SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported) November 7, 2005

FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
(Exact Name of Registrant as Specified in Its Charter)

                                      Ohio
                 ----------------------------------------------
                 (State or Other Jurisdiction of Incorporation)

       001-06249                                         34-6513657
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(Commission File Number)                    (I.R.S. Employer Identification No.)

7 Bulfinch Place, Suite 500, P.O. Box 9507, Boston, Massachusetts 02114
(Address of Principal Executive Offices) (Zip Code)

(617) 570-4600
(Registrant's Telephone Number, Including Area Code)

n/a

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions

|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFT|R 230.425)

|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 1.01 Entry into a Material Definitive Agreement.

On November 7, 2005, First Union Real Estate Equity and Mortgage Investment (the "Trust") entered into a definitive Securities Purchase Agreement with Vornado Investments L.L.C., an affiliate of Vornado Realty Trust ("Vornado"), pursuant to which the Trust agreed to sell to Vornado 3,522,566 shares (the "Vornado Shares"), representing 9.9% of the outstanding common shares of beneficial interest in the Trust after giving effect to the issuance of the Vornado Shares, at the previously agreed upon per share sale price of $4.00 for a total sales price of $14,090,264. The Vornado Shares were registered pursuant to the Trust's effective shelf registration statement on Form S-3 and the sale was consummated on November 7, 2005.

In connection with the sale of the Vornado Shares, the Trust entered into Registration Rights Agreement with Vornado. Pursuant to the registration rights agreement, subject to certain conditions, Vornado has the right to request on one occasion that the Trust register the Vornado Shares for sale so long as Vornado then owns (i) all of the Vornado Shares; and (ii) pays all out-of-pocket costs of the Trust associated with such registration statement and sale.

The foregoing summary is qualified in its entirety by reference to the Securities Purchase Agreement and Registration Rights Agreement attached hereto as Exhibits 10.1 and 10.2, respectively.

Item 2.01. Completion of Acquisition or Disposition of Assets

On November 7, 2005, the Trust consummated the transactions contemplated by (i) a definitive Securities Purchase Agreement between the Trust and Newkirk Realty Trust, Inc. ("Newkirk") and (ii) an Acquisition Agreement between the Trust and Newkirk. Newkirk was formed to acquire a 30.1% interest in The Newkirk Master Limited Partnership, a Delaware limited partnership, which is a publicly reporting limited partnership that owns a diversified portfolio of triple-net leased properties and other real estate-related assets.

Pursuant to the Securities Purchase Agreement, the Trust acquired 3,125,000 shares of common stock in Newkirk for a per share purchase price of $16.00, for a total purchase price of $50 million.

Pursuant to the Acquisition Agreement, the Trust assigned to Newkirk all rights it held under an Exclusivity Services Agreement with Michael Ashner, the Trust's Chief Executive Officer, relating to business opportunities generated by or offered to Mr. Ashner relating to net lease assets, as defined. In consideration for the assignment of these rights, Newkirk issued to the Trust an additional 1,250,000 shares of Newkirk's common stock (the "Exclusivity Shares"). The transactions pursuant to both Agreements were entered into in connection with the closing of Newkirk's initial public offering.

With respect to the Exclusivity Shares, 625,000 shares were received without vesting restrictions. The remaining 625,000 shares will vest in 36 equal monthly installments of 17,361shares per month, with the unvested amount subject to forfeiture if: (i) the advisory agreement between Newkirk and NKT Advisors LLC ("NKT"), the external advisor of Newkirk and an entity owned in part and controlled by Michael Ashner, is terminated by Newkirk for cause; (ii) Michael Ashner dies or becomes disabled, unless the other members of NKT's senior management then in place remain in their positions; or (iii) Michael Ashner resigns as an officer and director of both Newkirk and NKT. Conversely, all of the forfeiture restrictions shall terminate and the Exclusivity Shares subject to forfeiture shall fully vest : (i) if Newkirk terminates the advisory agreement with NKT other than for cause; (ii) if NKT terminates the advisory agreement following a breach of a material term of the advisory agreement by Newkirk that is not timely cured; or (iii) upon non-renewal of the advisory agreement. The Trust has full voting and dividend rights with respect to the 625,000 restricted shares, which rights shall terminate only upon forfeiture with respect to those shares that had not then vested.

The assignment of the exclusivity rights provided for in the Acquisition Agreement immediately terminates and such rights revert back to the Trust upon:
(i) the resignation by Michael Ashner as an officer and director of both Newkirk and NKT; or (ii) the termination or non-renewal of the advisory agreement between Newkirk and NKT for any reason.


The 4,375,000 shares of the common stock of Newkirk acquired by the Trust under the Agreements represent 22.58% of the outstanding common shares of Newkirk following the Newkirk IPO. In connection with the acquisition of the Newkirk shares as referenced above, the Trust entered into an Ownership Limit Waiver Agreement with Newkirk, permitting the Trust to own up to 17.5% of the Newkirk common stock determined on a fully-liquidated basis. In determining the Trust's ownership percentage in Newkirk for purposes of the Ownership Limited Waiver Agreement, the number of shares owned by the Trust is divided by the total number of shares of Newkirk common stock outstanding plus the total number of partnership units in The Newkirk Master Limited Partnership that are redeemable for shares of Newkirk common stock, whether or not such units are then redeemable. Accordingly, the Trust's ownership percentage for purposes of the Ownership Limit Waiver Agreement is 6.8% as there are 64,375,000 total units outstanding.

In connection with the foregoing transactions, the Advisory Agreement between the Trust and FUR Advisors LLC, its external advisor, was modified to provide for a credit to the Trust equal to 80% of the incentive management fee, if any, payable by Newkirk to NKT under the advisory agreement between such parties. In the event that the credit exceeds the fee payable by the Trust to FUR Advisors, the excess is carried forward to subsequent quarters in the same year with any excess at year end being paid by FUR Advisors to the Trust. FUR Holdings LLC, the sole member of FUR Advisors, has effectively guaranteed these payments, if any. There can be no assurance that any incentive fee payable will be earned by NKT or, if earned, that the amount of such fee will be paid.

In connection with the issuance of the Newkirk shares, the Trust has agreed not to sell, transfer, pledge, redeem or otherwise dispose of its shares of common stock in Newkirk for a period equal to the earlier of (i) three years from the date of the Newkirk IPO (November 2, 2008) or (ii) at such time as NKT is no longer providing advisory services to Newkirk; provided, however, in no event shall such period be less than one year from the date of the Newkirk IPO. Notwithstanding the foregoing, commencing one year from the date of the Newkirk IPO, the Trust is permitted to pledge its shares of common stock in Newkirk in connection with borrowings with a maximum principal amount no greater than 35% of the value (based on the Newkirk IPO common stock price) of all shares of Newkirk's common stock held by the Trust.

The Trust also entered into a Registration Rights Agreement with Newkirk pursuant to which the Trust will have certain rights to demand that the shares acquired pursuant to the Securities Purchase Agreement and the Acquisition Agreement be registered pursuant to a registration statement or statements filed by Newkirk with the Securities and Exchange Commission.

