/s/Robert P. Kogod	Trustee	February 13, 2017
	(Robert P. Kogod)

By:	/s/Michael Lynne	Trustee	February 13, 2017
	(Michael Lynne)

By:	/s/David Mandelbaum	Trustee	February 13, 2017
	(David Mandelbaum)

By:	/s/Mandakini Puri	Trustee	February 13, 2017
	(Mandakini Puri)

By:	/s/Daniel R. Tisch	Trustee	February 13, 2017
	(Daniel R. Tisch)

By:	/s/Richard R. West	Trustee	February 13, 2017
	(Richard R. West)

By:	/s/Russell B. Wight	Trustee	February 13, 2017
	(Russell B. Wight, Jr.)

By:	/s/Stephen W. Theriot	Chief Financial Officer	February 13, 2017
	(Stephen W. Theriot)	(Principal Financial and Accounting Officer)

166

SIGNATURES

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

		VORNADO REALTY L.P.
		(Registrant)


Date: February 13, 2017	By:	/s/ Stephen W. Theriot
		Stephen W. Theriot, Chief Financial Officer of Vornado Realty Trust, sole general partner of Vornado Realty L.P. (duly authorized officer and principal financial and accounting officer)

	Signature	Title	Date

By:	/s/Steven Roth	Chairman of the Board of Trustees and	February 13, 2017
	(Steven Roth)	Chief Executive Officer of Vornado Realty Trust

By:	/s/Candace K. Beinecke	Trustee of Vornado Realty Trust	February 13, 2017
	(Candace K. Beinecke)

By:	/s/Michael D. Fascitelli	Trustee of Vornado Realty Trust	February 13, 2017
	(Michael D. Fascitelli)

By:	/s/Robert P. Kogod	Trustee of Vornado Realty Trust	February 13, 2017
	(Robert P. Kogod)

By:	/s/Michael Lynne	Trustee of Vornado Realty Trust	February 13, 2017
	(Michael Lynne)
By:	/s/David Mandelbaum	Trustee of Vornado Realty Trust	February 13, 2017
	(David Mandelbaum)

By:	/s/Mandakini Puri	Trustee of Vornado Realty Trust	February 13, 2017
	(Mandakini Puri)

By:	/s/Daniel R. Tisch	Trustee of Vornado Realty Trust	February 13, 2017
	(Daniel R. Tisch)

By:	/s/Richard R. West	Trustee of Vornado Realty Trust	February 13, 2017
	(Richard R. West)

By:	/s/Russell B. Wight	Trustee of Vornado Realty Trust	February 13, 2017
	(Russell B. Wight, Jr.)

By:	/s/Stephen W. Theriot	Chief Financial Officer of Vornado Realty Trust	February 13, 2017
	(Stephen W. Theriot)	(Principal Financial and Accounting Officer)

167

VORNADO REALTY TRUST AND VORNADO REALTY L.P.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
December 31, 2016
(Amounts in Thousands)


	Column A			Column B		Column C		Column D		Column E
						Additions
				Balance at		Charged		Uncollectible		Balance
				Beginning		Against		Accounts		at End
		Description		of Year		Operations		Written-off		of Year

		Year Ended December 31, 2016:
			Allowance for doubtful accounts	$	14,659	$	2,679	$	(4,191)	$	13,147
		Year Ended December 31, 2015:
			Allowance for doubtful accounts	$	21,209	$	(99)	$	(6,451)	$	14,659
		Year Ended December 31, 2014:
			Allowance for doubtful accounts	$	24,719	$	3,076	$	(6,586)	$	21,209

168

VORNADO REALTY TRUST AND VORNADO REALTY L.P.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
(Amounts in thousands)
COLUMN A				COLUMN B			COLUMN C				COLUMN D		COLUMN E						COLUMN F	COLUMN G	COLUMN H		COLUMN I
													Gross amount at which										Life on which
						Initial cost to company (1)							carried at close of period										depreciation
											Costs							Accumulated					in latest
								Building			capitalized			Buildings				depreciation					income
								and			subsequent			and				and		Date of		Date	statement
				Encumbrances (2)		Land		improvements			to acquisition		Land	improvements		Total (3)		amortization		construction (4)		acquired	is computed
	*New York*
		Manhattan
			1290 Avenue of the Americas	$	950,000	$	515,539	$	923,653	$	218,275	$	515,539	$	1,141,928	$	1,657,467	$	267,734	1963		2007	(5)
			697-703 Fifth Avenue (St. Regis - retail)		450,000		152,825		584,230		15		152,825		584,245		737,070		31,803			2014	(5)
			350 Park Avenue		400,000		265,889		363,381		47,355		265,889		410,736		676,625		106,513	1960		2006	(5)
			666 Fifth Avenue (Retail Condo)		390,000		189,005		471,072		-		189,005		471,072		660,077		49,040			2012	(5)
			One Penn Plaza		-		-		412,169		213,425		-		625,594		625,594		274,984	1972		1998	(5)
			100 West 33rd Street		398,402		242,776		247,970		33,439		242,776		281,409		524,185		70,106	1911		2007	(5)
			1535 Broadway (Marriott Marquis)		-		-		249,285		146,879		-		396,164		396,164		14,979			2012	(5)
			150 West 34th Street		205,000		119,657		268,509		-		119,657		268,509		388,166		10,628	1900		2015	(5)
			1540 Broadway		-		105,914		214,208		28,549		105,914		242,757		348,671		48,294			2006	(5)
			655 Fifth Avenue		140,000		102,594		231,903		-		102,594		231,903		334,497		18,993			2013	(5)
			Two Penn Plaza		575,000		53,615		164,903		104,657		52,689		270,486		323,175		145,896	1968		1997	(5)
			90 Park Avenue		-		8,000		175,890		133,922		8,000		309,812		317,812		104,063	1964		1997	(5)
			Manhattan Mall		181,598		88,595		113,473		71,543		88,595		185,016		273,611		54,431	2009		2007	(5)
			770 Broadway		700,000		52,898		95,686		105,109		52,898		200,795		253,693		81,596	1907		1998	(5)
			888 Seventh Avenue		375,000		-		117,269		127,369		-		244,638		244,638		108,194	1980		1998	(5)
			Eleven Penn Plaza		450,000		40,333		85,259		90,093		40,333		175,352		215,685		68,628	1923		1997	(5)
			640 Fifth Avenue		-		38,224		25,992		149,668		38,224		175,660		213,884		44,685	1950		1997	(5)
			909 Third Avenue		350,000		-		120,723		89,018		-		209,741		209,741		83,782	1969		1999	(5)
			150 East 58th Street		-		39,303		80,216		42,252		39,303		122,468		161,771		53,983	1969		1998	(5)
			595 Madison Avenue		-		62,731		62,888		26,913		62,731		89,801		152,532		35,028	1968		1999	(5)
			330 West 34th Street		-		-		8,599		136,606		-		145,205		145,205		13,616	1925		1998	(5)
			828-850 Madison Avenue		80,000		107,937		28,261		10		107,937		28,271		136,208		8,245			2005	(5)
			33-00 Northern Boulevard		60,782		46,505		86,226		2,000		46,505		88,226		134,731		4,990	1915		2015	(5)
			715 Lexington Avenue		-		-		26,903		63,244		63,000		27,147		90,147		7,933	1923		2001	(5)
			478-486 Broadway		-		30,000		20,063		34,188		30,000		54,251		84,251		11,003	2009		2007	(5)
			4 Union Square South		116,022		24,079		55,220		2,632		24,079		57,852		81,931		17,928	1965/2004		1993	(5)
			260 Eleventh Avenue		-		-		80,482		591		-		81,073		81,073		3,207	1911		2015	(5)
			510 Fifth Avenue		-		34,602		18,728		20,064		34,602		38,792		73,394		7,129			2010	(5)
			606 Broadway		25,768		-		54,399		5,587		-		59,986		59,986		-			2016	(5)
			40 Fulton Street		-		15,732		26,388		15,628		15,732		42,016		57,748		18,691	1987		1998	(5)
			689 Fifth Avenue		-		19,721		13,446		23,094		19,721		36,540		56,261		10,521	1925		1998	(5)
			443 Broadway		-		11,187		41,186		-		11,187		41,186		52,373		3,736			2013	(5)
			40 East 66th Street		-		13,616		34,635		142		13,616		34,777		48,393		9,630			2005	(5)

169

VORNADO REALTY TRUST AND VORNADO REALTY L.P.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
(Amounts in thousands)
COLUMN A						COLUMN B		COLUMN C				COLUMN D		COLUMN E						COLUMN F	COLUMN G	COLUMN H	COLUMN I
														Gross amount at which									Life on which
							Initial cost to company (1)							carried at close of period									depreciation
												Costs							Accumulated				in latest
									Building			capitalized			Buildings				depreciation				income
									and			subsequent			and				and		Date of	Date	statement
Description					Encumbrances (2)		Land		improvements			to acquisition		Land	improvements		Total (3)		amortization		construction (4)	acquired	is computed
	*New York - continued*
		Manhattan - continued
			155 Spring Street		$	-	$	13,700	$	30,544	$	3,578	$	13,700	$	34,122	$	47,822	$	8,470		2007	(5)
			435 Seventh Avenue			97,706		19,893		19,091		37		19,893		19,128		39,021		6,934	2002	1997	(5)
			3040 M Street			-		7,830		27,490		3,517		7,830		31,007		38,837		8,942		2006	(5)
			608 Fifth Avenue			-		-		-		36,499		-		36,499		36,499		6,051	1932	2012	(5)
			692 Broadway			-		6,053		22,908		3,540		6,053		26,448		32,501		7,658		2005	(5)
			131-135 West 33rd Street			-		8,315		21,312		24		8,315		21,336		29,651		323		2016	(5)
			265 West 34th Street			-		28,500		-		-		28,500		-		28,500		-	1920	2015	(5)
			304 Canal Street			-		3,511		12,905		8,184		-		24,600		24,600		-	1910	2014	(5)
			677-679 Madison Avenue			-		13,070		9,640		388		13,070		10,028		23,098		2,657		2006	(5)
			1131 Third Avenue			-		7,844		7,844		5,236		7,844		13,080		20,924		1,076		1997	(5)
			486 Eighth Avenue			-		20,000		71		-		20,000		71		20,071		-	1928	2016	(5)
			431 Seventh Avenue			-		16,700		2,751		-		16,700		2,751		19,451		671		2007	(5)
			138-142 West 32nd Street			-		9,252		9,936		-		9,252		9,936		19,188		476	1920	2015	(5)
			334 Canal Street			-		1,693		6,507		7,300		1,693		13,807		15,500		565		2011	(5)
			267 West 34th Street			-		5,099		10,037		-		5,099		10,037		15,136		800		2013	(5)
			1540 Broadway Garage			-		4,086		8,914		-		4,086		8,914		13,000		2,364	1990	2006	(5)
			966 Third Avenue			-		8,869		3,631		-		8,869		3,631		12,500		303		2013	(5)
			148 Spring Street			-		3,200		8,112		416		3,200		8,528		11,728		1,848		2008	(5)
			150 Spring Street			-		3,200		5,822		277		3,200		6,099		9,299		1,338		2008	(5)
			137 West 33rd Street			-		6,398		1,550		-		6,398		1,550		7,948		68	1932	2015	(5)
			488 Eighth Avenue			-		10,650		1,767		(4,674)		6,859		884		7,743		200		2007	(5)
			484 Eighth Avenue			-		3,856		762		399		3,856		1,161		5,017		385		1997	(5)
			825 Seventh Avenue			-		1,483		697		33		1,483		730		2,213		361		1997	(5)
			Other (including signage)			-		75,862		14,829		110,071		75,865		124,897		200,762		25,377
				Total Manhattan		5,945,278		2,660,341		5,730,335		2,107,092		2,715,116		7,782,652		10,497,768		1,866,856

		Other Properties
			Hotel Pennsylvania			-		29,903		121,712		95,273		29,903		216,985		246,888		103,008	1919	1997	(5)
			Paramus			-		-		-		25,942		1,033		24,909		25,942		14,073	1967	1987	(5)
				Total Other Properties		-		29,903		121,712		121,215		30,936		241,894		272,830		117,081

	Total New York					5,945,278		2,690,244		5,852,047		2,228,307		2,746,052		8,024,546		10,770,598		1,983,937

170

VORNADO REALTY TRUST AND VORNADO REALTY L.P.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
(Amounts in thousands)
COLUMN A					COLUMN B		COLUMN C				COLUMN D		COLUMN E						COLUMN F	COLUMN G	COLUMN H	COLUMN I
													Gross amount at which									Life on which
						Initial cost to company (1)							carried at close of period									depreciation
											Costs							Accumulated				in latest
								Building			capitalized			Buildings				depreciation				income
								and			subsequent			and				and		Date of	Date	statement
Description				Encumbrances (2)		Land		improvements			to acquisition		Land	improvements		Total (3)		amortization		construction (4)	acquired	is computed
	*Washington, DC*
		2011-2451 Crystal Drive - 5 buildings		$	216,629	$	100,935	$	409,920	$	162,507	$	100,228	$	573,134	$	673,362	$	228,973	1984-1989	2002	(5)
		S. Clark Street/12th Street - 5 buildings			53,708		63,420		231,267		130,043		63,291		361,439		424,730		112,593	1981, 1983-1987	2002	(5)
		2001 Jefferson Davis Highway,			68,426		57,213		131,206		216,730		57,070		348,079		405,149		77,331	1964-1969	2002	(5)
			2100/2200 Crystal Drive, 223 23rd
			Street, 2221 South Clark Street, Crystal
			City Shops at 2100, 220 20th Street
		1550-1750 Crystal Drive/			37,307		64,817		218,330		96,244		64,652		314,739		379,391		111,549	1974-1980	2002	(5)
			241-251 18th Street - 4 buildings
		RiverHouse Apartments - 3 buildings			307,710		118,421		125,078		76,671		138,851		181,319		320,170		47,192		2007	(5)
		The Bartlett			-		41,687		-		216,844		41,687		216,844		258,531		3,664		2007	(5)
		1825 - 1875 Connecticut Ave NW -			185,000		69,393		143,320		19,063		68,612		163,164		231,776		44,146	1956, 1963	2007
			(Universal Buildings) - 2 buildings
		WestEnd 25			100,841		67,049		5,039		107,638		68,198		111,528		179,726		20,143		2007	(5)
		2101 L Street, NW			143,415		32,815		51,642		83,064		39,768		127,753		167,521		36,447	1975	2003	(5)
		2200/2300 Clarendon Blvd			11,000		-		105,475		53,505		-		158,980		158,980		62,247	1988-1989	2002	(5)
			(Courthouse Plaza) - 2 buildings
		1800, 1851 and 1901 South Bell Street			-		37,551		118,806		356		37,551		119,162		156,713		39,446	1968	2002	(5)
			- 3 buildings
		875 15th Street, NW (Bowen Building)			-		30,077		98,962		5,443		30,176		104,306		134,482		29,760	2004	2005	(5)
		1399 New York Avenue, NW			-		33,481		67,363		7,075		34,178		73,741		107,919		10,715	-	2011	(5)
		Commerce Executive - 3 buildings			-		13,401		58,705		29,414		13,140		88,380		101,520		32,027	1985-1989	2002	(5)
		Met Park/Warehouses			-		65,259		1,326		26,309		82,898		9,996		92,894		28		2007	(5)
		H Street - North 10-1D Land Parcel			-		104,473		55		(32,808)		61,970		9,750		71,720		-		2007	(5)
		Crystal City Hotel			-		8,000		47,191		11,659		8,000		58,850		66,850		18,059	1968	2004	(5)
		1730 M Street, NW			14,853		10,095		17,541		15,521		10,687		32,470		43,157		12,094	1963	2002	(5)
		Democracy Plaza One			-		-		33,628		5,954		-		39,582		39,582		20,252	1987	2002	(5)
		Crystal Drive Retail			-		-		20,465		5,806		-		26,271		26,271		11,069	2004	2004	(5)
		1109 South Capitol Street			-		11,541		178		(253)		11,597		(131)		11,466		-		2007	(5)
		South Capitol			-		4,009		6,273		(1,865)		-		8,417		8,417		306		2005	(5)
		1726 M Street, NW			-		9,450		22,062		(30,660)		-		852		852		-	1964	2006	(5)
		1700 M Street			28,728		23,359		24,876		(48,231)		-		4		4		-	1970	2002	(5)
		Other			-		1,763		52,408		14,134		1,763		66,542		68,305		1,104
	Total Washington, DC				1,167,617		968,209		1,991,116		1,170,163		934,317		3,195,171		4,129,488		919,145

171

VORNADO REALTY TRUST AND VORNADO REALTY L.P.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
(Amounts in thousands)
COLUMN A						COLUMN B		COLUMN C				COLUMN D		COLUMN E						COLUMN F	COLUMN G	COLUMN H	COLUMN I
														Gross amount at which									Life on which
							Initial cost to company (1)							carried at close of period									depreciation
												Costs							Accumulated				in latest
									Building			capitalized			Buildings				depreciation				income
									and			subsequent			and				and		Date of	Date	statement
Description					Encumbrances (2)		Land		improvements			to acquisition		Land	improvements		Total (3)		amortization		construction (4)	acquired	is computed
	*Other*
		theMART
		Illinois
			theMART, Chicago		$	675,000	$	64,528	$	319,146	$	368,328	$	64,535	$	687,467	$	752,002	$	259,808	1930	1998	(5)
			527 West Kinzie, Chicago			-		5,166		-		25		5,166		25		5,191		-		1998
				Total Illinois		675,000		69,694		319,146		368,353		69,701		687,492		757,193		259,808

		New York
			MMPI Piers			-		-		-		14,663		-		14,663		14,663		1,916		2008	(5)

				Total theMART		675,000		69,694		319,146		383,016		69,701		702,155		771,856		261,724

			555 California Street			579,795		221,903		893,324		117,729		221,903		1,011,053		1,232,956		243,944	1922/1969/1970	2007	(5)
			220 Central Park South			950,000		115,720		16,420		987,158		-		1,119,298		1,119,298		-		2005	(5)
			Borgata Land, Atlantic City, NJ			56,607		83,089		-		-		83,089		-		83,089		-		2010	(5)
			Wayne Towne Center			-		-		26,137		51,253		-		77,390		77,390		12,158		2010	(5)
			40 East 66th Residential			-		29,199		85,798		(93,222)		8,454		13,321		21,775		3,402		2005	(5)
			Annapolis			-		-		9,652		-		-		9,652		9,652		3,458		2005	(5)
			677-679 Madison			-		1,462		1,058		284		1,626		1,178		2,804		400		2006	(5)
			Other			-		-		3,766		726		-		4,492		4,492		972		2005	(5)
	Total Other					2,261,402		521,067		1,355,301		1,446,944		384,773		2,938,539		3,323,312		526,058

	Leasehold improvements
		equipment and other				-		-		-		116,560		-		116,560		116,560		84,434

	Total December 31, 2016				$	9,374,297	$	4,179,520	$	9,198,464	$	4,961,974	$	4,065,142	$	14,274,816	$	18,339,958	$	3,513,574


(1)		Initial cost is cost as of January 30, 1982 (the date on which we commenced real estate operations) unless acquired subsequent to that date see Column H.
(2)		Represents the contractual debt obligations.
(3)		The net basis of our assets and liabilities for tax reporting purposes is approximately $3.7 billion lower than the amount reported for financial statement purposes.
(4)		Date of original construction –– many properties have had substantial renovation or additional construction –– see Column D.
(5)		Depreciation of the buildings and improvements are calculated over lives ranging from the life of the lease to forty years.

172

VORNADO REALTY TRUST AND VORNADO REALTY L.P.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
(AMOUNTS IN THOUSANDS)

	The following is a reconciliation of real estate assets and accumulated depreciation:

				Year Ended December 31,
				2016		2015		2014
	Real Estate
		Balance at beginning of period		$	18,090,137	$	16,822,358	$	15,392,968
		Additions during the period:
			Land		30,805		281,048		225,536
			Buildings & improvements		1,074,259		1,288,136		1,348,153
					19,195,201		18,391,542		16,966,657
		Less: Assets sold, written-off and deconsolidated			855,243		301,405		144,299
		Balance at end of period		$	18,339,958	$	18,090,137	$	16,822,358

	Accumulated Depreciation
		Balance at beginning of period		$	3,418,267	$	3,161,633	$	2,829,862
		Additions charged to operating expenses			478,788		459,612		461,689
					3,897,055		3,621,245		3,291,551
		Less: Accumulated depreciation on assets sold, written-off and deconsolidated			383,481		202,978		129,918
		Balance at end of period		$	3,513,574	$	3,418,267	$	3,161,633

173

EXHIBIT INDEX

Exhibit No.
2.1	-	Master Transaction Agreement, dated as of October 31, 2016, by and among Vornado
			Realty Trust, Vornado Realty L.P., JBG Properties, Inc., JBG/Operating Partners, L.P.,
			certain affiliates of JBG Properties Inc. and JBG/Operating Partners set forth on
			Schedule A thereto, JBG SMITH Properties and JBG SMITH Properties LP

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

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

3.3	-	Articles Supplementary, 5.40% Series L Cumulative Redeemable Preferred Shares of		*
			Beneficial Interest, liquidation preference $25.00 per share, no par value – Incorporated by
			reference to Exhibit 3.6 to Vornado Realty Trust’s Registration Statement on Form 8-A
			(File No. 001-11954), filed on January 25, 2013

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

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

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

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

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

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

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

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

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

			___________________________________________
	*		Incorporated by reference.

174


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

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

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

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

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

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

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

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

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

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

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

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

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

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

			___________________________________________
	*		Incorporated by reference.

175


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

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

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

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

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

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

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

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

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

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

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

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

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

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

			___________________________________________
	*		Incorporated by reference.

176


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

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

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

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

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

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

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

3.48	-	Forty-Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership		*
			of Vornado Realty L.P., dated as of March 30, 2012 - Incorporated by reference to Exhibit 99.1
			to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 001-34482), filed on
			April 5, 2012

3.49	-	Forty-Fourth Amendment to Second Amended and Restated Agreement of Limited Partnership		*
			dated as of July 18, 2012 – Incorporated by reference to Exhibit 3.1 to Vornado Realty L.P.’s
			Current Report on Form 8-K (File No. 001-34482), filed on July 18, 2012

3.50	-	Forty-Fifth Amendment to Second Amended and Restated Agreement of Limited Partnership,		*
			dated as of January 25, 2013 – Incorporated by reference to Exhibit 3.1 to Vornado Realty
			L.P.’s Current Report on Form 8-K (File No. 001-34482), filed on January 25, 2013

3.51	-	Forty-Sixth Amendment to Second Amended and Restated Agreement of Limited Partnership		*
			of Vornado Realty L.P., dated April 1, 2015 - Incorporated by reference to Exhibit 3.1
			to Vornado Realty L.P.'s Current Report on Form 8-K (File No. 001-34482), filed on
			April 2, 2015

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 March 31, 2005
			(File No. 001-11954), filed on April 28, 2005

			___________________________________________
	*		Incorporated by reference.

177


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

10.1		-	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

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

10.3	^**	-	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

10.4		-	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

10.5	^**	-	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

10.6	^**	-	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

10.7		-	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

10.8	^**	-	Form of 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 on December 26, 2002.

10.9	^**	-	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

10.10	^**	-	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

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

178


10.11	^**	-	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

10.12	^**	-	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

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

10.14	^**	-	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

10.15	^**	-	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

10.16	^**	-	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

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

10.18	^**	-	Form of Vornado Realty Trust 2010 Omnibus Share Plan Incentive / Non-Qualified Stock Option		*
				Agreement. Incorporated by reference to Exhibit 99.1 to Vornado Realty Trust's Current
				Report on Form 8-K (File No. 001-11954) filed on April 5, 2012

10.19	^**	-	Form of Vornado Realty Trust 2010 Omnibus Share Plan Restricted Stock Agreement.		*
				Incorporated by reference to Exhibit 99.2 to Vornado Realty Trust's Current Report on Form
				8-K (File No. 001-11954) filed on April 5, 2012

10.20	^**	-	Form of Vornado Realty Trust 2010 Omnibus Share Plan Restricted LTIP Unit Agreement.		*
				Incorporated by reference to Exhibit 99.3 to Vornado Realty Trust's Current Report on Form
				8-K (File No. 001-11954) filed on April 5, 2012

10.21	^**	-	Form of Vornado Realty Trust 2012 Outperformance Plan Award 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, 2012 (File No. 001-11954) filed on February 26, 2013

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

179


10.22	^**	-	Form of Vornado Realty Trust 2013 Outperformance Plan Award Agreement. Incorporated		*
				by reference to Exhibit 10.50 to Vornado Realty Trust’s Quarterly Report on Form 10-Q
				for the quarter ended March 31, 2013 (File No. 001-11954), filed on May 6, 2013

10.23	^**	-	Employment agreement between Vornado Realty Trust and Stephen W. Theriot dated		*
				June 1, 2013. Incorporated by reference to Exhibit 10.51 to Vornado Realty Trust’s
				Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 (File No. 001-11954),
				filed on August 5, 2013

10.24	^**	-	Employment agreement between Vornado Realty Trust and Michael J. Franco dated		*
				January 10, 2014. Incorporated by reference to Exhibit 10.52 to Vornado Realty Trust's
				Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (File No. 001-11954),
				filed on May 5, 2014

10.25	^**	-	Form of Vornado Realty Trust 2014 Outperformance Plan Award Agreement. Incorporated		*
				by reference to Exhibit 10.53 to Vornado Realty Trust's Quarterly Report on Form 10-Q
				for the quarter ended March 31, 2014 (File No. 001-11954), filed on May 5, 2014

10.26		-	Amended and Restated Revolving Credit Agreement dated as of September 30, 2014, by and		*
				among Vornado Realty L.P. as Borrower, Vornado Realty Trust as General Partner, the
				Banks listed on the signature pages thereof, and JPMorgan Chase Bank N.A. as
				Administrative Agent for the Banks. Incorporated by reference to Exhibit 10.54 to
				Vornado Realty Trust's Quarterly Report on Form 10-Q for the quarter ended
				September 30, 2014 (File No. 001-11954), filed on November 3, 2014

10.27	^**	-	Form of Vornado Realty Trust 2016 Outperformance Plan Award Agreement. Incorporated by		*
				reference to Exhibit 99.1 to Vornado Realty Trust’s Current Report on Form 8-K
				(File No. 001-11954), filed on January 21, 2016

10.28		-	Term Loan Agreement dated as of October 30, 2015, by and among Vornado Realty L.P. as		*
				Borrower, Vornado Realty Trust as General Partner, the Banks listed on the signature
				pages thereof, and JPMorgan Chase Bank, N.A. as Administrative Agent for the Banks.
				Incorporated by reference to Exhibit 10.32 to Vornado Realty Trust's Annual Report on
				Form 10-K for the year ended December 31, 2015 (File No. 001-11954), filed on
				February 16, 2016.

10.29		-	Amended and Restated Revolving Credit Agreement dated as of November 7, 2016, among
				Vornado Realty L.P. as Borrower,Vornado Realty Trust as General Partner, the Banks
				listed on the signature pages thereof, and JPMorgan Chase Bank N.A. as Administrative
				Agent for the Banks.

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

180


12.1	-	Computation of Ratios for Vornado Realty Trust

12.2		Computation of Ratios for Vornado Realty L.P.

21	-	Subsidiaries of Vornado Realty Trust and Vornado Realty L.P.

23.1	-	Consent of Independent Registered Public Accounting Firm for Vornado Realty Trust

23.2	-	Consent of Independent Registered Public Accounting Firm for Vornado Realty L.P.

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

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

31.3	-	Rule 13a-14 (a) Certification of the Chief Executive Officer of Vornado Realty L.P.

31.4	-	Rule 13a-14 (a) Certification of the Chief Financial Officer of Vornado Realty L.P.

32.1	-	Section 1350 Certification of the Chief Executive Officer of Vornado Realty Trust

32.2	-	Section 1350 Certification of the Chief Financial Officer of Vornado Realty Trust

32.3	-	Section 1350 Certification of the Chief Executive Officer of Vornado Realty L.P.

32.4	-	Section 1350 Certification of the Chief Financial Officer of Vornado Realty L.P.

101.INS	-	XBRL Instance Document of Vornado Realty Trust and Vornado Realty L.P.

101.SCH	-	XBRL Taxonomy Extension Schema of Vornado Realty Trust and Vornado Realty L.P.

101.CAL	-	XBRL Taxonomy Extension Calculation Linkbase of Vornado Realty Trust and Vornado Realty L.P.

101.DEF	-	XBRL Taxonomy Extension Definition Linkbase of Vornado Realty Trust and Vornado Realty L.P.

101.LAB	-	XBRL Taxonomy Extension Label Linkbase of Vornado Realty Trust and Vornado Realty L.P.

101.PRE	-	XBRL Taxonomy Extension Presentation Linkbase of Vornado Realty Trust and Vornado Realty L.P.

181

<SUBMISSION>
      <TYPE>  10-K
      <FILER>
            <CIK>  0000899689
            <CCC>  xxxxxxx
            <ACCELERATED-STATUS>
      </FILER>
      <PERIOD>
      <SHELL-COMPANY>
      <SMALL-REPORTING-CO>
      <SROS>  NYSE
      <SUBMISSION-CONTACT>
            <NAME>  EDGAR  Advantage  Service  Team
            <PHONE>  (800)  688  -  1933
      </SUBMISSION-CONTACT>
      <VOLUNTARY-FILER>
      <WKSI>

EDGAR DOCUMENT 10-K goes here

EXHIBIT 2.1

MASTER TRANSACTION AGREEMENT

by and among

VORNADO REALTY TRUST,

VORNADO REALTY L.P.,

JBG PROPERTIES INC.,

JBG/OPERATING PARTNERS, L.P.,

THE JBG PARTIES SET FORTH ON SCHEDULE A,

VORNADO DC SPINCO

and

VORNADO DC SPINCO OP LP

dated as of

October 31, 2016

TABLE OF CONTENTS

		Page

ARTICLE I CONTRIBUTIONS, DISTRIBUTIONS AND MERGERS		3

Section 1.1.	Pre-Combination Transactions	3
Section 1.2.	Combination Transactions	3
Section 1.3.	Post-Closing Structuring	5
Section 1.4.	Consideration for JBG Contributions	5
Section 1.5.	Asset Values of the Included Assets	6
Section 1.6.	Kickout of Included Interests; Designation of Additional Vornado Excluded Properties	10
Section 1.7.	Determination and Election of Consideration to the JBG Parties; Requirements of Equity Consideration	11
Section 1.8.	Distributions of Consideration to the Equityholders of the JBG Parties	13
Section 1.9.	JBG Representative	13
Section 1.10.	Withholding	15

ARTICLE II CLOSING		15

Section 2.1.	Closing	15
Section 2.2.	Deliveries by the Vornado Parties at the Closing	16
Section 2.3.	Deliveries by the JBG Parties at the Closing	18

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE VORNADO PARTIES		19

Section 3.1.	Organization and Qualification; Subsidiaries	19
Section 3.2.	Organizational Documents	21
Section 3.3.	Capital Structure	21
Section 3.4.	Authority	23
Section 3.5.	No Conflict; Required Filings and Consents	24
Section 3.6.	Financial Statements	25
Section 3.7.	No Undisclosed Liabilities	27
Section 3.8.	Absence of Certain Changes or Events	27
Section 3.9.	Litigation	27
Section 3.10.	Taxes	28
Section 3.11.	Material Contracts	30
Section 3.12.	Environmental Matters	33
Section 3.13.	Compliance with Laws; Permits	34

Section 3.14.	Intellectual Property	35
Section 3.15.	Properties	35
Section 3.16.	Intentionally Omitted	38
Section 3.17.	Personal Property	38
Section 3.18.	Approval Required	39
Section 3.19.	Insurance	39
Section 3.21.	Information in SEC Filings	39
Section 3.22.	Bankruptcy	40
Section 3.23.	Employee Benefit Plans	40
Section 3.24.	Brokers; Expenses	41
Section 3.25.	Labor and Other Employment Matters	42
Section 3.26.	OFAC	42
Section 3.27.	Patriot Act	43
Section 3.28.	Anti-Corruption	43
Section 3.29.	Capital Commitments for Vornado Included Investments	43
Section 3.30.	No Other Representations or Warranties	44

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE JBG PARTIES		44

Section 4.1.	Organization	44
Section 4.2.	Authorization; Validity of Agreement	46
Section 4.3.	No Conflict; Consents	46
Section 4.4.	Capital Structure; Subsidiaries	47
Section 4.5.	Securities Laws Matters	49
Section 4.6.	Financial Statements	52
Section 4.7.	No Undisclosed Liabilities	53
Section 4.8.	Absence of Certain Changes or Events	53
Section 4.9.	JBG Included Properties	53
Section 4.10.	JBG Development Properties	57
Section 4.11.	Personal Property	58
Section 4.12.	Litigation	58
Section 4.13.	Taxes	58
Section 4.14.	Compliance with Laws; Permits	61
Section 4.15.	Funds	62
Section 4.16.	Material Contracts	62
Section 4.17.	Environmental Matters	66
Section 4.18.	Bankruptcy	66
Section 4.19.	Employee Benefit Plans	67
Section 4.20.	Labor and Other Employment Matters	68

Section 4.21.	Intellectual Property	69
Section 4.22.	OFAC	70
Section 4.23.	Patriot Act	70
Section 4.24.	Anti-Corruption	70
Section 4.25.	Insurance	70
Section 4.26.	Information in the SEC Filings	71
Section 4.27.	Brokers; Expenses	71
Section 4.28.	Capital Commitments	71
Section 4.29.	Non-Controlled Subsidiaries	71
Section 4.30.	JBG Fund Credit Amounts	71
Section 4.31.	No Other Representations or Warranties	71

ARTICLE V PRE-CLOSING COVENANTS		72

Section 5.1.	Access; Notice of Certain Events	72
Section 5.2.	Consents and Approvals	73
Section 5.3.	Publicity	80
Section 5.4.	Conduct of Business by the Vornado Parties	81
Section 5.5.	Conduct of Business by the JBG Parties	86
Section 5.6.	Compliance with Securities Regulations	91
Section 5.7.	Credit Facility	91
Section 5.8.	Certain Pre-Closing Actions	92
Section 5.9.	Rule 3-14/Regulation S-X Cooperation	93
Section 5.10.	Exclusivity	94
Section 5.11.	NYSE Listing	94
Section 5.12.	Equity Incentive Plan	94
Section 5.13.	Newco Board of Trustees and Officers	95
Section 5.14.	Newco Declaration and Bylaws	96
Section 5.15.	Intentionally Omitted	96
Section 5.16.	Newco Officer’s Certificate	96
Section 5.17.	Vornado Officer’s Certificates	96
Section 5.18.	JBG Officer’s Certificates	96
Section 5.19.	Form 10 Filing	97
Section 5.20.	Confidentiality	97

ARTICLE VI ADDITIONAL AGREEMENTS		98

Section 6.1.	ROFRs and Tenant Estoppels under Ground Leases and Joint Venture Agreements	98
Section 6.2.	Casualty and Condemnation	100
Section 6.3.	Tax Matters	100

iii

Section 6.4.	Employee Matters	102
Section 6.5.	Management of Vornado Excluded Assets	103
Section 6.6.	Transition Services; Separation and Distribution Agreement; Cleaning Services Agreements	103
Section 6.7.	Further Assurances	104
Section 6.8.	Other Post-Closing Matters	104

ARTICLE VII CONDITIONS TO CONSUMMATION OF THE TRANSACTIONS		104

Section 7.1.	Conditions to Each Party’s Obligations to Consummate the Transactions at the Closing	104
Section 7.2.	Conditions to Obligations of the Vornado Parties	105
Section 7.3.	Conditions to Obligations of the JBG Parties	108
Section 7.4.	Frustration of Closing Conditions	110

ARTICLE VIII TERMINATION		111

Section 8.1.	Termination	111
Section 8.2.	Effect of Termination	112

ARTICLE IX	MISCELLANEOUS	112

Section 9.1.	Amendment	112
Section 9.2.	Waiver	112
Section 9.3.	Non-Survival	113
Section 9.4.	Expenses	113
Section 9.5.	Notices	113
Section 9.6.	Certain Definitions	115
Section 9.7.	Terms Defined Elsewhere	131
Section 9.8.	Interpretation	135
Section 9.9.	Counterparts	136
Section 9.10.	Entire Agreement; Third-Party Beneficiaries	136
Section 9.11.	Severability	136
Section 9.12.	Governing Law; Jurisdiction	136
Section 9.13.	Waiver of Jury Trial	137
Section 9.14.	Assignment	137
Section 9.15.	Enforcement; Remedies	137
Section 9.16.	No Recourse	138
Section 9.17.	Joint and Several	138

Schedules and Exhibits

Schedule A		JBG Properties Affiliates
Schedule B		Asset Values
Schedule C		Terms of Cleaning Services Agreements
Schedule D		Example of Share Number Calculation
Exhibit A-1		Vornado Included Properties
Exhibit A-2		Vornado Included Entities
Exhibit A-3		Vornado Included Investments
Exhibit B-1		JBG Included Properties
Exhibit B-2		JBG Included Entities
Exhibit B-3		JBG Managing Member Entities
Exhibit C-1		Form of JBG LLC Merger Agreement
Exhibit C-2		Form of JBG Fund Contribution Agreement
Exhibit C-3		Form of JBG Partnership Merger Agreement
Exhibit C-4		Form of JBG Properties Contribution Agreement
Exhibit C-5		Form of JBG Managing Member Contribution Agreement
Exhibit D		Form of Separation and Distribution Agreement
Exhibit E		Form of Registration Rights Agreements
Exhibit F		Form of Partnership Agreement Amendment and Restatement
Exhibit G		Form of Employee Matters Agreement
Exhibit H		Form of Tax Matters Agreement
Exhibit I		Form of GP Subcontract
Exhibit J		Form of FIRPTA Certificate
Exhibit K		Form of Equity Incentive Plan
Exhibit L		Form of Declaration of Trust Amendment and Restatement
Exhibit M		Form of Bylaws Amendment and Restatement
Exhibit N		Form of Ground Lease Estoppel

MASTER TRANSACTION AGREEMENT

This MASTER TRANSACTION AGREEMENT (hereinafter referred to as this “ Agreement ”), dated as of October 31, 2016, is made by and among Vornado Realty Trust, a Maryland real estate investment trust (“ Vornado ”), Vornado Realty L.P., a Delaware limited partnership (“ Vornado OP ”, and together with Vornado, the “ Vornado Parties ”), JBG Properties Inc., a Maryland corporation (“ JBG Properties ”), JBG/Operating Partners, L.P., a Delaware limited partnership (“ JBG Operating Partners ” and together with JBG Properties, the “ JBG Management Entities ”) and the JBG Properties affiliates listed on Schedule A (the “ JBG Funds ” and together with the JBG Management Entities, the “ JBG Parties ”), Vornado DC Spinco, a Maryland real estate investment trust (“ Newco ”) and Vornado DC Spinco OP LP, a Delaware limited partnership (“ Newco OP ”, and together with the Vornado Parties, the JBG Parties and Newco, collectively, the “ Parties ”). All capitalized terms used in this Agreement shall have the meaning ascribed to such terms in Section 9.6 (Certain Definitions) or as otherwise defined elsewhere in this Agreement unless the context clearly provides otherwise.

RECITALS

WHEREAS, certain subsidiaries of the Vornado Parties are engaged in real estate investment, development, leasing and property management in the Washington D.C. metropolitan area;

WHEREAS, the JBG Parties and their affiliate entities are engaged in real estate investment, development, leasing and property management predominantly in the Washington D.C. metropolitan area;

WHEREAS, the Vornado Parties own direct or indirect interests in the real properties set forth on Exhibit A-1 hereto (all such real property interests, together with all buildings, structures and other improvements and fixtures located on or under such real property and all easements, rights and other appurtenances benefitting such real property, collectively, the “ Vornado Included Properties ”) through their ownership of the Equity Interests of the entities set forth on Exhibit A-2 hereto (the “ Vornado Included Entities ”) (collectively, the “ Vornado Included Interests ”);

WHEREAS, the Vornado Included Entities own direct or indirect interests in the real properties listed on Section A of the Vornado Disclosure Letter (collectively, the “ Vornado Excluded Properties ”), which Vornado Excluded Properties will not be acquired by Newco or Newco OP (together with all other assets and properties of the Vornado Parties that constitute Vornado Assets as defined in the Separation and Distribution Agreement, the “ Vornado Excluded Assets ”);

WHEREAS, certain Vornado Included Entities own direct or indirect debt or equity investments in the entities listed on Exhibit A-3 hereto (collectively, the “ Vornado Included Investments ”);

WHEREAS, the JBG Funds own direct or indirect interests in the real properties and hold real property purchase options and interests set forth on Exhibit B-1 hereto (all such real property interests and purchase options, together with all buildings, structures and other improvements and fixtures located on or under such real property and all easements, rights and other appurtenances benefitting such real property, collectively, the “ JBG Included Properties ”) through their ownership of the Equity Interests of the entities (the “ JBG Included Entities ”) set forth on Exhibit B-2 hereto (collectively, the “ JBG Included Interests ”);

WHEREAS, the entities listed on Exhibit B-3 hereto (the “ JBG Managing Member Entities ”) act as the managing member in respect of certain JBG Included Entities;

WHEREAS, the JBG Funds own direct or indirect interests in the real properties listed on Section A of the JBG Disclosure Letter hereto (collectively, the “ JBG Excluded Properties ”), which JBG Excluded Properties will not be acquired by Newco or Newco OP (together with all other assets and properties of the JBG Funds other than the JBG Included Assets, the “ JBG Excluded Assets ”);

WHEREAS, prior to the Closing, each JBG Fund will engage in a restructuring through a series of steps pursuant to which, among other things, the JBG Included Assets of each JBG Fund will be transferred to a newly formed entity (each such newly formed entity, a “ Transferred LLC ”) to be owned directly or indirectly by the members or partners of such JBG Fund, as applicable;

WHEREAS, pursuant to the terms and subject to the conditions of this Agreement, the Parties desire to effectuate a series of transactions, including the Pre-Combination Transactions (as defined below), the Combination Transactions (as defined below) and the Restructuring Transactions (as defined below) (together, the “ Transactions ”);

WHEREAS, as consideration for the contributions of the JBG Included Assets, by way of contribution, merger or otherwise, of the Transferred LLCs by way of contribution, merger or otherwise, and of the merger of JBG Operating Partners described below, (a) Newco shall, or shall cause Newco OP to, deliver to the applicable JBG Parties or JBG Designees the Cash Consideration, (b) Newco shall issue to the applicable JBG Parties or JBG Designees the Issued Newco Shares and/or shall contribute certain of the Issued Newco Shares to Newco OP in exchange for an equal number of OP Units, and in turn Newco OP shall deliver such Issued Newco Shares to the applicable JBG Parties or JBG Designees, and (c) Newco OP shall issue to the JBG Parties the Issued OP Units (the transactions contemplated under the preceding clauses (b) and (c) being referred to herein as the “ Equity Issuance ”);

WHEREAS, the board of trustees of Vornado (the “ Vornado Board ”) has duly and validly authorized the execution and delivery of this Agreement and the Transactions to be effected by Vornado, Vornado OP and the Vornado Subsidiaries;

WHEREAS, Vornado in its capacity as the sole general partner of Vornado OP, on behalf of Vornado OP, has approved this Agreement and the Transactions to be effected by Vornado OP and its Subsidiaries;

WHEREAS, each of the JBG Parties has received any requisite approval pursuant to its Governing Documents of the Restructuring Transactions, this Agreement, the contribution of the JBG Included Assets and the other Transactions;

WHEREAS, as an inducement to and condition of the Vornado Parties entering into this Agreement, each of the employees listed in Section B of the JBG Disclosure Letter have concurrently entered into employment agreements with Newco, which shall become effective contingent upon and as of the Closing (the “ Employment Agreements ”); and

WHEREAS, the Vornado Parties and the JBG Parties desire to make certain representations, warranties, covenants and agreements in connection with the Transactions and also prescribe various conditions to the Transactions as set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

AGREEMENT

ARTICLE I

CONTRIBUTIONS, DISTRIBUTIONS AND MERGERS

Section 1.1. Pre-Combination Transactions . Subject to Section 5.8 , and pursuant to the terms and subject to the conditions herein, and in reliance upon the representations, warranties and agreements herein, the steps set forth on Section 1.1 of the Vornado Disclosure Letter constitute the “ Pre-Combination Transactions ”.

Section 1.2. Combination Transactions . Subject to Section 5.8 , immediately following the occurrence of the Pre-Combination Transactions, and pursuant to the terms and subject to the conditions herein, and in reliance upon the representations, warranties and agreements herein, the following “ Combination Transactions ” shall occur:

(a) Fund VI Contribution . Immediately prior to or at the Closing, but following the occurrence of the Pre-Combination Transactions, JBG Investment Fund VI, L.L.C. (“ Fund VI ”) will consummate a series of transactions, pursuant to which the Transferred LLC of Fund VI (which will own all right, title and interest in and to the JBG Included Interests with respect to the JBG Included Properties listed under “Fund VI” on Section 1.2 of the JBG Disclosure Letter and all JBG Included Assets related thereto and no other assets or properties) will merge (pursuant to a merger agreement substantially in the form attached hereto as Exhibit C-1 (such form, with all blanks completed and other applicable revisions made in a manner consistent with this Agreement being hereinafter referred to as the “ JBG LLC Merger

Agreement ”)) with a wholly-owned subsidiary (directly and indirectly) of Newco OP, with the Transferred LLC of Fund VI surviving in such merger and Newco OP owning all of the interests in the Transferred LLC of Fund VI (directly and indirectly).

(b) Fund VII Contribution . Immediately prior to or at the Closing, but following the occurrence of the Pre-Combination Transactions, JBG Investment Fund VII, L.L.C. (“ Fund VII ”) will consummate a series of transactions, pursuant to which the Transferred LLC of Fund VII (which will own all right, title and interest in and to the JBG Included Interests with respect to the JBG Included Properties listed under “Fund VII” on Section 1.2 of the JBG Disclosure Letter and all JBG Included Assets related thereto and no other assets or properties) will merge (pursuant to a JBG LLC Merger Agreement with all blanks completed and other applicable revisions made in a manner consistent with this Agreement) with a wholly-owned subsidiary (directly and indirectly) of Newco OP, with the Transferred LLC of Fund VII surviving in such merger and Newco OP owning all of the interests in the Transferred LLC of Fund VII (directly and indirectly).

(c) Fund VIII Contribution . Immediately prior to or at the Closing, but following the occurrence of the Pre-Combination Transactions, JBG Investment Fund VIII, L.L.C. (“ Fund VIII ”) will consummate a series of transactions, pursuant to which all of the Equity Interests in the Transferred LLC of Fund VIII (which will own 100% of the outstanding common Equity Interests in JBG/Fund VIII Trust (“ Fund VIII REIT ”) and which together with Fund VIII REIT will collectively own all right, title and interest in and to the JBG Included Interests with respect to the JBG Included Properties listed under “Fund VIII” on Section 1.2 of the JBG Disclosure Letter and all JBG Included Assets related thereto and no other assets or properties) will be contributed to Newco OP pursuant to a contribution agreement substantially in the form attached hereto as Exhibit C-2 (such form, with all blanks completed and other applicable revisions made in a manner consistent with this Agreement being hereinafter referred to as the “ JBG Fund Contribution Agreement ”).

(d) Fund IX Contribution . Immediately prior to or at the Closing, but following the occurrence of the Pre-Combination Transactions, JBG Investment Fund IX, L.L.C. (“ Fund IX ”) will consummate a series of transactions, pursuant to which the Transferred LLC of Fund IX (which will own all right, title and interest in and to the JBG Included Interests with respect to the JBG Included Properties listed under “Fund IX” on Section 1.2 of the JBG Disclosure Letter and all JBG Included Assets related thereto and no other assets or properties) will merge (pursuant to a JBG LLC Merger Agreement with all blanks completed and other applicable revisions made in a manner consistent with this Agreement) with a wholly-owned subsidiary (directly and indirectly) of Newco OP, with the Transferred LLC of Fund IX surviving in such merger and Newco OP owning all of the interests in the Transferred LLC of Fund IX (directly and indirectly).

(e) UDM Contribution . Immediately prior to or at the Closing, but following the occurrence of the Pre-Combination Transactions, JBG/Urban Direct Member, L.L.C. (“ UDM ”) will consummate a series of transactions, pursuant to which all of the Equity Interests in the Transferred LLC of UDM (which will own all right, title and interest in and to the JBG

Included Interests listed under “UDM” on Section 1.2 of the JBG Disclosure Letter and all JBG Included Assets related thereto and no other assets or properties) will be contributed to Newco OP pursuant to a JBG Fund Contribution Agreement with all blanks completed and other applicable revisions made in a manner consistent with this Agreement.

(f) Management Company Transactions . Immediately prior to or at the Closing, but following the occurrence of the Pre-Combination Transactions:

(i) JBG Operating Partners will merge with and into a wholly owned limited liability company Subsidiary of Newco OP, with the partners of JBG Operating Partners receiving OP Units as set forth in a merger agreement substantially in the form attached hereto as Exhibit C-3 (such form with all blanks completed in a manner consistent with this Agreement being hereinafter referred to as the “ JBG Partnership Merger Agreement ” and together with the JBG LLC Merger Agreement, the “ JBG Merger Agreements ”);

(ii) JBG Properties will transfer all of its assets to Newco OP in exchange for OP Units as set forth in a contribution agreement substantially in the form attached hereto as Exhibit C-4 (such form with all blanks completed in a manner consistent with this Agreement being hereinafter referred to as the “ JBG Properties Contribution Agreement ”); and

(iii) The JBG Management Entities shall cause each JBG Managing Member Entity to transfer and contribute any managing member interest it has in any JBG Included Entity as set forth on Section 1.2 of the JBG Disclosure Letter (collectively, the “ Managing Member Interests ”) other than any Excluded Managing Member Interest, to a newly formed wholly owned Subsidiary of Newco OP pursuant to a contribution agreement substantially in the form attached hereto as Exhibit C-5 (such form, with all blanks completed and other applicable revisions made in a manner consistent with this Agreement being hereinafter referred to as the “ JBG Managing Member Contribution Agreement ” and together with the JBG Fund Contribution Agreements and the JBG Properties Contribution Agreement, the “ JBG Contribution Agreements ”).

Section 1.3. Post-Closing Structuring . Immediately following the Closing, Newco shall cause the actions set forth on Section 1.3 of the JBG Disclosure Letter that are contemplated to be taken after Closing (the “ Post-Closing Transactions ”) to be implemented as set forth therein. The Parties will reasonably agree to modify the Post-Closing Transactions as requested by either Party so long as such modifications do not adversely affect the non- requesting Party in any material respect.

Section 1.4. Consideration for JBG Contributions . In consideration of the JBG Parties’ contribution of the JBG Included Assets pursuant to the transactions described in Section 1.2 , the JBG Parties and their JBG Designees will receive from Newco and Newco OP, collectively, a number of Issued Newco Shares and/or Issued OP Units (collectively, the “ Equity

Consideration ”) equal to the Share Number. The composition of the Equity Consideration will be determined in accordance with Section 1.7 (it being understood that certain JBG Parties or JBG Designees may be required to accept Cash Consideration in lieu of Equity Consideration as provided by Section 1.7 ).

Section 1.5. Asset Values of the Included Assets .

(a) As of the applicable Valuation Date, the equity value of each Included Property, each Vornado Included Investment, and of the Vornado management business and of the JBG management business (each such value, the “ Asset Value ”) is set forth on Schedule B .

(b) Adjustments to Valuations .

(i) The Asset Value of each Included Property shall be increased, without duplication, by amounts actually paid prior to the Revaluation Time in connection with such Included Property by the Vornado Parties or their Subsidiaries or the JBG Parties or their Subsidiaries, as applicable, for (A) tenant improvement costs, tenant improvement allowances, landlord work, base building work required in connection with a lease, leasing commissions, buyout costs (net of any subleasing or other similar revenues) with respect to a tenant’s former premises and other leasing costs (collectively, “ Leasing Costs ”) actually paid before the Revaluation Time (or, as provided by Section 1.5(d) , after the Revaluation Time and before the Closing Date) pursuant to any Vornado Lease or JBG Lease (including any amendments, extensions, expansions or renewals of a Vornado Lease or JBG Lease) first signed after the applicable Valuation Date, provided , that with respect to the Included Properties identified on Section 1.5(b)(i)(A) of the JBG Disclosure Letter or on Section 1.5(b)(i)(A) of the Vornado Disclosure Letter (collectively, the “ Under Construction and Predevelopment Properties ”), the adjustment described in this clause (A) shall also apply with respect to Leasing Costs actually paid after the Valuation Date with respect to Vornado Leases and JBG Leases (including any amendments, extensions, expansions or renewals of a Vornado Lease or JBG Lease) in existence as of the applicable Valuation Date, (B) costs of capital expenditures to an Included Property paid after the applicable Valuation Date and before the Revaluation Time (or, as provided by Section 1.5(d) , after the Revaluation Time and before the Closing Date), (C) amortization, repayment, prepayment or paydown after the applicable Valuation Date and before the Revaluation Time (or, as provided by Section 1.5(d) , after the Revaluation Time and before the Closing Date) of the principal amount of any Indebtedness, other than Intercompany Indebtedness (but excluding, however, any Interest Payments, exit fees, prepayment premiums, LIBOR breakage fees, hedge breakage costs and similar amounts payable in connection therewith, and any other financing fees and closing costs paid in connection therewith) of a JBG Included Entity or a Vornado Included Entity, as applicable, which owns a direct or indirect interest in such Included Property, (D) land acquisition and development costs, including soft costs such as architect’s and engineering fees, pre- development fees, development fees, construction management fees, legal fees, marketing expenses, taxes and utilities during construction, brokerage fees, etc. and all

hard costs, including amounts payable to contractors and subcontractors with respect to the development project, including but not limited to site costs, parking and garage costs and base building costs (“ Acquisition and Development Costs ”), paid for the Included Properties after the applicable Valuation Date and before the Revaluation Time (or, as provided by Section 1.5(d) , after the Revaluation Time and before the Closing Date), but excluding, however, (x) Interest Payments and capitalized interest for the Included Properties and (y) real estate taxes, insurance premiums and other carrying costs for the Included Properties (except that the exclusion described in this clause (y) shall not apply to Under Construction and Predevelopment Properties, the amounts for which shall not be excluded), and (z) Acquisition and Development Costs paid to acquire an additional interest in an Included Property, to the extent the ownership percentage in such Included Property is thereby increased as contemplated by Section 1.5(b)(iii) , (E) with respect to the Vornado Included Properties only, an amount equal to the fees that would have been paid with respect to such Vornado Included Property between the applicable Valuation Date and the Revaluation Time had the Vornado Parties paid fees in accordance with the fee schedule set forth on Section 1.5(b)(i)(E) of the Vornado Disclosure Letter, (F) costs spent for any purpose set forth on Section 1.5(b)(i)(F) of the Vornado Disclosure Letter or Section 1.5(b)(i)(F) of the JBG Disclosure Letter between the applicable Valuation Date and the Revaluation Time, (G) any overstatement on Schedule B of the debt balance of such Included Property’s debt amount as of the applicable Valuation Date, and (H) any positive Net Working Capital balance of a JBG Included Entity or Vornado Included Entity as of the Revaluation Time.

(ii) The Asset Value of each Included Property shall be decreased, without duplication, by the amount of (A) Leasing Costs that are not yet paid as of the Revaluation Time (or, as provided by Section 1.5(d) , as of the Closing Date) pursuant to any Vornado Lease or JBG Lease (including any amendments, extensions, expansions or renewals of a Vornado Lease or JBG Lease) existing as of the applicable Valuation Date, provided , that any liability for ongoing lease and other payment obligations related to the assumption of space on behalf of a tenant (net of any subleasing or other similar revenues) shall decrease Asset Value by only fifty percent (50%) of the outstanding liability; provided , further , that this clause (A) shall not apply to Under Construction and Predevelopment Properties, (B) new Indebtedness or advances with respect to existing Indebtedness, or the accrual of additional accrued and unpaid interest of any new or existing Indebtedness, of any JBG Included Entity or Vornado Included Entity, as applicable, which owns a direct or indirect interest in such Included Property incurred after the applicable Valuation Date and existing as of the Revaluation Time, but in each case, excluding any Intercompany Indebtedness, (C) exit fees, prepayment premiums, LIBOR breakage fees, hedge breakage costs and similar amounts payable in connection with the refinancing of Indebtedness pursuant to a Credit Facility Refinancing Draw as provided by Section 5.2(f)(i) or Section 5.2(f)(ii) , (D) any understatement on Schedule B of the debt balance of such Included Property’s debt amount as of the applicable Valuation Date and (E) any negative Net Working Capital balance of a JBG Included Entity or Vornado Included Entity as of the Revaluation Time.

(iii) Schedule B sets forth the ownership percentage in each Included Property represented by the Vornado Included Interests or the JBG Included Interests, as applicable, as of the applicable Valuation Date. Any adjustments made pursuant to this Section 1.5(b) shall take into account the percentage ownership such that the increase or decrease with respect to a particular item shall be in an amount equal to the product of the total amount paid multiplied by the “Contributed Percentage” with respect to such Included Property as specified on such Schedule B . If as of the Revaluation Time a Vornado Party or the applicable JBG Party owns a percentage of the direct or indirect interests in any Included Property that is different than the percentage specified on Schedule B , then the adjustments made pursuant to this Section 1.5(b) as modified by this clause (iii) shall take into account the actual amount of such ownership as of the Revaluation Time. In addition, the initial Asset Values will be adjusted to reflect the actual amount of the Parties’ ownership in any Included Property as of the Revaluation Time.

(iv) Notwithstanding the foregoing, with respect to the Included Properties listed on Section 1.5(b)(iv) of the JBG Disclosure Letter and on Section 1.5(b)(iv) of the Vornado Disclosure Letter, there will be no increase to the Asset Value of such Included Properties on account of payments of amounts described in clauses (A) , (B) or (D) of Section 1.5(b)(i) , and the Asset Values of such Included Properties shall be decreased by the amount of any Acquisition and Development Costs and any Leasing Costs required to achieve stabilization of such Included Properties, in each case, that are still to be paid as of the Revaluation Time (or, as provided by Section 1.5(d) , as of the Closing Date).

(v) The Asset Value of the JBG management business shall be decreased by (A) the amount of any liabilities set forth on Section 1.5(b)(v) of the JBG Disclosure Letter and (B) the amount of any further management fees to be paid by any JBG Fund to any JBG Party other than in cash.

(vi) The Asset Value of any Vornado Included Investment shall be increased by amounts actually contributed after September 30, 2016 and prior to the Revaluation Time by the Vornado Parties or their Subsidiaries (other than from one Vornado Included Entity to another) on account of unfunded capital commitments to the entities pertaining to such Vornado Included Investments.

(vii) The aggregate Asset Values of the JBG Included Assets (such decrease to be allocated among the individual JBG Included Properties on a pro rata basis, based on Asset Values as adjusted on the Revaluation Time pursuant to this Section 1.5 ) and the aggregate Asset Values of the Vornado Included Assets shall be decreased by the amounts set forth on Section 1.5(b)(vii) of the JBG Disclosure Letter and Section 1.5(b)(vii) of the Vornado Disclosure Letter, respectively.

(c) Each Group shall use Commercially Reasonable Efforts to prepare and provide to the other Group an interim calculation of the adjustments to its Asset Values

described in Section 1.5(b) with respect to the most recently ended fiscal quarter within thirty (30) days after the end of each such fiscal quarter, beginning with the quarter ending December 31, 2016. Promptly after the date hereof, the each Group will engage a “Big Four” accounting firm (each a “ Retained Accountant ”) to periodically review its interim calculations and the draft final adjustments to be made as of the Revaluation Time. Each Group will, and will instruct its Retained Accountant to, cooperate in good faith with the other Group and its Retained Accountant to agree upon sets of procedures that will be conducted on the calculations of the adjustments set forth in this Section 1.5 and the schedules and information supporting such calculations.

(d) With respect to each of its Included Properties, each Group shall be entitled to identify, reasonably and in good faith, the amount of any Leasing Costs, capital expenditures, debt amortization, and Acquisition and Development Costs that such Group anticipates to be paid with respect to such Included Property between the Revaluation Time and the Closing Date and that, had they been paid prior to the Revaluation Time, would have been the subject of an increase in such Included Property’s Asset Value pursuant to clauses (A) through (D) of Section 1.5(b)(i) , or any Leasing Costs, capital expenditures and Acquisition and Development Costs that such Group anticipates to be paid with respect to such Included Property between the Revaluation Time and the Closing Date and that, had they been paid prior to the Revaluation Time, would have averted a decrease in such Included Property’s Asset Value pursuant to clause (A) of Section 1.5(b)(ii) or Section 1.5(b)(iv) (collectively, “ Credited Post- Revaluation Time Amounts ”), itemizing the same in reasonable detail, and the applicable Included Property’s Asset Value will be increased, or will not be decreased, as applicable, on the Revaluation Time by such Credited Post-Revaluation Time Amounts. Between the Revaluation Time and the Closing Date, neither Group shall (x) declare, set aside or pay any Distribution on or with respect to Equity Interests of any of its Included Entities, except as may be expressly contemplated by the Pre-Combination Transactions, the Restructuring Transactions or the Combination Transactions, or (y) permit any of its Included Entities to incur any Indebtedness for borrowed money, in each case, without the approval of the other Group in its sole discretion (and if any Party shall do so in violation of this sentence, the amount of such Distribution shall be added to the amount of cash to be contributed by such Group pursuant to Section 2.2(o) or Section 2.3(k) , as applicable).

(e) The Parties shall prepare and file their respective Tax Returns and any Transfer Tax returns or other filings consistent with the Asset Values of the Included Assets as adjusted pursuant to this Section 1.5 and otherwise in accordance with the methodology set forth on Section 1.5(e) of the JBG Disclosure Letter and Section 1.5(e) of the Vornado Disclosure Letter, and shall take no positions contrary thereto in any Tax Return or other Tax filing or proceeding unless otherwise required by applicable Law. Each Party’s Transfer Tax returns shall be subject to the approval of the other Group, such approval not to be unreasonably withheld, delayed or conditioned.

Section 1.6. Kickout of Included Interests; Designation of Additional Vornado Excluded Properties .

(a) The Parties acknowledge that certain Included Interests may be Kickout Interests pursuant to Section 5.2(f) or another provision of this Agreement. Notwithstanding anything to the contrary contained herein, no Kickout Interest shall be transferred at the Closing, and the Asset Value of a Kickout Interest shall not be taken into account when calculating the amount of Consideration payable at Closing.

(b) At any time on or before the Revaluation Time, the Vornado Parties shall have the right, upon written notice to the JBG Parties, to designate any or all of the properties listed on Section 1.6(b) of the Vornado Disclosure Letter as Vornado Excluded Properties or JBG Excluded Properties, as applicable. Following such designation, any such properties and any entities that own only a direct or indirect ownership interest in any such properties (and no direct or indirect ownership interest in any Vornado Included Assets or JBG Included Assets) shall constitute Vornado Excluded Assets or JBG Excluded Assets, as applicable, for all purposes of this Agreement (and the Parties shall reasonably modify the Pre-Combination Transactions as necessary to effect the same).

(c) If any Vornado Included Interest is permanently designated as a Kickout Interest pursuant to the terms of this Agreement or if any JBG Included Asset listed on Section 1.6(c) of the JBG Disclosure Letter (the “ Must-Have Properties ”) is permanently designated as a Kickout Interest pursuant to the terms of this Agreement, then for the period beginning on the Closing Date through the later of (i) the Outside Date and (ii) sixty (60) days after the Closing Date, the Vornado Parties or the JBG Parties (as applicable), Newco and Newco OP shall cooperate in good faith and use their Commercially Reasonable Efforts to obtain such Required Consent. If a Required Consent is obtained within such period, then the applicable Party shall cause the applicable Vornado Included Interest or JBG Included Interest to be contributed to Newco OP, and Newco OP shall accept such applicable Vornado Included Interest or JBG Included Interest from the applicable Party. In exchange for such contribution, Newco OP shall issue to the Vornado Parties or the applicable JBG Parties an amount of Issued OP Units or Issued Newco Shares (as elected by such Vornado Parties or such applicable JBG Parties) equal to the Post-Closing Consideration Number. Newco shall pay or reimburse the transferring Party for any Transfer Taxes or other Expenses (other than Consent Expenses, Financial Advisor Expenses and the expenses set forth in Section 6.1(f) of the JBG Disclosure Letter below the cap described therein) owed on account of such contribution. The foregoing provisions of this Section 1.6(c) shall survive the Closing.

(d) If any Joint Venture Partner or ground lease counterparty exercises a right of first offer, right of first refusal, buy/sell right or other similar right to acquire the direct or indirect interest in an Included Property, then (i) the applicable Party shall notify the other Group of the same, (ii) the net purchase price paid or payable to the applicable Party with respect to the applicable Included Property shall be included in the Included Assets and (iii) the applicable Included Property shall not be a Kickout Interest.

Section 1.7. Determination and Election of Consideration to the JBG Parties; Requirements of Equity Consideration of the JBG Parties .

(a) Promptly following the first filing of a Form 10 by the Vornado Parties with the SEC as contemplated by Section 5.19 (but in any event no later than ten (10) days after the date of such filing), the Parties shall cause an information statement regarding the Transactions and a JBG Investor Questionnaire to be distributed to each direct and indirect owner of such JBG Party (each, a “ JBG Designee ”). The JBG Parties shall use their Commercially Reasonable Efforts to obtain from each such JBG Designee within forty-five (45) days after such distribution a completed JBG Investor Questionnaire from such JBG Designee and an election, from each JBG Designee entitled to make such an election, with respect to the composition of the Consideration such JBG Designee may be entitled to pursuant to the Transactions. The JBG Parties shall periodically update the Vornado Parties regarding the status of the receipt of the above-referenced JBG Investor Questionnaires and elections. As soon as reasonably practicable following receipt by the JBG Parties of the above-referenced elections (but in any event no later than seventy-five (75) days after the distribution of the information statement to the JBG Designees), the JBG Parties shall deliver to the Vornado Parties a final schedule (the “ JBG Election Schedule ”), certified by such JBG Parties as true and complete, setting forth the election of each JBG Party or JBG Designee with respect to the composition (expressed as percentages) of the Consideration such JBG Designee may be entitled to and the name of each JBG Designee with respect thereto; provided , however , that if on the date the JBG Election Schedule is delivered the JBG Parties have not obtained completed JBG Investor Questionnaires (or otherwise received information to enable the Parties to reasonably conclude that the applicable JBG Investor is an Accredited Investor) from a sufficient number of JBG Designees to permit payment of Cash Consideration (as calculated in accordance with Section 1.7(b) ) equal to or less than the Cash Consideration Cap, then, unless the Vornado Parties agree that any Cash Consideration in excess of the Cash Consideration Cap may be drawn from the Credit Facility or otherwise borne by Newco and Newco OP in accordance with Section 1.7(b) , then the Revaluation Time will be extended until 11:59 p.m. Eastern time on the last day of the calendar month in which the Parties first determine that the Cash Consideration will be equal to or less than the Cash Consideration Cap; provided , that if the Parties first so determine in the last five (5) days of a calendar month, then the Revaluation Time will be extended until the date that is 11:59 p.m. (Eastern time) on the last day of the next calendar month; provided , further , that in no event may the Revaluation Time be extended pursuant to this sentence to a date later than April 30, 2017. The JBG Parties shall have the right to update from time to time the JBG Election Schedule after its initial delivery based on information received following such delivery, provided that any such updates shall not, in the Vornado Parties’ reasonable judgment, require any delay in the anticipated Closing Date.

(b) The JBG Parties shall make available to the Vornado Parties each completed JBG Investor Questionnaire received by the JBG Parties with respect to each JBG Party or JBG Designee identified therein. To the extent that the Vornado Parties reasonably determine following a review of such JBG Investor Questionnaires that the issuance of Newco Shares and/or OP Units cannot be effected in a private placement satisfying the requirements of Regulation D of the Securities Act, then the Vornado Parties may require that, with respect to

any JBG Party or JBG Designee as to which there is not a reasonable basis to conclude that such JBG Party or JBG Designee is an Accredited Investor, or as to which the JBG Parties do not timely furnish to the Vornado Parties a JBG Investor Questionnaire by the date that is forty-five (45) days prior to the anticipated Closing Date (or such later date as may be permitted by Section 1.7(a) ), Newco and Newco OP shall pay the Consideration owed to such JBG Party or JBG Designee in the form of cash (“ Cash Consideration ”) rather than Equity Consideration. Any such Cash Consideration shall be equal to the product of (x) the number of Issued Newco Shares and/or Issued OP Units that would otherwise have been payable to such JBG Party or JBG Designee multiplied by (y) the Trading Price. Any Cash Consideration shall be drawn from the Credit Facility or otherwise paid by Newco and Newco OP, up to a maximum amount equal to the Cash Consideration Cap (unless otherwise agreed pursuant to Section 1.7(a) ). Subject to Section 1.7(a) , any amount of Cash Consideration in excess of the Cash Consideration Cap shall be contributed to Newco by the JBG Parties. The amount of Cash Consideration shall be determined on the Closing Date and shall be paid to the applicable JBG Party or JBG Designee by Newco within ten (10) Business Days. In exchange for the JBG Parties’ contribution of any portion of the Cash Consideration, Newco or Newco OP shall deliver to the JBG Parties Equity Consideration equal to the Share Number that would have been payable to the applicable JBG Party or JBG Designee had such JBG Party or JBG Designee been entitled to receive Equity Consideration in accordance with this Section 1.7 .

(c) With respect to the transactions described in Sections 1.2(a) through 1.2(e) , the applicable JBG Party (or its JBG Designees) shall be entitled to receive either Issued Newco Shares or Issued OP Units, in each case payable in accordance with Section 1.7(d) (subject, however, to the provisions of Section 1.7(b) with respect to Cash Consideration). With respect to the transactions described in Section 1.2(f)(i) , (ii) and (iii) , the applicable JBG Party (or its JBG Designees) shall be entitled to receive only Issued OP Units, payable in accordance with Section 1.7(d) (subject, however, to the provisions of Section 1.7(b) with respect to Cash Consideration). With respect to the transactions described in Section 1.2(f) , the individuals listed in Section 1.7(c)(i) of the JBG Disclosure Letter must execute an agreement with Newco OP in the form set forth in Section 1.7(c)(ii) of the JBG Disclosure Letter and the individuals listed in Section 1.7(c)(iii) of the JBG Disclosure Letter must execute an agreement with Newco OP in the form set forth in Section 1.7(c)(iv) of the JBG Disclosure Letter, in each case prior to or at the Closing in order to receive Issued OP Units pursuant to this Section 1.7(c) . Vornado agrees to cause Newco OP to enter into agreements in such form with such individuals prior to or at the Closing, provided that such individuals are willing to execute such an agreement with Newco OP.

(d) With respect to any Newco Shares to be delivered by Newco OP to the applicable JBG Parties and/or one or more JBG Designees, Newco shall contribute to Newco OP and the JBG Parties (and/or JBG Designees, if applicable) shall receive from Newco OP, newly issued Newco Shares in a transaction to which Treasury Regulations Section 1.1032-3 is intended to apply, and with respect to any Newco Shares to be issued by Newco directly to the JBG Parties or JBG Designees, Newco shall issue newly issued Newco Shares (collectively, the “ Issued Newco Shares ”), which shall be validly issued, fully paid and non-assessable, and free and clear of all Liens (other than restrictions arising under the Governing Documents of Newco),

and which will be registered in the name of the applicable JBG Party (and/or JBG Designee) by book entry in an account or accounts with Newco’s transfer agent. With respect to any OP Units to be delivered by Newco OP to the applicable JBG Parties and/or one or more JBG Designees, Newco OP shall issue to the JBG Parties (and/or JBG Designees, if applicable), and the JBG Parties (and/or JBG Designees, if applicable) shall receive from Newco OP, a number of newly issued OP Units (collectively, the “ Issued OP Units ”), which shall be validly issued and free and clear of all Liens (other than restrictions arising under the Governing Documents of Newco OP), and which will be registered in the name of the applicable JBG Party (and/or JBG Designee) by book entry in an account or accounts with Newco OP’s transfer agent.

Section 1.8. Distributions of Consideration to the Equityholders of the JBG Parties . The JBG Parties shall cause any Consideration received by the JBG Parties hereunder to be distributed in accordance with the allocation schedule set forth on Section 1.8 of the JBG Disclosure Letter and otherwise in accordance with the respective JBG Contribution Agreements and JBG Merger Agreements, the Restructuring Transactions and the applicable Governing Documents of the JBG Parties and their respective Affiliates.

Section 1.9. JBG Representative .

(a) Each JBG Party (on behalf of itself, its Subsidiaries, its JBG Designees and their respective successors, assigns and heirs) hereby irrevocably appoints JBG Properties as the representative of the JBG Parties (the “ JBG Representative ”) and to be the agent, proxy and attorney-in-fact for such Person regarding any matter relating to or arising from this Agreement, any Ancillary Document or the Transactions, including the full power and authority on such Person’s behalf (i) to execute the Partnership Agreement Amendment and Restatement and any other Ancillary Documents and otherwise to consummate the transactions contemplated herein and therein, (ii) to pay such Person’s expenses incurred in connection with the negotiation and performance of this Agreement, the Ancillary Documents and any other agreement entered into in connection herewith (whether incurred on or after the date hereof), (iii) to disburse any funds received hereunder to the JBG Parties (as applicable), (iv) to endorse and deliver any certificates or instruments representing the Equity Consideration and execute such further agreements or instruments of assignment as the Vornado Parties, Newco or Newco OP shall reasonably request or which the JBG Representative shall consider necessary or proper to effectuate the Transactions, all of which shall have the effect of binding the JBG Parties, their Subsidiaries and the JBG Designees as if such Person had personally executed such agreement or instrument, (v) to give and receive notices, communications and other deliverables hereunder or under any Ancillary Document on behalf of such Person, (vi) to take all other actions to be taken by or on behalf of such Person in connection herewith, including under any Ancillary Document, (vii) to dispute, compromise, settle and pay any claims made in connection with this Agreement or the Transactions, (viii) to retain legal and other professional advisors on behalf of, and at the expense of such Persons in connection with its actions hereunder and (ix) to take all actions necessary or appropriate in the judgment of the JBG Representative for the accomplishment of the foregoing. Each JBG Party agrees that such agency, proxy and attorney-in-fact and all authority granted hereunder are coupled with an interest, and are therefore irrevocable without the consent of the JBG Representative and shall survive the death, incapacity, bankruptcy,

dissolution or liquidation of any Person. If, after the execution of this Agreement, any JBG Party, its Subsidiaries or its JBG Designee dies, dissolves or liquidates or becomes incapacitated or incompetent, then the JBG Representative is nevertheless authorized, empowered and directed to act in accordance with this Agreement as if that death, dissolution, liquidation, incapacity or incompetency had not occurred and regardless of notice thereof. All actions, decisions or determinations so made or taken by the JBG Representative (to the extent authorized by this Agreement) shall be deemed the actions, decisions or determinations of each such Person, and any notice, communication, document, certificate or information required (other than any notice required by Law or under any JBG Party’s or its Subsidiaries’ Governing Documents) to be given to any JBG Party, its Subsidiaries or its JBG Designees hereunder or pursuant to any other agreement entered into in connection herewith shall be deemed so given if given to the JBG Representative.

(b) Each JBG Party will severally, for itself, its Subsidiaries, and its JBG Designees only, and not jointly, indemnify the JBG Representative and hold the JBG Representative harmless against all expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred without gross negligence or willful misconduct on the part of the JBG Representative and arising out of or in connection with the good faith acceptance or administration of its duties hereunder, and any act done or omitted pursuant to the advice of counsel will be conclusive evidence of such good faith.

(c) The JBG Representative hereby accepts its appointment as representative of the JBG Parties under this Agreement. The JBG Representative shall act in good faith. Subject to the JBG Representative’s right to pay expenses reasonably incurred in connection with the negotiation and performance of this Agreement or otherwise to satisfy the reasonable expenses and obligations of the JBG Parties, their Subsidiaries and their JBG Designees, the JBG Representative shall promptly disburse to each Person such Person’s share of any Cash Consideration and Equity Consideration (as applicable) received by the JBG Representative in accordance with the terms of this Agreement. The JBG Representative shall have only the duties expressly stated in this Agreement and shall have no other duty, express or implied. The JBG Representative is not, by virtue of serving as the JBG Representative, a fiduciary of the JBG Parties or any other Person. The JBG Representative, in its capacity as such, has no personal responsibility or liability for any representation, warranty or covenant of the JBG Parties.

(d) The JBG Representative shall not be liable to any JBG Party or any other Person for any action taken or omitted by it or any agent employed by it hereunder or under any other document entered into in connection herewith, except that the JBG Representative shall not be relieved of any liability imposed by Law for fraud or bad faith. The JBG Representative shall not be liable to the JBG Parties or any other Person for any apportionment or distribution of consideration made by the JBG Representative in good faith, and, if any such apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Person to whom payment was due, but not made, shall be to recover from other JBG Parties any payment in excess of the amount to which they are determined to have been entitled. The JBG Representative shall not be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement. Neither the JBG

Representative nor any agent employed by it shall incur any liability to any JBG Party or any other Person by virtue of the failure or refusal of the JBG Representative for any reason to consummate the Transactions or relating to the performance of its other duties hereunder, except for actions or omissions constituting fraud or bad faith.

(e) The JBG Representative shall not be entitled to and shall not charge or collect from the JBG Parties or any other Person any fees or other compensation for its services as the JBG Representative under this Agreement. The JBG Representative, however, shall be entitled to reimbursement from the JBG Parties for its reasonable out-of-pocket expenses incurred in connection with its services as the JBG Representative under this Agreement.

(f) If the JBG Representative resigns or is otherwise unable or unwilling to serve in such capacity, then the JBG Parties will appoint a new Person to serve as the JBG Representative and will provide prompt written notice thereof to Vornado, Newco and Newco OP. Until such notice is received, the Vornado Parties, Newco and Newco OP will be entitled to rely on the actions and statements of the previous JBG Representative.

Section 1.10. Withholding . Notwithstanding anything to the contrary in this Agreement, Newco and Newco OP shall be entitled to deduct and withhold from any amounts otherwise payable in connection with this Agreement and the Transactions to any Person such amounts as are required to be deducted and withheld under the Code or any provision of applicable Law. Any amounts so withheld shall be paid over to the appropriate Governmental Entity to the extent required by Law. To the extent that amounts are so deducted and withheld, such deducted and withheld amounts shall be treated for all purposes of this Agreement as having been paid to such Person in respect of whom such deduction and withholding were made.

ARTICLE II

CLOSING

Section 2.1. Closing . The closing of the Combination Transactions (the “ Closing ”) shall take place at 12:01 a.m. Eastern time on the fifteenth (15 th ) day of the calendar month immediately following the month in which the Revaluation Time occurs (or, if such day is not a Business Day, the next succeeding Business Day). Subject to the last sentence of Section 7.1(g) , the “Revaluation Time” shall be 11:59 p.m. Eastern time on the last day of the calendar month in which all of the conditions set forth in Sections 7.1 , 7.2 and 7.3 (other than those that by their terms are to be satisfied at the Closing) are satisfied or waived by the Parties entitled to grant such waiver; provided , that if such conditions are so satisfied or waived in the last five (5) days of a calendar month, then the Revaluation Time will be 11:59 p.m. (Eastern time) on the last day of the next calendar month. Notwithstanding the foregoing, (x) in no event shall the Closing take place before March 15, 2017, and (y) the Revaluation Time and the Closing shall be subject to extension as provided by Section 1.7(a) . If each of the closing conditions described in Sections 7.1 , 7.2 and 7.3 (other than those that by their terms are to be satisfied at the Closing) has been satisfied or waived by the Parties entitled to grant such waiver, then subject to the last sentence of Section 7.1(g) , (a) the Vornado Parties may set the Revaluation Time in accordance with the

first two sentences of this paragraph to allow the date of Closing to be on or after March 15, 2017 once (i) no more than ten percent (10%) of the Vornado Included Properties are Kickout Interests and (ii) no more than twenty percent (20%) of the JBG Included Properties are Kickout Interests; (b) the Vornado Parties may set the Revaluation Time in accordance with the first two sentences of this paragraph to allow the date of Closing to be after May 1, 2017 once (i) no more than fifteen percent (15%) of the Vornado Included Properties are Kickout Interests and (ii) no more than thirty percent (30%) of the JBG Included Properties are Kickout Interests; (c) the JBG Parties may set the Revaluation Time in accordance with the first two sentences of this paragraph to allow the date of Closing to be after July 1, 2017 once (i) no more than ten percent (10%) of the Vornado Included Properties are Kickout Interests, (ii) no more than twenty percent (20%) of the JBG Included Properties are Kickout Interests and (iii) no more than twenty percent (20%) of the Must-Have Properties are Kickout Interests; and (d) the JBG Parties may set the Revaluation Time in accordance with the first two sentences of this paragraph to allow the date of Closing to be on or after March 15, 2017 once no Vornado Included Properties or JBG Included Properties are deemed Kickout Interests. For clarity, the percentages described in the immediately preceding sentence shall be calculated (x) with respect to the JBG Included Properties, on the basis of their initial Asset Values as a percentage of the aggregate initial Asset Values of all of the JBG Included Properties, including any Kickout Interests, (y) with respect to the Vornado Included Properties, on the basis of their initial Asset Values as a percentage of the aggregate initial Asset Values of all of the Vornado Included Properties, including any Kickout Interests, and (z) with respect to the Must-Have Properties, on the basis of their initial Asset Values as a percentage of the aggregate initial Asset Values of all of the Must-Have Properties, including any Kickout Interests. The date of the Closing hereunder is referred to herein as the “ Closing Date ”. The documents for the Closing shall be assembled at the offices of Hogan Lovells US LLP, 555 Thirteenth Street, NW, Washington, District of Columbia 20004, or at such other location as is mutually acceptable to the Vornado Parties and the JBG Parties, no later than the Business Day before the Closing Date.