The foregoing summary is qualified in its entirety by reference to the Securities Purchase Agreement, Acquisition Agreement, Amended and Restated Advisory Agreement, Registration Rights Agreement and the other related agreements and documents which are attached hereto as Exhibits.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Effective November 7, 2005, the Trust adopted an amendment to Article VI,
Section 6 of its By-laws to provide that such section does not apply to Vornado and any wholly-owned subsidiary of Vornado Realty, L.P. with respect to ownership of shares of beneficial interest acquired pursuant to the Securities Purchase Agreement described in Item 1.01 above, so long as Vornado together with any wholly-owned subsidiary of Vornado Realty L.P. does not own more than the greater of (i) the number of shares acquired under the Securities Purchase Agreement or (ii) 9.9% of the Trust's outstanding shares of beneficial interest.

On November 8, 2005, the Board of Trustees adopted Restated By-laws that incorporate the foregoing amendment as well as all prior amendments.

Item 7.01 Regulation FD Disclosure

On November 7, 2005, First Union issued a press release announcing the transactions described in Item 1.01 above. A copy of the release is attached hereto as exhibit 99.1.

Also on November 7, 2005, First Union issued a press release announcing the transactions described in Item 2.01 above. A copy of the release is attached hereto as exhibit 99.2.

Item 9.01. Financial Statements and Exhibits

(b) Pro Forma Financial Information.

The financial information required will be filed prior to the 71st day after the date hereof

(c) Exhibits


3.1 Bylaws of the Trust as restated on November 8, 2005

10.1 Securities Purchase Agreement, dated November 7, 2005, between the Trust and Vornado Investments L.L.C. ("Vornado").

10.2 Registration Rights Agreement, dated November 7, 2005, between the Trust and Vornado

10.3 Securities Purchase Agreement, dated November 7, 2005, between Newkirk Realty Trust, Inc. and the Trust

10.4. Acquisition Agreement, dated November 7, 2005, between Newkirk Realty Trust, Inc. and the Trust

10.5 Registration Rights Agreement, dated November 7, 2005, between Newkirk Realty Trust, Inc.

10.6 Amended and Restated Advisory Agreement, dated November 7, 2005, between the Trust, First Union REIT, L.P., and FUR Advisors LLC

10.7 Amendment No. 1 to Exclusivity Services Agreement, dated November 7, 2005, between the Trust and Michael Ashner.

10.8 Lock-Up Agreement, dated November 7, 2005, executed by the Trust

10.9 Ownership Limit Waiver Agreement dated November 7, 2005, between the Trust and Newkirk Realty Trust, Inc.

10.10 Joinder Agreement with respect to the Securities Purchase Agreement, dated November 7, 2005, by and among the Trust, Newkirk Realty Trust, Inc. and The Newkirk Master Limited Partnership

10.11 Undertaking, dated November 7, 2005, by FUR Holdings LLC and FUR Advisors LLC for the benefit of the Trust.

99.1 Press Release, dated November 7, 2005 relating to the stock sale by the Trust to Vornado.

99.2 Press Release, dated November 7, 2005 relating to the transactions between the Trust and Newkirk.

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 hereunto duly authorized on this 10th day of November, 2005.

FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS

By: /s/ Carolyn Tiffany
    ------------------------------
    Carolyn Tiffany
    Chief Operating Officer


FIRST UNION REAL ESTATE EQUITY AND MORTGAGE
INVESTMENTS

BY-LAWS

As restated on
November 8, 2005


                                      INDEX

ARTICLE I MEETINGS OF BENEFICIARIES........................................... 1
         Section 1.  Annual Meeting........................................... 1
         Section 2.  Special Meetings......................................... 1
         Section 3.  Place of Meeting......................................... 1
         Section 4.  Notice of Meetings....................................... 1
         Section 5.  Procedure at Meetings.................................... 1
         Section 6.  Quorum................................................... 1
         Section 7.  Nominations and Beneficiary Business..................... 1

ARTICLE II TRUSTEES........................................................... 2
         Section 1.  Regular Meetings......................................... 2
         Section 2.  Special Meetings......................................... 2
         Section 3.  Notice of and Participation in Meetings.................. 2
         Section 4.  Quorum................................................... 3
         Section 5.  Compensation of Trustees................................. 3
         Section 6.  Committees of the Board of Trustees...................... 3
         Section 7.  Qualifications of Nominees - Age......................... 3
         Section 8.  Acquisitions and Dispositions............................ 3

ARTICLE III OFFICERS.......................................................... 3
         Section 1.  Designation of Officers.................................. 3
         Section 2.  Tenure of Office......................................... 3
         Section 3.  Delegation of Duties..................................... 4
         Section 4.  Compensation............................................. 4
         Section 5.  Signing Checks and Other Instruments..................... 4
         Section 6.  Control By Trustees...................................... 4

ARTICLE IV SHARES IN TRUST.................................................... 4
         Section 1.  Issue of Certificate of Beneficial Ownership............. 4

ARTICLE V AMENDMENTS.......................................................... 4
         Section 1.  Amendment of By-Laws..................................... 4

ARTICLE VI MISCELLANEOUS PROVISIONS........................................... 4
         Section 1.  Fiscal Year.............................................. 4
         Section 2.  Notice and Waiver of Notice.............................. 4
         Section 3.  Checks for Money......................................... 5
         Section 4.  Form of Certificate of Beneficial Interest............... 5
         Section 5.  Regulations on Transfer of Shares to Prevent
         Disqualification  of the Trust Under the Internal Revenue Code....... 6
         Section 6.  Restrictions on Issuance and Transfer of Securities...... 6

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ARTICLE I MEETINGS OF BENEFICIARIES.
Section 1. Annual Meeting.

The annual meeting of the Beneficiaries of the Trust for the transacting of such business as shall be specified in the notice of the meeting shall be held as provided in the Declaration of Trust.

Section 2. Special Meetings.

Special meetings may be called at any time as provided in the Declaration of Trust.

Section 3. Place of Meeting.

All meetings of the Beneficiaries shall be held at the office of the Trust, or at such other place within or without the State of Ohio as may be designated, in the case of an annual meeting, by the Trustees, or, in the case of a special meeting, by the Trustees calling such meeting or by the person or persons requesting such meeting pursuant to the Declaration of Trust.

Section 4. Notice of Meetings.

Written notice of each annual or special meeting of the Beneficiaries, stating the time, place and purpose thereof shall be given in accordance with the Declaration of Trust.

Section 5. Procedure at Meetings.

At each meeting of the Beneficiaries, the Trustees shall appoint one of their number or one of the Beneficiaries to preside thereat. The Trustees shall appoint a Secretary for each such meeting, who shall be duly sworn to the faithful discharge of his duties and to keep the minutes of such meeting, which minutes shall be signed and attested by him and filed with the records of the Trust.

Section 6. Quorum.

A majority of the outstanding shares of the Trust present in person or by proxy shall constitute a quorum for any annual or special meeting of Beneficiaries.

Section 7. Nominations and Beneficiary Business.

(a) With respect to any Annual or Special Meeting of Beneficiaries, (a "Meeting") nominations for election to the Board of Trustees and the proposal of matters to be considered by the Beneficiaries may be made only (i) by or at the direction of the Board of Trustees or (ii) by any Beneficiary who was a Beneficiary of record at the record date for the Meeting, as defined in the Declaration of Trust, who is entitled to vote at the Meeting and who complied with the notice procedures set forth in this Section 7.

(b) For a nomination or proposal to be properly brought before a Meeting by a Beneficiary, other than a shareholder proposal included in the Trust's proxy statement pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended, the Beneficiary must have given timely notice thereof in writing to the Secretary of the Trust, and such Beneficiary or his representative must be present in person at the Meeting. A Beneficiary's notice shall be timely if delivered to, or mailed and received at, the principal executive offices of the Trust (i) for an Annual Meeting not less than 120 days prior to the anniversary date of the immediately preceding Annual Meeting of Beneficiaries, or Special Meeting held in lieu thereof and (ii) for a Special Meeting, not less than 120 days prior to the date requested for such meeting.

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(c) A Beneficiary's notice to the Secretary shall set forth as to each nomination or proposal the Beneficiary intends to bring before the Meeting (i) as to any nomination, the name and address of any proposed nominee, the nominee's business affiliation, the information required as to nominees by Item 401 of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934, all as may be amended from time to time, a certification of the proponent that such nominee meets all the qualifications for Trustees set forth in the Declaration of Trust, including, but not limited to, Section 8.10 thereof and the written consent of such nominee to serve as Trustee if elected,
(ii) as to any proposal, a brief description of the proposal desired to be brought before the Meeting, (iii) the name and address of the Beneficiary offering such nomination or proposal, (iv) the class and number of shares of the Trust's capital shares which are beneficially owned by the Beneficiary, and (v) any financial interest of the Beneficiary in such proposal. Nothing contained in this Subsection (c) shall be deemed to supersede the provisions of Section 7.2 of the Declaration of Trust relating to business that may be transacted at a Special Meeting.

ARTICLE II TRUSTEES.
Section 1. Regular Meetings.

Regular meetings of the Trustees may be held at such times and places within or without the State of Ohio as may be provided for in resolution adopted by the Trustees.

Section 2. Special Meetings.

Special meetings of the Trustees may be held at any time or place within or without the State of Ohio upon call of the Chairman of the Board or any two of the Trustees at the time and place designated in the notice of meeting.

Section 3. Notice of and Participation in Meetings.

Notice of each meeting, regular or special, shall be given by mailing or by sending to each Trustee (addressed to the address last furnished to the Trust by the Trustee) a letter at least 4 days before the meeting, or a facsimile transmittal at least 24 hours before the meeting. Notice of any special or regular meeting, as provided in the Declaration of Trust, may be waived in writing or by facsimile transmittal by any Trustee either before or after such meeting, and such notice shall be deemed to have been waived by the Trustees attending such meeting. Except as provided in Article VI hereof, unless otherwise indicated in the notice thereof, any business may be transacted at any regular or special meeting. Meetings of the Trustees may be held through any communications equipment if all persons participating can hear each other and participation in a meeting pursuant to this sentence shall constitute presence at such meeting.

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Section 4. Quorum.

At any meeting a majority of the Trustees then in office shall constitute a quorum.

Section 5. Compensation of Trustees.

The Trustees are authorized to fix a reasonable retainer for members of the Board of Trustees and the Chairman and a reasonable fee for attendance at meetings. In addition to such compensation there shall be reimbursement for expenses for traveling to and from such meetings.

Section 6. Committees of the Board of Trustees.

The Trustee may elect from their members committees of the Board and give them any or all powers of the Trustees during intervals between the meetings of the Trustees, except that such committees shall not be empowered to declare dividends. All actions of such committees shall be reported to the Trustees at their next meeting.

Section 7. Qualifications of Nominees - Age.

No nominee for Trustee shall be more than 72 years of age at the time of his election as Trustee, nor shall any Trustee nominated for a subsequent term be more than 72 years of age at the time of his election for such subsequent term, provided that any Trustee elected prior to attaining age 72 may continue to serve the remainder of his term despite attaining the age of 72 before the expiration of his term.

Section 8. Acquisitions and Dispositions.

All investments made by the Trust in excess of $1,500,000 (other than investments in government insured securities) and all dispositions made by the Trust in excess of $2,000,000 shall require the prior approval of a majority of the Trustees.

ARTICLE III OFFICERS
Section 1. Designation of Officers.

The Trustees shall elect a Chairman of the Board, a President, a Secretary, a Treasurer, and such Vice Presidents and other officers, or assistant officers, as they shall deem advisable. Each officer and assistant officer shall have such functions and duties as the Trustees shall from time to time designate, and, in the absence of such designation, such duties as are usually associated with such office. Except as otherwise determined by the Trustees, any two or more offices may be held by the same person.

Section 2. Tenure of Office.

The officers of the Trust shall hold office at the pleasure of the Trustees, and until successors are chosen and qualified. A vacancy in any office, however created, may be filled by election by the Trustees.

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Section 3. Delegation of Duties.

The Trustees may delegate the duties of any officer to any other officer and generally may control the action of the officers and require the performance of duties in addition to those mentioned herein.

Section 4. Compensation.

The Trustees are authorized to determine or to provide the method of determining the compensation of officers.

Section 5. Signing Checks and Other Instruments.

The Trustees shall determine or provide the method of determining how checks, notes, bills of exchange and similar instruments issued by or on behalf of the Trust shall be signed, countersigned, or endorsed.

Section 6. Control By Trustees.

Nothing contained herein shall be interpreted to relieve the Trustees, in any manner, of their duty to control and manage the Trust property.

ARTICLE IV SHARES IN TRUST
Section 1. Issue of Certificate of Beneficial Ownership.

The Chairman shall cause to be issued to each Beneficiary one or more certificates, under the seal of the Trust, signed as provided in Article III,
Section 5 hereof, certifying the number of shares owned by such Beneficiary in the Trust. Such certificates shall be countersigned by the Transfer Agent and registered by the Registrar and shall be transferable on the books of the Trust as provided in the Declaration of Trust.

ARTICLE V AMENDMENTS.
Section 1. Amendment of By-Laws.

The Trustees, by the affirmative vote of a majority, may at any meeting, provided the substance of the proposed amendment shall have been stated in a notice of the meeting, alter, change, or amend in any respect, or supersede by new by-laws, in whole or in part, any of these by-laws.

ARTICLE VI MISCELLANEOUS PROVISIONS.
Section 1. Fiscal Year.

The fiscal year of the Trust shall be as determined from time to time by the Trustees.

Section 2. Notice and Waiver of Notice.

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Whenever any notice is required by these by-laws to be given, personal notice is not required unless expressly so stated; and any notice so required shall be deemed to be sufficient if given (i) by letter, by depositing the same in a post-office box in a sealed post-paid wrapper, addressed to the person entitled thereto (at his last known post-office address as shown by the register of the Trust) and such notice shall be deemed to have been given on the day of such mailing; or (ii) by facsimile transmittal if transmitted via facsimile with evidence of receipt by the sender, and such notice shall be deemed to have been given on the day of such facsimile transmittal.

Section 3. Checks for Money.

All checks, drafts or orders for the payment of money shall be signed by the Treasurer or Assistant Treasurer or by such other officer, officers, Trustee or Trustees as the Trustees may from time to time designate.

Section 4. Form of Certificate of Beneficial Interest.