Section 2.2. Deliveries by the Vornado Parties at the Closing . Subject to the terms and conditions set forth herein, and on the basis of the representations, warranties, covenants and agreements set forth herein, at the Closing, the applicable Vornado Party shall deliver, or cause to be delivered, to the JBG Parties (and/or the JBG Designees, as applicable):

(a) evidence of the issuance to the JBG Parties (and/or JBG Designees, as applicable) of the Newco Shares by Newco and/or OP Units by Newco OP issuable pursuant to Section 1.4 and Section 1.7 ;

(b) the Separation and Distribution Agreement, in the form attached hereto as Exhibit D (the “ Separation and Distribution Agreement ”), duly executed by Vornado, Vornado OP, Newco and Newco OP (which, for the avoidance of doubt, will be signed no later than the time at which the Pre-Combination Transactions are effected pursuant to Section 5.8(a) );

(c) the JBG Contribution Agreements referenced in Section 1.2 and the JBG Merger Agreements referenced in Section 1.2 , duly executed by Newco or its applicable Subsidiary;

(d) Registration Rights Agreements, each in the form attached hereto as Exhibit E (the “ Registration Rights Agreements ”), duly executed by Newco;

(e) an amendment and restatement of the Partnership Agreement in the form attached hereto as Exhibit F (the “ Partnership Agreement Amendment and Restatement ”), duly executed by Newco in its capacity as the sole general partner of Newco OP and as the attorney- in-fact for the other partners of Newco OP, and effective as of the time during the Pre- Combination Transactions at which a third party is first admitted as a partner of Newco OP;

(f) intentionally omitted;

(g) a certificate executed by a duly authorized officer of Vornado pursuant to Section 7.3(c) ;

(h) the Vornado REIT Opinions;

(i) any Transfer Tax returns as may be necessary to comply with Title 42, Subtitle 1, Chapter 11 of the District of Columbia Code and the regulations applicable thereto, and Titles 12 and 13 of the Maryland Tax-Property Code and the regulations applicable thereto and any other required Transfer Tax declarations or similar documentation required to evidence the payment of any Tax imposed by any state, county or municipality together with any change of ownership statements required under any legal requirements;

(j) the Employee Matters Agreement, in the form attached hereto as Exhibit G (the “ Employee Matters Agreement ”), duly executed by Vornado, Vornado OP, Newco and Newco OP;

(k) the Transition Services Agreement, duly executed by Vornado OP, Newco and Newco OP;

(l) the Tax Matters Agreement, in the form attached hereto as Exhibit H (the “ Tax Matters Agreement ”), duly executed by Vornado and Newco;

(m) the Cleaning Services Agreements, duly executed by Newco and the applicable Vornado Affiliates;

(n) intentionally omitted;

(o) evidence of a cash contribution to Newco in an amount set forth on Section 2.2(o) of the Vornado Disclosure Letter;

(p) one or more subcontracts, in the form attached hereto as Exhibit I (the “ GP Subcontracts ”), duly executed by Newco or Newco’s Subsidiary, pursuant to which the managing members of each of the JBG Funds and of the general partners or managing members of JBG Investment Fund I, L.P., JBG Investment Fund II, L.P., JBG Investment Fund III, L.P., JBG Investment Fund IV, L.L.C., JBG Investment Fund V, L.L.C., JBG/Recap Investors, L.L.C.,

JBG/SEFC Fund Investors, L.L.C. and JBG/SEFC Partners, L.L.C., as applicable, will subcontract asset management services to Newco or a Subsidiary thereof;

(q) all documents, items or agreements required to be delivered by the Vornado Parties or their Affiliates under the Separation and Distribution Agreement, the JBG Merger Agreements and the JBG Contribution Agreements.

Section 2.3. Deliveries by the JBG Parties at the Closing . Subject to the terms and conditions set forth herein, and on the basis of the representations, warranties, covenants and agreements set forth herein, at the Closing, the applicable JBG Party shall deliver, or cause to be delivered, to the Vornado Parties:

(a) the Registration Rights Agreements, duly executed by each of the JBG Parties (and/or JBG Designees, as applicable);

(b) a counterpart signature page to the Partnership Agreement Amendment and Restatement and all other documents or instruments as required by the terms of the Partnership Agreement for the admission of the JBG Parties (and/or JBG Designees, as applicable) as limited partners of Newco OP;

(c) counterpart signature pages to JBG Contribution Agreements referenced in Section 1.2 and the JBG Merger Agreements referenced in Section 1.2 , duly executed by the applicable JBG Parties;

(d) a certificate executed by a duly authorized officer of each of the JBG Parties or its general partner or manager pursuant to Section 7.2(c) ;

(e) a certificate duly completed and executed by each of the transferor JBG Parties, dated as of the Closing Date, certifying in accordance with Section 1445 of the Code that each such JBG Party (or, if such JBG Party is a disregarded entity for U.S. federal income tax purposes, the Person treated as the owner of such JBG Party’s assets for such purposes) is not a “foreign person” within the meaning of such section, in substantially the form of Exhibit J hereto;

(f) an Internal Revenue Service Form W-9 or relevant Form W-8, as applicable, completed and executed by each JBG Party or Affiliate directly receiving Equity Consideration pursuant to this Agreement;

(g) any Transfer Tax returns as may be necessary to comply with Title 42, Subtitle 1, Chapter 11 of the District of Columbia Code and the regulations applicable thereto, and Titles 12 and 13 of the Maryland Tax-Property Code and the regulations applicable thereto and any other required Transfer Tax declarations or similar documentation required to evidence the payment of any Tax imposed by any state, county or municipality together with any change of ownership statements required under any legal requirements;

(h) the JBG REIT Opinions;

(i) intentionally omitted;

(j) Intentionally omitted;

(k) evidence of a cash contribution to Newco in an amount set forth on Section 2.3(k) of the JBG Disclosure Letter;

(l) counterpart signature pages to the GP Subcontracts, duly executed by the managing members of each of the JBG Funds and of the general partners or managing members of JBG Investment Fund I, L.P., JBG Investment Fund II, L.P., JBG Investment Fund III, L.P., JBG Investment Fund IV, L.L.C., JBG Investment Fund V, L.L.C., JBG/Recap Investors, L.L.C., JBG/SEFC Fund Investors, L.L.C. and JBG/SEFC Partners, L.L.C., as applicable; and

(m) all documents, items or agreements required to be delivered by the JBG Parties or their Affiliates under the Separation and Distribution Agreement, the JBG Merger Agreements and the JBG Contribution Agreements.

ARTICLE III

REPRESENTATIONS AND WARRANTIES
OF THE VORNADO PARTIES

The following representations and warranties by the Vornado Parties set forth in this Article III are qualified in their entirety by reference to the disclosures (i) in any document or instrument attached as an exhibit to, or incorporated by reference in, any publicly available Vornado SEC Filings filed or furnished on or after January 1, 2016 and prior to the second Business Day preceding the date hereof; provided , however , that such disclosures in the Vornado SEC Filings shall not be deemed to qualify the representations and warranties made in Sections 3.1(a) and (c) (Organization and Qualification; Subsidiaries), Section 3.2 (Organizational Documents), Section 3.4 (Authority), Section 3.5 (No Conflict; Required Filings and Consents), and Section 3.24 (Brokers; Expenses) and (ii) set forth in the disclosure letter delivered by the Vornado Parties to the JBG Parties immediately prior to the execution of this Agreement (the “ Vornado Disclosure Letter ”). Each disclosure set forth in the Vornado Disclosure Letter shall qualify or modify the Section to which it corresponds and any other Section to the extent the applicability of the disclosure to each other Section is reasonably apparent from the text of the disclosure made.

Section 3.1. Organization and Qualification; Subsidiaries .

(a) Each Vornado Party is duly incorporated or organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, as the case may be, and has the requisite organizational power and authority and any necessary governmental authorization to own, lease and, to the extent applicable, operate its properties and to carry on its business as it is now being conducted. Each Vornado Party is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, operated or leased by it or the nature of its business makes such qualification,

licensing or good standing necessary, except for such failures to be so qualified, licensed or in good standing that, individually or in the aggregate, have not had and would not reasonably be expected to have a Vornado Material Adverse Effect. Each Vornado Party is in compliance in all material respects with the terms of its Governing Documents.

(b) Each of Newco and Newco OP is, or as of the Closing will be, duly incorporated or organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, as the case may be, and has, or will have as of the Closing, the requisite organizational power and authority and any necessary governmental authorization to own, lease and, to the extent applicable, operate its properties and to carry on its business as it is now being conducted. Each of Newco and Newco OP is, or as of the Closing will be, duly qualified or licensed to do business, and is, or as of the Closing will be, in good standing, in each jurisdiction where the character of the properties owned, operated or leased by it or the nature of its business makes such qualification, licensing or good standing necessary. Each of Newco and Newco OP is, or as of the Closing will be, in compliance in all material respects with the terms of is Governing Documents.

(c) Each Vornado Included Entity is duly incorporated or organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, as the case may be, and has the requisite organizational power and authority and any necessary governmental authorization to own, lease and, to the extent applicable, operate its properties (including its Vornado Included Assets) and to carry on its business as it is now being conducted, except for such failures to be so organized, in good standing or have certain power and authority that, individually or in the aggregate, have not had and would not reasonably be expected to have a Vornado Material Adverse Effect. Each Vornado Included Entity is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, operated or leased by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so qualified, licensed or in good standing that, individually or in the aggregate, have not had and would not reasonably be expected to have a Vornado Material Adverse Effect. Each Vornado Included Entity is in compliance in all material respects with the terms of its Governing Documents, except for such noncompliance that, individually or in the aggregate, have not had and would not reasonably be expected to have a Vornado Material Adverse Effect.

(d) Section 3.1(d) of the Vornado Disclosure Letter sets forth a true, correct and complete list of Newco, Newco OP and all of the Vornado Included Entities, including a list of each Vornado Included Entity that is a “qualified REIT subsidiary” within the meaning of Section 856(i)(2) of the Code (“ Qualified REIT Subsidiary ”), a “taxable REIT subsidiary” within the meaning of Section 856(l) of the Code (“ Taxable REIT Subsidiary ”) or a real estate investment trust within the meaning of Sections 856 — 860 of the Code (“ REIT ”), together with (i) the jurisdiction of incorporation or organization, as the case may be, of each Vornado Included Entity, (ii) the type of and percentage of voting, equity, profits, capital and other beneficial interest held, directly or indirectly, by Vornado OP in and to each Vornado Included Entity, (iii) the names of and the type of and percentage of voting, equity, profits, capital and other beneficial interest held by any Person other than Vornado or a Vornado Subsidiary in each

Vornado Included Entity, and (iv) the classification for U.S. federal income tax purposes of each Vornado Included Entity. None of the Vornado Included Entities other than the Vornado REITs has elected or will elect to be treated as a REIT.

(e) Newco and Newco OP have been organized solely for the purpose of, and have not engaged in activities except in preparation for, the Transactions. The Vornado Included Entities have not engaged in any activities except for the acquisition, construction, development, ownership, operation, management, leasing and repair of the Vornado Included Properties and the management of properties belonging to third parties, and other activities ancillary thereto.

Section 3.2. Organizational Documents . Vornado has made available to the JBG Parties complete and correct copies of (i) Newco’s declaration of trust (the “ Newco Declaration ”) and Newco’s bylaws, as amended to date (the “ Newco Bylaws ”), the Partnership Agreement and the certificate of limited partnership of Newco OP, and (ii) the Governing Documents of each Vornado Included Entity, each as in effect on the date hereof.

Section 3.3. Capital Structure; Subsidiaries .

(a) As of the date hereof, (i) the authorized capital stock of Newco consists of 1,000 Newco Shares; (ii) the outstanding partnership interests of Newco OP consist of an undivided one hundred percent (100%) limited partnership interest and a zero percent (0%) noneconomic general partner interest, respectively; (ii) all such Newco Shares are issued and outstanding and owned by Vornado; (iii) the one hundred percent (100%) limited partnership interest in Newco OP is owned by Vornado OP; (iv) the zero percent (0%) noneconomic general partner interest in Newco OP is owned by Vornado DC Spinco GP LLC, a Delaware limited liability company (“ Newco GP ”); and (v) all of the membership interests in Newco GP are owned by Newco OP. Immediately prior to the Closing, (x) the number of authorized Newco Shares shall be sufficient to issue the Equity Consideration to the JBG Parties and the JBG Designees and (y) the number of authorized OP Units shall be sufficient to issue the Equity Consideration to the JBG Parties and JBG Designees.

(b) All the outstanding shares of capital stock of each of Newco and any of the Vornado Included Entities that is a corporation or trust are, or in the case of Newco, will be as of the Closing, duly authorized, validly issued, fully paid and non-assessable. All Equity Interests in Newco OP and each of the Vornado Included Entities that is a partnership or limited liability company are, or in the case of Newco OP, will be as of the Closing, duly authorized and validly issued. All shares of capital stock of (or other ownership interests in) Newco, Newco OP and each of the Vornado Included Entities that may be issued upon exercise of outstanding options or exchange rights are, or in the case of Newco and Newco OP, will be as of the Closing, duly authorized and, upon issuance, will be validly issued and in the case of Newco, fully paid and non-assessable. Immediately prior to the Vornado Distribution (as defined in Section 1.1 of the Vornado Disclosure Letter), (i) Vornado will own all of the issued and outstanding Newco Shares, (ii) Newco will own all of the limited partnership interests in Newco OP except for those limited partnership interests in Newco OP previously distributed to the limited partners of Vornado OP pursuant to the Pre-Combination Transactions, (iii) Newco GP will own one

hundred percent (100%) of the general partnership interests in Newco OP, and (iv) Newco will own one hundred percent (100%) of the limited liability company interests in Newco GP. Except as set forth in Section 3.3(b) of the Vornado Disclosure Letter, Vornado OP owns, directly or indirectly, all of the issued and outstanding capital stock and other ownership interests of each of the Vornado Included Entities, free and clear of all Liens other than statutory or other Liens for Taxes or assessments which are not yet due or delinquent or the validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves are maintained on Vornado’s Financial Statements in accordance with GAAP to the extent required under GAAP, and there are no existing options, warrants, calls, subscriptions, convertible securities or other securities, agreements, commitments (other than commitments to contribute capital to Joint Ventures) or obligations of any character relating to the outstanding capital stock or other securities of any Vornado Included Entity or which would require any Vornado Included Entity to issue or sell any shares of its capital stock, ownership interests or securities convertible into or exchangeable for shares of its capital stock or ownership interests.

(c) Except as set forth in this Agreement or in Section 3.3(c) of the Vornado Disclosure Letter, there are no securities, options, warrants, calls, rights, commitments, agreements, rights of first refusal, arrangements or undertakings of any kind to which Newco, Newco OP or any of the Vornado Included Entities is a party or by which any of them is bound, obligating Newco, Newco OP or any Vornado Included Entity to issue, deliver or sell or create, or cause to be issued, delivered or sold or created, additional Newco Shares, OP Units, or any other partnership units or other Equity Interests or phantom stock or other contractual rights the value of which is determined in whole or in part by the value of or in reference to any equity security of Newco, Newco OP or any Vornado Included Entity or obligating Newco, Newco OP or any Vornado Included Entity to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, right of first refusal, arrangement or undertaking. Except as set forth in this Agreement or in Section 3.3(c) of the Vornado Disclosure Letter, there are no outstanding contractual obligations of Newco, Newco OP or any Vornado Included Entity to repurchase, redeem or otherwise acquire any Newco Shares, OP Units, or any other partnership units or other Equity Interests. None of Newco, Newco OP or any Vornado Included Entity is a party to or bound by any agreements or understandings concerning the voting (including voting trusts and proxies) of any capital stock of Newco, Newco OP or any Vornado Included Entity.

(d) Section 3.1(d) of the Vornado Disclosure Letter sets forth Vornado OP’s direct or indirect percentage ownership interests in Newco, Newco OP and each of the Vornado Included Entities as of the date hereof, and, subject to the exceptions set forth on Section 3.1(d) of the Vornado Disclosure Letter, Vornado OP will own not less than such percentage immediately prior to the consummation of the Pre-Combination Transactions except as adjusted or modified as permitted under this Agreement. Except as set forth on Section 3.1(d) of the Vornado Disclosure Letter, each Vornado Included Entity is and, immediately prior to the Pre- Combination Transactions, will be, directly or indirectly wholly owned by Vornado OP. Newco is and, immediately prior to the Vornado Distribution, will be directly or indirectly wholly owned by Vornado. Newco OP is and, immediately prior to the Pre-Combination Transactions, will be, directly or indirectly wholly owned by Vornado OP.

(e) With regard to the Vornado Included Interests, except as set forth in Section 3.3(e) of the Vornado Disclosure Letter, all of the material capital obligations currently due and payable of Newco, Newco OP and any Vornado Included Entity and, to the knowledge of the Vornado Parties, all of the material capital obligations currently due and payable of any Joint Venture Partner have been fully funded. To the knowledge of the Vornado Parties, except as set forth in Section 3.3(e) of the Vornado Disclosure Letter, no Joint Venture Partner has made or advanced any loans that would adversely impact the Vornado Parties’ share of distributions from the Joint Venture.

(f) As of the date hereof, (i) no right of first offer, forced sale, buy/sell or similar right under any Joint Venture Agreement has been exercised by any Vornado Party or any Vornado Included Entity, on the one hand, or any Joint Venture Partner of a Vornado Party or Vornado Included Entity, on the other hand, or is the exercise of any such right now pending or proposed and (ii) no Joint Venture to which a Vornado Included Entity is party has been dissolved or liquidated and not reconstituted in accordance with the applicable Joint Venture Agreement and no event or condition which would trigger or result in the dissolution or liquidation of a Joint Venture has occurred and is continuing without the reconstitution of such Person in accordance with the applicable Joint Venture Agreement.

Section 3.4. Authority .

(a) Each of the Vornado Parties, Newco and Newco OP has all necessary corporate, trust or limited partnership power and authority, as applicable, to execute and deliver this Agreement, and each Ancillary Document to be executed and delivered by it at the Closing, to perform its obligations hereunder and thereunder, and to consummate the Transactions. The execution, delivery and performance by the Vornado Parties, Newco and Newco OP of this Agreement and the execution, delivery and performance by such Vornado Party, Newco or Newco OP of each Ancillary Document to which such Vornado Party, Newco or Newco OP is or will be a party and the consummation by the Vornado Parties, Newco and Newco OP of the Transactions have been duly and validly authorized by all necessary corporate, trust and limited partnership action, and no other corporate, trust or limited partnership proceedings on the part of the Vornado Parties, Newco or Newco OP, as applicable, are, or in the case of Newco and Newco OP, will be as of the Closing, necessary to authorize the execution and delivery by any Vornado Party, Newco and Newco OP of this Agreement, any such Ancillary Document and the consummation by it of the Transactions, subject to the filing with and acceptance by, the applicable Governmental Entity, of any certificate or articles of merger for any merger contemplated by the Transactions. This Agreement has been, and each Ancillary Document to which it is or will be contemplated that such Vornado Party, Newco or Newco OP will be party is or will be, duly executed and delivered by such Vornado Party, Newco or Newco OP (as applicable) and, assuming due and valid authorization, execution and delivery hereof and thereof by such JBG Parties party thereto, is or will be a valid and binding obligation of such Vornado Party, Newco or Newco OP, enforceable against such Vornado Party, Newco or Newco OP in accordance with its terms, except as the enforcement hereof or thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in

effect, relating to creditors’ rights generally and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law).

(b) Each of the Vornado Board and the Newco Board, at a duly held meeting, has duly and validly authorized the execution and delivery of this Agreement and each Ancillary Document to be executed and delivered by Vornado and Vornado OP at the Closing, which resolutions remain in full force and effect and have not been subsequently rescinded, modified or withdrawn in any way.

Section 3.5. No Conflict; Required Filings and Consents .

(a) Except as set forth in Section 3.5(a) of the Vornado Disclosure Letter, none of the execution, delivery or performance of this Agreement or the Ancillary Documents to which any Vornado Party, Newco or Newco OP is a party, the consummation of the Transactions or compliance by such Vornado Parties, Newco or Newco OP with any of the provisions of this Agreement or any Ancillary Document will (i) conflict with or result in any breach of any provision of (A) the Newco Declaration, the Newco Bylaws, the certificate of limited partnership of Newco OP or the Partnership Agreement or (B) any Governing Documents of any Vornado Party or Vornado Included Entity, (ii) assuming that all consents, approvals, authorizations and permits described in Section 3.5(b) have been obtained, all filings and notifications described in Section 3.5(b) have been made and any waiting periods thereunder have terminated or expired, require any filing by the Vornado Parties, Newco or Newco OP with, or the obtaining of any permit, authorization, consent or approval of, any court, arbitral tribunal, administrative agency or commission or other governmental or other regulatory authority or agency, whether foreign, federal, state or local (a “ Governmental Entity ”) (except for (x) compliance with applicable requirements of the Exchange Act and (y) such filings as may be required in connection with state and local Transfer Taxes), (iii) automatically result in a modification, violation or breach of, or material increase in cost or obligation of any Vornado Included Entity, Newco or Newco OP under, or constitute (with or without notice or lapse of time or both) a default (or give rise to any right to others, including, but not limited to, any right of termination, amendment, cancellation or acceleration) under, or give rise to any right of purchase, first offer or forced sale under or result in the creation of a Lien on any property or asset of any Vornado Included Entity, Newco or Newco OP pursuant to any note, bond, mortgage, debt instrument, indenture, contract, agreement, ground lease, license, permit or other legally binding obligation to which any Vornado Included Entity, Newco or Newco OP is a party, (iv) assuming that all consents, approvals, authorizations and permits described in Section 3.5(b) have been obtained, all filings and notifications described in Section 3.5(b) have been made and any waiting periods thereunder have terminated or expired, violate any order, writ, injunction, decree or Law applicable to such Vornado Parties, Newco or Newco OP or any of their respective properties or assets, (v) require any consent or approval of, or notice to, any other Person, under any of the terms, conditions or provisions of (x) any Vornado Ground Lease other than any Vornado Ground Lease set forth in Section 3.5(a)(v)(x) of the Vornado Disclosure Letter (the “ Required Vornado Ground Lease Consents ”), (y) any Joint Venture Agreement of a Vornado Included Entity other than any Joint Venture Agreement set forth on Section 3.5(a)(v)(y) of the Vornado Disclosure Letter (the “ Required Vornado JV Consents ”), or (z) any Contract constituting an Indebtedness obligation

of a Vornado Included Entity that relates to any of the Vornado Included Assets or pursuant to which any Vornado Included Entity could become an obligor pursuant to the Transactions other than any such Contract set forth on Section 3.5(a)(v)(z) of the Vornado Disclosure Letter (the “ Required Vornado Debt Consents ”), or (vi) require any consent or approval of, or notice to, any other Person, including, without limitation, from limited partners, members or parties to leases or other agreements or commitments, except, as to clauses (i)(B), (ii), (iii), (iv) and (vi), respectively, for any such conflicts, violations, breaches, defaults or other occurrences which, individually or in the aggregate, have not had and would not reasonably be expected to have a Vornado Material Adverse Effect.

(b) The execution and delivery of this Agreement or the Ancillary Documents to which any Vornado Party, Newco or Newco OP is a party does not, and the performance of this Agreement, any Ancillary Document or the Ancillary Documents to which any Vornado Party, Newco or Newco OP is a party will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity, except for (i) such reports under, and compliance with, the Exchange Act (and the rules and regulations promulgated thereunder) and the Securities Act (and the rules and regulations promulgated thereunder) as may be required in connection with this Agreement and the Transactions, (ii) as may be required under the rules and regulations of the NYSE, (iii) filings, permits, authorizations, consents, waiting period expirations or terminations, and approvals as may be required under the Hart- Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), (iv) the filing with SDAT of an amendment and restatement of the Newco Declaration (the “ Declaration of Trust Amendment and Restatement ”) and any articles of merger and the acceptance for record by SDAT of the Declaration of Trust Amendment and Restatement and any such articles of merger, or the filing of any certificate of merger with the Delaware Secretary of State, in each case, as required in connection with any merger contemplated by the Transactions, (v) such filings and approvals as may be required by any applicable state securities or “blue sky” Laws, (vi) such filings as may be required in connection with state and local Transfer Taxes and ordinary course information reporting filings required to be made with the IRS, and (vii) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, individually or in the aggregate, has not had and would not reasonably be expected to have a Vornado Material Adverse Effect.

Section 3.6. Financial Statements .

(a) Attached as Section 3.6(a) of the Vornado Disclosure Letter are copies of the following: balance sheets, statements of income, statements of changes in equity and statements of cash flows with respect to the Vornado Included Assets on an aggregate basis, each unaudited and with any footnotes in draft format only, as of and for the fiscal years ended December 31, 2015, 2014 and 2013 and the unaudited consolidated balance sheet as of June 30, 2016 and the related consolidated statements of operations and comprehensive income, consolidated statements of changes in partners’ deficit and consolidated statements of cash flows as of and for the six months ended June 30, 2016 and 2015, each unaudited and with any footnotes in draft format only (collectively, the “ Newco Financial Statements ”). The Newco Financial Statements were derived from the books and records of the Vornado Parties and their

Subsidiaries and were prepared in accordance with GAAP (it being understood, however, that the Vornado Included Entities have not been operating historically as a separate “standalone” entity or reporting segment and, therefore, when the Newco Financial Statements (including footnotes) are audited and filed in connection with the Form 10 (in such form, the “ Newco Audited Financial Statements ”), they will reflect certain adjustments necessary to be presented on a stand-alone basis in accordance with GAAP and SEC requirements), subject in the case of unaudited combined financial statements, to normal year-end adjustments, as at the dates and for the periods presented, and present fairly in all material respects the financial position, results of operations and cash flows of the Vornado Included Assets as at the dates and for the periods presented. The Newco Financial Statements present fairly, in all material respects, the combined financial position and the combined results of operations of the Vornado Included Entities (taken as a whole and assuming none of them had been designated as Kickout Interests), as of the respective dates thereof or the periods then ended, in each case except as may be noted therein (it being understood, however, that the Vornado Included Entities have not been operating historically as a separate “standalone” entity or reporting segment and, therefore, the Newco Audited Financial Statements will reflect certain adjustments necessary to be presented on a stand-alone basis in accordance with GAAP and SEC requirements).

(b) When delivered, the Newco Audited Financial Statements will present fairly, in all material respects, the combined financial position and the combined results of operations of the Vornado Included Entities (taken as a whole and assuming none of them had been designated as Kickout Interests) as of the dates thereof or for the periods covered thereby, and will have been prepared in accordance with GAAP consistently applied based on the historic practices and accounting policies of Vornado to the extent compliant with GAAP (it being understood, however, that the Vornado Included Entities have not been operating historically as a separate “standalone” entity or reporting segment and, therefore, the Newco Audited Financial Statements will reflect certain adjustments necessary to be presented on a stand-alone basis in accordance with GAAP and SEC requirements). The Newco Audited Financial Statements will conform in all material respects to the published rules and regulations of the SEC applicable to financial statements for each of the periods that will be required to be included in the Form 10.

(c) With respect to Newco and Newco OP, Vornado and its Subsidiaries maintain, and have maintained, a standard system of accounting established and administered in accordance with GAAP applied on a consistent basis. Vornado and its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions in the Vornado Included Entities, Newco and Newco OP are executed in accordance with management’s general or specific authorizations; (ii) transactions in the Vornado Included Entities, Newco and Newco OP are recorded as necessary to permit preparation of Newco Financial Statements in conformity with GAAP applied on a consistent basis and to maintain accountability for assets of the Vornado Included Entities, Newco and Newco OP; (iii) access to assets of the Vornado Included Entities, Newco and Newco OP is permitted only in accordance with management’s general or specific authorizations; and (iv) the recorded accountability for assets of the Vornado Included Entities, Newco and Newco OP is compared with the existing assets at reasonable intervals and appropriate action is to be taken with respect to any differences.

(d) Vornado and Vornado OP maintain disclosure controls and procedures required by Rule 13a-15 or Rule 15d-15 under the Exchange Act, including in relation to the Vornado Included Assets, and such controls and procedures are effective to ensure that all material information concerning Vornado and Vornado OP and their subsidiaries in relation to the Vornado Included Assets is made known on a timely basis to the individuals responsible for the preparation of Vornado SEC Filings and other public disclosure documents. As used in this Section 3.6 , the term “filed” shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.

Section 3.7. No Undisclosed Liabilities . Except as reflected or reserved against on the most recent balance sheet (or in the notes thereto) included in the Newco Financial Statements, none of Newco, Newco OP or any Vornado Included Entity has any liabilities or obligations of any nature (whether accrued, contingent or otherwise) which are required by GAAP to be reflected in a consolidated balance sheet, except for liabilities or obligations (i) expressly contemplated by, or arising out of, or under this Agreement, (ii) incurred in the ordinary course of business consistent with past practice since the most recent balance sheet set forth in the Newco Financial Statements made through and including the date of this Agreement, (iii) described in Section 3.7 of the Vornado Disclosure Letter or (iv) that, individually or in the aggregate, have not had and would not reasonably be expected to have a Vornado Material Adverse Effect.

Section 3.8. Absence of Certain Changes or Events . Between June 30, 2016 and the date hereof, (a) except as contemplated by this Agreement or as set forth in Section 3.8 of the Vornado Disclosure Letter, Newco, Newco OP and each Vornado Included Entity has conducted its business in the ordinary course in all material respects consistent with past practice and (b) there has not been any Vornado Material Adverse Effect, or any effect, event, development or circumstance that, individually or in the aggregate with all other effects, events, developments and changes, would reasonably be expected to result in a Vornado Material Adverse Effect.

Section 3.9. Litigation . Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Vornado Material Adverse Effect or adversely affect the ability of Newco, Newco OP, any Vornado Included Entity, any Vornado Party or any other Subsidiary of a Vornado Party to perform its obligations hereunder or under any Ancillary Documents to which such Person is a party, or prevent or materially delay the consummation of the Transactions, and except as set forth in Section 3.9 of the Vornado Disclosure Letter, as of the date hereof, (a) there is no litigation, claim, action, suit, arbitration, alternative dispute resolution action, order, decree, writ, injunction, government investigation, proceeding or any other judicial or administrative proceeding, in Law or equity (each, an “ Action ”), pending against (or to the knowledge of the Vornado Parties, threatened in writing against), Newco, Newco OP, any Vornado Included Entity or their Included Assets or any Vornado Party, nor, to the knowledge of the Vornado Parties, is there any investigation by a Governmental Entity pending or threatened in writing against Newco, Newco OP or any Vornado Included Entity, and (b) none of Newco, Newco OP, any Vornado Included Entity or with respect to any Included Assets thereof or any Vornado Party is subject to any outstanding order, writ, injunction, decree or arbitration ruling or judgment or award of any Governmental Entity.

Section 3.10. Taxes . Except as expressly set forth in Section 3.10 of the Vornado Disclosure Letter:

(a) Newco, Newco OP and each Vornado Included Entity each has (i) duly and timely filed (or caused to be filed on its behalf) with the appropriate Governmental Entity all U.S. federal and all other material Tax Returns required to be filed by it, taking into account any extensions of time within which to file such Tax Returns, and all such Tax Returns were and are true, correct and complete in all material respects and (ii) duly and timely paid in full (or there has been duly and timely paid in full on its behalf), or made adequate provision for, all material amounts of Taxes required to be paid by it.

(b) Each Vornado REIT and Newco (i) for its First Applicable Year and through and including its taxable year ended December 31, 2015 (and, for purposes of Section 7.3(a) , through and including its taxable year ended December 31, 2016, if the Closing Date occurs in the taxable year ending December 31, 2017) has been subject to taxation as a REIT and has satisfied all requirements to qualify as a REIT for such taxable years; (ii) has operated since January 1, 2016 (and, for purposes of Section 7.3(a) , January 1, 2017, if the Closing Date occurs in the taxable year ending December 31, 2017) to the date hereof in such a manner so as to qualify as a REIT; (iii) intends to continue to operate through the Closing Date in such a manner so as to qualify as a REIT; and (iv) has not taken or omitted to take any action that would reasonably be expected to result in a challenge by the IRS or any other Governmental Entity to its status as a REIT, and no such challenge is pending or threatened in writing.

(c) Since the later of its acquisition or formation by Vornado, Newco, Newco OP and each Vornado Included Entity has been and continues to be treated for U.S. federal Tax purposes as a (A) a partnership (or a disregarded entity) and not as a corporation or an association or publicly traded partnership taxable as a corporation, (B) a Qualified REIT Subsidiary, (C) a Taxable REIT Subsidiary, or (D) a REIT.

(d) Other than H Street, UBI and their respective Subsidiaries (and any successors thereof), none of Newco, Newco OP nor any Vornado Included Entity holds, directly or indirectly, any asset the disposition of which would be subject to (or to rules similar to) Section 1374 of the Code or, taking into account the Transactions, Treasury Regulations Section 1.337(d)-7 and Temporary Treasury Regulations Section 1.337(d)-7T.

(e) (i) There are no audits, investigations or proceedings pending (or threatened in writing) for and/or in respect of any material Taxes or material Tax Returns of Newco, Newco OP or any Vornado Included Entity and none of Newco, Newco OP or any Vornado Included Entity is a party to any litigation or administrative proceeding relating to a material amount of Taxes; (ii) no deficiency for a material amount of Taxes of Newco, Newco OP or any Vornado Included Entity has been claimed, proposed or assessed in writing or, to the knowledge of Vornado, threatened in writing, by any Governmental Entity, which deficiency has not yet been settled, except for such deficiencies which are being contested in good faith; (iii) none of Newco, Newco OP or any Vornado Included Entity has extended or waived (nor granted any extension or waiver of) the limitation period for the assessment or collection of any material

amount of Tax that has not since expired; and (iv) none of Newco, Newco OP or any Vornado Included Entity has entered into any “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law) regarding a material amount of Tax.

(f) Since its formation, (i) none of Newco, Newco OP or any Vornado Included Entity has incurred any material liability for Taxes under Sections 857(b), 860(c) or 4981 of the Code that has not been previously paid; and (ii) none of Newco, Newco OP or any Vornado Included Entity has incurred any material liability for any other Taxes other than (x) in the ordinary course of business, or (y) transfer or similar Taxes arising in connection with acquisitions or dispositions of property. No event has occurred, and no condition or circumstance exists, which presents a material risk that any material amount of Tax described in the previous sentence will be imposed upon Newco, Newco OP or any Vornado Included Entity (other than transfer or similar Taxes arising in connection with the Transactions).

(g) Newco, Newco OP and each Vornado Included Entity have complied in all material respects with all applicable Laws relating to the payment and withholding of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 1445, 1446 and 3402 of the Code or similar provisions under any state and foreign Laws) and have duly and timely withheld and, in each case, have paid over to the appropriate Governmental Entities any and all material amounts required to be so withheld and paid over on or prior to the due date thereof under all applicable Laws.

(h) Except as described on Section 3.10(h) of the Vornado Disclosure Letter, there are no Vornado Included Entity Tax Protection Agreements (as hereinafter defined) in force as of the date of this Agreement, and, as of the date of this Agreement, no Person has raised in writing a material claim against any Vornado Included Entity for any breach of any Vornado Included Entity Tax Protection Agreement. As used herein, “ Vornado Included Entity Tax Protection Agreement ” means any written agreement which Newco, Newco OP or any Vornado Included Entity is a party to or is otherwise bound by or subject to pursuant to which: (i) any liability to holders of limited partnership interests in a Vornado Included Entity that is a partnership for U.S. federal income tax purposes relating to Taxes may arise, whether or not as a result of the consummation of the Transactions; and/or (ii) in connection with the deferral of income Taxes of a holder of limited partnership interests in a Vornado Included Entity that is a partnership for U.S. federal income tax purposes, Newco, Newco OP or the Vornado Included Entities have agreed to (A) maintain a minimum level of debt, continue a particular debt or provide rights to guarantee debt, (B) retain or not dispose of assets for a period of time that has not since expired, (C) make or refrain from making Tax elections, and/or (D) only dispose of assets in a particular manner.

(i) There are no material Tax Liens upon any property or assets of Newco, Newco OP or any Vornado Included Entity except Liens for Taxes not yet due and payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP.

(j) None of Newco, Newco OP or any Vornado Included Entity (A) has been a member of an affiliated group filing a consolidated U.S. federal income Tax Return or (B) has any liability for material amounts of Taxes of any Person (other than Vornado, Newco, Newco OP or any Vornado Included Entity) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor.

(k) None of Newco, Newco OP or any Vornado Included Entity has participated in any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2).

(l) Other than in connection with the distribution by Vornado of its Equity Interests in Urban Edge Properties to its stockholders on January 15, 2015 and the Pre- Combination Transactions, none of Vornado, Newco, Newco OP or any of the Vornado Included Entities has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the two (2) years prior to the date of this Agreement.

(m) None of Newco, Newco OP or any of the Vornado Included Entities (other than Taxable REIT Subsidiaries and other than, in the case of any Vornado REITs, during any taxable year before its First Applicable Year) currently has or, as of December 31 of any taxable year through and including the taxable year ended December 31 immediately prior to the Closing Date, has had any earnings and profits attributable to such entity or any other corporation in any non-REIT year within the meaning of Section 857(a) of the Code.

Section 3.11. Material Contracts .

(a) Except for contracts listed in Section 3.11(a) of the Vornado Disclosure Letter or publicly filed by Vornado or Newco with the SEC, as of the date of this Agreement, none of Newco, Newco OP or any Vornado Included Entity is a party to or bound by or subject to any contract that, as of the date hereof:

(i) obligates Newco, Newco OP or such Vornado Included Entity to make non-contingent aggregate annual expenditures (other than principal and/or interest payments or the deposit of other reserves with respect to debt obligations) in excess of $500,000 and is not cancelable within ninety (90) days without material penalty to such Vornado Included Entity, except for any lease under which such Vornado Included Entity is lessee or any ground lease affecting any Vornado Included Property or relates to tenant improvement expenses under a Vornado Lease;

(ii) contains any non-compete or exclusivity provisions with respect to any line of business or geographic area that restricts the business of Newco, Newco OP or such Vornado Included Entity in any material respect, or would otherwise limit the freedom of such Persons with respect to, or restrict the lines of business conducted by Newco, Newco OP or such Vornado Included Entity or the geographic area in which

Newco, Newco OP or such Vornado Included Entity may conduct business in any material respect, excluding any such contract that is a Vornado Lease;

(iii) is an agreement which obligates Newco, Newco OP or such Vornado Included Entity to indemnify any past or present directors, officers, trustees, employees and agents of Vornado, Newco, Newco OP or such Vornado Included Entity pursuant to which Newco, Newco OP or such Vornado Included Entity is the indemnitor, in each case, other than pursuant to any Governing Documents, operating agreements, property management agreements, advisory agreements or any similar agreement;

(iv) obligates Newco, Newco OP or such Vornado Included Entity to any material continuing contractual obligation (i) for indemnification under any agreements relating to the sale of real property, or any other business or material assets, previously owned, whether directly or indirectly, by Newco, Newco OP or such Vornado Included Entity that are reasonably likely to involve a Liability of $1,000,000 or more or (ii) to make payments, contingent or otherwise, on account of prior acquisitions or sales of any Vornado Included Property;

(v) constitutes an Indebtedness obligation of Newco, Newco OP or such Vornado Included Entity with a principal amount outstanding as of the date hereof greater than $500,000, other than any such Indebtedness for which all parties are Vornado Included Entities;

(vi) requires Newco, Newco OP or such Vornado Included Entity to dispose of or acquire assets or properties (other than in connection with the expiration of a Vornado Lease or a ground lease affecting a Vornado Included Property) with a fair market value in excess of $1,000,000, or involves any pending or contemplated merger, consolidation or similar business combination transaction, except for any Vornado Lease or any ground lease affecting any Vornado Included Property;

(vii) constitutes an interest rate cap, interest rate collar, interest rate swap or other contract or agreement relating to a hedging transaction that relates to any of Newco, Newco OP or a Vornado Included Entity or to Indebtedness secured by any Vornado Included Asset;

(viii) is an agreement, arrangement or understanding between Newco, Newco OP or such Vornado Included Entity, on the one hand, and any other Vornado Party, any Affiliate of Vornado, Newco, Newco OP, any other Vornado Included Entity, or any Vornado Party’s respective current directors, officers, trustees, partners, members or other Affiliates, on the other hand, other than any such agreement (A) where all parties are Vornado Included Entities, (B) which will be terminated on or before the Closing or (C) which will otherwise not be binding on Newco, Newco OP or a Vornado Included Entity following Closing;

(ix) sets forth the operational terms of a joint venture, partnership, limited liability company or strategic alliance of Newco, Newco OP or such Vornado Included Entity with any party other than a Vornado Included Entity;

(x) constitutes a loan to any Person (other than a wholly owned Vornado Included Entity) by Newco, Newco OP or such Vornado Included Entity (other than advances made pursuant to the Vornado Leases or any disbursement agreement, development agreement, or development addendum entered into in connection with a Vornado Lease with respect to the development, construction, or equipping of Vornado Included Properties or the funding of improvements to Vornado Included Properties) in an amount in excess of $500,000;

(xi) is an agreement obligating Newco, Newco OP or such Vornado Included Entity to provide any funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person in excess of $500,000;

(xii) is an agreement entered into by Newco, Newco OP or such Vornado Included Entity with or for the benefit of any Governmental Entity requiring payment in excess of $500,000 in any calendar year remaining in its term or requires total remaining payment in excess of $500,000, other than any such agreement that is a Vornado Lease or Vornado Ground Lease;

(xiii) is a gross maximum price contract or an agreement for any construction or development work (including any additions or expansions) which are currently in effect and under which Newco, Newco OP or such Vornado Included Entity currently has an obligation in excess of $5,000,000;

(xiv) is a management agreement (i.e., contracts providing for or otherwise governing the management and/or operation of any Vornado Included Entities or Vornado Included Properties), including, without limitation, leasing, asset management, construction management and property management agreements pursuant to which Newco, Newco OP or such Vornado Included Entity are obligated to pay to another party an amount in excess of $1,000,000, other than any such agreement where all parties are Vornado Included Entities;

(xv) is a leasing, development management or property management agreement pursuant to which Newco, Newco OP or any Vornado Included Entity perform such services for a third-party, other than any Vornado Lease or any such agreement where all parties are Vornado Included Entities; or

(xvi) is an agreement that obligates payments to any Person contingent on the future operating results or other similar future events having a material economic effect relating to the Vornado Included Assets or arising out of prior results, leases, acquisitions or sales in respect of the Vornado Included Assets pursuant to which Newco,

Newco OP or such Vornado Included Entity could become an obligor pursuant to the Transactions.

Each contract of the type described above in this Section 3.11(a) , whether or not listed on Section 3.11(a) of the Vornado Disclosure Letter, to which Newco, Newco OP or any Vornado Included Entity is a party or by which it is bound as of the date hereof is referred to herein as a “ Vornado Material Contract ”. True and complete copies of each Vornado Material Contract listed on Section 3.11(a) of the Vornado Disclosure Letter have been provided or made available to the JBG Parties.

(b) Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Vornado Material Adverse Effect, each Vornado Material Contract is legal, valid, binding and enforceable on Newco, Newco OP or each Vornado Included Entity that is a party thereto and, to the knowledge of Vornado, each other party thereto, and is in full force and effect, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law). Except as, individually or in the aggregate, have not had and would not reasonably be expected to have a Vornado Material Adverse Effect, Newco, Newco OP and each Vornado Included Entity has performed all obligations required to be performed by it prior to the date hereof under each Vornado Material Contract and, to the knowledge of Vornado, each other party thereto has performed all obligations required to be performed by it prior to the date hereof under each Vornado Material Contract. None of Newco, Newco OP or any Vornado Included Entity, nor, to the knowledge of Vornado, any other party thereto, is in material breach or violation of, or default under, any Vornado Material Contract, and no event has occurred that, with notice or lapse of time or both, would constitute a violation or breach of, or default under, any Vornado Material Contract, except where in each case such breach, violation or default is not reasonably likely to have, individually or in the aggregate, reasonably be expected to have a Vornado Material Adverse Effect. None of Newco, Newco OP or any Vornado Included Entity has given or received notice of any violation or default under any Vornado Material Contract, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to have a Vornado Material Adverse Effect.

Section 3.12. Environmental Matters . Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Vornado Material Adverse Effect, or as set forth in Section 3.12 of the Vornado Disclosure Letter: (a) Newco, Newco OP and each Vornado Included Entity is in compliance with all Environmental Laws; (b) none of Vornado, Vornado OP, Newco, Newco OP or any Vornado Included Entity has received any written notice, demand, letter or claim alleging that Vornado, Newco, Newco OP or any such Vornado Included Entity is in violation of, or liable under, any Environmental Law or with respect to Hazardous Substances or that any judicial, administrative or compliance order has been issued against Newco, Newco OP or any Vornado Included Entity, in each case, which remains unresolved and which relates to any of the Vornado Included Assets; and (c) none of Newco, Newco OP or any Vornado Included Entity has entered into or agreed to any consent decree or order or is subject to any judgment, decree or judicial, administrative or compliance order

relating to compliance with Environmental Laws, Environmental Permits or the investigation, claim, sampling, monitoring, treatment, remediation, removal or cleanup of Hazardous Substances and no investigation, litigation or other proceeding is pending or, to the knowledge of Vornado, threatened against Newco, Newco OP or any Vornado Included Entity under any Environmental Law, in each case, that relates to the Vornado Included Assets. This Section 3.12 contains the exclusive representations and warranties of Vornado with respect to environmental matters.

Section 3.13. Compliance with Laws; Permits .

(a) As of the date hereof, (i) Newco, Newco OP and each Vornado Included Entity has complied and is in compliance with all Laws applicable to Newco, Newco OP or such Vornado Included Entity or by which their Vornado Included Assets and Vornado Included Properties are bound and (ii) no notice, charge or assertion has been received by or, to the knowledge of Vornado, threatened against, Newco, Newco OP or any Vornado Included Entity alleging any non-compliance with any such Laws, except in each case above for such non- compliance that has not had and would not reasonably be expected to have a Vornado Material Adverse Effect. Notwithstanding anything to the contrary in this Section 3.13(a) , the provisions of this Section 3.13(a) shall not apply to matters covered by Section 3.12 (Environmental Matters).

(b) Newco, Newco OP and each Vornado Included Entity is in possession of all authorizations, licenses, permits, certificates, approvals variances, exemptions, orders, franchises, certifications and clearances of any Governmental Entity necessary for Newco, Newco OP or such Vornado Included Entity to own, lease and operate its properties or to carry on its respective business as currently conducted (the “ Vornado Permits ”), and all such Vornado Permits are valid, and in full force and effect, individually or in the aggregate, except where the failure to possess and maintain such Vornado Permits in full force and effect, individually or in the aggregate, has not had and would not reasonably be expected to have a Vornado Material Adverse Effect. All applications required to have been filed for the renewal of the Vornado Permits have been filed on a timely basis with the appropriate Governmental Entity, and all other filings required to have been made with respect to such Vornado Permits have been duly made on a timely basis with the appropriate Governmental Entity, except in each case, where such failure to do so, individually or in the aggregate, has not had and would not reasonably be expected to have a Vornado Material Adverse Effect. None of Newco, Newco OP or any Vornado Included Entity has received any claim or notice, nor has any knowledge indicating, that Newco, Newco OP or such Vornado Included Entity currently is not in compliance with the terms of any Vornado Permit, except where the failure to be in compliance with the terms of any such Vornado Permit, individually or in the aggregate, would not have had and would not reasonably be expected to have a Vornado Material Adverse Effect.

(c) None of Newco, Newco OP or any Vornado Included Entity is an “investment company” within the meaning of the Investment Company Act.

Section 3.14. Intellectual Property . Except as set forth on Section 3.14 of the Vornado Disclosure Letter or, as individually or in the aggregate, has not had and would not reasonably be expected to have a Vornado Material Adverse Effect, (a) Newco, Newco OP and the Vornado Included Entities own or are licensed or otherwise possess valid rights to use all Intellectual Property used in the conduct of their business as it is currently conducted, (b) the conduct of the business of Newco, Newco OP and the Vornado Included Entities as it is currently conducted does not infringe, misappropriate or otherwise violate and, to the knowledge of Vornado, is not alleged to infringe, misappropriate or otherwise violate, the Intellectual Property rights of any third party, (c) there are no pending or, to the knowledge of Vornado, threatened claims with respect to any of the Intellectual Property rights owned by Newco, Newco OP or any Vornado Included Entity, and (d) to the knowledge of Vornado, no third party is currently infringing or misappropriating Intellectual Property rights of Newco, Newco OP or any Vornado Included Entity. This Section 3.14 contains the exclusive representations and warranties of Vornado with respect to Intellectual Property matters.

Section 3.15. Properties .

(a) Section 3.15(a) of the Vornado Disclosure Letter sets forth a list of (i) each Vornado Included Property, and (ii) whether the applicable Vornado Included Entity directly or indirectly owns such Vornado Included Property in fee simple or directly or indirectly holds such Vornado Included Property pursuant to a leasehold, ground leasehold or some other property interest. Except as expressly set forth in Section 3.15(a) of the Vornado Disclosure Letter, as of the date hereof there are no real properties that Newco, Newco OP or any Vornado Included Entity is obligated to buy, lease or sublease at some future date, or otherwise enter into any contract for sale, ground lease or letter of intent to sell or ground lease any such Vornado Included Property or any portion thereof (in each case, excluding any Vornado Leases and the Vornado Ground Leases), and no commissions, fees or other amounts are payable (or are to become payable) in connection with the acquisition or disposition of any Vornado Included Property.

(b) The applicable Vornado Included Entity owns good and marketable fee simple title or leasehold title (as applicable) to each of the Vornado Included Properties, in each case, free and clear of Liens, except for Vornado Permitted Liens. Except as set forth on Section 3.15(b) of the Vornado Disclosure Letter, the Vornado Included Entities have not granted, and to the knowledge of Vornado, none of the Vornado Included Properties is subject to, unexpired option to purchase agreements, rights of first refusal or first offer or any other rights to purchase or otherwise acquire any Vornado Included Property or any portion thereof.

(c) To the knowledge of the Vornado Parties, except as may be disclosed in the third party physical condition reports with respect to the Vornado Included Properties which have been delivered or otherwise made available to the JBG Parties (it being understood and agreed that a reference in a physical condition report to a document not otherwise delivered or made available to the JBG Parties shall not be deemed to constitute disclosure of the contents of such document), as of the date hereof, with respect to each Vornado Included Property, (i) such Vornado Included Property is supplied with utilities and other services as necessary to permit its

continued operation as it is now being operated, (ii) such Vornado Included Property is in good working order sufficient for its normal operation in the manner currently being conducted, (iii) such Vornado Included Property has not suffered any casualty or other damage that has not been repaired, and (iv) there are no patent or latent structural, mechanical or other significant defects or deficiencies in the improvements on any Vornado Included Property, in each case, except as has not had and would not reasonably be expected to have a Vornado Material Adverse Effect; provided , however , that this Section 3.15(c) shall not apply to any Vornado Included Property that is an Under Construction and Predevelopment Property or is otherwise raw land, under development or not otherwise in active operation.

(d) No Vornado Included Entity has received (i) written notice that any certificate, permit or license from any Governmental Entity having jurisdiction over any of the Vornado Included Properties necessary to permit the lawful use and operation of the buildings and improvements on any of the Vornado Included Properties as currently used and operated or that is necessary to permit the lawful use and operation of all utilities and means of egress and ingress to and from any of the Vornado Included Properties for the current use and operation of the Vornado Included Properties is not in full force and effect as of the date of this Agreement, except for such failures to be in full force and effect that, individually or in the aggregate, has not had and would not reasonably be expected to have a Vornado Material Adverse Effect, or of any pending written threat of modification or cancellation of any of same, that would reasonably be expected to have a Vornado Material Adverse Effect, or (ii) written notice of any uncured violation of any Laws affecting any of the Vornado Included Properties which, individually or in the aggregate, has had or would reasonably be expected to have a Vornado Material Adverse Effect.

(e) Except as set forth in Section 3.15(e) of the Vornado Disclosure Letter, no condemnation, eminent domain or similar proceeding has occurred or to the knowledge of the Vornado Included Entities is pending with respect to any Vornado Included Property and, except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Vornado Material Adverse Effect, no Vornado Included Entity has received any written notice to the effect that (i) any condemnation or rezoning proceedings are threatened with respect to any of the Vornado Included Properties, or (ii) any zoning regulation or ordinance (including with respect to parking), Board of Fire Underwriters rules, building, fire, health or other Law has been violated (and remains in violation) for any Vornado Included Property.

(f) Section 3.15(f) of the Vornado Disclosure Letter sets forth all ground leases affecting the interest of the Vornado Included Entities in any Vornado Included Property, other than ground leases as to which a Vornado Included Entity is both lessor and lessee, and all amendments, modifications (including pursuant to any estoppel), guarantees, renewals and extensions exercised related thereto (collectively, the “ Vornado Ground Leases ”). Vornado hereby represents that (a) Section 3.15(f) of the Vornado Disclosure Letter contains a true, complete and correct list of all Vornado Ground Leases to which any Vornado Included Entity is bound; (b) true, complete and correct copies of such Vornado Ground Leases have been delivered or made available to the JBG Parties; and (c) each such Vornado Ground Lease is valid, binding and enforceable in accordance with its terms and is in full force and effect with

respect to the applicable Vornado Included Entity and, to the knowledge of Vornado, with respect to the other parties thereto, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law). As of the date hereof, there are no monetary or non-monetary material defaults under any Vornado Ground Lease to which any Vornado Included Entity is bound, by any Vornado Included Entity or any other party thereto. As of the date hereof, no Vornado Included Entity has sent or received any notice of any violation or breach of, or default under, any Vornado Ground Lease to which any Vornado Included Entity is bound.

(g) Except for discrepancies, errors or omissions that, individually or in the aggregate, would not reasonably be expected to have a Vornado Material Adverse Effect, the rent rolls for each of the Vornado Included Properties as of September 1, 2016 (with respect to office and retail properties) or as of September 29, 2016 (with respect to residential properties) that have been previously made available to the JBG Parties by the Vornado Included Entities, are true and correct and (i) correctly reference each tenant under each lease that was in effect as of as the respective dates of such rent rolls, and to which a Vornado Included Entity is a party as lessor with respect to each of the Vornado Included Properties (all leases, together with all amendments, modifications, supplements, renewals and extensions related thereto, the “ Vornado Leases ”) and (ii) identify the rent payable under the Vornado Lease as of such date. Except for discrepancies, errors or omissions that, individually or in the aggregate, would not reasonably be expected to have a Vornado Material Adverse Effect, the Vornado Included Entities have made available to the JBG Parties a list of all security deposit amounts currently held under the Vornado Leases as of September 30, 2016.

(h) True and complete (in all material respects) copies of all (x) Vornado Ground Leases and (y) Vornado Leases for space in excess of 25,000 square feet in or at any Vornado Included Properties (the “ Material Vornado Leases ”) (it being understood that a Vornado Lease shall constitute a Material Vornado Lease if there are other Vornado Leases with the same tenant at the same Vornado Included Property that, if aggregated with such Vornado Lease, would exceed 25,000 square feet), in each case in effect as of the date hereof and to the extent within Vornado’s possession and control, have been made available to the JBG Parties. Except as would not, individually or in the aggregate, reasonably be expected to have a Vornado Material Adverse Effect, (i) no Vornado Included Entity has given or received written notice of any violation or breach of, or default under, any Material Vornado Lease, which violation or breach remains outstanding and uncured, (ii) except as set forth on Section 3.15(h) of the Vornado Disclosure Letter, no tenant under a Material Vornado Lease is in monetary or non- monetary material default under such Material Vornado Lease, which default remains outstanding and uncured, and (iii) each Material Vornado Lease is valid, binding and enforceable in accordance with its terms and is in full force and effect with respect to a Vornado Included Entity and, to the knowledge of Vornado, with respect to the other parties thereto, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law). Except as set forth on Section 3.15(h) of the Vornado Disclosure Letter, any and all material leasing commissions or brokerage

fees payable by Vornado Included Entities with respect to any Material Vornado Leases have been paid in full. To the knowledge of Vornado, except as set forth on Section 3.15(h) of the Vornado Disclosure Letter, all material tenant improvement allowances, relocation allowances or other inducements due with respect to the current unexpired term of each Material Vornado Lease have been paid in full. As of June 30, 2016, except as set forth on Section 3.15(h) of the Vornado Disclosure Letter, there are no other material Leasing Costs to be paid in the future with respect to any Material Vornado Leases.

(i) Except as set forth on Section 3.15(i) of the Vornado Disclosure Letter, there are no material Tax abatements or exemptions specifically affecting the Vornado Included Properties, and the Vornado Included Entities have not received any written notice of (and the Vornado Included Entities do not have any knowledge of) any proposed increase in the assessed valuation of any of the Vornado Included Properties, except in each case for any such Taxes or assessment that have not had and would not reasonably be expected to have, individually or in the aggregate, a Vornado Material Adverse Effect.

(j) Except for Vornado Permitted Liens, as set forth in Vornado Leases and title documents made available to the JBG Parties prior to the date hereof or as would not reasonably be expected to have, individually or in the aggregate, a Vornado Material Adverse Effect and except as set forth on Section 3.15(j) of the Vornado Disclosure Letter, no Vornado Included Entity is a party to any (i) unexpired option to purchase agreements, rights of first refusal or first offer or any other rights to purchase or otherwise acquire any Vornado Included Property or any portion thereof that would materially adversely affect any Vornado Included Entity’s, ownership, ground lease or right to use a Vornado Included Property subject to a Material Vornado Lease, and (ii) other outstanding rights or agreements to enter into any contract for sale, ground lease or letter of intent to sell or ground lease any Vornado Included Property or any portion thereof that is owned by any Vornado Included Entity, which, in each case, is in favor of any party other than a Vornado Included Entity.

(k) No written unresolved claim has been made against any title insurance policy evidencing title insurance with respect to a Vornado Included Property which, individually or in the aggregate, would be material to such Vornado Included Property.

(l) Schedule B accurately states the outstanding principal amount of the Indebtedness secured by each Vornado Included Property as of the applicable Valuation Date.

(m) Newco and Newco OP do not directly own any real or personal property.

Section 3.16. Intentionally Omitted .

Section 3.17. Personal Property . The Vornado Included Entities have good and valid title to, or a valid and enforceable leasehold interest in, or other right to use, all personal property owned, used or held for use by them which constitutes part of the “Vornado Included Assets” (other than property owned by tenants and used or held in connection with the applicable tenancy), except as, individually or in the aggregate, has not had and would not reasonably be

expected to have a Vornado Material Adverse Effect. The Vornado Included Entities’ ownership of or leasehold interest in any such personal property is not subject to any Liens, except for Vornado Permitted Liens and Liens that have not had and would not reasonably be expected to have a Vornado Material Adverse Effect.

Section 3.18. Approval Required . No approval of the Vornado stockholders, Newco stockholders or any other vote of holders of securities in Vornado or Newco or holders of limited partnership units in Vornado OP or Newco OP is required to approve this Agreement, the transactions contemplated hereby and the Transactions.

Section 3.19. Insurance . Except for those matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a Vornado Material Adverse Effect, there is no claim for coverage by Newco, Newco OP or any Vornado Included Entity pending under any of the material insurance policies (including title insurance policies) and all material fidelity bonds or other insurance service contracts in Vornado’s possession providing coverage for all material Vornado Included Properties (the “ Vornado Insurance Policies ”) that has been denied or disputed by the insurer. Except for those matters that have not had and would not reasonably be expected to have a Vornado Material Adverse Effect, all premiums due and payable under all Vornado Insurance Policies have been paid, and Newco, Newco OP and the Vornado Included Entities have otherwise complied in all material respects with the terms and conditions of all the Vornado Insurance Policies. To the knowledge of Vornado, such Vornado Insurance Policies are valid and enforceable in accordance with their terms and are in full force and effect and no written notice of cancellation or termination has been received by Vornado, Newco, Newco OP or any Vornado Included Entity with respect to any such policy which has not been replaced on substantially similar terms prior to the date of such cancellation.

Section 3.20. Intentionally Omitted .

Section 3.21. Information in SEC Filings . None of the information supplied or to be supplied by or on behalf of Vornado, Vornado OP, Newco, Newco OP or any Vornado Included Entity for inclusion or incorporation by reference in any registration statement on Form 10, or such other form as required by the SEC, to be filed with the SEC by Newco or Vornado OP (any such registration statement, a “ Form 10 ”) will at the time such Form 10 is filed and declared effective under the Exchange Act contain any untrue statement of any material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. None of the information supplied or to be supplied by or on behalf of Vornado, Newco, Newco OP or any Vornado Included Entity for inclusion in any of the filings made or to be made by the Vornado Parties, Newco, Newco OP or their Affiliates with the SEC or with any stock exchange of or other regulatory authority will, at the time filed with the SEC, any stock exchange or other regulatory authority, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. All documents that Vornado is responsible for filing with the SEC in connection with the Transactions, including any Form 10,

to the extent relating to Newco, Newco OP or any Vornado Included Entity or other information supplied by or on behalf of Newco, Newco OP or any Vornado Included Entity for inclusion therein, will comply as to form, in all material respects, with the provisions of the Securities Act or Exchange Act, as applicable, and the rules and regulations of the SEC thereunder and each such document required to be filed with any Governmental Entity (other than the SEC) will comply in all material respects with the provisions of any applicable Law as to the information required to be contained therein. The representations and warranties contained in this Section 3.21 will not apply to statements or omissions included any of the filings to be made by the Vornado Parties, Newco, Newco OP or their Affiliates with the SEC or with any stock exchange of or other regulatory authority to the extent based upon information supplied in writing to Vornado by or on behalf of the JBG Parties for use therein.

Section 3.22. Bankruptcy . None of Newco, Newco OP or any Vornado Included Entity has (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by its creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of its assets, which remains pending as of such time, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of its assets, which remains pending as of such time, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally.

Section 3.23. Employee Benefit Plans .

(a) The Vornado Included Entities do not sponsor, maintain or contribute to any Plans. Except as set forth on Section 3.23(a) of the Vornado Disclosure Letter, no Vornado Service Provider is party to an individual employment Contract with any of the Vornado Parties.

(b) Each Vornado Benefit Plan (other than a Multiemployer Plan) that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service or is the subject of a favorable opinion letter from the Internal Revenue Service on the form of such Vornado Benefit Plan, a copy of such letter has been made available to the JBG Parties, and, to the Vornado Parties’ knowledge, there are no facts or circumstances that would be reasonably likely to adversely affect the qualified status of any such Vornado Benefit Plan.

(c) Section 3.23(c) of the Vornado Disclosure Letter sets forth, as of the date of this Agreement, each (i) Multiemployer Plan, or (ii) single employer plan or other pension plan that is subject to Title IV or Section 302 of ERISA or Section 412 of the Code, in each case, that any Vornado Party or any of their respective Subsidiaries or ERISA Affiliates, sponsors, maintains or contributes to, or has within the last six (6) years prior to the date hereof sponsored, maintained or contributed to. For any Vornado Benefit Plan subject to the minimum funding requirements of Section 412 of the Code or Title IV of ERISA (other than a Multiemployer Plan), (i) no such plan has failed to satisfy the minimum funding standards of Section 302 of ERISA or Sections 412 or 418(B) of the Code, respectively, (ii) no unsatisfied liability (other than for premiums to the Pension Benefit Guaranty Corporation (the “ PBGC ”)) under Title IV of

ERISA has been, or is expected to be, incurred by a Vornado Party or any of its Subsidiaries or ERISA Affiliates, (iii) the PBGC has not instituted proceedings to terminate any such Vornado Benefit Plan and (iv) no “reportable event” within the meaning of Section 4043 of ERISA (excluding any such event for which the thirty (30) day notice requirement has been waived under the regulations to Section 4043 of ERISA) has occurred for which there remains any outstanding liability, nor has any event described in Sections 4062, 4063 or 4041 of ERISA occurred. Except as set forth on Section 3.23(c) of the Vornado Disclosure Letter, neither such Vornado Party nor any of its Subsidiaries or ERISA Affiliates have incurred or would be likely to incur (whether as a result of the Transactions or otherwise) any liability (including any indirect, contingent or secondary liability) to or on account of a Multiemployer Plan pursuant to Sections 515, 4201, 4204 or 4212 of ERISA; and Vornado Parties and each of their respective Subsidiaries and ERISA Affiliates have made all required contributions and are not delinquent in any contributions to any Multiemployer Plan.

(d) No assets of the Vornado Parties or any of their ERISA Affiliates constitute “plan assets” for purposes of Title I of ERISA or Section 4975 of the Code or any applicable similar Law.

(e) Except as described on Section 3.23(e) of the Vornado Disclosure Letter, neither the execution and delivery of this Agreement, nor the consummation of the Transactions, either alone or in combination with another event (whether contingent or otherwise) will (i) entitle any current or former Vornado Service Provider to any payment; (ii) increase the amount of compensation or benefits due to any such Vornado Service Provider; (iii) accelerate the vesting, funding or time of payment of any compensation, equity award or other benefit to any Vornado Service Provider; or (iv) result in the payment of any amount to any Vornado Service Provider that could, individually or in combination with any other such payment, constitute an “excess parachute payment” as defined in Section 280G(b)(1) of the Code.

Section 3.24. Brokers; Expenses . No broker, investment banker, financial advisor or other Person (other than Goldman, Sachs & Co. and Morgan Stanley Incorporated), is entitled to receive any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with this Agreement or the Transactions based upon arrangements made by or on behalf of the Vornado Parties, Newco, Newco OP or any Vornado Included Entity. Other than the arrangements described in the engagement letters with Goldman, Sachs & Co. and Morgan Stanley Incorporated, Section 3.24 of the Vornado Disclosure Letter sets forth the outside legal, accounting and financial advisors retained as of the date hereof by any Vornado Party, Newco, Newco OP or any Vornado Included Entity (on its own behalf or on behalf of any other Person) in connection with the Transactions with which such Vornado Party has any contingent payment arrangements requiring payments to be made after December 31, 2015 in connection with the Transactions that are contingent upon the execution of this Agreement or the Transactions or, in the case of advisors customarily compensated on the basis of hourly time charges, are not based on actual time charges and expense reimbursement and describes such arrangements. Since December 31, 2015, none of the Vornado Parties, Newco, Newco OP or any Vornado Included Entities or their respective Affiliates has made any material payments in excess of the amounts contemplated by this Section 3.24 to any such advisors.

Section 3.25. Labor and Other Employment Matters .

(a) Section 3.25(a) of the Vornado Disclosure Letter sets forth, as of the date of this Agreement, each collective bargaining or similar agreement by which a Vornado Party or any Affiliate thereof is, or has, within the past six (6) years been bound with respect to any Vornado Service Providers. As of the date hereof, there is no, and since January 1, 2014, there has not been any, labor strike, work stoppage, picketing, lockout, walkout or other organized work interruption pending, or to the knowledge of the Vornado Parties threatened in writing or anticipated against any Vornado Included Entity or any Affiliate thereof relating to any Vornado Service Providers. Except as specified in Section 3.25(a) of the Vornado Disclosure Letter, there are no labor unions or other organizations certified or recognized to represent any Vornado Service Providers and as of the date hereof, to the Vornado Parties’ knowledge, no union organization campaign is in progress with respect to, any Vornado Service Providers at any of the Vornado Included Assets. As of the date hereof, there are no unfair labor practice charges pending before the National Labor Relations Board or any other Governmental Entity, any grievances, complaints, claims or judicial or administrative proceedings, in each case, which are pending, or to the Vornado Parties’ knowledge threatened in writing or, anticipated by or on behalf of any current or former Vornado Service Providers at any of the Vornado Included Assets.

(b) No Vornado Service Provider has been improperly excluded from participation in any Vornado Benefit Plan. Each Vornado Service Provider has been properly classified under the Fair Labor Standards Act with respect to any classification of any person as an independent contractor rather than as an employee, with respect to any classification of any employee as exempt versus non-exempt, and with respect to any employee leased from another employer, and neither the Vornado Parties nor any of their Subsidiaries has any written notice or knowledge of any pending or threatened material claim by any Vornado Service Provider that he/she is or was misclassified for any purpose.

(c) The Vornado Parties and their Subsidiaries are in compliance in all material respects with all applicable Laws, statutes, rules and regulations respecting employment and employment practices, terms and conditions of employment of current and former Vornado Service Providers, wages and hours, discrimination in employment, wrongful discharge, collective bargaining, the Worker Adjustment Retraining and Notification Act of 1988, as amended or similar state or local Law, statute, rule or regulation (the “ WARN Act ”), fair labor standards, occupational health and safety, and any other labor and employment-related matters, in each case, with respect to all Vornado Service Providers.

(d) During the three (3) years prior to the date of this Agreement, no Vornado Party nor any of their respective Subsidiaries have engaged in or effectuated any “plant closing” or employee “mass layoff” (in each case, as defined in the WARN Act), or any similar state or local Law, statute, rule or regulation affecting any current or former Vornado Service Providers.

Section 3.26. OFAC . None of Newco, Newco OP or any of the Vornado Included Entities constitute a Person with whom a U.S. Person is prohibited from transacting business of

the type contemplated by this Agreement, whether such prohibition arises under United States Laws and lists published by Office of Foreign Assets Control, Department of the Treasury (“ OFAC ”) (including those executive orders and lists published by OFAC with respect to Persons that have been designated by executive order or by the sanction regulations of OFAC as Persons with whom U.S. Persons may not transact business or must limit their interactions to types approved by OFAC) or otherwise.

Section 3.27. Patriot Act . None of the Vornado Parties, Newco, Newco OP or the Vornado Included Entities nor, to the knowledge of Vornado, any Person that owns more than twenty-five percent (25%) of the direct or indirect ownership interests in any Vornado Party (a) is under investigation by any Governmental Entity for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist related activities, any crimes which in the United States would be predicate crimes to money laundering, or any violation of any Anti-Money Laundering Laws; (b) has been assessed civil or criminal penalties under any Anti-Money Laundering Laws; or (c) has had any of its funds seized or forfeited in any action under any Anti- Money Laundering Laws. For purposes of this Agreement, “ Anti-Money Laundering Laws ” means all Laws, regulations and sanctions, state and federal, criminal and civil, that (i) limit the use of and/or seek the forfeiture of proceeds from illegal transactions; (ii) limit commercial transactions with designated countries or individuals believed to be terrorists, narcotics dealers or otherwise engaged in activities contrary to the interests of the United States; (iii) require identification and documentation of the parties with whom a financial institution conducts business; or (iv) are designed to disrupt the flow of funds to terrorist organizations. Such laws, regulations and sanctions shall be deemed to include the USA PATRIOT Act of 2001, Pub. L. No. 107-56, the Bank Secrecy Act, 31 U.S.C. Section 5311 et seq., the Trading with the Enemy Act, 50 U.S.C. App. Section 1 et seq., the International Emergency Economic Powers Act, 50 U.S.C. Section 1701 et seq., and the sanction regulations promulgated pursuant thereto by the OFAC, as well as laws relating to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957.

Section 3.28. Anti-Corruption . The Vornado Parties, Newco, Newco OP and the Vornado Included Entities have complied, are in compliance with, and will continue to comply with applicable anti-bribery/anti-corruption laws, including the US Foreign Corrupt Practices Act. None of the Vornado Parties, Newco, Newco OP or any Vornado Included Entity nor, to the knowledge of Vornado, any of their respective principals, owners, officers, directors, trustees, or agents, in each case, acting at the direction or on behalf of a Vornado Party, its Subsidiaries or any of their respective Affiliates, has engaged, promised to engage, will promise to engage, or will cause to be engaged, in any transaction or activity involving a direct or indirect improper inducement to any Person (including but not limited to a government official) to obtain or keep business or to secure some other advantage, in violation of applicable anti-bribery/anti- corruption laws.

Section 3.29. Capital Commitments for Vornado Included Investments . Section 3.29 of the Vornado Disclosure Letter sets forth, for each Vornado Included Investment, the amount of capital commitments that the Vornado Parties or the Vornado Included Entities have made to each Vornado Included Investment through the date hereof and any outstanding capital

commitments of the Vornado Parties or the Vornado Included Entities with respect to each Vornado Included Investment.

Section 3.30. No Other Representations or Warranties . Except for the representations and warranties expressly set forth in this Article III or in any Ancillary Document, no Vornado Party nor any other Person makes any express or implied representation or warranty with respect to the Vornado Parties, the Vornado Included Entities, Newco, Newco OP or the Vornado Included Assets, or with respect to any other information provided to the JBG Parties in connection with (i) the Transactions or (ii) the businesses, affairs, operations, assets, Liabilities, condition (financial or otherwise) or prospects or any other matter relating to the Vornado Parties, Newco, Newco OP, the Vornado Included Entities and the Vornado Included Assets, including with respect to any documentation, forecasts, budgets, projections, estimates or other information (including the accuracy or completeness of, or the reasonableness of the assumptions underlying, such documentation, forecasts, budgets, projections, estimates or other information) provided by the Vornado Parties or any other Person to the JBG Parties. For clarity, none of the representations and warranties set forth in this Article III pertains to or purports to disclose any information with respect to any Vornado Excluded Asset (other than with respect to Liabilities that apply to or could reasonably be expected to adversely impact Newco, Newco OP or any Vornado Included Entity after the Closing), even if such Vornado Excluded Asset is owned by a Vornado Included Entity prior to the Closing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES
OF THE JBG PARTIES

The following representations and warranties by the JBG Parties set forth in this Article IV are qualified in their entirety by reference to the disclosures set forth in the disclosure letter delivered by the JBG Parties immediately prior to the execution of this Agreement (the “ JBG Disclosure Letter ”). Each disclosure set forth in the JBG Disclosure Letter shall qualify or modify the Section to which it corresponds and any other Section to the extent the applicability of the disclosure to each other Section is reasonably apparent from the text of the disclosure made. Except as set forth in the JBG Disclosure Letter, each JBG Party, severally and not jointly, represents to the Vornado Parties as follows; provided , that with respect to any representation or warranty made by any JBG Fund, such representation or warranty is made jointly and severally by such JBG Fund and JBG Operating Partners:

Section 4.1. Organization .

(a) Such JBG Party is a limited partnership, limited liability company or other legal entity duly organized, validly existing and in good standing under the Laws of the jurisdiction in which it is organized and has the requisite organizational power, as the case may be, and authority and any necessary governmental authorization to own, lease and operate its properties (including its JBG Included Assets) and to conduct its business as it is now being conducted. Such JBG Party and each of its Subsidiaries is duly qualified or licensed to do

business, and is in good standing, in each jurisdiction where the character of the assets owned, operated or leased by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so qualified, licensed or in good standing that, individually or in the aggregate, have not had and would not reasonably be expected to have a JBG Material Adverse Effect. Such JBG Party and each of its Subsidiaries is in compliance in all material respects with the terms of its Governing Documents.

(b) Each Subsidiary of such JBG Party is a limited partnership, limited liability company or other legal entity duly organized, validly existing and in good standing under the Laws of the jurisdiction in which it is organized and has the requisite organizational power, as the case may be, and authority and any necessary governmental authorization to own, lease and operate its properties (including its JBG Included Assets) and to conduct its business as it is now being conducted, except for such failures to be so organized, in good standing or have certain power and authority that, individually or in the aggregate, have not had and would not reasonably be expected to have a JBG Material Adverse Effect. Each Subsidiary of such JBG Party is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the assets owned, operated or leased by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so qualified, licensed or in good standing that, individually or in the aggregate, have not had and would not reasonably be expected to have a JBG Material Adverse Effect. Each Subsidiary of such JBG Party is in compliance in all material respects with the terms of its Governing Documents, except for such noncompliance that, individually or in the aggregate, have not had and would not reasonably be expected to have a JBG Material Adverse Effect.

(c) Section 4.1(c) of the JBG Disclosure Letter sets forth a true, correct and complete list of all of the Subsidiaries of such JBG Party, including a list of each Subsidiary of such JBG Party that is a Qualified REIT Subsidiary, a Taxable REIT Subsidiary, a REIT or an “S corporation” within the meaning of Section 1361(a)(1) of the Code (an “ S Corporation ”), together with (i) the jurisdiction of incorporation or organization, as the case may be, of each Subsidiary of such JBG Party and (ii) the classification for U.S. federal income tax purposes of each Subsidiary of such JBG Party. As of the date hereof, Exhibit B-2 sets forth for each JBG Included Property, a true, correct and complete organizational chart identifying each JBG Fund, Subsidiary of a JBG Fund, Joint Venture or Subsidiary of a Joint Venture through which any JBG Party holds a direct or indirect ownership interest in such JBG Included Property. None of the JBG Included Entities other than the JBG REITs has elected or will elect to be treated as a REIT. Other than JBG Properties, none of the JBG Included Entities has elected or will elect to be treated as an S Corporation.

(d) Except as set forth on Section 4.1(d) of the JBG Disclosure Letter, no Person, other than a JBG Managing Member Entity, a JBG Included Entity or a JBG Management Entity, is a managing member or holds any managing member or similar interest in any JBG Included Entity. Section 4.1(d) of the JBG Disclosure Letter sets forth, for each JBG Managing Member Entity, each Person owning Equity Interests therein and the percentage interest of each such Person in such JBG Managing Member Entity.

Section 4.2. Authorization; Validity of Agreement .

(a) Such JBG Party and each of its Subsidiaries has all necessary organizational power and authority to execute and deliver this Agreement, the JBG Contribution Agreement, the JBG Merger Agreements and each Ancillary Document to be executed and delivered by it at the Closing, to perform its obligations hereunder and thereunder and to consummate the Transactions. The execution, delivery and performance by such JBG Party of this Agreement and the execution, delivery and performance by such JBG Party or any of its Subsidiaries of each Ancillary Document to which such JBG Party or any such Subsidiary will be a party, and the consummation by such JBG Party and each of its Subsidiaries of the Transactions, have been duly and validly authorized by the general partner or managing member of such JBG Party or each such Subsidiary (as applicable), and each other member or partner or committee of members or partners or their representatives (as applicable and as necessary), and no other organizational action on the part of such JBG Party or any of its Subsidiaries is necessary to authorize the execution and delivery by such JBG Party or any of its Subsidiaries of this Agreement, any such Ancillary Document and the consummation by it of the Transactions. Each JBG Management Entity has obtained all required consents from its stockholders, board of directors or other governing body with respect to the Transactions to be effected by such JBG Management Entity pursuant to this Agreement, including the applicable merger to be effected by such JBG Management Entity, and true, complete and correct copy of such consents have been delivered to the Vornado Parties. This Agreement has been, and each Ancillary Document to which it is contemplated that such JBG Party or any of its Subsidiaries will be party will be, duly executed and delivered by such JBG Party or its Subsidiaries (as applicable) and, assuming due and valid authorization, execution and delivery hereof and thereof by each of the Vornado Parties party thereto, is or will be a valid and binding obligation of such JBG Party or each such Subsidiary, enforceable against such JBG Party or each such Subsidiary in accordance with its terms, except as the enforcement hereof or thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and (ii) general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law).

(b) Pursuant to a valid power of attorney to be granted by each of its direct and indirect equityholders (as applicable), the JBG Party designated as attorney in fact in such power of attorney will have full power and authority to execute and deliver the Partnership Agreement and any other Ancillary Document so executed and delivered by such JBG Party on each such equityholder’s behalf, and the execution and delivery by such JBG Party of such Ancillary Documents on any such equityholder’s behalf will be binding on such Person as fully as if such Person had executed and delivered such Ancillary Documents.

Section 4.3. No Conflict; Consents . Except as set forth in Section 4.3 of the JBG Disclosure Letter, none of the execution, delivery or performance of this Agreement or any Ancillary Document to which such JBG Party or any of its Subsidiaries is a party, the consummation by such JBG Party and its Subsidiaries of the direct or indirect sale of its JBG Included Assets, the Equity Issuance or any other Transaction or compliance by such JBG Party or any of its Subsidiaries with any of the provisions of this Agreement or any Ancillary

Document will (i) conflict with or result in any breach of any provision of such JBG Party’s or any of its Subsidiaries’ Governing Documents, (ii) require any filing by such JBG Party or any of its Subsidiaries with, or the obtaining of any permit, authorization, consent or approval of, any Governmental Entity (except for (x) compliance with any applicable requirements of the Exchange Act, (y) filings, permits, authorizations, consents, waiting period expirations or terminations, and approvals as may be required under the HSR Act or (z) such filings as may be required in connection with state and local Transfer Taxes), (iii) automatically result in a modification, violation or breach of, or material increase in cost or obligation of such JBG Party or any of its Subsidiaries, or constitute (with or without notice or lapse of time or both) a default (or give rise to any right to others, including, but not limited to, any right of termination, amendment, cancellation or acceleration) under, any of the terms, conditions or provisions of any JBG Ground Lease, JBG Lease or other material contract to which such JBG Party or any of its Subsidiaries is a party or by which any of their JBG Included Assets are bound, (iv) assuming that all consents, approvals, authorizations, and permits described in Section 4.3(ii)(y) have been obtained, and all filings and notifications described in Section 4.3(ii)(y) have been made and any waiting periods thereunder have terminated or expired, violate any order, writ, injunction, decree or Law applicable to such JBG Party or any of its Subsidiaries or any of their respective properties or assets, (v) require any consent or approval of, or notice to, any other Person, under any of the terms, conditions or provisions of (x) any JBG Ground Lease other than any JBG Ground Lease set forth in Section 4.3(v)(x) of the JBG Disclosure Letter (the “ Required JBG Ground Lease Consents ”), (y) any Joint Venture Agreement of a JBG Party or any of its Subsidiaries other than any Joint Venture Agreement set forth on Section 4.3(v)(y) of the JBG Disclosure Letter (the “ Required JBG JV Consents ”), or (z) any Contract constituting an Indebtedness obligation of such JBG Party or any of its Subsidiaries that relates to any of the JBG Included Assets or pursuant to which Newco or any of its Subsidiaries (including, after the Closing, the JBG Included Entities and the JBG Management Entities) could become an obligor pursuant to the Transactions other than any such Contract set forth on Section 4.3(v)(z) of the JBG Disclosure Letter (the “ Required JBG Debt Consents ”), or (vi) require any consent or approval of, or notice to, any other Person, including, without limitation, from limited partners, members or parties to leases or other agreements or commitments, except as to clauses (i), (ii), (iv) and (vi), respectively, for any such conflicts, violations, breaches, defaults or other occurrences which, individually or in the aggregate, would not materially and adversely affect any JBG Included Asset or JBG Management Entity or the consummation of any contribution or merger contemplated herein or in any JBG Contribution Agreement or JBG Merger Agreements.

Section 4.4. Capital Structure; Subsidiaries .

(a) Except as set forth on Section 4.4(a) of the JBG Disclosure Letter, JBG Operating Partners directly or indirectly wholly owns each of its Subsidiaries. Other than through its Equity Interests in JBG Operating Partners, JBG Properties owns no Equity Interests in any Person. As of the date hereof, with respect to each JBG Management Entity and each Subsidiary of each JBG Party, all of the outstanding Equity Interests have been duly authorized and validly issued and (i) in the case of outstanding shares of capital stock of any Subsidiary of such JBG Party that is a corporation, are fully paid and non-assessable and (ii) are free of preemptive or other similar rights under Law, any applicable organization document and any

Contract or instrument to which such JBG Party or any of its Subsidiaries is a party or by which it is bound.

(b) Except as set forth in this Agreement or Section 4.4(b) of the JBG Disclosure Letter, there are no securities, options, warrants, calls, rights, commitments, agreements, rights of first refusal, arrangements or undertakings of any kind to which such JBG Party or any of its Subsidiaries is a party or by which any of them is bound, obligating such JBG Party or any of its Subsidiaries to issue, deliver or sell or create, or cause to be issued, delivered or sold or created, additional Equity Interests, phantom stock or other contractual rights, the value of which is determined in whole or in part by the value of or in reference to any equity security of such JBG Party or any of its Subsidiaries or obligating such JBG Party or any of its Subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, commitment, agreement, right of first refusal, arrangement or undertaking. Except as set forth in Section 4.4(b) of the JBG Disclosure Letter, there are no outstanding contractual obligations of such JBG Party or any of its Subsidiaries to repurchase, redeem or otherwise acquire any partnership units or other Equity Interests. Neither such JBG Party nor any of its Subsidiaries is a party to or bound by any agreements or understandings concerning the voting (including voting trusts and proxies) of any capital stock or other Equity Interests of such JBG Party or any of its Subsidiaries.