The form of certificate of beneficial interest representing shares of $1 par value shall be substantially as follows:

No._______________________________ Shares

FIRST UNION
Real Estate Equity and Mortgage Investments

THIS CERTIFIES THAT_________________________ is the registered holder of ______________ Fully Paid and Non-assessable Share of Beneficial Interest, $1 Par Value, in

FIRST UNION
Real Estate Equity and Mortgage Investments

A Trust established in business trust from under the laws of the State of Ohio under a Declaration of Trust dated as of August 1, 1961, as amended from time to time, a copy of which is on file with the Transfer Agents of the Trust by all the terms and provisions of which the holder or transferee hereof by accepting this certificate agrees to be bound. The Trust is not a bank or trust company and does not and will not solicit, receive or accept deposits as a business. The shares represented hereby are transferable on the records of the Trust only by the registered holder hereof or by his agent duly authorized in writing on delivery to a Transfer Agent of the Trust of this certificate properly endorsed or accompanied by duly executed instrument of transfer together with such evidence of the genuineness thereof and such other matters as may reasonably be required. The transferability of the shares represented hereby is subject to such regulation as may from time to time be adopted by the Trustees of the Trust and set forth in the By-Laws to which reference is hereby made to prevent transfers of shares which would result in disqualification of the Trust for taxation as a real estate investment trust under the Internal Revenue Code an amended.

This certificate is not valid unless countersigned by a Transfer Agent and registered by a Registrar of the Trust.

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IN WITNESS WHEREOF, the Trustees of this Trust have caused this certificate to be signed by facsimile signatures.

[ON REVERSE SIDE]

The By-Laws of the Trust provide, among other things, that no person may acquire Trust securities (including these securities) if, thereafter, he would beneficially own more than 9.8% of the Trust's shares of beneficial interest. In applying this restriction, convertible securities of the Trust beneficially owned by such person (including convertible securities) are to be treated as if already converted into shares of beneficial interest. A copy of the By-Laws and information about the limitation on ownership may be obtained from the Secretary of the Trust.

Section 5. Regulations on Transfer of Shares to Prevent Disqualification of the Trust Under the Internal Revenue Code

Notification of the Trust Under the Internal Revenue Code.

The Chief Executive Officer of the Trust or an officer designated by him shall:

(a) From time to time cause to be prepared a list of holders of record (with their holdings) of shares of the Trust (preferred and common) and shall designate those holders which the officer acting shall have reason to believe are not also the beneficial owners of the holdings of record in their respective names;

(b) Review the list with counsel and impose such restrictions on transfer of shares as counsel shall advise should be imposed to prevent disqualification of the Trust as a Real Estate Investment Trust under Section 856 et seq. of the Internal Revenue Code.

Section 6. Restrictions on Issuance and Transfer of Securities.

(a) No person may own more than 9.8% of the outstanding Shares (the Limit), and no Securities shall be issued or transferred to any person if, following such issuance or transfer, such person's ownership of Shares would exceed the Limit. For purposes of computing the Limit, Convertible Securities owned by such person shall be treated as if the Convertible Securities owned by such person had been converted into Shares.

(b) If any Securities in excess of the Limit are issued or transferred to any person in violation of Paragraph a) hereof (the "Excess Securities"), such issuance or transfer shall be valid only with respect to such amount of Securities as does not result in a violation of Paragraph a) hereof, and such issuance or transfer shall be null and void with respect to such Excess Securities.

If the last clause of the foregoing sentence is determined to be invalid by virtue of any legal decision, statute, rule or regulation, such person shall be conclusively deemed to have acted as an agent on behalf of the Trust in acquiring the Excess Securities and to hold such Excess Securities on behalf of the Trust. As the equivalent of treasury Securities for such purposes, the Excess Securities shall not be entitled to any voting rights; shall not be considered to be outstanding for quorums or voting purposes; and shall not be entitled to receive dividends. Interest or any other distribution with respect to the Securities. Any person who receives dividends, interest or any other distribution in respect to Excess Securities shall hold the same as agent for the Trust and (following a permitted transfer) for the transferee thereof.

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Notwithstanding the foregoing, any holder of Excess Securities may transfer the same (together with any distributions thereon) to any person who, following such transfer, would not own Shares (within the meaning of Paragraph (a)) in excess of the Limit. Upon such permitted transfer, the Trust shall pay or distribute to the transferee any distributions on the Excess Securities not previously paid or distributed.

(c) Ownership of Securities is conditional upon the owner or prospective owner having provided to the Trust definitive written information respecting his ownership of Securities. Failure to provide such information, upon reasonable request shall result in the Securities so owned being treated as Excess Securities pursuant to Paragraph b) for so long as such failure continues.

(d) For purposes of this Section 6:

(i) Person, includes an individual, corporation, partnership, association, joint stock company, trust, unincorporated association or other entity.

(ii) Shares, means Shares of Beneficial Interest, par value $1 per share.

(iii) Convertible Securities, means any securities of the Trust that are convertible into Shares.

(iv) Securities, means Shares and Convertible Securities.

(v) Ownership, means beneficial ownership. Beneficial ownership, for this purpose, may be determined on the basis of the beneficial ownership rules applicable under the Securities Exchange Act of 1934, as amended, or such other basis as management reasonably determines to be appropriate to effectuate the purposes hereof.

(e) Nothing herein contained shall limit the ability of the Trust to impose, or to seek judicial or other imposition of additional restrictions if deemed necessary or advisable to protect the Trust and the interests of its security holders by preservation of the Trust's status as a qualified real estate investment trust under the Code.

(f) These restrictions on issuance and transfer of Securities shall be applied only on a prospective basis. Accordingly, Paragraphs (a) and (b) hereof shall not apply to Shares in excess of the limit that were owned (within the meaning of Paragraph (a) by any person at the close of business on June 3, 1981, but Paragraph (a) and (b) shall prospectively apply to the transfer of such Shares and to further acquisitions of Securities by any such person. Similarly, Paragraphs (a) and (b) shall not apply to the conversion of Convertible Securities that were owned by any person at the close of business on such date or to the resultant Shares owned by such person, but Paragraph (a) and (b) shall prospectively apply to such Shares and to such person.

(g) Notwithstanding any other provision of this Section 6, a lower percentage (the Temporary Limit) shall operate in place of the 9.8% ownership Limit set forth in Paragraph (a) hereof for so long as there are outstanding Securities excepted from the restrictions of this Section 6 pursuant to Paragraph (f)

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hereof ("Exempt Securities"). The Temporary Limit shall initially be 6%, but upon the transfer of Exempt Securities the Temporary Limit shall be fixed by the Trustees from time to time but shall in no event exceed an amount equal to 25% of the difference between (i) 49% of the Shares outstanding and (ii) the number of Shares owned by any person who owns Exempt Securities. For purposes of this calculation, Convertible Securities owned by such person shall be treated as if the Convertible Securities owned by such person had been converted into Shares.

(h) If any provision of this Section 6 or any application of any such provision is determined to be invalid by any federal or state court having jurisdiction over the issue, the validity of the remaining provisions shall not be affected and other applications of such provision shall be affected only to the extent necessary to comply with the determination of such court.