(c) Section 4.4(c) of the JBG Disclosure Letter sets forth each JBG Funds’ direct or indirect percentage interests in the JBG Included Properties as of the date hereof and, subject to the exceptions set forth on Section 4.4(c) of the JBG Disclosure Letter and after giving effect to the Restructuring Transactions, such JBG Fund will own not less than such percentage immediately prior to the consummation of the Closing except as adjusted or modified as permitted under this Agreement. The JBG Funds own such percentage interests through the JBG Included Entities. Except as set forth on Section 4.4(c) of the JBG Disclosure Letter, each Subsidiary of JBG Operating Partners is and, immediately prior to the Closing, will be, directly or indirectly wholly owned, beneficially and of record by JBG Operating Partners and neither JBG Operating Partners nor any of its Subsidiaries owns directly or indirectly any other capital stock, limited liability company or partnership interest, joint venture interest or other Equity Interest in any other Person.

(d) With regard to the JBG Included Interests, all of the material capital obligations currently due and payable of any JBG Party and, to the knowledge of the JBG Parties, all of the material capital obligations currently due and payable of any Joint Venture Partner have been fully funded. To the knowledge of the JBG Parties, no Joint Venture Partner has made or advanced any loans that would adversely impact the JBG Parties’ share of distributions from the Joint Venture.

(e) The JBG Parties own, directly or indirectly, beneficially and of record all of the JBG Included Interests. Each of the Persons on Section 4.4(e) of the JBG Disclosure Letter owns, directly or indirectly, beneficially and or record each of the Equity Interests in each of the JBG Management Entities set forth opposite his, her or its name on Section 4.4(e) of the JBG Disclosure Letter. All of the JBG Included Interests, Managing Member Interests and the

Equity Interests in each of JBG Operating Partners and JBG Properties, are duly authorized, validly issued (and with respect to any corporate or trust Equity Interests, fully paid and non-assessable), and free and clear of all Liens, except for JBG Permitted Liens. Immediately prior to the Closing, the Transferred LLCs will own beneficially and of record all of the JBG Included Interests, free and clear of all Liens, except for JBG Permitted Liens. Upon the consummation of the transactions contemplated by the JBG Merger Agreements and JBG Contribution Agreements, the applicable JBG Parties will own beneficially and of record all of the JBG Included Interests (other than any Kickout Interest) free and clear of any Liens, except for JBG Permitted Liens.

(f) Each Equity Interest in each Subsidiary of a JBG Management Entity has been duly authorized, validly issued (and with respect to any corporate or trust Equity Interests, fully paid and non-assessable), and is free and clear of any Liens, except as otherwise set forth in this Agreement.

(g) As of the date hereof and only with respect to JBG Included Interests, (i) no right of first offer, forced sale, buy/sell or similar right under any Joint Venture Agreement has been exercised by any JBG Party or any Subsidiary thereof, on the one hand, or any Joint Venture Partner of a JBG Party or any Subsidiary thereof, on the other hand, or is the exercise of any such right now pending or proposed and (ii) no Joint Venture of a JBG Party or any Subsidiary thereof has been dissolved or liquidated and not reconstituted in accordance with the applicable Joint Venture Agreement and no event or condition which would trigger or result in the dissolution or liquidation of a Joint Venture of a JBG Party or any Subsidiary thereof has occurred and is continuing without the reconstitution of such Person in accordance with the applicable Joint Venture Agreement.

Section 4.5. Securities Laws Matters .

(a) Such JBG Party acknowledges (on behalf of itself and the JBG Designees) that the Issued OP Units and Issued Newco Shares have not been registered under the Securities Act or under any state securities Laws. Such JBG Party acknowledges (on behalf of itself and its JBG Designees) that the Issued OP Units and Issued Newco Shares to be acquired by such JBG Party or any of its Subsidiaries or any JBG Designee pursuant hereto are “restricted securities” as that term is defined by Rule 144(a)(3) under the Securities Act and under applicable state securities Laws and that, pursuant to such Laws, such JBG Party and its JBG Designees must hold such Issued OP Units and Issued Newco Shares until they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available and, other than as set forth in the Registration Rights Agreements, the Vornado Parties, Newco and Newco OP have no obligation to register or qualify such units or shares for resale.

(b) Such JBG Party (i) acknowledges that it or any of its Subsidiaries or any JBG Designee is acquiring the Issued OP Units and Issued Newco Shares pursuant to an exemption from registration under the Securities Act solely for investment with no present intention to distribute any of the Issued OP Units and Issued Newco Shares to any Person in

violation of applicable securities Laws, (ii) will not sell or otherwise dispose of any of the Issued OP Units and Issued Newco Shares, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws, (iii) is an Accredited Investor, and (iv) (x) has had access to and has received such financial and other information regarding the Parties, Newco, Newco OP, the Issued Newco Shares and/or the Issued OP Units, as applicable, that it deems necessary to make an informed investment decision regarding such Issued OP Units and Issued Newco Shares and (y) can bear the economic risk of an investment in the Issued OP Units and/or Issued Newco Shares indefinitely. Such JBG Party will have obtained investor questionnaires (each, a “ JBG Investor Questionnaire ”) from each of its JBG Designees to which the Issued OP Units and Issued Newco Shares will be issued, which questionnaires shall contain, for the benefit of Newco and Newco OP (as applicable), acknowledgements with respect to the matters covered in Section 4.5(a) and written representations from each such JBG Designee to the effect that that such JBG Designee is an Accredited Investor (or, in the event any non-Accredited Investor is permitted to receive Equity Consideration consistent with Regulation D pursuant to Section 1.7(b) , that such non-Accredited Investor is a Sophisticated Investor) and that the preceding representations and warranties in this Section 4.5(b) are otherwise true, complete and correct with respect to such JBG Designee. To the knowledge of such JBG Party, each such Investor Questionnaire is true, complete and correct.

(c) Each JBG Party acknowledges that the Issued Newco Shares to be acquired by such JBG Party and its JBG Designees pursuant hereto, if certificated, shall bear the following legends (in addition to any legend required under applicable state securities Laws):

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE ENCUMBERED, PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHIN THE UNITED STATES EXCEPT PURSUANT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS AND, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS.”

(d) Each JBG Party acknowledges that the Issued OP Units to be acquired by such JBG Party and its JBG Designees pursuant hereto, if certificated, shall bear the following legends (in addition to any legend required under applicable state securities Laws):

“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE

SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.”

(e) In addition, such JBG Party acknowledges that the Issued Newco Shares are subject to restrictions on ownership and transfer set forth in the Newco Declaration, and the Newco Shares to be acquired by such JBG Party and its JBG Designees pursuant hereto, if certificated, shall bear the following legends, or such other legend as may be required from time to time by the Newco Declaration:

“THE EQUITY SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OWNERSHIP FOR THE PURPOSE, AMONG OTHERS, OF THE TRUST’S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST (A “REIT”) UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”). SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS EXPRESSLY PROVIDED IN THE TRUST’S DECLARATION OF TRUST, (I) NO PERSON MAY BENEFICIALLY OWN EQUITY SHARES IN EXCESS OF THE OWNERSHIP LIMIT; (II) NO PERSON MAY CONSTRUCTIVELY OWN EQUITY SHARES IN EXCESS OF THE CONSTRUCTIVE OWNERSHIP LIMIT; (III) NO PERSON MAY TRANSFER EQUITY SHARES IF SUCH TRANSFER WOULD RESULT IN THE EQUITY SHARES OF THE TRUST BEING OWNED BY FEWER THAN 100 PERSONS; AND (IV) NO PERSON MAY TRANSFER EQUITY SHARES IF SUCH TRANSFER WOULD RESULT IN THE TRUST BEING “CLOSELY HELD” UNDER SECTION 856(H) OF THE CODE OR OTHERWISE CAUSE THE TRUST TO FAIL TO QUALIFY AS A REIT. ANY PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY OWNS OR ATTEMPTS TO BENEFICIALLY OR CONSTRUCTIVELY OWN EQUITY SHARES WHICH CAUSES OR WILL CAUSE A PERSON TO BENEFICIALLY OR CONSTRUCTIVELY OWN EQUITY SHARES IN EXCESS OR IN VIOLATION OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE TRUST. ATTEMPTED TRANSFERS IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE WILL BE VOID AB INITIO, AND IF THE BENEFICIAL OWNERSHIP, CONSTRUCTIVE OWNERSHIP OR TRANSFER OF THE EQUITY SHARES REPRESENTED HEREBY VIOLATES

THE RESTRICTIONS ON TRANSFER OR OWNERSHIP SET FORTH IN CLAUSES (I), (II) OR (IV), THE EQUITY SHARES REPRESENTED HEREBY WILL BE AUTOMATICALLY TRANSFERRED TO A SPECIAL TRUST FOR THE BENEFIT OF ONE OR MORE BENEFICIARIES. IN ADDITION, THE TRUST MAY REDEEM EQUITY SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD OF TRUSTEES IN ITS SOLE AND ABSOLUTE DISCRETION IF THE BOARD OF TRUSTEES DETERMINES THAT OWNERSHIP OR A TRANSFER OR OTHER EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED ABOVE. ALL CAPITALIZED TERMS IN THIS LEGEND HAVE THE MEANINGS SET FORTH IN THE DECLARATION OF TRUST, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO EACH HOLDER OF EQUITY SHARES OF THE TRUST ON REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE SECRETARY OF THE TRUST AT ITS PRINCIPAL OFFICE.”

Section 4.6. Financial Statements . The JBG Parties have delivered to Vornado (i) a copy of the audited consolidated balance sheets and the related consolidated statements of operations and comprehensive income, consolidated statements of changes in partners’ deficit and consolidated statements of cash flows as of and for the fiscal years ended December 31, 2015, 2014 and 2013 and the unaudited consolidated balance sheet as of March 31, 2016 and the related consolidated statements of operations and comprehensive income, consolidated statements of changes in partners’ deficit and consolidated statements of cash flows as of and for the three months ended March 31, 2016 and 2015 (the “ JBG Operating Partners Financial Statements ”); (ii) a copy of the audited balance sheet of the JBG/Rosenfeld Retail Properties, LLC and the related statements of operations and comprehensive income, statements of changes in partners’ deficit and statements of cash flows as of and for the fiscal years ended December 31, 2015 and 2014 (the “ JBG Retail Financial Statements ”); and (iii) the audited combined statements of revenues and expenses from real estate operations of the JBG Included Properties listed on Section 4.6 of the JBG Disclosure Letter for the years ended December 31, 2015, 2014 and 2013 and the unaudited combined statements of revenues and expenses from real estate operations of the JBG Included Properties listed on Section 4.6 of the JBG Disclosure Letter for the three months ended March 31, 2016 (the “ 3-14 Financial Statements ” and together with the JBG Operating Partners Financial Statements and the JBG Retail Financial Statements, collectively, the “ JBG Financial Statements ”). The JBG Financial Statements (x) have been prepared from the books and records of the JBG Parties and their Subsidiaries (as applicable), (y) have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of interim financial statements, for normal and recurring year-end adjustments), and (z) with respect to the JBG Operating Partners Financial Statements, fairly present, in all material respects, the financial position and the results of operations of JBG Operating Partners and its Subsidiaries, with respect to the JBG Retail Financial Statements, fairly present, in all material respects, the financial position and the results of operations of JBG/Rosenfeld Retail Properties, LLC and with respect to the 3-14 Financial Statements, fairly present, in all material respects, the revenues and expenses from the real estate operations presented therein as of the times and for the periods

referred to therein (subject, in the case of unaudited quarterly financial statements, to normal year-end adjustments).

Section 4.7. No Undisclosed Liabilities . Neither the JBG Included Entities nor the JBG Management Entities has any liabilities or obligations of any nature (whether accrued, contingent or otherwise) which are required by GAAP to be reflected in a consolidated balance sheet, except for liabilities or obligations (a) reflected or reserved against on the most recent balance sheet included in the JBG Operating Partners Financial Statements and the JBG Retail Financial Statements, (b) under the Indebtedness disclosed in Section 4.16(a)(v) of the JBG Disclosure Letter, (c) under the JBG Leases and JBG Ground Leases, (d) incurred in the ordinary course of business consistent with past practice since March 31, 2016, (e) set forth on Section 4.7 of the JBG Disclosure Letter, (f) expressly contemplated by, or arising out of, or under this Agreement, or (g) that, individually or in the aggregate, have not had and would not reasonably be expected to have a JBG Material Adverse Effect. Other than as reflected in the JBG Operating Partners Financial Statements, the JBG Management Entities do not have any material amount of Indebtedness.

Section 4.8. Absence of Certain Changes or Events . Between March 31, 2016 and the date hereof, (a) except as contemplated by this Agreement or as set forth in Section 4.8 of the JBG Disclosure Letter, each JBG Management Entity, and with respect to the JBG Included Assets other than the JBG Management Entities each JBG Fund and its Subsidiaries, have conducted their businesses in the ordinary course in all material respects consistent with past practice and (b) there has not been any JBG Material Adverse Effect or any effect, event, development or circumstance that, individually or in the aggregate with all other effects, events, developments and changes, would reasonably be expected to result in a JBG Material Adverse Effect.

Section 4.9. JBG Included Properties .

(a) Section 4.9(a)(i) of the JBG Disclosure Letter sets forth a list of (i) each JBG Included Property, and (ii) whether such JBG Party or its Subsidiary directly or indirectly owns such JBG Included Property in fee simple or directly or indirectly holds such JBG Included Property pursuant to a leasehold, ground leasehold or some other property interest, including purchase options. With respect to each JBG Party, Section 4.9(a)(i) of the JBG Disclosure Letter sets forth a true, complete and correct list of all JBG Included Properties in which such JBG Party owns a direct or indirect interest. Except as expressly set forth in Section 4.9(a)(ii) of the JBG Disclosure Letter, as of the date hereof, neither such JBG Party nor its Subsidiaries is obligated to buy, sell, lease or sublease any JBG Included Properties at some future date, or otherwise enter into any contract for sale, ground lease or letter of intent to sell or ground lease any such JBG Included Property or any portion thereof (in each case, excluding any JBG Leases and the JBG Ground Leases), and no commissions, fees or other amounts are payable (or are to become payable) in connection with the acquisition or disposition of any JBG Included Property.

(b) Such JBG Party and its Subsidiaries owns good and marketable fee simple title or leasehold title (as applicable) to each of their respective JBG Included Properties, in each

case, free and clear of Liens, except for JBG Permitted Liens. Except as set forth on Section 4.9(b) of the JBG Disclosure Letter, such JBG Party and its Subsidiaries have not granted, and to the knowledge of such JBG Party, none of its or its Subsidiaries’ JBG Included Properties is subject to, unexpired option to purchase agreements, rights of first refusal or first offer or any other rights to purchase or otherwise acquire any JBG Included Property of such JBG Party or its Subsidiaries or any portion thereof.

(c) To the knowledge of such JBG Party, except as may be disclosed in the third party physical condition reports with respect to its and its Subsidiaries’ JBG Included Properties which have been delivered or otherwise made available to the Vornado Parties (it being understood and agreed that a reference in a physical condition report to a document not otherwise delivered or made available to the Vornado Parties shall not be deemed to constitute disclosure of the contents of such document), as of the date hereof, with respect to each JBG Included Property of such JBG Party and its Subsidiaries, (i) such JBG Included Property is supplied with utilities and other services as necessary to permit its continued operation as it is now being operated, (ii) such JBG Included Property is in good working order sufficient for its normal operation in the manner currently being conducted, (iii) such JBG Included Property has not suffered any casualty or other damage that has not been repaired, and (iv) there are no patent or latent structural, mechanical or other significant defects or deficiencies in the improvements on any JBG Included Property, in each case, except as has not had and would not reasonably be expected to have a JBG Material Adverse Effect; provided , however , that this Section 4.9(c) shall not apply to any JBG Included Property that is raw land, is a JBG Development Property or is not otherwise in active operation.

(d) Neither such JBG Party or any of its Subsidiaries has received (i) written notice that any certificate, permit or license from any Governmental Entity having jurisdiction over any of its JBG Included Properties necessary to permit the lawful use and operation of the buildings and improvements on any of its JBG Included Properties as currently used and operated or that is necessary to permit the lawful use and operation of all utilities and means of egress and ingress to and from any of its JBG Included Properties for the current use and operation of the JBG Included Property is not in full force and effect as of the date of this Agreement, except for such failures to be in full force and effect that, individually or in the aggregate, have not had and would not reasonably be expected to have a JBG Material Adverse Effect, or of any pending written threat of modification or cancellation of any of same, that has had or would reasonably be expected to have a JBG Material Adverse Effect, or (ii) written notice of any uncured violation of any Laws affecting any of its JBG Included Properties which, individually or in the aggregate, has had or would reasonably be expected to have a JBG Material Adverse Effect.

(e) Except as set forth in Section 4.9(e) of the JBG Disclosure Letter, no condemnation, eminent domain or similar proceeding has occurred or to the knowledge of such JBG Party is pending with respect to any JBG Included Property of such JBG Party or any of its Subsidiaries and, except as, individually or in the aggregate, has not had and would not reasonably be expected to have a JBG Material Adverse Effect, neither such JBG Party nor any of its Subsidiaries has received any written notice to the effect that (i) any condemnation or

rezoning proceedings are threatened with respect to any of its JBG Included Properties, or (ii) any zoning regulation or ordinance (including with respect to parking), Board of Fire Underwriters rules, building, fire, health or other Law has been violated (and remains in violation) for any of its JBG Included Properties.

(f) Except as set forth on Section 4.9(f) of the JBG Disclosure Letter, there are no material Tax abatements or exemptions specifically affecting the JBG Included Properties of such JBG Party or any of its Subsidiaries, and such JBG Party and its Subsidiaries have not received any written notice of (and such JBG Party and its Subsidiaries do not have any knowledge of) any proposed increase in the assessed valuation of any of the JBG Included Properties, except in each case for any such Taxes or assessment that have not had and would not reasonably be expected to have, individually or in the aggregate, a JBG Material Adverse Effect.

(g) No written unresolved claim has been made against any title insurance policy evidencing title insurance with respect to a JBG Included Property which, individually or in the aggregate, would be material to such JBG Included Property.

(h) Section 4.9(h) of the JBG Disclosure Letter sets forth all ground leases affecting the interest of each JBG Party or its Subsidiaries in any JBG Included Property, other than ground leases as to which a JBG Included Entity is both lessor and lessee, and all amendments, modifications (including pursuant to any estoppel), guarantees, renewals and extensions exercised related thereto (collectively, the “ JBG Ground Leases ”). With respect to each JBG Party, such JBG Party hereby represents that (i) Section 4.9(h) of the JBG Disclosure Letter contains a true, complete and correct list of all JBG Ground Leases to which such JBG Party or any of its Subsidiaries is bound; (ii) true, complete and correct copies of such JBG Ground Leases have been delivered or made available to the Vornado Parties; and (iii) each such JBG Ground Lease is valid, binding and enforceable in accordance with its terms and is in full force and effect with respect to such JBG Party or its Subsidiary and, to the knowledge of such JBG Party, with respect to the other parties thereto, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law). As of the date hereof, there are no monetary or non- monetary material defaults under any JBG Ground Lease to which such JBG Party or any of its Subsidiaries is bound, by such JBG Party or its Subsidiaries or any other party thereto. As of the date hereof, such JBG Party and its Subsidiaries have not sent or received any notice of any violation or breach of, or default under, any JBG Ground Lease to which such JBG Party or any of its Subsidiaries is bound.

(i) Except for discrepancies, errors or omissions that, individually or in the aggregate, would not reasonably be expected to have a JBG Material Adverse Effect, the rent rolls for each of the JBG Included Properties as of September 15, 2016 that have previously been made available to the Vornado Parties by such JBG Party or its Subsidiaries, are true and correct and (i) correctly reference each tenant under each lease that was in effect as of September 15, 2016, and to which any JBG Party is a party as lessor with respect to each of the JBG Included Properties (all leases, together with, in the case of JBG Leases for non-residential JBG Included

Properties, for all amendments, modifications, supplements, renewals and extensions related thereto, the “ JBG Leases ”) and (ii) identify the rent payable under the JBG Lease as of such date. Except for discrepancies, errors or omissions that, individually or in the aggregate, would not reasonably be expected to have a JBG Material Adverse Effect, such JBG Party or its Subsidiaries have made available to the Vornado Parties a list of all security deposits currently held under the JBG Leases as of September 15, 2016.

(j) True and complete (in all material respects) copies of all JBG Leases for space in excess of 25,000 square feet in or at any JBG Included Properties (the “ Material JBG Leases ”) (it being understood that a JBG Lease shall constitute a Material JBG Lease if there are other JBG Leases with the same tenant at the same JBG Included Property that, if aggregated with such JBG Lease, would exceed 25,000 square feet), in each case in effect as of the date hereof and to the extent within JBG’s possession and control, have been made available to the Vornado Parties. Except as would not, individually or in the aggregate, reasonably be expected to have a JBG Material Adverse Effect, (i) neither such JBG Party nor any of its Subsidiaries has given or received written notice of any violation or breach of, or default under, any JBG Lease, which violation or breach remains outstanding and uncured, (ii) except as set forth on Section 4.9(j) of the JBG Disclosure Letter, no tenant under a JBG Lease is in monetary or other material default under such JBG Lease, which default remains outstanding and uncured, and (iii) each JBG Lease is valid, binding and enforceable in accordance with its terms and is in full force and effect with respect to any JBG Party and, to the knowledge of any JBG Party, with respect to the other parties thereto, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law). Except as set forth on Section 4.9(j) of the JBG Disclosure Letter, any and all material leasing commissions or brokerage fees payable by such JBG Party or any of its Subsidiaries with respect to any Material JBG Leases have been paid in full. To the knowledge of such JBG Party, except as set forth on Section 4.9(j) of the JBG Disclosure Letter, all material tenant improvement allowances, relocation allowances or other inducements due with respect to the current unexpired term of each Material JBG Lease have been paid in full. As of March 31, 2016, except as set forth on Section 4.9(j) of the JBG Disclosure Letter, there are no other material Leasing Costs to be paid in the future with respect to any Material JBG Leases.

(k) Other than any economic rights assigned to a JBG Included Entity or the JBG Management Entities, the Managing Member Interests do not include any economic rights in any Joint Venture to which such Managing Member Interests are attributable, except as set forth on Section 4.9(k) of the JBG Disclosure Letter.

(l) As of the date hereof, the JBG Included Properties and the JBG Excluded Assets constitute all of the real property interests held by the JBG Parties and their controlled Affiliates.

(m) Except as (i) set forth on Section 4.9(m) of the JBG Disclosure Letter and (ii) by virtue of their interest in the JBG Management Entities, no member of the executive committee of JBG Operating Partners is entitled to receive compensation for providing

development, asset and property management, leasing, construction management or other real estate-related services.

(n) Except for JBG Permitted Liens, as set forth in JBG Leases and title documents made available to the Vornado Parties prior to the date hereof or as would not reasonably be expected to have, individually or in the aggregate, a JBG Material Adverse Effect and except as set forth on Section 4.9(n) of the JBG Disclosure Letter, no such JBG Party nor any of its Subsidiaries is a party to any (i) unexpired option to purchase agreements, rights of first refusal or first offer or any other rights to purchase or otherwise acquire any JBG Included Property or any portion thereof that would materially adversely affect any JBG Included Entity’s, ownership, ground lease or right to use a JBG Included Property subject to a Material JBG Lease, and (ii) other outstanding rights or agreements to enter into any contract for sale, ground lease or letter of intent to sell or ground lease any JBG Included Property or any portion thereof that is owned by any JBG Party or its Subsidiaries, which, in each case, is in favor of any party other than a JBG Included Entity.

(o) Schedule B accurately states the outstanding principal amount of the Indebtedness secured by each JBG Included Property as of the applicable Valuation Date.

Section 4.10. JBG Development Properties .

(a) Section 4.10(a) of the JBG Disclosure Letter (i) lists each JBG Included Property (x) which is under construction or (y) which is subject to a binding agreement for development or commencement of construction (each, a “ JBG Development Property ”) and (ii) sets forth the estimated completion date for each JBG Development Property.

(b) Except as would not reasonably be expected to have, in the aggregate, a JBG Material Adverse Effect, to the knowledge of such JBG Party, no circumstances exist that would (i) prevent or unreasonably delay the development or construction of any of its or its Subsidiaries’ JBG Development Properties or (ii) prevent or unreasonably delay the attainment of any entitlements required to commence or complete construction or development of such JBG Development Properties, in each case, in accordance with the estimated completion date set forth on Section 4.10(a) of the JBG Disclosure Letter, subject, in the case of any JBG Development Property where the development or construction is not “by right,” to (A) any delays in the receipt of all required approvals, (B) failure to receive all required approvals and (C) receipt of approvals with conditions that are unacceptable to the applicable JBG Party in its good faith business discretion.

(c) Except as would not reasonably be expected to have, in the aggregate, a JBG Material Adverse Effect, (i) all development and construction required to be completed with respect to any JBG Development Property (and any Contract related to such development or construction) (A) has been completed timely and on budget (or such requirement has been waived by the party benefiting from such covenant), or (B) is on schedule to be completed timely and on budget, and all payments, expenses and fees required in connection therewith have been made, in each case, in accordance therewith and (ii) neither such JBG Party nor any of its

Subsidiaries is and, to the knowledge of such JBG Party, no other party is in breach or violation of, or default under, any such JBG Lease or Contract related to such development or construction, nor has any event occurred which would result in a breach or violation of, or a default under, any such JBG Lease or Contract by such JBG Party or any of its Subsidiaries, or, to the knowledge of such JBG Party, any other party thereto (in each case, with or without notice or lapse of time or both).

Section 4.11. Personal Property . Such JBG Party and its Subsidiaries have good and valid title to, or a valid and enforceable leasehold interest in, or other right to use, all personal property owned, used or held for use by them which constitutes part of the “JBG Included Assets” (other than property owned by tenants and used or held in connection with the applicable tenancy), except as, individually or in the aggregate, has not had and would not reasonably be expected to have a JBG Material Adverse Effect. Neither such JBG Party’s nor any of its Subsidiaries’ ownership of or leasehold interest in any such personal property is subject to any Liens, except for JBG Permitted Liens and Liens that have not had and would not reasonably be expected to have a JBG Material Adverse Effect.

Section 4.12. Litigation . Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a JBG Material Adverse Effect or adversely affect the ability of such JBG Party or any of its Subsidiaries to perform their obligations hereunder or under any Ancillary Documents to which such Persons are a party, or prevent or materially delay the consummation of the Transactions, and except as set forth in Section 4.12 of the JBG Disclosure Letter, as of the date hereof, (a) there is no Action, pending against (or to the knowledge of such JBG Party, threatened in writing against), such JBG Party, any of its Subsidiaries or their Included Assets nor, to the knowledge of such JBG Party, is there any investigation by a Governmental Entity pending or threatened in writing against such JBG Party or any of its Subsidiaries or, with respect to any Included Assets of such JBG Party or its Subsidiaries, and (b) neither such JBG Party nor any of its Subsidiaries is subject to any outstanding order, writ, injunction, decree or arbitration ruling or judgment or award of a Governmental Entity.

Section 4.13. Taxes . Except as expressly set forth in Section 4.13 of the JBG Disclosure Letter:

(a) The JBG Parties and their Subsidiaries each has (i) duly and timely filed (or caused to be filed on its behalf) with the appropriate Governmental Entity all U.S. federal and all other material Tax Returns required to be filed by it, taking into account any extensions of time within which to file such Tax Returns, and all such Tax Returns were and are true, correct and complete in all material respects and (ii) duly and timely paid in full (or there has been duly and timely paid in full on its behalf), or made adequate provision for, all material amounts of Taxes required to be paid by it.

(b) Each JBG REIT (i) for its First Applicable Year and through and including its taxable year ended December 31, 2015 (and, for purposes of Section 7.2(a) , through and including its taxable year ended December 31, 2016, if the Closing Date occurs in the taxable

year ending December 31, 2017) has been subject to taxation as a REIT and has satisfied all requirements to qualify as a REIT for such taxable years; (ii) has operated since January 1, 2016 (and, for purposes of Section 7.2(a) , January 1, 2017, if the Closing Date occurs in the taxable year ending December 31, 2017) to the date hereof in such a manner so as to qualify as a REIT; (iii) intends to continue to operate through the Closing Date in such a manner so as to qualify as a REIT; and (iv) has not taken or omitted to take any action that would reasonably be expected to result in a challenge by the IRS or any other Governmental Entity to its status as a REIT, and no such challenge is pending or threatened in writing.

(c) Each of the JBG Parties and their Subsidiaries, other than the JBG Corporate Entities, has been since the later of its acquisition or formation and continues to be treated for U.S. federal Tax purposes as a partnership (or a disregarded entity (other than a Qualified REIT Subsidiary)) and not as a corporation or an association or publicly traded partnership taxable as a corporation.

(d) None of the JBG Parties nor any of their Subsidiaries holds, directly or indirectly, any asset the disposition of which would be subject to (or to rules similar to) Section 1374 of the Code or, taking into account the Transactions, Treasury Regulations Section 1.337(d)-7 and Temporary Treasury Regulations Section 1.337(d)-7T.

(e) (i) There are no audits, investigations or proceedings pending (or threatened in writing) for and/or in respect of any material Taxes or material Tax Returns of a JBG Party or any of their Subsidiaries and none of the JBG Parties nor any of their Subsidiaries is a party to any litigation or administrative proceeding relating to a material amount of Taxes; (ii) no deficiency for a material amount of Taxes of the JBG Parties or any of their Subsidiaries has been claimed, proposed or assessed in writing or, to the knowledge of the JBG Parties, threatened in writing, by any Governmental Entity, which deficiency has not yet been settled, except for such deficiencies which are being contested in good faith; (iii) none of the JBG Parties nor any of their Subsidiaries has extended or waived (nor granted any extension or waiver of) the limitation period for the assessment or collection of any material amount of Tax that has not since expired; and (iv) none of the JBG Parties nor any of their Subsidiaries has entered into any “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law) regarding a material amount of Tax.

(f) Since formation of the JBG REITs, (i) none of the JBG REITs nor any of their Subsidiaries has incurred any material liability for Taxes under Sections 857(b), 860(c) or 4981 of the Code that has not been previously paid; and (ii) none of the JBG REITs nor any of their Subsidiaries has incurred any material liability for any other Taxes other than (x) in the ordinary course of business, or (y) transfer or similar Taxes arising in connection with acquisitions or dispositions of property. No event has occurred, and no condition or circumstance exists, which presents a material risk that any material amount of Tax described in the previous sentence will be imposed upon the JBG REITs or any of their Subsidiaries (other than transfer or similar Taxes arising in connection with the Transactions).

(g) The JBG Parties and each of their Subsidiaries have complied in all material respects with all applicable Laws relating to the payment and withholding of Taxes (including withholding of Taxes pursuant to Sections 1441, 1442, 1445, 1446 and 3402 of the Code or similar provisions under any state and foreign Laws) and have duly and timely withheld and, in each case, have paid over to the appropriate Governmental Entities any and all material amounts required to be so withheld and paid over on or prior to the due date thereof under all applicable Laws.

(h) None of the JBG Parties, the JBG Designees, and the members or owners of the JBG Parties is a “foreign person” within the meaning of Treasury Regulations Section 1.1445-2.

(i) There are no JBG Tax Protection Agreements (as hereinafter defined) in force as of the date of this Agreement, and, as of the date of this Agreement, no Person has raised in writing a material claim against the JBG Parties or any of their Subsidiaries for any breach of any JBG Tax Protection Agreement. As used herein, “ JBG Tax Protection Agreement ” means any written agreement which the JBG Parties or any of their Subsidiaries is a party to or is otherwise bound by or subject to pursuant to which: (i) any liability to holders of limited partnership interests in a JBG Subsidiary Partnership relating to Taxes may arise, whether or not as a result of the consummation of the Transactions; and/or (ii) in connection with the deferral of income Taxes of a holder of limited partnership interests in a JBG Subsidiary Partnership, the JBG Parties or any of their Subsidiaries have agreed to (A) maintain a minimum level of debt, continue a particular debt or provide rights to guarantee debt, (B) retain or not dispose of assets for a period of time that has not since expired, (C) make or refrain from making Tax elections, and/or (D) only dispose of assets in a particular manner. As used herein, “ JBG Subsidiary Partnership ” means a JBG Party or a Subsidiary of a JBG Party that is a partnership for United States federal income tax purposes.

(j) Section 4.13(j) of the JBG Disclosure Letter sets forth, for each JBG Included Property, the relevant JBG Party’s adjusted tax basis in such JBG Included Property.

(k) There are no material Tax Liens upon any property or assets of the JBG Parties or any of their Subsidiaries except Liens for Taxes not yet due and payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP.

(l) Neither the JBG Parties nor any of their Subsidiaries (A) has been a member of an affiliated group filing a consolidated U.S. federal income Tax Return or (B) has any liability for the Taxes of any Person (other than the JBG Parties or any of their Subsidiaries) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, or otherwise.

(m) Neither the JBG Parties nor any of their Subsidiaries has participated in any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2).

(n) Neither the JBG Parties nor any of their Subsidiaries has constituted either a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code in the two (2) years prior to the date of this Agreement.

(o) None of the JBG REITs nor any of their Subsidiaries (other than Taxable REIT Subsidiaries) currently has or, as of December 31 of any taxable year through and including the taxable year ended December 31 immediately prior to the Closing Date, has had any earnings and profits attributable to such entity or any other corporation in any non-REIT year within the meaning of Section 857(a) of the Code.

(p) The JBG Tax Group does not own any stock, or options to acquire stock of Vornado or Newco.

Section 4.14. Compliance with Laws; Permits .

(a) As of the date hereof (i) such JBG Party and its Subsidiaries, have complied and are in compliance with all Laws applicable to such JBG Party or any of its Subsidiaries or by which their JBG Included Assets (including, without limitation, any JBG Included Property) is bound, and (ii) no notice, charge or assertion has been received by such JBG Party or its Subsidiaries or, to the knowledge of such JBG Party, threatened against such JBG Party or its Subsidiaries alleging any non-compliance of any JBG Party or its Subsidiaries, except in each case above for such non-compliance that has not had and would not reasonably be expected to have a JBG Material Adverse Effect. Notwithstanding anything to the contrary in this Section 4.14(a) , the provisions of this Section 4.14(a) shall not apply to matters covered by Section 4.17 (Environmental Matters), Section 4.19 (Employee Benefit Plans) and Section 4.20 (Labor and Other Employment Matters).

(b) Such JBG Party and its Subsidiaries are in possession of all authorizations, licenses, permits, certificates, approvals, variances, exemptions, orders, franchises, certifications and clearances of any Governmental Entity necessary for such JBG Party and its Subsidiaries to own, lease and operate their respective JBG Included Assets (including, without limitation, the JBG Included Properties) and conduct their respective businesses as currently conducted (the “ JBG Permits ”), and all such JBG Permits are valid, and in full force and effect, except where the failure to possess and maintain such JBG Permits in full force and effect, individually or in the aggregate, has not had and would not reasonably be expected to have a JBG Material Adverse Effect. All applications required to have been filed for the renewal of the JBG Permits have been filed on a timely basis with the appropriate Governmental Entity, and all other filings required to have been made with respect to such JBG Permits have been duly made on a timely basis with the appropriate Governmental Entity, except in each case, where such failure to do so, individually or in the aggregate, has not had and would not reasonably be expected to have a JBG Material Adverse Effect. Neither any JBG Party nor any of their Subsidiaries has received any claim or notice, nor has any knowledge indicating, that such JBG Party or its Subsidiaries currently is not in compliance with the terms of any JBG Permit, except where the failure to be

in compliance with the terms of any such JBG Permit, individually or in the aggregate, would not have had and would not reasonably be expected to have a JBG Material Adverse Effect.

(c) Neither such JBG Party nor any of its Subsidiaries is an “investment company” within the meaning of the Investment Company Act.

Section 4.15. Funds .

(a) The Equity Interests of such JBG Party and any of its Subsidiaries have been issued and sold in compliance with applicable Law in all material respects.

(b) Neither of the JBG Management Entities nor any of its Subsidiaries or any managing member of any JBG Fund currently acts as an adviser, sub-adviser, general partner, managing member, manager or sponsor to any pooled investment vehicle that would be required to be a registered “Investment Company” under the Investment Company Act. Section 4.15(b)(i) of the JBG Disclosure Letter sets forth each material agreement pursuant to which such JBG Management Entity (or its Subsidiaries) or any other JBG Included Entity performs management, advisory or sub-advisory services for any Person, and each material Contract pursuant to which such JBG Management Entity (or its Subsidiaries) or JBG Included Entity receives compensation in respect of any such activities in connection with any such Person (each such agreement, a “ JBG Advisory Agreement ”), and each such JBG Advisory Agreement was duly approved and performed in all material respects in accordance with the applicable Governing Documents of such fund and applicable Law. There are no existing material violations by such JBG Management Entity or any of its Subsidiaries, such JBG Included Entity or their respective Affiliates or any managing member of any JBG Fund or, to the knowledge of such Persons, any other party thereto, of the Governing Documents of any fund or any JBG Advisory Agreement or any side letter with any investor in a JBG Fund. True and complete copies have been made available to the Vornado Parties prior to the date hereof of (i) each form of subscription agreement and private placement memorandum or other offering document in effect as of the date hereof for each JBG Fund, (ii) the Governing Documents of each JBG Fund, (iii) each JBG Advisory Agreement and (iv) all material side letters with any investor in any JBG Fund.

Section 4.16. Material Contracts .

(a) Except for contracts listed in Section 4.16(a) of the JBG Disclosure Letter, as of the date of this Agreement, no such JBG Party or any of its Subsidiaries is a party to or bound by or subject to any contract that, as of the date hereof:

(i) obligates such JBG Party or any of its Subsidiaries to make non-contingent aggregate annual expenditures (other than principal and/or interest payments or the deposit of other reserves with respect to debt obligations) in excess of $500,000 and is not cancelable within ninety (90) days without material penalty to such JBG Party or any of its Subsidiaries that relates to any of the JBG Included Assets or pursuant to which Newco or any of its Subsidiaries (including, after the Closing, the JBG

Included Entities and the JBG Management Entities) could become an obligor pursuant to the Transactions, except for any lease under which such JBG Party or any of its Subsidiaries is lessee, any ground lease affecting any JBG Included Property or relates to tenant improvement expenses under a JBG Lease;

(ii) contains any non-compete or exclusivity provisions with respect to any line of business or geographic area that restricts the business of such JBG Party or any of its Subsidiaries in any material respect, or would otherwise limit the freedom of such persons with respect to, or restrict, the lines of business conducted by such JBG Party or any of its Subsidiaries or the geographic area in which such JBG Party or any of its Subsidiaries may conduct business in any material respect that relates to any of the JBG Included Assets or pursuant to which Newco or any of its Subsidiaries (including, after the Closing, the JBG Included Entities and the JBG Management Entities) could become an obligor pursuant to the Transactions, excluding any such contract that is a JBG Lease;

(iii) obligates any JBG Included Entity, JBG Management Entity or Subsidiary of a JBG Party to any material continuing contractual obligation (i) for indemnification under any agreements relating to the sale of real property, or any other business or material assets, previously owned, whether directly or indirectly, by a JBG Management Entity, a JBG Included Entity, or Subsidiary of a JBG Party that are reasonably likely to involve a Liability of $1,000,000 or more or (ii) to make payments, contingent or otherwise, on account of prior acquisitions or sales of any real property;

(iv) is an agreement which obligates such JBG Party or any of its Subsidiaries to indemnify any past or present directors, officers, trustees, employees and agents of such JBG Party or any of its Subsidiaries pursuant to which such JBG Party or any of its Subsidiaries is the indemnitor, in each case, other than pursuant to any Governing Documents, operating agreements, property management agreements, development agreements, advisory agreements or any similar agreement;

(v) constitutes an Indebtedness obligation of such JBG Party or any of its Subsidiaries with a principal amount outstanding as of September 30, 2016 greater than $500,000 that relates to any of the JBG Included Assets or pursuant to which Newco or any of its Subsidiaries (including, after the Closing, the JBG Included Entities and the JBG Management Entities) could become an obligor pursuant to the Transactions, other than any such Indebtedness for which both obligor and obligee are JBG Included Entities;

(vi) requires such JBG Party or any of its Subsidiaries to dispose of or acquire assets or properties (other than in connection with the expiration of a JBG Lease or a ground lease affecting a JBG Included Property) with a fair market value in excess of $1,000,000, or involves any pending or contemplated merger, consolidation or similar business combination transaction, except for any JBG Lease or any ground lease affecting any JBG Included Property, that relates to any of the JBG Included Assets or pursuant to which Newco or any of its Subsidiaries (including, after the Closing, the JBG

Included Entities and the JBG Management Entities) could become an obligor pursuant to the Transactions;

(vii) constitutes an interest rate cap, interest rate collar, interest rate swap or other contract or agreement relating to a hedging transaction that relates to any of the JBG Included Assets or pursuant to which Newco or any of its Subsidiaries (including, after the Closing, the JBG Included Entities and the JBG Management Entities) could become an obligor pursuant to the Transactions or to Indebtedness secured by any JBG Included Asset;

(viii) is a JBG Advisory Agreement;

(ix) sets forth the operational terms of a joint venture, partnership, limited liability company or strategic alliance of a JBG Included Entity, a JBG Management Entity or Subsidiary of a JBG Party with any party other than a JBG Included Entity, JBG Management Entity or Subsidiary of a JBG Party;

(x) constitutes a loan to any Person (other than to a wholly owned Subsidiary of a JBG Party) by a JBG Included Entity, JBG Management Entity or Subsidiary of a JBG Party (other than advances made pursuant to the JBG Leases or any disbursement agreement, development agreement, or development addendum entered into in connection with a JBG Lease with respect to the development, construction, or equipping of a JBG Included Property or the funding of improvements to JBG Included Properties) in an amount in excess of $500,000;

(xi) is an agreement that obligates payments to any Person contingent on the future operating results or other similar future events having a material economic effect relating to the JBG Included Assets or arising out of prior results, leases, acquisitions or sales in respect of the JBG Included Assets pursuant to which Newco or any of its Subsidiaries (including, after the Closing, the JBG Included Entities and the JBG Management Entities) could become an obligor pursuant to the Transactions;

(xii) is an agreement (other than a Joint Venture Agreement) obligating a JBG Included Entity, a JBG Management Entity or a Subsidiary of a JBG Party to provide any funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in any other Person in excess of $500,000;

(xiii) is an agreement with or for the benefit of any Governmental Entity requiring payment by a JBG Included Entity, a JBG Management Entity or Subsidiary of a JBG Party in excess of $500,000 in any calendar year remaining in its term or requires total remaining payment in excess of $500,000 other than a ground lease that relates to any of the JBG Included Assets or pursuant to which Newco or any of its Subsidiaries (including, after the Closing, the JBG Included Entities and the JBG Management Entities) could become an obligor pursuant to the Transactions, other than any such agreement that is a JBG Lease or JBG Ground Lease;

(xiv) is a gross maximum price construction contract or an agreement for any construction or development work (including any additions or expansions) which are currently in effect and under which such JBG Party or any of its Subsidiaries currently has an obligation in excess of $5,000,000, unless a JBG Party or its Subsidiary is the developer, that relates to any of the JBG Included Properties or pursuant to which Newco or any of its Subsidiaries (including, after the Closing, the JBG Included Entities and the JBG Management Entities) could become an obligor pursuant to the Transactions;

(xv) is an agreement between a JBG Management Entity or a JBG Included Entity, on the one hand, and the current directors, officers, trustees, partners, members or other Affiliates of any JBG Party (but not including as Affiliates any JBG Included Entities or JBG Management Entities), on the other hand, pursuant to which Newco or any of its Subsidiaries (including, after the Closing, the JBG Included Entities and the JBG Management Entities) could become an obligor pursuant to the Transaction, other than any such agreement (A) where all parties are JBG Included Entities, (B) which will be terminated on or before the Closing or (C) which will otherwise not be binding on Newco or any of its Subsidiaries following Closing; or

(xvi) is a management agreement (i.e., contracts providing for or otherwise governing the management and/or operation of such JBG Party, its Subsidiaries or any of their JBG Included Assets (including their JBG Included Properties)), including, without limitation, asset management, construction management and property management agreements pursuant to which such JBG Party or its Subsidiaries are obligated to pay to another party (that is not a JBG Party or a JBG Party’s Subsidiary) an amount in excess of $1,000,000 that relates to any of the JBG Included Assets or pursuant to which Newco or any of its Subsidiaries (including, after the Closing, the JBG Included Entities and the JBG Management Entities) could become an obligor pursuant to the Transactions, other than any such agreement where all parties are JBG Included Entities.

Each contract of the type described above in this Section 4.16(a) , whether or not listed on Section 4.16(a) of the JBG Disclosure Letter, to which such JBG Party or any of its Subsidiaries is a party is referred to herein as a “ JBG Material Contract ”. True and complete copies of each JBG Material Contract listed on Section 4.16(a) of the JBG Disclosure Letter have been provided or made available to the Vornado Parties.

(b) Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a JBG Material Adverse Effect, each JBG Material Contract is legal, valid, binding and enforceable on such JBG Party and each of its Subsidiaries that is a party thereto and, to the knowledge of such JBG Party, each other party thereto, and is in full force and effect, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at Law). Except as, individually or in the aggregate, have not had and would not reasonably be expected

to have a JBG Material Adverse Effect, such JBG Party and each of its Subsidiaries has performed all obligations required to be performed by it prior to the date hereof under each JBG Material Contract and, to the knowledge of such JBG Party, each other party thereto has performed all obligations required to be performed by it prior to the date hereof under each JBG Material Contract. No such JBG Party or any of its Subsidiaries, nor, to the knowledge of such JBG Party, any other party thereto, is in material breach or violation of, or default under, any JBG Material Contract, and no event has occurred that, with notice or lapse of time or both, would constitute a violation or breach of, or default under, any JBG Material Contract, except where in each case such breach, violation or default is not reasonably likely to have, individually or in the aggregate, or reasonably be expected to have a JBG Material Adverse Effect. Neither such JBG Party nor any of its Subsidiaries has given or received notice of any violation or default under any JBG Material Contract, except for violations or defaults that would not, individually or in the aggregate, reasonably be expected to have a JBG Material Adverse Effect.

Section 4.17. Environmental Matters . Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a JBG Material Adverse Effect, or as set forth in Section 4.17 of the JBG Disclosure Letter: (a) with respect to the JBG Included Assets, such JBG Party and its Subsidiaries are in compliance with all Environmental Laws; (b) neither such JBG Party nor any of its Subsidiaries has received any written notice, demand, letter or claim alleging that such JBG Party or any of its Subsidiaries is in violation of, or liable under, any Environmental Law or with respect to Hazardous Substances or that any judicial, administrative or compliance order has been issued against such JBG Party or any of its Subsidiaries, in each case, which remains unresolved and which relates to any of the JBG Included Assets; and (c) neither such JBG Party nor any of its Subsidiaries has entered into or agreed to any consent decree or order or is subject to any judgment, decree or judicial, administrative or compliance order relating to compliance with Environmental Laws, Environmental Permits or the investigation, claim, sampling, monitoring, treatment, remediation, removal or cleanup of Hazardous Substances and no investigation, litigation or other proceeding is pending or, to the knowledge of such JBG Party, threatened against such JBG Party or any of its Subsidiaries under any Environmental Law, in each case, that relates to the JBG Included Assets. This Section 4.17 contains the exclusive representations and warranties of such JBG Party with respect to environmental matters.

Section 4.18. Bankruptcy . Neither such JBG Party nor any of its Subsidiaries has (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by such JBG Party’s or any such Subsidiary’s creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of such JBG Party’s or any such Subsidiary’s assets, which remains pending as of such time, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of such JBG Party’s or any such Subsidiary’s assets, which remains pending as of such time, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally.

Section 4.19. Employee Benefit Plans .

(a) Section 4.19(a) of the JBG Disclosure Letter sets forth a correct and complete list of all material JBG Benefit Plans. For each material JBG Benefit Plan (other than any Multiemployer Plan), the JBG Parties have made available to the Vornado Parties, to the extent applicable, accurate and complete copies of (i) the Plan document, including any amendments thereto, and all related trust documents, insurance contracts or other funding vehicles, (ii) a written description, if not set forth in a written document, (iii) the most recently prepared actuarial report, and (iv) all material correspondence to or from any Governmental Entity received in the last three years.

(b) (i) Each JBG Benefit Plan (other than any Multiemployer Plan) has been established and administered in accordance with its terms and in compliance in all material respects with all applicable Laws, including ERISA and the Code, (ii) all material contributions, benefits and premiums required by and due under the terms of each JBG Benefit Plan for current or prior plan years have been paid or accrued in accordance with GAAP, and (iii) there are no pending or, to the JBG Parties’ knowledge, threatened claims (other than routine claims for benefits) or proceedings by a Governmental Entity by, on behalf of or against any JBG Benefit Plan or any trust related thereto which could reasonably be expected to result in any material liability to any JBG Party or any of their Subsidiaries.

(c) Each JBG Benefit Plan (other than any Multiemployer Plan) that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service or is the subject of a favorable opinion letter from the Internal Revenue Service on the form of such JBG Benefit Plan, a copy of such letter has been made available to the Vornado Parties, and, to the JBG Parties’ knowledge, there are no facts or circumstances that would be reasonably likely to adversely affect the qualified status of any such JBG Benefit Plan. Each trust established in connection with any JBG Benefit Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code is so exempt, and, to the JBG Parties’ knowledge, no fact or event has occurred that would reasonably be expected to adversely affect the exempt status of any such trust.

(d) Section 4.19(d) of the JBG Disclosure Letter sets forth, as of the date of this Agreement, each (i) Multiemployer Plan, or (ii) single employer plan or other pension plan that is subject to Title IV or Section 302 of ERISA or Section 412 of the Code, in each case, that any JBG Party or any of their respective Subsidiaries or ERISA Affiliates, sponsors, maintains or contributes to, or has within the last six (6) years prior to the date hereof sponsored, maintained or contributed to. For any JBG Benefit Plan subject to the minimum funding requirements of Section 412 of the Code or Title IV of ERISA (other than a Multiemployer Plan), (i) no such plan has failed to satisfy the minimum funding standards of Section 302 of ERISA or Sections 412 or 418(B) of the Code, respectively, (ii) no unsatisfied liability (other than for premiums to the PBGC) under Title IV of ERISA has been, or is expected to be, incurred by a JBG Party or any of its Subsidiaries or ERISA Affiliates, (iii) the PBGC has not instituted proceedings to terminate any such JBG Benefit Plan and (iv) no “reportable event” within the meaning of Section 4043 of ERISA ((excluding any such event for which the thirty (30) day notice

requirement has been waived under the regulations to Section 4043 of ERISA) has occurred for which there remains any outstanding liability, nor has any event described in Sections 4062, 4063 or 4041 of ERISA occurred. Except as set forth on Section 4.19(d) of the JBG Disclosure Letter, neither such JBG Party nor any of its Subsidiaries or ERISA Affiliates have incurred or would be likely to incur (whether as a result of the Transactions or otherwise) any liability (including any indirect, contingent or secondary liability) to or on account of a Multiemployer Plan pursuant to Sections 515, 4201, 4204 or 4212 of ERISA; and JBG Parties and each of their respective Subsidiaries and ERISA Affiliates have made all required contributions and are not delinquent in any contributions to any Multiemployer Plan.

(e) No JBG Benefit Plan provides health, accident, disability, life insurance benefits to any JBG Service Provider (or any spouse, beneficiary or dependent of the foregoing) beyond the termination of service or retirement of such JBG Service Provider other than as required under Section 4980B of the Code or any similar applicable Law or at the sole expense of such JBG Service Provider.

(f) No assets of the JBG Parties or any of their ERISA Affiliates constitute “plan assets” for purposes of Title I of ERISA or Section 4975 of the Code or any applicable similar Law.

(g) Neither the execution and delivery of this Agreement, nor the consummation of the Transactions, either alone or in combination with another event (whether contingent or otherwise) will (i) entitle any current or former JBG Service Provider to any payment; (ii) increase the amount of compensation or benefits due to any such JBG Service Provider; (iii) accelerate the vesting, funding or time of payment of any compensation, equity award or other benefit to any JBG Service Provider; or (iv) result in the payment of any amount to any JBG Service Provider that could, individually or in combination with any other such payment, constitute an “excess parachute payment” as defined in Section 280G(b)(1) of the Code.

(h) Neither such JBG Party nor any of its Subsidiaries is a party to, or has any obligation under, any Contract or JBG Benefit Plan to compensate any Person for additional taxes payable pursuant to Sections 409A or 4999 of the Code.

Section 4.20. Labor and Other Employment Matters .

(a) Section 4.20(a) of the JBG Disclosure Letter sets forth, as of the date of this Agreement, each collective bargaining or similar agreement by which a JBG Party or any Affiliate thereof is, or has, within the past six (6) years been bound with respect to any JBG Service Providers. As of the date hereof, there is no, and since January 1, 2014, there has not been any, labor strike, work stoppage, picketing, lockout, walkout or other organized work interruption pending, or to the knowledge of the JBG Parties threatened in writing or anticipated against any JBG Party or any Affiliate thereof relating to any JBG Service Providers. Except as specified in Section 4.20(a) of the JBG Disclosure Letter, there are no labor unions or other organizations certified or recognized to represent any JBG Service Providers and as of the date

hereof, to the JBG Parties’ knowledge, no union organization campaign is in progress with respect to, any JBG Service Providers at any of the JBG Included Assets. As of the date hereof, there are no unfair labor practice charges pending before the National Labor Relations Board or any other Governmental Entity, any grievances, complaints, claims or judicial or administrative proceedings, in each case, which are pending, or to the knowledge of the JBG Parties threatened in writing or anticipated by or on behalf of any current or former JBG Service Providers at any of the JBG Included Assets.

(b) No JBG Service Provider has been improperly excluded from participation in any JBG Benefit Plan. Each JBG Service Provider has been properly classified under the Fair Labor Standards Act with respect to any classification of any person as an independent contractor rather than as an employee, with respect to any classification of any employee as exempt versus non-exempt, and with respect to any employee leased from another employer, and neither the JBG Parties nor any of their Subsidiaries has any written notice or knowledge of any pending or threatened material claim by any JBG Service Provider that he/she is or was misclassified for any purpose.

(c) The JBG Parties and their Subsidiaries are in compliance in all material respects with all applicable Laws, statutes, rules and regulations respecting employment and employment practices, terms and conditions of employment of current and former JBG Service Providers, wages and hours, discrimination in employment, wrongful discharge, collective bargaining, WARN Act, fair labor standards, occupational health and safety, and any other labor and employment-related matters, in each case, with respect to all JBG Service Providers.

(d) During the three (3) years prior to the date of this Agreement, no JBG Party nor any of their respective Subsidiaries have engaged in or effectuated any “plant closing” or employee “mass layoff” (in each case, as defined in the WARN Act), or any similar state or local Law, statute, rule or regulation affecting any current or former JBG Service Providers.

Section 4.21. Intellectual Property . Except as set forth on Section 4.21 of the JBG Disclosure Letter or, as individually or in the aggregate, has not had and would not reasonably be expected to have a JBG Material Adverse Effect, (a) such JBG Party and its Subsidiaries own or are licensed or otherwise possess valid rights to use all Intellectual Property necessary to conduct the business of such JBG Party and its Subsidiaries as it is currently conducted, (b) the conduct of the business of such JBG Party and its Subsidiaries as it is currently conducted does not infringe, misappropriate or otherwise violate and, to the knowledge of such JBG Party, is not alleged to infringe misappropriate or otherwise violate, the Intellectual Property rights of any third party (c) there are no pending or, to the knowledge of such JBG Party, threatened claims with respect to any of the Intellectual Property rights owned by such JBG Party or any of its Subsidiaries, and (d) to the knowledge of such JBG Party, no third party is currently infringing or misappropriating Intellectual Property rights of such JBG Party or any of its Subsidiaries. This Section 4.21 contains the exclusive representations and warranties of such JBG Party and its Subsidiaries with respect to Intellectual Property matters.

Section 4.22. OFAC . Neither such JBG Party nor any of its Subsidiaries constitutes a Person with whom a U.S. Person is prohibited from transacting business of the type contemplated by this Agreement, whether such prohibition arises under United States Laws and lists published by OFAC (including those executive orders and lists published by OFAC with respect to Persons that have been designated by executive order or by the sanction regulations of OFAC as Persons with whom U.S. Persons may not transact business or must limit their interactions to types approved by OFAC) or otherwise.

Section 4.23. Patriot Act . Neither such JBG Party or any of its Subsidiaries nor, to the knowledge of such JBG Party, any Person providing funds to a JBG Party or any of its Subsidiaries (a) is under investigation by any Governmental Entity for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist related activities, any crimes which in the United States would be predicate crimes to money laundering, or any violation of any Anti-Money Laundering Laws; (b) has been assessed civil or criminal penalties under any Anti- Money Laundering Laws; or (c) has had any of its funds seized or forfeited in any action under any Anti-Money Laundering Laws.

Section 4.24. Anti-Corruption . The JBG Parties have complied, are in compliance with, and will continue to comply with applicable anti-bribery/anti-corruption laws, including the US Foreign Corrupt Practices Act. Neither such JBG Party or any of its Subsidiaries nor, to the knowledge of such JBG Party, any of their principals, owners, officers, directors, trustees, or agents, in each case, acting at the direction or on behalf of such JBG Party, its Subsidiaries or any of their respective Affiliates, has engaged, promised to engage, will promise to engage, or will cause to be engaged, in any transaction or activity involving a direct or indirect improper inducement to any Person (including but not limited to a government official) to obtain or keep business or to secure some other advantage, in violation of applicable anti-bribery/anti- corruption laws.

Section 4.25. Insurance . Except for those matters that, individually or in the aggregate, have not had and would not reasonably be expected to have a JBG Material Adverse Effect, there is no claim for coverage by such JBG Party or any of its Subsidiaries that relates to any of the JBG Included Assets pending under any of the material insurance policies (including title insurance policies) and all material fidelity bonds or other insurance service contracts in such JBG Party’s or its Subsidiaries’ possession providing coverage for all JBG Included Properties (the “ JBG Insurance Policies ”) that has been denied or disputed by the insurer. Except for those matters that have not had and would not reasonably be expected to have a JBG Material Adverse Effect, all premiums due and payable under all JBG Insurance Policies that relate to any of the JBG Included Assets have been paid, and such JBG Party and its Subsidiaries have otherwise complied in all material respects with the terms and conditions of all JBG Insurance Policies. To the knowledge of such JBG Party, such JBG Insurance Policies that relate to any of the JBG Included Assets are valid and enforceable in accordance with their terms and are in full force and effect and no written notice of cancellation or termination has been received by such JBG Party or any of its Subsidiaries with respect to any such policy which has not been replaced on substantially similar terms prior to the date of such cancellation.

Section 4.26. Information in the SEC Filings . None of the information supplied or to be supplied by or on behalf of such JBG Party or its Subsidiaries for inclusion in any of the filings made or to be made by the Vornado Parties or their Affiliates with the SEC or with any stock exchange of or other regulatory authority will, at the time filed with the SEC, any stock exchange or other regulatory authority, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they are made, not misleading.

Section 4.27. Brokers; Expenses . No broker, investment banker, financial advisor or other Person (other than Bank of America Merrill Lynch), is entitled to receive any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with this Agreement or the Transactions based upon arrangements made by or on behalf of such JBG Party or any of its Subsidiaries. Other than the arrangements described in the engagement letters with Bank of America Merrill Lynch, Section 4.27 of the JBG Disclosure Letter sets forth the outside legal, accounting and financial advisors retained as of the date hereof by any JBG Party (on its own behalf or on behalf of any other Person) in connection with the Transactions with which such JBG Party has any contingent payment arrangements requiring payments to be made after December 31, 2015 in connection with the Transactions that are contingent upon the execution of this Agreement or the Transactions or, in the case of advisors customarily compensated on the basis of hourly time charges, are not based on actual time charges and expense reimbursement and describes such arrangements. Since December 31, 2015, none of the JBG Parties or any of their Subsidiaries or Affiliates has made any material payments in excess of the amounts contemplated by this Section 4.27 to any such advisors.

Section 4.28. Capital Commitments . Section 4.28 of the JBG Disclosure Letter sets forth, for each JBG Fund, the aggregate amount of capital commitments that the general partner or managing member of the applicable JBG Fund has available to call from the direct and indirect limited partners or members of each JBG Fund.

Section 4.29. Non-Controlled Subsidiaries . Each Subsidiary of the JBG Parties listed on Section 4.29 of the JBG Disclosure Letter is controlled, directly or indirectly, by a Person other than a JBG Party or its Affiliates. Notwithstanding anything to the contrary contained herein, the representations and warranties of the JBG Parties in this Article IV with respect to such Subsidiaries shall be qualified to the knowledge of the JBG Parties.

Section 4.30. JBG Fund Credit Amounts . With respect to each JBG Fund, all further management fees to be paid by any JBG Fund to any JBG Party, will be paid entirely in cash.

Section 4.31. No Other Representations or Warranties . Except for the representations and warranties expressly set forth in this Article IV or any Ancillary Document, no JBG Party nor any of its Subsidiaries or any other Person makes any other express or implied representation or warranty with respect to such JBG Party, its Subsidiaries, the JBG Included Properties, the JBG Included Entities, the JBG Included Interests, the Managing Member Interests, the JBG Included Assets, or with respect to any other information provided to the Vornado Parties in connection with (i) the Transactions or (ii) the businesses, affairs, operations,

assets, Liabilities, condition (financial or otherwise) or prospects or any other matter relating to such JBG Party, its Subsidiaries or any of their JBG Included Properties, including with respect to any documentation, forecasts, budgets, projections, estimates or other information (including the accuracy or completeness of, or the reasonableness of the assumptions underlying, such documentation, forecasts, budgets, projections, estimates or other information) provided by such JBG Party, its Subsidiaries or any other Person to the Vornado Parties. For clarity, none of the representations and warranties set forth in this Article IV pertains to or purports to disclose any information with respect to any JBG Excluded Asset (other than with respect to Liabilities that apply to or could reasonably be expected to adversely impact Newco, Newco OP or any Vornado Included Entity after the Closing), even if such JBG Excluded Asset is owned by a JBG Included Entity prior to the Closing.

ARTICLE V

PRE-CLOSING COVENANTS

Each of the Parties covenants and agrees to the extent applicable to it as follows (it being understood that the covenants and agreements of any JBG Party are as to itself and not as to the other JBG Parties and are several and not joint; provided , that with respect to any covenant or agreement of any JBG Fund, such covenant or agreement is made jointly and severally by such JBG Fund and JBG Operating Partners).

Section 5.1. Access; Notice of Certain Events .

(a) Between the date of this Agreement and the Closing or the date, if any, on which this Agreement is terminated pursuant to Section 8.1 , to the extent permitted by applicable Law and contracts, the members of each Group shall, and shall cause each of their Subsidiaries to, afford to the other Group and its Representatives reasonable access during normal business hours and upon reasonable advance notice to all of their respective properties, offices, books, contracts, commitments and records to the extent related to such Group’s Included Assets and, during such period, the members of each Group shall, and shall cause each of their Subsidiaries to, furnish reasonably promptly to the other Group all information (financial or otherwise) concerning their business and properties and to the extent related to their Included Assets that the other Group may reasonably request. Notwithstanding the foregoing, the Parties shall not be required by this Section 5.1 to provide members of the other Group or their respective Representatives with access to or to disclose (i) material prepared in connection with or relating to the Transactions or any other strategic alternatives contemplated by the Parties, (ii) information that is subject to confidentiality obligations to a third party ( provided , however , that each Group shall use its Commercially Reasonable Efforts to obtain the required consent of such third party to such access or disclosure), (iii) information the disclosure of which would violate any Law, (iv) information that is subject to any attorney-client, attorney work product or other legal privilege, (v) information that the Group reasonably believes is competitively sensitive with respect to the other Group, (vi) information to the extent it relates solely to any Vornado Excluded Asset or JBG Excluded Asset (as applicable) or (vii) information pertaining to the activities or assets of Vornado and its Subsidiaries that are Vornado Assets (as defined in the

Separation and Distribution Agreement). The members of each Group shall use their Commercially Reasonable Efforts to minimize any disruption to the business of the other Group or any of their Subsidiaries that may result from any requests for access, data or information hereunder. Any access to the properties of a Group or any of its Subsidiaries shall be subject to the other Group’s reasonable security measures and insurance requirements and shall not include the right to perform invasive testing without the members of such other Group’s prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned. Prior to the Closing, the members of each Group shall not, and shall cause their respective Representatives and Affiliates not to, contact or otherwise communicate with any tenants, lenders, Joint Venture Partners or other parties with which such other Group or any of its Subsidiaries has a business relationship regarding the business of such other Group and its Subsidiaries or this Agreement and the Transactions (other than in connection with efforts to obtain any Required Consent, in accordance with Section 5.2), in each case, without the prior consent of the other Group, not to be unreasonably withheld, delayed or conditioned.

(b) Each Party agrees to give prompt written notice to the members of the other Group (i) of any notice or other communication received by such Party (A) from any Governmental Entity in connection with this Agreement or the Transactions, (B) from any Person alleging that the consent of such Person (or another Person) is or may be required in connection with the Transactions, or (C) of any written notice received from any Person in connection with any material violation or default under or notice to terminate, not renew or challenge the validity or enforceability of any Vornado Material Contract or JBG Material Contract, as applicable, (ii) of any legal proceeding commenced or, any written threat to commence against, such Party or any of its Subsidiaries or Affiliates or, to its knowledge, otherwise relating to, involving or affecting such Party or any of its Subsidiaries or Affiliates, in each case in connection with, arising from or otherwise relating to the Transactions, and (x) upon becoming aware of the occurrence or impending occurrence of any event, change, development or circumstance relating to it or any Vornado Subsidiary or any Subsidiary of such JBG Party, respectively, which makes or is reasonably likely to make any of the conditions set forth in Article VII to not be satisfied. The failure to deliver any such notice, in and of itself, shall not result in the failure of, or otherwise affect, any of the conditions set forth in Article VII .

Section 5.2. Consents and Approvals .

(a) Upon the terms and subject to the conditions set forth in this Agreement, each of the Parties shall use Commercially Reasonable Efforts (unless, with respect to any action, another standard is set forth herein) to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable under applicable Law or pursuant to any contract or agreement to consummate and make effective, as promptly as practicable, the Transactions, including using Commercially Reasonable Efforts (i) to cause the conditions to Closing set forth in Article VII to be satisfied, (ii) to obtain all necessary actions or nonactions, waiting period expirations or terminations, waivers, consents, authorizations and approvals from Governmental Entities or other Persons necessary in connection with the consummation of the Transactions, including, with respect to the Vornado Parties, the consents listed on Section 3.5(a) of the Vornado

Disclosure Letter and with respect to the JBG Parties, the consents listed on Section 4.3 of the JBG Disclosure Letter, and the making of all necessary registrations and filings (including filings with Governmental Entities, if any) to obtain an approval, waiting period expirations or terminations or waiver from, or to avoid an action or proceeding by, any Governmental Entity or other Persons necessary in connection with the consummation of the Transactions, (iii) to defend any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the Transactions, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed, and avoid each and every impediment under any antitrust, merger control, competition or trade regulation Law that may be asserted by any Governmental Entity with respect to the Transactions so as to enable the Closing to occur as soon as reasonably possible, and (iv) to execute and deliver any additional instruments necessary to consummate the Transactions and to fully carry out the purposes of this Agreement. Each Group shall keep the other Group reasonably apprised of the status of the matters related to the completion of the Transactions, including with respect to obtaining the Required Consents, and shall afford the other Group a reasonable opportunity to participate in discussions with lenders, Joint Venture Partners, ground lessors and other third parties with respect to the Required Consents.

(b) In connection with and without limiting the foregoing, each Party shall give (or shall cause to be given) any notices to any Person, and the Parties shall use, and cause each of their respective Affiliates to use, Commercially Reasonable Efforts to obtain any consents, terminations, waivers, authorizations and approvals not covered by Section 5.2(a) that are proper or advisable to consummate the Transactions.

(c) Any material notices pursuant to Sections 5.2(a) and (b) shall be subject to the review and consent of the other Group, such consent not to be unreasonably withheld, delayed or conditioned. Any material notice with respect to any waiver, consent, authorization or approval shall be subject to the review and consent of the other Group, such consent not to be unreasonably withheld, delayed or conditioned.

(d) The members of each Group will furnish to the other such necessary information and reasonable assistance as the other Group may request in connection with the preparation of any required governmental filings or submissions and will cooperate in responding to any inquiry from a Governmental Entity, including promptly informing the other Group of such inquiry, consulting in advance before making any presentations or submissions to a Governmental Entity, and supplying each other with copies of all material correspondence, filings, productions or communications between either Group and any Governmental Entity with respect to this Agreement. To the extent reasonably practicable, the other Group or its Representatives shall have the right to review in advance and each of the Parties will consult the other Group on, all the information relating to the other Group and each of its Affiliates that appears in any filing made with, or written materials submitted to, any Governmental Entity in connection with the Transactions, except that confidential competitively sensitive business information may be redacted from such exchanges. The Parties may, as they deem advisable and necessary, designate any commercially sensitive materials provided to the other Group under this Section 5.2 as “outside counsel only”. Such materials and the information contained therein

shall be given only to outside counsel of the recipient and will not be disclosed by such outside counsel to employees, officers, or directors of the recipient without the advance written consent of the Party providing such materials. To the extent reasonably practicable, neither the Vornado Parties nor the JBG Parties shall, nor shall they permit their respective Representatives to, participate independently in any meeting or engage in any substantive conversation with any Governmental Entity in respect of any filing, investigation or other inquiry relating to the Transactions without giving the other Group prior notice of such meeting or conversation and, to the extent permitted by applicable Law and the Governmental Entity, without giving the other Group the opportunity to attend or participate (whether by telephone or in person) in any such meeting with such Governmental Entity. Subject to applicable law, each Party will consult and cooperate with the other Group in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, and proposals made or submitted to any Governmental Entity regarding the Transactions.

(e) The Vornado Parties and the JBG Parties agree: (i) to make, or cause their ultimate parent entities as that term is defined in the HSR Act to make, or cause to be made, appropriate filings of the Notification and Report Form under the HSR Act if applicable, with respect to the Transactions as promptly as practicable; and (ii) to take all other actions reasonably necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as practicable. The responsibility for the payment of any filings fees in connection with any filings under the HSR Act shall be apportioned between the JBG Parties and the Vornado Parties in proportion to the relative aggregate Asset Values of their Included Assets on the date hereof, in each case, including any Kickout Interests.

(f) Additional Third Party Consent Procedures; Kickout Interests .

(i) If a Required Debt Consent has not been obtained as to a JBG Included Asset within one hundred twenty (120) days of the date hereof, then, except with the consent of the Vornado Parties (not to be unreasonably withheld, conditioned or delayed), the JBG Parties shall use Commercially Reasonable Efforts either (x) to prepay the applicable Indebtedness with their own funds (which may, at the JBG Parties’ election and on notice to the Vornado Parties, be prepaid concurrently with Closing) or (y) to refinance the applicable Indebtedness (A) for a principal amount not to exceed the sum of the outstanding principal amount under the Indebtedness being refinanced plus all costs specifically necessary to accomplish such refinancing, (B) for a term that is no shorter than five (5) years (or three (3) years for Indebtedness related to an Included Asset under development), inclusive of extension terms and (C) on market terms and on terms which do not restrict the consummation of the Transactions (either of the foregoing provisions (x) and (y), a “ Debt Refinancin g”). The JBG Parties shall provide the Vornado Parties copies of any term sheets, commitments, agreements or instruments to be executed in connection with any Debt Refinancing prior to the execution thereof, shall keep the Vornado Parties reasonably apprised of the progress of and reasonably consult with the Vornado Parties regarding the terms of any Debt Refinancing prior to the consummation thereof, and shall promptly provide to the Vornado Parties written notice of the consummation of any Debt Refinancing. If a Required Debt Consent has not been

obtained or a Debt Refinancing consummated as of the date that is twenty (20) days before the anticipated Closing Date, then (i) the JBG Parties may elect to draw on the Credit Facility on the Closing Date (in the event that it is reasonably expected that the Credit Facility will be in effect at or prior to the Closing) in an amount sufficient to repay the outstanding principal amount of such Indebtedness and to use such the proceeds of such draw to repay the Indebtedness under which such Required Debt Consent is required (a “ Credit Facility Refinancing Draw ”); provided , that the JBG Parties may not elect to effect Credit Facility Refinancing Draws in excess of one hundred million dollars ($100,000,000) in the aggregate for this purpose without the consent of the Vornado Parties, in the Vornado Parties’ sole discretion; and (ii) if the JBG Parties have not elected to effect a Credit Facility Refinancing Draw as to a given Included Property, but if they did so the applicable percentage thresholds specified in Section 2.1(a) , Section 2.1(b) or Section 7.1(g) would be met, then the Vornado Parties may elect to effect a Credit Facility Refinancing Draw in an amount sufficient to meet the applicable threshold; provided , that (x) the total amount of Credit Facility Refinancing Draws (including those drawn by the JBG Parties) shall not exceed one hundred million dollars ($100,000,000) in the aggregate for this purpose; and (y) Newco shall bear any prepayment fees or similar costs with respect to each separate Indebtedness in excess of the greater of (A) one hundred thousand dollars ($100,000) and (B) one percent (1%) of the principal amount of each separate Indebtedness to be repaid with the proceeds of a Credit Facility Refinancing Draw. Any Included Interest that is subject to a Required Debt Consent shall be deemed a Kickout Interest until such Required Debt Consent is obtained or until a Debt Refinancing is consummated or a Credit Facility Refinancing Draw is available with respect to the applicable Indebtedness as described above; provided , that if as of the date that is twenty (20) days before the anticipated Closing Date, the JBG Parties have not been able to obtain such Required Debt Consent or consummate a Debt Refinancing with respect to the applicable Indebtedness or it is not then reasonably expected that a Credit Facility Refinancing Draw can be made at Closing with respect to the applicable Indebtedness (or if it is reasonably expected that a Credit Facility Refinancing Draw can be made but then no such Credit Facility Refinancing Draw actually occurs at Closing), then (a) if the Closing occurs on the then-anticipated Closing Date, the Included Interest the contribution of which requires such Required Debt Consent will be permanently deemed a “Kickout Interest” for purposes of this Agreement and the contribution of such Kickout Interest shall not occur or (b) if the Closing does not occur on the then-anticipated Closing Date, then the provisions of this Section 5.1(f)(i) will continue to apply in accordance with their terms (including as to such Required Debt Consent) in connection with the actual Closing Date.

(ii) If a Required Debt Consent has not been obtained as to a Vornado Included Asset within one hundred twenty (120) days of the date hereof, then, except with the consent of the JBG Parties (not to be unreasonably withheld, conditioned or delayed), the Vornado Parties shall use Commercially Reasonable Efforts to consummate a Debt Refinancing with respect to the applicable Indebtedness. The Vornado Parties shall provide the JBG Parties copies of any term sheets, commitments, agreements or instruments to be executed in connection with any Debt Refinancing prior to the

execution thereof, shall keep the JBG Parties reasonably apprised of the progress of and reasonably consult with the JBG Parties regarding the terms of any Debt Refinancing prior to the consummation thereof, and shall promptly provide to the JBG Parties written notice of the consummation of any Debt Refinancing. If a Required Debt Consent has not been obtained or a Debt Refinancing consummated as of the date that is twenty (20) days before the anticipated Closing Date, then (i) the Vornado Parties may effect a Credit Facility Refinancing Draw (in the event that it is reasonably expected that the Credit Facility will be in effect at or prior to the Closing); provided , that the Vornado Parties may not elect to effect a Credit Facility Refinancing Draws in excess of one hundred fifty million dollars ($150,000,000) in the aggregate for this purpose without the consent of the JBG Parties, in the JBG Parties’ sole discretion; provided further , that the Vornado Parties may elect to draw on the Credit Facility in an amount not to exceed the amount set forth on Section 5.2(f)(ii) of the Vornado Disclosure Letter for the purpose identified on Section 5.2(f)(ii) of the Vornado Disclosure Letter, which draw shall not be subject to the JBG Parties’ consent and which shall not count for purposes of the foregoing $150,000,000 cap or be otherwise restricted by the provisions of this paragraph; and (ii) if the Vornado Parties have not elected to effect a Credit Facility Refinancing Draw as to a given Included Property, but if they did so the percentage thresholds specified in Section 2.1(c) or Section 7.1(g) would be met, then the JBG Parties may elect to effect a Credit Facility Refinancing Draw in an amount sufficient to meet the threshold; provided , that (x) the total amount of Credit Facility Refinancing Draws (including those drawn by the Vornado Parties) shall not exceed one hundred fifty million dollars ($150,000,000) in the aggregate for this purpose; and (y) Newco shall bear any prepayment fees or similar costs with respect to each separate Indebtedness in excess of the greater of (A) one hundred thousand dollars ($100,000) and (B) one percent (1%) of the principal amount of each separate Indebtedness to be repaid with the proceeds of a Credit Facility Refinancing Draw. Any Included Interest that is subject to a Required Debt Consent shall be deemed a Kickout Interest until such Required Debt Consent is obtained or until a Debt Refinancing is consummated or a Credit Facility Refinancing Draw is available with respect to the applicable Indebtedness as described above; provided , that if as of the date that is twenty (20) days before the anticipated Closing Date, the Vornado Parties have not been able to obtain such Required Debt Consent or consummate a Debt Refinancing with respect to the applicable Indebtedness or it is not then reasonably expected that a Credit Facility Refinancing Draw can be made at Closing with respect to the applicable Indebtedness (or if it is reasonably expected that a Credit Facility Refinancing Draw can be made but then no such Credit Facility Refinancing Draw actually occurs at Closing), then (a) if the Closing occurs on the then-anticipated Closing Date, the Included Interest the contribution of which requires such Required Debt Consent will be permanently deemed a “Kickout Interest” for purposes of this Agreement and the contribution of such Kickout Interest shall not occur or (b) if the Closing does not occur on the then- anticipated Closing Date, then the provisions of this Section 5.1(f)(ii) will continue to apply in accordance with their terms (including as to such Required Debt Consent) in connection with the actual Closing Date.

(iii) Until a Party is able to obtain any Required Ground Lease Consent, then the applicable Included Property shall be deemed a Kickout Interest. If such Required Ground Lease Consent is not obtained on or before the date that is twenty (20) days before the anticipated Closing Date, the applicable Included Interest the contribution of which requires such Required Ground Lease Consent will be permanently deemed a “Kickout Interest” for purposes of this Agreement and the contribution of such Kickout Interest shall not occur. If a Required Ground Lease Consent with respect to any JBG Included Interest holding a direct or indirect interest in the Included Properties set forth on Section 5.2(f)(iii) of the JBG Disclosure Letter is not obtained on or before the date that is twenty (20) days before the anticipated Closing Date, then, notwithstanding anything to the contrary in this Agreement but subject to Section 5.2(f)(iii) of the JBG Disclosure Letter, if the Closing occurs on the then-anticipated Closing Date such JBG Included Interest shall not be deemed a Kickout Interest but the Managing Member Interest with respect to any such JBG Included Interest will be deemed an “Excluded Managing Member Interest” for purposes of this Agreement and shall not be contributed to Newco OP or any Subsidiary thereof.

(iv) Until a Party is able to obtain any Required JV Consent, the applicable Included Property shall be deemed a Kickout Interest. If such Required JV Consent is not obtained on or before the date that is twenty (20) days before the anticipated Closing Date, and if the Closing occurs on the then-anticipated Closing Date, the applicable Included Interest the contribution of which requires such Required JV Consent will be permanently deemed a “Kickout Interest” for purposes of this Agreement and the contribution of such Kickout Interest shall not occur. If a Required JV Consent with respect to any JBG Included Interest holding a direct or indirect interest in the Included Properties set forth on Section 5.2(f)(iv) of the JBG Disclosure Letter is not obtained on or before the date that is twenty (20) days before the anticipated Closing Date, then, notwithstanding anything to the contrary in this Agreement but subject to Section 5.2(f)(iv) of the JBG Disclosure Letter, such JBG Included Interest shall not be deemed a Kickout Interest but the Managing Member Interest with respect to any such JBG Included Interest will be deemed an “Excluded Managing Member Interest” for purposes of this Agreement and shall not be contributed to Newco OP or any Subsidiary thereof.

(v) The JBG Parties shall use Commercially Reasonable Efforts to cause the actions specified on Section 5.2(f)(v) of the JBG Disclosure Letter to occur with respect to the JBG Included Interests identified on Section 5.2(f)(v) of the JBG Disclosure Letter. Until such an action is completed, the applicable JBG Included Interests shall be deemed to be a Kickout Interest. If any such action is not completed on or before the date that is twenty (20) days before the anticipated Closing Date for any reason, then, and if the Closing occurs on the then-anticipated Closing Date, then the applicable JBG Included Interest will be permanently deemed a “Kickout Interest” for purposes of this Agreement and the contribution of such Kickout Interest shall not occur.

(vi) Until the lease identified on Section 5.2(f)(vi) of the Vornado Disclosure Letter is modified to eliminate any percentage rent payments to the relevant Vornado Included Entity, the Vornado Included Interest identified on Section 5.2(f)(vi) of the Vornado Disclosure Letter shall be a Kickout Interest. If such lease is not so modified on or before the date that is twenty (20) days before the anticipated Closing Date, then the Vornado Included Interest identified on Section 5.2(f)(vi) of the Vornado Disclosure Letter will be permanently deemed a “Kickout Interest” for purposes of this Agreement and the contribution of such Kickout Interest shall not occur. The Vornado Parties shall use Commercially Reasonable Efforts to obtain such lease modification.

(g) Release of Vornado and JBG Guarantees .

(i) On or prior to the Closing Date, or as soon as practicable thereafter, Newco shall, with the reasonable cooperation of the other Parties, use Commercially Reasonable Efforts to (A) have any Vornado Party or Affiliate of any Vornado Party related to a Vornado Included Asset removed as guarantor of, indemnitor of or obligor for any Indebtedness, including the removal of any security interest on or in any assets of the Vornado Parties and their Subsidiaries that are not Vornado Included Assets that may serve as collateral or security for any such Indebtedness; and (B) have any member(s) of any JBG Party or Affiliate of any JBG Party related to a JBG Included Asset removed as guarantor of, indemnitor of or obligor for any Indebtedness, including the removal of any security interest on or in any assets of the JBG Parties and their Subsidiaries that are not JBG Included Assets that may serve as collateral or security for any such Indebtedness.

(ii) To the extent required to obtain a release from any such guarantee or indemnity described in Section 5.2(g)(i) , Newco or a suitable Newco Subsidiary shall execute a guarantee or indemnity agreement in the form of the existing guarantee or indemnity or such other form as is agreed to by the relevant parties to such guarantee or indemnity agreement, which agreement shall include the removal of any security interest on or in any assets of the Vornado Parties and their Subsidiaries or the JBG Parties and their Subsidiaries that are not Included Assets that may serve as collateral or security for any such Indebtedness, except to the extent that such existing guarantee or indemnity contains representations, covenants or other terms or provisions either (A) with which Newco or such Subsidiary would be reasonably unable to comply or (B) which Newco or such Subsidiary would not reasonably be able to avoid breaching.

(iii) The reasonable consent of JBG Properties (with respect to Vornado Included Assets) or Vornado (with respect to JBG Included Assets) shall be required prior to Newco or a Newco Subsidiary undertaking any obligation in furtherance of clause (i) or (ii) of this Section 5.2(g) that subjects Newco or a Newco Subsidiary to obligations that are materially different from those that the Vornado Parties or the JBG Parties, or their respective Affiliates, are currently subject to under the existing guaranty or indemnity arrangement, including entering into guarantee or indemnity agreements in a materially different form than any existing agreement, if such obligations or differences

would adversely affect, in any material respect, the rights or obligations of Newco or such Newco Subsidiary under the existing guarantee or indemnity arrangement.

(iv) From and after the Closing Date, until such time as Newco or a suitable Newco Subsidiary has obtained any removal or release as set forth in this Section 5.2(g) , (A) Newco, or a suitable Newco Subsidiary, will indemnify, defend and hold harmless the applicable JBG Party, Vornado Party or Affiliate thereof, as the case may be, and its respective agents, assigns and successors against or from any Liabilities arising under or relating to such guarantees or similar agreements described in Section 5.2(g)(i) with respect to Liabilities arising thereunder from and after the Closing Date, and shall, as agent or subcontractor for such guarantor, indemnitor or obligor, pay, perform and discharge fully all the obligations or other Liabilities of such guarantor, indemnitor or obligor thereunder. Until such time as Newco or a suitable Newco Subsidiary has obtained any removal or release as set forth in this Section 5.2(g) , Newco agrees not to renew or extend the term of, increase any obligations under, or transfer to a third party, any loan, guarantee, lease, Contract or other obligation for which a Vornado Party, a JBG Party, Affiliates thereof, or their respective agents, assigns and successors, is or may be liable unless all obligations of such Vornado Party, JBG Party, Affiliate, agents, assigns and successors thereunder are thereupon terminated by documentation satisfactory in form and substance to the Vornado Parties or the JBG Parties (as the case may be).

(v) Until such time as Newco or a Newco Subsidiary has obtained any removal or release as set forth in this Section 5.2(g) , Vornado and Newco (in the case of Vornado Included Assets) and JBG Properties and Newco (in the case of JBG Included Assets) shall coordinate with respect to contact with the beneficiary of such guarantee, afford each other a reasonable opportunity to participate in discussions with such beneficiaries prior to engaging therein, and keep the other Party reasonably informed of any discussions with such beneficiaries in which such other Party does not participate.

(vi) For the avoidance of doubt, this Section 5.2(g) shall not be construed in a manner as creating any Vornado Included Entity Tax Protection Agreement or a JBG Tax Protection Agreement, or otherwise causing the representations in Section 3.10(g) and Section 4.13(j) to be untrue.

(vii) The provisions of this Section 5.2(g) shall survive Closing.

Section 5.3. Publicity . So long as this Agreement is in effect, no Party, nor any Affiliate or Representative of a Party, shall issue or cause the publication of any press release or other public announcement with respect to the Transactions or this Agreement without the prior written consent of the other Group, unless such Party determines, after consultation with outside counsel, that it is required by applicable Law or by any listing agreement with or the listing rules of a national securities exchange or trading market to issue or cause the publication of any press release or other public announcement with respect to the Transactions or this Agreement, in which event such Party shall endeavor, on a basis reasonable under the circumstances, to provide

a meaningful opportunity to the other Group to review and comment upon such press release or other public announcement and shall give due consideration to all reasonable additions, deletions or changes suggested thereto; provided , however , that this Section 5.3 does not apply to the information that the Parties are required to include in any notification required under the HSR Act or in connection with their responses to any inquiries from a Governmental Entity regarding the Transactions.

Section 5.4. Conduct of Business by the Vornado Parties .

(a) The Vornado Parties agree that between the date of this Agreement and the Closing or the date, if any, on which this Agreement is terminated pursuant to Section 8.1 , except (i) as set forth in Section 5.4 of the Vornado Disclosure Letter, (ii) as required pursuant to this Agreement, (iii) as may be required by Law or (iv) as consented to in writing by the JBG Parties (which consent shall not be unreasonably withheld, delayed or conditioned), they shall cause Newco, Newco OP and each of the Vornado Included Entities to (A) conduct their business in all material respects in the ordinary course of business consistent with past practices, (B) operate, manage and develop the Vornado Included Properties in the ordinary course and consistent with past practices (including, with respect to maintenance of insurance and the application of security deposits and the payment of obligations) in all material respects, provided that the foregoing shall not impose any obligation on any Vornado Included Entity to undertake any new capital improvement projects after the date hereof (other than to repair or replace any capital improvements requiring immediate repair or replacement or in connection with contractual lease obligations and Material Contracts) except as provided in Section 5.4 of the Vornado Disclosure Letter, (C) perform and otherwise comply, or cause their agents to perform and otherwise comply, in all material respects with, all of the obligations of the lessee under the ground leases affecting any Vornado Included Property and all obligations of the Vornado Included Entities under the Vornado Material Contracts, (D) use their respective Commercially Reasonable Efforts to maintain in all material respects the Vornado Included Properties in their current condition (ordinary wear and tear excepted), preserve their business organizations intact in all material respects, and maintain existing relations and goodwill with lenders, tenants, employees and business associates in all material respects, (E) maintain the status of Newco OP as a disregarded entity or a partnership for U.S. federal income tax purposes, (F) maintain the status of the Vornado REITs as REITs and the Vornado TRSs as Taxable REIT Subsidiaries and (G) from the time Newco makes its REIT election pursuant to Section 856(c)(1) of the Code, maintain the status of Newco as a REIT.

(b) Without limiting the generality of the foregoing, and except (w) as set forth in Section 5.4 of the Vornado Disclosure Letter, (x) as required pursuant to this Agreement, (y) as required by Law or (z) as consented to in writing by the JBG Parties (which consent shall not be unreasonably withheld, delayed or conditioned), between the date of this Agreement and the Closing or the date, if any, on which this Agreement is terminated pursuant to Section 8.1 , the Vornado Parties shall not, and shall cause Newco, Newco OP and each Vornado Included Entity not to, directly or indirectly:

(i) amend the Governing Documents of Newco, Newco OP or any Vornado Included Entity, except as contemplated by the Declaration of Trust Amendment and Restatement, the Bylaws Amendment and Restatement or the Partnership Agreement Amendment and Restatement;

(ii) adjust, split, combine, subdivide or reclassify any shares of the capital stock of Newco, Newco OP or any Vornado Included Entity;

(iii) redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of the capital stock or other Equity Interests of Newco, Newco OP or any Vornado Included Entity;

(iv) grant, issue, deliver or sell any additional Equity Interests of Newco, Newco OP or any Vornado Included Entity;

(v) cause or permit Newco, Newco OP or any Vornado Included Entity to enter into a line of business other than the line of business currently engaged in by it;

(vi) enter into a merger agreement, acquisition agreement or disposition agreement with respect to Newco, Newco OP or any Vornado Included Entity or any Vornado Included Property or authorize the liquidation, dissolution, consolidation, bankruptcy or other reorganization of Newco, Newco OP or any Vornado Included Entity;

(vii) with respect to Newco, Newco OP or any Vornado Included Entity, change any material method of Tax accounting, make or change any material Tax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of a material amount of Taxes other than in the ordinary course of business, enter into any closing agreement with respect to a material amount of Tax or surrender any right to claim a material Tax refund;

(viii) take any action that (or fail to take any action the omission of which) would reasonably be expected to prevent the Pre-Combination Transactions from qualifying for the Agreed Treatment (provided that the Combination Transactions and Post-Closing Transactions shall be treated as in compliance with this clause (viii));

(ix) cause or permit Newco, Newco OP or any Vornado Included Entity to enter into any acquisition agreement or acquire any real property, or otherwise enter into any acquisition agreement for, or acquire, any real property in the Washington, D.C. metropolitan area;

(x) except for the properties listed on Section 1.6(b) of the Vornado Disclosure Letter, sell, transfer or assign any Vornado Included Property or any direct interest therein (other than pursuant to a buy-sell or other mandatory contractual

obligation triggered by a third party) or encumber (other than in connection with Indebtedness permitted to be incurred hereunder) any Vornado Included Property with any mortgages, deeds of trust or other Liens which secure Indebtedness for borrowed money;

(xi) sell, transfer, assign or remove any material personal property from any Vornado Included Property, except in the ordinary course consistent with past practices, unless replaced by unencumbered personal property of equal or greater utility and value;

(xii) cause or permit Newco, Newco OP or any Vornado Included Entity to incur, create, assume, refinance, replace or prepay any Indebtedness for borrowed money or issue or amend the terms in any material respect of any Indebtedness for borrowed money or assume, guarantee or endorse, or otherwise become responsible (whether directly, contingently or otherwise) for any Indebtedness of any other Person other than in the ordinary course of business, except (A) the refinancing of existing Indebtedness within six (6) months of maturity, in a principal amount not to exceed the principal amount of such Indebtedness being refinanced, for a term that is no shorter than five (5) years (or three (3) years for Indebtedness related to a Vornado Included Asset under development), inclusive of extension terms, and on other market terms and on terms which do not restrict the Transactions, (B) as set forth on Section 5.4(b)(xii) of the Vornado Disclosure Letter, (C) as contemplated by Section 5.2(f) , (D) the drawdown of unused amounts under existing construction loans and delayed draw mortgage loans that are available for draw in accordance with the terms of such facilities, (E) the repayment or prepayment of Indebtedness with cash and not with the proceeds of a refinancing and (F) the exercise of any as-of-right extension options with respect to existing Indebtedness;

(xiii) except as required by applicable Law or written Contract in effect as of the date of this Agreement that has been disclosed or made available to the JBG Parties, take or permit to be taken any action or commitment to enter into or amend any employment, severance, retention or change in control agreement or arrangement with any individual Vornado Service Providers that may result in any Liability to Newco or its Affiliates (other than any agreement or arrangement which is terminable upon ninety (90) days’ notice without incurring any obligation other than payment for the 90-day notice period);

(xiv) cause or permit any Vornado Included Entity to materially amend (except as required by applicable Law), adopt or establish any Plan for the benefit of the Vornado Service Providers, or the spouses, beneficiaries or other dependents thereof ;

(xv) cause or permit Newco, Newco OP or any Vornado Included Entity to enter into, or amend, extend, modify, terminate or consent to any such amendment, extension, modification or termination of, any agreement with any Related Party;

(xvi) enter into, amend, extend, modify, terminate or consent to any such entry into, amendment, extension, modification or termination of (i) any lease affecting any Vornado Included Property demising square footage in excess of 25,000 square feet, other than any lease for which a written proposal was submitted to the tenant before the date hereof, (ii) any lease for premises in a building that is not in operation or substantially under construction as of the date hereof;

(xvii) enter into or extend the term of any retail lease affecting any Vornado Included Property described on Section 5.4(b)(xvii) of the Vornado Disclosure Letter, other than any lease which is terminable by the landlord without penalty (other than a de minimis amount) either on no more than one hundred eighty (180) days’ notice or in connection with the demolition or significant renovation of the premises; provided , that with respect to any proposal to enter into or extend a lease described in this paragraph, such proposal shall be deemed approved by the JBG Parties if the JBG Parties fail to respond to a written request for approval within five (5) days of the delivery thereof; provided , further , that the Vornado Parties shall be liable to Newco for any damages to Newco or its Subsidiaries caused by a Willful Breach of this paragraph caused by a senior executive officer of the Vornado Parties, even if the Closing nevertheless occurs (This clause shall survive Closing.);

(xviii) amend, extend, modify, terminate or consent to any such amendment, extension, modification or termination of any ground lease affecting any Vornado Included Property in a manner that would materially and adversely affect such Vornado Included Property;

(xix) enter into, or amend, extend, modify, terminate or consent to, any such amendment, extension, modification or termination of, any Joint Venture Agreement affecting any Vornado Included Property in a manner that would materially and adversely affect such Vornado Included Property;

(xx) enter into a new agreement with a general contractor pertaining to, obtain or guarantee any construction financing with respect to, or actually commence, the development or construction of any Vornado Included Property;

(xxi) commence any new base building capital project with respect to a Vornado Included Property, the aggregate cost to the Vornado Parties of which is projected to exceed $2,000,000, other than a project commenced prior to the date hereof, a project that is under the control of a Joint Venture Partner, or a project required by law or a Vornado Lease or to address an emergency;

(xxii) amend or modify, or consent to the amendment or modification of, the zoning or entitlements use of any Vornado Included Property in a manner that would materially and adversely affect such Vornado Included Property;

(xxiii) knowingly take any action, or knowingly fail to take any action, which action or failure would reasonably be expected to cause any of the Vornado REITs to fail to qualify as a REIT or that would reasonably be expected to cause Newco to fail to qualify as a REIT after the Closing;

(xxiv) waive, release, assign, commence, settle or compromise any pending or threatened legal proceeding by or against Newco, Newco OP or any Vornado Included Entity that (A) requires payment (not covered by insurance) by Newco, Newco OP or any Vornado Included Entity of an amount in excess of $1,000,000 in the aggregate or that would require the issuance of any Equity Interests, (B) entails the incurrence of any obligation or liability of in excess of such amount, including costs or revenue reductions or obligations that would impose any material restrictions on its business or operations, or (C) imposes any non-monetary relief or an admission of liability or wrongdoing or that would result in any supplement, modification to or amendment of the terms of (1) any agreement or document relating to the Transactions to which the JBG Parties or any of their Affiliates is a party or (2) any Vornado Material Contract;

(xxv) take any of the actions described on Section 5.4(b)(xxv) of the Vornado Disclosure Letter; or

(xxvi) authorize, or enter into, any Contract, commitment or arrangement to do any of the foregoing.

(c) Notwithstanding anything to the contrary set forth in this Agreement, nothing in this Agreement shall prohibit Vornado from taking, or causing Newco, Newco OP or any Vornado Included Entity to take, any action, at any time or from time to time, that in the reasonable judgment of Vornado is reasonably necessary for Vornado to maintain its and Newco’s qualification as REITs under the Code for any period or to avoid incurring entity level income or excise Taxes under the Code, including making dividend or other distribution payments to stockholders of Vornado in accordance with this Agreement or otherwise. If Vornado determines that it is necessary to take any such action, it shall notify the JBG Parties in writing as soon as reasonably practicable and the JBG Parties shall be given a reasonable opportunity to review and provide comments to such action, and Vornado shall give consideration, not to be unreasonably withheld, to such comments of the JBG Parties prior to the taking of such action.

(d) Nothing in this Section 5.4 shall restrict the Vornado Parties’ rights with respect to any Vornado Excluded Assets or give the JBG Parties any approval, consent or other rights with respect thereto.

(e) Nothing contained in this Agreement shall give the JBG Parties, directly or indirectly, the right to control or direct the Vornado Parties’ operations prior to the Closing. Prior to the Closing, the Vornado Parties shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their operations. Notwithstanding

anything to the contrary set forth in this Agreement, no consent of the JBG Parties shall be required with respect to any matter set forth in Section 5.4 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Law.

Section 5.5. Conduct of Business by the JBG Parties .

(a) Each JBG Party agrees that between the date of this Agreement and the Closing or the date, if any, on which this Agreement is terminated pursuant to Section 8.1 , except (i) as set forth in Section 5.5 of the JBG Disclosure Letter, (ii) as required pursuant to this Agreement, (iii) as may be required by Law or (iv) as consented to in writing by the Vornado Parties (which consent shall not be unreasonably withheld, delayed or conditioned), such JBG Party shall (A) conduct its business in all material respects in the ordinary course of business consistent with past practice (it being understood that this clause (A) shall not restrict any JBG Party from the issuance of any Equity Interests if such issuance is permitted by Sections 5.5(b)(iv) , 5.5(b)(vi) and 5.5(b)(ix) ); (B) operate, manage and develop the JBG Included Properties in the ordinary course and consistent with past practices (including, with respect to maintenance of insurance and the application of security deposits and the payment of obligations) in all material respects, provided that the foregoing shall not impose any obligation on the JBG Parties to undertake any new capital improvement projects after the date hereof (other than to repair or replace any capital improvements requiring immediate repair or replacement or in connection with contractual lease obligations and Material Contracts) except as provided in Section 5.5 of the JBG Disclosure Letter; (C) perform and otherwise comply, or cause its agents to perform and otherwise comply, in all material respects with, all of the obligations of the lessee under the ground leases affecting any JBG Included Property and all obligations of the JBG Parties under the JBG Material Contracts; (D) use their respective Commercially Reasonable Efforts to maintain in all material respects the JBG Included Properties in their current condition (ordinary wear and tear excepted and except in relation to JBG Development Properties), preserve their business organizations intact in all material respects, and maintain existing relations and goodwill with lenders, tenants, employees and business associates in all material respects; (E) continue to implement the development plan for the JBG Included Properties that constitute properties under development in accordance with existing plans, specifications and budgets and past practice; and (F) maintain the status of the JBG REITs as REITs and the status of the JBG TRSs as Taxable REIT Subsidiaries and the status of other JBG Funds and the JBG Management Entities as partnerships or, in the case of JBG Properties Inc., as a corporation, for U.S. federal income tax purposes.

(b) Without limiting the generality of the foregoing, and except (w) as set forth in Section 5.5 of the JBG Disclosure Letter, (x) as required pursuant to this Agreement, (y) as required by Law or (z) as consented to in writing by the Vornado Parties (which consent shall not be unreasonably withheld, delayed or conditioned), between the date of this Agreement and the Closing or the date, if any, on which this Agreement is terminated pursuant to Section 8.1 , the JBG Parties shall not, and shall cause each of their Subsidiaries not to:

(i) amend the Governing Documents of any JBG Party or its Subsidiary, other than (x) in connection with the Restructuring Transactions, (y) in

connection with obtaining a Required Debt Consent, Required JV Consent or Required Ground Lease Consent or (z) in a manner that would not materially adversely affect any JBG Included Asset;

(ii) adjust, split, combine, subdivide or reclassify any shares of the capital stock of any JBG Included Entity other than in connection with the Restructuring Transactions;

(iii) redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise acquire, directly or indirectly, any of the capital stock or other Equity Interests of any JBG Included Entity other than in connection with the Restructuring Transactions;

(iv) grant, issue, deliver or sell any additional Equity Interests of any JBG Included Entity; provided , however , that the JBG Parties may issue Equity Interests as required in connection with the Restructuring Transactions;

(v) enter into a line of business other than the line of business currently engaged in by it;

(vi) enter into a merger agreement, acquisition agreement or disposition agreement or authorize the liquidation, dissolution, consolidation, bankruptcy or other reorganization of any JBG Party or its Subsidiary other than in connection with the Restructuring Transactions or Combination Transactions;

(vii) change any material method of Tax accounting, make or change any material Tax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to the assessment or determination of a material amount of Taxes other than in the ordinary course of business, enter into any closing agreement with respect to a material amount of Tax or surrender any right to claim a material Tax refund with respect to the JBG Parties and the JBG Included Entities;

(ix) enter into any acquisition agreement or acquire any real property, (or permit any fund or other investment vehicle advised, managed or controlled by any JBG Party to do the same, except for acquisitions of real property that are subject to a binding acquisition agreement as of the date hereof or that are related to and would reasonably be expected to directly enhance the value of a JBG Excluded Asset; provided , that the JBG Parties shall give the Vornado Parties at least five (5) days’ prior written notice before entering into any such acquisition agreement or consummating any such acquisition);

(x) sell, transfer or assign any JBG Included Property or any direct interest therein (other than pursuant to a buy-sell, forced sale or other mandatory contractual obligation triggered by a third party) or encumber (other than in connection with Indebtedness permitted to be incurred hereunder) any JBG Included Property with any mortgages, deeds of trust or other Liens which secure Indebtedness for borrowed money;

(xi) sell, transfer, assign or remove any material personal property from any JBG Included Property, except in the ordinary course consistent with past practices, unless replaced by unencumbered personal property of equal or greater utility and value;

(xii) take any action to cause the termination or material amendment or waiver of any provision of any JBG Advisory Agreement other than in connection with the Restructuring Transactions or Combination Transactions or in a manner that would not materially adversely affect any JBG Included Asset;

(xiii) incur, create, assume, refinance, replace or prepay any material Indebtedness for borrowed money or issue or amend the terms of any material Indebtedness for borrowed money or assume, guarantee or endorse, or otherwise become responsible (whether directly, contingently or otherwise) for any material Indebtedness of any other Person other than in the ordinary course of business, except (A) the refinancing of existing Indebtedness within six (6) months of maturity, in a principal amount not to exceed the principal amount of such Indebtedness being refinanced, for a term that is no shorter than five (5) years (or three (3) years for Indebtedness related to a JBG Included Asset under development), inclusive of extension terms, and on other market terms and on terms which do not restrict the Transactions, (B) as set forth on Section 5.5(b)(xiii) of the JBG Disclosure Letter, (C) as contemplated by Section 5.2(f) , (D) the drawdown of unused amounts under existing construction loans and delayed draw mortgage loans that are available for draw in accordance with the terms of such facilities, (E) the repayment or prepayment of Indebtedness with cash and not with the proceeds of a refinancing and (F) the exercise of any as-of-right extension options with respect to existing Indebtedness;

(xiv) with respect to the JBG Management Entities only, have outstanding Indebtedness as of the Closing Date for borrowed money in excess of the aggregate amount of Expenses (other than Consent Expenses, Financial Advisor Expenses and the expenses set forth in Section 6.1(f) of the JBG Disclosure Letter below the cap described therein) actually incurred and paid by the JBG Parties prior to the Closing;

(xv) except as required by applicable Law or written Contract in effect as of the date of this Agreement that has been disclosed or made available to the Vornado Parties, take or permit to be taken any action or commitment to enter into or amend any employment, severance, retention or change in control agreement or arrangement with any JBG Service Providers (other than any agreement or arrangement which is terminable

upon ninety (90) days’ notice without incurring any obligation other than payment for the 90-day notice period);

(xvi) cause or permit any JBG Included Entity or JBG Management Entity to materially amend (except as required by applicable Law), adopt or establish any Plan (other than any “welfare plan” within the meaning of ERISA Section 3(1)) for the benefit of the JBG Service Providers, or the spouses, beneficiaries or other dependents thereof, except in connection with the Restructuring Transactions;

(xvii) enter into, or amend, extend, modify, terminate or consent to any such amendment, extension, modification or termination of, any agreement with any Related Party affecting any JBG Included Asset in a materially adverse manner;

(xviii) enter into, amend, extend, modify, terminate or consent to any such entry into, amendment, extension, modification or termination of (i) any lease affecting any JBG Included Property demising square footage in excess of 25,000 square feet, other than any lease for which a written proposal was submitted to the tenant before the date hereof, (ii) any lease for premises in a building that is not in operation or substantially under construction as of the date hereof;

(xix) other than as necessary to effect the Restructuring Transactions, amend, extend, modify, terminate or consent to any such amendment, extension, modification or termination of any ground lease affecting a JBG Included Property in a manner that would materially adversely affect such JBG Included Property;

(xx) enter into, or amend, extend, modify, terminate or consent to any such amendment, extension, modification or termination of, any Joint Venture Agreement affecting any JBG Included Property other than as provided in clause (i) of this Section 5.5(b) , or extend or permit the extension of the permitted investment period of any Joint Venture;

(xxi) enter into a new agreement with a general contractor pertaining to, obtain or guarantee any construction financing with respect to, or actually commence, the development or construction of any JBG Included Property;

(xxii) commence any new base building capital project with respect to a JBG Included Property, the aggregate cost to the JBG Parties of which is projected to exceed $2,000,000, other than a project commenced prior to the date hereof, a project that is under the control of a Joint Venture Partner, or a project required by law or a JBG Lease or to address an emergency;

(xxiii) amend or modify, or consent to the amendment or modification of, the zoning or entitlements use of any JBG Included Property in a manner that would materially adversely affect such JBG Included Property;

(xxiv) knowingly take any action, or knowingly fail to take any action, which action or failure would reasonably be expected to cause any of the JBG REITs to fail to qualify as a REIT or that would reasonably be expected to cause Newco to fail to qualify as a REIT after the Closing;

(xxv) waive, release, assign, commence, settle or compromise any pending or threatened legal proceeding by or against the JBG Management Entities, any JBG Included Entity or any Transferred LLC that (A) requires payment (not covered by insurance) by the JBG Management Entities or any JBG Included Entity of an amount in excess of $1,000,000 in the aggregate or that would require the issuance of any Equity Interests, (B) entails the incurrence of any obligation or liability in excess of such amount, including costs or revenue reductions or obligations that would impose any material restrictions on its business or operations, or (C) imposes any non-monetary relief or an admission of liability or wrongdoing or that would result in any supplement, modification to or amendment of the terms of (1) any agreement or document relating to the Transactions to which the JBG Parties or any of their Affiliates is a party or (2) any JBG Material Contract;

(xxvi) take any of the actions described on Section 5.5(b)(xxvi) of the JBG Disclosure Letter; or

(xxvii) authorize, or enter into, any Contract, commitment or arrangement to do any of the foregoing.

(c) Nothing in this Section 5.5 shall restrict the JBG Parties’ rights with respect to any JBG Excluded Assets or give the Vornado Parties any approval, consent or other rights with respect thereto.

(d) Nothing contained in this Agreement shall give the Vornado Parties, directly or indirectly, the right to control or direct the JBG Parties’ operations prior to the Closing. Prior to the Closing, the JBG Parties shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their operations. Notwithstanding anything to the contrary set forth in this Agreement, no consent of the Vornado Parties shall be required with respect to any matter set forth in this Section 5.5 or elsewhere in this Agreement to the extent that the requirement of such consent could violate any applicable Law.

(e) Notwithstanding anything to the contrary set forth in this Agreement, nothing in this Agreement shall prohibit the JBG Parties from taking, or causing any JBG Party or a Subsidiary to take, any action, at any time or from time to time, that in the reasonable judgment of the JBG Parties is reasonably necessary for the JBG REITs to maintain their qualification as REITs under the Code for any period or to avoid incurring entity level income or excise Taxes under the Code, including making dividend or other distribution payments to shareholders of the JBG REITs in accordance with this Agreement or otherwise. If the JBG Parties determine that it is necessary to take any such action, it shall notify Vornado in writing as soon as reasonably

practicable and Vornado shall be given a reasonable opportunity to review and provide comments to such action, and the JBG Parties shall give consideration, not to be unreasonably withheld, to such comments of Vornado prior to the taking of such action.

Section 5.6. Compliance with Securities Regulations . Vornado shall use Commercially Reasonable Efforts to take any action required to be taken under the Securities Act, the Exchange Act, and any applicable foreign or state securities or “blue sky” Laws and regulations thereunder in connection with the Equity Issuance and the JBG Parties shall furnish all information as Vornado may reasonably request in connection with any such actions.

Section 5.7. Credit Facility .

(a) The Parties shall use Commercially Reasonable Efforts to cooperate to arrange a debt financing for Newco and Newco OP (the “ Credit Facility ”) and take, or cause to be taken, all actions and do, or cause to be done, all things that are within their respective control and are reasonably necessary or advisable to obtain the Credit Facility on or immediately prior to the Closing, on terms acceptable to the Parties in their reasonable discretion. Without limiting the generality of the foregoing, such actions shall include, to the extent reasonably necessary or advisable to obtain and close the Credit Facility, the following: (i) using Commercially Reasonable Efforts to identify and contact potential lenders; (ii) preparing any materials related to marketing the Credit Facility to the extent reasonably requested by the Financing Sources; (iii) participating in and assisting with the preparation of rating agency presentations and meetings with rating agencies; (iv) delivering to the Financing Sources all information related to the Included Properties reasonably requested by them and within the Parties’ possession or control; (v) at the reasonable request of the Financing Sources, using Commercially Reasonable Efforts to deliver any requests for, and reasonably cooperating in seeking to obtain, consents, landlord waivers and estoppels, or non-disturbance agreements to the applicable counterparties; (vi) granting the Financing Sources and their Representatives access to the Included Properties (including related documentation or other items in the Parties’ respective possession or control) in order to conduct field examinations, collateral audits, asset appraisals, surveys, environmental site assessments and engineering/property condition reports and other inspections that are reasonably necessary in connection with the Credit Facility, including taking and analyzing any samples of any environmental media or any building material, but only to the extent such sampling is reasonably recommended pursuant to a third party environmental report and reasonably required by such Financing Source; (vii) participating in negotiating definitive Credit Facility documentation; and (viii) paying reasonable and customary fees and expenses in connection with obtaining the Credit Facility.

(b) Notwithstanding anything to the contrary contained in this Agreement, nothing contained in this Agreement shall require, and in no event shall the Commercially Reasonable Efforts of the Parties be deemed or construed to require in connection with the obtaining or assistance in obtaining the Credit Facility, a Party to provide assistance that (i) unreasonably interferes with such Party’s ongoing business; (ii) causes any representation or warranty of such Party in this Agreement to be breached; (iii) causes any closing condition set forth in Article VII to fail to be satisfied or otherwise causes the breach of this Agreement or any

Contract to which such Party is a party; or (iv) requires such Party (other than Newco or Newco OP) or its directors, officers, trustees, managers or employees (except in their capacity, or contemplated capacity as directors, officers, trustees, managers or employees of Newco, Newco OP or any of their Subsidiaries) to execute, deliver or enter into, or perform any agreement, document or instrument, including any commitment letter, with respect to the Credit Facility prior to the Closing, except for (x) a customary UCC pre-filing authorization letter effective as of the Closing, (y) any customary payoff letters in connection with the payment in full of any Indebtedness and release of Liens securing such Indebtedness required to be delivered as a condition precedent to the closing of the Credit Facility, and (z) customary fee and expense reimbursement and/or indemnity agreements entered into in favor of the Financing Sources prior to the Closing (but which reimbursement and/or indemnity obligations shall expire upon the closing of the Credit Facility).

(c) If Closing does not occur, then all costs, fees, expenses and indemnification obligations associated with pursuing the Credit Facility shall be apportioned between the JBG Parties and the Vornado Parties in proportion to the relative aggregate Asset Values of their Included Assets on the date hereof, in each case, including any Kickout Interests.

(d) Newco and Newco OP shall use the proceeds from the Credit Facility for the purposes set forth in the definition of Closing Date Payments and in accordance with Section 5.2(f) , as applicable.

Section 5.8. Certain Pre-Closing Actions .

(a) Prior to the Closing (and in any event no later than 11:59 p.m. on the Business Day preceding the Closing Date), the Vornado Parties, Newco and Newco OP shall cause the Pre-Combination Transactions set forth on Section 5.8(a) of the Vornado Disclosure Letter to be implemented as set forth therein. Immediately following the occurrence of the Pre- Combination Transactions, but prior to the Closing, the JBG Parties shall cause the actions set forth on Section 5.8(a) of the JBG Disclosure Letter that are contemplated to be taken prior to the Closing (collectively, the “ Restructuring Transactions ”) to be implemented as set forth therein. The Parties will reasonably agree to modify the Restructuring Transactions, the Combination Transactions and the Pre-Combination Transactions as requested by either Party and agree further to reasonably cooperate with each other for four (4) weeks following the date hereof in respect of the “ Potential Restructuring ”, as set forth on Section 5.8(a) of the Vornado Disclosure Letter, so long as (i) such modifications do not adversely affect the non-requesting Party in any material respect and (ii) such modifications would not reasonably be expected to affect the ability of the Vornado Parties to receive the opinions described in Section 7.2(e) and Section 7.2(f) and the ability of the JBG Parties to receive the opinions described in Section 7.3(e) . The Parties agree to amend the provisions of this Agreement, any schedule thereto, and any exhibit thereto to reflect any modifications described in the previous sentence. With the mutual consent of the Parties, the obligations of Newco hereunder may be assigned, to the extent necessary to reflect any modifications described herein, to a newly formed Subsidiary of Vornado.

(b) The Parties and their Subsidiaries shall use Commercially Reasonable Efforts prior to the Closing, to take such actions as may be necessary so that at Closing Newco has the capacity, after taking into account the services to be provided under the Transition Services Agreement and any available transition periods, to maintain material compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder and related or similar rules and regulations promulgated by any other governmental or self-regulatory entity or agency with jurisdiction over Newco.

(c) The JBG Parties shall take the actions set forth on Section 5.8(c) of the JBG Disclosure Letter and shall otherwise use Commercially Reasonable Efforts to cause the closing condition set forth in Section 7.2(h) to be satisfied on or before the Closing Date.

(d) Prior to the Closing date, the JBG Parties shall take the actions set forth on Section 5.8(d) of the JBG Disclosure Letter.

Section 5.9. Rule 3-14/Regulation S-X Cooperation . Without limiting the obligations of the JBG Parties under this Section 5.9 , from the date of this Agreement and continuing through the first (1st) anniversary of the Closing Date, the JBG Parties shall, within thirty (30) days of the date of this Agreement, and thereafter from time to time, at Newco’s or Newco OP’s reasonable request, within thirty (30) days after a calendar quarter end, provide:

(a) Newco, Newco OP and their Representatives with financial statements (prepared from the books and records of the JBG Parties, in accordance with GAAP applied on a consistent basis during the periods involved and fairly presenting, in all material respects, the financial position and results of operations of the JBG Management Entities and other JBG Included Entities, as of the times and for the periods referred to therein) and access to all financial and other information pertaining to the JBG Parties and the JBG Included Properties pertaining to the period of the JBG Parties’ ownership and operation of the JBG Included Properties to the extent in the JBG Parties’ possession or control (or to the extent the JBG Parties could obtain such information without unreasonable effort or expense), which information is relevant and reasonably necessary, in the opinion of Newco and Newco OP, for the preparation and filing of financial statements in compliance with the requirements of any or all of (x) Rules 3-12 and 3-14 of Regulation S-X of the SEC, or if required by the SEC, Rule 3-05 of Regulation S-X of the SEC, and enable the JBG Parties’ outside, third-party accountants (the “ Accountants ”) to audit such information, (y) any other rule issued by the SEC and applicable to Newco and Newco OP or their Affiliates, and (z) any registration statement, schedule, proxy statement, report or disclosure statement filed with the SEC by or on behalf of Newco and Newco OP or their Affiliates; and

(b) reasonable assistance to Newco and Newco OP and the Accountants in completing audits and the preparation of such financial statements and any required pro forma financial statements. Without limiting the generality of the foregoing, if requested by Newco and Newco OP (A) the JBG Parties shall deliver a customary representation letter in such form as is reasonably required by the Accountants, with such facts and assumptions as reasonably determined by the Accountants in order to make such certificate accurate, signed by the

individual(s) responsible for the JBG Parties’ financial reporting, as prescribed by GAAP promulgated by the Auditing Standards Division of the American Institute of Certified Public Accountants, which representation letter may be required to assist the Accountants in rendering an opinion on such financial statements in order to comply with subclauses (x), (y) and (z) of Section 5.9(a) above and (B) to the extent that the JBG Parties’ financial statements have previously been audited, the JBG Parties shall use Commercially Reasonable Efforts to cause the auditor of the JBG Parties’ financial statements to provide its consent to the inclusion of its report, without exception or qualification, with respect to such audited financial statements, to provide to Newco and Newco OP and/or their Affiliates or the underwriters or initial purchasers in any financing with appropriate comfort letters in accordance with the American Institute of Public Accountants’ professional standards and to participate in due diligence sessions customarily conducted in connection with the provision of comfort letters.

Section 5.10. Exclusivity . From the date of this Agreement until the Closing or the date, if any, on which this Agreement is terminated pursuant to Section 8.1 , each Party shall not, and shall cause each of its Affiliates not to, and shall direct its Representatives not to, directly or indirectly, except as permitted under Section 5.4 or Section 5.5 , solicit, initiate, knowingly facilitate or otherwise enter into any discussions, negotiations or agreements which could reasonably be expected to lead to a possible sale or other disposition of (a) all or any of the Included Assets of its Group, other than as specifically required pursuant to the terms of any right of first refusal described in Section 6.1(b) or Section 6.1(c) , or (b) except as contemplated by the Restructuring Transactions, all or any part of the ownership interests in any JBG Included Entity or Vornado Included Entity owned by such Party (whether by merger, reorganization, recapitalization or otherwise), in each case with any Person other than the other Group, or provide any non-public information regarding such Party’s Included Assets to any Person other than the other Group and its Affiliates and Representatives and Financing Sources other than as required by applicable Law or as specifically required pursuant to the terms of any Contract affecting an Included Property or Joint Venture Agreement, in each case excluding any information which is traditionally provided in the regular course of the such Party’s operation and management of its Included Properties to third parties where such Party and its Affiliates and Representatives have no reason to believe that such information may be utilized to evaluate any such transaction.

Section 5.11. NYSE Listing . Vornado shall cause Newco to use its Commercially Reasonable Efforts to cause the Issued Newco Shares to be approved for listing on the NYSE prior to the Closing Date, subject only to official notice of issuance. The Parties agree that Newco shall be listed on the NYSE under the ticker symbol listed on Section 5.11 of the Vornado Disclosure Letter.

Section 5.12. Equity Incentive Plan . Prior to Closing, the Newco Board shall adopt an equity incentive plan, in the form attached hereto as Exhibit K , to be effective as of Closing.

Section 5.13. Newco Board of Trustees and Officers .

(a) Immediately after the Pre-Combination Transactions, the Newco Board shall take or cause to be taken such action as may be necessary, in each case, to be effective as of the Closing, to (i) increase the number of trustees of Newco to twelve (12), (ii) cause six (6) individuals designated by the JBG Parties (such persons, and any replacement designees selected, the “ JBG Board Designees ”) and six (6) individuals designated by the Vornado Parties (such persons, and any replacement designees selected, the “ Vornado Board Designees ”, and together with the JBG Board Designees, the “ Board Designees ”) to compose the entire Newco Board, (iii) appoint the individual listed on Section 5.13(a) of the Vornado Disclosure Letter as Chairman of the Newco Board; provided , that if such individual dies or becomes disabled or incapacitated prior to Closing, the Vornado Parties shall have the right to designate a replacement for such individual, subject to the consent of the JBG Parties (which consent shall not be unreasonably withheld, delayed or conditioned), (iv) appoint the individual listed on Section 5.13(a) of the JBG Disclosure Letter as Vice Chairman of the Newco Board, and (v) appoint an equal number of JBG Board Designees and Vornado Board Designees to the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee (with the JBG Board Designees to serve on such committees being selected at the direction of the JBG Parties). The Vornado Board Designees shall include the individuals listed on Section 5.13(a) of the Vornado Disclosure Letter, and the JBG Board Designees shall include the individuals listed on Section 5.13(a) of the JBG Disclosure Letter. The remaining three (3) JBG Board Designees and four (4) Vornado Board Designees shall be independent as determined under the applicable NYSE independence rules. If any of such independent Board Designees is unable or unwilling to serve on the Newco Board, as of the Closing, the JBG Parties (in the case of any Board Designee initially designated by the JBG Parties) or the Vornado Parties (in the case of any Board Designee initially designated by the Vornado Parties) shall select, within a reasonable period of time prior to the Closing, a replacement, which designee shall (i) not violate any of the NYSE independence tests set forth in Section 303A.02(b) of the NYSE Listed Company Manual and (ii) not be subject to any disclosures required under Rule 401(f) of Regulation S-K. Subject to the foregoing, the Newco Board shall elect such replacement as a member of the Newco Board, as of the Closing. Immediately after the Pre-Combination Transactions, the Newco Board shall take or cause to be taken such action as may be necessary, in each case, to be effective as of the Closing, to elect the individuals set forth on Section 5.13(a) of the Vornado Disclosure Letter as executive officers of Newco.

(b) For a period of two (2) years following the Closing, if any Vornado Board Designee or JBG Board Designee is unable or unwilling to serve or is otherwise no longer serving as a member of the Newco Board, then the remaining Vornado Board Designees or JBG Board Designees, respectively, may designate a replacement individual reasonably satisfactory to the Nominating and Corporate Governance Committee of the Newco Board (a “ Replacement Designee ”) and the Newco Board shall promptly appoint such Replacement Designee to fill the vacancy created thereby. In connection with the first annual meeting of shareholders following the closing, the Newco Board shall, subject to the reasonable exercise of its duties, take all such actions as may be necessary to nominate the Vornado Board Designees and the JBG Board Designees (as they may have changed as the result of the appointment of any Replacement

Designees) for election by Newco’s shareholders and shall use no less rigorous efforts to cause the election of each such Vornado Board Designee and JBG Board Designee than the manner in which Newco supports all other nominees of the Newco Board. In addition, for a period of two (2) years following the Closing, the Newco Board shall, to the extent reasonably practicable, appoint an equal number of Vornado Board Designees and JBG Board Designees (including, if applicable, their respective Replacement Designees) to the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee of the Newco Board.

Section 5.14. Newco Declaration and Bylaws . Prior to the Closing, the Newco Board shall adopt (a) the Declaration of Trust Amendment and Restatement, in the form attached hereto as Exhibit L , to be effective as of the Closing, and (b) an amendment and restatement of the Newco Bylaws, in the form attached hereto as Exhibit M (the “ Bylaws Amendment and Restatement ”), to be effective as of the Closing. The applicable Vornado Party shall cause the Declaration of Trust Amendment and Restatement and the Bylaws Amendment and Restatement to be authorized and approved.

Section 5.15. Intentionally Omitted .

Section 5.16. Newco Officer’s Certificate . Newco shall deliver to JBG REIT Counsel and Vornado REIT Counsel an officer’s certificate, dated as of the Closing Date, signed by an officer of Newco with the knowledge necessary to make the representations contained therein and in form and substance reasonably satisfactory to the JBG Parties and the Vornado Parties, respectively, containing representations of Newco as shall be reasonably necessary or appropriate to enable JBG REIT Counsel and Vornado REIT Counsel, respectively, to render the opinions described in Section 7.3(e)(ii) and Section 7.2(e)(ii) , respectively, on the Closing Date.

Section 5.17. Vornado Officer’s Certificates .

(a) Vornado shall deliver to Sullivan & Cromwell LLP an officer’s certificate, dated as of the Closing Date, signed by an officer of Vornado with the knowledge necessary to make the representations contained therein, containing representations of Vornado as shall be reasonably necessary or appropriate to enable Sullivan & Cromwell LLP to render the opinion described in Section 7.2(f) on the Closing Date.

(b) Vornado and the Vornado REITs shall each deliver to Vornado REIT Counsel an officer’s certificate, dated as of the Closing Date, signed by an officer of Vornado or such Vornado REIT, as applicable, with the knowledge necessary to make the representations contained therein and in form and substance reasonably satisfactory to the JBG Parties, containing representations of Vornado and the Vornado REITs as shall be reasonably necessary or appropriate to enable Vornado REIT Counsel to render the opinions described in Section 7.3(e)(i) and Section 7.3(e)(iii) on the Closing Date.

Section 5.18. JBG Officer’s Certificates .

(a) The JBG REITs shall each deliver to JBG REIT Counsel an officer’s certificate, dated as of the Closing Date, signed by an officer of such JBG REIT with the

knowledge necessary to make the representations contained therein and in form and substance reasonably satisfactory to the Vornado Parties, containing representations of the JBG REITs as shall be reasonably necessary or appropriate to enable JBG REIT Counsel to render the opinions described in Section 7.2(e)(i) on the Closing Date.

Section 5.19. Form 10 Filing . As promptly as practicable following the execution of this Agreement, Vornado shall cause Newco to prepare and file with the SEC an initial registration statement on Form 10. Vornado shall, and shall cause Newco to, use Commercially Reasonable Efforts to have such Form 10 declared effective under the Exchange Act as promptly as practicable after the date hereof and keep the Form 10 effective for so long as necessary to consummate the Transactions. No filing of, or amendment or supplement to, any Form 10 will be made by Vornado or Newco without providing the JBG Parties a reasonable opportunity to review and comment thereon. Vornado shall promptly notify the JBG Parties upon the receipt of any comments from the SEC or any request from the SEC for amendments or supplements to such Form 10, and shall, as soon as reasonably practicable, provide the JBG Parties with copies of all correspondence between Vornado and its Representatives, on the one hand, and the SEC, on the other hand, and all written comments with respect to the Form 10 received from the SEC, and shall promptly advise the JBG Parties of any oral comments with respect to the Form 10 received from the SEC. Vornado shall use Commercially Reasonable Efforts to respond as soon as practicable to any comments from the SEC with respect to the Form 10 and to have such comments cleared by the SEC as soon as practicable. Notwithstanding the foregoing, prior to filing the Form 10 or responding to any comments of the SEC with respect thereto, Vornado shall cooperate and provide the JBG Parties a reasonable opportunity to review and comment on such document or response (including the proposed final version of such document or response) and shall give due consideration to all changes provided by the JBG Parties.

Section 5.20. Confidentiality .

(a) Each of the JBG Parties, on the one hand, and the Vornado Parties, on the other hand, in the course of discussions and negotiations, have disclosed to the other Confidential Information relating to its business. Each Party shall use the Confidential Information of the other Party only for the purposes contemplated by this Agreement. The Receiving Party shall ensure that the Confidential Information of the Disclosing Party is not used, disclosed, published, released, transferred or otherwise made available in any form to, for the use or benefit of, any person (other than its Affiliates) except as provided in this Section 5.20 , without such Disclosing Party’s approval. Notwithstanding the foregoing, the Receiving Party may disclose Confidential Information in connection with any notification under the HSR Act that it is required to file to report any of the transactions described herein or to respond to any request for information or documents made by a Governmental Entity in connection with its investigation of the transactions described herein. In addition, the Receiving Party may disclose Confidential Information to any of its Representatives who need to know such Confidential Information for the purpose of evaluating the Transaction; provided , however , that the Receiving Party informs each such Representative of the confidential nature of the Confidential Information and the restrictive terms of this Section 5.20 and that the Receiving Party directs such Representative to comply with such restrictions. The Receiving Party shall be liable for any disclosure or use by

any such Representative other than in accordance with this Section 5.20 . The obligations of this Section 5.20 shall not restrict any disclosure by any Receiving Party pursuant to applicable Law; provided , that the Receiving Party (including with respect to any notification under the HSR Act that it is required to file to report any of the transactions described herein or to respond to any request for information or documents made by a Governmental Entity in connection with its investigation of the transactions described herein) will (a) provide the Disclosing Party with prompt notice thereof; (b) consult with the Disclosing Party on the advisability of taking steps to resist or narrow such disclosure; (c) cooperate (following the Disclosing Party’s written request and at its expense) with the Disclosing Party in any attempt that the Disclosing Party may make to resist such disclosure or obtain an order or other reliable assurance that confidential treatment will be accorded to designated portions of the Confidential Information; and (d) subject to the foregoing, disclose only that portion of Confidential Information that the Receiving Party reasonably deems it is required to disclose. Nothing herein, however, will require the Receiving Party to become subject to criminal or civil liability or regulatory censure for failure to disclose information pursuant to applicable Law.

(b) The Receiving Party acknowledges that significant portions of Confidential Information are proprietary in nature and that the Disclosing Party may suffer significant and irreparable harm in the event of the misuse or disclosure of Confidential Information and acknowledges that remedies other than injunctive relief may not be adequate. Accordingly, each Party has the right to seek the remedies of injunction, specific performance and other equitable relief for any breach, threatened breach or anticipatory breach of the provisions of this Section 5.20 by the Receiving Party or its Representatives. Notwithstanding the foregoing, any claim for damages hereunder shall be limited to actual damages and losses and shall not include punitive, consequential, special or indirect damages.

(c) The confidentiality provisions contained in this Section 5.20 supersede any and all prior agreements or understandings, whether written or oral, between or among the parties with respect to the matters covered by this Section 5.20 , and shall survive the Closing for six (6) months.

ARTICLE VI

ADDITIONAL AGREEMENTS

Section 6.1. ROFRs and Tenant Estoppels under Ground Leases and Joint Venture Agreements .

(a) The JBG Parties and the Vornado Parties shall use Commercially Reasonable Efforts to obtain prior to the Closing from each of the ground lessors under the JBG Ground Leases listed on Section 4.9(h) of the JBG Disclosure Letter and under the Vornado Ground Leases listed on Section 3.15(f) of the Vornado Disclosure Letter, respectively, a ground lease estoppel substantially in the form of Exhibit N hereto or such other form or terms as is provided under the applicable JBG Ground Lease or Vornado Ground Lease, if applicable. The Parties shall keep the other Group reasonably informed regarding the status of the discussions

with the applicable ground lessors regarding the foregoing matters from time to time prior to the Closing and shall within a reasonable period of time, provide the other Group with any estoppel received under this Section 6.1 . In no event will failure to obtain a ground lease estoppel be a condition to the Closing.

(b) With regard to any Included Property located in Montgomery County, Maryland that is a multifamily property that already has leases, which Included Properties are listed on Section 6.1(b) of the JBG Disclosure Letter and Section 6.1(b) of the Vornado Disclosure Letter (the “ Montgomery County Multifamily Properties ”), the Parties acknowledge that the Transactions may be subject to the requirements imposed by Section 11C-18 and Chapter 53A of the Code of Ordinances (said referenced sections, the “ Ordinances ”) of Montgomery County, Maryland (the “ County ”), pursuant to which the County and certain other entities, organizations and persons (the County and such other entities, organizations and persons, collectively, the “ Montgomery County Rights Holders ”) may be entitled to notice of any sale of certain rental housing projects in the County, and may have a right of first refusal to acquire such a project on substantially the same terms and conditions as a pending bona fide contract of sale from a third party to buy the rental housing. For each Montgomery County Multifamily Property, to the extent a JBG Party or Vornado Party, as applicable, is required to provide a right of first refusal, said right of first refusal shall be for the purchase price set forth on Section 6.1(b) of the JBG Disclosure Letter or Section 6.1(b) of the Vornado Disclosure Letter, as applicable, or as otherwise required by the Ordinances.

(c) With regard to any Included Property located in the District of Columbia that is a multifamily property that already has leases, which Included Properties are listed on Section 6.1(c) of the JBG Disclosure Letter and Section 6.1(c) of the Vornado Disclosure Letter (the “ DC Multifamily Properties ”), the Parties acknowledge that the Transactions may be subject to the requirements imposed by Subchapter IV of Section 42-3404 of the District of Columbia Code (“ TOPA ”) pursuant to which the tenants of said DC Multifamily Properties (collectively, the “ DC Rights Holders ”) are entitled to notice of any sale of certain rental housing projects in the District of Columbia. For each DC Multifamily Property, to the extent a JBG Party or Vornado Party, as applicable, is required to provide a right of first refusal, said right of first refusal shall be for the purchase price set forth on Section 6.1(c) of the JBG Disclosure Letter or Section 6.1(c) of the Vornado Disclosure Letter, as applicable.

(d) The Party that directly or indirectly owns the affected Included Property shall prepare all notices and take all required steps as required under the Ordinances and TOPA as promptly as reasonably possible after the date hereof in consultation with the other Group and may enter into such settlements and agreements with the Montgomery County Rights Holders and the DC Rights Holders with the approval of the other Group, which shall not be unreasonably withheld.

(e) Should Montgomery County Rights Holders or DC Rights Holders exercise their right to purchase and close such purchase of the applicable Included Property, (i) the applicable Party shall notify the other Group of the same, and (ii) the net purchase price paid or payable to the applicable Party with respect to the applicable Included Property shall be

included in the Included Assets and such purchase price shall be conclusively deemed to be the Asset Value of such Included Property.

(f) Each Group shall bear or reimburse Newco and Newco OP at Closing the expenses as set forth on Section 6.1(f) of the JBG Disclosure Letter or Vornado Disclosure Letter.

Section 6.2. Casualty and Condemnation . The risk of loss relating to the Included Assets prior to the Closing shall be borne by Newco and Newco OP if the Transaction closes and the Closing shall not be affected by a condemnation or casualty. If, prior to the Closing, (a) any Included Property is materially or totally destroyed or damaged by fire or other casualty or (b) any Included Property is materially or totally taken by eminent domain or through condemnation proceedings, then at Closing any sums collected (directly or indirectly) by the applicable Party, if any, under any policies of insurance or award proceeds relating to such casualty or condemnation, which have not been applied to repair or replacement of any such damage or destruction shall be paid to Newco, and all rights (directly or indirectly) of such Party to collect such sums as may then be uncollected shall be included in such Party’s Included Assets, except to the extent required for collection costs or repairs by such Party prior to the Closing Date; provided, however , that the Asset Value of any Included Property subject to a casualty shall be decreased for any deductible not applied or any remaining cost to repair any damage not covered by insurance.

Section 6.3. Tax Matters .

(a) The Vornado Parties and the JBG Parties and their respective Affiliates will timely and reasonably cooperate, to the extent reasonably requested by any of the Vornado Parties, JBG Parties and their respective Affiliates, in connection with any Tax matters relating to the JBG Included Assets, the Vornado Included Assets or the Transactions (including by the timely provision of reasonably relevant records or information reasonably available to such party, which shall include information regarding depreciation methodology and other Tax information necessary for the preparation and filing of any Tax Return); provided , however , that in recognition of the thorough cooperation and diligence that to date has been dedicated to REIT Diligence Matters, no further diligence in respect of such matters will be required, from this date forward, from the Vornado Parties by the JBG Parties, or from the JBG Parties by the Vornado Parties with respect to periods through the date of this Agreement (recognizing that, consistent with Section 6.3(e) , the Parties will cooperate to complete any diligence necessary with respect to the period from the date of this Agreement to Closing to facilitate consummation of the Transactions as contemplated by this Agreement). The Vornado Parties and the JBG Parties agree and shall cause their respective Affiliates (i) to retain all books and records with respect to Tax matters pertinent to the JBG Included Assets, the Vornado Included Assets and the Transactions relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by the Vornado Parties or JBG Parties, as applicable, any extensions thereof) of the respective taxable periods, and to substantially abide by all record retention agreements entered into with any Tax authority or other Governmental Entity, and (ii) to give the other Group reasonable written notice prior to transferring, destroying

100

or discarding any such books and records and, upon reasonable request, the Vornado Parties or the JBG Parties or their respective Affiliates, as the case may be, shall furnish or cause to be furnished to the other Group or allow the other Group access to such books and records.

(b) The Vornado Parties and the JBG Parties and their respective Affiliates will cooperate in the preparation, execution and filing of all returns, questionnaires, applications or other documents regarding any real property transfer or gains, sales, use, transfer, value added, stock transfer or stamp taxes, any transfer, recording registration and other fees and any similar taxes that become payable in connection with the Transactions (together with any related interest, penalties or additions to such Tax, “ Transfer Taxes ”). Newco shall pay or cause to be paid, without deduction or withholding from any consideration or amounts payable pursuant to this Agreement, all Transfer Taxes resulting from the Pre-Combination Transactions and the Combination Transactions, whether payable at or after the Closing; provided , that for the avoidance of doubt, the JBG Parties and their respective Affiliates shall be liable for and shall pay or cause to be paid all Taxes (excluding Transfer Taxes previously described in this Section 6.3(b) ) that may be incurred by them as a result of the Restructuring Transactions.

(c) Newco, as general partner of Newco OP, shall adjust the Carrying Value (as defined in the Partnership Agreement) of Newco OP’s assets immediately prior to the consummation of the Combination Transactions (the “ Historic Vornado Assets ”) in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f) and paragraph 1.D.(2) of Exhibit B of the Partnership Agreement, and the capital accounts of the partners of Newco OP who were partners immediately prior to the consummation of the Combination Transactions shall be adjusted to reflect such adjustment to the Carrying Value of the Historic Vornado Assets.

(d) The Vornado Parties and the JBG Parties agree to report for U.S. federal income tax purposes (i) the Pre-Combination Transactions in accordance with the Agreed Treatment (as that term is defined in the Tax Matters Agreement) and (ii) the Combination Transactions in the manner set forth in the relevant JBG Contribution Agreement or JBG Merger Agreements.

(e) The Vornado Parties and the JBG Parties will cooperate with each other in good faith and use reasonable best efforts to (i) cause the applicable Transactions to qualify for the Agreed Treatment (as that term is defined in the Tax Matters Agreement), including (x) refraining from any action that such Party knows is reasonably likely to prevent the Agreed Treatment, (y) executing such amendments to this Agreement or the Ancillary Documents as may be reasonably required in order for the applicable Transactions to qualify for the Agreed Treatment (it being understood that no Party will be required to agree to any such amendment that it determines in good faith materially adversely affects the value of the applicable Transactions to such Party or its stockholders or equityholders) and (z) permitting the Vornado Parties to obtain the opinions described in Section 7.2(e) and Section 7.2(f) and permit the JBG Parties to obtain the opinions described in Section 7.3(e) , and (ii) minimize the amount of any Taxes resulting from the Transactions. For the avoidance of doubt, the Parties shall reasonably cooperate with each other so that the activities and assets associated with the Vornado Included Interests and the JBG Included Interests, between the date hereof and the Closing, shall be

101

consistent with the applicable REIT requirements and shall work with each to identify and remove any issues that may arise.

(f) The JBG Parties shall not (and shall cause the other members of the JBG Tax Group not to) acquire any shares of Vornado or Newco stock prior to the Closing, it being understood that the receipt of the Equity Consideration as contemplated by this Agreement is not prohibited hereby.

Section 6.4. Employee Matters .

(a) Employees . Following the Closing, the Parties shall cause Newco or its Subsidiary to employ each JBG Employee who is employed by a JBG Party as of the Closing. Each JBG Employee who so remains in active employment with Newco or an Affiliate thereof shall hereinafter be referred to as a “ Continuing Employee ” as of the Closing.

(b) No Severance Obligations . The Parties intend that the Transactions shall not result in a separation of employment of any Continuing Employee for purposes of any JBG Benefit Plan prior to or upon the consummation of the Transactions and that the Continuing Employees will have continuous and uninterrupted employment for such purposes immediately before and immediately after the Closing, and the Parties shall make reasonable efforts to ensure the same. Newco shall be responsible for all severance obligations for Newco employees (including the Continuing Employees) arising from employment terminations after the Closing, except as set forth in Section 6.4(b) of the JBG Disclosure Letter or Section 6.4(b) of the Vornado Disclosure Letter.

(c) WARN Act . Without limiting any other provision hereof, the JBG Parties and Vornado Parties shall each be responsible for complying with the WARN Act and any and all obligations under other applicable Laws requiring notice of plant closings, relocations, mass layoffs, reductions in force or similar actions (and for any failures to so comply), in any case, applicable to their respective employees, provided that in the case of Vornado employees, this paragraph shall apply with respect to only those employees who are anticipated to continue as employees of Newco or an Affiliate thereof prior to, at or after Closing, as a result of any action by any JBG Party or Vornado Party with respect to such respective employees on or prior to the Closing Date.

(d) Collective Bargaining Agreements . The JBG Parties shall, or shall cause their Affiliates, consistent with applicable Law, to bargain in good faith and consistent with past practice with any union that has been certified or recognized as the collective bargaining representative of any Continuing Employees who are employed by the JBG Parties and/or their Affiliates; to assume all obligations to any such employees under all collective bargaining, works council or other similar employee representative agreements; and to cooperate and take all reasonable steps and fulfill all of their respective obligations under applicable Law and the terms of such collective bargaining, works council or other similar employee representative agreements, including obtaining any prior approvals or consents, or engaging in any prior discussions or consultations, on a timely basis, as may be legally required in order for the JBG

102

Parties and their Affiliates to assume such obligations. This Agreement shall only be subject to such agreements, if any, that result from such bargaining, if such agreements are approved by the Vornado Parties, in their sole and absolute discretion after discussions with the JBG Parties. The JBG Parties will retain, and will indemnify Newco for, any liability in respect of the items set forth in Section 6.4(d) of the JBG Disclosure Letter.

(e) Incentive Compensation . The Vornado Parties shall be responsible for all annual bonuses payable to Vornado Service Providers with respect to performance periods ending on or prior to the Closing, and the JBG Parties shall be responsible for all annual bonuses payable to JBG Service Providers with respect to performance periods ending on or prior to the Closing.

(f) No Third Party Beneficiaries; No Continued Service or Service Terms . The provisions of this Section 6.4 are solely for the benefit of the Parties and nothing in this Section 6.4 , express or implied, shall confer upon any employee, consultant, manager or other service provider (or any dependent, successor, legal representative or beneficiary thereof), any rights or remedies, including any right to continuance of employment or any other service relationship with the Parties or any of their Affiliates, or any right to compensation or benefits of any nature or kind whatsoever under this Agreement. Nothing in this Section 6.4 , express or implied, shall be: (i) an amendment or deemed amendment of any Plan, (ii) construed to interfere with the right of the Vornado Parties, Newco or their Affiliates to terminate the employment or other service relationship of any of the Continuing Employees at any time, with or without cause, or restrict any such entity in the exercise of their independent business judgment in modifying any of the terms and conditions of the employment or other service arrangement of the Continuing Employees, or (iii) deemed to obligate the Parties or any of their Affiliates to adopt, enter into or maintain any Plan at any time.

Section 6.5. Management of Vornado Excluded Assets . Following Closing, upon request of the Vornado Parties from time to time, Newco or its Subsidiary shall provide property management, asset management, leasing brokerage and other similar services with respect to any Vornado Excluded Asset (including any Vornado Included Asset that is designated as a Kickout Interest) consisting of real property located in the Washington, D.C. metropolitan area as of the Closing Date, except for any services that, as of the Closing Date, are provided to such property by a third party that is not an Affiliate of Vornado. Such services shall be provided pursuant to a management agreement reflecting the terms set forth on Section 6.5 of the Vornado Disclosure Letter and such other reasonable and customary terms as the Parties may agree in good faith. The foregoing provisions of this Section 6.5 shall survive the Closing.

Section 6.6. Transition Services; Separation and Distribution Agreement; Cleaning Services Agreements .

(a) Between the date of this Agreement and March 15, 2017, the Vornado, JBG Properties and Newco agree to negotiate in good faith and finalize, for execution and delivery at the Closing, the terms and conditions (including cost and duration) of a transition

103

services agreement (the “ Transition Services Agreement ”) whereby Vornado, or its Subsidiaries, will provide transition services to Newco and Newco OP.

(b) After the date of this Agreement, the Vornado Parties shall prepare all schedules to be attached to the Separation and Distribution Agreement when such Separation and Distribution Agreement is executed, and provide such schedules to the JBG Parties sufficiently in advance of the anticipated execution of the Separation and Distribution Agreement by the parties thereto so that the JBG Parties have a reasonable opportunity to review and provide comments on such schedules, which schedules shall be in form and substance reasonably acceptable to the JBG Parties.

(c) Between the date of this Agreement and March 15, 2017, the Vornado, JBG Properties and Newco agree to negotiate in good faith and finalize, for execution and delivery at the Closing, the terms and conditions of agreement for cleaning services (the “ Cleaning Services Agreements ”) in accordance with the terms set forth on Schedule C .

Section 6.7. Further Assurances . Upon the terms and subject to the conditions contained herein, the Parties agree, both prior to and following the Closing (for a period not to exceed twelve (12) months) (a) to use Commercially Reasonable Efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transfer of the JBG Included Interests contemplated hereunder, (b) to execute any documents, instruments or conveyances of any kind which may be reasonably necessary or advisable to carry out the transfer of the JBG Included Interests contemplated hereunder, and (c) to cooperate with each other in connection with the foregoing. The foregoing provisions of this Section 6.7 shall survive the Closing. In addition, if requested by a Party, the members of the other Group agree prior to Closing to use Commercially Reasonable Efforts to deliver requests for estoppels, waivers or other agreements under any covenants, conditions or restrictions or other encumbrances affecting any of the Included Properties and Joint Venture Agreements.

Section 6.8. Other Post-Closing Matters . At all times from and after Closing, Newco and the JBG Parties shall, and shall cause their respective Affiliates to, take the actions set forth on Section 6.8 of the JBG Disclosure Letter. The provisions of this Section 6.8 shall survive the Closing.

ARTICLE VII

CONDITIONS TO CONSUMMATION OF THE TRANSACTIONS

Section 7.1. Conditions to Each Party’s Obligations to Consummate the Transactions at the Closing . The respective obligations of each Party to consummate the Transactions contemplated at the Closing shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions, any and all of which may be waived in whole or in part by the Vornado Parties and the JBG Representative, as the case may be, to the extent permitted by applicable Law:

104

(a) Listing . The Issued Newco Shares and Newco Shares issuable in exchange for OP Units shall have been approved for listing on the NYSE, subject only to official notice of issuance.

(b) Laws; Court Orders . No Law shall have been enacted or promulgated by any Governmental Entity of competent jurisdiction which prohibits or makes illegal the consummation of the Transactions, and there shall be no order or injunction of a court of competent jurisdiction in effect preventing the consummation of the Transactions.

(c) Antitrust Laws . Any required waiting periods (or any extensions thereof) under any provision of the HSR Act, and all other all federal and state statutes, rules, regulations, orders, decrees, administrative and judicial doctrines, and other Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade, shall have expired, been waived or been terminated.

(d) Pre-Combination Transactions . Subject to Section 5.8(a) , the Pre- Combination Transactions shall have been consummated in all material respects in accordance with the Separation and Distribution Agreement.

(e) Closing of Contribution and Merger Agreements . The closing of the transactions contemplated by the JBG Contribution Agreements and JBG Merger Agreements with respect to the other JBG Parties shall occur substantially contemporaneously with the Closing (but after the closing of the Pre-Combination Transactions).

(f) Form 10 . The Form 10 shall have become effective in accordance with the Exchange Act and shall not be subject to any stop order or proceeding seeking a stop order.

(g) Kickout Interests .

(i) No more than forty percent (40%) (calculated on the basis of the initial Asset Values as a percentage of the aggregate initial Asset Values of all of the JBG Included Properties, including any Kickout Interests) of the JBG Included Properties shall be Kickout Interests.

(ii) No more than twenty percent (20%) (calculated on the basis of the initial Asset Values as a percentage of the aggregate initial Asset Values of all of the Vornado Included Properties, including any Kickout Interests) of the Vornado Included Properties shall be Kickout Interests.

It being understood that even if the closing condition described in this Section 7.1(g) has been satisfied before the Outside Date, the Closing may not occur before the Outside Date unless a Party has the right to set the Revaluation Time and require the Closing to occur at an earlier time pursuant to Section 2.1 .

Section 7.2. Conditions to Obligations of the Vornado Parties . The obligations of the Vornado Parties to consummate the Transactions shall also be subject to the satisfaction or

105

waiver by Vornado Parties (in writing) on or prior to the Closing Date of each of the following additional conditions:

(a) Representations and Warranties . (i) Other than the representations and warranties set forth in Section 4.1 (Organization) (except to the extent such representations and warranties relate only to Subsidiaries of the JBG Parties), Section 4.2 (Authorization; Validity of Agreement), Section 4.4 (Capital Structure; Subsidiaries) (except to the extent such representations and warranties relate only to Subsidiaries of the JBG Parties) and Section 4.27 (Brokers; Expenses), each of the representations and warranties of each of the JBG Parties set forth in this Agreement shall be true and correct (without giving effect to any qualification as to materiality or JBG Material Adverse Effect contained in Article IV ) as of the date of this Agreement and as of the Closing as though made on and as of the Closing (except that representations and warranties that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct (without giving effect to any qualification as to materiality or JBG Material Adverse Effect contained in Article IV ) as of such date), except where any failures of any such representations and warranties to be true and correct would not reasonably be expected to have, individually or in the aggregate, a JBG Material Adverse Effect, and (ii) the representations and warranties set forth in Section 4.1 (Organization) (except to the extent such representations and warranties relate only to Subsidiaries of the JBG Parties), Section 4.2 (Authorization; Validity of Agreement), Section 4.4 (Capital Structure; Subsidiaries) (except to the extent such representations and warranties relate only to Subsidiaries of the JBG Parties) and Section 4.27 (Brokers; Expenses) of each of the JBG Parties shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that representations and warranties that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct as of such date).

(b) Performance of Obligations of the JBG Parties . Each of the JBG Parties shall have performed or complied (i) with all obligations required to be performed or complied with by such JBG Party under Section 5.5 of this Agreement (other than the obligations set forth in Section 5.5(b)(xiv) ) at or prior to the Closing, except where such non-performance or non- compliance would not reasonably be expected to have, individually or in the aggregate, a JBG Material Adverse Effect, and (ii) in all material respects with all other obligations required to be performed or complied with by such JBG Party under this Agreement at or prior to the Closing (including, without limitation, their obligations set forth in Section 5.5(b)(xiv) and in the last sentence of Section 9.4 ).

(c) Officer’s Certificate . The JBG Parties shall have delivered to Vornado a certificate, dated the date of the Closing and signed by the chief executive officer or another senior officer of its general partner or managing member on behalf of each of the JBG Parties, certifying to the effect that the conditions set forth in Section 7.2(a) and Section 7.2(b) have been satisfied.

(d) JBG Party Deliverables . The JBG Parties shall have delivered to the Vornado Parties at the Closing all other agreements and items set forth in Section 2.3 .

106

(e) REIT Opinions .

(i) The Vornado Parties and Newco shall have received a written opinion of JBG REIT Counsel with respect to each JBG REIT on which Vornado REIT Counsel shall be entitled to rely in connection with its opinion rendered pursuant to Section 7.2(e)(ii) and on which Newco and its REIT counsel shall be entitled to rely following the Closing Date for future opinions, dated as of the Closing Date and in form and substance reasonably satisfactory to the Vornado Parties, to the effect that, commencing with such JBG REIT’s First Applicable Year, such JBG REIT has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code and its actual method of operation has enabled such JBG REIT to meet, through the Closing Date, and its proposed method of operation will enable such JBG REIT to continue to meet, the requirements for qualification and taxation as a REIT under the Code (each, a “ JBG REIT Opinion ” and, collectively and together with the JBG Newco REIT Opinion, the “ JBG REIT Opinions ”), which opinion will (i) be subject to customary exceptions, assumptions and qualifications (including Reasonable Cause Exceptions) and (ii) be based on customary representations contained in an officer’s certificate from the JBG Parties (including Reasonable Cause Exceptions) provided pursuant to Section 5.18 , and executed by an officer with the knowledge necessary to make the representations contained therein.

(ii) The Vornado Parties and Newco shall have received a written opinion of Vornado REIT Counsel, dated as of the Closing Date and in form and substance reasonably satisfactory to the Vornado Parties and on which Newco and its REIT counsel shall be entitled to rely following the Closing Date, to the effect that, commencing with Newco’s first taxable year and taking into account the Transactions and the Post-Closing Transactions, Newco will be organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code and its proposed method of operation will enable Newco to continue to meet the requirements for qualification and taxation as a REIT under the Code for the taxable year that includes the Closing and subsequent taxable years (the “ Vornado Newco REIT Opinion ”), which opinion will (i) be subject to customary exceptions, assumptions and qualifications (including Reasonable Cause Exceptions) and (ii) be based on customary representations contained in officer’s certificates from Newco (including Reasonable Cause Exceptions) provided pursuant to Section 5.16 , and executed by an officer with the knowledge necessary to make the representations contained therein.

(f) Distribution Opinion . The Vornado Parties shall have received a written opinion of Sullivan & Cromwell LLP, special tax counsel to Vornado, satisfactory to the Vornado board of trustees, to the effect that the Vornado Contribution of OP Units (as defined in Section 1.1 of the Vornado Disclosure Letter) together with the Vornado Distribution (as defined in Section 1.1 of the Vornado Disclosure Letter), each as provided in the Separation and Distribution Agreement, and taking into account the other Transactions and the Post-Closing Transactions, will qualify (a) as a transaction described in Section 368(a)(1)(D) and Section 355 of the Code, (b) as a transaction in which the stock distributed by Vornado is “qualified

107

property” for purposes of Section 355(d) and 355(e) of the Code, and (c) as a transaction in which shareholders of Vornado will not recognize gain or loss upon the distribution under Section 355(a) of the Code, which opinion will (i) be subject to customary exceptions, assumptions and qualifications, (ii) be based on customary representations contained in officer’s certificates from Vornado, provided pursuant to Section 5.17(a) , and executed by an officer with the knowledge necessary to make the representations contained therein.

(g) Key Persons . Each of the individuals listed on Section 7.2(g) of the Vornado Disclosure Letter shall have remained employed by the JBG Parties through the Closing Date, and no such individual shall have repudiated his or her Employment Agreement.

(h) Licenses, Approvals, Permits and Registrations . Except as set forth on Section 7.2(h) of the JBG Disclosure Letter, the JBG Parties shall have obtained all of the licenses, approvals, permits and registrations necessary to operate the management business of the JBG Parties following the Closing, except where the failure to have obtained the same would not reasonably be expected to have, individually or in the aggregate, a JBG Material Adverse Effect.

Section 7.3. Conditions to Obligations of the JBG Parties . The obligations of the JBG Parties to consummate the Transactions contemplated at the Closing are also subject to the satisfaction or waiver (in writing) by the JBG Representative on or prior to the Closing Date of each of the following additional conditions:

(a) Representations and Warranties . (i) Other than the representations and warranties set forth in Section 3.1 (Organization and Qualifications; Subsidiaries) (except, with respect to the representations and warranties in Section 3.1(e) , to the extent the same relate only to Vornado Included Entities), Section 3.3 (Capital Structure) (except to the extent such representations and warranties relate only to Vornado Included Entities), Section 3.4 (Authority) and Section 3.24 (Brokers; Expenses), each of the representations and warranties of the Vornado Parties set forth in this Agreement shall be true and correct (without giving effect to any qualification as to materiality or Vornado Material Adverse Effect contained in Article III ) as of the date of this Agreement and as of the Closing as though made on and as of the Closing (except that representations and warranties that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct (without giving effect to any qualification as to materiality or Vornado Material Adverse Effect contained in Article III ) as of such date), except where any failures of any such representations and warranties to be true and correct would not reasonably be expected to have, individually or in the aggregate, a Vornado Material Adverse Effect, and (ii) the representations and warranties set forth in Section 3.1 (Organization and Qualifications; Subsidiaries) (except, with respect to the representations and warranties in Section 3.1(e) , to the extent the same relate only to Vornado Included Entities), Section 3.3 (Capital Structure) (except to the extent such representations and warranties relate only to Vornado Included Entities), Section 3.4 (Authority) and Section 3.24 (Brokers; Expenses) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that representations and warranties

108

that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct as of such date).

(b) Performance of Obligations of the Vornado Parties . The Vornado Parties shall have performed or complied (i) with all obligations required to be performed or complied with by them under Section 5.4 of this Agreement at or prior to the Closing, except where such non-performance or non-compliance would not reasonably be expected to have, individually or in the aggregate, a Vornado Material Adverse Effect, and (ii) in all material respects with all other obligations required to be performed or complied with by such Vornado Party under this Agreement at or prior to the Closing (including, without limitation, their obligations set forth in the last sentence of Section 9.4 ).

(c) Officer’s Certificate . Vornado shall have delivered to the JBG Parties a certificate, dated the date of the Closing and signed by its chief executive officer or another senior officer on behalf of Vornado, certifying to the effect that the conditions set forth in Section 7.3(a) and Section 7.3(b) have been satisfied.

(d) Vornado Party Deliverables . The Vornado Parties shall have delivered or caused to be delivered to the JBG Parties at the Closing the Equity Consideration and all agreements and other items set forth in Section 2.2 .

(e) REIT Opinions .

(i) The JBG Parties and Newco shall have received a written opinion of Vornado REIT Counsel with respect to each Vornado REIT on which JBG REIT Counsel shall be entitled to rely in connection with its opinion rendered pursuant to Section 7.3(e)(ii) and on which Newco and its REIT counsel shall be entitled to rely following the Closing Date for future opinions, dated as of the Closing Date and in form and substance reasonably satisfactory to the JBG Parties, to the effect that, commencing with such Vornado REIT’s First Applicable Year, such Vornado REIT has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code and its actual method of operation has enabled such Vornado REIT to meet, through the Closing Date, and its proposed method of operation will enable such Vornado REIT to continue to meet, the requirements for qualification and taxation as a REIT under the Code (each, a “ Vornado REIT Opinion ” and, collectively and together with the Vornado Newco REIT Opinion, the “ Vornado REIT Opinions ”), which opinion will (i) be subject to customary exceptions, assumptions and qualifications (including Reasonable Cause Exceptions) and (ii) be based on customary representations contained in an officer’s certificate from the Vornado Parties (including Reasonable Cause Exceptions) provided pursuant to Section 5.17(b) , and executed by an officer with the knowledge necessary to make the representations contained therein.

(ii) The JBG Parties and Newco shall have received a written opinion of JBG REIT Counsel, dated as of the Closing Date and in form and substance reasonably satisfactory to the JBG Parties and on which Newco and its REIT counsel shall be

109

entitled to rely following the Closing Date, to the effect that, commencing with Newco’s first taxable year and taking into account the Transactions and the Post-Closing Transactions, Newco will be organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code and its proposed method of operation will enable Newco to continue to meet the requirements for qualification and taxation as a REIT under the Code for the taxable year that includes the Closing and subsequent taxable years (the “ JBG Newco REIT Opinion ”), which opinion will (i) be subject to customary exceptions, assumptions and qualifications (including Reasonable Cause Exceptions) and (ii) be based on customary representations contained in officer’s certificates from Newco (including Reasonable Cause Exceptions) provided pursuant to Section 5.16 , and executed by an officer with the knowledge necessary to make the representations contained therein.

(iii) The JBG Parties and Newco shall have received a written opinion of Vornado REIT Counsel on which JBG REIT Counsel shall be entitled to rely in connection with its opinion rendered pursuant to Section 7.3(e)(ii) and on which Newco and its REIT counsel shall be entitled to rely following the Closing Date for future opinions, dated as of the Closing Date and in form and substance reasonably satisfactory to the JBG Parties, to the effect that, commencing with Vornado’s First Applicable Year, Vornado has been organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code and its actual method of operation has enabled Vornado to meet, through the Closing Date, and its proposed method of operation will enable Vornado to continue to meet, the requirements for qualification and taxation as a REIT under the Code, which opinion will (i) be subject to customary exceptions, assumptions and qualifications (including Reasonable Cause Exceptions) and (ii) be based on customary representations contained in an officer’s certificate from the Vornado Parties (including Reasonable Cause Exceptions) provided pursuant to Section 5.17(b) , and executed by an officer with the knowledge necessary to make the representations contained therein.

(f) Newco Board Resignations . Each current member of the Newco Board who is not a JBG Board Designee or a Vornado Board Designee shall have delivered an irrevocable written resignation from the Newco Board or shall have otherwise ceased to be a member of the Newco Board.

Section 7.4. Frustration of Closing Conditions . No Party may rely on the failure of any condition set forth in this Article VII to be satisfied if such failure was caused by the failure of such Party to comply with its obligations set forth in this Agreement or the Separation and Distribution Agreement.

110

ARTICLE VIII

TERMINATION

Section 8.1. Termination . This Agreement may be terminated at any time prior to the Closing, as follows:

(a) by mutual written agreement of each of Vornado and the JBG Representative; or

(b) by either Vornado or the JBG Parties, if:

(i) the Closing shall not have occurred on or before December 29, 2017 (the “ Outside Date ”); provided , that the right to terminate this Agreement pursuant to this Section 8.1(b)(i) shall not be available to any Party if the failure of such Party (and (A) in the case of Vornado, including the failure of any Vornado Party and (B) in the case of the JBG Parties, including the failure of any JBG Party) to perform any of its obligations under this Agreement has been a principal cause of, or resulted in, the failure of the Closing to be consummated on or before such date; or

(ii) any Governmental Entity of competent jurisdiction shall have issued a judgment, injunction, order or decree or taken any other action permanently restraining, enjoining or otherwise prohibiting the Transactions, and such judgment, injunction, order or decree or other action shall have become final and non-appealable; provided , however , that the right to terminate this Agreement under this Section 8.1(b)(ii) shall not be available to a Party if the issuance of such final, non-appealable judgment, injunction, order or decree was primarily due to the failure of such Party (and (A) in the case of Vornado, including the failure of any Vornado Party and (B) in the case of the JBG Parties, including the failure of any JBG Party) to perform any of its obligations under this Agreement; or

(c) by the Vornado Parties if any JBG Party shall have breached or failed to perform any of its representations, warranties, covenants or other agreements set forth in this Agreement, which breach or failure to perform, either individually or in the aggregate, (x) would result in a failure of a condition set forth in Section 7.1 or Section 7.2 and (y) cannot be cured on or before the Outside Date or, if curable, is not cured by the JBG Parties within twenty (20) Business Days of receipt by the JBG Parties of written notice of such breach or failure; provided that Vornado shall not have the right to terminate this Agreement pursuant to this Section 8.1(c) if any Vornado Party is then in breach of any of their respective representations, warranties, covenants or agreements set forth in this Agreement such that the conditions set forth in either Section 7.1 or Section 7.3 would not be satisfied; or

(d) by the JBG Parties if any Vornado Party shall have breached or failed to perform any of its representations, warranties, covenants or other agreements set forth in this Agreement, which breach or failure to perform, either individually or in the aggregate, (x) would

111

result in a failure of a condition set forth in Section 7.1 or Section 7.3 and (y) cannot be cured on or before the Outside Date or, if curable, is not cured by the Vornado Parties within twenty (20) Business Days of receipt by the Vornado Parties of written notice of such breach or failure; provided that the JBG Parties shall not have the right to terminate this Agreement pursuant to this Section 8.1(d)(i) if any JBG Party is then in breach of any of its respective representations, warranties, covenants or agreements set forth in this Agreement such that the conditions set forth in either Section 7.1 or Section 7.2 would not be satisfied.

Section 8.2. Effect of Termination . In the event that this Agreement is terminated and the Closing and the other Transactions are abandoned pursuant to Section 8.1 , written notice thereof shall be given to the other party or parties, specifying the provisions hereof pursuant to which such termination is made and describing the basis therefor in reasonable detail, and this Agreement shall forthwith become null and void and of no further force or effect whatsoever without Liability on the part of any party hereto (or any of the Vornado Subsidiaries, JBG Parties’ Subsidiaries or any of the Vornado Parties’ or the JBG Parties’ respective Representatives), and all rights and obligations of any party hereto shall cease; provided , however , that, notwithstanding anything in the foregoing to the contrary (a) no such termination shall relieve any party hereto of any Liability or damages resulting from or arising out of any fraud or Willful Breach of this Agreement prior to such termination of this Agreement, in which case the aggrieved party shall be entitled to all rights and remedies available at law or in equity; and (b) Section 5.20 , this Section 8.2 , Article IX and the definitions of all defined terms appearing in such sections shall survive any termination of this Agreement pursuant to Section 8.1 for twelve (12) months. For avoidance of doubt, and without limiting the foregoing, any failure of the Vornado Parties or the JBG Parties (as applicable) to effect the Closing as required by Section 2.1 shall be a willful and intentional material breach of this Agreement by such parties and shall be deemed to constitute a Willful Breach. If this Agreement is terminated as provided herein, all filings, applications and other submissions made pursuant to this Agreement, to the extent practicable, shall be withdrawn from the Governmental Entity or other Person to which they were made.

ARTICLE IX

MISCELLANEOUS

Section 9.1. Amendment . Subject to compliance with applicable Law, this Agreement may be amended by mutual agreement of the Parties hereto by action taken or authorized by their respective boards of directors, boards of trustees, general partners or other similar governing body or entity at any time prior to the Closing. This Agreement may not be amended except by an instrument in writing signed by each of the Parties hereto.