(h) (I) Notwithstanding any other provision of this Section 6, paragraphs
(a) and (b) hereto shall not apply to Halcyon Structured Opportunities Fund, L.P. and Halcyon Fund, L.P. (collectively, "Halcyon") and any Halcyon Permitted Transferee (as hereinafter defined), as long as and on the condition that (i) no person who or which is a beneficial owner of Halcyon or of such Halcyon Permitted Transferee owns indirectly (based solely on such person's percentage ownership of Series B-1 Preference Shares through Halcyon or through such Halcyon Permitted Transferee) 9.8% or more of the Series B-1 Preference Shares, and (ii) none of Halcyon, any Halcyon Permitted Transferee or any of their respective affiliates, as defined in Rule 12b-2 under the Securities Exchange Act of 1934 ("Affiliates"), owns or acquires ownership of any Securities other than (A) the shares of Series B-1 Preference Shares initially acquired by Halcyon in February or June 2005 (the "Halcycon Shares") and any Shares issued on the conversion thereof in accordance with their terms, (B) any Shares issued in connection with the exercise by Halcyon or a Halcyon Permitted Transferee of rights (other than over-subscription rights) to purchase Shares pursuant to
Section 11 of the Certificate of Designations, and (C) any Additional Securities (but not Extra Additional Securities) as such terms are defined in the Investors Rights Agreement (the "Investors' Rights Agreement"), dated as of February 28, 2004, by and among the Trust, Michael Ashner, Peter Braverman and a group of investors, issued as a result of the exercise by Halcyon of its Preemptive Rights under the Investors' Rights Agreement. A Halcyon Permitted Transferee means any Beneficial Holder or Institutional Investor or Affiliate of Halcyon (as such terms are defined in the Investors' Rights Agreement), other than HBK and King Street and their respective Affiliates, who acquires the Halcyon Shares.

(h) (II) Notwithstanding any other provision of this Section 6, paragraphs
(a) and (b) hereto shall not apply to HBK Fund, L.P. ("HBK") and any HBK Permitted Transferee (as hereinafter defined), as long as and on the condition that (i) no person who or which is a beneficial owner of HBK or of such HBK Permitted Transferee owns indirectly (based solely on such person's percentage ownership of Series B-1 Preference Shares through HBK or through such HBK Permitted Transferee) 9.8% or more of the Series B-1 Preference Shares, and (ii) none of HBK, any HBK Permitted Transferee or any of their respective Affiliates owns or acquires ownership of any Securities other than (A) the shares of Series B-1 Preference Shares initially acquired by HBK in February or June 2005 (the "HBK Shares") and any Shares issued on the conversion thereof in accordance with their terms, (B) any Shares issued in connection with the exercise by HBK or an HBK Permitted Transferee of rights (other than over-subscription rights) to purchase Shares pursuant to Section 11 of the Certificate of Designations, and
(C) any Additional Securities (but not Extra Additional Securities) issued as a result of the exercise by HBK of its Preemptive Rights under the Investors' Rights Agreement. An HBK Permitted Transferee means any Beneficial Holder, Institutional Investor or Affiliate of HBK, other than Halcyon and King Street and their respective Affiliates, who acquires the HBK Shares.

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(h) (III) Notwithstanding any other provision of this Section 6, paragraphs (a) and (b) hereto shall not apply to King Street Capital, L.P. ("King Street") and any King Street Permitted Transferee (as hereinafter defined), as long as and on the condition that (i) no person who or which is a beneficial owner of King Street or of such King Street Permitted Transferee owns indirectly (based solely on such person's percentage ownership of Series B-1 Preference Shares through King Street or through such King Street Permitted Transferee) 9.8% or more of the Series B-1 Preference Shares, and (ii) none of King Street, any King Street Permitted Transferee, or any of their respective Affiliates owns or acquires ownership of any Securities other than (A) the shares of Series B-1 Preference Shares initially acquired by King Street in February or June 2005 (the "King Street Shares") and any Shares issued on the conversion thereof in accordance with their terms, (B) any Shares issued in connection with the exercise by King Street or a King Street Permitted Transferee of rights (other than over-subscription rights) to purchase Shares pursuant to Section 11 of the Certificate of Designations, and (C) any Additional Securities (but not Extra Additional Securities) issued as a result of the exercise by King Street of its Preemptive Rights under the Investors' Rights Agreement. A King Street Permitted Transferee means any Beneficial Holder, Institutional Investor or Affiliate of King Street, other than Halcyon and HBK and their respective Affiliates, who acquires the King Street Shares.

(i) The Limit shall not apply to FUR Investors, LLC and its manager (collectively, the "Exempt Persons") so long as (i) the Exempt Persons do not own more than 33% of either the total outstanding Shares or the total outstanding shares of any class of preferred shares (in either case, without giving effect to the convertibility of any preferred shares owned by Exempt Persons), and (ii) no one individual owns, directly or constructively pursuant to the application of Section 544 of the Internal Revenue Code, as modified by
Section 856(h)(1)(B) and Section 856(h)(3)(A) of the Internal Revenue Code ("Code Ownership"), more than 35% of the equity interests in FUR Investors, LLC and no two individuals have Code Ownership of more than 50% of the equity interests in FUR Investors, LLC.

(j) The limitations of this Article VI, Section 6 shall not apply to Vornado Investments L.L.C. or any wholly-owned subsidiary of Vornado Realty L.P. with respect to ownership of shares of beneficial interest acquired pursuant to that Securities Purchase Agreement dated as of November 7, 2005, so long as Vornado Investments L.L.C. together with any wholly-owned subsidiary of Vornado Realty L.P. does not own more than the greater of (i) the number of Shares acquired under the Agreement or (ii) 9.9% of the outstanding Shares of beneficial interest.

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Execution Copy

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT, dated as of November 7, 2005 (this "Agreement"), is by and between First Union Real Estate Equity and Mortgage Investments, an unincorporated association in the form of a business trust organized in Ohio (the "Company") and Vornado Investments L.L.C., a Delaware limited liability company (the "Investor").

WHEREAS, the Company has filed with the SEC the Shelf Registration Statement which has been declared effective by the SEC; and

WHEREAS, the Investor wishes to purchase, and the Company wishes to issue and sell to the Investor, an amount of the Company's registered common shares of beneficial interest, par value $1.00 per share (the "Common Stock") that is equal to the lesser of (i) 9.9% of the outstanding shares of Common Stock as of the Closing Date, after giving effect to said issuance and sale; and (ii) 4,000,000 shares of Common Stock (such number of shares of Common Stock, the "Shares"), in each case, at the purchase price of $4.00 per Share (the "Purchase Price"), upon the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties agree as follows:

ARTICLE I
DEFINITIONS

Section 1.01. Definitions. As used in this Agreement, the following terms have the meanings set forth below.

"Affiliate" shall mean (a) with respect to an individual, any member of such individual's family residing in the same household; (b) with respect to an entity: (i) any executive officer, director, partner or Person that owns ten percent (10%) or more of the outstanding beneficial interest of or in such entity, or (ii) any brother, sister, brother-in-law, sister-in-law, lineal descendant or ancestor of any executive officer, director, partner or Person that owns ten percent (10%) or more of the outstanding beneficial interest of or in such entity; and (c) with respect to a Person, any Person which directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person or entity; provided, however, that for purposes of the definition of "Affiliate," no Investor shall be deemed an "Affiliate" of the Company.

"Agreement" shall have the meaning set forth in the preamble.

"Basket" shall have the meaning set forth in Section 9.03.


"Business Day" shall mean any day other than (i) a Saturday, (ii) a Sunday or (iii) any other day on which banks in the City of New York are authorized or required to close.

"By-Laws" shall mean, when used with respect to a specified Person, the by-laws of a Person, as the same may be amended from time to time.

"Capital Stock" shall mean, with respect to any Person, any and all shares, shares of beneficial interest, interests, participations, rights in or other equivalents (however designated and whether voting or non-voting) of such Person's capital stock or any form of membership, ownership or participation interests, as applicable, including partnership interests, whether now outstanding or hereafter issued and any and all securities, debt instruments, rights, warrants or options exercisable or exchangeable for or convertible into such capital stock.