Section 9.2. Waiver . At any time prior to the Closing, subject to applicable Law, any Party hereto may (a) extend the time for the performance of any obligation or other act of any other Party hereto, (b) waive any inaccuracy in the representations and warranties of the other Party contained herein or in any document delivered pursuant hereto, and (c) subject to the proviso of Section 9.1 , waive compliance with any agreement or condition contained herein.

112

Any agreement on the part of a Party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party or Parties to be bound thereby. Notwithstanding the foregoing, no failure or delay by any Party hereto in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.

Section 9.3. Non-Survival . None of the representations, warranties, pre-Closing covenants or agreements in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the Closing; provided , however , that this Section 9.3 shall not limit any covenant or agreement of the Parties to the extent such covenant or agreement by its terms contemplates performance after the Closing, which shall survive the Closing.

Section 9.4. Expenses . Except as may be otherwise expressly contemplated herein, all Expenses incurred in connection with this Agreement and the Transactions (including Financial Advisor Expenses) shall be paid by the Party incurring such Expenses in the event the Closing does not occur unless the Closing does not occur by reason of the other Party’s Willful Breach, breach of representation or warranty or breach or default of covenant which results in a condition in Section 7.1 , Section 7.2 or Section 7.3 not to be satisfied (it being agreed, for clarity, that a failure of the condition in Section 7.2(g) to be satisfied on account of the death, disability or incapacity of one or more of the individuals listed on Section 7.2(g) of the Vornado Disclosure Letter shall not be deemed a breach or default of covenant by the JBG Parties for purposes of this sentence). In the event that the Closing occurs, Newco and Newco OP shall pay all bona fide third party Expenses (which, for the avoidance of doubt, shall not include any expenses incurred by the JBG Parties or their Affiliates solely in connection with the proposed initial public offering of the JBG Parties or the proposed transaction between the JBG Parties and New York REIT, Inc.) incurred by the Parties in connection with this Agreement, the Restructuring Transactions and the other Transactions (and shall reimburse the JBG Parties and the Vornado Parties for any such Expenses previously paid by them), other than Consent Expenses, Financial Advisor Expenses and the expenses set forth in Section 6.1(f) of the JBG Disclosure Letter and the Vornado Disclosure Letter below the cap described therein; provided , that if the JBG Management Entities incur Indebtedness in amounts permitted by Section 5.5(b)(xiv) , then the JBG Parties agree to apply any reimbursement for Expenses from Newco and Newco OP to the repayment of such Indebtedness until the same is fully repaid. On or before the Closing, the JBG Parties and the Vornado Parties shall pay their respective Consent Expenses, Financial Advisor Expenses and the expenses set forth in Section 6.1(f) of the JBG Disclosure Letter and the Vornado Disclosure Letter below the cap described therein.

Section 9.5. Notices . All notices, requests, demands, claims and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given (i) when received if delivered personally; (ii) when transmitted if transmitted by e-mail of a pdf attachment and the hard copy is sent by the next Business Day by reliable overnight delivery service (with proof of service) or hand delivery); and (iii) the Business Day after it is sent, if sent for next day delivery by reliable overnight delivery service (with proof of service), hand delivery or certified or registered mail (return

113

receipt requested and first-class postage prepaid), addressed as follows (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 9.5 ):

if to the Vornado Parties, to:

	Vornado Realty Trust
	888 Seventh Avenue
	New York, New York 10019
	Attention:	Secretary and General Counsel
	E-mail:	arice@vno.com

	Vornado Realty
	888 Seventh Avenue
	New York, New York 10019
	Attention:	Executive Vice President — Chief Investment Officer
	E-mail:	mfranco@vno.com

	Vornado Realty Trust
	210 Route 4 East
	Paramus, New Jersey 07652
	Attention:	Executive Vice President — Finance and
		Chief Administrative Officer
	E-mail:	jmacnow@vno.com

with copies to (which shall not constitute notice):

	Sullivan & Cromwell LLP
	125 Broad Street
	New York, New York 10004
	Attention:	Arthur S. Adler, Esq.
	E-mail:	adlera@sullcrom.com

if to the JBG Parties, to:

	JBG Properties Inc.
	4445 Willard Avenue, Suite 400
	Chevy Chase, Maryland 20815
	Attention:	W. Matthew Kelly
	E-mail:	mkelly@jbg.com

with copies to (which shall not constitute notice):

	Hogan Lovells US LLP
	Columbia Square
	555 Thirteenth Street, NW
	Washington, District of Columbia 20004

114

	Attention:	David W. Bonser, Esq.
	E-mail:	david.bonser@hoganlovells.com

Section 9.6. Certain Definitions . For the purposes of this Agreement, the term:

“ Accredited Investor ” means an “accredited investor” as defined in Rule 501(a) promulgated under the Securities Act.

“ Affiliate ” of any Person means any other Person directly or indirectly controlling or controlled by or under common control with such Person. For the purposes of this definition, “control”, when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“ Agreed Treatment ” has the meaning ascribed to such term in the Tax Matters Agreement.

“ Ancillary Documents ” means the Separation and Distribution Agreement, the JBG Fund Contribution Agreements, the JBG Managing Member Contribution Agreements, the JBG Properties Contribution Agreement, the JBG Partnership Merger Agreement, the JBG LLC Merger Agreement, the Registration Rights Agreements, the Declaration of Trust Amendment and Restatement, the Bylaws Amendment and Restatement, the Partnership Agreement Amendment and Restatement, the Employment Agreements, the Employee Matters Agreement, the Transition Services Agreement, the Tax Matters Agreement, the GP Subcontracts, the Cleaning Services Agreement and each other document or instrument contemplated hereby to be executed and delivered by any of the Parties at or prior to the Closing.

“ Atlantic REIT ” means JBG/Atlantic REIT, L.L.C.

“ Business Day ” means any day that is not a Saturday, Sunday or other day on which banking institutions in New York City or Washington D.C. are authorized or required by Law to close.

“ Cash Consideration Cap ” means five million dollars ($5,000,000).

“ Cash Contributed at Closing by JBG ” means the product of (x) a fraction, the numerator of which is the aggregate of the Asset Values of the JBG Parties’ JBG Included Assets (as determined in accordance with Section 1.5 and Section 1.6(a) , and including, for clarity, all JBG Included Assets initially designated as Kickout Interests that are subsequently included in the transaction following the receipt of all applicable Required JBG Consents), and the denominator of which is the aggregate of the Asset Values of the Vornado Included Assets (as determined in accordance with Section 1.5 and Section 1.6(a) , and including, for clarity, all Vornado Included Assets initially designated as Kickout Interests that are subsequently included in the transaction following the receipt of all applicable Required Vornado Consents), multiplied by (y) $200,000,000.

115

“ Cash Contributed at Closing by Vornado ” means $200,000,000.

“ Closing Date Payments ” means the payment in full, in cash, of the aggregate Expenses of the Parties other than Consent Expenses, Financial Advisor Expenses and the expenses set forth on Section 6.1(f) of the JBG Disclosure Letter and the Vornado Disclosure Letter below the cap described therein.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Commercially Reasonable Efforts ” means the efforts that a commercially reasonable Person desirous of achieving a result would use in similar circumstances to achieve that result as expeditiously as reasonably practicable; provided , however , that, except as otherwise set forth herein (including, for clarity, any provision of this Agreement requiring a Person to expend funds in given amounts), a Person required to use Commercially Reasonable Efforts under this Agreement will not be thereby required to take any action that would result in a material adverse change in the benefits to such Person under this Agreement or the transactions contemplated hereby, to consummate the Closing at any time prior to the date determined in accordance with Section 2.1 , to make any change to its business, to incur any material fees or expenses (other than reasonable or customary consent fees not to exceed the amounts set forth on Section 9.6(a) of the Vornado Disclosure Letter and Section 9.6(a) of the JBG Disclosure Letter, normal and usual filing fees, processing fees and incidental expenses), to commence any litigation or to incur any other material obligation or liability.

“ Confidential Information ” means all confidential and proprietary information of the Disclosing Party, including, but not limited to, all documents, financial statements, reports, forecasts, projections, surveys, diagrams, records, engineering reports and all other written or oral information, as well as diskettes and other forms of electronically transmitted data, furnished or made available by the Disclosing Party to, or at the direction of, the Receiving Party, or the Receiving Party’s Representatives relating to the Disclosing Party, the Transaction or directly related matters to, as well as any written memoranda, notes, analyses, reports, compilations, or studies prepared by the Receiving Party or any of its Representatives (in whatever form of medium) that contain, or are derived from, such information. Confidential Information shall also include the fact that Confidential Information has been furnished or made available, that discussions or negotiations are taking place concerning the Transaction, or any of the terms, conditions or other facts with respect to the Transaction, including the status thereof. Notwithstanding the foregoing, Confidential Information does not include information furnished or made available by or on behalf of the Disclosing Party if such information (a) is or becomes generally available to the public, other than as a result of disclosure by or through the Receiving Party or its Representatives in violation of this agreement; (b) was already in the possession of the Receiving Party prior to its disclosure hereunder; (c) becomes available to the Receiving Party from a source (other than the Disclosing Party or its Representatives) not bound, to the knowledge of the Receiving Party or its Representatives, by any obligation of confidentiality to the Disclosing Party with respect to such information; or (d) is independently developed by the Receiving Party or its Representatives without the use of any Confidential Information. Consistent with the foregoing, (i) as to all Confidential Information about the Vornado Included

116

Entities, Vornado Included Assets, JBG Included Entities and JBG Included Assets, from and after the Closing, such Confidential Information shall be Confidential Information of Newco and Newco OP, (ii) with respect to all Confidential Information about the JBG Excluded Assets or any of the JBG Parties (other than any JBG Included Entities, such Confidential Information shall remain be Confidential Information of the JBG Parties and (iii) with respect to all Confidential Information about the Vornado Excluded Assets or any of the Vornado Parties (other than the Newco, Newco OP and any Vornado Included Entities, such Confidential Information shall remain Confidential Information of the Vornado Parties.

“ Consent Expenses ” means (i) any assumption, consent or transfer fees owed or otherwise charged by the applicable counterparty (or its servicer or representative) in connection with obtaining any Required Consents, (ii) all refinancing costs and expenses (including, without limitation, brokerage fees, origination fees, title insurance premiums and other costs incurred or reimbursed to a lender) relating to any refinanced Indebtedness in respect of any Included Properties as a result of a Debt Refinancing, a Failed Loan Assumption or otherwise, (iii) all prepayment premiums and penalties and “make-wholes” that result from the refinancing of any Indebtedness in respect of any Included Property as a result of a Debt Refinancing, a Failed Loan Assumption or otherwise, (iv) all costs to provide replacement collateral required to defease any Indebtedness in respect of any Included Property as a result of a Debt Refinancing, a Failed Loan Assumption or otherwise, (v) all processing fees charged by a lender or a servicer in order to submit application packages relating to the assumption of any Indebtedness in respect of any Included Property, (vi) all applicable mortgage taxes, intangible taxes, documentary stamp taxes and recordation charges relating to any assumption of any Indebtedness in respect of any Included Property or a refinancing thereof, (vii) any third party, out-of-pocket costs and expenses, including attorneys’ fees and expenses charged by a lender in connection with the assumption of any Indebtedness relating to any Included Property or the refinancing thereof, and (viii) any third party, out-of-pocket costs and expenses, including attorneys’ fees and expenses charged by a lender, landlord or Joint Venture Partner in connection with the consideration of, and/or the documentation of, any Required Debt Consent, Required Ground Lease Consent or Required JV Consent, as applicable.

“ Consideration ” means, collectively, the Cash Consideration and the Equity Consideration.

“ Contract ” means any agreement, contract, instrument, commitment, lease, guaranty, indenture, license, or other arrangement or understanding (and all amendments, side letters, modifications and supplements thereto) between parties or by one party in favor of another party, whether written or oral, but excluding any Vornado Leases, JBG Leases and any ground lease affecting an Included Property.

“ Core REITs ” means 151 Q Street REIT, L.L.C., Fairways Residential REIT, L.L.C., JBG/Foundry Office REIT, L.L.C., JBG/Pickett Office REIT, L.L.C., and JBG/Woodbridge REIT, L.L.C.

117

“ Disclosing Party ” means either the JBG Parties or the Vornado Parties, as applicable, when such Party is acting in its capacity as the provider of Confidential Information and any Representative thereof providing information hereunder.

“ Distributions ” means, during the applicable period, any of the following: (i) the declaration or payment of any dividend or any other distribution in respect of the partnership, membership or other ownership interests or any payment made to the direct or indirect holders (in their capacities as such) of the partnership, limited liability company or other entity, or (ii) the purchase, redemption or other acquisition or retirement for value by of any Equity Interest in such entity.

“ Environmental Law ” means any and all applicable Laws which (i) regulate or relate to the protection or clean-up of natural resources or the environment; the use, treatment, storage, transportation, handling, disposal or release of Hazardous Substances, the preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants or other natural resources; or the health and safety of persons or property, including protection of the health and safety of employees, with respect to exposure to Hazardous Substances; or (ii) impose liability or responsibility with respect to any of the foregoing, including the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), or any other Law of similar effect.

“ Environmental Permits ” means any material permit, exemption, license, authorization or approval required under applicable Environmental Laws.

“ Equity Interest ” means, with respect to any entity, any share, capital stock, partnership, member or similar interest in such entity, and any option, warrant, right or security (including debt securities) convertible, exchangeable or exercisable therefor.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, and all regulations, rules and other guidance promulgated thereunder.

“ ERISA Affiliate ” means any Person (whether or not incorporated) which is (or at any relevant time was) a member of a “controlled group of corporations” with, under “common control” with, or a member of an “affiliated service group” with, any Party as defined in Section 414(b), (c), (m) or (o) of the Code.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and all regulations, rules and other guidance promulgated thereunder.

“ Expenses ” means all reasonable out-of-pocket expenses (including all fees and expenses of counsel, accountants, experts and consultants to a Party and its affiliates, except to the extent constituting Financial Advisor Expenses) incurred by a Party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement, the solicitation of equityholder and stockholder approvals, the filing of any required notices under the HSR Act or other similar regulations, the obtaining of the licenses, approvals, permits and registrations described on Section 7.2(h) of the JBG Disclosure Letter, any filings

118

with the SEC and all other matters related to the consummation of the Transactions, including debt assumption costs and expenses (except to the extent constituting Consent Expenses), mortgage recording fees and Transfer Taxes.

“ Failed Loan Assumption ” means the rejection by a lender or servicer (acting on behalf of a lender) to consent to the direct or indirect transfer of an Included Property in accordance with the Transactions.

“ Financial Advisor Expenses ” means all amounts, whether contractual or otherwise, to be paid to a broker, investment banker, financial advisor, including, with respect to the Vornado Parties, the amounts described in Section 3.24 , and with respect to the JBG Parties, the amounts described in Section 4.27 .

“ Financing Sources ” means the entities that provide or arrange or otherwise have entered into agreements in connection with all or any part of the Credit Facility in connection with the Transactions, together with their respective Affiliates, and their respective Affiliates’ officers, directors, trustees, employees, agents and representatives and their respective successors and assigns.

“ First Applicable Year ” means, in the case of any REIT, its taxable year that ended on December 31 of the year for which it made its initial REIT election pursuant to Section 856(c)(1) of the Code.

“ GAAP ” means U.S. generally accepted accounting principles, applied on a consistent basis (except as may be indicated in the notes to financial statements or, in the case of interim financial statements, for normal year-end adjustments).

“ Governing Documents ” means (a) the articles or certificate of formation or incorporation, all certificates of determination and designation, and the bylaws of a corporation; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate or articles of limited partnership of a limited partnership; (d) the operating agreement, limited liability company agreement and the certificate or articles of organization or formation of a limited liability company; (e) any charter or similar document adopted or filed in connection with the creation, formation or organization of any other Person; and (f) any amendment to any of the foregoing.

“ Group ” means either the JBG Parties taken as a whole or the Vornado Parties taken as a whole.

“ H Street ” means H Street Building Corporation, a Delaware corporation, and any corporation to which the tax attributes of H Street enumerated in Section 381(c) of the Code are carried over in a transaction to which Section 381(a) of the Code applies.

“ Hazardous Substances ” means any pollutant, chemical, substance and any toxic, infectious, carcinogenic, reactive, corrosive, ignitable or flammable chemical, or chemical compound, or hazardous substance, material or waste, whether solid, liquid or gas, that is subject

119

to regulation, control, remediation or with respect to which liability may be imposed under any Environmental Laws, including any quantity of asbestos, urea formaldehyde, polychlorinated biphenyls (PCBs), radon gas, and petroleum products or by-products.

“ Included Assets ” means, collectively, the JBG Included Assets and the Vornado Included Assets.

“ Included Interest ” means a JBG Included Interest or a Vornado Included Interest. “ Included Property ” means a JBG Included Property or a Vornado Included Property. “ Indebtedness ” means with respect to any Person, (i) all indebtedness, notes payable, accrued interest payable or other obligations for borrowed money, whether secured or unsecured, (ii) all indebtedness evidenced by a note, bond, debenture or other similar instrument or debt security, (iii) all obligations under conditional sale or other title retention agreements, or incurred as financing, in either case with respect to property acquired by such Person, (iv) all obligations issued, undertaken or assumed as the deferred purchase price for any property or assets, (v) all obligations under capital leases, (vi) all obligations in respect of bankers acceptances or letters of credit, (vii) all obligations under interest rate cap, swap, collar or similar transaction or currency hedging transactions, and (viii) any guarantee (other than customary non-recourse carve-out or “bad boy” guarantees) of any of the foregoing, whether or not evidenced by a note, mortgage, bond, indenture or similar instrument.

“ Intellectual Property ” means all United States and foreign (i) patents, patent applications, invention disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions and extensions thereof, (ii) trademarks, service marks, trade dress, logos, trade names, corporate names, internet domain names, design rights and other source identifiers, together with the goodwill symbolized by any of the foregoing, (iii) copyrightable works and copyrights, (iv) confidential and proprietary information, including trade secrets, know-how, ideas, formulae, models and methodologies, (v) all rights in the foregoing and in other similar intangible assets, and (vi) all applications and registrations for the foregoing.

“ Intercompany Indebtedness ” means Indebtedness with respect to which both the borrower and the lender either are Vornado Parties and their Affiliates and Subsidiaries or are JBG Parties and their Affiliates and Subsidiaries.

“ Interest Payments ” means, during the applicable period, all interest payments, including the net cash costs or benefits under all interest rate protection agreements related to the applicable Indebtedness, made in accordance with the loan documents evidencing Indebtedness for borrowed money, excluding any interest payments that would be capitalized under GAAP.

“ Investment Company Act ” means the Investment Company Act of 1940, as amended.

“ IRS ” means the U.S. Internal Revenue Service.

120

“ JBG Benefit Plan ” means each Plan which is sponsored, maintained or contributed to, or required to be contributed to, by to the JBG Included Entities or the JBG Management Entities or that provides, or under which any JBG Party or its Subsidiary has any obligation or liability to provide compensation or benefits to or for the benefit of any current or former JBG Employee, or the spouses, beneficiaries or other dependents thereof.

“ JBG Corporate Entities ” means Fund VIII REIT, Atlantic REIT, the Core REITs, 51 N 50 Patterson Corporate Member, L.L.C., JBG/Landbay G Corporate Member, L.L.C., the JBG TRSs and JBG Properties.

“ JBG Employees ” means any current or former employees of the JBG Included Entities or the JBG Management Entities.

“ JBG Included Assets ” means, in addition to the JBG Included Interests, JBG Operating Partners and the assets and liabilities of JBG Properties, all assets, liabilities and properties of the JBG Funds and their Subsidiaries related to the JBG Included Properties and JBG Included Interests or the proceeds from any sale thereof.

“ JBG Material Adverse Effect ” means any effect, change, event or occurrence that, individually or in the aggregate, has had, or would reasonably be expected to have, a material adverse effect on the business, properties, assets, liabilities, results of operation or financial condition of the JBG Included Assets, taken as a whole; provided , however , that no effect, change, event or occurrence resulting or arising from the following shall be deemed to constitute a JBG Material Adverse Effect or shall be taken into account when determining whether a JBG Material Adverse Effect has occurred or is reasonably likely to exist or occur: (i) any changes in general United States or global political, regulatory or economic conditions, or the capital, financial or securities markets, including changes in interest rates, to the extent that such changes do not have a disproportionately greater adverse impact on the JBG Parties and their Subsidiaries, taken as a whole, relative to other similarly situated participants in the industries in which the JBG Parties and their Subsidiaries operate generally, (ii) any changes generally affecting the industries or markets in which the JBG Parties and their Subsidiaries operate to the extent that such changes do not disproportionately have a greater adverse impact on the JBG Parties and their Subsidiaries, taken as a whole, relative to other similarly situated participants in the industries in which the JBG Parties operate generally, (iii) any changes after the date hereof in GAAP (or any interpretation thereof in accordance with the Financial Accounting Standards Board Statements of Financial Accounting Standards and Interpretations), (iv) any adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal of any applicable Law of or by any Governmental Entity after the date hereof to the extent that such adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal does not disproportionately have a greater adverse impact on the JBG Parties and their Subsidiaries, taken as a whole, relative to other similarly situated participants in the industries in which the JBG Parties operate generally, (v) any actions taken, or the failure to take any action, if such action or such failure to take action is at the written request or with the prior written consent of the Vornado Parties, (vi) any effect, change, event or occurrence attributable to the negotiation, execution, announcement or other public disclosure or

121

performance of this Agreement and the Transactions or the impact of such negotiation, execution, announcement, disclosure or performance on relationships, contractual or otherwise, with customers, suppliers, tenants, lenders, employees, unions, licensors, Joint Venture Partners or other Persons with business relationships with the JBG Parties or their Subsidiaries, or any action by a Governmental Entity or any Action or dispute brought or threatened arising out of or relating from such negotiation, execution, announcement, disclosure or performance ( provided that this clause (vi) shall not apply with respect to Section 4.3 of this Agreement), (vii) any failure by the JBG Parties to meet any internal or published projections, estimates or expectations of the JBG Parties’ revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by the JBG Parties to meet their internal budgets, plans or forecasts of their revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from the definition of a “JBG Material Adverse Effect” may be taken into account, unless such fact or occurrence is otherwise excluded from this definition), and (viii) any effect, change, event or occurrence after the date hereof arising out of changes in geopolitical conditions, acts of terrorism, civil disobedience or sabotage, the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions or other force majeure events, including any material worsening of such conditions threatened or existing as of the date of this Agreement to the extent that such changes do not disproportionately have a greater adverse impact on the JBG Parties and their Subsidiaries, taken as a whole, relative to other similarly situated participants in the industries in which the JBG Parties operate generally.

“ JBG Permitted Liens ” means all of the following: (i) the matters set forth in any title insurance policy evidencing title insurance with respect to a JBG Included Property provided to the Vornado Parties prior to the date hereof, (ii) the JBG Leases and any ground lease affecting any of the JBG Included Properties as of the date hereof, or amendments or modifications to the foregoing, entered into after the date hereof in accordance with the terms of this Agreement, (iii) Liens for current real estate taxes and special assessments which are not yet due and payable (subject to apportionment in accordance with the terms hereof), (iv) standard exceptions and provisions contained in the form of owner’s title insurance policies for each of the JBG Included Properties, (v) subject to the adjustments provided for herein and to the extent due after Closing, any charges for service, installation, connection, maintenance, sewer, water, electricity, telephone, cable television or gas, (vi) rights of vendors and holders of security interests on personal property installed at any JBG Included Property by tenants under JBG Leases in effect on the date hereof or entered into after the date hereof in accordance with the terms of this Agreement, (vii) to the extent permitted under the JBG Leases in effect on the date hereof or entered into after the date hereof in accordance with the terms of this Agreement, rights of tenants to remove fixtures at the expiration of the term of the JBG Leases of such tenants, (viii) mechanics liens arising by or through the tenants under any JBG Leases affecting the JBG Included Assets, (ix) any exceptions created by the ground lessor pursuant to any ground lease on the fee interest of the relevant property, (x) Laws, regulations, resolutions or ordinances, including, without limitation, building, zoning and environmental protection, as to the use, occupancy, subdivision, development, conversion or redevelopment of any JBG Included Property currently or hereinafter imposed by any governmental or quasi-governmental body or

122

authority, (xi) Liens relating to Indebtedness that is disclosed in Section 4.16(a)(v) of the JBG Disclosure Letter, and (xii) such other easements, covenants, restrictions and other matters affecting title to the JBG Included Asset that do not have a JBG Material Adverse Effect on the applicable JBG Included Asset. In no event shall any JBG right of first refusal under Section 6.1 constitute a JBG Permitted Lien.

“ JBG REIT Counsel ” means Hogan Lovells US LLP.

“ JBG REITs ” means Fund VIII REIT, Atlantic REIT and the Core REITs.

“ JBG Service Provider ” means any employee (including any JBG Employee), consultant, director or other service provider of the JBG Included Entities or the JBG Management Entities or who is engaged or employed at, or principally provides services to, any of the JBG Included Properties.

“ JBG Tax Group ” means the JBG Parties and the JBG Included Entities, together with any person (i) whose ownership of stock would be attributable to or aggregated with the JBG Parties under Section 355(d)(8) or 355(e)(4)(C) of the Code, (ii) who is a member of any “coordinating group” (within the meaning of Treasury Regulation Section 1.355-7(h)(4)) that includes any of the JBG Parties or the JBG Included Entities, or (iii) who is acting pursuant to a “plan or arrangement” (within the meaning of Section 355(d)(7)(B) of the Code) with any of the JBG Parties or the JBG Included Entities.

“ JBG TRSs ” means the Taxable REIT Subsidiaries of the JBG REITs which include: Fund VIII TRS, L.L.C., JBG/Fund VIII Services, L.L.C., JBG/New York Hotel Operator, L.L.C., JBG/Crystal City Hotel Operator, L.L.C., JBG/151 Q Street Services, L.L.C., and JBG/Foundry Office Services, L.L.C].

“ Joint Venture ” means any Person owning, directly or indirectly, any interests in any Included Properties and in which one or more Parties owns Equity Interests and which Person is not wholly owned, directly or indirectly, by such Parties.

“ Joint Venture Agreement ” means any partnership agreement, limited partnership agreement, shareholders’ agreement, limited liability company operating agreement, joint venture agreement (or the equivalent), together with all amendments, amendment and restatements, addendums, side letters and joinders in respect of which any of the Joint Ventures is governed.

“ Joint Venture Partner ” means any Person, other than a Party, which holds a direct or indirect legal or beneficial right, title or interest or the right or option to acquire such right, title or interest, in a Joint Venture.

“ Kickout Interest ” means any Included Interest that is deemed to be a “Kickout Interest” pursuant to Section 5.2(f) or another provision of this Agreement.

123

“ knowledge ” means, with respect to any Vornado Party, the actual knowledge of any of the persons listed on Section 9.6(b) of the Vornado Disclosure Letter as of the date hereof.

“ knowledge ” means, with respect to any JBG Party, the actual knowledge of any of the persons listed on Section 9.6(b) of the JBG Disclosure Letter as of the date hereof.

“ Law ” means any law, common law, statute, code, rule, regulation, order, ordinance, judgment or decree or other requirement or rule of law of any Governmental Entity having the effect of law.

“ Liability ” means any liability, debt, obligation, deficiency, interest, Tax, penalty, fine, claim, demand, damage, judgment, cause of action or other loss (including loss of benefit or relief), cost or expense of any kind or nature whatsoever, whether asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, and whether matured or unmatured, regardless of when asserted.

“ Lien ” means any lien, pledge, hypothecation, mortgage, security interest, encumbrance, claim, infringement, interference, option, right of first refusal, preemptive right, community property interest or other restriction of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).

“ Multiemployer Plan ” means a “multiemployer plan” within the meaning of Section 3(37) of ERISA.

“ Net Working Capital ” means, with respect to any JBG Included Entity or Vornado Included Entity, the difference between:

(i) all current assets, including:

(a) restricted cash and escrows (including lender-controlled accounts), except restricted accounts for tenant security deposits,

(b) accounts receivable from tenants and other third parties,

(d) allowances for doubtful accounts (with 50% credit for non-GSA tenant receivables more than sixty (60) days past due and with no credit for receivables from bankrupt or insolvent tenants, for amounts disputed by the GSA or non-GSA tenant receivables more than one hundred twenty (120) days past due),

(e) prepaid expenses (including real estate taxes and insurance), and

(f) all other current assets (i.e., assets that settle in cash within twelve (12) months).

124

minus

(ii) all current liabilities, including:

(a) accounts payable,

(b) accrued expenses,

(d) amounts due to tenants, and

(e) all other current liabilities (i.e., liabilities that settle in cash within twelve (12) months).

The foregoing amounts shall each be determined in accordance with the accrual basis of accounting. For the avoidance of doubt, none of the following items shall be taken into consideration in any calculation of Net Working Capital:

(1) unrestricted cash,

(2) cash contributed by the Parties at Closing (including by means of repayment of intercompany debt),

(3) cash and liabilities related to tenant security deposits,

(4) fixed assets (e.g., property, plant & equipment),

(5) straight-line rent receivables,

(6) deferred compensation plans,

(7) mortgage loans and other long-term Indebtedness,

(8) intercompany accounts that are wholly among Included Entities or that will be eliminated by or in connection with the Closing,

(9) accrued Leasing Costs (it being agreed that adjustments on account of Leasing Costs are otherwise addressed by Section 1.5(b) ),

(10) accrued capital improvements (it being agreed that adjustments on account of capital improvements are otherwise addressed by Section 1.5(b) ),

(11) accrued Acquisition and Development Costs (it being agreed that adjustments on account of Acquisition and Development Costs are otherwise addressed by Section 1.5(b) ) and

125

(12) any other items that are the subject of an adjustment to Asset Values pursuant to clauses (A) through (G) of Section 1.5(b)(i) or clauses (A) through (D) of Section 1.5(b)(ii) .

“ Newco Board ” means the board of trustees of Newco.

“ Newco Shares ” means common shares of beneficial interest, par value ($0.01) per share, of Newco.

“ NYSE ” means the New York Stock Exchange.

“ OP Units ” means a partnership unit designated by Newco OP as an OP Unit under the Partnership Agreement.

“ Partnership Agreement ” means the Agreement of Limited Partnership of Newco OP entered into on October 31, 2016.

“ Person ” means a natural person, sole proprietorship, firm, entity, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, unincorporated syndicate, unincorporated organization, joint venture, Governmental Entity or other entity or organization.

“ Plan ” means (i) each employment, consulting, noncompetition, nondisclosure, nonsolicitation, severance, termination, retention, transaction and change in control arrangement, agreement, policy or commitment, (ii) each stock option, restricted stock, deferred stock, performance stock, stock appreciation, stock unit or other equity or equity-based plan, program, arrangement, agreement, policy or commitment, and (iii) each pension, retirement, supplemental retirement, excess benefit, profit sharing, bonus, incentive, deferred compensation, savings, life, health, disability, accident, medical, dental, vision, death benefit, cafeteria, insurance, flexible spending, adoption assistance, employee assistance, tuition reimbursement, vacation, paid-time- off, perquisite, outplacement, welfare benefit, fringe benefit and other similar compensation or benefit plan, program, arrangement, agreement, policy (whether formal or informal) or commitment, including in each case each “employee benefit plan” as defined in Section 3(3) of ERISA (whether or not subject to ERISA) and any trust, escrow, funding, insurance or other agreement related to any of the foregoing.

“ Post-Closing Consideration Number ” means, with respect to any Included Interest contributed to Newco OP subsequent to the Closing in accordance with Section 1.6(c) , the product of (x) a fraction, the numerator of which is the Asset Value of the applicable Included Interest as adjusted in accordance with Section 1.5 , and the denominator of which is the sum of (1) the aggregate of the Asset Values, each as adjusted in accordance with Section 1.5 , of all Included Assets (excluding any Kickout Interests as of the Closing Date but, for clarity, including any Included Interest previously contributed to Newco OP subsequent to the Closing in accordance with Section 1.6(c) , and including, without duplication, the Asset Value of the Vornado management business) plus all Cash Contributed at Closing by JBG plus all Cash Contributed at Closing by Vornado, multiplied by (y) the sum of the number of OP Units

126

(excluding any OP Units issued as equity incentive awards) issued and outstanding immediately after the Closing plus, in the event the Credit Facility is utilized to pay any Cash Consideration pursuant to Section 1.7(b) , the number of additional OP Units that would have been issued at Closing had the recipients of such Cash Consideration received Equity Consideration plus the number of OP Units previously issued in connection with the contribution of any Included Interest subsequent to the Closing in accordance with Section 1.6(c) . For purposes of this definition, the Asset Value of each Included Interest contributed subsequent to the Closing in accordance with Section 1.6(c) shall be determined in accordance with Section 1.5 , except that all references to the “Closing Date” in Section 1.5(b) shall be deemed to refer to the date on which such Vornado Included Interest is actually contributed to Newco or its Subsidiary.

“ Reasonable Cause Exceptions ” means the “reasonable cause” exceptions specified in Section 856(c)(6), Section 856(c)(7), Section 856(g)(4), or Section 856(g)(5) of the Code.

“ Receiving Party ” means either the JBG Parties or the Vornado Parties, as applicable, when such Party is acting in its capacity as the recipient of Confidential Information.

“ Related Party ” means (i) with respect to the Vornado Parties, any former, current or future officers, employees, directors, trustees, partners, equityholders, managers, members, Affiliates or agents of Vornado or any Vornado Subsidiary, and the family members of each such person (other than the JBG Parties) and (ii) with respect to the JBG Parties, the principals and executive officers of any JBG Party or its Subsidiaries, Affiliates and members of the family of each such person (other than the Vornado Parties).

“ Representatives ” means a Person’s Affiliates and a Person’s and its Affiliates’ directors, officers, trustees, employees, consultants, financial advisors, partners, Subsidiaries, shareholders, co-investors, joint venture partners, existing financing sources, accountants, legal counsel, investment bankers, and other agents, advisors and representatives.

“ Required Consent ” means a Required JBG Consent or a Required Vornado Consent. “ Required Debt Consent ” means a Required JBG Debt Consent or a Required Vornado Debt Consent.

“ Required Ground Lease Consent ” means a Required JBG Ground Lease Consent or a Required Vornado Ground Lease Consent.

“ Required JBG Consents ” means, collectively, the Required JBG Debt Consents, the Required JBG Ground Lease Consents and the Required JBG JV Consents.

“ Required JV Consent ” means a Required JBG JV Consent or a Required Vornado JV Consent.

“ Required Vornado Consents ” means, collectively, the Required Vornado Debt Consents, the Required Vornado Ground Lease Consents and the Required Vornado JV Consents.

127

“ SDAT ” means the State Department of Assessments and Taxation of Maryland. “ SEC ” means the U.S. Securities and Exchange Commission.

“ Securities Act ” means the Securities Act of 1933, as amended, and all regulations, rules and other guidance promulgated thereunder.

“ Share Number ” means the product of (x) a fraction, the numerator of which is the aggregate of the Asset Values of the JBG Parties’ JBG Included Assets (as determined in accordance with Section 1.5 and Section 1.6(a) , and including, for clarity, all JBG Included Assets initially designated as Kickout Interests that are subsequently included in the transaction at the Closing Date following the receipt of all applicable Required JBG Consents) and of the Cash Contributed at Closing by JBG, and the denominator of which is the aggregate of the Asset Values of the Vornado Included Assets (as determined in accordance with Section 1.5 and Section 1.6(a) , including, without duplication, the Asset Value of the Vornado management business and including, for clarity, all Vornado Included Assets initially designated as Kickout Interests that are subsequently included in the transaction at the Closing Date following the receipt of all applicable Required Vornado Consents) and of the Cash Contributed at Closing by Vornado, multiplied by (y) a figure equal to the sum of the number of OP Units received by partners of Vornado OP (other than Vornado) pursuant to the Vornado OP Distribution of OP Units (as defined in Section 1.1 of the Vornado Disclosure Letter) plus the number of Newco Shares received by shareholders of Vornado pursuant to the Vornado Distribution (as defined in Section 1.1 of the Vornado Disclosure Letter). An example of the calculation of the Share Number, which is provided for illustrative purposes only, is attached hereto as Schedule D .

“ Sophisticated Investor ” means an investor who is not an Accredited Investor who either alone or with his purchaser representative(s) has such knowledge and experience in financial and business matters that such investor is capable of evaluating the merits and risks of an investment in the Equity Consideration, or who Newco or Newco OP reasonably believes immediately prior to issuing such Equity Consideration comes within this description, as contemplated in Rule 506(b)(ii) promulgated under the Securities Act.

“ Subsidiary ” or “ Subsidiaries ” means with respect to any Person, any corporation, limited liability company, partnership or other organization, whether incorporated or unincorporated, of which (i) at least a majority of the outstanding shares of capital stock of, or other Equity Interests, having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries, or (ii) with respect to a partnership or any limited liability company, such Person or any other Affiliate of such Person is a general partner or managing member of such partnership or limited liability company. Notwithstanding the above, with regard to each JBG Fund, a “Subsidiary” means only a JBG Included Entity in which such JBG Fund has a direct or indirect Equity Interest.

“ Tax ” or “ Taxes ” has the meaning ascribed to such term in the Tax Matters Agreement.

128

“ Tax Return ” has the meaning ascribed to such term in the Tax Matters Agreement.

“ Trading Price ” means the average of the high and the low trading prices of Newco Shares on the New York Stock Exchange on the Closing Date.

“ Treasury Regulations ” means the U.S. Treasury Regulations, promulgated under the Code.

“ UBI ” means Universal Building Inc. and any corporation to which the tax attributes of UBI enumerated in Section 381(c) of the Code are carried over in a transaction to which Section 381(a) of the Code applies.

“ Valuation Date ” means (i) the date indicated on Section 9.6(c) of the Vornado Disclosure Letter, as to the Vornado Included Assets, and (ii) the date indicated on Section 9.6(c) of the JBG Disclosure Letter, as to the JBG Included Assets.

“ Vornado Benefit Plan ” means each Plan which is sponsored, maintained or contributed to, or required to be contributed to, by the Vornado Parties, or in which any Vornado Service Provider participates or under which any Vornado Party or its Subsidiary has any obligation or liability to provide compensation or benefits to or for the benefit of any current or former Vornado Service Provider, or the spouses, beneficiaries or other dependents thereof.

“ Vornado Included Assets ” means, in addition to the Vornado Included Interests, all assets, and properties of the Vornado Parties and their Subsidiaries related to the Vornado Included Properties, the Vornado Included Interests and the Vornado Included Investments or the proceeds from any sale thereof that comprise the Newco Assets (as defined in the Separation and Distribution Agreement), but excluding any Vornado Excluded Assets.

“ Vornado Material Adverse Effect ” means any effect, change, event or occurrence that, individually or in the aggregate, has had, or would reasonably be expected to have, a material adverse effect on the business, properties, assets, liabilities, results of operations or financial condition of the Vornado Included Assets, taken as a whole; provided , however , that no effect, change, event or occurrence resulting or arising from the following shall be deemed to constitute a Vornado Material Adverse Effect or shall be taken into account when determining whether a Vornado Material Adverse Effect has occurred or is reasonably likely to exist or occur: (i) any changes in general United States or global political, regulatory or economic conditions, or the capital, financial or securities markets, including changes in interest rates, to the extent that such changes do not disproportionately have a greater adverse impact on the Vornado Included Entities, taken as a whole, relative to other similarly situated participants in the industries in which the Vornado Included Entities operate generally, (ii) any changes generally affecting the industries or markets in which the Vornado Included Entities operate to the extent that such changes do not disproportionately have a greater adverse impact on the Vornado Included Entities, taken as a whole, relative to other similarly situated participants in the industries in which the Vornado Included Entities operate generally, (iii) any changes after the date hereof in GAAP (or any interpretation thereof in accordance with the Financial Accounting Standards

129

Board Statements of Financial Accounting Standards and Interpretations), (iv) any adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal of any applicable Law of or by any Governmental Entity after the date hereof to the extent that such adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal does not disproportionately have a greater adverse impact on the Vornado Included Entities, taken as a whole, relative to other similarly situated participants in the industries in which the Vornado Included Entities operate generally, (v) any actions taken, or the failure to take any action, if such action or such failure to take action is at the written request or with the prior written consent of the JBG Parties, (vi) any effect, change, event or occurrence attributable to the negotiation, execution, announcement or other public disclosure or performance of this Agreement and the Transactions or the impact of such negotiation, execution, announcement, disclosure or performance on relationships, contractual or otherwise, with customers, suppliers, tenants, lenders, employees, unions, licensors, Joint Venture Partners or other Persons with business relationships with Vornado or any Vornado Subsidiary, or any action by a Governmental Entity or any Action or dispute brought or threatened arising out of or relating from such negotiation, execution, announcement, disclosure or performance ( provided that this clause (vi) shall not apply with respect to Section 3.5 of this Agreement), (vii) any failure by the Vornado Included Entities to meet any internal or published projections, estimates or expectations of their revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by the Vornado Included Entities to meet their internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from the definition of a “Vornado Material Adverse Effect” may be taken into account, unless such fact or occurrence is otherwise excluded from this definition), and (viii) any effect, change, event or occurrence after the date hereof arising out of changes in geopolitical conditions, acts of terrorism, civil disobedience or sabotage, the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions or other force majeure events, including any material worsening of such conditions threatened or existing as of the date of this Agreement to the extent that such changes do not disproportionately have a greater adverse impact on the Vornado Included Entities, taken as a whole, relative to other similarly situated participants in the industries in which the Vornado Included Entities operate generally.

“ Vornado Permitted Liens ” means all of the following: (i) the matters set forth in any title insurance policy evidencing title insurance with respect to a Vornado Included Property provided to the JBG Parties prior to the date hereof, (ii) the Vornado Leases and the ground leases affecting any of the Vornado Included Properties as of the date hereof, or amendments or modifications to the foregoing, entered into after the date hereof in accordance with the terms of this Agreement, (iii) Liens for current real estate taxes and special assessments which are not yet due and payable (subject to apportionment in accordance with the terms hereof), (iv) standard exceptions and provisions contained in the form of owner’s title insurance policies for each of the Vornado Included Properties, (v) subject to the adjustments provided for herein and to the extent due after Closing, any charges for service, installation, connection, maintenance, sewer, water, electricity, telephone, cable television or gas, (vi) rights of vendors and holders of security interests on personal property installed at any Vornado Included Property by tenants under

130

Vornado Leases in effect on the date hereof or entered into after the date hereof in accordance with the terms of this Agreement, (vii) to the extent permitted under the Vornado Leases in effect on the date hereof or entered into after the date hereof in accordance with the terms of this Agreement, rights of tenants to remove fixtures at the expiration of the term of the Vornado Leases of such tenants, (viii) mechanics liens arising by or through the tenants under any Vornado Leases affecting Vornado Included Properties, (ix) any exceptions created by the ground lessor pursuant to any ground lease on the fee interest of the relevant property, (x) Laws, regulations, resolutions or ordinances, including, without limitation, building, zoning and environmental protection, as to the use, occupancy, subdivision, development, conversion or redevelopment of any Vornado Included Property currently or hereinafter imposed by any governmental or quasi-governmental body or authority; (xi) Liens relating to Indebtedness that is disclosed in Section 3.11(a)(v) of the Vornado Disclosure Letter; and (xii) any other non-monetary Liens, limitations, restrictions or title defects first arising from and after the date of this Agreement in the ordinary course of operation of the applicable Vornado Included Asset that do not have a Vornado Material Adverse Effect on the applicable Vornado Included Property.

“ Vornado REIT Counsel ” means Sullivan & Cromwell LLP.

“ Vornado REITs ” means H Street, Vornado 17 th Street LLC, UBI and Vornado Warner LLC.

“ Vornado SEC Filings ” means all forms, reports, schedules, statements and documents required to be filed or furnished by Vornado or Vornado OP under the Securities Act or the Exchange Act, as the case may be, including any amendments or supplements thereto.

“ Vornado Service Provider ” means any employee, consultant, director or other service provider of the Vornado Included Entities.

“ Vornado TRSs ” means CESC TRS Inc., CESC Engineering TRS Inc., VNO Crystal City TRS Inc., VNO Crystal City Marriott Inc., The Commerce Metro Center Association of Co- Owners, Washington CESC TRS Inc. and Washington Mart TRS Inc.

“ Willful Breach” means a material breach or material default of this Agreement that is a consequence of an act knowingly undertaken by the breaching party with the intent of causing a breach of this Agreement.

Section 9.7. Terms Defined Elsewhere . The following terms are defined elsewhere in this Agreement, as indicated below:

“3-14 Financial Statements”		Section 4.6
“Accountants”		Section 5.9(a)
“Acquisition and Development Costs”		Section 1.5(b)(i)
“Action”		Section 3.9
“Agreement”		Preamble

131

“Anti-Money Laundering Laws ”		Section 3.27
“Asset Value”		Section 1.5(a)
“Board Designees”		Section 5.13(a)
“Bylaws Amendment and Restatement”		Section 5.14
“Cash Consideration”		Section 1.7(b)
“Chosen Courts”		Section 9.12(b)
“Cleaning Services Agreements”		Section 6.6(c)
“Closing”		Section 2.1
“Closing Date”		Section 2.1
“Combination Transactions”		Section 1.2
“Continuing Employee”		Section 6.4(a)
“County”		Section 6.1(b)
“Credited Post-Revaluation Time Amounts”		Section 1.5(d)
“Credit Facility”		Section 5.7(a)
“Credit Facility Refinancing Draw”		Section 5.2(f)(i)
“DC Multifamily Properties”		Section 6.1(c)
“DC Rights Holders”		Section 6.1(c)
“Debt Refinancing”		Section 5.2(f)(i)
“Declaration of Trust Amendment and Restatement”		Section 3.5(b)
“Employee Matters Agreement”		Section 2.2(j)
“Employment Agreements”		Recitals
“Equity Consideration”		Section 1.4
“Equity Issuance”		Recitals
“Excluded Managing Member Interest”		Section 5.2(f)(iii-iv)
“Form 10”		Section 3.21
“Fund VI”		Section 1.2(a)
“Fund VII”		Section 1.2(b)
“Fund VIII”		Section 1.2(c)
“Fund IX”		Section 1.2(d)
“Fund VIII REIT”		Section 1.2(c)
“Governmental Entity”		Section 3.5(a)
“GP Subcontracts”		Section 2.2(p)
“Historic Vornado Assets”		Section 6.3(c)
“HSR Act”		Section 3.5(b)
“Issued Newco Shares”		Section 1.7(d)
“Issued OP Units”		Section 1.7(d)
“JBG Advisory Agreement”		Section 4.15(b)
“JBG Board Designee”		Section 5.13(a)
“JBG Contribution Agreements”		Section 1.2(f)(iii)

132

“JBG Designee”		Section 1.7(a)
“JBG Development Property”		Section 4.10(a)
“JBG Disclosure Letter”		Article IV
“JBG Election Schedule”		Section 1.7(a)
“JBG Excluded Assets”		Recitals
“JBG Excluded Properties”		Recitals
“JBG Financial Statements”		Section 4.6
“JBG Fund Contribution Agreement”		Section 1.2(c)
“JBG Funds”		Preamble
“JBG Ground Leases”		Section 4.9(h)
“JBG Included Entity”		Recitals
“JBG Included Interests”		Recitals
“JBG Included Properties”		Recitals
“JBG Insurance Policies”		Section 4.25
“JBG Investor Questionnaire”		Section 4.5(b)
“JBG Leases”		Section 4.9(i)
“JBG LLC Merger Agreement”		Section 1.2(a)
“JBG Management Entities”		Preamble
“JBG Managing Member Contribution Agreement”		Section 1.2(f)(iii)
“JBG Managing Member Entities”		Recitals
“JBG Material Contract”		Section 4.16(a)
“JBG Merger Agreements”		Section 1.2(f)(i)
“JBG Newco REIT Opinion”		Section 7.3(e)(ii)
“JBG Operating Partners”		Preamble
“JBG Operating Partners Financial Statements”		Section 4.6
“JBG Parties”		Preamble
“JBG Partnership Merger Agreement”		Section 1.2(f)(i)
“JBG Permits”		Section 4.14(b)
“JBG Properties”		Preamble
“JBG Properties Contribution Agreement”		Section 1.2(f)(ii)
“JBG REIT Opinion”		Section 7.2(e)(i)
“JBG REIT Opinions”		Section 7.2(e)(i)
“JBG Representative”		Section 1.8(a)
“JBG Retail Financial Statements”		Section 4.6
“JBG Subsidiary Partnership”		Section 4.13(i)
“JBG Tax Protection Agreement”		Section 4.13(i)
“JBG Title Policies”		Section 4.9(g)
“Leasing Costs”		Section 1.5(b)(i)
“Managing Member Interests”		Section 1.2(f)(iii)

133

“Material Vornado Leases”		Section 3.15(h)
“Material JBG Leases”		Section 4.9(j)
“Montgomery County Multifamily Properties”		Section 6.1(b)
“Montgomery County Rights Holders”		Section 6.1(b)
“Must-Have Properties”		Section 1.6(c)
“Newco”		Preamble
“Newco Bylaws”		Section 3.2
“Newco Declaration”		Section 3.2
“Newco Audited Financial Statements”		Section 3.6(a)
“Newco Financial Statements”		Section 3.6(a)
“Newco GP”		Section 3.3(a)
“Newco OP”		Preamble
“Non-Recourse Party”		Section 9.16
“OFAC”		Section 3.26
“Ordinances”		Section 6.1(b)
“Outside Date”		Section 8.1(b)(i)
“Parties”		Preamble
“Partnership Agreement Amendment and Restatement”		Section 2.2(e)
“PBGC”		Section 3.23(c)
“Post-Closing Transactions”		Section 1.3
“Potential Restructuring”		Section 5.8(a)
“Pre-Combination Transactions”		Section 1.1
“Qualified REIT Subsidiary”		Section 3.1(d)
“Registration Rights Agreements”		Section 2.2(d)
“REIT”		Section 3.1(d)
“Replacement Designee”		Section 5.13(b)
“Required JBG Debt Consents”		Section 4.3
“Required JBG Ground Lease Consents”		Section 4.3
“Required JBG JV Consents”		Section 4.3
“Required Vornado Debt Consents”		Section 3.5(a)
“Required Vornado Ground Lease Consents”		Section 3.5(a)
“Required Vornado JV Consents”		Section 3.5(a)
“Restructuring Transactions”		Section 5.8(a)
“Retained Accountant”		Section 1.5(c)
“Revaluation Time”		Section 2.1
“S Corporation”		Section 4.1(c)
“Separation and Distribution Agreement”		Section 2.2(b)
“Specified REIT Matters”		Section 5.1(a)
“Taxable REIT Subsidiary”		Section 3.1(d)

134

“Tax Matters Agreement”		Section 2.2(l)
“TOPA”		Section 6.1(c)
“Transactions”		Recitals
“Transfer Taxes”		Section 6.3(b)
“Transferred LLC”		Recitals
“Transition Services Agreement”		Section 6.6(a)
“UDM”		Section 1.2(e)
“Under Construction and Predevelopment Properties”		Section 1.5(b)(i)
“Vornado”		Preamble
“Vornado Board”		Recitals
“Vornado Board Designee”		Section 5.13(a)
“Vornado Disclosure Letter”		Article III
“Vornado Excluded Assets”		Recitals
“Vornado Excluded Properties”		Recitals
“Vornado Ground Leases”		Section 3.15(f)
“Vornado Included Entities”		Recitals
“Vornado Included Entity Tax Protection Agreement”		Section 3.10(g)
“Vornado Included Interests”		Recitals
“Vornado Included Investments”		Recitals
“Vornado Included Properties”		Recitals
“Vornado Insurance Policies”		Section 3.19
“Vornado Investor Questionnaire”		Section 3.20(b)
“Vornado Leases”		Section 3.15(g)
“Vornado Material Contract”		Section 3.11(a)
“Vornado Newco REIT Opinion”		Section 7.2(e)(ii)
“Vornado OP”		Preamble
“Vornado Parties”		Preamble
“Vornado Permits”		Section 3.13(b)
“Vornado REIT Opinion”		Section 7.3(e)(i)
“Vornado REIT Opinions”		Section 7.3(e)(i)
“Vornado Title Policies”		Section 3.15(k)
“WARN Act”		Section 3.25(c)

Section 9.8. Interpretation . When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The table of contents and headings set forth in this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision hereof. When reference is made herein to a Person, such reference shall be deemed to

135

include all direct and indirect Subsidiaries of such Person unless otherwise indicated or the context otherwise requires. All references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect Subsidiaries of such Person unless otherwise indicated or the context otherwise requires. The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

Section 9.9. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile, portable document format (.pdf) or other electronic means shall be effective as delivery of a manually executed counterpart to this Agreement.

Section 9.10. Entire Agreement; Third-Party Beneficiaries .

(a) This Agreement (including the Vornado Disclosure Letter and the JBG Disclosure Letter) constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and oral, among the Parties or any of them with respect to the subject matter hereof and thereof.

(b) This Agreement (including the Vornado Disclosure Letter and the JBG Disclosure Letter) is not intended to confer upon any Person, other than the Parties and their successors and permitted assigns, any rights or remedies hereunder, other than Section 9.16 (No Recourse).

Section 9.11. Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions is not affected in any manner adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the Transactions are fulfilled to the extent possible.

Section 9.12. Governing Law; Jurisdiction .

(a) This Agreement, and all claims or causes of actions (whether at Law, in contract or in tort) that may be based upon, arise out of or related to this Agreement or the negotiation, execution or performance of this Agreement, shall be governed by, and construed in accordance with, the Laws of the State of New York without giving effect to conflicts of laws principles (whether of the State of New York or any other jurisdiction that would cause the application of the Laws of any jurisdiction other than the State of New York).

136

(b) All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in the state courts sitting in the City, County and State of New York, or if jurisdiction over the matter is vested exclusively in federal courts, the United States District Court for the Southern District of New York, and the appellate courts to which orders and judgments thereof may be appealed (the “ Chosen Courts ”). Each of the Parties hereby irrevocably and unconditionally (a) submits to the exclusive jurisdiction of the Chosen Courts for the purpose of any Action arising out of or relating to this Agreement brought by any Party, whether sounding in tort, contract or otherwise, (b) agrees not to commence any such action or proceeding except in such courts, (c) agrees that any claim in respect of any such action or proceeding may be heard and determined in any Chosen Court, (d) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding, and (e) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding. Each of the Parties agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party irrevocably consents to service of process in the manner provided for notices in Section 9.5 . Nothing in this Agreement will affect the right of any Party to serve process in any other manner permitted by Law.

Section 9.13. Waiver of Jury Trial . EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.13 .

Section 9.14. Assignment . This Agreement shall not be assigned by any of the Parties (whether by operation of Law or otherwise) without the prior written consent of the other Parties. Any assignment referred to in the immediately preceding sentence shall not relieve any Party of any obligation hereunder, and following such assignment this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.

Section 9.15. Enforcement; Remedies .

(a) Except as otherwise provided herein, any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other

137

remedy conferred hereby, or by Law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy.

(b) The Parties’ right of specific enforcement is an integral part of the Transactions and each Party hereby waives any objections to the grant of the equitable remedy of specific performance to prevent or restrain breaches of this Agreement by any other Party (including any objection on the basis that there is an adequate remedy at Law or that an award of specific performance is not an appropriate remedy for any reason at Law or equity), and except as set forth in this Section 9.15 , each Party shall be entitled to an injunction or injunctions and to specifically enforce the terms and provisions of this Agreement to prevent or restrain breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of such Party under this Agreement all in accordance with the terms of this Section 9.15 . In the event any Party seeks an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, such Party shall not be required to provide any bond or other security in connection with such order or injunction all in accordance with the terms of this Section 9.15 .

(c) Notwithstanding anything in this Agreement or in any Ancillary Agreement to the contrary, in no event shall either Party have any Liability under this Agreement for any consequential, special, incidental, indirect or punitive damages, lost profits or similar items (including loss of business reputation or opportunity relating to a breach or alleged breach of this Agreement).

Section 9.16. No Recourse . This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as Parties hereto and no former, current or future equity holders, controlling persons, directors, officers, trustees, employees, agents or Affiliates of any Party, any Financing Source or any former, current or future stockholder, controlling person, director, officer, employee, general or limited partner, member, manager, agent or Affiliate of any of the foregoing (each, a “ Non-Recourse Party ”) shall have any liability for any obligations or liabilities of the Parties to this Agreement or for any claim (whether at Law or equity, in contract, tort or otherwise) based on, in respect of, or by reason of, the Transactions or in respect of any representations made or alleged to be made in connection herewith. Without limiting the rights of any Party against the other Parties hereto, in no event shall any Party or any of its Affiliates seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Non-Recourse Party. Notwithstanding the foregoing, this Section 9.16 shall in no way be deemed to limit the liability or obligations of any Party to the extent that such Party is required to cause its subsidiaries, Affiliates or Representatives to take any action or refrain from taking any action pursuant to this Agreement.

Section 9.17. Joint and Several . Unless otherwise specifically indicated herein, the obligations of the JBG Parties hereunder, on the one hand, and the Vornado Parties hereunder, on the other hand, are joint and several.

138

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.

VORNADO :

VORNADO REALTY TRUST , a Maryland real estate investment trust

By:			/s/ Alan J. Rice
			Name: Alan J. Rice
			Title: Senior Vice President

VORNADO OP :

VORNADO REALTY L.P. , a Delaware limited partnership

By:		Vornado Realty Trust, a Maryland real estate investment trust, its general partner

	By:			/s/ Alan J. Rice
				Name: Alan J. Rice
				Title: Senior Vice President

[Signature Page to Master Transaction Agreement]

NEWCO :

VORNADO DC SPINCO , a Maryland real estate investment trust

By:		/s/ Alan J. Rice
		Name: Alan J. Rice
		Title: Vice President and Secretary

NEWCO OP :

VORNADO DC SPINCO OP LP , a Delaware limited partnership

By:		Vornado DC Spinco GP LLC, a Delaware limited liability company, its general partner

	By:			Vornado Realty L.P., a Delaware limited partnership, its manager

			By:			Vornado Realty Trust, a Maryland real estate investment trust, its general partner

					By:		/s/ Alan J. Rice
							Name: Alan J. Rice
							Title: Senior Vice President

[Signature Page to Master Transaction Agreement]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.

JBG PROPERTIES :

JBG PROPERTIES, INC., a Maryland
corporation

By:			/s/ W. Matthew Kelly
			Name: W. Matthew Kelly
			Title: Executive Vice President and Assistant Secretary

JBG OPERATING PARTNERS :

JBG/OPERATING PARTNERS, L.P., a Delaware limited partnership

By:		JBG Properties, Inc., its General Partner

	By:			/s/ W. Matthew Kelly
				Name: W. Matthew Kelly
				Title: Executive Vice President and Assistant Secretary

[Signature Page to Master Transaction Agreement]

JBGFUNDS :

JBG INVESTMENT FUND VI, L.L.C., a
Delaware limited liability company

By:		JBG/Fund VI Manager, L.L.C., its Managing Member

	By:			/s/ Michael J. Glosserman
				Name: Michael J. Glosserman
				Title: Managing Member

JBG INVESTMENT FUND VII, L.L.C., a
Delaware limited liability company

By:		JBG/Fund VII Manager, L.L.C., its Managing Member

	By:		/s/ W. Matthew Kelly
			Name: W. Matthew Kelly
			Title: Managing Member

JBG INVESTMENT FUND VIII, L.L.C., a
Delaware limited liability company

By:		JBG/Fund VIII Manager, L.L.C., its Managing Member

		By:			/s/ W. Matthew Kelly
					Name: W. Matthew Kelly
					Title: Managing Member

[Signature Page to Master Transaction Agreement]

JBG INVESTMENT FUND IX, L.L.C., a
Delaware limited liability company

By:			JBG/Fund IX Manager, L.L.C., its Managing Member


		By:			/s/ W. Matthew Kelly
					Name: W. Matthew Kelly
					Title: Managing Member


JBG/URBAN DIRECT MEMBER, L.L.C., a
Delaware limited liability company


By:			JBG/Company Manager IV, L.L.C., its Managing Member

	By:			/s/ W. Matthew Kelly
				Name: W. Matthew Kelly
				Title: Managing Member

[Signature Page to Master Transaction Agreement]

Pursuant to Item 601(b)(2) of Regulation S-K, we have omitted schedules (or similar attachments) to this agreement that contain information that is immaterial to an investment decision and/or that is otherwise disclosed in this agreement or the Annual Report on Form 10-K for the year ended December 31, 2016. The omitted schedules (or similar attachments) are:

· Schedule A: JBG Properties Affiliates

· Schedule B: Asset Values

· Schedule C: Terms of Cleaning Services Agreements

· Schedule D: Example of Share Number Calculation

We will furnish supplementally a copy of any omitted schedule (or similar attachment) to the Commission upon request.

Exhibit A-1

Vornado Included Properties

NAME		ADDRESS
Crystal Mall 1 land		1800 South Bell Street, Arlington, VA 22202
Crystal Mall 3 land		1851 South Bell Street, Arlington, VA 22202
Crystal Mall 4 land		1901 South Bell Street, Arlington, VA 22202
Crystal Mall 1		1800 South Bell Street, Arlington, VA 22202
Crystal Mall 3		1851 South Bell Street, Arlington, VA 22202
Crystal Mall 4		1901 South Bell Street, Arlington, VA 22202
Crystal Square 2		1550 Crystal Drive, Arlington, VA 22202
Crystal Square 3		1750 Crystal Drive, Arlington, VA 22202
Crystal Underground III		1750 Crystal Drive, Arlington, VA 22202
Crystal Underground IV		1550 Crystal Drive, Arlington, VA 22202
Crystal Underground West aka Crystal Underground V		1615 Jefferson Davis Highway, Arlington, VA 22202
Crystal Square 4		241 18 th Street South, Arlington, VA 22202
Crystal Underground II		241 18 th Street South, Arlington, VA 22202
Crystal Gateway 2		1225 South Clark Street, Arlington, VA 22202
Crystal Square 5		251 18 th Street South, Arlington, VA 22202
Crystal Gateway 3		1215 South Clark Street, Arlington, VA 22202
Crystal Gateway 4		200 12 th Street South, Arlington, VA 22202
Crystal Underground I		251 18 th Street South, Arlington, VA 22202
Potomac Parking Lot		As identified on property tax bills as RPC 34-027-035 3535 South Ball Street, RPC 34-027-036 2733 Crystal Drive, and RPC

		34-027-037 2777 Crystal Drive, Arlington, VA 22202 (being the same 3 parcels identified elsewhere as 2595 Crystal Drive)
Crystal Plaza 5		223 23 rd Street South, Arlington, VA 22202
Crystal Plaza 1		2001 Jefferson Davis Hwy ,Arlington, VA 22202
Crystal Plaza 3		2100 Crystal Drive, Arlington, VA 22202
Crystal Plaza 4		2200 Crystal Drive, Arlington, VA 22202
Crystal Plaza 6		2221 South Clark Street, Arlington, VA 22202
220 20 th Street South		220 20 th Street South, Arlington, VA 22202
Courthouse Plaza I		2200 Clarendon Boulevard, Arlington, VA 22201
Courthouse Plaza II		2300 Clarendon Boulevard, Arlington, VA 22201
2101 L Street, NW		2101 L Street, NW, Washington, DC 20037
1700 M St., NW (being a combination through resubdivision of the properties previously known as 1150 17 th Street, NW, and 1726 M Street, NW)		1700 M Street, NW, Washington, DC 20036
1730 M St., NW		1730 M Street, NW, Washington, DC 20036
Two Crystal Park		2121 Crystal Drive, Arlington, VA 22202
Track corridor parcel related to Two Crystal Park		2121 Crystal Drive, Arlington, VA 22202
One Crystal Park		2011 Crystal Drive, Arlington, VA 22202
One Crystal Park land and related track corridor parcel		2011 Crystal Drive, Arlington, VA 22202
Three Crystal Park		2231 Crystal Drive, Arlington, VA 22202
Three Crystal Park land and related track corridor parcel		2231 Crystal Drive, Arlington, VA 22202

Four Crystal Park		2345 Crystal Drive, Arlington, VA 22202
Four Crystal Park land and related track corridor parcel		2345 Crystal Drive, Arlington, VA 22202
Five Crystal Park		2451 Crystal Drive, Arlington, VA 22202
Track corridor parcel related to Five Crystal Park		2451 Crystal Drive, Arlington, VA 22202
Fairfax Square		8045, 8065 and 8075 Leesburg Pike, Vienna, VA 22182
Commerce Executive III		1850 Centennial Park Drive, Reston, VA 20191
Commerce Executive IV		11400 Commerce Park Drive, Reston, VA 20191
Commerce Executive V		11440 Commerce Park Drive, Reston, VA 20191
Vienna Retail		352 Maple Avenue East and 362 Maple Avenue East, Vienna, VA 22180
The Bartlett		520 12 th Street S, Arlington, VA 22202
Metropolitan Park 5		RPCs 35003023 and 35003015
Metropolitan Park 6		RPCs 35003016, 35003017, 35003018 and 35003019
Metropolitan Park 7		RPCs 35003020 and 35003021
Metropolitan Park 8		RPCs 35003001 and 35003002
PenPlace		RPCs 35003436, 35003032, 35003033 and 35003438
Crystal Gateway North		201 12 th Street S., Arlington, VA 22202
Crystal Gateway 1		1235 South Clark Street, Arlington, VA 22202
Universal South		1825 Connecticut Ave, NW, Washington, DC 20009
Universal North		1875 Connecticut Ave., NW, Washington, DC

		20009
Ashley House		1600 South Joyce St., Arlington, VA 22202
James House		1111 Army Navy Drive, Arlington, VA 22202
Potomac House		1400 South Joyce St., Arlington, VA 222202
The Warner		1299 Pennsylvania Ave, NW, Washington, DC 20004
Investment Building		1501 K Street, NW, Washington, DC 20005
Bowen Building		875 15 th Street, NW, Washington, DC 20005
London House		1001 Wilson Boulevard, Arlington, VA 22209
Normandy House		1701 North Kent Street, Arlington, VA 22209
Spectrum Theater		1611 North Kent Street, Arlington, VA 22209
Building C		1601 North Kent Street, Arlington, VA 22209
Building D		1611 North Kent Street, Arlington, VA 22209
Building E		1621 North Kent Street, Arlington, VA 22209
1.10856 acres purchased from VDOT		Arlington, VA
Rosslyn Plaza North		1777 North Kent Street, Arlington, VA 22209
1101 17 th Street		1101 17 th Street, NW, Washington, DC 20036
1101 17 th Street		1101 17 th Street, NW, Washington, DC 20036
Square 649 Lot 48		1101/1109 South Capitol St, SW, Washington, DC 20003
Democracy Plaza		6701 Democracy Boulevard, Bethesda, MD 20817
1399 NY Ave.		1399 New York Ave., NW, Washington, DC 20005
Square 649 Lots 43, 44 and 45.		Parcels at 20 L Street, SW, 30 L Street, SW, and 25 M Street, SW, Washington, DC 20024

Waterfront Station		375 M Street, SE , Washington, DC 20003
Waterfront Station		425 M Street, SE, Washington, DC 20003
Crystal City Water Park		1601 Crystal Drive, Arlington, VA 22202
West End 25		1255 25th Street, NW, Washington, DC 20037
CC Marriott		1999 Jefferson Davis Highway, Arlington, VA 22202
CC Marriott		1999 Jefferson Davis Highway, Arlington, VA 22202
Crystal Drive Retail		2010/2100/2200/2250 Crystal Drive, Arlington, VA 22202
Crystal Plaza Arcade		2100 Crystal Drive, Arlington, VA 22202

Exhibit A-2

Vornado Included Entities

Name of Vornado Included Entity		Jurisdiction
1101 Fern St., Inc.		Delaware
1200 Eads St., Inc.		Delaware
1400 Eads St., Inc.		Delaware
1776 Seed Investors, LP		Delaware
220 S. 20th Street Developer LLC		Delaware
Arna-Eads, Inc.		Delaware
Arna-Fern, Inc.		Delaware
Bowen Building, L.P.		Delaware
CESC 1101 17 th Street L.L.C.		Delaware
CESC 1101 17 th Street Limited Partnership		Maryland
CESC 1101 17 th Street Manager L.L.C.		Delaware
CESC 1150 17 th Street L.L.C.		Delaware
CESC 1150 17th Street Manager L.L.C.		Delaware
CESC 1730 M Street L.L.C.		Delaware
CESC 2101 L Street L.L.C.		Delaware
CESC Commerce Executive Park L.L.C.		Delaware
CESC Crystal Square Four L.L.C.		Delaware
CESC Crystal/Rosslyn L.L.C.		Delaware
CESC District Holdings L.L.C.		Delaware
CESC Downtown Member L.L.C.		Delaware
CESC Engineering TRS Inc.		Delaware
CESC Fairfax Square Manager L.L.C.		Delaware
CESC Gateway One L.L.C.		Delaware
CESC Gateway Two Limited Partnership		Virginia
CESC Gateway Two Manager L.L.C.		Virginia
CESC Gateway/Square L.L.C.		Delaware
CESC Gateway/Square Member L.L.C.		Delaware

CESC H Street L.L.C.		Delaware
CESC Mall L.L.C.		Virginia
CESC Mall Land L.L.C.		Delaware
CESC One Courthouse Plaza Holdings L.L.C.		Delaware
CESC One Courthouse Plaza L.L.C.		Delaware
CESC One Democracy Plaza L.P.		Maryland
CESC One Democracy Plaza Manager L.L.C.		Delaware
CESC Park Five Land L.L.C.		Delaware
CESC Park Five Manager L.L.C.		Virginia
CESC Park Four Land L.L.C.		Delaware
CESC Park Four Manager L.L.C.		Virginia
CESC Park One Land L.L.C.		Delaware
CESC Park One Manager L.L.C.		Delaware
CESC Park Three Land L.L.C.		Delaware
CESC Park Three Manager L.L.C.		Virginia
CESC Park Two L.L.C.		Delaware
CESC Park Two Land L.L.C.		Delaware
CESC Plaza Five Limited Partnership		Virginia
CESC Plaza Limited Partnership		Virginia
CESC Plaza Manager L.L.C.		Virginia
CESC Potomac Yard LLC		Delaware
CESC Square L.L.C.		Virginia
CESC TRS, Inc.		Delaware
CESC Two Courthouse Plaza Limited Partnership		Virginia
CESC Two Courthouse Plaza Manager L.L.C.		Delaware
CESC Water Park L.L.C.		Virginia
Charles E. Smith Commercial Realty L.P.		Delaware
Crystal Tech Fund LP		Delaware
Fairfax Square LLC		Delaware

Fairfax Square Parking LLC		Delaware
Fairfax Square Partners		Delaware
Fifth Crystal Park Associates Limited Partnership		Virginia
First Crystal Park Associates Limited Partnership		Virginia
Fourth Crystal Park Associates Limited Partnership		Virginia
Geneva Associates Limited Partnership		Virginia
Geneva Associates Owner LLC		Delaware
Geneva Rosslyn LLC		Virginia
H Street Building Corporation		Delaware
H Street Management LLC		Delaware
IB Associates Limited Partnership		Delaware
JBG/VNO Holdings, L.L.C.		Delaware
Kaempfer Management Services, LLC		Delaware
New Kaempfer 1501 LLC		Delaware
New Kaempfer IB LLC		Delaware
New Kaempfer Waterfront LLC		Delaware
Palisades 1399 New York Avenue TIC Owner LLC		Delaware
Paris Associates Limited Partnership		Virginia
Paris Associates Owner LLC		Delaware
Paris LLC		Virginia
Park One Member L.L.C.		Delaware
Sinewave Ventures Fund I, L.P.		Delaware
South Capitol L.L.C.		Delaware
The Commerce Metro Center Association of Co-Owners		Virginia
Third Crystal Park Associates Limited Partnership		Virginia
UBI Management LLC		Delaware
Universal Bldg., North, Inc.		District of Columbia
Universal Building, Inc.		District of Columbia

VNO 1229-1231 25 th Street LLC		Delaware
VNO 1399 Holding LLC		Delaware
VNO 1399 New York Avenue TIC Owner LLC		Delaware
VNO 220 S 20 th Street LLC		Delaware
VNO 220 S. 20 th Street Member LLC		Delaware
VNO Ashley House LLC		Delaware
VNO Ashley House Member LLC		Delaware
VNO Courthouse I LLC		Delaware
VNO Courthouse II LLC		Delaware
VNO Crystal City Marriott, Inc.		Delaware
VNO Crystal City TRS, Inc.		Delaware
VNO Hotel L.L.C.		Delaware
VNO James House LLC		Delaware
VNO James House Member LLC		Delaware
VNO Pentagon Plaza LLC		Virginia
VNO Potomac House LLC		Delaware
VNO Potomac House Member LLC		Delaware
VNO South Capitol LLC		Delaware
VNO/HQ Member LLC		Delaware
Vornado 17 th Street Holdings, L.P.		Delaware
Vornado 17 th Street LLC		Delaware
Vornado Bowen GP LLC		Delaware
Vornado Bowen II LLC		Delaware
Vornado Bowen LLC		Delaware
Vornado CESCR Gen-Par, LLC		Delaware
Vornado Crystal City L.L.C.		Delaware
Vornado IB Holdings LLC		Delaware
Vornado KMS Holdings LLC		Delaware
Vornado Rosslyn LLC		Delaware
Vornado Warner Acquisition LLC		Delaware
Vornado Warner GP LLC		Delaware
Vornado Warner Holdings, L.P.		Delaware

Vornado Warner LLC		Delaware
Vornado Waterfront Holdings LLC		Delaware
Vornado/ Charles E. Smith L.P.		Virginia
Vornado/ Charles E. Smith Management L.L.C.		Virginia
Warner Investments, L.P.		Delaware
Washington CESC TRS, Inc.		Delaware
Washington CT Fund GP LLC		Delaware
Washington Mart TRS Inc.		Delaware
Waterfront 375 M Street, LLC		Delaware
Waterfront 425 M Street, LLC		Delaware

Exhibit A-3

Vornado Included Investments

1. SineWave Ventures Fund I, L.P.

2. 1776 Global, Inc. PBC.

3. 1776 Seed Investors, LP

4. Crystal Tech Fund LP

5. Local Motors, Inc.

FINAL FORM

Exhibit B-1

JBG Included Properties

Property Name		Address	City	State
1.	1233 20th Street	1233 20th Street NW	Washington	DC
2.	1600 K Street	1600 K Street NW	Washington	DC
3.	Pickett Industrial Park	841-929 South Pickett Street	Alexandria	VA
4.	800 North Glebe Road	800 North Glebe Road	Arlington	VA
5.	RTC West	12100-12120 Sunset Hills Road	Reston	VA
6.	Summit I	2000 Edmund Halley Drive	Reston	VA
7.	Summit II	2002 Edmund Halley Drive	Reston	VA
8.	Wiehle Avenue Office Building	1861 Wiehle Ave	Reston	VA
9.	1831 Wiehle Avenue	1831 Wiehle Ave	Reston	VA
10.	Artery Plaza	7200 Wisconsin Avenue	Bethesda	MD
11.	Rosslyn Gateway — North	1911 North Fort Meyer Drive	Arlington	VA
12.	Rosslyn Gateway — South	1901 South Fort Myer Drive	Arlington	VA
13.	L’Enfant Plaza Office — East	470/490 L’Enfant Plaza SW	Washington	DC
14.	L’Enfant Plaza Office — North	955 L’Enfant Plaza SW	Washington	DC
15.	11333 Woodglen Drive	11333 Woodglen Drive	Rockville	MD
16.	NoBe II Office	11411 Woodglen Drive	Rockville	MD
17.	The Foundry	1055 Thomas Jefferson Street NW	Washington	DC
18.	The Gale	151 Q Street NE	Washington	DC
19.	Fairway Apartments	11659 North Shore Drive	Reston	VA
20.	Falkland Chase South & West	8305 16th Street	Silver Spring	MD
21.	Falkland Chase North	8305 16th Street	Silver Spring	MD
22.	The Terano	5700 Fishers Lane	Rockville	MD
23.	The Alaire	1101 Higgins Place	Rockville	MD
24.	Fort Totten Square	5601 3rd Street NE	Washington	DC
25.	Galvan	1800 Rockville Pike	Rockville	MD
26.	Atlantic Plumbing	2112 8th Street NW	Washington	DC
27.	7770 Norfolk	7770 Norfolk	Bethesda	MD
28.	Fort Totten Square Retail	300 Riggs Road NE	Washington	DC
29.	Galvan Retail	1800 Rockville Pike	Rockville	MD
30.	North End Retail I	1921 & 1924 8th Street NW	Washington	DC
31.	L’Enfant Plaza Retail — West	429 L’Enfant Plaza SW	Washington	DC
32.	L’Enfant Plaza Retail — East	470 L’Enfant Plaza SW	Washington	DC
33.	Stonebridge at Potomac Town Center	14900 Potomac Town Place	Woodbridge	VA
34.	CEB Tower at Central Place	1201 Wilson Boulevard	Arlington	VA
35.	1244 South Capitol Street	1244 South Capitol Street SE	Washington	DC
36.	RTC West Retail	12100-12120 Sunset Hills Road	Reston	VA
37.	4749 Bethesda Avenue Retail (f/k/a 4735 Bethesda	4749 Bethesda Avenue	Bethesda	MD
	Avenue Retail)
38.	1900 N Street	1900 N Street NW	Washington	DC
39.	1250 1st Street	1250 1st Street	Washington	DC
40.	50 Patterson Street	50 Patterson St.	Washington	DC
41.	4747 Bethesda Avenue (f/k/a 4733 Bethesda Avenue)	4747 Bethesda Avenue	Bethesda	MD
42.	West Half II	1201 West Half Street	Washington	DC
43.	West Half III	1202 West Half Street	Washington	DC
44.	51 N Street	51 N St NE	Washington	DC
45.	Atlantic Plumbing C — North	X	Washington	DC
46.	Atlantic Plumbing C — South	X	Washington	DC
47.	Stonebridge at Potomac Town Center — Phase II	14900 Potomac Town Place	Woodbridge	VA

48.	Gallaudet	X	Washington	DC
49.	Capitol Point North Option	35, 39, 41, and 75 New York Avenue NE	Washington	DC
50.	Capitol Point North	1300 1st Street NE	Washington	DC
51.	965 Florida Avenue	965 Florida Avenue NW 1923 9 th Street NW	Washington	DC
52.	DCDF- 801 17th Street, NE	801 17th Street NE	Washington	DC
53.	Hoffman Town Center	X	Alexandria	VA
54.	Potomac Yard Land Bay G	X	Alexandria	VA
55.	Potomac Yard Land Bay F	X	Alexandria	VA
56.	Wiehle Avenue Development Parcel	1861 Wiehle Ave	Reston	VA
57.	1831 Wiehle Avenue Land	1831 Wiehle Ave	Reston	VA
58.	Summit I & II Land	2000 Edmund Halley Drive	Reston	VA
59.	Fairway Land	11659 North Shore Drive	Reston	VA
60.	RTC West Land	12100-12120 Sunset Hills Road	Reston	VA
61.	Stonebridge Land	14900 Potomac Town Place	Woodbridge	VA
62.	Falkland Chase North Land	8305 16th Street	Silver Spring	MD
63.	Rosslyn Gateway South Land	1901 South Fort Myer Drive	Rosslyn	VA
64.	Rosslyn Gateway North Land	1911 North Fort Meyer Drive	Rosslyn	VA
65.	L’Enfant Plaza Office Center	X	Washington	DC
66.	L’Enfant Plaza Office Southeast	X	Washington	DC
67.	NoBe II Land	11411 Woodglen Drive	Rockville	MD
68.	5615 Fishers Drive	5615 Fishers Drive	Rockville	MD
69.	12511 Parklawn Drive	12511 Parklawn Drive	Rockville	MD
70.	Bethesda North Marriott Land	X	Rockville	MD
71.	Woodglen	5640 Nicholson Lane	Rockville	MD
72.	Twinbrook	X	Rockville	MD
73.	Courthouse Metro Land Option	2046 Wilson Blvd.	Arlington	VA
74.	Courthouse Metro Land	2046 Wilson Blvd.	Arlington	VA
75.	FBI	X	Washington	DC
76.	7900 Wisconsin	X	Washington	DC
77.	Aldi (901 17th Street NE)	X	Washington	DC
78.	Howard University	X	Washington	DC

Exhibit B-2

JBG Included Entities

The JBG Included Entities are highlighted in yellow in the attached exhibit.

1233 20th Street Preferred Shareholders 0% MM 100% 1233 20th Street JBG/1233 20th Street, L.L.C. JBG/Fund VIII Trust JBG/DC Manager, L.L.C. JBG Investment Fund VIII, L.L.C.

1600 K Street Preferred Shareholders 0% MM 100% 0% MM 1600 K Street JBG/1600 K Member, L.L.C. 100% JBG/1600 K, L.L.C. JBG/DC Manager, L.L.C. JBG/Fund VII Trust JBG/Company Manager IV, L.L.C. JBG Investment Fund VII, L.L.C.

Pickett Industrial Park Stonebridge at Potomac Town Center Stonebridge at Potomac Town Center – Phase II The Foundry Fairway Apartments Fairway Land Stonebridge Land Other Limited Partners 10% LP 100% LP 19.5% LP 0% GP 0% GP 71.5% LP Preferred Shareholders 50% common 100% common 100% common The Gale Preferred Shareholders Preferred Shareholders Preferred Shareholders Preferred Shareholders 100% preferred 0% MM L.L.C.* 100% MM 100% MM JBG/Woodbridge Retail, L.L.C. (Operating Parcel) Pickett Industrial Park Stonebridge at PTC - Phase II Stonebridge at Potomac Town Center Fairway Apartments Fairway Land Stonebridge Land The Foundry *Managed by a Board of Directors consisting of JBG Principals. Woodbridge, L.L.C. (Development Parcel) JBG/Foundry Office REIT, MM Boundary TJ LLC ($500K Capital Account) JBG/Foundry Office, L.L.C. JBG/ JBG/Pickett Office REIT, L.L.C.* 100% JBG/Pickett Office, L.L.C. JBG/Company Manager IV, L.L.C. Fairways Residential REIT, L.L.C.* 0% MM 100% Fairways I Residential, L.L.C. Fairways II Residential, L.L.C. JBG/Woodbridge REIT, L.L.C.* JBG/Company Manager IV, L.L.C. JBG Core Venture I, L.P. 151 Q Street Co-Investment, L.P. 50% common 151 Q Street REIT, L.L.C.* 151 Q Street Residential, L.L.C. llis Global Alpha Fund CB Richard Ellis Global Alpha Fund JBG/Company Manager IV, L.L.C. JBG Investment Fund IX, L.L.C. 0% MM 100% JBG/Core I GP, L.L.C. JBG/Core I LP, L.L.C. CB Richard E

800 North Glebe 18% 0% MM 800 North Glebe JBG/Urban Direct Member, L.L.C. JBG/Company Manager IV, L.L.C. JBG Investment Fund VII, L.L.C. 82% North Glebe Office, L.L.C.

RTC West RTC West Retail RTC West Land Preferred Shareholders 0% MM 100% RTC West RTC West Retail RTC West Land JBG/Reston Executive Center, L.L.C. JBG/Fund VIII Trust JBG/Company Manager IV, L.L.C. JBG Investment Fund VIII, L.L.C.

Summit I Summit II Summit I & II Land Preferred Shareholders 0% MM 100% Summit I & II Land Summit I Summit II JBG/Summit Member, L.L.C. JBG/Summit, L.L.C. JBG/Fund VIII Trust JBG/Company Manager IV, L.L.C. JBG Investment Fund VIII, L.L.C.

Wiehle Avenue Office Building Wiehle Avenue Development Parcel 0% MM 100% Wiehle Avenue Development Parcel* Wiehle Avenue Office Building* *Ground Lease JBG/1861 Wiehle Lessee, L.L.C. JBG Investment Fund VIII, L.L.C. JBG/Company Manager IV, L.L.C.

1831 Wiehle Avenue 1831 Wiehle Avenue Land 18% 0% MM 1831 Wiehle Avenue 1831 Wiehle Avenue Land JBG/Urban Direct Member, L.L.C. JBG/Company Manager, L.L.C. JBG Investment Fund VIII, L.L.C. 82% JBG/1831 Wiehle, L.L.C.

Artery Plaza 0% MM 100% Artery Plaza JBG/7200 Wisconsin Mezz, L.L.C. JBG/7200 Wisconsin, L.L.C. JBG Investment Fund VI, L.L.C. JBG/Company Manager IV, L.L.C.

Rosslyn Gateway – North Rosslyn Gateway North Land 0% MM 82% 100% 0% MM Rosslyn Gateway North Land Rosslyn Gateway – North JBG/Rosslyn Gateway North, L.L.C. JBG/Company Manager, L.L.C. MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C.

Rosslyn Gateway – South Rosslyn Gateway South Land 0% MM 82% 100% 0% MM Rosslyn Gateway - South Rosslyn Gateway South Land JBG/Rosslyn Gateway South, L.L.C. JBG/Company Manager, L.L.C. MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C.

L’Enfant Plaza Office – East L’Enfant Plaza Office – North L’Enfant Plaza Retail – East L’Enfant Plaza Retail – West L’Enfant Plaza Office Center L’Enfant Plaza Office Southeast 0% MM 82% L.L.C. 6 37.7990915836% 0% MM L’Enfant Plaza Office - East L’Enfant Plaza Office -North L’Enfant Plaza Retail - East L’Enfant Plaza Retail - West L’Enfant Plaza Office Center L’Enfant Plaza Office Southeast JBG/Company Manager II, JBG Investment Fund VI, L.L.C. MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C. 2.2009084164% JBG/L’Enfant Plaza Member, L.L.C. JBG/L’Enfant Plaza Mezzanine, L.L.C. Potomac Creek Associates, L.L.C.

11333 Woodglen Drive NoBe II Office NoBe II Land Woodglen 0% MM 82% L.L.C. 100% 0% MM 11333 Woodglen Drive Woodglen* NoBe II Office NoBe II Land * Ground lease JBG/Nicholson Lane East II, L.L.C. JBG/Nicholson Lane West, L.L.C. JBG/Nicholson Member, L.L.C. 100% JBG/Nicholson Lane East, L.L.C. JBG/Company Manager II, MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C.

Falkland Chase – South & West Falkland Chase North Falkland Chase North Land Preferred Shareholders Falkland Chase North Falkland Chase North Land Falkland Chase - West Falkland Chase - South JBG/Company Manager IV , L.L.C. JBG/Fund VIII Trust 0% MM100% Falkland Road Residential, L.L.C. Falkland Chase Residential I, L.L.C. Falkland Chase Residential II, L.L.C. JBG Investment Fund VIII, L.L.C.

The Terano 0% MM 82% 10% MM 90% The Terano* *Ground Lease Twinbrook Commons Residential 1B, L.L.C. MFP Twinbrook 1B, LLC MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C.

The Alaire Twinbrook 0% MM 82% L.L.C. 0% MM The Alaire** *IDOT Borrower ** Ground lease *** With respect to Twinbrook, Twinbrook Commons, L.L.C. is party to a joint development agreement with WMATA pursuant to which Twinbrook Commons, L.L.C. may ground lease and develop future phases (Twinbrook) adjacent to the Alaire and The Terano. Twinbrook Phase IA Associates, L.L.C.* Twinbrook Commons Residential South, L.L.C. Twinbrook Commons Office, L.L.C. Twinbrook Commons Residential West, L.L.C. JBG/Company Manager II, MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C. 100% Twinbrook Commons, L.L.C.*** Twinbrook Commons Residential North, L.L.C.

Fort Totten Square Fort Totten Square Retail 0% MM Promote Interest Only 99.25% 0.75% 100% L.L.C. 9.6937%* 0% MM Fort Totten Square Fort Totten Square Retail *Percentages as of 11/18/2015. JBG/Fort Totten Member will fund all future capital calls, and percentage interests will be adjusted accordingly. JBG Investment Fund VII, JBG/DC Manager, L.L.C. JBG/Fort Totten Member, L.L.C.* 90.3063%* Fort Totten North, L.L.C. JBGR Fort Totten Square, L.L.C. JBG Investment Fund VII, L.L.C. JBG/Company Manager IV, L.L.C. 1111 Property Associates (2012-3) L.L.C.

Galvan Galvan Retail 0% MM 82% 10% MM 90% Galvan Galvan Retail 1800 Rockville Residential, L.L.C. MFP 1800 Rockville Pike, LLC MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C.

Atlantic Plumbing (promote 125 Preferred Shareholders 36% MM 64% 100% 100% Atlantic Plumbing Residential A Atlantic Plumbing Retail A Atlantic Plumbing Retail B Atlantic Residential A, L.L.C. Atlantic Retail B, L.L.C. Atlantic AB Holdings, L.L.C. CBREI Investors JBG/Company Manager IV, L.L.C. JBG Investment Fund VII, L.L.C. 0% MM 100% JBG/Atlantic GP, L.L.C. 100% LP 0% GP only) JBG/Atlantic Fund, L.P. 100% common JBG/Atlantic REIT, L.L.C. JBG/Atlantic Investor, L.L.C.

7770 Norfolk L.L.C. 0% MM 0% Manager 10% 2.2%* 78.3%* ation est 7770 Norfolk *Percentage interest may vary over time and will be based on capital contributed. t Development, LLC Fairmont Ross Investor LLC 4900 Alliance RDI, LLC 4900 Ross Manager, LLC JBG/Company Manager IV, JBG Investment Fund VII, L.L.C. 100% JBG/4900 Fairmont Member, L.L.C. CIM Urban Fund GP, LLC (CA) GP CIM Urban Real Estate Fund, LP 100% CIM/Fairmont LLC 19.5%* 90% Fairmon Particip Inter 4900 Fairmont Residential, L.L.C.

North End Retail I Hatton Retail Shay Retail JBG/DC Manager, L.L.C. 99% JBG Investment Fund VII, L.L.C. 0% MM99% 100% JBG Fund VII Corporate, L.L.C. 1% JBG/Hatton Retail, L.L.C. JBG/Shay Retail, L.L.C.

CEB Tower at Central Place 18% 0% MM CEB Tower at Central Place* *A portion is held via ground Lease JBG/Urban Direct Member, L.L.C. JBG/Company Manager IV, L.L.C. JBG Investment Fund IX, L.L.C. 82% Central Place Office, L.L.C.

1244 South Capitol Street 100% 1% 0% MM 1244 South Capitol Street JBG/Fund VIII Corporate Member, L.L.C. JBG/DC Manager, L.L.C. JBG Investment Fund VIII, L.L.C. 99% 1244 South Capitol Residential, L.L.C.

4749 Bethesda Avenue Retail (f/k/a 4735 Bethesda Avenue Retail) 18% 0% MM 4749 Bethesda Avenue Retail JBG/Urban Direct Member, L.L.C. JBG/Company Manager IV, L.L.C. JBG Investment Fund VIII, L.L.C. 82% JBG/Woodmont II, L.L.C.

1900 N Street 0% MM 92.78 % 1926/28 N Street 1244 19th Street* 1920 N Street 1247 20th Street 1253 20th Street 1924 N Street *Ground Lease JBG/1253 20th Street, L.L.C. JBG/1247 20th St. Lessee, L.L.C. JBG/19th Street, L.L.C. JBG/1920 N, L.L.C. JBG Investment Fund VIII, L.L.C. JBG Investment Fund VI, L.L.C. 7.22% JBG/19th & N Holdings, L.L.C. JBG/DC Manager, L.L.C.

1250 1st Street 50 Patterson Street 51 N Street 0% MM 50 Patterson Street 1250 1st Street 51 N Street JBG/DC Manager, L.L.C. JBG/Company Manager IV, L.L.C. JBG Investment Fund VI, L.L.C. JBG/Urban Direct Member, L.L.C. 0% MM84.746% 15.254% JBG/DC Manager, L.L.C. JBG/N & Patterson Member, L.L.C. JBG/1250 First Member, L.L.C. 0% MM 0% MM 30%70% 30% 51 N 50 Patterson Holdings, L.L.C. 1250 First Street Office, L.L.C. 100% 99% 51 N 50 Patterson Corporate Member, L.L.C. 1% 51 N Residential, L.L.C. 50 Patterson Office, L.L.C. BDN NoMa LLC

4747 Bethesda Avenue (f/k/a 4733 Bethesda Avenue) 18% 0% MM 4747 Bethesda Avenue JBG/Urban Direct Member, L.L.C. JBG/Company Manager IV, L.L.C. JBG Investment Fund VIII, L.L.C. 82% JBG/Bethesda Avenue, L.L.C.

West Half II West Half III 0% MM 100% West Half II West Half III JBG/DC Manager, L.L.C. JBG/West Half Residential Member, L.L.C. Half Street Holdings, LLC 0% MM 94.2497% 5.7503% West Half Residential II, L.L.C. West Half Residential III, L.L.C. JBG Investment Fund IX, L.L.C. JBG/Company Manager IV, L.L.C.

Atlantic Plumbing C – North Atlantic Plumbing C – South L.L.C. common Atlantic Plumbing C - North* Atlantic Plumbing C - South* JBG Investment Fund VII, L.L.C. 100% 99% JBG/DC Manager, L.L.C. JBG Fund VII Corporate, L.L.C. 0% MM 1% Atlantic Residential C, L.L.C. Florida Avenue Residential, 60% tenant in common 40% tenant in

7900 Wisconsin JBG currently owns only an interest in a small spike parcel at 7900 Wisconsin. With the respect to the remainder of the land, JBG has an LOI in place to purchase the land and an LOI with Berkshire to enter into a joint venture. The PSA and JV agreement are being negotiated. Fund VI would be the owner of the asset if acquired.

Gallaudet 0% MM 0% MM 1% * Option to ground lease pursuant to Development and Transfer Agreement between JBG/6th Street Associates, L.L.C., Gallaudet University and Gallaudet University Foundation dated as of April 10, 2015 (as amended). JBG/Fund IX Corporate Member, L.L.C. JBG/DC Manager, L.L.C. JBG/Company Manager IV, L.L.C. JBG Investment Fund IX, L.L.C. 99% 100% JBG/6th Street Associates, L.L.C.*

Capitol Point North Option 82% 0% MM L.L.C. 0% MM 50% 100% MM 100% MM L.L.C.*** *Owns option on 75 New York Avenue (McDonald’s parcel) **Leases and owns option on 35 New York Avenue ***Former ground lessee of 39-41 New York Avenue, will dissolve when settle potential claims with car wash tenant. ****Owns option on 39-41 New York Avenue New York Avenue Lessee, JBG/75 New York Option, L.L.C.* JBG/Company Manager IV, JBG Investment Fund VI, L.L.C. 50% JBG/New York Avenue, L.L.C.**** 100% MM 35 New York Avenue, L.L.C.** MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C.

Capitol Point North L.L.C. 55 New York Avenue 1300 First Street Note: JBG intends to exercise its option to purchase the interest of MFP Capitol Point North, LLC and redistribute the ownership interests between Fund VI and JBG Urban, resulting in Fund VI and JBG Urban each owning 50% of the assets. JBG/Urban Direct Member, L.L.C. MFP-JBGU, LLC 0% MM18% 82% 100% JBG/DC Manager, L.L.C. JBG Investment Fund VI, L.L.C. JBG Urban, L.L.C. MFP Capitol Point North, LLC 0% MM 14.304% 14.304% 71.392% JBG/1300 First Street, L.L.C. JBG/55 New York Avenue, JBG/Urban Manager, L.L.C.

965 Florida Avenue 2015-6, L.L.C. 0% MM 0% promote 30% MM 965 Florida Avenue* *Option to purchase pursuant to Land Disposition Agreement by and between District of Columbia, a municipal corporation, acting by and through the Office of the Deputy Mayor for Planning and Economic Development and Sherman Avenue, LLC, dated November 17, 2015 MRP/Ellis Sherman, L.L.C. 1111 Property Associates JBG/Company Manager IV, L.L.C. JBG Investment Fund IX, L.L.C. 100% JBG/Sherman Member, L.L.C. 70% Sherman Avenue LLC

DCDF 801 17th Street, NE Pursuant to that certain Purchase and Sale Agreement, dated as on or about July 20, 2015, by and between Developing Families Center, Inc. and JBG Associates, L.L.C., JBG Associates, L.L.C. (or its permitted assigns) is entitled to acquire fee simple ownership of the land and improvements located at 801 17th Street, NE, Washington DC 20002, subject to the satisfaction or waiver of certain conditions. It is currently intended that JBG Associates, L.L.C. will assign the right to purchase to JBG Investment Fund IX, L.L.C.

Hoffman Town Center Pursuant to that certain Purchase and Sale Agreement, dated as of January 13, 2015, by and among Hoffman Family, LLC, Hoffman Management, Inc. and JBG Associates, L.L.C., as amended, JBG Associates, L.L.C. (or its permitted assigns) is entitled to purchase the fee simple interest in the land and improvements thereon generally known as “Block 2,” Hoffman Town Center, 312 Taylor Drive, 314 Taylor Drive and 301 Stovall Street, subject to the satisfaction or waiver of certain conditions. It is currently intended that JBG Associates, L.L.C. will assign the right to purchase to JBG Investment Fund IX, L.L.C.

Potomac Yard Land Bay G L.L.C. Investor, L.L.C. ote 85% NNoottcchh88 RReessiiddeennttiiaall,,LL..LL..CC.. Potomac Yard Land Bay G (Parcel D) Potomac Yard Land Bay G (Parcel B) Potomac Yard Land Bay G (Parcel E) Notch 8 Notch 8 Retail *Property has been sold. Entities remain in structure until dissolved. ** Entity owns the land and the right to repurchase the retail unit when building is constructed on the portion of the land previously sold. CARING L.L.C. Gateway Belleve, LLC Gateway Residences at Exchange LLC* JBG/Notch 8 Residential JBG Investment Fund VII, L.L.C. 100% JBG/Landbay G Member, 2%98% JBG/Landbay G, L.L.C. 100% 100% LACERAomote 100% 100% MM 99%0% prom Landbay G Corporate Member, L.L.C. JBG/MRP Notch 8 Residential Member, JBG/Company Manager IV, L.L.C. 1%15% 90% MM10% 0% MM LBG Parcel A, L.L.C.** LBG Parcel B, L.L.C. LBG Parcel C, L.L.C.* LBG Parcel D, L.L.C.* LBG Parcel E, L.L.C. LBG Parcel F, L.L.C.* LBG Parcel G, L.L.C.* MRP PY CF Manager, LLC MM + pr MRB/JBG Gateway Residences Member, L.L.C.* MRP PY LBG, LLC JBG/Company Manager IV, L.L.C. 0% MM Landbay G Declarant, L.L.C.

Potomac Yard Land Bay F Preferred Shareholders JBG Individuals 0% MM 0% MM L.L.C. 33.3334% 33.3333% 33.3333% 0% promote 100% 100% 100% Non-theater Parcel Theater Parcel *Each of these entities is managed by an appointed manager. Not JBG managed. CPYR Shopping Center, LLC* CPYR Shopping Theater, LLC* CPYR, LLC* Roadhouse Alexandria, LLC JBG/Landbay F Member, L.L.C. JBG/Landbay F Investors, 1111 Property Associates 2014-1, L.L.C. (JBGR Entity) JBG Fund VIII Trust (REIT) JBG Investment Fund VIII, L.L.C. JBG/Company Manager IV, L.L.C.

5615 Fishers Drive 0% MM 82% L.L.C. 0% MM 100% 5615 Fishers Drive JBG/Twinbrook Metro, L.L.C. JBG/Company Manager II, MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C.

12511 Parklawn Drive 0% MM 82% L.L.C. 100% 0% MM 12511 Parklawn Drive JBG/12511 Parklawn, L.L.C. JBG/Company Manager II, MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C.

Bethesda North Marriott Land 0% MM 82% L.L.C. 0% MM 100% Bethesda North Marriott Land *North Bethesda Hotel, L.L.C. currently owns the ground lease for this asset, but the ground lease is intended to be bifurcated, at which time the ground lease, with respect to the Bethesda North Mariott Land, will be owned by North Bethesda Lessee, L.L.C. North Bethesda Lessee, L.L.C.* JBG/Company Manager IV, MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C.

Courthouse Metro Land Option Courthouse Metro Land 0% MM 82% 0% MM 100% Courthouse Metro Land Option** Courthouse Metro Land* * Ground lease ** Option to purchase pursuant to Purchase and Sale Agreement by and between 2046 Wilson Boulevard LLC and JBG/Courthouse Metro, L.L.C., dated June 11, 2013. JBG/Courthouse Metro, L.L.C. JBG/Company Manager, L.L.C. MFP-JBGU, LLC JBG/Urban Manager, L.L.C. JBG/Urban Direct Member, L.L.C. 18% JBG Urban, L.L.C.

FBI L.L.C. 0% MM 50% 0% MM FBI* * No property is yet owned VNO/HQ Member LLC JBG/DC Manager, L.L.C. JBG/Company Manager IV, JBG Investment Fund IX, L.L.C. 100% JBG/HQ Member, L.L.C. 50% JBG/VNO Holdings, L.L.C.

Aldi (901 17th Street NE) No property or contract right to purchase is currently owned. JBG Investment Fund IX, L.L.C. has incurred expenses in pursuit of acquiring this asset, which expenses are the “JBG Included Property” for these purposes, as well as any additional costs incurred in the pursuit or acquisition of the asset and the asset itself, if acquired.

Howard University No property or contract right to purchase is currently owned. JBG Investment Fund IX, L.L.C. has incurred expenses in pursuit of acquiring this asset, which expenses are the “JBG Included Property” for these purposes, as well as any additional costs incurred in the pursuit or acquisition of the asset and the asset itself, if acquired.

Exhibit B-3

JBG Managing Member Entities

JBG/Company Manager, L.L.C.

JBG/Company Manager II, L.L.C.

JBG/Company Manager IV, L.L.C.

JBG/DC Manager, L.L.C.

JBG/Urban Manager, L.L.C.

FINAL FORM

Exhibit C-1

AGREEMENT AND PLAN OF MERGER

Between

FUND [ · ] TRANSFERRED LLC

and

FUND [ · ] OP MERGERCO

Dated as of [ · ], 2017

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER, dated as of [ · ], 2017 (this “ Agreement ”), is made and entered into by and between Fund [ · ] OP Mergerco, a Delaware limited liability company (“ Mergerco ”), and Fund [ · ] Transferred LLC, a Delaware limited liability company (“ Transferred LLC ” and together with Mergerco, the “ Parties ”).

WHEREAS, this Agreement is being entered into and carried out by Transferred LLC and Mergerco in connection with, and as contemplated by that certain Master Transaction Agreement, dated as of October 31, 2016 (the “ Transaction Agreement ”), by and among Vornado Realty Trust, a Maryland real estate investment trust (“ Vornado ”), Vornado Realty L.P., a Delaware limited partnership (“ Vornado OP ”), Vornado DC Spinco, a Maryland real estate investment trust (“ Newco ”), Vornado DC Spinco OP LP, a Delaware limited partnership (“ Newco OP”), JBG Properties Inc., a Maryland corporation, JBG/Operating Partners, L.P., a Delaware limited partnership and certain affiliates of JBG Properties Inc. and JBG/Operating Partners;

WHEREAS, Mergerco is a subsidiary of Newco OP and TRS [ · ] (“ TRS ”);

WHEREAS, the Parties hereto wish to effect a business combination through a merger of Mergerco with and into Transferred LLC, with Transferred LLC surviving as a limited liability company owned by Newco OP and TRS (the “ Merger ”), on the terms and subject to the conditions set forth in this Agreement and in accordance with Section 18-209 of the Delaware Code, as amended (the “ Code ”);

WHEREAS, Transferred LLC has acquired ownership of certain JBG Included Interests as set forth on Schedule A (the “ Equity Interests ”) on the date hereof pursuant to the Restructuring Transactions outlined in 5.8(a) of the Transaction Agreement (the “ Restructuring ”);

WHEREAS, JBG/Fund [ · ] Manager, L.L.C., the managing member (the “ Managing Member ”) of Transferred LLC and the members holding a majority of the membership interests in Transferred LLC (the “ Investors ”, and together with the Managing Member, the “ Members ”) have approved this Agreement and the Merger on behalf of Transferred LLC and declared that this Agreement and the Merger of Mergerco with and into Transferred LLC, with Transferred LLC surviving, are advisable, on the terms and subject to the conditions set forth herein;

WHEREAS, Newco OP, the sole managing member of Mergerco, has approved this Agreement and the Merger on behalf of Mergerco and declared that this Agreement and the Merger are advisable, on the terms and subject to the conditions set forth herein;

WHEREAS, for U.S. federal income tax purposes, the Parties intend that the Merger be treated as follows: (i) with respect to each Member of Transferred LLC that receives Issued OP Units pursuant to the transactions contemplated by this Agreement, the Merger shall be treated as a contribution of the portion of such Member’s interests in Transferred LLC to Newco OP for which such form of consideration is received pursuant to Section 721(a) of the Internal Revenue Code of 1986, as amended (the “ IRS Code ”), and (ii) with respect to each member of Transferred LLC that receives cash or Issued Newco Shares pursuant to the transactions contemplated by this Agreement, the Merger shall be treated as the sale to Newco OP and TRS of the portion of such member’s interests in Divided LLC for which such form of consideration is received, and Newco OP and TRS, pursuant to Section 1.08 below, agree to report the Merger pursuant to this intent; and

WHEREAS, capitalized terms not otherwise defined herein shall have the respective meaning set forth in the Transaction Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereto hereby agree as follows:

ARTICLE I
THE MERGER

SECTION 1.01. The Merger .

Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with Section 18-209 of the Code, at the Merger Effective Time (as defined below), Transferred LLC and Mergerco shall consummate the Merger, pursuant to which (i) Mergerco shall be merged with and into Transferred LLC and the separate existence of Mergerco shall thereupon cease, and (ii) Transferred LLC shall be the surviving limited liability company in the Merger.

SECTION 1.02. Effective Time of the Merger .

At the Closing (as defined below), Transferred LLC shall file the certificate of merger with respect to the Merger, in such form as is required by, and executed in accordance with, the relevant provisions of the Code (the “ Certificate of Merger ”), with the Secretary of State of the State of Delaware (the “ DSOS ”). The Merger shall become effective upon such time as the Certificate of Merger has been filed with the DSOS, or such later time on the date of the Closing designated in such filings in accordance with the Code, as the effective time of the Merger (such time, the “ Merger Effective Time ”), but in any event the Merger shall become effective after the consummation of the Pre-Combination Transactions as set forth in the Transaction Agreement.

SECTION 1.03. Closing .

The closing of the Merger (the “ Closing ”) shall be on the date hereof, after the consummation of the Pre-Combination Transactions and simultaneously with the closing of the Combination Transactions pursuant to the Transaction Agreement.

SECTION 1.04. Effects of the Merger .

The Merger shall have the effects specified in Section 18-209 of the Code, and in addition, a t the Merger Effective Time, by virtue of the Merger and without any action on the part of a holder of an interest in Transferred LLC or in Mergerco:

(a) Pursuant to Section 1.2([ · ]) of the Transaction Agreement, the Members of Transferred LLC will receive cash, Issued Newco Shares and Issued OP Units (the “ Consideration ”) as set forth on Schedule B (1) attached hereto and incorporated herein as consideration for the Merger, and by virtue of the Merger and without any action on the part of Transferred LLC or Mergerco or the Members of Transferred LLC, each interest held in Transferred LLC outstanding immediately prior to the Effective Time shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each Member of Transferred LLC shall thereafter cease to have any rights, except the right to receive the Consideration as set forth on Schedule B ; and

(1) Note to Draft: This schedule will show 1% of the Consideration being paid by the TRS in the form of Issued Newco Shares. Note: If so, a valuation adjustment will be needed.

(b) Each interest in Mergerco issued and outstanding immediately prior to the Merger Effective Time shall, by virtue of the Merger and without any action on the part of Transferred LLC or Mergerco or the Members of Transferred LLC or the members of Mergerco, be converted automatically into an interest in Transferred LLC.

SECTION 1.05. Transferred LLC Limited Liability Company Agreement .

Immediately following the Merger Effective Time, the limited liability company agreement of Transferred LLC shall be amended and restated to be the limited liability company agreement of Mergerco as in effect immediately prior to the Merger Effective Time (the “ New Transferred LLC Agreement ”).

SECTION 1.06. Managing Member of Transferred LLC .

Immediately following the Merger Effective Time, Newco OP shall be the managing member of Transferred LLC, until its resignation or removal in accordance with the New Transferred LLC Agreement.

SECTION 1.07. Dissenters’ Rights .

No dissenters’ rights or appraisal rights shall be available with respect to the Merger or the other transactions contemplated hereby.

SECTION 1.08. Release .

Persons who at any time prior to the Merger Effective Time have been members, partners, shareholders, directors, trustees, officers, agents or employees of Transferred LLC or of any of its affiliates prior to the Merger Effective Time (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, who are not, as of immediately following the Merger Effective Time, directors, trustees, officers or employees of Newco or any of its Subsidiaries are hereby released of and from any further liabilities or obligations whether accruing before or after the date hereof with respect to the Equity Interests, including, without limitation, all Liabilities arising from or in connection with the Transactions and all other activities to implement the Transactions, and all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Merger Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Merger Effective Time), in each case to the extent relating to, arising out of or resulting from the Newco Business, the Newco Assets or the Newco Liabilities (each as defined in the Separation and Distribution Agreement to be entered into by and among Vornado, Vornado OP, Newco and Newco OP, in the form attached to the Transaction Agreement as Exhibit D), but subject to the terms and conditions of the Transaction Agreement.

SECTION 1.09. Intended Tax Treatment of the Merger .

(a) With respect to each Member of Transferred LLC that receives Issued OP Units pursuant to the transactions contemplated by this Agreement, the Merger shall be treated as a contribution of the portion of such Member’s interests in Transferred LLC to Newco OP for which such form of

consideration is received in exchange for Issued OP Units received pursuant to Section 721(a) of the IRS Code in a transaction in which no gain or loss is required to be recognized;

(b) With respect to each Member of Transferred LLC that receives cash or Issued Newco Shares pursuant to the transactions contemplated by this Agreement, the Merger shall be treated as the sale to Newco OP and TRS of the portion of such Member’s interests in Transferred LLC for which such form of consideration is received, as described in Schedule B attached hereto and incorporated herein; and

(c) Transferred LLC will be treated as continuing as a partnership for federal income tax purposes following the Merger, with Newco OP and TRS as its partners.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF TRANSFERRED LLC

Transferred LLC hereby represents and warrants to Mergerco as follows:

SECTION 2.01. Organization, Power and Authority .

Transferred LLC is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Transferred LLC has all requisite limited liability company power and authority to own and operate its assets.

SECTION 2.02. Authorization .

Transferred LLC has all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Merger as contemplated by this Agreement. The execution, delivery and performance by Transferred LLC of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly and validly authorized by all necessary limited liability company action on behalf of Transferred LLC, and no further limited liability company action on the part of Transferred LLC is required to consummate the transactions contemplated by this Agreement, other than the filing and recordation of the Certificate of Merger and other appropriate merger documents as required by the Code. This Agreement has been duly and validly executed and delivered by Transferred LLC, and assuming the due authorization, execution and delivery by Mergerco, constitutes a valid, binding and enforceable obligation of Transferred LLC, enforceable against Transferred LLC in accordance with its terms.

SECTION 2.03. No Prior Business.

Since the date of its formation, Transferred LLC has not conducted any business, nor has it incurred any liabilities or obligations (direct or indirect, present or contingent), in each case, except in connection with the Transactions and the assets and liabilities of Fund [•] and its subsidiaries related to the Equity Interests.

SECTION 2.04. Assumption of Liabilities .

Pursuant to the Restructuring, Transferred LLC assumed all obligations of certain JBG Included Entities, whether arising before or after the date hereof, to the extent such obligations relate to the Equity Interests. Transferred LLC is subject to and in compliance with the representations and warranties in Article IV of the Transaction Agreement as such representations and warranties were applicable to certain JBG Included Entities’ holding of the Equity Interests and the assets and properties

that were held by certain JBG Included Entities on the date thereof and are now held by Transferred LLC and its subsidiaries after giving effect to the Restructuring Transactions.

SECTION 2.05. Disclaimer of Representations and Warranties .

THE PARTIES UNDERSTAND AND AGREE THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, IN THE TRANSACTION AGREEMENT, OR IN ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT CONTEMPLATED HEREBY OR THEREBY, NO PARTY TO THIS AGREEMENT, THE TRANSACTION AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, THE TRANSACTION AGREEMENT, ANY ANCILLARY AGREEMENT OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS, APPROVALS OR NOTIFICATIONS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SET-OFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN, IN THE TRANSACTION AGREEMENT OR IN ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS, WHERE IS” BASIS AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE WILL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR MADE OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.

ARTICLE III

GENERAL PROVISIONS

SECTION 3.01. Amendment .

Subject to compliance with applicable Law, this Agreement may be amended by mutual agreement of the Parties hereto by action taken or authorized by their respective board of directors, managing member or other similar governing body, if necessary; provided , however , that there shall not be any amendment or change not permitted under applicable Law. This Agreement may not be amended except by an instrument in writing signed by each of the Parties hereto.

SECTION 3.02. Non-Survival .

None of the representations, warranties, or agreements in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the Closing; provided , however , that this Section 3.02 shall not limit any covenant or agreement of the each of the Parties hereto to the extent such covenant or agreement by its terms contemplates performance after the Closing, which shall survive the Closing.

SECTION 3.03. Interpretation .

When a reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The headings set forth in this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision hereof. When reference is made herein to a Person, such reference shall be deemed to include all direct and indirect Subsidiaries of such Person unless otherwise indicated or the context otherwise requires. All references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect Subsidiaries of such Person unless otherwise indicated or the context otherwise requires. The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document. In the case of any conflict between this Agreement and the Transaction Agreement, the Transaction Agreement shall control.

SECTION 3.04. Counterparts .

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile, portable document format (.pdf) or other electronic means shall be effective as delivery of a manually executed counterpart to this Agreement.

SECTION 3.05. Entire Agreement .

This Agreement, the Transaction Agreement and the other Ancillary Documents constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and oral, among the Parties or any of them with respect to the subject matter hereof and thereof. This Agreement is not intended to confer upon any Person, other than the Parties and their successors and permitted assigns, any rights or remedies hereunder.

SECTION 3.06. Severability .

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

SECTION 3.07. Governing Law; Jurisdiction .

This Agreement and all claims or causes of actions (whether at Law, in contract or in tort) that may be based upon, arise out of or related to this Agreement or the negotiation, execution or performance of this Agreement, shall be governed by, and construed in accordance with, the Laws of the State of Delaware without giving effect to conflicts of laws principles (whether of the State of Delaware

or any other jurisdiction that would cause the application of the Laws of any jurisdiction other than the State of Delaware) .

SECTION 3.08. Waiver of Jury Trial .

EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 3.08 .

SECTION 3.09. Assignment .

This Agreement shall not be assigned by any of the Parties (whether by operation of Law or otherwise) without the prior written consent of the other Parties. Any assignment referred to in the immediately preceding sentence shall not relieve any Party of any obligation hereunder, and following such assignment this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.

IN WITNESS WHEREOF, Transferred LLC and Mergerco have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

	Fund [ · ] Transferred LLC, a Delaware limited liability company


		By:
		Name:
		Title:

	Fund [ · ] OP Mergerco, a Delaware limited liability company

	By: Vornado DC Spinco OP LP


		By:
		Name:
		Title:

[Signature Page to Agreement and Plan of Merger by and between Transferred LLC and Mergerco]

FINAL FORM

Exhibit C-2

CONTRIBUTION AND ASSIGNMENT AGREEMENT

Between

JBG SMITH PROPERTIES LP

and

[ · ] LEGACY LLC

Dated as of [ · ], 2017

CONTRIBUTION AND ASSIGNMENT AGREEMENT(1)

This CONTRIBUTION AND ASSIGNMENT AGREEMENT, dated as of [ · ], 2017 (this “ Agreement ”), is made and entered into by and between JBG SMITH Properties LP, a Delaware limited partnership (the “ Operating Partnership ”), and [ · ] Legacy LLC, a Delaware limited liability company (“ Legacy LLC ” and together with the Operating Partnership, the “ Parties ”).

WHEREAS, this Agreement is being entered into and carried out by the Operating Partnership and Legacy LLC in connection with, and as contemplated by that certain Master Transaction Agreement, dated as of October 31, 2016 (the “ Transaction Agreement ”), by and among Vornado Realty Trust, a Maryland real estate investment trust (“ Vornado ”), Vornado Realty L.P., a Delaware limited partnership (“ Vornado OP ”), Vornado DC Spinco, a Maryland real estate investment trust (“ Newco ”), the Operating Partnership, JBG Properties Inc., a Maryland corporation, JBG/Operating Partners, L.P., a Delaware limited partnership and certain affiliates of JBG Properties Inc. and JBG/Operating Partners, L.P.;

WHEREAS, Legacy LLC owns 100% of the outstanding membership interests (the “ LLC Interest ”) in [ · ] Transferred LLC (“ Transferred LLC ”), which is disregarded as an entity separate from Legacy LLC for U.S. federal income tax purposes;

WHEREAS, Legacy LLC has acquired the LLC Interest from JBG [ · ], L.L.C. (“ JBG [ · ] ”) via a merger of Transferred LLC with a subsidiary of Legacy LLC on the date hereof pursuant to the Restructuring Transactions outlined in Section 5.8(a) of the Transaction Agreement (the “ Restructuring ”);

WHEREAS, pursuant to Section 1.2([ · ]) of the Transaction Agreement, the Operating Partnership desires to acquire from Legacy LLC, and Legacy LLC desires to contribute and transfer to the Operating Partnership, subject to the terms and conditions set forth herein, the LLC Interest;

WHEREAS, pursuant to Section 1.4 of the Transaction Agreement, Legacy LLC will receive cash, Issued Newco Shares and Issued OP Units (collectively, the “ Consideration ”), as consideration for the contribution of the LLC Interest;

WHEREAS, immediately following the contribution of the LLC Interest to the Operating Partnershp in exchange for the Consideration, Legacy LLC will distribute the Consideration to its members and liquidate;

WHEREAS, for U.S. federal income tax purposes, (i) the Parties intend that the contribution of the LLC Interest to the Operating Partnership in exchange for the Consideration, followed by the immediate liquidation of Legacy LLC and the distribution of the Consideration to its members, be treated as a merger of Legacy LLC with the Operating Partnership within the meaning of Section 708(b)(2)(A) of the Internal Revenue Code of 1986, as amended (the “ Code ”) and Treasury Regulations §1.708-1(c), with such merger treated as an “assets-over” form of merger as provided for in Treasuary Regulations §1.708-1(c)(3)(i), and (ii) each member of Legacy LLC has agreed and consented to treat the receipt of any cash or Issued Newco Shares pursuant to the transactions contemplated by this Agreement as the sale to the Operating Partnership of the portion of such member’s interests in Legacy LLC for which such form of consideration is received, and the Operating Partnership, pursuant to Article IV below,

(1) Please note that this form agreement will be appropriately revised for each contribution set forth in Section 1.2 of the Transaction Agreement.

agrees to report the payment of any cash and the issuance of any Issued Newco Shares as the purchase from such Legacy LLC member of those interests in Legacy LLC immediately prior to the merger described in clause (i) of this paragraph, all pursuant to Treasury Regulations Section 1.708-1(c)(4);

WHEREAS, Schedule A attached hereto and incorporated herein, specifies the portion and nature of the Consideration to be transferred to each member of Legacy LLC pursuant to the transactions contemplated herein, and the portion of the interests held by such member in Legacy LLC, if any, that is purchased by the Operating Partnership in exchange for such Consideration;

WHEREAS, the closing (the “ Closing ”) of the transactions contemplated by this Agreement shall be on the date hereof, after the consummation of the Pre-Combinaiton Transactions and simultaneously with the closing of the Combination Transactions pursuant to the Transaction Agreement; and

WHEREAS, capitalized terms not otherwise defined herein shall have the respective meaning set forth in the Transaction Agreement.

ARTICLE I
CONTRIBUTION

SECTION 1.01. Contribution and Assignment .

Upon the terms and subject to the conditions set forth in this Agreement, Legacy LLC hereby contributes, grants, assigns, transfers and conveys and delivers forever to the Operating Partnership, all of Legacy LLC’s rights, title and interest under, in and to the LLC Interest in exchange for the Consideration. The Operating Partnership hereby accepts the foregoing contribution, grant, assignment, transfer and conveyance of the LLC Interest as a contribution by Legacy LLC to the Operating Partnership and hereby pays the Consideration to Legacy LLC, subject to Article IV hereof.

SECTION 1.02. Assumption .

Upon the terms and subject to the conditions set forth in this Agreement, Newco OP hereby expressly assumes and agrees to perform, satisfy and discharge, in each case in due course, all of the liabilities and obligations of Legacy LLC relating to the LLC Interest whether arising or accruing before or after the date hereof. Legacy LLC, any of its affiliates, their respective successors and assigns, all persons who at any time prior to the Closing have been shareholders, directors, trustees, officers, agents or employees of Legacy LLC or any of its affiliates (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns and all persons who at any time prior to the Closing are or have been shareholders, directors, trustees, officers, agents or employees of Transferred LLC and who are not, as of immediately following the Closing, directors, trustees, officers or employees of Newco or any of its Subsidiaries are hereby released of and from any further liabilities or obligations whether accruing before or after the date hereof with respect to the LLC Interest, including, without limitation, all Liabilities arising from or in connection with the Transactions and all other activities to implement the Transactions, and all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Closing (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Closing), in each case to the extent relating to,

arising out of or resulting from the Newco Business, the Newco Assets or the Newco Liabilities (each as defined in the Separation and Distribution Agreement to be entered into by and among Vornado, Vornado OP, Newco and Newco OP, in the form attached to the Transaction Agreement as Exhibit D), but subject to the terms and conditions of the Transaction Agreement.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF LEGACY LLC

Legacy LLC hereby represents and warrants to the Operating Partnership as follows:

SECTION 2.01. Organization, Power and Authority .

Legacy LLC is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Legacy LLC has all requisite limited liability company power and authority to own and operate its assets.

SECTION 2.02. Authorization .

Legacy LLC has full right, authority, power and capacity (a) to enter into this Agreement and each agreement, document and instrument to be executed and delivered by or on behalf of Legacy LLC pursuant to this Agreement; (b) to carry out the transactions contemplated hereby and thereby; and (c) to contribute, transfer and deliver all of the LLC Interest to the Operating Partnership (or its designee) in accordance with this Agreement. This Agreement and each agreement, document and instrument executed and delivered by or on behalf of Legacy LLC pursuant to this Agreement constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of Legacy LLC, each enforceable in accordance with its respective terms.

SECTION 2.03. No Prior Business.

Since the date of its formation, Legacy LLC has not conducted any business, nor has it incurred any liabilities or obligations (direct or indirect, present or contingent), in each case, except in connection with the Transactions and the assets and liabilities of Transferred LLC and its subsidiaries related to the LLC Interest.

SECTION 2.04. Assumption of Liabilities.

Pursuant to the Restructuring, Legacy LLC assumed all obligations of JBG [•], to the extent such obligations relate to the LLC Interest. Legacy LLC is subject to and in compliance with the representations and warranties in Article IV of the Transaction Agreement as such representations and warranties were applicable to JBG [•]’s holding of the LLC Interest and the assets and properties that were held by JBG [•] on the date thereof and are now held by Transferred LLC and its subsidiaries after giving effect to the Restructuring Transactions.

SECTION 2.05. Disclaimer of Representations and Warranties .

OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS, APPROVALS OR NOTIFICATIONS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SET-OFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN, IN THE TRANSACTION AGREEMENT OR IN ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS, WHERE IS” BASIS AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE WILL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR MADE OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.

ARTICLE III

COVENANTS (2)

SECTION 3.01. Subsequent Actions.

Immediately following the contribution of the LLC Interest to the Operating Partnership in exchange for the Consideration pursuant to this Agreement, Legacy LLC will liquidate and distribute the Consideration to its members in accordance with Schedule A .

ARTICLE IV

TAX MATTERS

(a) The contribution and assignment of the LLC Interest by Legacy LLC to the Operating Partnership in exchange for the Consideration and the distribution, immediately thereafter, of the Consideration by Legacy LLC to its members in liquidation of Legacy LLC shall be treated as a merger, undertaken by Legacy LLC in the “assets-over” form, of Legacy LLC and the Operating Partnership pursuant to Treasury Regulations Section 1.708-1(c)(3)(i); and

(b) The issuance of the cash and the Issued Newco Shares to Legacy LLC for distribution in the liquidation of Legacy LLC to the members thereof electing such consideration shall be treated as the direct purchase by the Operating Partnership, immediately prior to the merger described in clause (a) of this Article IV, of the membership interests in Legacy LLC from the electing members of

(2) Please note that with respect to the Contribution Agreement of Fund VIII Legacy LLC, an additional covenant will be added obligating Newco OP to keep Fund VIII REIT in existence for a minimum of two years following the closing.

Legacy LLC, and for the Consideration, described in Schedule A attached hereto and incorporated herein, as contemplated by Treasury Regulations Section 1.708-1(c)(4).

ARTICLE V
GENERAL PROVISIONS

SECTION 5.01. Amendment .

Subject to compliance with applicable Law, this Agreement may be amended by mutual agreement of the Parties hereto by action taken or authorized by their respective boards of directors, general partners or other similar governing body or entity, if necessary; provided , however , that there shall not be any amendment or change not permitted under applicable Law. This Agreement may not be amended except by an instrument in writing signed by each of the Parties hereto.

SECTION 5.02. Non-Survival .

None of the representations, warranties, or agreements in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the Closing; provided , however , that this Section 5.02 shall not limit any covenant or agreement of the Parties hereto to the extent such covenant or agreement by its terms contemplates performance after the Closing, which shall survive the Closing.

SECTION 5.03. Interpretation .

SECTION 5.04. Counterparts .

SECTION 5.05. Entire Agreement .

This Agreement the Transaction Agreement and the other Ancillary Documents constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and

supersedes all other prior agreements and understandings, both written and oral, among the Parties or any of them with respect to the subject matter hereof and thereof. This Agreement is not intended to confer upon any Person, other than the Parties and their successors and permitted assigns, any rights or remedies hereunder.

SECTION 5.06. Severability .

SECTION 5.07. Governing Law; Jurisdiction .

(b) All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in the state courts sitting in the City, County and State of New York, or if jurisdiction over the matter is vested exclusively in federal courts, the United States District Court for the Southern District of New York, , and the appellate courts to which orders and judgments thereof may be appealed (the “ Chosen Courts ”). Each of the Parties hereby irrevocably and unconditionally (a) submits to the exclusive jurisdiction of the Chosen Courts for the purpose of any Action arising out of or relating to this Agreement brought by any Party, whether sounding in tort, contract or otherwise, (b) agrees not to commence any such action or proceeding except in such courts, (c) agrees that any claim in respect of any such action or proceeding may be heard and determined in any Chosen Court, (d) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding, and (e) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding. Each of the Parties agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Nothing in this Agreement will affect the right of any Party to serve process in any manner permitted by Law.

SECTION 5.08. Waiver of Jury Trial .

PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.08 .

SECTION 5.09. Assignment .

[signature page follows]

IN WITNESS WHEREOF, the Operating Partnership and Legacy LLC have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

	JBG SMITH PROPERTIES LP, a Delaware limited partnership

	By:	[•]

		By:
		Name:
		Title:

	[•] LEGACY LLC, a Delaware limited liability company

	By:	[•]

		By:
		Name:
		Title:

[Signature Page to Contribution and Assignment Agreement by and between JBG SMITH Properties LP and [ · ] Legacy LLC]

FINAL FORM

Exhibit C-3

AGREEMENT AND PLAN OF MERGER

Between

JBG/OPERATING PARTNERS, L.P.

and

[NEWCO OP SUBSIDIARY]

Dated as of [•], 2017

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER, dated as of [•], 2017 (this “ Agreement ”), is made and entered into by and between JBG/Operating Partners, L.P., a Delaware limited partnership (the “ Merging Entity ”), and [Newco OP Subsidiary], a Delaware limited liability company (the “ Surviving Entity ” and together with the Merging Entity, the “ Parties ”).

WHEREAS, this Agreement is being entered into and carried out by the Merging Entity and the Surviving Entity in connection with, and as contemplated by that certain Master Transaction Agreement, dated as of October 31, 2016 (the “ Transaction Agreement ”), by and among Vornado Realty Trust, a Maryland real estate investment trust (“ Vornado ”), Vornado Realty L.P., a Delaware limited partnership (“ Vornado OP ”), Vornado DC Spinco, a Maryland real estate investment trust (“ Newco ”), Vornado DC Spinco OP LP, a Delaware limited partnership (“ Newco OP ”), JBG Properties Inc., a Maryland corporation (“ JBG Properties ”), the Merging Entity and certain affiliates of JBG Properties and the Merging Entity;

WHEREAS, the Parties hereto wish to effect a business combination through a merger of the Merging Entity with and into the Surving Entity, with the Surviving Entity surviving (the “ Merger ”), on the terms and subject to the conditions set forth in this Agreement and in accordance with Section 17-211 and Section 18-209 of the Delaware Code, as amended (the “ Code ”).

WHEREAS, the Merging Entity currently holds equity interests (the “ Equity Interests ”) in certain entities that are listed on Schedule A hereto.

WHEREAS, JBG Properties, the general partner of the Merging Entity, has approved this Agreement and the Merger on behalf of the Merging Entity and declared that this Agreement and the Merger of the Merging Entity with and into the Surviving Entity, with the Surviving Entity surviving, are advisable, on the terms and subject to the conditions set forth herein;

WHEREAS, Newco OP, the sole member and managing member of the Surviving Entity, has approved this Agreement and the Merger on behalf of the Surviving Entity and declared that this Agreement and the Merger are advisable, on the terms and subject to the conditions set forth herein; and

WHEREAS, capitalized terms not otherwise defined herein shall have the respective meaning set forth in the Transaction Agreement.

ARTICLE I
THE MERGER

SECTION 1.01. The Merger .

Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with Section 17-211 and Section 18-209 of the Code, at the Merger Effective Time (as defined below), the Surviving Entity and the Merging Entity shall consummate the Merger, pursuant to which (i) the Merging Entity shall be merged with and into the Surviving Entity and the separate existence of the Merging Entity shall thereupon cease, and (ii) the Surviving Entity shall be the surviving limited liability company in the Merger.

SECTION 1.02. Effective Time of the Merger .

At the Closing (as defined below), the Surviving Entity shall file a certificate of merger with respect to the Merger, in such form as is required by, and executed in accordance with, the relevant provisions of the Code (the “ Certificate of Merger ”), with the Secretary of State of the State of Delaware (the “ DSOS ”). The Merger shall become effective upon such time as the Certificate of Merger has been filed with the DSOS, or such later time on the date of the Closing designated in such filing in accordance with the Code as the effective time of the Merger (such time, the “ Merger Effective Time ”), but in any event the Merger shall become effective after the consummation of the Pre-Combination Transactions as set forth in the Transaction Agreement.

SECTION 1.03. Closing .

SECTION 1.04. Effects of the Merger .

The Merger shall have the effects specified in Section 17-211 and Section 18-209 of the Code, and in addition, at the Merger Effective Time, by virtue of the Merger and without any action on the part of a holder of an interest in the Surviving Entity or in the Merging Entity:

(a) Pursuant to Section 1.2(f)(i) of the Transaction Agreement, the partners of Merging Entity will receive OP Units (the “ Consideration ”) as set forth on Schedule B attached hereto and incorporated herein as consideration for the Merger, and by virtue of the Merger and without any action on the part of the Merging Entity or the Surviving Entity or any partner in the Merging Entity, from and after the Merger Effective Time, each partnership interest in the Merging Entity shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and each holder of such partnership interests shall thereafter cease to have any rights, except the right to receive the Consideration applicable thereto;

(b) Each interest in the Surviving Entity issued and outstanding immediately prior to the Merger Effective Time shall remain outstanding and unchanged as an interest in the Surviving Entity.

SECTION 1.05. Surviving Entity Limited Liability Company Agreement .

Immediately following the Merger Effective Time, the limited liability company agreement of the Surviving Entity as in effect immediately prior to the Merger Effective Time, shall be the limited liability company agreement of the Surviving Entity (the “ Surviving LLC Agreement ”).

SECTION 1.06. Managing Member of the Surviving Entity .

Immediately following the Merger Effective Time, Newco OP shall continue to be the sole member and managing member of the Surviving Entity, until its resignation or removal in accordance with the Surviving LLC Agreement.

SECTION 1.07. Dissenters’ Rights .

No dissenters’ rights or appraisal rights shall be available with respect to the Merger or the other transactions contemplated hereby.

SECTION 1.08. Release .

Persons who at any time prior to the Merger Effective Time have been members, partners, shareholders, directors, trustees, officers, agents or employees of the Merging Entity or of any of its affiliates prior to the Merger Effective Time (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, who are not, as of immediately following the Merger Effective Time, directors, trustees, officers or employees of Newco or any of its Subsidiaries are hereby released of and from any further liabilities or obligations whether accruing before or after the date hereof with respect to the Equity Interests, including, without limitation, all Liabilities arising from or in connection with the Transactions and all other activities to implement the Transactions, and all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Merger Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Merger Effective Time), in each case to the extent relating to, arising out of or resulting from the Newco Business, the Newco Assets or the Newco Liabilities (each as defined in the Separation and Distribution Agreement to be entered into by and among Vornado, Vornado OP, Newco and Newco OP, in the form attached to the Transaction Agreement as Exhibit D), but subject to the terms and conditions of the Transaction Agreement.

SECTION 1.09. Intended Tax Treatment of the Merger .

The Parties intend for the Merger to be treated for U.S. federal income tax purposes, and agree to report it in a manner consistent with such treatment, as a merger, undertaken by the Merging Entity, in the “assets-over form” pursuant to Treasury Regulations Section 1.708-1(c)(3)(i), whereby the Merging Entity (i) contributes all of its assets and liabilities to Newco OP, the sole member of the Surviving Entity, which is treated as an entity disregarded from Newco OP for federal income tax purposes, in exchange for OP Units and (ii) immediately thereafter distributes the OP Units to the Merging Entity partners in liquidation of the Merging Entity.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF MERGING ENTITY

The Merging Entity hereby represents and warrants to the Surviving Entity as follows:

SECTION 2.01. Organization, Power and Authority .

The Merging Entity is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware. The Merging Entity has all requisite limited partnership power and authority to own and operate its assets.

SECTION 2.02. Authorization .

The Merging Entity has all requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the Merger as contemplated by this Agreement. The execution, delivery and performance by the Merging Entity of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly and validly authorized

by all necessary limited partnership action on behalf of the Merging Entity, and no further limited partnership action on the part of the Merging Entity is required to consummate the transactions contemplated by this Agreement, other than the filing and recordation of the Certificate of Merger and other appropriate merger documents as required by the Code. This Agreement has been duly and validly executed and delivered by the Merging Entity, and assuming the due authorization, execution and delivery by the Surviving Entity, constitutes a valid, binding and enforceable obligation of the Merging Entity, enforceable against the Merging Entity in accordance with its terms.

SECTION 2.03. Disclaimer of Representations and Warranties .

ARTICLE III

GENERAL PROVISIONS

SECTION 3.01. Amendment .

Subject to compliance with applicable Law, this Agreement may be amended by mutual agreement of the Parties hereto by action taken or authorized by their respective general partner or managing members, if necessary; provided , however , that there shall not be any amendment or change not permitted under applicable Law. This Agreement may not be amended except by an instrument in writing signed by each of the Parties hereto.

SECTION 3.02. Non-Survival .

None of the representations, warranties, or agreements in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the Closing;

provided , however , that this Section 3.02 shall not limit any covenant or agreement of the each of the Parties hereto to the extent such covenant or agreement by its terms contemplates performance after the Closing, which shall survive the Closing.

SECTION 3.03. Interpretation .

SECTION 3.04. Counterparts .

SECTION 3.05. Entire Agreement .

SECTION 3.06. Severability .

SECTION 3.07. Governing Law; Jurisdiction .

SECTION 3.08. Waiver of Jury Trial .

SECTION 3.09. Assignment .

IN WITNESS WHEREOF, the Merging Entity and the Surviving Entity have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

JBG/Operating Partners, L.P. a Delaware limited partnership

By:		JBG Properties, Inc., its general partner

	By:
	Name:
	Title:

[Newco OP Subsidiary] , a Delaware limited liability company

By:	JBG SMITH PROPERTIES LP

			By:
			Name:
			Title:

[Signature Page to Agreement and Plan of Merger by and between [Newco OP Subsidiary] and
JBG/Operating Partners, L.P.]

FINAL FORM

Exhibit C-4

CONTRIBUTION AND ASSIGNMENT AGREEMENT

Between

JBG PROPERTIES, INC.

and

JBG SMITH PROPERTIES LP

Dated as of [ · ], 2017

CONTRIBUTION AND ASSIGNMENT AGREEMENT

THIS CONTRIBUTION AND ASSIGNMENT AGREEMENT, dated as of [ · ], 2017 (this “ Agreement ”), is made and entered into by and between JBG Properties Inc., a Maryland corporation (“ JBG Properties ”), and JBG SMITH Properties LP, a Delaware limited partnership (“ Newco OP ”, and together with JBG Properties, the “ Parties ”).

WHEREAS, this Agreement is being entered into and carried out by JBG Properties and Newco OP in connection with, and as contemplated by that certain Master Transaction Agreement, dated as of October 31, 2016 (the “ Transaction Agreement ”), by and among Vornado Realty Trust, a Maryland real estate investment trust (“ Vornado ”), Vornado Realty L.P., a Delaware limited partnership (“ Vornado OP ”), Vornado DC Spinco, a Maryland real estate investment trust (“ Newco ”), Newco OP, JBG Properties, JBG/Operating Partners, L.P., a Delaware limited partnership, and certain affiliates of JBG Properties and JBG/Operating Partners, L.P.;

WHEREAS, JBG Properties currently owns interests in certain entities (the “ Contributed Interests ”), which Contributed Interests are set forth on Schedule A hereto;

WHEREAS, pursuant to Section 1.2(f)(ii) of the Transaction Agreement, Newco OP desires to acquire from JBG Properties, and JBG Properties desires to contribute and transfer to Newco OP, subject to the terms and conditions set forth herein, the Contributed Interests;

WHEREAS, pursuant to Section 1.4 of the Transaction Agreement, JBG Properties will receive Issued OP Units (the “ Consideration ”), as set forth on Schedule B hereto, as consideration for the contribution of the Contributed Interest;

WHEREAS, the closing (the “ Closing ”) of the transactions contemplated by this Agreement shall be on the date hereof, after the consummation of the Pre-Combination Transactions and simultaneously with the closing of the Combination Transactions pursuant to the Transaction Agreement; and

WHEREAS, capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Transaction Agreement.

ARTICLE I
CONTRIBUTION

SECTION 1.01. Contribution and Assignment .

Upon the terms and subject to the conditions set forth in this Agreement, JBG Properties hereby contributes, grants, assigns, transfers and conveys and delivers forever to Newco OP, all of JBG Properties’ rights, title and interest under, in and to the Contributed Interests. Newco OP hereby accepts the foregoing contribution, grant, assignment, transfer and conveyance of the Contributed Interests by JBG Properties to Newco OP.

SECTION 1.02. Assumption .

Upon the terms and subject to the conditions set forth in this Agreement, Newco OP hereby expressly assumes and agrees to perform, satisfy and discharge, in each case, in due course, all of the liabilities and obligations of JBG Properties relating to the Contributed Interests whether arising or accruing before or after the date hereof. JBG Properties, any of its affiliates, their respective successors and assigns, all persons who at any time prior to the Closing have been stockholders, directors, trustees, officers, agents or employees of JBG Properties or any of its affiliates (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, and all persons who at any time prior to the Closing are or have been shareholders, directors, trustees, officers, agents or employees of the entities described on Schedule A and who are not, as of immediately following the Closing, directors, trustees, officers or employees of Newco, Newco OP or any Subsidiary of Newco, are hereby released of and from any further liabilities or obligations whether accruing before or after the date hereof with respect to the Contributed Interests, including, without limitation, all Liabilities arising from or in connection with the Transactions and all other activities to implement the Transactions, and all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Closing (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Closing), in each case, to the extent relating to, arising out of or resulting from the Newco Business, the Newco Assets or the Newco Liabilities (each as defined in the Separation and Distribution Agreement to be entered into by and among Vornado, Vornado OP, Newco and Newco OP, in the form attached to the Transaction Agreement as Exhibit D), but subject to the terms and conditions of the Transaction Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF JBG PROPERTIES

JBG Properties hereby represents and warrants to Newco OP as follows:

SECTION 2.01. Organization, Power and Authority .

JBG Properties is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland. JBG Properties has all requisite corporate power and authority to own and operate its assets.

SECTION 2.02. Authorization .

JBG Properties has full right, authority, power and capacity (a) to enter into this Agreement and each agreement, document and instrument to be executed and delivered by or on behalf of JBG Properties pursuant to this Agreement; (b) to carry out the transactions contemplated hereby and thereby; and (c) to contribute, transfer and deliver all of the Contributed Interests to Newco OP (or its designee) in accordance with this Agreement. This Agreement and each agreement, document and instrument executed and delivered by or on behalf of JBG Properties pursuant to this Agreement constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of JBG Properties, each enforceable in accordance with its respective terms.

SECTION 2.03. Disclaimer of Representations and Warranties .

ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, THE TRANSACTION AGREEMENT, ANY ANCILLARY AGREEMENT OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS, APPROVALS OR NOTIFICATIONS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SET-OFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN, IN THE TRANSACTION AGREEMENT OR IN ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS, WHERE IS” BASIS AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE WILL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR MADE OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.

ARTICLE III

TAX MATTERS

The Parties intend for the transactions contemplated by this Agreement to be treated in accordance with, and agree to report in a manner consistent with, the following for U.S. federal income tax purposes: The contribution of the Contributed Interests in exchange for the Consideration as a transaction in which no gain or loss is recognized by JBG Properties or Newco OP under Section 721(a) of the Internal Revenue Code of 1986.

ARTICLE IV

GENERAL PROVISIONS

SECTION 4.01. Amendment .

Subject to compliance with applicable Law, this Agreement may be amended by mutual agreement of the Parties hereto by action taken or authorized by their respective board of directors, general partner or other similar governing body or entity, if necessary; provided , however , that there shall not be any amendment or change not permitted under applicable Law. This Agreement may not be amended except by an instrument in writing signed by each of the Parties hereto.

SECTION 4.02. Non-Survival .

None of the representations, warranties, or agreements in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the Closing; provided , however , that this Section 4.02 shall not limit any covenant or agreement of the Parties hereto to the extent such covenant or agreement by its terms contemplates performance after the Closing, which shall survive the Closing.

SECTION 4.03. Interpretation .

SECTION 4.04. Counterparts .

SECTION 4.05. Entire Agreement .

SECTION 4.06. Severability .

SECTION 4.07. Governing Law; Jurisdiction .

State of New York or any other jurisdiction that would cause the application of the Laws of any jurisdiction other than the State of New York).

(b) All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in the state courts sitting in the City, County and State of New York, or if jurisdiction over the matter is vested exclusively in federal courts, the United States District Court for the Southern District of New York, and the appellate courts to which orders and judgments thereof may be appealed (the “ Chosen Courts ”). Each of the Parties hereby irrevocably and unconditionally (a) submits to the exclusive jurisdiction of the Chosen Courts for the purpose of any Action arising out of or relating to this Agreement brought by any Party, whether sounding in tort, contract or otherwise, (b) agrees not to commence any such action or proceeding except in such courts, (c) agrees that any claim in respect of any such action or proceeding may be heard and determined in any Chosen Court, (d) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding, and (e) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding. Each of the Parties agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Nothing in this Agreement will affect the right of any Party to serve process in any manner permitted by Law.

SECTION 4.08. Waiver of Jury Trial .

SECTION 4.09. Assignment .

[signature page follows]

IN WITNESS WHEREOF, JBG Properties and Newco OP have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

	JBG Properties, Inc., a Maryland corporation

		By:
		Name:
		Title:

	JBG SMITH Properties LP , a Delaware limited partnership

	By: [•]

		By:
		Name:
		Title:

[Signature Page to Contribution and Assignment Agreement by and between JBG SMITH Properties LP and JBG Properties, Inc.]

FINAL FORM

Exhibit C-5

CONTRIBUTION AND ASSIGNMENT AGREEMENT

Between

[NEWCO COMPANY MANAGER]

and

JBG COMPANY MANAGER [ · ], L.L.C.

Dated as of [ · ], 2017

CONTRIBUTION AND ASSIGNMENT AGREEMENT(1)

This CONTRIBUTION AND ASSIGNMENT AGREEMENT, dated as of [ · ], 2017 (this “ Agreement ”), is made and entered into by and between [Newco Company Manager], a Delaware limited partnership (the “ Newco Company Manager ”), and JBG Company Manager [ · ], L.L.C., a Delaware limited liability company (“ JBG Company Manager ” and together with Newco Company Manager, the “ Parties ”).

WHEREAS, this Agreement is being entered into and carried out by Newco Company Manager and JBG Company Manager in connection with, and as contemplated by that certain Master Transaction Agreement, dated as of October 31, 2016 (the “ Transaction Agreement ”), by and among Vornado Realty Trust, a Maryland real estate investment trust (“ Vornado ”), Vornado Realty L.P., a Delaware limited partnership (“ Vornado OP ”), Vornado DC Spinco, a Maryland real estate investment trust (“ Newco ”), Vornado DC Spinco OP LP, a Delaware limited partnership (the “ Newco OP ”), Newco Company Manager, JBG Properties Inc., a Maryland corporation, JBG/Operating Partners, L.P., a Delaware limited partnership and certain affiliates of JBG Properties Inc. and JBG/Operating Partners, L.P.;

WHEREAS, JBG Company Manager owns interests in certain entities (the “ Contributed Interests ”), which Contributed Interests are set forth on Schedule A hereto;

WHEREAS, pursuant to Section 1.2(f)(iii) of the Transaction Agreement, the Newco Company Manager, a wholly owned subsidiary of Newco OP, desires to acquire from JBG Company Manager, and JBG Company Manager desires to contribute and transfer to Newco Company Manager, subject to the terms and conditions set forth herein, the Contributed Interests;

WHEREAS, capitalized terms not otherwise defined herein shall have the respective meaning set forth in the Transaction Agreement.

ARTICLE I
CONTRIBUTION

SECTION 1.01. Contribution and Assignment .

Upon the terms and subject to the conditions set forth in this Agreement, JBG Company Manager hereby contributes, grants, assigns, transfers and conveys and delivers forever to Newco Company Manager, all of JBG Company Manager’s rights, title and interest under, in and to the Contributed Interests. Newco Company Manager hereby accepts the foregoing contribution, grant,

(1) Please note that this form agreement will be appropriately revised for each contribution set forth in Section 1.2 of the Transaction Agreement.

assignment, transfer and conveyance of the Contributed Interests by JBG Company Manager to New Company Manager.

SECTION 1.02. Assumption .

Upon the terms and subject to the conditions set forth in this Agreement, Newco Company Manager hereby expressly assumes and agrees to perform, satisfy and discharge, in each case, in due course, all of the liabilities and obligations of JBG Company Manager relating to the Contributed Interests whether arising or accruing before or after the date hereof. JBG Company Manager, any of its affiliates, their respective successors and assigns, all persons who at any time prior to the Closing have been shareholders, directors, trustees, officers, agents or employees of JBG Company Manager or any of its affiliates (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, and all persons who at any time prior to the Closing are or have been shareholders, directors, trustees, officers, agents or employees of the entities described on Schedule A and who are not, as of immediately following the Closing, directors, trustees, officers or employees of Newco Company Manager or any Subsidiary of Newco, are hereby released of and from any further liabilities or obligations whether accruing before or after the date hereof with respect to the Contributed Interests, including, without limitation, all Liabilities arising from or in connection with the Transactions and all other activities to implement the Transactions, and all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Closing (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Closing), in each case, to the extent relating to, arising out of or resulting from the Newco Business, the Newco Assets or the Newco Liabilities (each as defined in the Separation and Distribution Agreement to be entered into by and among Vornado, Vornado OP, Newco and Newco OP, in the form attached to the Transaction Agreement as Exhibit D), but subject to the terms and conditions of the Transaction Agreement.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF LEGACY LLC

JBG Company Manager hereby represents and warrants to Newco Company Manager as follows:

SECTION 2.01. Organization, Power and Authority .

JBG Company Manager is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. JBG Company Manager has all requisite limited liability company power and authority to own and operate its assets.

SECTION 2.02. Authorization .

JBG Company Manager has full right, authority, power and capacity (a) to enter into this Agreement and each agreement, document and instrument to be executed and delivered by or on behalf of JBG Company Manager pursuant to this Agreement; (b) to carry out the transactions contemplated hereby and thereby; and (c) to contribute, transfer and deliver all of the Contributed Interests to Newco Company Manager (or its designee) in accordance with this Agreement. This Agreement and each agreement, document and instrument executed and delivered by or on behalf of JBG Company Manager pursuant to this Agreement constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of JBG Company Manager, each enforceable in accordance with its respective terms.

SECTION 2.03. Disclaimer of Representations and Warranties .

ARTICLE III

TAX MATTERS

The Parties intend for the transactions contemplated by this Agreement be treated in accordance with, and agree to report in a manner consistent with, the following for U.S. federal income tax purposes: The parties acknowledge and agree that the interests have no economic value and are accordingly being transferred to Newco Company Manager for no consideration.

ARTICLE IV
GENERAL PROVISIONS

SECTION 4.01. Amendment .

SECTION 4.02. Non-Survival .

the extent such covenant or agreement by its terms contemplates performance after the Closing, which shall survive the Closing.

SECTION 4.03. Interpretation .

SECTION 4.04. Counterparts .

SECTION 4.05. Entire Agreement .

SECTION 4.06. Severability .

SECTION 4.07. Governing Law; Jurisdiction .

(b) All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in the state courts sitting in the City, County and State of New York, or if jurisdiction over the matter is vested exclusively in federal courts, the United States District Court for the Southern District of New York, and the appellate courts to which orders and judgments thereof may be appealed (the “ Chosen Courts ”). Each of the Parties hereby irrevocably and unconditionally (a) submits to the exclusive jurisdiction of the Chosen Courts for the purpose of any Action arising out of or relating to this Agreement brought by any Party, whether sounding in tort, contract or otherwise, (b) agrees not to commence any such action or proceeding except in such courts, (c) agrees that any claim in respect of any such action or proceeding may be heard and determined in any Chosen Court, (d) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding, and (e) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding. Each of the Parties agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Nothing in this Agreement will affect the right of any Party to serve process in any manner permitted by Law.

SECTION 4.08. Waiver of Jury Trial .

SECTION 4.09. Assignment .

[signature page follows]

IN WITNESS WHEREOF, Newco Company Manager and JBG Company Manager have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

	[NEWCO COMPANY MANAGER], a Delaware limited liability company

	By:	[ · ]

		By:
		Name:
		Title:

	JBG COMPANY MANAGER [ · ], L.L.C., a Delaware limited liability company

	By:	[ · ]

		By:
		Name:
		Title:

[Signature Page to Contribution and Assignment Agreement by and between [Newco Company Manager] and JBG Company Manager]

FINAL FORM

Exhibit D

SEPARATION AND DISTRIBUTION AGREEMENT

BY AND AMONG

VORNADO REALTY TRUST,

VORNADO REALTY L.P.,

JBG SMITH PROPERTIES

AND

JBG SMITH PROPERTIES LP

DATED AS OF [ · ], 2017

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS		2

ARTICLE II THE SEPARATION		13

2.1	Transfer of Assets and Assumption of Liabilities	13
2.2	Newco Assets	16
2.3	Newco Liabilities; Vornado Liabilities	18
2.4	Approvals and Notifications	19
2.5	Novation of Liabilities	20
2.6	Release of Guarantees	21
2.7	Termination of Agreements	22
2.8	Treatment of Shared Contracts	22
2.9	Bank Accounts; Cash Balances	24
2.10	Ancillary Agreements	24
2.11	Disclaimer of Representations and Warranties	24
2.12	Cooperation	25
2.13	Newco Assumption of Indebtedness	25
2.14	Partnership Agreement	26
2.15	Financial Information Certifications	26
2.16	Vornado OP Distribution of OP Units	26
2.17	Certain Resignations	27
2.18	Plan of Reorganization	27

ARTICLE III THE DISTRIBUTION		27

3.1	Sole and Absolute Discretion; Cooperation	27
3.2	Actions Prior to the Distribution	27
3.3	Conditions to the Distribution	29
3.4	The Vornado Distribution	29

ARTICLE IV MUTUAL RELEASES; INDEMNIFICATION		31

4.1	Release of Pre-Distribution Claims	31
4.2	Indemnification by Newco	33
4.3	Indemnification by Vornado	34
4.4	Indemnification Obligations Net of Insurance Proceeds and Other Amounts	34
4.5	Procedures for Indemnification of Third-Party Claims	35
4.6	Additional Matters	37
4.7	Right of Contribution	38
4.8	Covenant Not to Sue	39
4.9	Remedies Cumulative	39
4.10	Survival of Indemnities	39

4.11	Certain Tax Procedures	39

ARTICLE V CERTAIN OTHER MATTERS		45

5.1	Insurance Matters	45
5.2	Late Payments	47
5.3	Treatment of Payments for Tax Purposes	48
5.4	Post-Effective Time Conduct	48
5.5	Non-Solicitation Covenant	48

ARTICLE VI EXCHANGE OF INFORMATION; CONFIDENTIALITY		48

6.1	Agreement for Exchange of Information	48
6.2	Ownership of Information	49
6.3	Compensation for Providing Information	49
6.4	Record Retention	49
6.5	Limitations of Liability	49
6.6	Other Agreements Providing for Exchange of Information	50
6.7	Production of Witnesses; Records; Cooperation	50
6.8	Privileged Matters	51
6.9	Confidentiality	53
6.10	Protective Arrangements	54

ARTICLE VII DISPUTE RESOLUTION		55

7.1	Good-Faith Negotiation	55
7.2	Mediation	55
7.3	Arbitration	56
7.4	Litigation and Unilateral Commencement of Arbitration	57
7.5	Conduct During Dispute Resolution Process	57

ARTICLE VIII FURTHER ASSURANCES AND ADDITIONAL COVENANTS		57

8.1	Further Assurances	57

ARTICLE IX TERMINATION		59

9.1	Termination	59
9.2	Effect of Termination	59

ARTICLE X MISCELLANEOUS		59

10.1	Counterparts; Entire Agreement; Corporate Power	59
10.2	Governing Law	60
10.3	Waiver of Jury Trial	60
10.4	Assignability	61
10.5	Subsidiaries	61
10.6	Third-Party Beneficiaries	61

10.7	Notices	61
10.8	Severability	63
10.9	Force Majeure	63
10.10	No Set-Off	64
10.11	Publicity	64
10.12	Expenses	64
10.13	Headings	64
10.14	Survival of Covenants	64
10.15	Waivers of Default	64
10.16	Specific Performance	65
10.17	Amendments	65
10.18	Interpretation	65
10.19	Limitations of Liability	66
10.20	Performance	66
10.21	Mutual Drafting	66
10.22	No Admission of Liability	66

SCHEDULES

1.1	Employment-Related Agreements
1.2	Newco Contracts
1.3	Newco Intellectual Property
1.4	Newco Properties
2.2(a)(x)	Newco Assets
2.2(b)(v)	Vornado Assets
2.3(a)(vi)	Newco Liabilities
2.3(b)	Vornado Liabilities
2.7(b)(ii)	Agreements, Arrangements, Commitments or Understandings Which Shall Not Terminate
2.13	Newco Assumption of Indebtedness and Other Financing Arrangements

SEPARATION AND DISTRIBUTION AGREEMENT

This SEPARATION AND DISTRIBUTION AGREEMENT, dated as of [ · ], 2017 (this “ Agreement ”), is by and among Vornado Realty Trust, a Maryland real estate investment trust (“ Vornado ”), Vornado Realty L.P., a Delaware limited partnership (“ Vornado OP ”), JBG Smith Properties, a Maryland real estate investment trust (“ Newco ”), and JBG Smith Properties LP, a Delaware limited partnership (“ Newco OP ”). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article I .

R E C I T A L S

WHEREAS, the board of trustees of Vornado (the “ Vornado Board ”) has determined that it is in the best interests of Vornado and its shareholders to create a new publicly traded company that shall operate the Newco Business (as defined below);

WHEREAS, in furtherance of the foregoing, the Vornado Board has determined that it is appropriate and desirable to separate the DC Business (as defined below) from the Vornado Business (as defined below) (the “ Separation ”);

WHEREAS, Vornado, Vornado OP, Newco, Newco OP, JBG Properties Inc. (“ JBG Properties ”), JBG/Operating Partners, L.P. (“ JBG Operating Partners ”) and, together with JBG Properties, the “ JBG Management Entities ”) and certain real estate investment funds sponsored by JBG Properties (each, a “ JBG Fund ” and, collectively, the “ JBG Funds ”) are parties to that certain Master Transaction Agreement, dated as of October 31, 2016 (the “ Master Agreement ”), pursuant to which, among other things, certain Assets and a portion of the business conducted by the JBG Management Entities and the JBG Funds will be combined with the business of Newco (the “ Business Combination ”);

WHEREAS, in furtherance of the Separation and pursuant to the Plan of Reorganization (as defined below), the Pre-Combination Transactions (as defined below), among others, are contemplated to occur;

WHEREAS, in furtherance of the Business Combination and pursuant to the Master Agreement, immediately following the Vornado Distribution (as defined below), the JBG Funds will contribute, directly or indirectly, by means of contribution, merger or otherwise, certain metropolitan DC real estate Assets to Newco OP or its Subsidiaries and the JBG Management Entities will contribute, directly or indirectly, by means of contribution, merger or otherwise, the JBG Management Business (as defined below) to Newco OP or its Subsidiaries;

WHEREAS, Newco and Newco OP have been organized solely for these purposes, and have not engaged in activities except in preparation for the Separation, the Distribution (as defined below) and the Business Combination;

WHEREAS, for U.S. federal income tax purposes, the Vornado OP Contribution to Newco OP (as defined below) and the Vornado OP Distribution of OP Units (as defined below) together are intended to qualify as a partnership division taking the “assets-over form” (as described in U.S. Treasury Regulations Section 1.708-1(d)) in which no gain or loss is recognized by Vornado OP, Newco OP and Vornado under Sections 721(a), 731(a) and 731(b)

of the Internal Revenue Code of 1986, as amended (the “ Code ”), and the Vornado Contribution of OP Units (as defined below) and the Vornado Distribution (as defined below) together are intended to qualify as a transaction described in Section 368(a)(1)(D) and Section 355 of the Code;

WHEREAS, Newco and Vornado have prepared or are preparing, and Newco has filed or will file with the SEC (as defined below), the Form 10 (as defined below), which includes the Information Statement (as defined below), which sets forth disclosure concerning Newco, the Separation, the Distribution and the Business Combination; and

WHEREAS, each of Vornado and Newco has determined that it is appropriate and desirable to set forth the principal corporate transactions required to effect the Separation and the Distribution and certain other agreements that will govern certain matters relating to the Separation, the Distribution and the Business Combination and the relationship of Vornado, Newco and the members of their respective Groups following the Separation, the Distribution and the Business Combination.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I
DEFINITIONS

For the purpose of this Agreement, the following terms shall have the following meanings:

“ Action ” shall mean any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal.

“ Affiliate ” shall mean, when used with respect to a specified Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purpose of this definition, “ control ” (including with correlative meanings, “ controlled by ” and “ under common control with ”), when used with respect to any specified Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise. It is expressly agreed that, prior to, at and after the Effective Time, for purposes of this Agreement and the Ancillary Agreements, (a) no member of the Newco Group shall be deemed to be an Affiliate of any member of the Vornado Group and (b) no member of the Vornado Group shall be deemed to be an Affiliate of any member of the Newco Group.

“ Agent ” shall mean the trust company or bank duly appointed by Vornado and Vornado OP to act as distribution agent, transfer agent and registrar for the Newco Shares in connection with the Distribution.

“ Agreement ” shall have the meaning set forth in the Preamble.

“ Ancillary Agreement ” shall mean all agreements (other than this Agreement) entered into by the Parties and/or members of their respective Groups (but as to which no Third Party is a party) in connection with the Separation, the Distribution, or the other transactions contemplated by this Agreement, including the Transition Services Agreement, the Tax Matters Agreement, the Employee Matters Agreement and the Transfer Documents.

“ Approvals or Notifications ” shall mean any consents, waivers, approvals, Permits or authorizations to be obtained from, notices, registrations or reports to be submitted to, or other filings to be made with, any Third Party, including any Governmental Authority.

“ Arbitration Request ” shall have the meaning set forth in Section 7.3(a) .

“ Assets ” shall mean, with respect to any Person, the assets, properties, claims and rights (including goodwill) of such Person, wherever located (including in the possession of vendors or other Third Parties or elsewhere), of every kind, character and description, whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of such Person, including rights and benefits pursuant to any contract, license, permit, indenture, note, bond, mortgage, agreement, concession, franchise, instrument, undertaking, commitment, understanding or other arrangement.

“ Business Combination ” shall have the meaning set forth in the Recitals.

“ Code ” shall have the meaning set forth in the Recitals.

“ Chosen Court ” shall have the meaning set forth in Section 10.2(b) .

“ DC Business ” shall mean the business, operations and activities of the Vornado Group relating primarily to the Newco Properties as conducted at any time prior to the Effective Time by either Vornado or Newco or any of their current or former Subsidiaries.

“ Dispute ” shall have the meaning set forth in Section 7.1 .

“ Distribution ” means the Vornado OP Distribution of OP Units and the Vornado Distribution.

“ Distribution Date ” shall mean the date of the consummation of the Distribution.

“ Effective Time ” shall mean 11:59 p.m., Eastern time, on the Distribution Date.

“ Employee Matters Agreement ” shall mean the employee matters agreement to be entered into by and between Vornado and Newco (or certain members of their respective

Groups) in connection with the Separation, the Distribution, the Business Combination or the other transactions contemplated by this Agreement, in the form attached as Exhibit G to the Master Agreement, as it may be amended from time to time.

“ Environmental Law ” shall mean any Law relating to pollution, protection or restoration of or prevention of harm to the environment or natural resources, including the use, handling, transportation, treatment, storage, disposal, Release or discharge of Hazardous Materials or the protection of or prevention of harm to human health and safety.

“ Environmental Liabilities ” shall mean all Liabilities relating to, arising out of or resulting from any Hazardous Materials, Environmental Law or contract or agreement relating to environmental, health or safety matters (including all removal, remediation or cleanup costs, investigatory costs, response costs, natural resources damages, property damages, personal injury damages, costs of compliance with any product take-back requirements or with any settlement, judgment or other determination of Liability and indemnity, contribution or similar obligations) and all costs and expenses, interest, fines, penalties or other monetary sanctions in connection therewith.

“ Exchange Act ” shall mean the U.S. Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

“ Force Majeure ” shall mean, with respect to a Party or any member of its Group, an event beyond the control of such Party or member of its Group (or any Person acting on its or their behalf), which event (a) does not arise or result from the fault or negligence of such Party or member of its Group (or any Person acting on its or their behalf) and (b) by its nature would not reasonably have been foreseen by such Party or member of its Group (or such Person), or, if it would reasonably have been foreseen, was unavoidable, and includes acts of God, acts of civil or military authority, embargoes, epidemics, war, riots, insurrections, fires, explosions, earthquakes, floods, unusually severe weather conditions, labor problems or, in the case of computer systems, any failure in electrical or air conditioning equipment. Notwithstanding the foregoing, the receipt by a Party or any member of its Group of an unsolicited takeover offer or other acquisition proposal, even if unforeseen or unavoidable, and such Party’s or member of its Group’s response thereto, shall not be deemed an event of Force Majeure.

“ Form 10 ” shall mean the registration statement on Form 10, or such other form as required by the SEC, filed by Newco with the SEC to effect the registration of Newco Shares pursuant to the Exchange Act in connection with the Distribution, as such registration statement may be amended or supplemented from time to time prior to the Distribution.

“ Governmental Approvals ” shall mean any Approvals or Notifications to be made to, or obtained from, any Governmental Authority.

“ Governmental Authority ” shall mean any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, local, domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory,

administrative or other similar functions of, or pertaining to, government and any executive official thereof.

“ Group ” shall mean either the Newco Group or the Vornado Group, as the context requires.

“ Hazardous Materials ” shall mean any chemical, material, substance, waste, pollutant, emission, discharge, Release or contaminant that could result in Liability under, or that is prohibited, limited or regulated by or pursuant to, any Environmental Law, and any natural or artificial substance (whether solid, liquid or gas, noise, ion, vapor or electromagnetic) that could cause harm to human health or the environment, including petroleum, petroleum products and byproducts, asbestos and asbestos-containing materials, urea formaldehyde foam insulation, electronic, medical or infectious wastes, polychlorinated biphenyls, radon gas, radioactive substances, chlorofluorocarbons and all other ozone-depleting substances.

“ Indemnifying Party ” shall have the meaning set forth in Section 4.4(a) .

“ Indemnitee ” shall have the meaning set forth in Section 4.4(a) .

“ Indemnity Payment ” shall have the meaning set forth in Section 4.4(a) .

“ Information ” shall mean information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other Software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data; provided that “Information” shall not include Registrable IP.

“ Information Statement ” shall mean the information statement to be sent to the holders of Vornado Shares and the holders of Vornado OP Units in connection with the Distribution, as such information statement may be amended or supplemented from time to time prior to the Distribution.

“ Initial Notice ” shall have the meaning set forth in Section 7.1 .

“ Insurance Proceeds ” shall mean those monies:

(a) received by an insured from an insurance carrier; or

(b) paid by an insurance carrier on behalf of the insured;

in any such case net of any applicable premium adjustments (including reserves and retrospectively rated premium adjustments) and net of any costs or expenses incurred in the collection thereof.

“ Insurance Termination Date ” shall have the meaning set forth in Section 5.1(a) .