"Certificate of Incorporation" shall mean, when used with respect to a specified Person, the Declaration of Trust, Articles or Certificate of Incorporation or other applicable organizational document of such Person, as currently in effect.

"Closing" shall have the meaning set forth in Section 2.02(a).

"Closing Date" shall have the meaning set forth in Section 2.02(a).

"Commission Filings" shall have the meaning set forth in Section 3.08.

"Common Stock" shall mean the common shares of beneficial interest, $1 par value per share, of the Company.

"Company" shall have the meaning set forth in the preamble.

"Company Subsidiaries" and "Company Subsidiary" shall have the meaning set forth in Section 3.03.

"Consents" shall mean all governmental and third party consents, approvals, authorizations, qualifications and waivers necessary to be received by a Person for the consummation of the transaction contemplated by the Agreement.

"Contract" shall mean any legally binding contract, agreement, mortgage, deed of trust, bond, loan, indenture, lease, license, note, option, warrant, right, instrument, commitment or other similar document, arrangement or agreement, whether written or oral.

"Declaration of Trust" shall have the meaning set forth in Section 3.01.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

"GAAP" shall mean generally accepted accounting principles applied on a consistent basis as used in the United States of America.

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"Governmental Body" shall mean any government or governmental or quasi-governmental authority including, without limitation, any federal, state, territorial, county, municipal or other governmental or quasi-governmental agency, board, branch, bureau, commission, court, arbitral body (public or private), department or other instrumentality or political unit or subdivision, whether located in the United States or abroad, the National Association of Securities Dealers, Inc., the New York Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market or the American Stock Exchange.

"Indemnitee" shall have the meaning set forth in Section 9.01.

"Indemnitor" shall have the meaning set forth in Section 9.01.

"Investor" shall have the meaning set forth in the preamble.

"Law" shall mean any treaty, statute, ordinance, code, rule, regulation, Order or other legal requirement enacted, adopted, promulgated, applied or followed by any Governmental Body.

"Legal Proceeding" shall mean any judicial, administrative or arbitral actions, suits, proceedings (public or private) or governmental proceedings.

"Lien" shall mean any mortgage, pledge, lien (statutory or otherwise), security interest, hypothecation, conditional sale agreement, encumbrance or similar restriction or agreement.

"Loss" shall have the meaning set forth in Section 9.01.

"Material Adverse Effect" shall mean any event, condition or contingency that has had, or is reasonably likely to have, a material adverse effect on the business, assets, liabilities, results of operations, prospects or financial condition of the Company or its Subsidiaries, taken as a whole.

"Newkirk" shall mean Newkirk Realty Trust, Inc., a newly-formed real estate investment trust.

"Newkirk IPO" shall mean the initial public offering by Newkirk of its common shares through an underwritten public offering, substantially as described in a Newkirk Registration Statement on Form S-11 filed with the SEC on or about August 8, 2005.

"Notice" shall have the meaning set forth in Section 9.02(a).

"NYSE" shall mean the New York Stock Exchange.

"Order" shall mean any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award issued by a Governmental Body.

"Person" shall mean any individual, corporation, partnership, firm, limited liability company, joint venture, trust, association, unincorporated organization, group, joint-stock company, Governmental Body or other entity.

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"Purchase Price" shall mean the product of the multiplication of (i) the amount of Shares issued and sold hereunder and (ii) $4.00.

"SEC" shall mean the U.S. Securities and Exchange Commission.

"Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

"Shelf Registration Statement" shall mean the registration statement of the Company on Form S-3 (No. 333-125987) and all amendments and supplements thereto, covering the registration of Company securities, including the Shares, under the Securities Act.

"Subsidiary" shall mean, as to any Person, any other Person more than 50% of the shares of the voting stock, voting interests, membership interests or partnership interests of which are owned or controlled, or the ability to select or elect more than 50% of the directors or similar managers is held, directly or indirectly, by such first Person or one or more of its Subsidiaries or by such first Person and one or more of its Subsidiaries; provided, however, that First Union Management, Inc. shall not be deemed to be a Subsidiary of the Company.

"Unaudited Financial Statements" shall have the meaning specified in
Section 3.07.

Section 1.02. Rules of Construction. Unless the context otherwise requires:

(a) an accounting term defined by GAAP that is not otherwise defined herein has the meaning assigned to it in accordance with GAAP;

(b) "or" is not exclusive;

(c) words in the singular include the plural, and words in the plural include the singular;

(d) the words "include" and "including" shall be deemed to mean "include, without limitation," and "including, without limitation";

(e) "herein," "hereof," "hereto," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular article, section, paragraph or clause where such terms may appear;

(f) references to sections mean references to such section in this Agreement, unless stated otherwise; and

(g) the use of any gender shall be applicable to all genders.

ARTICLE II
ISSUANCE, SALE AND PURCHASE OF THE SHARES.

Section 2.01. Sale and Purchase of the Shares. Upon the terms and subject to the conditions of this Agreement, the Company will sell to the Investor, and the Investor will purchase from the Company, the Shares for a purchase price of $4.00 per share (the "Purchase Price"). The final amount of the Purchase Price

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shall be determined by the Company at such time as the actual number of Shares to be issued to Investor are capable of being determined. Such amount of Shares, and the corresponding Purchase Price, shall be communicated in writing to Investor no later than one Business Day prior to the Closing Date.

Section 2.02. Closing.

(a) Subject to the satisfaction or waiver of the conditions set forth in this Agreement, the closing of the transaction contemplated by Section
2.01 (the "Closing") shall occur on the earlier of (i) a date which is within five (5) business days subsequent to the consummation of the Newkirk IPO and
(ii) March 31, 2006 (the "Closing Date"); provided, however, that the Company shall have the right, but not the obligation, to terminate this Agreement if the Newkirk IPO is not consummated on or before March 28, 2006, as provided in
Section 10.02 hereof. The Closing shall occur on the Closing Date at such time during business hours as may be mutually agreed upon by the Investor and the Company at the offices of [to be determined] or at such other date, time and location as may be mutually agreed upon by the parties hereto.

(b) At the Closing: (i) the Company will deliver to the Investor (x) a certificate for the Shares registered in the name of the Investor and (y) legal opinions of counsel to the Company, addressed to the Investor, in substantially the form of Annex A and Annex B (the "Company Counsel Opinions");
(ii) the Investor, in full payment for the Shares, will deliver to the Company the Purchase Price in immediately available funds, by wire transfer to such account as the Company shall specify, and (iii) each party shall take or cause to happen such other actions, and shall execute and deliver such other instruments or documents, as shall be required under Article VII.

Section 2.03 Use of Proceeds. The Company shall use the proceeds from the sale of the Shares for general corporate purposes.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investor as follows:

Section 3.01. Organization and Good Standing. The Company is an unincorporated association in the form of a business trust organized, validly existing and in good standing under the Laws of the State of Ohio and has trust power and authority to own, lease and operate its properties and carry on its business as presently conducted. The Company is duly qualified, registered or licensed as a foreign business entity to do business and is in good standing in each jurisdiction in which the ownership or leasing of its properties or the character of its present operations makes such qualification, registration or licensing necessary, except where the failure to so qualify or be in good standing could not reasonably have a Material Adverse Effect. The Company has heretofore delivered or made available to the Investor complete and correct copies of the declaration of trust of the Company, as amended to date (the "Declaration of Trust").