“ Intellectual Property ” shall mean all of the following whether arising under the Laws of the United States or of any other foreign or multinational jurisdiction: (a) patents, patent applications (including patents issued thereon) and statutory invention registrations, including reissues, divisions, continuations, continuations in part, substitutions, renewals, extensions and reexaminations of any of the foregoing, and all rights in any of the foregoing provided by international treaties or conventions, (b) trademarks, service marks, trade names, service names, trade dress, logos and other source or business identifiers, including all goodwill associated with any of the foregoing, and any and all common law rights in and to any of the foregoing, registrations and applications for registration of any of the foregoing, all rights in and to any of the foregoing provided by international treaties or conventions, and all reissues, extensions and renewals of any of the foregoing, (c) Internet domain names, registrations and related rights, (d) copyrightable works, copyrights, moral rights, mask work rights, database rights and design rights, in each case, other than Software, whether or not registered, and all registrations and applications for registration of any of the foregoing, and all rights in and to any of the foregoing provided by international treaties or conventions, (e) confidential and proprietary information, including trade secrets, invention disclosures, processes and know-how, in each case, other than Software, and (f) intellectual property rights arising from or in respect of any Technology.

“ IRS ” shall mean the U.S. Internal Revenue Service.

“ JBG Fund ” shall have the meaning set forth in the Recitals.

“ JBG Management Business ” shall mean the management business conducted by the JBG Management Entities, which manage various real estate investment funds and other Assets.

“ JBG Management Entities ” shall have the meaning set forth in the Recitals.

“ JBG Operating Partners ” shall have the meaning set forth in the Recitals.

“ JBG Properties ” shall have the meaning set forth in the Recitals.

“ Law ” shall mean any national, supranational, federal, state, provincial, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty, license, permit, authorization, approval, consent, decree, injunction, binding judicial or administrative interpretation or other requirement, in each case, enacted, promulgated, issued or entered by a Governmental Authority.

“ Liabilities ” shall mean all debts, guarantees, assurances, commitments, liabilities, responsibilities, Losses, remediation, deficiencies, damages, fines, penalties, settlements, sanctions, costs, expenses, interest and obligations of any nature or kind, whether accrued or fixed, absolute or contingent, matured or unmatured, accrued or not accrued, asserted or unasserted, liquidated or unliquidated, foreseen or unforeseen, known or unknown, reserved or unreserved, or determined or determinable, including those arising under any Law, claim (including any Third-Party Claim), demand, Action, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority or arbitration

tribunal, and those arising under any contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment or undertaking, or any fines, damages or equitable relief that is imposed, in each case, including all costs and expenses relating thereto.

“ Linked ” shall have the meaning set forth in Section 2.9(a) .

“ Losses ” shall mean actual losses (including any diminution in value), costs, damages, penalties and expenses (including legal and accounting fees, and expenses and costs of investigation and litigation), whether or not involving a Third-Party Claim.

“ Master Agreement ” shall have the meaning set forth in the Recitals.

“ Mediation Request ” shall have the meaning set forth in Section 7.2 .

“ Newco ” shall have the meaning set forth in the Preamble.

“ Newco Accounts ” shall have the meaning set forth in Section 2.9(a) .

“ Newco Assets ” shall have the meaning set forth in Section 2.2(a) .

“ Newco Balance Sheet ” shall mean [the unaudited pro forma combined balance sheet of the Newco Business (including any new Assets, activities, expansions, additions, or other modifications resulting from the Business Combination), including any notes and subledgers thereto, as of [ · ], as presented in the Information Statement mailed to the Record Holders.](1)

“ Newco Business ” shall mean the DC Business and also, with respect to events that take place after the Effective Time, the DC Business as it is operated by the Newco Group after the Effective Time, including any new Assets, activities, expansions, additions, or other modifications resulting from the Business Combination.

“ Newco Bylaws ” shall mean the Amended and Restated Bylaws of Newco, substantially in the form of Exhibit M to the Master Agreement.

“ Newco Contracts ” shall mean the following contracts and agreements to which either Vornado or Newco or any member their respective Groups is a party or by which it or any member of its Group or any of their respective Assets is bound, whether or not in writing; provided that Newco Contracts shall not include (x) any contract or agreement that is contemplated to be retained by Vornado or any member of the Vornado Group from and after the Effective Time pursuant to any provision of this Agreement or any Ancillary Agreement or (y) any contract or agreement that would constitute Newco Software or Newco Technology:

(1) NTD: To be revised, as appropriate, to conform to Newco financial statements included in the Information Statement.

(a) any leases relating primarily to any Newco Property pursuant to which a Third Party leases all or any portion of such Newco Property;

(b) any joint venture, shareholder, equityholder, partnership or similar agreements with any Third Party relating primarily to any Newco Property;

(c) any customer, distribution, supply, marketing, vendor or other contract, agreement or license, in each case with a Third Party and in effect as of the Effective Time, pursuant to which such Third Party provides or receives products or services to or from either Vornado or Newco or any member of their respective Groups, primarily in connection with the DC Business, excluding any such contracts or agreements for services that are addressed in the Transition Services Agreement or any other Ancillary Agreement;

(d) any contract or part thereof providing for any guarantee, indemnity, representation, covenant, warranty or other Liability of, by or in favor of, Vornado or Newco or any member of their respective Groups to the extent in respect of any Newco Liability or the DC Business;

(e) except as otherwise provided in the Master Agreement, any employment, change of control, retention, consulting, indemnification, termination, severance or other similar agreement with any Newco Group Employee or consultants of the Newco Group that is in effect as of the Effective Time and set forth on Schedule 1.1 ;

(f) any contract or agreement that is otherwise expressly contemplated pursuant to this Agreement or any of the Ancillary Agreements to be assigned to Newco or any member of the Newco Group;

(g) any interest rate, currency, commodity or other swap, collar, cap or other hedging or similar agreements or arrangements related exclusively to the DC Business or entered into by or on behalf of any division, business unit or member of the Newco Group;

(h) any contract, guarantee, note, mortgage, bond, debenture or other agreement providing for indebtedness, whether secured or unsecured, which relates exclusively to the DC Business; and

(i) any contracts, agreements or settlements listed on Schedule 1.2 , including the right to recover any amounts under such contracts, agreements or settlements.

“ Newco Declaration of Trust ” shall mean the Amended and Restated Declaration of Trust of Newco, substantially in the form of Exhibit L to the Master Agreement.

“ Newco Financing Arrangements ” shall have the meaning set forth in Section 2.13(a) .

“ Newco Group ” shall mean (a) prior to the Effective Time, Newco and each Person that will be a Subsidiary of Newco as of immediately after the Effective Time, including

the Transferred Entities, even if, prior to the Effective Time, such Person is not a Subsidiary of Newco; and (b) on and after the Effective Time, Newco and each Person that is a Subsidiary of Newco (including as a result of the Business Combination).

“ Newco Group Employee ” shall have the meaning set forth in the Employee Matters Agreement.

“ Newco Indemnitees ” shall have the meaning set forth in Section 4.3 .

“ Newco Indemnity Payment ” shall have the meaning set forth in Section 4.11(a)(i) .

“ Newco Intellectual Property ” shall mean (a) the Registrable IP set forth on Schedule 1.3 and (b) all Other IP owned by, licensed by or to, or sublicensed by or to either Vornado or Newco or any member of their respective Groups as of the Effective Time exclusively used or exclusively held for use in the DC Business, including any Other IP set forth on Schedule 1.3 .

“ Newco Liabilities ” shall have the meaning set forth in Section 2.3(a) .

“ Newco OP ” shall have the meaning set forth in the Preamble.

“ Newco OP Interests ” means common limited partnership interests in Newco OP.

“ Newco Permits ” shall mean all Permits owned or licensed by either Vornado or Newco or any member of their respective Groups primarily used or primarily held for use in the DC Business as of the Effective Time.

“ Newco Portion ” shall have the meaning set forth in Section 2.8(a) .

“ Newco Properties ” means the real properties listed on Schedule 1.4 .

“ Newco Shares ” means common shares, par value of $0.01 per share, of Newco.

“ Newco Software ” shall mean all Software owned or licensed by either Vornado or Newco or any member of their respective Groups exclusively used or exclusively held for use in the DC Business as of the Effective Time.

“ Newco Technology ” shall mean all Technology owned or licensed by either Vornado or Newco or any member of their respective Groups exclusively used or exclusively held for use in the DC Business as of the Effective Time.

“ NYSE ” shall mean the New York Stock Exchange.

“ Other IP ” shall mean all Intellectual Property, other than Registrable IP, that is owned by either Vornado or Newco or any member of their respective Groups as of the Effective Time.

“ Parties ” shall mean Newco and Vornado.

“ Party ” shall mean either Newco or Vornado, as applicable.

“ Permits ” means permits, approvals, authorizations, consents, licenses or certificates issued by any Governmental Authority.

“ Person ” shall mean an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.

“ Plan of Reorganization ” means the Pre-Combination Transactions set forth in Section 5.8(a) of the Vornado Disclosure Letter (as defined in the Master Agreement).

“ Pre-Combination Transactions ” shall have the meaning set forth in the Master Agreement.

“ Prime Rate ” means the rate that Bloomberg displays as “Prime Rate by Country United States” at www.bloomberg.com/markets/rates-bonds/key-rates/ or on a Bloomberg terminal at PRIMBB Index.

“ Privileged Information ” means any Information, in written, oral, electronic, or other tangible or intangible forms, including any communications by or to attorneys (including attorney-client privileged communications), memoranda and other materials prepared by attorneys or under their direction (including attorney work product), as to which a Party or any member of its Group would be entitled to assert or have asserted a privilege, including the attorney-client and attorney work product privileges.

“ Qualifying Income ” means income described in Sections 856(c)(2)(A) through (I) and 856(c)(3)(A) through (I) of the Code.

“ Record Date ” shall mean the close of business on the date to be determined by the Vornado Board, acting both on behalf of Vornado in its capacity as the general partner of Vornado OP and on its own behalf, as the record date for determining holders of Vornado OP Units entitled to receive Newco OP Interests pursuant to the Vornado OP Distribution of OP Units and for determining holders of Vornado Shares entitled to receive Newco Shares pursuant to the Vornado Distribution.

“ Record Holders ” shall mean the holders of record of Vornado Shares and the holders of record of the Vornado OP Units, in each case, as of the Record Date.

“ Registrable IP ” shall mean all patents, patent applications, statutory invention registrations, registered trademarks, registered service marks, registered Internet domain names and copyright registrations.

“ REIT ” shall mean “a real estate investment trust” within the meaning of Section 856 of the Code.

“ REIT Guidance ” shall mean either a ruling from the IRS or an opinion of Tax counsel selected by the Party who has given the relevant REIT Savings Notice, which opinion shall be reasonably satisfactory to such Party.

“ REIT Savings Notice ” shall mean the written notice delivered by Newco or Vornado, as the case may be, pursuant to Section 4.11(a) or Section 4.11(b), respectively.

“ Release ” shall mean any release, spill, emission, discharge, leaking, pumping, pouring, dumping, injection, deposit, disposal, dispersal, leaching or migration of Hazardous Materials into the environment (including ambient air, surface water, groundwater and surface or subsurface strata).

“ Representatives ” shall mean, with respect to any Person, any of such Person’s directors, trustees, officers, employees, agents, consultants, advisors, accountants, attorneys or other representatives.

“ SEC ” shall mean the U.S. Securities and Exchange Commission.

“ Security Interest ” shall mean any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-way, covenant, condition, easement, encroachment, restriction on transfer, or other encumbrance of any nature whatsoever.

“ Separation ” shall have the meaning set forth in the Recitals.

“ Shared Contract ” shall have the meaning set forth in Section 2.8(a) .

“ Software ” shall mean any and all (a) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (c) descriptions, flow charts and other work products used to design, plan, organize and develop any of the foregoing, (d) screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons and (e) documentation, including user manuals and other training documentation, relating to any of the foregoing.

“ Specified REIT Requirements ” means the requirements of Sections 856(c)(2) and (3) of the Code.

“ Subsidiary ” shall mean, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities, (ii) the total combined equity interests or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

“ Tangible Information ” means Information that is contained in written, electronic or other tangible forms.

“ Tax ” shall have the meaning set forth in the Tax Matters Agreement.

“ Tax Matters Agreement ” shall mean the tax matters agreement to be entered into by and between Vornado and Newco (or any members of their respective Groups) in connection with the Separation, the Distribution, the Business Combination or the other transactions contemplated by this Agreement, in the form attached as Exhibit H to the Master Agreement, as it may be amended from time to time.

“ Tax Return ” shall have the meaning set forth in the Tax Matters Agreement.

“ Technology ” shall mean all technology, designs, formulae, algorithms, procedures, methods, discoveries, processes, techniques, ideas, know-how, research and development, technical data, tools, materials, specifications, processes, inventions (whether patentable or unpatentable and whether or not reduced to practice), apparatus, creations, improvements, works of authorship in any media, confidential, proprietary or non-public information, and other similar materials, and all recordings, graphs, drawings, reports, analyses and other writings, and other tangible embodiments of the foregoing in any form, whether or not listed herein, in each case, other than Software.

“ Third Party ” means any Person other than the Parties or any members of their respective Groups.

“ Third-Party Claim ” shall have the meaning set forth in Section 4.5(a) .

“ Transfer Documents ” shall have the meaning set forth in Section 2.1(b) .

“ Transferred Entity ” shall mean any of the entities identified as “Vornado Included Entities” in the Master Agreement.

“ Transition Services Agreement ” shall mean the Transition Services Agreement as defined in the Master Agreement, as it may be amended from time to time.

“ Unreleased Newco Liability ” shall have the meaning set forth in Section 2.5(b) .

“ Unreleased Vornado Liability ” shall have the meaning set forth in Section 2.5(c) .

“ Vornado ” shall have the meaning set forth in the Preamble.

“ Vornado Accounts ” shall have the meaning set forth in Section 2.9(a) .

“ Vornado Assets ” shall have the meaning set forth in Section 2.2(b) .

“ Vornado Board ” shall have the meaning set forth in the Recitals.

“ Vornado Business ” shall mean all businesses, operations and activities (whether or not such businesses, operations or activities are or have been terminated, divested or

discontinued) conducted at any time prior to the Effective Time by either Vornado or Newco or any member of their respective Groups, other than the DC Business.

“ Vornado Contribution of OP Units ” shall have the meaning set forth on Section 1.1 of the Vornado Disclosure Letter.

“ Vornado Disclosure Letter ” shall have the meaning set forth in the Master Agreement.

“ Vornado Distribution ” shall have the meaning set forth on Section 1.1 of the Vornado Disclosure Letter.

“ Vornado Group ” shall mean Vornado and each Person that is a Subsidiary of Vornado (other than Newco and any other member of the Newco Group).

“ Vornado Indemnitees ” shall have the meaning set forth in Section 4.2 .

“ Vornado Indemnity Payment ” shall have the meaning set forth in Section 4.11(b)(i) .

“ Vornado Liabilities ” shall have the meaning set forth in Section 2.3(b) .

“ Vornado Name and Vornado Marks ” shall mean the names, marks, trade dress, logos, monograms, domain names and other source or business identifiers of either Vornado or Newco or any member of their respective Groups using or containing “Vornado Realty” or “Vornado,” either alone or in combination with other words or elements, and all names, marks, trade dress, logos, monograms, domain names and other source or business identifiers confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing.

“ Vornado Shares ” means common shares of Vornado, par value $0.04 per share.

“ Vornado OP ” shall have the meaning set forth in the Preamble.

“ Vornado OP Contribution to Newco OP ” shall have the meaning set forth on Section 1.1 of the Vornado Disclosure Letter.

“ Vornado OP Distribution of OP Units ” shall have the meaning set forth on Section 1.1 of the Vornado Disclosure Letter.

“ Vornado OP Units ” means common limited partnership interests in Vornado OP.

“ Vornado Portion ” shall have the meaning set forth in Section 2.8(a) .

ARTICLE II

THE SEPARATION

2.1 Transfer of Assets and Assumption of Liabilities .

(a) On or prior to the Distribution Date, but in any case, prior to the Vornado OP Distribution of OP Units, in accordance with the Plan of Reorganization:

(i) Transfer and Assignment of Newco Assets . Vornado shall, and shall cause the applicable members of the Vornado Group to, contribute, assign, transfer, convey and deliver to the applicable members of the Newco Group, and the applicable members of the Newco Group shall accept from Vornado and the applicable members of the Vornado Group, all of Vornado’s and such Vornado Group members’ respective direct or indirect right, title and interest in and to all of the Newco Assets (it being understood that if any Newco Asset shall be held by a Transferred Entity, such Newco Asset may be assigned, transferred, conveyed and delivered to Newco as a result of the transfer of all of the equity interests in such Transferred Entity from Vornado or the applicable members of the Vornado Group to the applicable member of the Newco Group);

(ii) Acceptance and Assumption of Newco Liabilities . The applicable members of the Newco Group shall accept, assume and agree faithfully to perform, discharge and fulfill all of the Newco Liabilities in accordance with their respective terms. The applicable members of the Newco Group shall be responsible for all Newco Liabilities, regardless of when or where such Newco Liabilities arose or arise ( provided , however , that nothing contained herein shall preclude or inhibit Newco from asserting against Third Parties any defenses available to the legal entity that incurred or holds such Newco Liability), or whether the facts on which they are based occurred prior to or subsequent to the Effective Time, regardless of where or against whom such Newco Liabilities are asserted or determined (including any Newco Liabilities arising out of claims made by Vornado’s or Newco’s respective trustees, officers, employees, agents, Subsidiaries or Affiliates against any member of the Vornado Group or the Newco Group) or whether asserted or determined prior to the date hereof;

(iii) Transfer and Assignment of Vornado Assets . Newco shall, and shall cause the applicable members of the Newco Group to, contribute, assign, transfer, convey and deliver to the applicable members of the Vornado Group, and the applicable members of the Vornado Group shall accept from Newco and the applicable members of the Newco Group, all of Newco’s and such Newco Group members’ respective direct or indirect right, title and interest in and to any of the Vornado Assets, if any, held by Newco or any such members of the Newco Group (it being understood that any such Vornado Asset may be assigned, transferred, conveyed and delivered to Vornado as a result of the transfer of all of the equity interests in the entity or entities that own such Vornado Asset from Newco or the applicable members of the Newco Group to the applicable member of the Vornado Group); and

(iv) Acceptance and Assumption of Vornado Liabilities . The applicable members of the Vornado Group shall accept, assume and agree faithfully to perform, discharge and fulfill all of the Liabilities of any Transferred Entity that are Vornado Liabilities in accordance with their respective terms, regardless of when or where such Vornado Liabilities arose or arise ( provided , however , that nothing contained herein shall preclude or inhibit Vornado from asserting against Third Parties any defenses available to

the legal entity that incurred or holds such Vornado Liability), or whether the facts on which they are based occurred prior to or subsequent to the Effective Time, regardless of where or against whom such Vornado Liabilities are asserted or determined (including any Vornado Liabilities arising out of claims made by Vornado’s or Newco’s respective trustees, officers, employees, agents, Subsidiaries or Affiliates against any member of the Vornado Group or the Newco Group) or whether asserted or determined prior to the date hereof.

(b) Transfer Documents . In furtherance of the contribution, assignment, transfer, conveyance and delivery of the Assets and the assumption of the Liabilities in accordance with Section 2.1(a) , (i) each Party shall execute and deliver, and shall cause the applicable members of its Group to execute and deliver, such bills of sale, quitclaim deeds, stock powers, certificates of title, assignments of contracts and other instruments of transfer, conveyance and assignment as and to the extent necessary to evidence the transfer, conveyance and assignment of all of such Party’s and the applicable members of its Group’s right, title and interest in and to such Assets to the other Party and the applicable members of its Group in accordance with Section 2.1(a) , and (ii) each Party shall execute and deliver, and shall cause the applicable members of its Group to execute and deliver, to the other Party such assumptions of contracts and other instruments of assumption as and to the extent necessary to evidence the valid and effective assumption of the Liabilities by such Party and the applicable members of its Group in accordance with Section 2.1(a) . All of the foregoing documents contemplated by this Section 2.1(b) shall be referred to collectively herein as the “ Transfer Documents .”

(c) Misallocations . In the event that at any time or from time to time (whether prior to, at or after the Effective Time), one Party (or any member of such Party’s respective Group) shall receive or otherwise possess any Asset that is allocated to the other Party (or any member of such Party’s Group) pursuant to this Agreement or any Ancillary Agreement (including, for the avoidance of doubt, any cash amount required to be contributed by one Party (or any member of such Party’s Group) to the other in accordance with the Plan of Reorganization), such Party shall promptly transfer, or cause to be transferred, such Asset to the Party so entitled thereto (or to any member of such Party’s Group), and such Party (or member of such Party’s Group) shall accept such Asset. Prior to any such transfer, the Person receiving or possessing such Asset shall hold such Asset in trust for any such other Person. In the event that at any time or from time to time (whether prior to, at or after the Effective Time), one Party hereto (or any member of such Party’s Group) shall receive or otherwise assume any Liability that is allocated to the other Party (or any member of such Party’s Group) pursuant to this Agreement or any Ancillary Agreement, such Party shall promptly transfer, or cause to be transferred, such Liability to the Party responsible therefor (or to any member of such Party’s Group), and such Party (or member of such Party’s Group) shall accept, assume and agree to faithfully perform such Liability. For the avoidance of doubt, in the event that at any time or from time to time (whether prior to, at or after the Effective Time), one Party (or any member of such Party’s respective Group) shall make a payment in respect of any Liability that the Parties agree is allocated to the other Party (or any member of such other Party’s Group) pursuant to this Agreement or otherwise, such other Party shall reimburse the first Party for the amount so paid as promptly as is reasonably practicable.

(d) Waiver of Bulk-Sale and Bulk-Transfer Laws . Newco, Newco OP and each member of the Newco Group hereby waives compliance by each and every member of the Vornado Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may be applicable with respect to the transfer or sale of any or all of the Newco Assets or Newco Properties to any member of the Newco Group.

2.2 Newco Assets .(2)

(a) Newco Assets . For purposes of this Agreement, “ Newco Assets ” shall mean:

(i) all issued and outstanding capital stock or other equity interests of the Transferred Entities that are owned by either Vornado or Newco or any member of their respective Groups as of the Effective Time;

(ii) all interests in the Newco Properties of whatever nature, including easements, whether as owner, mortgagee or holder of a Security Interest in the Newco Properties, lessor, sublessor, lessee, sublessee or otherwise, and including all buildings or barges located thereon, and all associated parking areas, fixtures and all other improvements located thereon, and including all rights, benefits, privileges, tenements, hereditaments, covenants, conditions, restrictions, easements and other appurtenances on any Newco Property or otherwise appertaining to or benefitting any Newco Property and/or the improvements situated thereon, including all mineral rights, development rights, air and water rights, subsurface rights, vested rights entitling, or prospective rights which may entitle, the owner of any Newco Property to related easements, land use rights, air rights, viewshed rights, density credits, water, sewer, electrical and other utility service, credits and/or rebates, strips and gores and any land lying in the bed of any street, road, alley, open or proposed, adjoining any Newco Property, and all easements, rights of way and other appurtenances used or connected with the beneficial use or enjoyment of any Newco Property;

(iii) all Assets of either Vornado or Newco or any member of their respective Groups included or reflected as Assets of the Newco Group on the Newco Balance Sheet and any Assets acquired by or for the Newco Business or the Newco Group subsequent to the date of the Newco Balance Sheet which, had they been so acquired on or before such date and owned as of such date would have been reflected on the Newco Balance Sheet if prepared on a consistent basis, subject to any dispositions of such Assets subsequent to the date of the Newco Balance Sheet as may be permitted under the Master Agreement; provided that the amounts set forth on the Newco Balance Sheet with respect to any Assets shall not be treated as minimum amounts or limitations on the amount of such Assets that are included in the definition of Newco Assets pursuant to this subclause (iii);

(2) NTD: To be further reviewed upon receipt of schedules, final structure memo and Newco financial statements.

(iv) all Assets of either Vornado or Newco or any member of their respective Groups as of the Effective Time that are expressly provided by this Agreement or any Ancillary Agreement as Assets to be transferred to Newco OP or any other member of the Newco Group;

(v) all Newco Contracts as of the Effective Time and all rights, interests or claims of either Vornado or Newco or any member of their respective Groups thereunder as of the Effective Time;

(vi) all Newco Intellectual Property, Newco Software and Newco Technology as of the Effective Time and all rights, interests or claims of either Vornado or Newco or any member of their respective Groups thereunder as of the Effective Time;

(vii) all Newco Permits as of the Effective Time and all rights, interests or claims of either Vornado or Newco or any member of their respective Groups thereunder as of the Effective Time;

(viii) all rights, interests and claims of either Vornado or Newco or any member of their respective Groups as of the Effective Time with respect to Information that is exclusively related to the Newco Assets, the Newco Liabilities, the DC Business or the Transferred Entities and, subject to the provisions of the applicable Ancillary Agreements, a non-exclusive right to all Information that is related to, but not exclusively related to, the Newco Assets, the Newco Liabilities, the DC Business or the Transferred Entities; and

(ix) all other Assets owned or held by Vornado or Newco or any member of their respective Groups immediately prior to the Effective Time that exclusively relate to or are exclusively used in the DC Business; and

(x) any and all Assets set forth on Schedule 2.2(a)(x) .

Notwithstanding the foregoing, the Newco Assets shall not in any event include any Asset referred to in subclauses (i) through (v) of Section 2.2(b) .

(b) Vornado Assets . For the purposes of this Agreement, “ Vornado Assets ” shall mean all Assets of either Vornado or Newco or any member of their respective Groups as of the Effective Time, other than the Newco Assets, it being understood that the Vornado Assets shall include:

(i) all Assets that are expressly contemplated by this Agreement, the Master Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be retained by Vornado, Vornado OP or any other member of the Vornado Group (including any Vornado Included Interests (as defined in the Master Agreement) that become “Kickout Interests” in accordance with the terms of the Master Agreement);

(ii) all contracts of either Vornado or Newco or any member of their respective Groups as of the Effective Time (other than the Newco Contracts);

(iii) all Intellectual Property of either Vornado or Newco or any member of their respective Groups as of the Effective Time (other than the Newco Intellectual Property), including the Vornado Name and Vornado Marks;

(iv) all Permits of either Vornado or Newco or any member of their respective Groups as of the Effective Time (other than the Newco Permits); and

(v) any and all Assets set forth on Schedule 2.2(b)(v) .

2.3 Newco Liabilities; Vornado Liabilities .

(a) Newco Liabilities . For the purposes of this Agreement, “ Newco Liabilities ” shall mean the following Liabilities of either Vornado or Newco or any member of their respective Groups:

(i) all Liabilities included or reflected as liabilities or obligations of Newco or the members of the Newco Group on the Newco Balance Sheet and all Liabilities arising or assumed after the date of the Newco Balance Sheet which, had they arisen or been assumed on or before such date and been retained as of such date, would have been reflected on the Newco Balance Sheet if prepared on a consistent basis, subject to any discharge of such Liabilities subsequent to the date of the Newco Balance Sheet; provided that the amounts set forth on the Newco Balance Sheet with respect to any Liabilities shall not be treated as minimum amounts or limitations on the amount of such Liabilities that are included in the definition of Newco Liabilities pursuant to this subclause (i);

(ii) all Liabilities, including any Environmental Liabilities, relating to, arising out of or resulting from the actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent that such Liabilities relate to, arise out of or result from the DC Business or any Newco Asset;

(iii) all Liabilities to the extent relating to, arising out of or resulting from (A) the activities or operations of the Newco Business or the ownership or use of the Newco Assets after the Effective Time by any member of the Newco Group or (B) the activities or operations of any other business conducted by any member of the Newco Group at any time after the Effective Time (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or Representative of any member of the Newco Group (whether or not such act or failure to act is or was within such Person’s authority));

(iv) any and all Liabilities that are expressly provided by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be assumed by Newco or any other member of the Newco Group, and all agreements, obligations and Liabilities of any member of the Newco Group under this Agreement or any of the Ancillary Agreements;

(v) all Liabilities to the extent relating to, arising out of or resulting from the Newco Contracts, the Newco Intellectual Property, the Newco Software, the Newco Technology or the Newco Permits;

(vi) any and all Liabilities set forth on Schedule 2.3(a)(vi) ; and

(vii) all Liabilities arising out of claims made by any Third Party (including Vornado’s or Newco’s respective trustees, officers, shareholders, employees and agents) against any member of the Vornado Group or the Newco Group to the extent relating to, arising out of or resulting from the DC Business or any Newco Asset or the other business, operations, activities or Liabilities referred to in clauses (i) through (vi) above;

provided that, notwithstanding the foregoing, the Parties agree that the Liabilities set forth on Schedule 2.3(b) , and any Liabilities of any member of the Vornado Group pursuant to the Ancillary Agreements, shall not be Newco Liabilities but instead shall be Vornado Liabilities.

(b) Vornado Liabilities . For the purposes of this Agreement, “ Vornado Liabilities ” shall mean (i) all Liabilities relating to, arising out of or resulting from actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time) of any member of the Vornado Group and, prior to the Effective Time, any member of the Newco Group, in each case that are not Newco Liabilities, including any and all Liabilities set forth on Schedule 2.3(b)(3) ; (ii) Liabilities of either Vornado or Newco or any member of their respective Groups to the extent relating to, arising out of or resulting from the Vornado Business or the Vornado Assets; and (iii) all Liabilities arising out of claims made by any Third Party (including Vornado’s or Newco’s respective trustees, officers, shareholders, employees and agents) against any member of the Vornado Group or the Newco Group to the extent relating to, arising out of or resulting from the Vornado Business or the Vornado Assets.

2.4 Approvals and Notifications . Approvals and Notifications for Newco Assets . To the extent that the transfer or assignment of any Newco Asset, the assumption of any Newco Liability, the Separation, or the Distribution requires any Approvals or Notifications, the Parties shall use their commercially reasonable efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided , however , that, except to the extent expressly provided in this Agreement, any of the Ancillary Agreements or the Master Agreement, as otherwise agreed between Vornado and Newco, or to the extent otherwise required to be made by the applicable Party or any of its Subsidiaries pursuant to the terms of any then-existing contract, neither Vornado nor Newco shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person in order to obtain or make such Approvals or Notifications.

(3) NTD: To include, among other items, all tax protection agreements that may otherwise relate to the Newco Assets, all of which shall constitute Vornado Assets and Vornado Liabilities for purposes of this Agreement.

2.5 Novation of Liabilities .

(a) Each of Vornado and Newco, at the request of the other, shall use its commercially reasonable efforts to obtain, or to cause to be obtained, as soon as reasonably practicable, any consent, substitution, approval or amendment required to novate or assign (i) all Newco Liabilities or obtain in writing the unconditional release of each member of the Vornado Group that is a party to any such arrangements, or the substitution of a member of the Newco Group if no member of the Newco Group is then a party thereto, so that, in any such case, the members of the Newco Group shall be solely responsible for such Newco Liabilities or (ii) all Vornado Liabilities or obtain in writing the unconditional release of each member of the Newco Group that is a party to any such arrangements, or the substitution of a member of the Vornado Group if no member of the Vornado Group is then a party thereto, so that, in any such case, the members of the Vornado Group shall be solely responsible for such Vornado Liabilities; provided , however , that, except as otherwise expressly provided in this Agreement, the Master Agreement or any of the Ancillary Agreements, neither Vornado nor Newco shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Third Party from whom any such consent, substitution, approval, amendment or release is requested.

(b) If Vornado or Newco is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release and the applicable member of the Vornado Group continues to be bound by such Newco Liability (or any agreement, lease, license or other obligation, in each case, pursuant to which any Newco Liability arises) (each, an “ Unreleased Newco Liability ”), Newco shall, to the extent not prohibited by Law, as indemnitor, guarantor, agent or subcontractor for such member of the Vornado Group, as the case may be, (i) pay, perform and discharge fully all of the obligations or other Liabilities of such member of the Vornado Group that constitute Unreleased Newco Liabilities from and after the Effective Time and (ii) use its commercially reasonable efforts to effect such payment, performance or discharge prior to the time any demand for such payment, performance or discharge is permitted to be made by the obligee thereunder on any member of the Vornado Group. If and when any such consent, substitution, approval, amendment or release shall be obtained or the Unreleased Newco Liabilities shall otherwise become assignable or able to be novated, Vornado shall promptly assign, or cause to be assigned, and Newco or the applicable Newco Group member shall assume, such Unreleased Newco Liabilities without exchange of further consideration.

(c) If Newco or Vornado is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release and the applicable member of the Newco Group continues to be bound by such Vornado Liability (or any agreement, lease, license or other obligation, in each case, pursuant to which any Vornado Liability arises) (each, an “ Unreleased Vornado Liability ”), Vornado shall, to the extent not prohibited by Law, as indemnitor, guarantor, agent or subcontractor for such member of the Newco Group, as the case may be, (i) pay, perform and discharge fully all of the obligations or other Liabilities of such member of the Newco Group that constitute Unreleased Vornado Liabilities from and after the Effective Time and (ii) use its commercially reasonable efforts to effect such payment, performance or discharge prior to the time any demand for such payment, performance or discharge is permitted to be made by the obligee thereunder on any member of the Newco Group. If and when any such consent, substitution, approval, amendment or release shall be

obtained or the Unreleased Vornado Liabilities shall otherwise become assignable or able to be novated, Newco shall promptly assign, or cause to be assigned, and Vornado or the applicable Vornado Group member shall assume, such Unreleased Vornado Liabilities without exchange of further consideration.

2.6 Release of Guarantees . In furtherance of, and not in limitation of, the obligations set forth in Section 2.5 :

(a) On or prior to the Distribution Date or as soon as practicable thereafter, Vornado shall, at the request of Newco and with the reasonable cooperation of Newco and the applicable member(s) of the Newco Group, use commercially reasonable efforts to have any member(s) of the Newco Group removed as guarantor of, indemnitor of or obligor for any Vornado Liability to the extent that they relate to Vornado Liabilities, including the removal of any Security Interest on or in any Newco Asset that may serve as collateral or security for any such Vornado Liability.

(b) To the extent required to obtain a release from a guarantee or indemnity of any member of the Newco Group, Vornado or one or more members of the Vornado Group shall execute a guarantee or indemnity agreement in the form of the existing guarantee or indemnity or such other form as is agreed to by the relevant parties to such guarantee or indemnity agreement, which agreement shall include the removal of any Security Interest on or in any Newco Asset that may serve as collateral or security for any such Vornado Liability, except to the extent that such existing guarantee contains representations, covenants or other terms or provisions either (i) with which Vornado would be reasonably unable to comply or (ii) which Vornado would not reasonably be able to avoid breaching.

(c) Until such time as Vornado or an applicable member of the Vornado Group has obtained, or has caused to be obtained, any removal or release as set forth in clauses (a) and (b) of this Section 2.6 , (i) Vornado or the relevant member of the Vornado Group that has assumed the Liability related to such guarantee shall indemnify, defend and hold harmless the guarantor or obligor against or from any Liability arising from or relating thereto in accordance with the provisions of Article IV and shall, as agent or subcontractor for such guarantor, indemnitor or obligor, pay, perform and discharge fully all the obligations or other Liabilities of such guarantor, indemnitor or obligor thereunder; and (ii) Vornado, on behalf of itself and the other members of its Group, agrees not to renew or extend the term of, increase any obligations under, or transfer to a Third Party, any loan, guarantee, lease, contract or other obligation for which Newco or a member of its Group is or may be liable unless all obligations of Newco and the members of its Group with respect thereto are thereupon terminated by documentation satisfactory in form and substance to Newco.

(d) Until such time as Vornado has obtained, or has caused to be obtained, any removal or release as set forth in clauses (a) and (b) of this Section 2.6 , Vornado shall coordinate with Newco with respect to contact with the beneficiary of such guarantee, afford Newco a reasonable opportunity to participate in discussions with such beneficiaries prior to engaging therein, and keep Newco reasonably informed of any discussions with such beneficiaries in which Newco does not participate.

2.7 Termination of Agreements .

(a) Except as set forth in Section 2.7(b) , in furtherance of the releases and other provisions of Section 4.1 , Newco and each member of the Newco Group, on the one hand, and Vornado and each member of the Vornado Group, on the other hand, hereby terminate any and all agreements, arrangements, commitments or understandings, whether or not in writing, between or among Newco and/or any member of the Newco Group, on the one hand, and Vornado and/or any member of the Vornado Group, on the other hand, effective or outstanding as of the Effective Time. No such terminated agreement, arrangement, commitment or understanding (including any provision thereof which purports to survive termination) shall be of any further force or effect after the Effective Time. Each Party shall, at the reasonable request of the other Party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing.

(b) The provisions of Section 2.7(a) shall not apply to any of the following agreements, arrangements, commitments or understandings (or to any of the provisions thereof):(4) (i) this Agreement, the Master Agreement and the Ancillary Agreements (and each other agreement or instrument expressly contemplated by this Agreement, the Master Agreement or any Ancillary Agreement to be entered into by any of the Parties or any of the members of their respective Groups or to be continued from and after the Effective Time); (ii) any agreements, arrangements, commitments or understandings listed or described on Schedule 2.7(b)(ii) ; (iii) any agreements, arrangements, commitments or understandings to which any Third Party is a party; (iv) any intercompany accounts payable or accounts receivable accrued as of the Effective Time that are reflected in the books and records of the parties or otherwise documented in writing in accordance with past practices, which shall be settled in the manner contemplated by Section 2.7(c) ; (v) any agreements, arrangements, commitments or understandings to which any non-wholly owned Subsidiary of Vornado or Newco, as the case may be, is a party (it being understood that directors’ qualifying shares or similar interests will be disregarded for purposes of determining whether a Subsidiary is wholly owned); and (vi) any Shared Contracts.

(c) All of the intercompany accounts receivable and accounts payable between any member of the Vornado Group, on the one hand, and any member of the Newco Group, on the other hand, outstanding as of the Effective Time shall, as promptly as is practicable after the Effective Time, be repaid, settled or otherwise eliminated by the member owing such amount, by means of cash payments, a dividend, capital contribution or a combination of the foregoing.

2.8 Treatment of Shared Contracts .

(a) Subject to applicable Law and without limiting the generality of the obligations set forth in Section 2.1 , unless the parties otherwise agree or the benefits of any contract, agreement, arrangement, commitment or understanding described in this Section 2.8 are expressly conveyed to the applicable party pursuant to this Agreement or an Ancillary Agreement, any contract or agreement entered into by a member of the Vornado Group with a

(4) NTD: Schedule 2.7(b)(ii) to contain a list of which agreements will remain in place.

Third Party that is not a Newco Contract, but pursuant to which the DC Business, as of the Effective Time, has been provided certain revenues or other benefits in respect of the Newco Properties (any such contract or agreement, a “ Shared Contract ”) shall not be assigned in relevant part to the applicable member(s) of the Newco Group or amended to give the relevant member(s) of the Newco Group any entitlement to such rights and benefits thereunder; provided , however , that the Parties shall, and shall cause each of the members of their respective Groups to, take such other reasonable and permissible actions to cause (i) the relevant member of the Newco Group to receive the rights and benefits previously provided in the ordinary course of business, consistent with past practice, to the DC Business pursuant to such Shared Contract and (ii) the relevant member of the Newco Group to bear the burden of the corresponding Liabilities under such Shared Contract. [Notwithstanding the foregoing, no member of the Vornado Group shall be required by this Section 2.8 to maintain in effect any Shared Contract, and no member of the Newco Group shall have any approval or other rights with respect to any amendment, termination or other modification of any Shared Contract; provided , however , that for any Shared Contract that the Newco Group in consultation with JBG Properties identifies as material to the operation of the DC Business, the Parties shall cause the members of their respective Groups to use their respective commercially reasonable efforts to work together (and, if necessary and desirable, to work with the Third Party to any Shared Contract) in an effort to divide, partially assign, modify and/or replicate (in whole or in part) the respective rights and obligations under and in respect of any such identified Shared Contract such that (i) a member of the Newco Group is the beneficiary of the rights and is responsible for the obligations related to that portion of such Shared Contract relating to the DC Business (the “ Newco Portion ”), which rights shall be a Newco Asset and which obligations shall be a Newco Liability and (ii) a member of the Vornado Group is the beneficiary of the rights and is responsible for the obligations related to such Shared Contract relating to the Vornado Business (the “ Vornado Portion ”), which rights shall be a Vornado Asset and which obligations shall be a Vornado Liability. If the Parties, or a member of their respective Groups, as applicable, do not or are not able to enter into an arrangement to formally divide, partially assign, modify and/or replicate such Shared Contract as contemplated by the previous sentence, then the Parties shall, and shall cause the members of their Groups to, cooperate in any lawful arrangement to provide that a member of the Newco Group shall receive the interest in the benefits and obligations of the Newco Portion under such Shared Contract and that a member of the Vornado Group shall receive the interest in the benefits and obligations of the Vornado Portion under such Shared Contract. The obligations set forth in this Section 2.8(a) shall terminate on the date that is twelve (12) months after the Effective Time.](5)

(b) Each of Vornado and Newco shall, and shall cause the members of its Group to, (i) treat for all Tax purposes the portion of each Shared Contract inuring to its respective businesses as Assets owned by, and/or Liabilities of, as applicable, such Party, or the members of its Group, as applicable, not later than the Effective Time, and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (unless required by applicable Law).

(5) NTD: JBG will review the list of Shared Contracts, when available, to ascertain whether any are material for purposes of this provision.

2.9 Bank Accounts; Cash Balances .

Except as otherwise provided in the Transition Services Agreement:

(a) Each Party agrees to take, or cause the members of its Group to take, at the Effective Time (or such earlier time as the Parties may agree), all actions necessary to amend all contracts or agreements governing each bank and brokerage account owned by Newco or any other member of the Newco Group (collectively, the “ Newco Accounts ”) and all contracts or agreements governing each bank or brokerage account owned by Vornado or any other member of the Vornado Group (collectively, the “ Vornado Accounts ”) so that each such Newco Account and Vornado Account, if currently Linked (whether by automatic withdrawal, automatic deposit or any other authorization to transfer funds from or to, hereinafter “ Linked ”) to any Vornado Account or Newco Account, respectively, is de-Linked from such Vornado Account or Newco Account, respectively.

(b) It is intended that, following consummation of the actions contemplated by Section 2.9(a) , there will be in place a cash management process pursuant to which the Newco Accounts will be managed and funds collected will be transferred into one (1) or more accounts maintained by Newco or a member of the Newco Group.

(c) It is intended that, following consummation of the actions contemplated by Section 2.9(a) , there will continue to be in place a cash management process pursuant to which the Vornado Accounts will be managed and funds collected will be transferred into one (1) or more accounts maintained by Vornado or a member of the Vornado Group.

(d) With respect to any outstanding checks issued or payments initiated by Vornado, Newco, or any of the members of their respective Groups prior to the Effective Time, such outstanding checks and payments shall be honored following the Effective Time by the Person or Group owning the account on which the check is drawn or from which the payment was initiated, respectively, without limiting the ultimate allocation of Liability for such amounts under this Agreement, the Master Agreement or any of the Ancillary Agreements.

(e) As between Vornado and Newco (and the members of their respective Groups), except to the extent prohibited by applicable Law, all payments made and reimbursements received after the Effective Time by either Vornado or Newco (or any member of their respective Groups) that relate to a business, Asset or Liability of the other Party (or member of its Group), shall be held by such Party in trust for the use and benefit of the Party entitled thereto and, promptly following receipt by such Party of any such payment or reimbursement, such Party shall pay over, or shall cause the applicable member of its Group to pay over, to the other Party (or a member of such other Party’s Group) the amount of such payment or reimbursement without right of set-off.

2.10 Ancillary Agreements . Effective on or prior to the Effective Time, each of Vornado and Newco will, or will cause the applicable members of their Groups to, execute and deliver all Ancillary Agreements to which it (or any member of its Group) is a party.

2.11 Disclaimer of Representations and Warranties . EACH OF VORNADO (ON BEHALF OF ITSELF AND EACH MEMBER OF THE VORNADO GROUP) AND

NEWCO (ON BEHALF OF ITSELF AND EACH MEMBER OF THE NEWCO GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, IN THE MASTER AGREEMENT, OR IN ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT CONTEMPLATED HEREBY OR THEREBY, NO PARTY TO THIS AGREEMENT, THE MASTER AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, THE MASTER AGREEMENT, ANY ANCILLARY AGREEMENT OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS, APPROVALS OR NOTIFICATIONS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SET-OFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN, IN THE MASTER AGREEMENT OR IN ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS, WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM OF DEED OR CONVEYANCE) AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE WILL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR MADE OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.

2.12 Cooperation . Notwithstanding any provision of this Agreement or the Master Agreement to the contrary, (a) Vornado shall keep JBG Properties reasonably informed and furnish JBG Properties with information relating to the determination of the Assets that are proposed to be transferred to, and Liabilities that are proposed to be assumed by, the Newco Group under this Agreement or any of the Ancillary Agreements on a reasonably current basis and (b) to the extent any of the Ancillary Agreements or exhibits or schedules hereto or thereto are to be completed following the date hereof, Vornado and Newco shall consult with JBG Properties in good faith regarding the terms and conditions to be included in such documents, give JBG Properties a reasonable opportunity to comment on any additions or modifications to such documents, take such comments into account in finalizing such documents and shall not finalize such documents without the prior written consent of JBG Properties (such consent not to be unreasonably withheld, conditioned or delayed).

2.13 Newco Assumption of Indebtedness .

(a) Prior to and/or immediately after the Effective Time, pursuant to the Plan of Reorganization, but subject to the terms of the Master Agreement, Newco and/or other member(s) of the Newco Group shall continue to be borrowers under and, to the extent the

borrowers thereunder are any members of the Vornado Group, shall assume all existing indebtedness which relates exclusively to one or more Newco Properties, as set forth in further detail on Schedule 2.13 , as such Schedule may be modified by the parties hereto (with the prior written consent of JBG Properties) to reflect changes in accordance with the terms of the Master Agreement (the “ Newco Financing Arrangements ”). Consistent with the terms set forth in the Master Agreement, Vornado and Newco agree to use commercially reasonable efforts to cause the full release and discharge of Vornado and the other members of the Vornado Group from all obligations pursuant to the Newco Financing Arrangements as of no later than the Effective Time. The parties hereto agree that, subject to the terms of the Master Agreement, Newco or another member of the Newco Group, as the case may be, and not Vornado or any member of the Vornado Group, are and shall be responsible for all costs and expenses incurred in connection with the Newco Financing Arrangements.

(b) Prior to the Effective Time, Vornado and Newco shall cooperate in the preparation of all materials as may be necessary or advisable to execute the Newco Financing Arrangements in accordance herewith.

2.14 Partnership Agreement . Newco shall, in its capacity as the general partner of and a limited partner in Newco OP, and on behalf of and as attorney in fact for the other limited partners, enter into the limited partnership agreement of Newco OP, effective as of the Effective Time, in the form attached as Exhibit F to the Master Agreement;

2.15 Financial Information Certifications . Vornado’s disclosure controls and procedures and internal control over financial reporting (as each is contemplated by the Exchange Act) are currently applicable to the Newco Group insofar as the members of the Newco Group are Subsidiaries of Vornado. In order to enable the principal executive officer and principal financial officer of Newco to make the certifications required of them under Section 302 of the Sarbanes-Oxley Act of 2002, Vornado, as soon as reasonably practicable following the Distribution Date and in any event prior to such time as Newco is required to file its first quarterly report on Form 10-Q (or annual report on Form 10-K, if earlier), shall provide Newco with one or more certifications with respect to such disclosure controls and procedures, its internal control over financial reporting and the effectiveness thereof. Such certification(s) shall be provided by Vornado (and not by any officer or employee in their individual capacity). Subject to the provisions of the Transition Services Agreement, with respect to any periods following the Distribution Date, the Parties shall cooperate and discuss in good faith any certifications or other supporting documentation required by Newco.

2.16 Vornado OP Distribution of OP Units . Prior to the Vornado Distribution, in accordance with the Plan of Reorganization, Vornado OP shall cause the following to occur:

(a) Vornado acting in its capacity as the general partner of Vornado OP shall cause Vornado OP to, and Vornado OP shall, declare and effectuate the Vornado OP Distribution of OP Units;

(b) Vornado shall thereafter effectuate the Vornado Contribution of OP Units; and

(c) Newco, acting in its capacity as the general partner of Newco OP, shall consent to, and use commercially reasonable efforts to cause, each of the holders of Vornado OP Units who receive Newco OP Interests in the Vornado OP Distribution of OP Units to be admitted as partners in Newco OP, effective as of immediately following the Vornado Contribution of OP Units.

2.17 Certain Resignations . At or prior to the Distribution Date, Vornado shall cause each director or employee of Vornado and its Subsidiaries who will not be employed by Newco or a Newco Subsidiary after the Distribution Date to resign, effective upon the consummation of the Pre-Combination Transactions, from all boards of directors or similar governing bodies of Newco or any Newco Subsidiary, and from all positions as officers of Newco or any Newco Subsidiary in which they serve.

2.18 Plan of Reorganization . For the avoidance of doubt, the Parties shall modify the Pre-Combination Transactions only in accordance with the principles set forth in Section 5.8(a) of the Master Agreement, and, to the extent necessary, such modifications shall be reflected in the Plan of Reorganization consistent with Section 5.8(a) of the Master Agreement.

ARTICLE III

THE DISTRIBUTION

3.1 Sole and Absolute Discretion; Cooperation .

(a) Subject to compliance with the terms of the Master Agreement, Vornado shall, in its sole and absolute discretion, determine the terms of the Distribution, including the form, structure and terms of any transaction(s) and/or offering(s) to effect the Distribution and the timing and conditions to the consummation of the Distribution. In addition, subject to compliance with the terms of the Master Agreement, Vornado may, at any time and from time to time until the consummation of the Distribution, modify or change the terms of the Distribution, including by accelerating or delaying the timing of the consummation of all or part of the Distribution. Nothing shall in any way limit Vornado’s right to terminate this Agreement or the Distribution as set forth in Article IX or alter the consequences of any such termination from those specified in Article IX .

(b) Newco shall cooperate with Vornado to accomplish the Distribution and shall, at Vornado’s direction, promptly take any and all actions necessary or desirable to effect the Distribution, including in respect of the registration under the Exchange Act of Newco Shares on the Form 10. Vornado shall select any investment bank or manager in connection with the Distribution, as well as any financial printer, solicitation and/or exchange agent and financial, legal, accounting and other advisors for Vornado. Newco and Vornado, as the case may be, will provide to the Agent any information required in order to complete the Distribution.

3.2 Actions Prior to the Distribution . Prior to the Effective Time and subject to the terms and conditions set forth herein, the Parties shall take, or cause to be taken, the following actions in connection with the Distribution:

(a) Notice to NYSE . Vornado shall, to the extent possible, give the NYSE not less than ten (10) days’ advance notice of the Record Date in compliance with Rule 10b-17 under the Exchange Act.

(b) Newco Declaration of Trust and Newco Bylaws . On or prior to the Distribution Date, Vornado and Newco shall take or cause to be taken all necessary actions so that, as of the Effective Time, the Newco Declaration of Trust and the Newco Bylaws shall become the declaration of trust and bylaws of Newco, respectively.

(c) Newco Trustees and Officers . On or prior to the Distribution Date, Vornado and Newco shall take or cause to be taken all necessary actions so that as of the Effective Time the trustees and executive officers of Newco shall be those set forth in, or determined in accordance with, the Master Agreement, unless otherwise agreed by the Parties and JBG Properties.

(d) NYSE Listing . Newco shall prepare and file, and shall use its reasonable best efforts to have approved, an application for the listing of the Newco Shares to be distributed in the Distribution on the NYSE, subject to official notice of distribution.

(e) Securities Law Matters . Newco shall file any amendments or supplements to the Form 10 as may be necessary or advisable in order to cause the Form 10 to become and remain effective as required by the SEC or federal, state or other applicable securities Laws. Vornado and Newco shall cooperate in preparing, filing with the SEC and causing to become effective registration statements or amendments thereof which are required to reflect the establishment of, or amendments to, any employee benefit and other plans necessary or advisable in connection with the transactions contemplated by this Agreement, the Master Agreement and the Ancillary Agreements. Vornado and Newco will prepare, and Newco will, to the extent required under applicable Law, file with the SEC any such documentation and any requisite no-action letters which Vornado determines are necessary or desirable to effectuate the Distribution, and Vornado and Newco shall each use its reasonable best efforts to obtain all necessary approvals from the SEC with respect thereto as soon as practicable. Vornado and Newco shall take all such action as may be necessary or appropriate under the securities or blue sky laws of the United States and shall use commercially reasonable efforts to comply with all applicable foreign securities Laws in connection with the transactions contemplated by this Agreement, the Master Agreement and the other Ancillary Agreements.

(f) Mailing of Information Statement . Vornado shall, as soon as is reasonably practicable after the Form 10 is declared effective under the Exchange Act and the Vornado Board has approved the Distribution, cause the Information Statement to be mailed to the Record Holders.

(g) The Distribution Agent . Vornado shall enter into a distribution agent agreement with the Agent or otherwise provide instructions to the Agent regarding the Distribution.

(h) Share-Based Employee Benefit Plans . Vornado and Newco shall take all actions as may be necessary to approve the grants of adjusted equity awards by Vornado (in

respect of Vornado shares) and Newco (in respect of Newco Shares) in connection with the Distribution in order to satisfy the requirements of Rule 16b-3 under the Exchange Act.

3.3 Conditions to the Distribution .

(a) The obligation of Vornado to consummate the Distribution will be subject to the satisfaction or waiver (subject to Section 10.15 ) at or prior to the Distribution Date of the following conditions ( provided , however , that unless the Master Agreement shall have been terminated in accordance with its terms, any such waiver shall be subject to the written consent of JBG Properties):

(i) the reorganization shall have been completed substantially in accordance with the Plan of Reorganization (other than those steps that are expressly contemplated to occur at or after the Distribution);

(ii) each of the Transfer Documents shall have been duly executed and delivered by the applicable parties thereto; and

(iii) the satisfaction or waiver of each of the conditions set forth in Article VII of the Master Agreement, including (i) the satisfaction, or waiver by Vornado and JBG Properties, of the conditions set forth in Section 7.1 of the Master Agreement; (ii) the satisfaction, or waiver by Vornado of the conditions set forth in Section 7.2 of the Master Agreement; and (iii) the satisfaction, or waiver by JBG Properties, of the conditions set forth in Section 7.3 of the Master Agreement, in each case other than those conditions that, by their nature, are to be satisfied contemporaneously with the Distribution or at the Closing (as defined in the Master Agreement).

(b) The foregoing conditions are for the sole benefit of Vornado and shall not give rise to or create any duty on the part of Vornado or the Vornado Board to waive or not waive any such condition or in any way limit Vornado’s right to terminate this Agreement as set forth in Article IX or alter the consequences of any such termination from those specified in Article IX , provided that the foregoing shall not limit the right of the parties hereto under the Master Agreement. Any determination made by the Vornado Board prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in Section 3.3(a) shall be conclusive and binding on the parties hereto. If Vornado waives any material condition, it shall promptly issue a press release disclosing such fact and file a Current Report on Form 8-K with the SEC describing such waiver.

3.4 The Vornado Distribution .

(a) Subject to Section 3.3 , on or prior to the Distribution Date, Newco will deliver to the Agent, for the benefit of the holders of record of Vornado Shares as of the Record Date, book-entry transfer authorizations for such number of the outstanding Newco Shares as is necessary to effect the Vornado Distribution, and shall cause the transfer agent for the Vornado Shares to instruct the Agent to distribute at the Effective Time the appropriate number of Newco Shares to each such Record Holder or designated transferee or transferees of such Record Holder by way of direct registration in book-entry form. Newco will not issue paper share certificates in respect of the Newco Shares. The Vornado Distribution shall be effective at the Effective Time.

(b) Subject to Section 3.3 , each Record Holder will be entitled to receive in the Vornado Distribution one Newco Share for every Vornado Share (or, as determined by Vornado in its sole discretion, one Newco Share for every two Vornado Shares), held in each case by such Record Holder on the Record Date, rounded down to the nearest whole number.

(c) No fractional shares will be distributed or credited to book-entry accounts in connection with the Vornado Distribution, and any such fractional share interests to which a Record Holder would otherwise be entitled shall not entitle such Record Holder to vote or to any other rights as a shareholder of Newco. In lieu of any such fractional shares, each Record Holder who, but for the provisions of this Section 3.4(c) , would be entitled to receive a fractional share interest of a Newco Share pursuant to the Vornado Distribution, as applicable, shall be paid cash, without any interest thereon, as hereinafter provided. As soon as practicable after the Effective Time, Vornado shall direct the Agent to determine the number of whole and fractional Newco Shares allocable to each Record Holder, to aggregate all such fractional shares into whole shares, and to sell the whole shares obtained thereby in the open market at the then-prevailing prices on behalf of each Record Holder who otherwise would be entitled to receive fractional share interests (with the Agent, in its sole and absolute discretion, determining when, how and through which broker-dealer and at what price to make such sales), and to cause to be distributed to each such Record Holder, in lieu of any fractional share, such Record Holder’s or owner’s ratable share of the total proceeds of such sale, after deducting any Taxes required to be withheld and applicable transfer Taxes, and after deducting the costs and expenses of such sale and distribution, including brokers fees and commissions. None of Vornado, Vornado OP, Newco or the Agent will be required to guarantee any minimum sale price for the fractional Newco Shares sold in accordance with this Section 3.4(c) . None of Vornado, Vornado OP or Newco will be required to pay any interest on the proceeds from the sale of fractional shares. Neither the Agent nor the broker-dealers through which the aggregated fractional shares are sold shall be Affiliates of Vornado or Newco. Solely for purposes of computing fractional share interests pursuant to this Section 3.4(c) and Section 3.4(d) , the beneficial owner of Vornado Shares or Vornado OP Units, as the case may be, held of record in the name of a nominee in any nominee account shall be treated as the Record Holder with respect to such shares or units.

(d) Any Newco Shares or cash in lieu of fractional shares with respect to Newco Shares that remain unclaimed by any Record Holder one hundred and eighty (180) days after the Distribution Date shall be delivered to Newco, and Newco shall hold such Newco Shares for the account of such Record Holder, and the parties hereto agree that all obligations to provide such Newco Shares and cash, if any, in lieu of fractional share interests shall be obligations of Newco, subject in each case to applicable escheat or other abandoned property Laws, and Vornado shall have no Liability with respect thereto.

(e) Until the Newco Shares are duly transferred in accordance with this Section 3.4 and applicable Law, from and after the Effective Time, Newco will regard the Persons entitled to receive such Newco Shares as record holders of Newco Shares in accordance with the terms of the Distribution without requiring any action on the part of such Persons. Newco agrees that, subject to any transfers of such shares, from and after the Effective Time (i) each such holder will be entitled to receive all dividends payable on, and exercise voting rights and all other rights and privileges with respect to, the Newco Shares then held by such

holder, and (ii) each such holder will be entitled, without any action on the part of such holder, to receive evidence of ownership of the Newco Shares then held by such holder.

ARTICLE IV

MUTUAL RELEASES; INDEMNIFICATION

4.1 Release of Pre-Distribution Claims .

(a) Newco Release of Vornado. Except (i) as provided in Sections 4.1(c) and 4.1(d) , (ii) as may be otherwise expressly provided in this Agreement or any other Ancillary Agreement, and (iii) for any matter for which any member of the Newco Group is entitled to indemnification or contribution pursuant to this Article IV , effective as of the Effective Time, Newco does hereby, for itself and each other member of the Newco Group, and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, trustees, officers, agents or employees of any member of the Newco Group (in each case, in their respective capacities as such), remise, release and forever discharge (i) Vornado and the members of the Vornado Group, and their respective successors and assigns, (ii) all Persons who at any time prior to the Effective Time have been shareholders, directors, trustees, officers, agents or employees of any member of the Vornado Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, and (iii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, trustees, officers, agents or employees of a Transferred Entity and who are not, as of immediately following the Effective Time, directors, trustees, officers or employees of Newco or a member of the Newco Group, in each case from: (A) all Newco Liabilities, (B) all Liabilities arising from or in connection with the transactions and all other activities to implement the Separation, the Distribution and the Business Combination, and (C) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the Newco Business, the Newco Assets or the Newco Liabilities.

(b) Vornado Release of Newco. Except (i) as provided in Sections 4.1(c) and 4.1(d) , (ii) as may be otherwise expressly provided in this Agreement or any other Ancillary Agreement and (iii) for any matter for which any member of the Vornado Group is entitled to indemnification or contribution pursuant to this Article IV , effective as of the Effective Time, Vornado does hereby, for itself and each other member of the Vornado Group and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, trustees, officers, agents or employees of any member of the Vornado Group (in each case, in their respective capacities as such), remise, release and forever discharge Newco and the members of the Newco Group and their respective successors and assigns, from (A) all Vornado Liabilities, (B) all Liabilities arising from or in connection with the transactions and all other activities to implement the Separation, the Distribution and the Business Combination, and (C) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being

contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the Vornado Business, the Vornado Assets or the Vornado Liabilities.

(c) Obligations Not Affected. Nothing contained in Section 4.1(a) or 4.1(b) shall impair any right of any Person to enforce this Agreement, any Ancillary Agreement, the Master Agreement or any agreements, arrangements, commitments or understandings that are specified in Section 2.7(b) or the applicable Schedules thereto as not to terminate as of the Effective Time, in each case in accordance with its terms. Nothing contained in Section 4.1(a) or 4.1(b) shall release any Person from:

(i) any Liability provided in or resulting from any agreement among any members of the Vornado Group or the Newco Group that is specified in Section 2.7(b) or the applicable Schedules thereto as not to terminate as of the Effective Time, or any other Liability specified in Section 2.7(b) as not to terminate as of the Effective Time;

(ii) any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any Ancillary Agreement;

(iii) any Liability for the sale, lease, construction or receipt of goods, property or services purchased, obtained or used in the ordinary course of business by a member of one Group from a member of the other Group prior to the Effective Time;

(iv) any Liability that the parties may have with respect to indemnification or contribution or other obligation pursuant to this Agreement, the Master Agreement, any Ancillary Agreement or otherwise for claims brought against the parties by Third Parties, which Liability shall be governed by the provisions of this Article IV and Article V and, if applicable, the appropriate provisions of the Master Agreement or the Ancillary Agreements; or

(v) any Liability the release of which would result in the release of any Person other than a Person released pursuant to this Section 4.1 .

In addition, nothing contained in Section 4.1(a) shall release any member of the Vornado Group from honoring its existing obligations to indemnify any director, trustee, officer or employee of Newco who was a director, trustee, officer or employee of any member of the Vornado Group on or prior to the Effective Time, to the extent such director, trustee, officer or employee becomes a named defendant in any Action with respect to which such director, trustee, officer or employee was entitled to such indemnification pursuant to such existing obligations; it being understood that, if the underlying obligation giving rise to such Action is a Newco Liability, Newco shall indemnify Vornado for such Liability (including Vornado’s costs to indemnify the director, trustee, officer or employee) in accordance with the provisions set forth in this Article IV .

(d) No Claims. Newco shall not make, and shall not permit any member of the Newco Group to make, any claim or demand, or commence any Action asserting any claim or

demand, including any claim of contribution or any indemnification, against Vornado or any other member of the Vornado Group, or any other Person released pursuant to Section 4.1(a) , with respect to any Liabilities released pursuant to Section 4.1(a) . Vornado shall not make, and shall not permit any other member of the Vornado Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification against Newco or any other member of the Newco Group, or any other Person released pursuant to Section 4.1(b) , with respect to any Liabilities released pursuant to Section 4.1(b) .

(e) Execution of Further Releases. At any time at or after the Effective Time, at the request of either Newco or Vornado, the other Party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions of this Section 4.1 .

4.2 Indemnification by Newco . Except as otherwise specifically set forth in this Agreement or in any Ancillary Agreement, to the fullest extent permitted by Law, Newco OP shall, and shall cause its Subsidiaries to, indemnify, defend and hold harmless Vornado, Vornado OP, each other member of the Vornado Group and each of their respective past, present and future directors, trustees, officers, employees and agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “ Vornado Indemnitees ”), from and against any and all Liabilities of the Vornado Indemnitees relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):

(a) any Newco Liability;

(b) any failure of Newco, any other member of the Newco Group or any other Person to pay, perform or otherwise promptly discharge any Newco Liabilities in accordance with their terms, whether prior to, on or after the Effective Time;

(d) except to the extent it relates to a Vornado Liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement, arrangement, commitment or understanding for the benefit of any member of the Newco Group by any member of the Vornado Group that is required to be novated pursuant to Section 2.5 of this Agreement and that survives following the Distribution (other than as a result of a breach thereof by any member of the Vornado Group after the Effective Time).

In order to induce Vornado and Vornado OP to enter into this Agreement and for other good and valuable consideration, Newco hereby irrevocably guarantees the due and punctual performance and observance by Newco OP of its obligations contained in this Section 4.2 , subject, in each case, to all of the terms, provisions and conditions herein, and Vornado, Vornado OP and the other Vornado Indemnitees shall not be required to seek recovery pursuant to any set-off of any amounts payable under this Agreement or otherwise prior to seeking recovery from Newco; provided that Newco shall in no event be liable for any percentage of indemnification obligations that exceeds its then current ownership percentage in Newco OP.

4.3 Indemnification by Vornado . Except as otherwise specifically set forth in this Agreement or in any Ancillary Agreement, to the fullest extent permitted by Law, Vornado OP shall, and shall cause its Subsidiaries to, indemnify, defend and hold harmless Newco, Newco OP, each other member of the Newco Group and each of their respective past, present and future directors, trustees, officers, employees or agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “ Newco Indemnitees ”), from and against any and all Liabilities of the Newco Indemnitees relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):

(a) any Vornado Liability;

(b) any failure of Vornado, any other member of the Vornado Group or any other Person to pay, perform or otherwise promptly discharge any Vornado Liabilities in accordance with their terms, whether prior to, on or after the Effective Time;

(c) any breach by Vornado or any other member of the Vornado Group of this Agreement or any of the Ancillary Agreements; and

(d) except to the extent it relates to a Newco Liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement, arrangement, commitment or understanding for the benefit of any member of the Vornado Group by any member of the Newco Group that is required to be novated pursuant to Section 2.5 of this Agreement and that survives following the Distribution (other than as a result of a breach thereof by any member of the Newco Group after the Effective Time).

In order to induce Newco and Newco OP to enter into this Agreement and for other good and valuable consideration, Vornado hereby irrevocably guarantees the due and punctual performance and observance by Vornado OP of its obligations contained in this Section 4.3 , subject, in each case, to all of the terms, provisions and conditions herein, and Newco, Newco OP and the other Newco Indemnitees shall not be required to seek recovery pursuant to any set-off of any amounts payable under this Agreement or otherwise prior to seeking recovery from Vornado; provided that Vornado shall in no event be liable for any percentage of indemnification obligations that exceeds its then current ownership percentage in Vornado OP.

4.4 Indemnification Obligations Net of Insurance Proceeds and Other Amounts .

(a) The Parties intend that any Liability subject to indemnification, contribution or reimbursement pursuant to this Article IV or Article V will be net of Insurance Proceeds or other amounts actually recovered (net of any out-of-pocket costs or expenses incurred in the collection thereof) from any Person by or on behalf of the Indemnitee in respect of any indemnifiable Liability. Accordingly, the amount which either Newco or Vornado (an “ Indemnifying Party ”) is required to pay to any Person entitled to indemnification or contribution hereunder (an “ Indemnitee ”) will be reduced by any Insurance Proceeds or other amounts actually recovered (net of any out-of-pocket costs or expenses incurred in the collection thereof) from any Person by or on behalf of the Indemnitee in respect of the related Liability. If

an Indemnitee receives a payment (an “ Indemnity Payment ”) required by this Agreement from an Indemnifying Party in respect of any Liability and subsequently receives Insurance Proceeds or any other amounts in respect of the related Liability, then the Indemnitee will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds or such other amounts (net of any out-of-pocket costs or expenses incurred in the collection thereof) had been received, realized or recovered before the Indemnity Payment was made.

(b) The Parties agree that an insurer that would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of any provision contained in this Agreement or any Ancillary Agreement have any subrogation rights with respect thereto, it being understood that no insurer or any other Third Party shall be entitled to a “windfall” (i.e., a benefit they would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification and contribution provisions hereof. Each Party shall, and shall cause the members of its Group to, use commercially reasonable efforts (taking into account the probability of success on the merits and the cost of expending such efforts, including attorneys’ fees and expenses) to collect or recover any Insurance Proceeds that may be collectible or recoverable respecting the Liabilities for which indemnification or contribution may be available under this Article IV ; provided that the Indemnitee’s ability or inability to collect or recover any such Insurance Proceeds shall not limit the Indemnifying Party’s obligations under this Agreement. Notwithstanding the foregoing, an Indemnifying Party may not delay making any indemnification payment required under the terms of this Agreement, or otherwise satisfying any indemnification obligation, pending the outcome of any Action to collect or recover Insurance Proceeds, and an Indemnitee need not attempt to collect any Insurance Proceeds prior to making a claim for indemnification or contribution or receiving any Indemnity Payment otherwise owed to it under this Agreement or any Ancillary Agreement.

(c) Any indemnification payment under this Article IV shall be adjusted in accordance with Section 4.4 of the Tax Matters Agreement.

4.5 Procedures for Indemnification of Third-Party Claims .

(a) Notice of Claims. If, at or following the date of this Agreement, an Indemnitee shall receive notice or otherwise learn of the assertion by a Person (including any Governmental Authority) who is not a member of the Vornado Group or the Newco Group of any claim or of the commencement by any such Person of any Action (collectively, a “ Third-Party Claim ”) with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnitee pursuant to Section 4.2 or 4.3 , or any other Section of this Agreement or any Ancillary Agreement, such Indemnitee shall give such Indemnifying Party written notice thereof as promptly as is reasonably practicable, but in any event within twenty (20) days (or sooner if the nature of the Third-Party Claim so requires) after becoming aware of such Third-Party Claim. Any such notice shall describe the Third-Party Claim in reasonable detail, including the facts and circumstances giving rise to such claim for indemnification, and include copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notwithstanding the foregoing, the failure of an Indemnitee to provide notice in accordance with this Section 4.5(a) shall not relieve an Indemnifying Party of its indemnification obligations under this Agreement, except to the extent to which the

Indemnifying Party is actually prejudiced by the Indemnitee’s failure to provide notice in accordance with this Section 4.5(a) .

(b) Control of Defense. An Indemnifying Party may elect to defend (and seek to settle or compromise), at its own expense and with its own counsel, any Third-Party Claim, provided that, prior to the Indemnifying Party assuming and controlling defense of such Third-Party Claim, it shall first confirm to the Indemnitee in writing that, assuming the facts presented to the Indemnifying Party by the Indemnitee being true, the Indemnifying Party shall indemnify the Indemnitee for any damages to the extent resulting from, or arising out of, such Third-Party Claim; provided , however , that if the Indemnifying Party (i) becomes aware that the facts presented at the time the Indemnifying Party delivered such acknowledgement are not true and/or (ii) becomes aware of new or additional facts that provide a reasonable basis for asserting that the Indemnifying Party does not have an indemnification obligation in respect of such Third-Party Claim, then the Indemnifying Party may withdraw such acknowledgment. Within thirty (30) days after the receipt of a notice from an Indemnitee in accordance with Section 4.5(a) (or sooner, if the nature of the Third-Party Claim so requires), the Indemnifying Party shall provide written notice to the Indemnitee indicating whether the Indemnifying Party shall assume responsibility for defending the Third-Party Claim. If an Indemnifying Party elects not to assume responsibility for defending any Third-Party Claim or fails to notify an Indemnitee of its election within thirty (30) days after receipt of the notice from an Indemnitee as provided in Section 4.5(a) , then the Indemnitee that is the subject of such Third-Party Claim shall be entitled to continue to conduct and control the defense of such Third-Party Claim.

(c) Allocation of Defense Costs . If an Indemnifying Party has elected to assume the defense of a Third-Party Claim, then such Indemnifying Party shall be solely liable for all fees and expenses incurred by it in connection with the defense of such Third-Party Claim and shall not be entitled to seek any indemnification or reimbursement from the Indemnitee for any such fees or expenses incurred by the Indemnifying Party during the course of the defense of such Third-Party Claim by such Indemnifying Party, regardless of any subsequent decision by the Indemnifying Party to reject or otherwise abandon its assumption of such defense. If an Indemnifying Party elects not to assume responsibility for defending any Third-Party Claim or fails to notify an Indemnitee of its election within thirty (30) days after receipt of a notice from an Indemnitee as provided in Section 4.5(a) , and the Indemnitee conducts and controls the defense of such Third-Party Claim and the Indemnifying Party has an indemnification obligation with respect to such Third-Party Claim, then the Indemnifying Party shall be liable for all reasonable fees and expenses incurred by the Indemnitee in connection with the defense of such Third-Party Claim.

(d) Right to Monitor and Participate. An Indemnitee that does not conduct and control the defense of any Third-Party Claim, or an Indemnifying Party that has failed to elect to defend any Third-Party Claim as contemplated hereby, nevertheless shall have the right to employ separate counsel (including local counsel as necessary) of its own choosing to monitor and participate in (but not control) the defense of any Third-Party Claim for which it is a potential Indemnitee or Indemnifying Party, but the fees and expenses of such counsel shall be at the expense of such Indemnitee or Indemnifying Party, as the case may be, and the provisions of Section 4.5(c) shall not apply to such fees and expenses. Notwithstanding the foregoing, but subject to Sections 6.7 and 6.8 , such Party shall cooperate with the Party entitled to conduct and

control the defense of such Third-Party Claim in such defense and make available to the controlling Party, at the non-controlling Party’s expense, all witnesses, information and materials in such Party’s possession or under such Party’s control relating thereto as are reasonably required by the controlling Party. In addition to the foregoing, if any Indemnitee shall in good faith determine that such Indemnitee and the Indemnifying Party have actual or potential differing defenses or conflicts of interest between them that make joint representation inappropriate, then the Indemnitee shall have the right to employ separate counsel (including local counsel as necessary) and to participate in (but not control) the defense, compromise, or settlement thereof, and the Indemnifying Party shall bear the reasonable fees and expenses of such counsel for all Indemnitees.

(e) No Settlement. Neither Party may settle or compromise any Third-Party Claim for which either Party (or a member of its Group) is seeking to be indemnified hereunder without the prior written consent of the other Party, which consent may not be unreasonably withheld, unless such settlement or compromise is solely for monetary damages, does not involve any finding or determination of wrongdoing or violation of Law by the other Party (or any member of its Group that are parties thereto) and provides for a full, unconditional and irrevocable release of the other Party (and all members of its Group that are parties thereto) from all Liability in connection with the Third-Party Claim. The Parties hereby agree that if a Party presents the other Party with a written notice containing a proposal to settle or compromise a Third-Party Claim for which either Party or a member of its Group is seeking to be indemnified hereunder and the Party receiving such proposal does not respond in any manner to the Party presenting such proposal within thirty (30) days (or within any such shorter time period that may be required by applicable Law or court order) of receipt of such proposal, then the Party receiving such proposal shall be deemed to have consented to the terms of such proposal.

4.6 Additional Matters .

(a) Timing of Payments. Indemnification or contribution payments in respect of any Liabilities for which an Indemnitee is entitled to indemnification or contribution under this Article IV shall be paid reasonably promptly (but in any event within thirty (30) days of the final determination of the amount that the Indemnitee is entitled to as indemnification or contribution under this Article IV ) by the Indemnifying Party to the Indemnitee as such Liabilities are incurred upon demand by the Indemnitee, including reasonably satisfactory documentation setting forth the basis for the amount of such indemnification or contribution payment, including documentation with respect to calculations made and consideration of any Insurance Proceeds that actually reduce the amount of such Liabilities. The indemnity and contribution provisions contained in this Article IV shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Indemnitee, and (ii) the knowledge by the Indemnitee of Liabilities for which it might be entitled to indemnification hereunder.

(b) Notice of Direct Claims. Any claim for indemnification or contribution under this Agreement or any Ancillary Agreement that does not result from a Third-Party Claim shall be asserted by written notice given by the Indemnitee to the applicable Indemnifying Party as promptly as is reasonably practicable, but in any event within twenty (20) days (or sooner if the nature of the claim so requires) after becoming aware of such claim; provided that the failure

by an Indemnitee to so assert any such claim shall not relieve the Indemnifying Party of its obligations hereunder except to the extent (if any) that the Indemnifying Party is prejudiced thereby. Such Indemnifying Party shall have a period of thirty (30) days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such thirty (30)-day period, the Indemnifying Party shall be deemed to have refused to accept responsibility for such claim. If such Indemnifying Party does not respond within such thirty (30)-day period or rejects such claim in whole or in part, such Indemnitee shall, subject to the provisions of Article VII , be free to pursue such remedies as may be available to such Party as contemplated by this Agreement and the Ancillary Agreements, as applicable, without prejudice to its continuing rights to pursue indemnification or contribution hereunder.

(c) Pursuit of Claims Against Third Parties. If (i) a Party or any member of its Group incurs any Liability arising out of this Agreement, the Master Agreement or any Ancillary Agreement; (ii) an adequate legal or equitable remedy is not available for any reason against the other Party or any member of its Group to satisfy the Liability incurred by the incurring Party or any member of its Group; and (iii) a legal or equitable remedy may be available to the other Party or any member of its Group against a Third Party for such Liability, then the other Party or any member of its Group shall use its commercially reasonable efforts to cooperate with the incurring Party or member of its Group, at the incurring Party’s expense, to permit the incurring Party or member of its Group to obtain the benefits of such legal or equitable remedy against the Third Party.

(d) Subrogation. In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.

(e) Substitution. In the event of an Action in which the Indemnifying Party is not a named defendant, if either the Indemnitee or Indemnifying Party shall so request, the Parties shall endeavor to substitute the Indemnifying Party for the named defendant. If such substitution or addition cannot be achieved for any reason or is not requested, the named defendant shall allow the Indemnifying Party to manage the Action as set forth in Section 4.5 and this Section 4.6 , and the Indemnifying Party shall fully indemnify the named defendant against all costs of defending the Action (including court costs, sanctions imposed by a court, attorneys’ fees, experts fees and all other external expenses), the costs of any judgment or settlement and the cost of any interest or penalties relating to any judgment or settlement.

4.7 Right of Contribution .

(a) Contribution. If any right of indemnification contained in Section 4.2 or Section 4.3 is held unenforceable or is unavailable for any reason, or is insufficient to hold harmless an Indemnitee in respect of any Liability for which such Indemnitee is entitled to indemnification hereunder, then the Indemnifying Party shall contribute to the amounts paid or

payable by the Indemnitees as a result of such Liability (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the members of its Group, on the one hand, and the Indemnitees entitled to contribution, on the other hand, as well as any other relevant equitable considerations.

(b) Allocation of Relative Fault. Solely for purposes of determining relative fault pursuant to this Section 4.7 : (i) any fault associated with the business conducted with the Delayed Newco Assets or Delayed Newco Liabilities (except for the gross negligence or willful misconduct of a member of the Vornado Group) or with the ownership, operation or activities of the DC Business prior to the Effective Time shall be deemed to be the fault of Newco and the other members of the Newco Group, and no such fault shall be deemed to be the fault of Vornado or any other member of the Vornado Group; and (ii) any fault associated with the ownership, operation or activities of the Vornado Business prior to the Effective Time shall be deemed to be the fault of Vornado and the other members of the Vornado Group, and no such fault shall be deemed to be the fault of Newco or any other member of the Newco Group.

4.8 Covenant Not to Sue . Each Party hereby covenants and agrees that none of it, the members of such Party’s Group or any Person claiming through it shall bring suit or otherwise assert any claim against any Indemnitee, or assert a defense against any claim asserted by any Indemnitee, before any court, arbitrator, mediator or administrative agency anywhere in the world, alleging that: (a) the assumption of any Newco Liabilities by Newco or a member of the Newco Group on the terms and conditions set forth in this Agreement and the Transfer Documents is void or unenforceable for any reason; (b) the retention of any Vornado Liabilities by Vornado or a member of the Vornado Group on the terms and conditions set forth in this Agreement and the Transfer Documents is void or unenforceable for any reason; or (c) the provisions of this Article IV are void or unenforceable for any reason.

4.9 Remedies Cumulative . The remedies provided in this Article IV shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

4.10 Survival of Indemnities . The rights and obligations of each of Vornado and Newco and their respective Indemnitees under this Article IV shall survive (a) the sale or other transfer by either Party or any member of its Group of any Assets or businesses or the assignment by it of any Liabilities; or (b) any merger, consolidation, business combination, sale of all or substantially all of its Assets, restructuring, recapitalization, reorganization or similar transaction involving either Party or any of the members of its Group.

4.11 Certain Tax Procedures .

(a) Indemnification Payments to Newco .

(i) With respect to any period in which Newco has made or will make an election to be taxed as a REIT, notwithstanding any other provisions in this Agreement or any Ancillary Agreement, any indemnification payments to be made to any member of the Newco Group pursuant to Section 4.3 or 4.4 or any indemnification payments to be made to any member of the Newco Group pursuant to any Ancillary

Agreement (a “ Newco Indemnity Payment ”) for any calendar year shall not exceed the sum of

(A) the amount that is determined (x) will not be gross income of Newco or (y) will be Qualifying Income of Newco, in each case for purposes of the Specified REIT Requirements and for any period in which Newco has made any election to be taxed as a REIT, with such determination to be set forth in REIT Guidance,

plus

(B) such additional amount that is estimated can be paid to Newco in such taxable year without causing Newco to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, determined (x) as if the payment of such amount did not constitute Qualifying Income and (y) by taking into account any other payments to Newco (and any other relevant member of the Newco Group) during such taxable year that do not constitute Qualifying Income, which determination shall be (xx) made by independent tax accountants to Newco, and (yy) submitted to and approved by Newco’s outside tax counsel.

Newco shall use commercially reasonable efforts to provide Vornado with a REIT Savings Notice at least fifteen (15) business days before the date on which such Newco Indemnity Payment is due, but any failure to deliver such REIT Savings Notice, whether or not timely, shall not be deemed a waiver of, or otherwise vitiate, this Section 4.11(a)(i).

(ii) Vornado shall place (or cause to be placed) the full amount of any Newco Indemnity Payments otherwise required to be made in a mutually agreed escrow account upon mutually acceptable terms, which shall provide that

(A) the amount in the escrow account shall be treated as the property of Vornado or the applicable member of the Vornado Group, unless it is released from such escrow account to any Indemnitee,

(B) all income earned upon the amount in the escrow account shall be treated as the property of Vornado or the applicable member of the Vornado Group and reported, as and to the extent required by applicable Law, by the escrow agent to the IRS, or any other

taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as income earned by Vornado or the applicable member of the Vornado Group whether or not said income has been distributed during such taxable year,

(C) the amount in the escrow account shall be invested only as determined by Vornado in its sole discretion, provided that such investments shall be limited to (i) AAA-rated money market funds that comply with Rule 2a-7 of the Investment Company Act of 1940, (ii) interest-bearing securities of, or guaranteed as to all principal and interest by, the United States Government with maturities of 90 days or less, or (iii) bank deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.), and

(D) any portion thereof shall not be released to any Newco Indemnitee unless and until Vornado receives any of the following: (x) a letter from Newco’s independent tax accountants indicating the amount that it is estimated can be paid at that time to the Newco Indemnitees without causing Newco to fail to meet the Specified REIT Requirements for the taxable year in which the payment would be made, which determination shall be made by such independent tax accountants or (y) an opinion of outside tax counsel selected by Newco, such opinion to be reasonably satisfactory to Newco, to the effect that, based upon a change in applicable Law after the date on which payment was first deferred hereunder, receipt of the additional amount of Newco Indemnity Payments otherwise required to be paid either would be excluded from gross income of Newco for purposes of the Specified REIT Requirements or would constitute Qualifying Income, in either of which events amounts shall be released from the escrow account to the applicable Newco Indemnitees in an amount equal to the lesser of the unpaid Newco Indemnity Payments due and owing (determined without regard to this Section

4.11(a) ) or the maximum amount stated in the letter referred to in clause (D)(x) above.

(iii) Any amount held in escrow pursuant to Section 4.11(a)(ii) for ten (10) years shall be released from such escrow to be used as determined by Vornado in its sole and absolute discretion.

(iv) Newco shall bear all costs and expenses with respect to the escrow.

(v) Vornado shall cooperate in good faith with Newco (including amending this Section 4.11(a) at the reasonable request of Newco) in order to (1) maximize the portion of the payments that may be made to the Newco Indemnitees hereunder without causing Newco to fail to meet the Specified REIT Requirements, (2) improve Newco’s chances of securing a favorable ruling from the IRS if Newco should seek to obtain such a ruling as to the matters described in Section 4.11(a)(i)(A), or (3) assist Newco in obtaining a favorable opinion from its outside tax counsel or determination from its tax accountants as described in this Section 4.11(a) . Such cooperation shall include, for example, agreeing, at the request of Newco, to make payments hereunder to a taxable REIT subsidiary of Newco or an Affiliate or designee of Newco. Newco shall reimburse Vornado for all reasonable costs and expenses of such cooperation.

(b) Indemnification Payments to Vornado .

(i) With respect to any period in which Vornado has made or will make an election to be taxed as a REIT, notwithstanding any other provisions in this Agreement or any Ancillary Agreement, any indemnification payments to be made to any member of the Vornado Group pursuant to Section 4.2 or 4.4 or any indemnification payments to be made to any member of the Vornado Group pursuant to any Ancillary Agreement (a “ Vornado Indemnity Payment ”) for any calendar year shall not exceed the sum of

(A) the amount that is determined (x) will not be gross income of Vornado or (y) will be Qualifying Income of Vornado, in each case for purposes of the Specified REIT Requirements and for any period in which Vornado has made any election to be taxed as a REIT, with such determination to be set forth in REIT Guidance,

plus

(B) such additional amount that is estimated can be paid to Vornado in such taxable year without causing Vornado to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code, determined (x) as if the payment of such amount did not constitute Qualifying Income and (y) by taking into account

any other payments to Vornado (and any other relevant member of the Vornado Group) during such taxable year that do not constitute Qualifying Income, which determination shall be (xx) made by independent tax accountants to Vornado, and (yy) submitted to and approved by Vornado’s outside tax counsel.

Vornado shall use commercially reasonable efforts to provide Newco with a REIT Savings Notice at least fifteen (15) business days before the date on which such Vornado Indemnity Payment is due, but any failure to deliver such REIT Savings Notice, whether or not timely, shall not be deemed a waiver of, or otherwise vitiate, this Section 4.11(b)(i).

(ii) Newco shall place (or cause to be placed) the full amount of any Vornado Indemnity Payments otherwise required to be made in a mutually agreed escrow account upon mutually acceptable terms, which shall provide that

(A) the amount in the escrow account shall be treated as the property of Newco or the applicable member of the Newco Group, unless it is released from such escrow account to any Vornado Indemnitee,

(B) all income earned upon the amount in the escrow account shall be treated as the property of Newco or the applicable member of the Newco Group and reported, as and to the extent required by applicable Law, by the escrow agent to the IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as income earned by Newco or the applicable member of the Newco Group whether or not said income has been distributed during such taxable year,

(C) the amount in the escrow account shall be invested only as determined by Newco in its sole discretion, provided that such investments shall be limited to (i) AAA-rated money market funds that comply with Rule 2a-7 of the Investment Company Act of 1940, (ii) interest-bearing securities of, or guaranteed as to all principal and interest by, the United States Government with maturities of 90 days or less, or (iii) bank deposit accounts of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above investment grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings,

Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.), and

(D) any portion thereof shall not be released to any Vornado Indemnitee unless and until Newco receives any of the following: (x) a letter from Vornado’s independent tax accountants indicating the amount that it is estimated can be paid at that time to the Vornado Indemnitees without causing Vornado to fail to meet the Specified REIT Requirements for the taxable year in which the payment would be made, which determination shall be made by such independent tax accountants or (y) an opinion of outside tax counsel selected by Vornado, such opinion to be reasonably satisfactory to Vornado, to the effect that, based upon a change in applicable Law after the date on which payment was first deferred hereunder, receipt of the additional amount of Vornado Indemnity Payments otherwise required to be paid either would be excluded from gross income of Vornado for purposes of the Specified REIT Requirements or would constitute Qualifying Income, in either of which events amounts shall be released from the escrow account to the applicable Vornado Indemnitees in an amount equal to the lesser of the unpaid Vornado Indemnity Payments due and owing (determined without regard to this Section 4.11(b) ) or the maximum amount stated in the letter referred to in clause (D)(x) above.

(iii) Any amount held in escrow pursuant to Section 4.11(b)(ii) for ten (10) years shall be released from such escrow to be used as determined by Newco in its sole and absolute discretion.

(iv) Vornado shall bear all costs and expenses with respect to the escrow.

(v) Newco shall cooperate in good faith with Vornado (including amending this Section 4.11(b) at the reasonable request of Vornado) in order to (1) maximize the portion of the payments that may be made to the Vornado Indemnitees hereunder without causing Vornado to fail to meet the Specified REIT Requirements, (2) improve Vornado’s chances of securing a favorable ruling from the IRS if Vornado should seek to obtain such a ruling as to the matters described in Section 4.11(b)(i)(A), or (3) assist Vornado in obtaining a favorable opinion from its outside tax counsel or determination from its tax accountants as described in this Section 4.11(b) . Such cooperation shall include, for example, agreeing, at the request of Vornado to make

payments hereunder to a taxable REIT subsidiary of Vornado or an Affiliate or designee of Vornado. Vornado shall reimburse Newco for all reasonable costs and expenses of such cooperation.

ARTICLE V

CERTAIN OTHER MATTERS

5.1 Insurance Matters .(6)

(a) In accordance with the Transition Services Agreement, until [ · ], to the extent permitted by applicable Law, Vornado and Vornado OP shall, and shall cause the relevant members of the Vornado Group to, maintain the insurance coverage applicable to the DC Business pursuant to the terms and conditions and coverages of the existing insurance policies of the Vornado Group in effect as of the Effective Time; provided , however , that in no event shall Vornado, any other member of the Vornado Group or any Vornado Indemnitee have any Liability or obligation whatsoever to any member of the Newco Group in the event that any insurance policy or other contract or policy of insurance shall be terminated or otherwise cease to be in effect for any reason, shall be unavailable or inadequate to cover any Liability of any member of the Newco Group for any reason whatsoever or shall not be renewed or extended with respect to the DC Business beyond the current expiration date. With respect to each insurance policy, the “ Insurance Termination Date ” shall be [], or such earlier date as of which the DC Business ceases to be covered by the insurance policies of the Vornado Group in effect as of the Effective Time in accordance with this Section 5.1(a) . Prior to the Insurance Termination Date, Vornado and Newco shall discuss in good faith whether to continue any insurance coverages beyond the Insurance Termination Date and shall cooperate in good faith to provide for an orderly transition of insurance coverage following the Insurance Termination Date; provided , however , that Vornado shall not be required to continue any such insurance coverages beyond the Insurance Termination Date.

(b) From and after the Effective Time, with respect to any Losses, damages and Liability incurred by any member of the Newco Group prior to the Insurance Termination Date, Vornado will provide Newco with access to, and Newco may, upon ten (10) days’ prior written notice to Vornado, make claims under, Vornado’s Third Party insurance policies in place prior to the Insurance Termination Date and Vornado’s historical policies of insurance, but solely to the extent that such policies provided coverage for members of the Newco Group prior to the Insurance Termination Date; provided that such access to, and the right to make claims under, such insurance policies, shall be subject to the terms and conditions of such insurance policies, including any limits on coverage or scope, any deductibles and other fees and expenses, and shall be subject to the following additional conditions:

(i) Newco shall report any claim to Vornado, as promptly as is reasonably practicable, and in any event in sufficient time so that such claim may be made in accordance with Vornado’s claim reporting procedures in effect immediately

(6) NTD: Subject to review and revision based on the terms of the Transition Services Agreement.

prior to the Effective Time (or in accordance with any modifications to such procedures after the Effective Time communicated by Vornado to Newco in writing);

(ii) Newco and the members of the Newco Group shall exclusively bear and be liable for (and neither Vornado nor any members of the Vornado Group shall have any obligation to repay or reimburse Newco or any member of the Newco Group for), and shall indemnify, hold harmless and reimburse Vornado and the members of the Vornado Group for, any deductibles, self-insured retention, fees and expenses to the extent resulting from any access to, or any claims made by Newco or any other members of the Newco Group or otherwise made in respect of Losses of the DC Business under, any insurance provided pursuant to this Section 5.1(b) , including any Indemnity Payments, settlements, judgments, legal fees and allocated claims expenses and claim handling fees, whether such claims are made by members of the Newco Group, its employees or Third Parties; and

(iii) Newco shall exclusively bear and be liable for (and neither Vornado nor any members of the Vornado Group shall have any obligation to repay or reimburse Newco or any member of the Newco Group for) all uninsured, uncovered, unavailable or uncollectible amounts of all such claims made by Newco or any member of the Newco Group under the policies as provided for in this Section 5.1(b) . In the event an insurance policy aggregate is exhausted, or believed likely to be exhausted, due to noticed claims, the Newco Group, on the one hand, and the Vornado Group, on the other hand, shall be responsible for their pro rata portion of the reinstatement premium, if any, based upon the Losses of such Group submitted to Vornado’s insurance carrier(s) (including any submissions prior to the Insurance Termination Date). To the extent that the Vornado Group or the Newco Group is allocated more than its pro rata portion of such premium due to the timing of Losses submitted to Vornado’s insurance carrier(s), the other Party shall promptly pay the first Party an amount so that each Group has been properly allocated its pro rata portion of the reinstatement premium. Subject to the following sentence, Vornado may elect not to reinstate the policy aggregate. In the event that, at any time prior to the Insurance Termination Date, Vornado elects not to reinstate the policy aggregate, it shall provide prompt written notice to Newco, and Newco may direct Vornado in writing to, and Vornado shall, in such case, reinstate the policy aggregate; provided that Newco shall be responsible for all reinstatement premiums and other costs associated with such reinstatement.

(c) Except as provided in Section 5.1(b) , from and after the Insurance Termination Date, neither Newco nor any member of the Newco Group shall have any rights to or under any of the insurance policies of Vornado or any other member of the Vornado Group. At the Insurance Termination Date, Newco shall, unless it has obtained the prior written consent of Vornado or Vornado OP, have in effect all insurance programs required to comply with Newco’s contractual obligations and such other insurance policies required by Law or as reasonably necessary or appropriate for companies operating a business similar to Newco’s. Such insurance programs may include but are not limited to general liability, commercial auto liability, worker’s compensation, employer’s liability, product/completed operations liability, pollution legal liability, surety bonds, professional services liability, property, cargo,

employment practices liability, employee dishonesty/crime, directors’ and officers’ liability and fiduciary liability.

(d) Neither Newco nor any member of the Newco Group, in connection with making a claim under any insurance policy of Vornado or any member of the Vornado Group pursuant to this Section 5.1 , shall take any action that would be reasonably likely to (i) have an adverse impact on the then-current relationship between Vornado or any member of the Vornado Group, on the one hand, and the applicable insurance company, on the other hand; (ii) result in the applicable insurance company terminating or reducing coverage, or increasing the amount of any premium owed by Vornado or any member of the Vornado Group under the applicable insurance policy; or (iii) otherwise compromise, jeopardize or interfere with the rights of Vornado or any member of the Vornado Group under the applicable insurance policy.

(e) All payments and reimbursements by Newco pursuant to this Section 5.1 will be made within fifteen (15) days after Newco’s receipt of an invoice therefor from Vornado. If Vornado incurs costs to enforce Newco’s obligations herein, Newco agrees to indemnify and hold harmless Vornado for such enforcement costs, including reasonable attorneys’ fees pursuant to Section 4.6(b) . Vornado shall retain the exclusive right to control its insurance policies and programs, including the right to exhaust, settle, release, commute, buy-back or otherwise resolve disputes with respect to any of its insurance policies and programs and to amend, modify or waive any rights under any such insurance policies and programs, notwithstanding whether any such policies or programs apply to any Newco Liabilities and/or claims Newco has made or could make in the future, and no member of the Newco Group shall erode, exhaust, settle, release, commute, buyback or otherwise resolve disputes with Vornado’s insurers with respect to any of Vornado’s insurance policies and programs, or amend, modify or waive any rights under any such insurance policies and programs. Newco shall cooperate with Vornado and share such information as is reasonably necessary in order to permit Vornado to manage and conduct its insurance matters as it deems appropriate. Neither Vornado nor any of the members of the Vornado Group shall have any obligation to secure extended reporting for any claims under any Liability policies of Vornado or any member of the Vornado Group for any acts or omissions by any member of the Newco Group incurred prior to the Insurance Termination Date.

(f) This Agreement shall not be considered as an attempted assignment of any policy of insurance or as a contract of insurance and shall not be construed to waive any right or remedy of any member of the Vornado Group in respect of any insurance policy or any other contract or policy of insurance.

(g) Newco does hereby, for itself and each other member of the Newco Group, agree that no member of the Vornado Group shall have any Liability whatsoever as a result of the insurance policies and practices of Vornado and the members of the Vornado Group as in effect at any time, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any policy, the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise.

5.2 Late Payments . Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount not paid when due pursuant to this

Agreement or any Ancillary Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within thirty (30) days of such bill, invoice or other demand) shall accrue interest at a rate per annum equal to Prime Rate plus two (2%) percent.

5.3 Treatment of Payments for Tax Purposes . For all Tax purposes, the Parties and the members of their respective Groups shall treat (i) any payment made pursuant to this Agreement (other than payments representing interest) as either a contribution by the relevant entity or a distribution by the relevant entity (or as adjustments to such contribution or distribution) occurring immediately prior to the applicable contribution or Distribution, as the case may be, or as a payment of an assumed or retained Liability; and (ii) any payment of interest as taxable or deductible, as the case may be, to the party entitled under this Agreement to retain such payment or required under this Agreement to make such payment, in either case except as otherwise required by applicable Law.

5.4 Post-Effective Time Conduct . The parties hereto acknowledge that, after the Effective Time, each Party and its Group shall be independent of the other Party and its Group, with responsibility for its and their own actions and inactions and its and their own Liabilities relating to, arising out of or resulting from the conduct of its and their business, operations and activities following the Effective Time, except as may otherwise be provided in any Ancillary Agreement, and each Party shall (except as otherwise provided in Article IV ) use commercially reasonable efforts to prevent such Liabilities from being inappropriately borne by the other Party or the members of its Group.

5.5 Non-Solicitation Covenant . For the period of two (2) years from and after the Effective Time, Newco shall not, and shall procure that the other members of the Newco Group shall not, directly or indirectly, solicit or hire any employees of the Vornado Group who have been engaged in providing services to the Newco Group pursuant to the Transition Services Agreement without the prior written consent of Vornado; provided , however , that (i) an individual shall not be deemed to have been solicited for employment or hired in violation of this Section 5.5 if such employee has ceased to be employed by any member of the Vornado Group for at least six (6) months prior to the date when any solicitation activity occurs, and (ii) this Section 5.5 shall not prohibit any general offers of employment to the public, including through a bona fide search firm, so long as it is not specifically targeted toward employees of the Vornado Group.

ARTICLE VI
EXCHANGE OF INFORMATION; CONFIDENTIALITY

6.1 Agreement for Exchange of Information .

(a) Subject to Section 6.9 and any other applicable confidentiality obligations, each of Vornado and Newco, on behalf of itself and each member of its Group, agrees to use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the other Party and the members of such other Party’s Group, at any time before, on or after the Effective Time, as soon as reasonably practicable after written request therefor, any information (or a copy thereof) in the possession or under the control of such Party or its Group

to the extent that (i) such information relates to the DC Business, or any Newco Asset or Newco Liability, if Newco is the requesting Party, or to the Vornado Business, or any Vornado Asset or Vornado Liability, if Vornado is the requesting Party; (ii) such information is required by the requesting Party to comply with its obligations under this Agreement, the Master Agreement, any Ancillary Agreement or any Transfer Document; or (iii) such information is required by the requesting Party to comply with any obligation imposed by any Governmental Authority; provided , however , that, in the event that the Party to whom the request has been made determines that any such provision of information could be detrimental to the Party providing the information, violate any Law or agreement, or waive any privilege available under applicable Law, including any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit compliance with such obligations to the extent and in a manner that avoids any such harm or consequence. The Party providing information pursuant to this Section 6.1 shall only be obligated to provide such information in the form, condition and format in which it then exists, and in no event shall such Party be required to perform any improvement, modification, conversion, updating or reformatting of any such information, and nothing in this Section 6.1 shall expand the obligations of a Party under Section 6.4 .

6.2 Ownership of Information . The provision of any information pursuant to Section 6.1 or Section 6.7 shall not affect the ownership of such information (which shall be determined solely in accordance with the terms of this Agreement and the Ancillary Agreements), or constitute a grant of rights in or to any such information.

6.3 Compensation for Providing Information . The Party requesting information agrees to reimburse the other Party for the reasonable costs, if any, of creating, gathering, copying, transporting and otherwise complying with the request with respect to such information (including any reasonable costs and expenses incurred in any review of information for purposes of protecting the Privileged Information of the providing Party or in connection with the restoration of backup media for purposes of providing the requested information) to the extent that such costs are incurred in connection with such other Party’s provision of information in response to the requesting Party. Except as may be otherwise specifically provided elsewhere in this Agreement, any Ancillary Agreement or any other agreement between the Parties, such costs shall be computed in accordance with the providing Party’s standard methodology and procedures.

6.4 Record Retention . To facilitate the possible exchange of information pursuant to this Article VI and other provisions of this Agreement after the Effective Time, the parties hereto agree to use their commercially reasonable efforts, which shall be no less rigorous than those used for retention of Vornado’s or JBG Properties’ own information, to retain all information in their respective possession or control on the Effective Time in accordance with the policies of such Persons as in effect on the Effective Time or such other policies as may be reasonably adopted by such Persons after the Effective Time; provided , however , that such policies at least provide for the retention of documents until the expiration of the applicable statute of limitations (giving effect to any extensions thereof). Notwithstanding the foregoing in this Section 6.4 , the Tax Matters Agreement will govern the retention of Tax-related records.

6.5 Limitations of Liability . No party hereto shall have any Liability to any other party hereto in the event that any information exchanged or provided pursuant to this

Agreement is found to be inaccurate in the absence of gross negligence or willful misconduct by the party providing such information. No party hereto shall have any Liability to any other party if any information is destroyed after commercially reasonable efforts by such party to comply with the provisions of Section 6.4 .

6.6 Other Agreements Providing for Exchange of Information .

(a) The rights and obligations granted under this Article VI are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange, retention or confidential treatment of information set forth in the Master Agreement or any Ancillary Agreement.

(b) Any party hereto that receives, pursuant to a request for information in accordance with this Article VI , Tangible Information that is not relevant to its request shall, at the request of the providing Party, (i) return it to the providing Party or, at the providing Party’s request, destroy such Tangible Information; and (ii) deliver to the providing Party written confirmation that such Tangible Information was returned or destroyed, as the case may be, which confirmation shall be signed by an authorized representative of the requesting Party.

6.7 Production of Witnesses; Records; Cooperation .

(a) After the Effective Time, except in the case of an adversarial Action or Dispute between Vornado and Newco, or any members of their respective Groups, each Party shall use its commercially reasonable efforts to make available to the other Party, upon written request, the former, current and future directors, trustees, officers, employees, other personnel and agents of the members of its respective Group as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available without undue burden, to the extent that any such Person (giving consideration to business demands of such directors, trustees, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any Action in which the requesting Party (or member of its Group) may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought hereunder. The requesting Party shall bear all costs and expenses in connection therewith.

(b) If an Indemnifying Party chooses to defend or to seek to compromise or settle any Third-Party Claim, the other Party shall make available to such Indemnifying Party, upon written request, the former, current and future directors, trustees, officers, employees, other personnel and agents of the members of its respective Group as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available without undue burden, to the extent that any such Person (giving consideration to business demands of such directors, trustees, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with such defense, settlement or compromise, or such prosecution, evaluation or pursuit, as the case may be, and shall otherwise cooperate in such defense, settlement or compromise, or such prosecution, evaluation or pursuit, as the case may be.

(c) Without limiting the foregoing, the Parties shall cooperate and consult to the extent reasonably necessary with respect to any Actions.

(d) Without limiting any provision of this Section 6.7 , each of the Parties agrees to cooperate, and to cause each member of its respective Group to cooperate, with each other in the defense of any infringement or similar claim with respect any Intellectual Property and shall not claim to acknowledge, or permit any member of its respective Group to claim to acknowledge, the validity or infringing use of any Intellectual Property of a Third Party in a manner that would hamper or undermine the defense of such infringement or similar claim.

(e) The obligation of the Parties to provide witnesses pursuant to this Section 6.7 is intended to be interpreted in a manner so as to facilitate cooperation and shall include the obligation to provide as witnesses, inventors and other officers without regard to whether the witness or the employer of the witness could assert a possible business conflict (subject to the exception set forth in the first sentence of Section 6.7(a) ).

6.8 Privileged Matters .

(a) The Parties recognize that legal and other professional services that have been and will be provided prior to the Effective Time have been and will be rendered for the collective benefit of each of the members of the Vornado Group and the Newco Group, and that each of the members of the Vornado Group and the Newco Group should be deemed to be the client with respect to such services for the purposes of asserting all privileges which may be asserted under applicable Law in connection therewith. The Parties recognize that legal and other professional services will be provided following the Effective Time, which services will be rendered solely for the benefit of the Vornado Group or the Newco Group, as the case may be.

(b) The Parties agree as follows:

(i) Vornado shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to the Vornado Business and not to the DC Business, whether or not the Privileged Information is in the possession or under the control of any member of the Vornado Group or any member of the Newco Group. Vornado shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to any Vornado Liabilities resulting from any Actions that are now pending or may be asserted in the future, whether or not the Privileged Information is in the possession or under the control of any member of the Vornado Group or any member of the Newco Group;

(ii) Newco shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to the DC Business and not to the Vornado Business, whether or not the Privileged Information is in the possession or under the control of any member of the Newco Group or any member of the Vornado Group. Newco shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to any Newco Liabilities

resulting from any Actions that are now pending or may be asserted in the future, whether or not the Privileged Information is in the possession or under the control of any member of the Newco Group or any member of the Vornado Group; and

(iii) if the Parties do not agree as to whether certain information is Privileged Information, then such information shall be treated as Privileged Information, and the Party that believes that such information is Privileged Information shall be entitled to control the assertion or waiver of all privileges and immunities in connection with any such information unless the Parties otherwise agree. The Parties shall use the procedures set forth in Article VII to attempt to resolve any disputes as to whether any information relates solely to the Vornado Business, solely to the DC Business, or to both the Vornado Business and the DC Business.

(c) Subject to the remaining provisions of this Section 6.8 , the Parties agree that they shall have a shared privilege or immunity with respect to all privileges and immunities not allocated pursuant to Section 6.8(b) and all privileges and immunities relating to any Actions or other matters that involve both Parties (or one or more members of their respective Groups) and in respect of which both Parties (or one or more members of their respective Groups) have Liabilities under this Agreement, and that no such shared privilege or immunity may be waived by either Party without the consent of the other Party.

(d) If any Dispute arises between the Parties or any members of their respective Groups regarding whether a privilege or immunity should be waived to protect or advance the interests of either Party and/or any member of their respective Groups, each Party agrees that it shall (i) negotiate with the other Party in good faith; (ii) endeavor to minimize any prejudice to the rights of the other Party; and (iii) not unreasonably withhold consent to any request for waiver by the other Party. Further, each Party specifically agrees that it shall not withhold its consent to the waiver of a privilege or immunity for any purpose except in good faith to protect its own legitimate interests.

(e) In the event of any adversarial Action or Dispute between Vornado and Newco, or any members of their respective Groups, either Party may waive a privilege in which the other Party or member of such other Party’s Group has a shared privilege, without obtaining consent pursuant to Section 6.8(c) ; provided that such waiver of a shared privilege shall be effective only as to the use of information with respect to the Action between the Parties and/or the applicable members of their respective Groups, and shall not operate as a waiver of the shared privilege with respect to any Third Party.

(f) Upon receipt by either Party, or by any member of its respective Group, of any subpoena, discovery or other request that may reasonably be expected to result in the production or disclosure of Privileged Information subject to a shared privilege or immunity or as to which the other Party has the sole right hereunder to assert a privilege or immunity, or if either Party obtains knowledge that any of its, or any member of its respective Group’s, current or former directors, trustees, officers, agents or employees have received any subpoena, discovery or other requests that may reasonably be expected to result in the production or disclosure of such Privileged Information, such Party shall promptly notify the other Party of the existence of the request (which notice shall be delivered to such other Party no later than five (5)

business days following the receipt of any such subpoena, discovery or other request) and shall provide the other Party a reasonable opportunity to review the Privileged Information and to assert any rights it or they may have under this Section 6.8 or otherwise, to prevent the production or disclosure of such Privileged Information.

(g) Any furnishing of, or access or transfer of, any information pursuant to this Agreement is made in reliance on the agreement of Vornado and Newco set forth in this Section 6.8 and in Section 6.9 to maintain the confidentiality of Privileged Information and to assert and maintain all applicable privileges and immunities. The Parties agree that their respective rights to any access to information, witnesses and other Persons, the furnishing of notices and documents and other cooperative efforts between the Parties contemplated by this Agreement, and the transfer of Privileged Information between the Parties and members of their respective Groups pursuant to this Agreement, shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

(h) In connection with any matter contemplated by Section 6.7 or this Section 6.8 , the Parties agree to, and to cause the applicable members of their Group to, use commercially reasonable efforts to maintain their respective separate and joint privileges and immunities, including by executing joint defense and/or common interest agreements where necessary or useful for this purpose.

6.9 Confidentiality .

(a) Confidentiality. Subject to Section 6.10 , from and after the Effective Time until the five (5)-year anniversary of the Effective Time, each of Vornado and Newco, on behalf of itself and each member of its respective Group, agrees to hold, and to cause its respective Representatives to hold, in strict confidence, with at least the same degree of care that applies to Vornado’s or JBG Properties’ respective confidential and proprietary information pursuant to policies in effect as of the Effective Time, all confidential and proprietary information concerning the other Party or any member of the other Party’s Group or their respective businesses that is either in its possession (including confidential and proprietary information in its possession prior to the date hereof) or furnished by any such other Party or any member of such Party’s Group or their respective Representatives at any time pursuant to this Agreement, any Ancillary Agreement or otherwise, and shall not use any such confidential and proprietary information other than for such purposes as shall be expressly permitted hereunder or thereunder, except, in each case, to the extent that such confidential and proprietary information has been (i) in the public domain or generally available to the public, other than as a result of a disclosure by such Party or any member of such Party’s Group or any of their respective Representatives in violation of this Agreement, (ii) later lawfully acquired from other sources by such Party (or any member of such Party’s Group) which sources are not themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such confidential and proprietary information, or (iii) independently developed or generated without reference to or use of any proprietary or confidential information of the other Party or any member of such Party’s Group. If any confidential and proprietary information of one Party or any member of its Group is disclosed to the other Party or any member of such other Party’s Group in connection with providing services to such first Party or any member of such first Party’s Group under this Agreement, the Master Agreement or any Ancillary Agreement, then

such disclosed confidential and proprietary information shall be used only as required to perform such services.

(b) No Release; Return or Destruction. Each Party agrees not to release or disclose, or permit to be released or disclosed, any information addressed in Section 6.9(a) to any other Person, except its Representatives who need to know such information in their capacities as such (who shall be advised of their obligations hereunder with respect to such information), and except in compliance with Section 6.10 . Without limiting the foregoing, when any such information is no longer needed for the purposes contemplated by this Agreement or any Ancillary Agreement, each Party will promptly after request of the other Party either return to the other Party all such information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or notify the other Party in writing that it has destroyed such information (and such copies thereof and such notes, extracts or summaries based thereon).

(c) Third-Party Information; Privacy or Data Protection Laws. Each Party acknowledges that it and members of its Group may presently have and, following the Effective Time, may gain access to or possession of confidential or proprietary information of, or personal information relating to, Third Parties (i) that was received under confidentiality or non-disclosure agreements entered into between such Third Parties, on the one hand, and the other Party or members of such Party’s Group, on the other hand, prior to the Effective Time; or (ii) that, as between the two Parties, was originally collected by the other Party or members of such Party’s Group and that may be subject to and protected by privacy, data protection or other applicable Laws. Each Party agrees that it shall hold, protect and use, and shall cause the members of its Group and its and their respective Representatives to hold, protect and use, in strict confidence the confidential and proprietary information of, or personal information relating to, Third Parties in accordance with privacy, data protection or other applicable Laws and the terms of any agreements that were either entered into before the Effective Time or affirmative commitments or representations that were made before the Effective Time by, between or among the other Party or members of the other Party’s Group, on the one hand, and such Third Parties, on the other hand.

(d) Assignment of Non-Disclosure and Confidentiality Agreements. At or prior to the Effective Time, Vornado shall assign, or cause to be assigned, to a member of the Newco Group any rights under non-disclosure and confidentiality agreements to which any member of the Vornado Group (which is not a member of the Newco Group) is a party to the extent restricting the use or disclosure of information of the DC Business (including any such agreement entered into in connection with the possible sale of the DC Business with any potential purchaser thereof); provided that in the event that such assignment cannot be completed or such agreement also restricts the use or disclosure of information of the Vornado Business, Vornado shall not be required to assign or cause such assignment, but shall enforce, or shall cause to be enforced, such agreements for the benefit of the DC Business as reasonably requested by Newco at Newco’s sole cost and expense.

6.10 Protective Arrangements . In the event that a Party or any member of its Group either determines on the advice of its counsel that it is required to disclose any information pursuant to applicable Law or receives any request or demand under lawful process or from any Governmental Authority to disclose or provide information of the other Party (or

any member of the other Party’s Group) that is subject to the confidentiality provisions hereof, such Party shall notify the other Party (to the extent legally permitted) as promptly as is reasonably practicable under the circumstances prior to disclosing or providing such information, shall consult with the other Party on the advisability of taking steps to resist or narrow such disclosure, and shall cooperate, following the other Party’s written request and at the other Party’s expense, in seeking any appropriate protective order requested by the other Party or in any attempt to resist such disclosure. In the event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand reasonably determines that its failure to disclose or provide such information shall actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide information to the extent required by such Law (as so advised by its counsel) or by lawful process or such Governmental Authority, and the disclosing Party shall promptly provide the other Party with a copy of the information so disclosed, in the same form and format so disclosed, together with a list of all Persons to whom such information was disclosed, in each case to the extent legally permitted.

ARTICLE VII
DISPUTE RESOLUTION

7.1 Good-Faith Negotiation . Either Party seeking resolution of any dispute, controversy or claim arising out of or relating to this Agreement or any Ancillary Agreement (including regarding whether any Assets are Newco Assets, any Liabilities are Newco Liabilities or the validity, interpretation, breach or termination of this Agreement or any Ancillary Agreement) (a “ Dispute ”), shall provide written notice thereof to the other Party (the “ Initial Notice ”), and within fifteen (15) days of the delivery of the Initial Notice, the Parties shall attempt in good faith to negotiate a resolution of the Dispute. The negotiations shall be conducted by executives who hold, at a minimum, the title of vice president. All such negotiations shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. Any resolution reached by the applicable executives through negotiation shall be subject to final approval by the Chief Administrative Officer of Vornado and the Chief Executive Officer of Newco. If the Parties are unable for any reason to resolve a Dispute within fifteen (15) days after the delivery of such notice or if a Party reasonably concludes that the other Party is not willing to negotiate as contemplated by this Section 7.1 , either Party may pursue any and all rights and remedies at Law or in equity available to it with respect to the Dispute. Nothing herein shall limit or otherwise affect the rights of the Parties under Section 10.16 .

7.2 Mediation . Any Dispute not resolved pursuant to Section 7.1 shall, at the written request of a Party (a “ Mediation Request ”), be submitted to nonbinding mediation in accordance with the then-current JAMS procedures, except as modified herein. The mediation shall be held in such place as the Parties may mutually agree in writing. The Parties shall have twenty (20) days from receipt by a Party of a Mediation Request to agree on a mediator from the JAMS panel. If no mediator has been agreed upon by the Parties within twenty (20) days of receipt by a party of a Mediation Request, then a Party may request (on written notice to the other Party), that JAMS appoint a mediator in accordance with the then current JAMS procedures from mediators on the JAMS panel. All mediation pursuant to this clause shall be confidential and shall be treated as compromise and settlement negotiations for purposes of

applicable rules of evidence, and no oral or documentary representations made by the Parties during such mediation shall be admissible for any purpose in any subsequent proceedings. No Party shall disclose or permit the disclosure of any information about the evidence adduced or the documents produced by the other Party in the mediation proceedings or about the existence, contents or results of the mediation without the prior written consent of such other Party, except in the course of a judicial or regulatory proceeding or as may be required by Law or requested by a Governmental Authority or securities exchange. Before making any disclosure permitted by the preceding sentence, the Party intending to make such disclosure shall, to the extent reasonably practicable, give the other Party reasonable written notice of the intended disclosure and afford the other party a reasonable opportunity to protect its interests. If the Dispute has not been resolved within sixty (60) days of the appointment of a mediator, or within ninety (90) days after receipt by a Party of a Mediation Request (whichever occurs sooner), or within such longer period as the Parties may agree to in writing, then the Dispute shall be submitted to binding arbitration in accordance with Section 7.3 .

7.3 Arbitration .

(a) In the event that a Dispute has not been resolved within sixty (60) days of the appointment of a mediator in accordance with Section 7.2 , or within ninety (90) days after receipt by a Party of a Mediation Request (whichever occurs sooner), or within such longer period as the Parties may agree to in writing, then such Dispute shall, upon the written request of a Party (the “ Arbitration Request ”) be submitted to be finally resolved by binding arbitration pursuant to the JAMS Comprehensive Arbitration Rules and Procedures. The arbitration shall be held in the same location as the mediation pursuant to Section 7.2 . Unless otherwise agreed by the Parties in writing, any Dispute to be decided pursuant to this Section 7.3 will be decided (i) before a sole arbitrator if the amount in dispute, inclusive of all claims and counterclaims, totals less than $5 million; or (ii) by a panel of three (3) arbitrators if the amount in dispute, inclusive of all claims and counterclaims, totals $5 million or more. Arbitrators shall be named from the JAMS panel.

(b) The panel of three (3) arbitrators will be chosen as follows: (i) within fifteen (15) days from the date of the receipt of the Arbitration Request, each Party will name an arbitrator; and (ii) the two (2) Party-appointed arbitrators will thereafter, within thirty (30) days from the date on which the second of the two (2) arbitrators was named, name a third, independent arbitrator who will act as chairperson of the arbitral tribunal. In the event that either Party fails to name an arbitrator within fifteen (15) days from the date of receipt of the Arbitration Request, then upon written application by either Party, that arbitrator shall be appointed pursuant to the JAMS Comprehensive Arbitration Rules and Procedures from the JAMS panel. In the event that the two (2) Party-appointed arbitrators fail to appoint the third, then the third, independent arbitrator will be appointed pursuant to the JAMS Comprehensive Arbitration Rules and Procedures. If the arbitration will be before a sole independent arbitrator, then the sole independent arbitrator will be appointed by agreement of the Parties within fifteen (15) days of the date of receipt of the Arbitration Request. If the Parties cannot agree to a sole independent arbitrator, then upon written application by either party, the sole independent arbitrator will be appointed pursuant to the JAMS Comprehensive Arbitration Rules and Procedures from the JAMS panel.

(c) The arbitrator(s) will have the right to award, on an interim basis, or include in the final award, any relief which it deems proper in the circumstances, including money damages (with interest on unpaid amounts from the due date), injunctive relief (including specific performance) and reasonable attorneys’ fees and costs which will be reviewed by the arbitrator(s) for reasonableness; provided that the arbitrator(s) will not award any relief not specifically requested by the Parties and, in any event, will not award any indirect, punitive, exemplary, remote, speculative or similar damages in excess of compensatory damages of the other arising in connection with the transactions contemplated hereby (other than any such Liability to a Third Party with respect to a Third-Party Claim). Upon selection of the arbitrator(s) following any grant of interim relief by a special arbitrator or court pursuant to Section 7.4 , the arbitrator(s) may affirm or disaffirm that relief, and the Parties will seek modification or rescission of the order entered by the court as necessary to accord with the decision of the arbitrator(s). The award of the arbitrator(s) shall be final and binding on the Parties and the members of their respective Groups, and may be enforced in any court of competent jurisdiction. The initiation of mediation or arbitration pursuant to this Article VII will toll the applicable statute of limitations for the duration of any such proceedings.

7.4 Litigation and Unilateral Commencement of Arbitration . Notwithstanding the foregoing provisions of this Article VII , (a) a Party may seek preliminary provisional or injunctive judicial relief with respect to a Dispute without first complying with the procedures set forth in Section 7.1 , Section 7.2 and Section 7.3 if such action is reasonably necessary to avoid irreparable damage and (b) either Party may initiate arbitration before the expiration of the periods specified in Section 7.2 and Section 7.3 if (i) such Party has submitted a Mediation Request or Arbitration Request, as applicable, and the other party has failed, within the applicable periods set forth in Section 7.3 , to agree upon a date for the first mediation session to take place within thirty (30) days after the appointment of such mediator or such longer period as the Parties may agree to in writing or (ii) such Party has failed to comply with Section 7.3 in good faith with respect to commencement and engagement in arbitration. In such event, the other Party may commence and prosecute such arbitration unilaterally in accordance with the JAMS Comprehensive Arbitration Rules and Procedures.

7.5 Conduct During Dispute Resolution Process . Unless otherwise agreed to in writing, the Parties shall, and shall cause their respective members of their Group to, continue to honor all commitments under this Agreement and each Ancillary Agreement to the extent required by such agreements during the course of dispute resolution pursuant to the provisions of this Article VII , unless such commitments are the specific subject of the Dispute at issue.

ARTICLE VIII
FURTHER ASSURANCES AND ADDITIONAL COVENANTS

8.1 Further Assurances .

(a) In addition to the actions specifically provided for elsewhere in this Agreement, each of the parties hereto shall use commercially reasonable best efforts, prior to, on and after the Effective Time, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws, regulations

and agreements to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements.

(b) Without limiting the foregoing, prior to, on and after the Effective Time, each party hereto shall cooperate with the other parties hereto, and without any further consideration, but, from and after the Effective Time, at the expense of the requesting party, execute and deliver, or use commercially reasonable best efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all Approvals or Notifications of, any Governmental Authority or any other Person under any Permit, license, agreement, indenture or other instrument (including any consents or Governmental Approvals), and to take or cause to be taken all such other actions as such party may reasonably be requested to take or cause to be taken by the other parties hereto from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the transfers of the Newco Assets and the Vornado Assets and the assignment and assumption of the Newco Liabilities and the Vornado Liabilities and the other transactions contemplated hereby and thereby. Without limiting the foregoing, each party hereto will, at the reasonable request, cost and expense of another party hereto, take such other actions as may be reasonably necessary to vest in such other Party good and marketable title to the Assets allocated to such party under this Agreement or any of the Ancillary Agreements, free and clear of any Security Interest, if and to the extent it is practicable to do so.

(c) On or prior to the Effective Time, Vornado and Newco in their respective capacities as direct and indirect shareholders of the members of their Groups, shall each ratify any actions which are reasonably necessary or desirable to be taken by Vornado, Newco or any of the members of their respective Groups, as the case may be, to effectuate the transactions contemplated by this Agreement and the Ancillary Agreements.

(d) Vornado and Newco, and each of the members of their respective Groups, waive (and agree not to assert against any of the others) any claim or demand that any of them may have against any of the others for any Liabilities or other claims relating to or arising out of: (i) the failure of Newco or any other member of the Newco Group, on the one hand, or of Vornado or any other member of the Vornado Group, on the other hand, to provide any notification or disclosure required under any state Environmental Law in connection with the Separation or the other transactions contemplated by this Agreement, including the transfer by any member of any Group to any member of the other Group of ownership or operational control of any Assets not previously owned or operated by such transferee; or (ii) any inadequate, incorrect or incomplete notification or disclosure under any such state Environmental Law by the applicable transferor. To the extent any Liability to any Governmental Authority or any Third Party arises out of any action or inaction described in clause (i) or (ii) above, the transferee of the applicable Asset hereby assumes and agrees to pay any such Liability (except in the case of willful misconduct).

ARTICLE IX
TERMINATION

9.1 Termination . This Agreement shall terminate simultaneously with the valid termination of the Master Agreement prior to the Closing Date (as defined in the Master Agreement). Except for a termination described in the immediately preceding sentence, prior to the Closing Date (as defined in the Master Agreement), Newco shall not agree to terminate this Agreement without the prior written consent of JBG Properties, which consent shall not be unreasonably withheld, conditioned or delayed. After the Closing Date (as defined in the Master Agreement), this Agreement may not be terminated except by an agreement in writing signed by a duly authorized officer of each of the parties hereto.

9.2 Effect of Termination . In the event of any termination of this Agreement prior to the Effective Time, no party hereto (nor any of its directors, trustees, officers or employees) shall have any Liability or further obligation to any other party hereto by reason of this Agreement.

ARTICLE X
MISCELLANEOUS

10.1 Counterparts; Entire Agreement; Corporate Power .

(a) This Agreement and each Ancillary Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto.

(b) This Agreement, the Master Agreement, the Ancillary Agreements and the Exhibits, Schedules and Appendices hereto and thereto contain the entire agreement between the parties hereto with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the parties hereto other than those set forth or referred to herein or therein.

(c) Vornado represents on behalf of itself and each other member of the Vornado Group, and Newco represents on behalf of itself and each other member of the Newco Group, as follows:

(i) each such Person has the requisite power and authority and has taken all action necessary in order to execute, deliver and perform this Agreement and each Ancillary Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby; and

(ii) this Agreement and each Ancillary Agreement to which it is a party has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms thereof.

(d) Each party to this Agreement acknowledges that it and each other party is executing certain of the Ancillary Agreements by facsimile, stamp or mechanical signature, and that delivery of an executed counterpart of a signature page to this Agreement or any Ancillary Agreement (whether executed by manual, stamp or mechanical signature) by facsimile or by email in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement or any Ancillary Agreement. Each party expressly adopts and confirms each such facsimile, stamp or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by email in portable document format (PDF)) made in its respective name as if it were a manual signature delivered in person, agrees that it will not assert that any such signature or delivery is not adequate to bind such party to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other parties hereto at any time, it will as promptly as is reasonably practicable cause each such Ancillary Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier.

10.2 Governing Law .

(b) All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in the state courts sitting in the City, County and State of New York, or if jurisdiction over the matter is vested exclusively in federal courts, the United States District Court for the Southern District of New York, and the appellate courts to which orders and judgments thereof may be appealed (the “ Chosen Courts ”). Each of the parties hereto hereby irrevocably and unconditionally (a) submits to the exclusive jurisdiction of the Chosen Courts for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, whether sounding in tort, contract or otherwise, (b) agrees not to commence any such action or proceeding except in such courts, (c) agrees that any claim in respect of any such action or proceeding may be heard and determined in any Chosen Court, (d) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding, and (e) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 10.7 . Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by Law.

10.3 Waiver of Jury Trial . EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN

CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.3 .

10.4 Assignability . Except as set forth in any Ancillary Agreement, this Agreement and each Ancillary Agreement shall be binding upon and inure to the benefit of the parties hereto and the parties thereto, respectively, and their respective successors and permitted assigns; provided , however , that no party hereto nor any such party thereto may assign its rights or delegate its obligations under this Agreement or any Ancillary Agreement without the express prior written consent of the other parties hereto or other parties thereto, as applicable, and any attempt to do so shall be null and void (provided that prior to the Effective Time, Newco shall not assign this Agreement or consent to an assignment of this Agreement without the prior written consent of JBG Properties, which consent shall not be unreasonably withheld, conditioned or delayed). Notwithstanding the foregoing, no such consent shall be required for the assignment of a party’s rights and obligations under this Agreement and the Ancillary Agreements (except as may be otherwise provided in any such Ancillary Agreement) in whole (i.e., the assignment of a party’s rights and obligations under this Agreement and all Ancillary Agreements all at the same time) in connection with a change of control of a party so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to the other parties hereto.

10.5 Subsidiaries . Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary of such Party or by any Person that becomes a Subsidiary of such Party at or after the Effective Time, in each case to the extent such Subsidiary remains a Subsidiary of the applicable Party.

10.6 Third-Party Beneficiaries . Except for the indemnification rights under this Agreement of any Vornado Indemnitee or Newco Indemnitee in their respective capacities as such, and except for JBG Operating Partners, who shall be a Third Party beneficiary of the rights of Newco under this Agreement, (a) the provisions of this Agreement and each Ancillary Agreement are solely for the benefit of the parties hereto and are not intended to confer upon any Person except the parties hereto any rights or remedies hereunder, and (b) there are no Third Party beneficiaries of this Agreement or any Ancillary Agreement and neither this Agreement nor any Ancillary Agreement shall provide any Third Party with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement or any Ancillary Agreement; provided , however , that JBG Properties shall be a Third Party beneficiary of the rights of JBG Properties as provided in this Agreement and the other Ancillary Agreements.

10.7 Notices . All notices, requests, claims, demands or other communications under this Agreement and, to the extent applicable and unless otherwise provided therein, under each of the Ancillary Agreements shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, or by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.7 ):

If to Vornado or, on or prior to the Effective Time, to Newco, then to:

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention: Corporation Counsel
Facsimile: (212) 894-7996

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention: Joseph Macnow
Facsimile: (212) 894-7996

with a copy to (which shall not constitute notice):

Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Attention: William G. Farrar
Facsimile: (212) 558-3588

and, in the case of Newco, with a copy to (which shall not constitute notice):

The JBG Companies
4445 Willard Avenue Suite 400
Chevy Chase, Maryland 20815
Attention: [ · ]
Facsimile: [ · ]

and

Hogan Lovells US LLP
Columbia Square
555 Thirteenth Street, NW
Washington, District of Columbia 20004
Phone: (202) 637-5868
Facsimile: (202) 637-5910

Attention: David W. Bonser, Esq.
E-mail: david.bonser@hoganlovells.com

If to Newco after the Effective Time, then to:

JBG Smith Properties
4445 Willard Avenue Suite 400
Chevy Chase, Maryland 20815
Attention: [ · ]
Facsimile: [ · ]

with a copy to (which shall not constitute notice):

Hogan Lovells US LLP
Columbia Square
555 Thirteenth Street, NW
Washington, District of Columbia 20004
Phone:                                                           (202) 637-5868
Facsimile:                                          (202) 637-5910
Attention:                                          David W. Bonser, Esq.
E-mail:                                                         david.bonser@hoganlovells.com

A Party may, by notice to the other Party, change the address to which such notices are to be given.

10.8 Severability . If any provision of this Agreement or any Ancillary Agreement or the application thereof to any Person or circumstance is determined by an arbitration tribunal or a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the parties hereto shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the parties hereto.

10.9 Force Majeure . No party hereto shall be deemed in default of this Agreement or, unless otherwise expressly provided therein, any Ancillary Agreement for any delay or failure to fulfill any obligation (other than a payment obligation) hereunder or thereunder so long as and to the extent to which any delay or failure in the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. In the event of any such excused delay, the time for performance of such obligations (other than a payment obligation) shall be extended for a period equal to the time lost by reason of the delay. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide written notice to the other Party of the nature and extent of any such Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement and the Ancillary Agreements, as applicable, as soon as reasonably practicable.

10.10 No Set-Off . Except as set forth in any Ancillary Agreement or as otherwise mutually agreed to in writing by the Parties, neither any Party nor any member of such Party’s Group shall have any right of set-off or other similar rights with respect to (a) any amounts received pursuant to this Agreement or any Ancillary Agreement; or (b) any other amounts claimed to be owed to such Party or any member of its Group arising out of this Agreement or any Ancillary Agreement.

10.11 Publicity . Prior to the Effective Time, Vornado and Newco shall consult with JBG Properties before issuing any press release or other public announcement that relates to the transactions contemplated hereby. Any such press release or public announcement shall comply with the requirements in Section 5.3 of the Master Agreement. From and after the Effective Time, the Chief Executive Officer of Newco and the Chief Administrative Officer of Vornado shall consult with each other prior to either Party or any member of their respective Groups issuing any press releases or otherwise making public statements with respect to the Separation, the Distribution or any of the other transactions contemplated hereby or under any Ancillary Agreement and prior to making any filings with any Governmental Authority with respect thereto.

10.12 Expenses . Except as otherwise expressly set forth in this Agreement, the Master Agreement or any Ancillary Agreement, or as otherwise agreed to in writing by the Parties, (a) Newco shall be responsible for all reasonable out-of-pocket Third Party fees, costs and expenses incurred on or prior to the Effective Time in connection with the preparation, execution, delivery and implementation of this Agreement and any Ancillary Agreement, the Separation, the Form 10, the Plan of Reorganization and the Distribution and the consummation of the transactions contemplated hereby and thereby; and (b) all fees, costs and expenses incurred after the Effective Time shall be borne by the Party or its applicable Subsidiary incurring such fees, costs or expenses.

10.13 Headings . The article, section and paragraph headings contained in this Agreement and in the Ancillary Agreements are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement or any Ancillary Agreement.

10.14 Survival of Covenants . Except as expressly set forth in this Agreement or any Ancillary Agreement, the covenants, representations and warranties contained in this Agreement and each Ancillary Agreement, and Liability for the breach of any obligations contained herein, shall survive the Separation and the Distribution and shall remain in full force and effect.

10.15 Waivers of Default . Waiver by a party hereto of any default by another party hereto of any provision of this Agreement or any Ancillary Agreement shall not be deemed a waiver by the waiving party of any subsequent or other default, nor shall it prejudice the rights of any other party. No failure or delay by a party hereto in exercising any right, power or privilege under this Agreement or any Ancillary Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.

10.16 Specific Performance . In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement or any Ancillary Agreement, the party or parties hereto who are, or are to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief in respect of its or their rights under this Agreement or such Ancillary Agreement, in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. The parties hereto agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any Loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by each of the parties hereto. For the avoidance of doubt, JBG Properties shall, during the term of this Agreement, have the right to enforce specifically the obligations of Vornado and Newco set forth herein.

10.17 Amendments . No provisions of this Agreement, including any Exhibit, Schedule or Appendices hereto, or any Ancillary Agreement shall be deemed waived, amended, supplemented or modified by a party hereto, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the party hereto against whom it is sought to enforce such waiver, amendment, supplement or modification. In addition, unless the Master Agreement shall have been terminated in accordance with its terms, any such amendment, waiver, supplement or modification shall be subject to the prior written consent of JBG Operating Partners.

10.18 Interpretation . In this Agreement and any Ancillary Agreement, (a) words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires; (b) the terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement (or the applicable Ancillary Agreement) as a whole (including all of the Schedules, Exhibits and Appendices hereto and thereto) and not to any particular provision of this Agreement (or such Ancillary Agreement); (c) Article, Section, Schedule, Exhibit and Appendix references are to the Articles, Sections, Schedules, Exhibits and Appendices to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified; (d) unless otherwise stated, all references to any agreement shall be deemed to include the exhibits, schedules and annexes to such agreement; (e) the word “including” and words of similar import when used in this Agreement (or the applicable Ancillary Agreement) shall mean “including, without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) unless otherwise specified in a particular case, the word “days” refers to calendar days; (h) references to “business day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions are generally authorized or required by Law to close in the United States or New York, New York; (i) references herein to this Agreement or any other agreement contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the date on which it is executed and as it may be amended, modified or supplemented thereafter, unless otherwise specified; and (j) unless expressly stated to the contrary in this Agreement or in any Ancillary Agreement, all references to “the date hereof,” “the date of this Agreement,” “hereby” and “hereupon” and words of similar import shall all be references to [ · ]. In the case of any conflict between this Agreement and any of the Transition Services Agreement, the Tax Matters Agreement and the Employee Matters Agreement in relation to any matters addressed by such Ancillary Agreement, the applicable Ancillary Agreement shall prevail unless such

Ancillary Agreement explicitly states that this Agreement shall control. In the case of any conflict between this Agreement and the Master Agreement, the Master Agreement shall control.

10.19 Limitations of Liability . Notwithstanding anything in this Agreement to the contrary, but without limiting any recovery expressly provided by Section 7.3 , neither Newco or any member of the Newco Group, on the one hand, nor Vornado or any member of the Vornado Group, on the other hand, shall be liable under this Agreement to the other for any indirect, punitive, exemplary, remote, speculative or similar damages in excess of compensatory damages of the other arising in connection with the transactions contemplated hereby (other than any such Liability with respect to a Third-Party Claim).

10.20 Performance . Vornado will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the Vornado Group. Newco will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the Newco Group. Each Party (including its permitted successors and assigns) further agrees that it will (a) give timely notice of the terms, conditions and continuing obligations contained in this Agreement and any applicable Ancillary Agreement to all of the other members of its Group and (b) cause all of the other members of its Group not to take any action or fail to take any such action inconsistent with such Party’s obligations under this Agreement, any Ancillary Agreement or the transactions contemplated hereby or thereby.

10.21 Mutual Drafting . This Agreement and the Ancillary Agreements shall be deemed to be the joint work product of the parties hereto and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

10.22 No Admission of Liability . The allocation of Assets and Liabilities herein (including on the Schedules hereto) is solely for the purpose of allocation such Assets and Liabilities between Vornado and Newco and is not intended as an admission of liability or responsibility for any alleged Liabilities vis-à-vis any Third Party, including with respect to the Liabilities of any non-wholly owned Subsidiary of Vornado or Newco.

[ Remainder of page intentionally left blank ]

IN WITNESS WHEREOF, the parties have caused this Separation and Distribution Agreement to be executed by their duly authorized representatives.

	VORNADO REALTY TRUST


	By:
		Name:
		Title:


	VORNADO REALTY L.P.


	By:
		Name:
		Title:


	JBG SMITH PROPERTIES


	By:
		Name:
		Title:


	JBG SMITH PROPERTIES LP


	By:
		Name:
		Title:

FINAL FORM

Exhibit E

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT is entered into as of [ · ], 2017 by and among JBG Smith Properties, a Maryland real estate investment trust (the “ Company ”), and the holders listed on Schedule I hereto (each an “ Initial Holder ” and, collectively, the “ Initial Holders ”).

RECITALS

WHEREAS, the Company and JBG SMITH Properties LP, a Delaware limited partnership (the “ Operating Partnership ”), have concurrently engaged in certain combination transactions as more fully set forth in that certain Master Transaction Agreement dated as of October 31, 2016 by and among Vornado Realty Trust, Vornado Realty L.P., JBG Properties Inc., JBG/Operating Partners, L.P., certain affiliates of JBG Properties Inc., the Company and the Operating Partnership (the “ Combination Transactions ”), pursuant to which the Initial Holders have concurrently received, in exchange for their (or certain related parties’) respective interests in the entities participating in the Combination Transactions, common units of limited partnership interest in the Operating Partnership (“ OP Units ”);

WHEREAS, upon the terms and subject to the conditions contained in the Operating Partnership Agreement (as defined below), OP Units will be redeemable for cash or, at the Company’s option, exchangeable for shares of beneficial interest of the Company, par value $0.01 per share (the “ Common Shares ”); and

WHEREAS, as a condition to the Combination Transactions, the Company has agreed to grant the Initial Holders and their permitted assignees and transferees the registration rights set forth in Article II hereof.

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1. Definitions . The following terms, as used herein, have the following meanings:

“ Affiliate ” of any Person means any other Person directly or indirectly controlling or controlled by or under common control with such Person. For the purposes of this definition, “control” when used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“ Agreement ” means this Registration Rights Agreement, as it may be amended, supplemented or restated from time to time.

“ Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in The City of New York, New York are authorized by law to close.

“ Charter ” means the Articles of Amendment and Restatement of the Company as filed with the Secretary of State of the State of Maryland on [ · ], 2017, as the same may be amended, modified or restated from time to time.

“ Combination Transactions ” has the meaning set forth in the recitals hereof.

“ Commission ” means the Securities and Exchange Commission.

“ Common Shares ” has the meaning set forth in the recitals hereof.

“ Company ” has the meaning set forth in the preamble hereof.

“ Effectiveness Period ” has the meaning set forth in Section 2.1(b) .

“ End of Suspension Notice ” has the meaning set forth in Section 2.9(a) .

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ Holder ” means (i) any Initial Holder who is the record or beneficial owner of any Registrable Security or (ii) any assignee or transferee of such Initial Holder (including assignments or transfers of Registrable Securities to such assignees or transferees as a result of the foreclosure on any loans secured by such Registrable Securities) (x) to the extent permitted under the Operating Partnership Agreement or the Charter, as applicable, and (y) provided such assignee or transferee agrees in writing to be bound by all the provisions hereof.

“ Initial Holder ” has the meaning set forth in the preamble hereof.

“ Issuer Shelf Registration Statement ” has the meaning set forth in Section 2.1(b) .

“ Notice and Questionnaire ” has the meaning set forth in Section 2.1(d) .

“ NYSE ” means The New York Stock Exchange.

“ OP Units ” has the meaning set forth in the recitals hereof.

“ Operating Partnership ” has the meaning set forth in the recitals hereof.

“ Operating Partnership Agreement ” means the Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of [ · ](1), 2017, as the same may be amended, modified or restated from time to time.

“ Person ” means an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“ Primary Shares ” has the meaning set forth in Section 2.1(b) .

“ Registrable Securities ” means with respect to any Holder, Common Shares owned, either of record or beneficially, by such Holder that were issued or issuable upon exchange of OP Units and any additional Common Shares issued as a dividend or distribution on, in exchange for, or otherwise in respect of, such shares (including as a result of combinations, recapitalizations, mergers, consolidations, reorganizations or otherwise).

As to any particular Registrable Securities of a Holder, they shall cease to be Registrable Securities in respect of such Holder at the earliest time as one of the following shall have occurred: (i) a registration statement (including a Resale Shelf Registration Statement) covering such shares shall have become effective and all such shares have been disposed of pursuant to such effective registration statement or unless such shares were issued pursuant to an effective registration statement, (ii) such shares have been publicly sold under Rule 144, (iii) all such shares may be sold in one transaction pursuant to Rule 144 or (iv) such shares have been otherwise transferred in a transaction that constitutes a sale thereof under the Securities Act, the Company has delivered to the Holder’s transferee a new certificate or other evidence of ownership for such shares not bearing the Securities Act restricted stock legend and such shares subsequently may be resold or otherwise transferred by such transferee without registration under the Securities Act.

“ Registration Expenses ” shall have the meaning set forth in Section 2.3 .

“ Registration Statement ” shall have the meaning set forth in Section 2.9(a) .

“ Resale Shelf Registration Statement ” shall have the meaning set forth in Section 2.1(a) .

“ Restricted Shares ” means Common Shares issued under an Issuer Shelf Registration Statement which if sold by the holder thereof would constitute “restricted securities” as defined under Rule 144.

“ Rule 144 ” means Rule 144 promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto that may be promulgated by the Commission.

“ Securities Act ” means the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder.

(1) NTD: Insert combination date

“ Selling Holder ” means a Holder who is selling Registrable Securities pursuant to a registration statement under the Securities Act pursuant to the terms hereof.

“ Shelf Registration Statement ” means a Resale Shelf Registration Statement and/or an Issuer Shelf Registration Statement.

“ Suspension Notice ” shall have the meaning set forth in Section 2.9(a) .

ARTICLE II

REGISTRATION RIGHTS

Section 2.1. Shelf Registration.

(a) Subject to Section 2.9 , the Company shall use commercially reasonable efforts to prepare and file, on or before the first Business Day that is thirteen (13) months after the consummation of the Combination Transactions, a “shelf” registration statement with respect to the resale of the Registrable Securities by the Holders thereof on an appropriate form that complies in all material respects with applicable Commission rules for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act (the “ Resale Shelf Registration Statement ”) and permitting registration of such Registrable Securities for resale by such Holders in accordance with the methods of distribution elected by the Holders and set forth in the Resale Shelf Registration Statement and use commercially reasonable efforts to cause such Resale Shelf Registration Statement to become effective as promptly as practicable thereafter. Subject to Sections 2.1(c) and 2.9 , the Company shall keep such Resale Shelf Registration Statement continuously effective for a period ending when all Common Shares covered by the Resale Shelf Registration Statement are no longer Registrable Securities.

(b) The Company may, at its option, satisfy its obligation to prepare and file a Resale Shelf Registration Statement pursuant to Section 2.1(a) with respect to Common Shares issuable upon exchange of OP Units by preparing and filing a registration statement on an appropriate form that complies in all material respects with applicable Commission rules for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act (an “ Issuer Shelf Registration Statement ”) providing for (i) the issuance by the Company, from time to time, to the Holders of such OP Units, of Common Shares registered under the Securities Act (the “ Primary Shares ”) and (ii) to the extent such Primary Shares constitute Restricted Shares, the registered resale thereof by their Holders from time to time in accordance with the methods of distribution elected by the Holders and set forth therein (but not an underwritten offering) and using commercially reasonable efforts to cause such Issuer Shelf Registration Statement to be filed by the first Business Day that is thirteen (13) months after the consummation of the Combination Transactions, and to become effective as promptly as practicable thereafter. Subject to Sections 2.1(c) and 2.9 , the Company shall keep such Issuer Shelf Registration Statement continuously effective for a period (the “ Effectiveness Period ”) expiring on the date all of the OP Units pursuant to which Registrable Securities may be issued have been redeemed for Common Shares or Registrable Securities shall cease to exist. If the Company shall exercise its rights under this Section 2.1(b) , Holders (other than Holders of

Restricted Shares) shall have no right to have Common Shares issued or issuable upon exchange of OP Units included in a Resale Shelf Registration Statement pursuant to Section 2.1(a) .

(c) Subsequent Filing . The Company shall prepare and file such additional registration statements as necessary every three (3) years and use its commercially reasonable efforts to cause such registration statements to become effective so that a Shelf Registration Statement remains continuously effective, subject to Section 2.9 , with respect to resales of Registrable Securities as and for the periods required under Sections 2.1(a) or (b) , as applicable (such subsequent registration statements to constitute a Resale Shelf Registration Statement or an Issuer Shelf Registration Statement, as the case may be, hereunder).

(d) Notice and Questionnaire . At the request of the Company, each Holder shall deliver a duly completed and executed written notice (each such notice, a “ Notice and Questionnaire ”) to the Company (i) notifying the Company of such Holder’s desire to include Registrable Securities held by it in a Resale Shelf Registration Statement, (ii) containing all information about such Holder required to be included in such registration statement in accordance with applicable law, including Item 507 of Regulation S-K promulgated under the Securities Act, as amended from time to time, or any similar successor rule thereto, and (iii) pursuant to which such Holder agrees to be bound by the terms and conditions hereof. At the time a Resale Shelf Registration Statement becomes effective, each Holder that has delivered a duly completed and executed Notice and Questionnaire to the Company on or prior to the date ten (10) Business Days prior to such time of effectiveness shall be named as a selling securityholder in such Resale Shelf Registration Statement and the related prospectus in such a manner as to permit such Holder to deliver such prospectus to purchasers of Registrable Securities in accordance with applicable law. If required by applicable law, subject to the terms and conditions hereof, after effectiveness of the Resale Shelf Registration Statement, the Company shall file a supplement to such prospectus or amendment to the Resale Shelf Registration Statement not less than once a quarter as necessary to name as selling securityholders therein any Holders that provide to the Company a duly completed and executed Notice and Questionnaire and shall use commercially reasonable efforts to cause any post-effective amendment to such Resale Shelf Registration Statement filed for such purpose to be declared effective by the Commission as promptly as reasonably practicable after the filing thereof. Any Holder that has not delivered a duly completed and executed Notice and Questionnaire shall not be entitled to be named as a Selling Holder in, or have the Registrable Securities held by it covered by, a Resale Shelf Registration Statement.

Section 2.2. Registration Procedures; Filings; Information . Subject to Section 2.9 hereof, in connection with any Resale Shelf Registration Statement under Section 2.1(a) , the Company will use its commercially reasonable efforts to effect the registration of the Registrable Securities covered thereby in accordance with the intended method of disposition thereof as quickly as practicable, and, in connection with any Issuer Shelf Registration Statement under Section 2.1(b) , the Company will use its commercially reasonable efforts to effect the registration of the Primary Shares (including for resale, to the extent provided in clause (ii) of Section 2.1(b) ) as quickly as reasonably practicable. In connection with any Shelf Registration Statement:

(a) At the request of the Selling Holder, the Company will, prior to filing a Resale Shelf Registration Statement (or an Issuer Shelf Registration Statement providing for resales pursuant to clause (ii) of Section 2.1(b) ) or prospectus or any amendment or supplement thereto, furnish without charge to each Selling Holder of the Registrable Securities covered by such registration statement copies of such registration statement as proposed to be filed, and thereafter furnish to such Selling Holder such number of conformed copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein, but excluding any documents to be incorporated by reference therein that are publicly available on the Commission’s EDGAR system), the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such Selling Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Selling Holder.

(b) After the filing of a Resale Shelf Registration Statement (or an Issuer Shelf Registration Statement providing for resales pursuant to clause (ii) of Section 2.1(b) ), the Company will promptly notify each Selling Holder of Registrable Securities covered by such registration statement of any stop order issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered.

(c) The parties hereto hereby acknowledge that, generally, pursuant to Section 18 of the Securities Act, no state securities laws requiring, or with respect to, registration or qualification of securities or securities transactions will apply to a security that is a “covered security” (as defined therein). “Covered securities,” for purposes of Section 18 of the Securities Act, includes securities listed or authorized for listing on the NYSE (or certain other national securities exchanges) and securities of the same issuer that are equal in seniority or senior to such securities. In the event that the Shares cease to constitute covered securities, subject to the conditions set forth in this Agreement, the Company will use its commercially reasonable efforts to (i) register or qualify the Registrable Securities under such other securities or “blue sky” laws of such jurisdictions in the United States (where an exemption does not apply) as any Selling Holder reasonably (in light of such Selling Holder’s intended plan of distribution) requests and (ii) cause such Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be reasonably necessary or advisable to enable such Selling Holder to consummate the disposition of the Registrable Securities owned by such Selling Holder; provided that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (c), (B) subject itself to general taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction. The Company will promptly notify each Selling Holder of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction or the initiation of any proceeding for such purpose.

an Issuer Shelf Registration Statement providing for resales pursuant to clause (ii) of Section 2.1(b) ) for sale in any jurisdiction; or (ii) the occurrence of an event requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and promptly make available to each Selling Holder any such supplement or amendment.

(e) The Company will use commercially reasonable efforts to cause all Registrable Securities covered by such Resale Shelf Registration Statement or Primary Shares covered by such Issuer Shelf Registration Statement to be listed on each securities exchange on which similar securities issued by the Company are then listed.

(f) In addition to the Notice and Questionnaire, the Company may require each Selling Holder of Registrable Securities to promptly furnish in writing to the Company such information regarding such selling Holder, the Registrable Securities held by it and the intended method of distribution of the Registrable Securities as the Company may from time to time reasonably request and such other information as may be legally required in connection with such registration. No Holder may include Registrable Securities in any registration statement pursuant to this Agreement unless and until such Holder has furnished to the Company such information. Each Holder further agrees to furnish as soon as reasonably practicable to the Company all information required to be disclosed in order to make information previously furnished to the Company by such Holder not misleading in light of the circumstances in which they were made.

(g) Each Selling Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Sections 2.2(b) or (d) or upon receipt of a Suspension Notice, such Selling Holder will forthwith discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Selling Holder’s receipt of written notice from the Company that such disposition may be made and, if applicable, copies of any supplemented or amended prospectus contemplated by clause (ii) of Section 2.2(d) or, if applicable, prepared under Section 2.9(a) , and, if so directed by the Company, such Selling Holder will deliver to the Company all copies, other than permanent file copies then in such Selling Holder’s possession, of the most recent prospectus covering such Registrable Securities at the time of receipt of such notice. Each Selling Holder of Registrable Securities agrees that it will immediately notify the Company at any time when a prospectus relating to the registration of such Registrable Securities is required to be delivered under the Securities Act of the happening of an event as a result of which information previously furnished by such Selling Holder to the Company in writing for inclusion in such prospectus contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made.

and filing fees, (ii) fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees and disbursements of its counsel in connection with blue sky qualifications of the Registrable Securities), (iii) printing expenses, (iv) internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), (v) the fees and expenses incurred in connection with the listing of the Registrable Securities, (vi) reasonable fees and disbursements of counsel for the Company, (vii) all fees and disbursements of the Company’s auditors, including in connection with the preparation of comfort letters, and any transfer agent and registrar fees, and (viii) the reasonable fees and expenses of any special experts retained by the Company in connection with such registration. Registration Expenses shall not include any brokerage and sales commission fees and disbursements of any counsel, accountants and other advisors of any Holder, and any transfer taxes relating to the sale or disposition of Common Shares by any Holder.

Section 2.4. Indemnification by the Company . The Company agrees to indemnify and hold harmless each Selling Holder of Registrable Securities, its officers, directors, agents, partners, members, employees, managers, advisors, sub-advisors, attorneys, representatives and Affiliates, and each Person, if any, who controls such Selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act from and against, as incurred, any and all losses, claims, damages, liabilities, judgments and expenses (or actions in respect thereof) that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement, preliminary prospectus, prospectus, or free writing prospectus relating to the Registrable Securities (in each case, as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or that arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages, liabilities, judgments or expenses arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission included in reliance upon and in conformity with information furnished in writing to the Company by such Selling Holder or on such Selling Holder’s behalf expressly for inclusion therein.

Section 2.5. Indemnification by Holders of Registrable Securities . Each Selling Holder agrees, severally but not jointly or jointly and severally, to indemnify and hold harmless the Company, its officers, directors, agents, employees, attorneys, representatives and Affiliates and each Person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Selling Holder, but only with respect to information relating to such Selling Holder included in reliance upon and in conformity with information furnished in writing by such Selling Holder or on such Selling Holder’s behalf expressly for use in any registration statement, preliminary prospectus, prospectus or free writing prospectus relating to the Registrable Securities, or any amendment or supplement thereto. In case any action or proceeding shall be brought against the Company or its officers, directors or agents or any such controlling person, in respect of which indemnity may be sought against such Selling Holder, such Selling Holder shall have the rights and duties given to the Company, and the Company or its officers, directors or agents or such controlling person shall have the rights and duties given to such Selling Holder, by Section 2.6 ; provided , however , that the total obligations of such Selling Holder under this Agreement (including, but not limited to, obligations arising under Section 2.7

herein) will be limited to an amount equal to the net proceeds actually received by such Selling Holder (after deducting any discounts and commissions) from the disposition of Registrable Securities pursuant to such registration statement.

Section 2.6. Conduct of Indemnification Proceedings . In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 2.4 or 2.5 , such person (an “ Indemnified Party ”) shall promptly notify the person against whom such indemnity may be sought (an “ Indemnifying Party ”) in writing and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Party, and shall assume the payment of all fees and expenses; provided , however , that the failure of any Indemnified Party to give such notice will not relieve such Indemnifying Party of any obligations under this Section 2 , except to the extent such Indemnifying Party is materially prejudiced by such failure. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) representation of the Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between the Indemnified Party and the Indemnified Party. It is understood that the Indemnifying Party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the Indemnified Parties, such firm shall be designated in writing by (i) in the case of Persons indemnified pursuant to Section 2.4 hereof, the Selling Holders which owned a majority of the Registrable Securities sold under the applicable registration statement and (ii) in the case of Persons indemnified pursuant to Section 2.5 , the Company. The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding without any admission of liability by such Indemnified Party.

such statements or omissions which resulted in such losses, claims, damages, liabilities, judgments or expenses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of each Selling Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party.

The Company and the Selling Holders agree that it would not be just and equitable if contribution pursuant to this Section 2.7 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages, liabilities, judgments or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 2.7 , no Selling Holder shall be required to contribute any amount which in the aggregate exceeds the amount by which the net proceeds actually received by such Selling Holder from the sale of its securities to the public exceeds the amount of any damages which such Selling Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Selling Holder’s obligations to contribute pursuant to this Section 2.7 , if any, are several in proportion to the proceeds of the offering actually received by such Selling Holder bears to the total proceeds of the offering received by all the Selling Holders and not joint.

Section 2.8. Rule 144 . The Company covenants that it will (a) make and keep public information regarding the Company available as those terms are defined in Rule 144, (b) file in a timely manner any reports and documents required to be filed by it under the Securities Act and the Exchange Act, (c) furnish to any Holder forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, and (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (d) take such further action as any Holder may reasonably request, all to the extent required from time to time to enable Holders to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144.

Section 2.9. Suspension of Use of Registration Statement.

(a) Notwithstanding the provisions of Section 2.1(a) , the Company shall be permitted to postpone the filing of any Shelf Registration Statement (for purposes of this Section 2.9 , the “ Registration Statement ”), and from time to time to require Holders not to sell under the Registration Statement or to suspend the use or effectiveness thereof, for such times as the Company reasonably may determine is necessary and advisable (but in no event shall the Company be entitled to exercise such right for more than an aggregate of 180 days in any rolling 12-month period commencing on the date of this Agreement, except as a result of a refusal by the Commission to declare any post-effective amendment to the Registration Statement effective

after the Company has used all commercially reasonable efforts to cause the post-effective amendment to be declared effective by the Commission, in which case, the Company must terminate the black-out period immediately following the effective date of the post-effective amendment), if any of the following events shall occur (each such circumstance a “ Suspension Event ”): (i) a majority of the Board of Directors of the Company determines in good faith that (A) the offer or sale of any Registrable Securities would materially impede, delay or interfere with any proposed financing, offer or sale of securities, acquisition, disposition, corporate reorganization or other material transaction involving the Company or any of its subsidiaries, (B) the sale of Registrable Securities pursuant to the Registration Statement would require disclosure of non-public material information not otherwise required to be disclosed under applicable law, or (C) (x) the Company has a bona fide business purpose for preserving the confidentiality of a proposed transaction described in clause (A) above, (y) disclosure of such proposed transaction would have a material adverse effect on the Company or the Company’s ability to consummate such transaction, or (z) such proposed transaction renders the Company unable to comply with Commission requirements, in each case under circumstances that would make it impractical or inadvisable to cause the Registration Statement (or such filings) to become effective or to promptly amend or supplement a Registration Statement on a post-effective basis, as applicable; or (ii) a majority of the Board of Directors of the Company determines in good faith that it is in the Company’s best interest or it is required by law, rule or regulation to supplement the Registration Statement or file a post-effective amendment to the Registration Statement in order to ensure that the prospectus included in the Registration Statement (A) contains the information required under Section 10(a)(3) of the Securities Act; (B) discloses any facts or events arising after the effective date of a Shelf Registration Statement (or of the most recent post-effective amendment) that, individually or in the aggregate, represents a fundamental change in the information set forth therein; or (C) discloses any material information with respect to the plan of distribution that was not disclosed in the Registration Statement or any material change to such information. Upon the occurrence of any such suspension, the Company shall use its commercially reasonable efforts to cause the Registration Statement to become effective or to promptly amend or supplement the Registration Statement on a post-effective basis or to take such action as is necessary to permit resumed use of the Registration Statement or filing thereof as soon as possible.

The Company will provide written notice (a “ Suspension Notice ”) to the Holders, if any, of the occurrence of any Suspension Event. If, as a result of a Suspension Event, the Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, each Holder agrees that (i) it will immediately discontinue offers and sales of the Registrable Securities under the Registration Statement until the Holder receives copies of a supplemental or amended prospectus (which the Company agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Company that it may resume such offers and sales, and (ii) it will maintain the confidentiality of any information included in the written notice delivered by the Company unless otherwise required by law or subpoena. If so directed by the Company, each Holder will deliver to the Company (at the expense of the Company) all copies of the prospectus covering the Registrable Securities at the time of receipt of the Suspension Notice, other than permanent file copies in the possession of

such Holder’s counsel. The Holders may recommence effecting sales of the Registrable Securities pursuant to the Registration Statement (or such filings) following receipt by the Holders of any prospectus contemplated by clause (ii) of this Section 2.9(a) and further written notice to such effect (an “ End of Suspension Notice ”) from the Company, which End of Suspension Notice shall be given by the Company to the Holders and to the Selling Holders’ counsel, if any, promptly following the conclusion of any Suspension Event and its effect.

(b) In connection with any Registration Statement utilized by the Company to satisfy its obligations under this Agreement, each Holder agrees to cooperate with the Company in connection with the preparation of the Registration Statement, and each Holder agrees that it will (i) respond within ten (10) Business Days to any written request by the Company to provide or verify information regarding the Holder or the Holder’s Registrable Securities (including the proposed manner of sale) that may be required to be included in such Registration Statement and related prospectus pursuant to the rules and regulations of the Commission, and (ii) provide in a timely manner information regarding the proposed distribution by the Holder of the Registrable Securities and such other information as may be requested by the Company from time to time in connection with the preparation of and for inclusion in the Registration Statement and related prospectus.

(c) If all reports required to be filed by the Company pursuant to the Exchange Act have not been filed by the required date taking into account any permissible extension, upon written notice thereof by the Company to the Holders, the rights of the Holders to offer, sell or distribute any Registrable Securities pursuant to any Registration Statement or to require the Company take action with respect to the registration or sale of any Registrable Securities pursuant to any Registration Statement shall be suspended until the date on which the Company has filed such reports, and the Company shall use commercially reasonable efforts, taking into account the circumstances of the Company at such time, to file the required reports as promptly as commercially practicable, and shall notify the Holders as promptly as practicable when such suspension is no longer required.

Section 2.10. Additional Shares . The Company, at its option, may register under a Shelf Registration Statement and any filings with any state securities commissions filed pursuant to this Agreement, any number of unissued Common Shares or any Common Shares owned by any other shareholder or shareholders of the Company.

ARTICLE III

MISCELLANEOUS

Section 3.1. Remedies . In addition to being entitled to exercise all rights provided herein and granted by law, including recovery of damages, the Holders shall be entitled to specific performance of the rights under this Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

Section 3.2. Amendments and Waivers . The provisions of this Agreement may be amended or waived at any time only by the written agreement of the Company and the Holders of a majority of the Registrable Securities; provided , however , that the provisions of this Agreement may not be amended or waived without the consent of each Holder of Registrable Securities adversely affected by such amendment or waiver if such amendment or waiver adversely affects a portion of the Registrable Securities but does not so adversely affect all of the Registrable Securities; provided , further , that the provisions of the preceding provision may not be amended or waived except in accordance with this sentence. Any waiver, permit, consent or approval of any kind or character on the part of any such Holder of any provision or condition of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in writing. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each Holder of Registrable Securities and the Company. No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

Section 3.3. Notices . All notices and other communications in connection with this Agreement shall be made in writing by hand delivery, registered first-class mail, telecopier, or air courier guaranteeing overnight delivery:

(1) if to any Holder, initially to the address indicated in such Holder’s Notice and Questionnaire or, if no Notice and Questionnaire has been delivered, c/o [ · ], Attention: [ · ], or to such other address and to such other Persons as any Holder may hereafter specify in writing; and

(2) if to the Company, initially at [ · ], Attention: Chief Executive Officer, or to such other address as the Company may hereafter specify in writing.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; when received if deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

Section 3.4. Successors and Assigns; Assignment of Registration Rights . This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties. Any Holder may assign its rights under this Agreement without the consent of the Company in connection with a transfer of such Holder’s Registrable Securities permitted under the Operating Partnership Agreement; provided , that the Holder notifies the Company of such proposed transfer and assignment and the transferee or assignee of such rights assumes in writing the obligations of such Holder under this Agreement.

Section 3.5. Counterparts . This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

Section 3.6. Governing Law . This Agreement shall be governed by and construed in accordance with the internal laws of the State of Maryland, without giving effect to conflict of laws principles.

Section 3.7. Severability . In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

Section 3.8. Entire Agreement . This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Registrable Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

Section 3.9. Headings . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

Section 3.10. Termination . The obligations of the parties hereunder shall terminate with respect to a Holder when it no longer holds Registrable Securities and with respect to the Company upon the end of the Effectiveness Period with respect to any Issuer Shelf Registration Statement and with respect to Resale Shelf Registration Statement when there are no longer Registrable Securities with respect to a Resale Shelf Registration Statement, except, in each case, for any obligations under Sections 2.3 , 2.4 , 2.5 , 2.6 , 2.7 and Article III .

Section 3.11. Consent to Jurisdiction.

(a) Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of Maryland and to the jurisdiction of the United States District Court for the State of Maryland, for the purpose of any action (whether based on contract, tort or otherwise), directly or indirectly, arising out of or relating to this Agreement or the actions of the parties hereto in the negotiation, administration, performance and enforcement thereof, and each of the parties hereto hereby irrevocably agrees that all claims in respect to such action may be heard and determined exclusively in any Maryland state or federal court.

(b) Each of the parties hereto (i) irrevocably consents to the service of the summons and complaint and any other process in any action relating to the transactions contemplated by this Agreement, on behalf of itself or its property, by personal delivery of copies of such process to such party and nothing in this Section 3.11 shall affect the right of any party to serve legal process in any other manner permitted by law, (ii) consents to submit itself to the personal jurisdiction of any United States federal court located in the State of Maryland or any Maryland state court in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (iii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (iv) agrees that it will not bring any action or proceeding relating to this Agreement or the transactions contemplated by this

Agreement in any court other than any United States federal court located in the State of Maryland or any Maryland state court. Each of the Holders and the Company agrees that a final judgment in any action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

Section 3.12. Waiver of Jury Trial . The parties hereto (including any Initial Holder and any subsequent Holder) irrevocably waive any right to trial by jury.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

	JBG SMITH PROPERTIES


	By:
		Name:
		Title:


	[ · ]
		(as Attorney-in-Fact for the Initial Holders listed on Schedule I hereto)


	By:

REGISTRATION RIGHTS AGREEMENT

RECITALS

WHEREAS, the Company and JBG SMITH Properties LP, a Delaware limited partnership (the “ Operating Partnership ”), have concurrently engaged in certain combination transactions as more fully set forth in that certain Master Transaction Agreement dated as of October 31, 2016 by and among Vornado Realty Trust, Vornado Realty L.P., JBG Properties Inc., JBG/Operating Partners, L.P., certain affiliates of JBG Properties Inc., the Company and the Operating Partnership (the “ Combination Transactions ” pursuant to which the Initial Holders have concurrently received, in exchange for their (or certain related parties’) respective interests in the entities participating in the Combination Transactions common shares of beneficial interest of the Company, par value $0.01 per share (the “ Common Shares ”); and