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Section 3.02. Authority; Binding Effect. The Company has trust power and authority to execute and deliver this Agreement and to consummate the transaction contemplated hereby. The execution and delivery of this Agreement and the Registration Rights Agreement, dated the date hereof (the "Registration Rights Agreement"), between the Company and the Investor with respect to the Shares, a form of which is attached hereto as Annex C and the consummation by the Company of the transactions contemplated hereby and thereby have been duly and validly approved by all necessary action on the part of the Company. This Agreement and the Registration Rights Agreement have been duly executed and delivered by the Company and constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their terms, except as such enforceability may be subject to the effects of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting creditors' rights generally and subject to the effects of general equitable principles.

Section 3.03. Organization and Good Standing of Company Subsidiaries. Exhibit 21 to the Shelf Registration Statement lists all Subsidiaries of the Company and their respective jurisdictions of formation (collectively, the "Company Subsidiaries" and each, a "Company Subsidiary"). The Company owns, directly or indirectly, all the shares of outstanding Capital Stock of each Company Subsidiary. There are no outstanding securities or rights convertible into or exchangeable for shares of any Capital Stock of any Company Subsidiary and there are no Contracts by which any Company Subsidiary is bound to issue additional shares of Capital Stock. All of the shares of Capital Stock of each of the Company Subsidiaries are duly and validly authorized, fully paid and non-assessable and, except for the Liens set forth in Schedule 3.03, are owned by the Company free and clear of any Lien with respect thereto. Each Company Subsidiary is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization, and has all requisite corporate power and authority to own, operate and lease its properties and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each other jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, except where the failure to be so licensed or qualified in any such jurisdiction could not reasonably have a Material Adverse Effect.

Section 3.04. Capitalization. Schedule 3.04 sets forth, in each case as of the date hereof, (i) the authorized capitalization of the Company, the number of shares of each class issued and outstanding and the number of shares reserved for issuance in connection with the Company's stock option plans, and (ii) all options, warrants, convertible securities, rights to subscribe to, calls, contracts, undertakings, arrangements and commitments to issue which may result in the issuance of stock of the Company. All of the issued and outstanding shares of the Company's Capital Stock have been validly authorized and issued and are fully paid and non-assessable and are not subject to any preemptive rights. Except as set forth on Schedule 3.04 (with respect to Series B-1 Convertible Redeemable Preferred Shares of Beneficial Interest), no securities of the Company are entitled to preemptive or similar rights, and no person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transaction contemplated by this Agreement. Such preemptive or similar rights do not apply to the sale of stock by the Company pursuant to a registration statement filed under the Securities Act and therefore do not apply to the sale of the Shares contemplated by this Agreement.

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Section 3.05. No Violations; Consents. Neither the execution, delivery or performance by the Company of this Agreement or the Registration Rights Agreement nor the consummation of the transactions contemplated hereby or thereby, will (a) conflict with, or result in the breach of, any provision of the organizational documents of the Company or any Company Subsidiary, (b) conflict with, violate, result in the breach or termination of, or constitute a default or give rise to any right of termination, amendment, cancellation or acceleration or right to increase the obligations or otherwise modify the terms thereof under any Contract or Order to which the Company or any Company Subsidiary is a party or by which the Company or any Company Subsidiary or any of the properties or assets of the Company or any Company Subsidiary is bound,
(c) constitute a violation of any Law applicable to the Company or any Company Subsidiary; or (d) result in the creation of any Lien upon the properties or assets of the Company or any Company Subsidiary. To the knowledge of the Company, no Consent is required on the part of the Company or the Company Subsidiaries in connection with the execution and delivery of this Agreement or the Registration Rights Agreement and the consummation of the transactions contemplated hereby and thereby.

Section 3.06. Listing. The Company is not in violation of the listing requirements of the NYSE in any material respect. The Company has not received any written notice from the NYSE that the Company is in violation of its listing agreement with the NYSE or the rules and regulations of the NYSE applicable to listed companies thereon.

Section 3.07. Financial Statements. The Company has previously delivered to the Investor copies of the unaudited combined balance sheet of the Company and the Company Subsidiaries as of June 30, 2005 and the related unaudited combined statements of operations and cash flows for the three months and nine months ended June 30, 2005, as reported in the Company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005, filed with the SEC under the Exchange Act (the "Unaudited Financial Statements"). The Unaudited Financial Statements accurately reflect the books and records of the Company and present fairly, in all material respects, the combined financial position of the Company and the Company Subsidiaries and the combined results of their operations and their cash flows for the period and date covered thereby, in conformity with GAAP, except for changes resulting from year-end adjustments (none of which will be material in amount) and the absence of footnote disclosures thereto. The financial statements and schedules included or incorporated by reference in the Prospectus present the consolidated financial condition of the Company as of the respective dates thereof and the consolidated results of operations and cash flows of the Company for the respective periods covered thereby, all in conformity with generally accepted accounting principles applied on a consistent basis throughout the entire period involved, except as otherwise disclosed in the Prospectus. No other financial statements of the Company are required by the Act and the Exchange Act to be included in the Prospectus. Deloitte & Touche LLP, who have reported on the Company's audited consolidated financial statements included in its Annual Report on Form 10-K incorporated by reference in the Shelf Registration Statement, is an independent registered public accountant with respect to the Company as required by the Act.

Section 3.08. Commission Filings. The Company has filed all reports, registration statements, proxy statements and other materials, together with any amendments required to be made with respect thereto, that were required to be filed with the SEC under the Securities Act or the Exchange Act from and after December 31, 2003 (all such reports and statements are collectively referred to herein as the "Commission Filings"). As of their respective dates, the

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Commission Filings, including the financial statements contained therein, complied in all material respects with all of the statutes and published rules and regulations enforced or promulgated by the regulatory authority with which the Commission Filings were filed, and, except to the extent the information in any Commission Filing has been revised or superseded by a later filed Commission Filing, did not and do not as of the date hereof contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the Commission Filings comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with GAAP, except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.

Section 3.09. Absence of Certain Developments. Except as specifically disclosed in the Commission Filings, since December 31, 2004 no event or series of events occurred which could reasonably have a Material Adverse Effect.

Section 3.10. Litigation. There are no Legal Proceedings pending or, to the knowledge of the Company, threatened, that question the validity of this Agreement or the transaction contemplated hereby or any action taken or to be taken by the Company or any Company Subsidiary in connection with the consummation of the transaction contemplated hereby. Except as otherwise specifically disclosed herein or in the Commission Filings, there are no Legal Proceedings pending or, to the knowledge of the Company, threatened, against or involving the Company or any Company Subsidiary or any of their respective properties or assets, at Law or in equity, involving, individual claims of more than $1,000,000 or claims in the aggregate of more than $3,000,000. There is no outstanding or, to the knowledge of the Company, threatened, Order of any Governmental Body against the Company or any Company Subsidiary or any of their respective properties or assets, which Order could reasonably have a Material Adverse Effect.

Section 3.11. Compliance with Laws. The Company and the Company Subsidiaries are in compliance in all respects with all Laws and Orders promulgated by any Governmental Body applicable to the Company and the Company Subsidiaries or to the conduct of the business or operations of the Company and the Company Subsidiaries or the use of their properties (including any leased properties) and assets, except where failure to comply would not have a Material Adverse Effect. Since December 31, 2004, neither the Company nor any Company Subsidiary has received any written notice of violation or alleged material violation of any such Law or Order by any Governmental Body in any material respect that has not been resolved. Since December 31, 2004, neither the Company nor any Company Subsidiary has received written notice that it is the subject of an investigation by any Governmental Body which could reasonably have a Material Adverse Effect.

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Section 3.12. Financial Advisors. No agent, broker, investment banker, finder, financial advisor or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from the Company, directly or indirectly, in connection with the transaction contemplated hereby.

Section 3.13. No Default. The Company is not in default in the payment or performance of any of its Contracts, except where such default would not have a Material Adverse Effect.

Section 3.14. Registration of Shares. Except as set forth in Schedule 3.14 hereto, the Company has not entered into any agreement to register its debt or equity securities under the Securities Act.

Section 3.15. Registration Statement. The Company meets the requirements for use of Form S-3 under the Securities Act. The Shelf Registration Statement, which covers the Shares, including a form of prospectus and such amendments or supplements to such Shelf Registration Statement as may have been required prior to the date of this Agreement, has been prepared by the Company under the provisions of the Act, has been filed with the SEC, and has become effective and which incorporates by reference documents which the Company has filed in accordance with the provisions of the Exchange Act. The Company has prepared a prospectus supplement (the "Prospectus Supplement"), to the prospectus included in the Shelf Registration Statement referred to above and the documents incorporated by reference therein, setting forth the terms of the offering, sale and plan of distribution of the Shares and additional information concerning the Company and its business. No stop order suspending the effectiveness of the Shelf Registration Statement or any post-effective amendment thereto has been issued and served on the Company, and no proceedings for that purpose are pending or, to the knowledge of the Company, threatened by the SEC. Copies of such Shelf Registration Statement and prospectus, any such amendment or supplement and all documents incorporated by reference therein that were filed with the SEC on or prior to the date of this Agreement have been delivered to the Investor. The final form of prospectus included in the Shelf Registration Statement, as amended or supplemented from time to time, is referred to herein as the "'Prospectus." Any reference herein to the Shelf Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated (or deemed to be incorporated) by reference therein, and any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Shelf Registration Statement or Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the SEC deemed to be incorporated by reference therein. As of the close of business on September 30, 2005, at least 4,000,000 shares of Common Stock were available for issuance pursuant to the Shelf Registration Statement, which permits the sale of the Shares in the manner contemplated by this Agreement;

Each part of the Shelf Registration Statement, when such part became or becomes effective, and the Prospectus and any amendment or supplement thereto, on the date of filing thereof with the SEC and at the date hereof and the Closing Date, did or will in all material respects comply with all applicable provisions of the Act and the Exchange Act. Each part of the Shelf Registration Statement, when such part became or becomes effective, did not or will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. The Prospectus and any amendment or supplement thereto, on the date of filing thereof with the SEC, did not or will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which

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they were made, not misleading; and any statutes, regulations, contracts or other documents that are required to be described in the Shelf Registration Statement or the Prospectus or to be filed as exhibits to the Shelf Registration Statement have been so described or filed. The foregoing representations and warranties in this Section 3.15 do not apply to any statements or omissions made in reliance on and in conformity with information relating to the Investor furnished in writing to the Company by the Investor specifically for inclusion in the Shelf Registration Statement or Prospectus or any amendment or supplement thereto.

The documents which are incorporated by reference in the Shelf Registration Statement or the Prospectus, or any amendment or supplement thereto, or from which information is so incorporated by reference, when they became effective or were filed with the SEC, as the case may be, complied in all material respects with the requirements of the Act or the Exchange Act, as applicable, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and any further documents so filed and incorporated by reference shall, when they become effective under the Act or when they are filed with the SEC, conform in all material respects with the requirements of the Act or the Exchange Act, as applicable, and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

Section 3.16. Disclosure Controls. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company, including its subsidiaries, is timely made known to the certifying officers by others within those entities, particularly during the period in which the Company's Form 10-K or 10-Q, as the case may be, is being prepared. The Company's certifying officers have evaluated the effectiveness of the Company's controls and procedures as of September 30, 2005, and the conclusions of such officers have not changed from the conclusions of such officers presented in the June 30, 2005 Company Form 10-Q. The Company presented in its Form 10-Q for the quarter ended June 30, 2005 (such date, the "Evaluation Date) the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company's internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the knowledge of the Company, in any factors that could significantly affect the Company's internal controls.

Section 3.17 Taxes. There have been properly completed and filed on a timely basis all material tax returns required to be filed by the Company or any Company Subsidiary on or prior to the date hereof. All such tax returns are true, correct and complete in all material respects. All taxes of the Company or any Company Subsidiary due and payable have been timely paid, except where the failure to pay such taxes would not reasonably be expected to have a Material Adverse Effect. The most recent audited financial statements of the Company contained in the Commission Filings reflect an adequate accrual in accordance

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with GAAP for all material taxes payable by the Company and any Company Subsidiaries for all taxable periods and portions thereof through the date of such financial statements. Neither the Company nor any Company Subsidiary is the subject of any actual or threatened tax audit or tax contingency. The Company
(i) for all taxable years for which the Internal Revenue Service could assert a tax liability, has elected to be treated and been subject to taxation, as a real estate investment trust (a "REIT") within the meaning of Section 856 of the Internal Revenue Code of 1986, as amended (the "Code") and has satisfied all requirements to qualify as a REIT for all such years, and currently intends to satisfy such requirements for all future taxable years, (ii) has not taken or omitted to take any action which would reasonably be expected to result in a challenge to its status as a REIT and (iii) the Company has received an opinion from Katten Muchin Rosenman LLP that the Company has qualified as a REIT for the taxable year ending on December 31, 2004 and has so qualified during 2005 through the most recent fiscal quarter prior to the date hereof and its proposed method of operation, as described in the Prospectus and as represented by the Company, will enable it to continue to meet the requirements for qualification and taxation as a REIT.

Section 3.18 Investment Company. The Company is not, and is not an affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE
INVESTOR

Section 4.01. Investor Representations. The Investor represents and warrants to the Company as follows:

(a) Authorization. The Investor is a limited liability company duly organized and validly existing as a limited liability company under the Laws of the State of Delaware. The Investor has the full power and authority to enter into this Agreement and to consummate the transaction contemplated hereby. The execution and delivery of this Agreement and the consummation by the Investor of the transaction contemplated hereby have been duly authorized by all necessary action on the part of the Investor. This Agreement has been duly executed and delivered by the Investor and constitutes the legal, valid and binding obligation of the Investor, enforceable in accordance with its respective terms, except as such enforceability may be subject to the effects of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting creditors' rights generally and subject to the effects of general equitable principles.

(b) Financial Advisors. No agent, broker, investment banker, finder, financial advisor or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from the Investor, directly or indirectly, in connection with the transaction contemplated by this Agreement.

(c) Ownership and Transfer Limitations. The Investor has received a copy of the By-Laws of the Company and understands, and will be in compliance with, the restrictions and limitations on transfer and ownership of the Company's Capital Stock set forth therein at the Closing and at all times thereafter, except as may be permitted by any waiver in writing by the Company of such restrictions and limitations.

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(d) Interests in the Company. Immediately prior to the acquisition of Capital Stock pursuant to this Agreement, the Investor does not beneficially own (as such term is used in Section 13(d) of the Exchange Act and the rules thereunder), directly or indirectly, any Capital Stock of the Company.

ARTICLE V
COVENANTS OF THE COMPANY

The Company covenants and agrees as follows:

Section 5.01. Maintain Listing. The Company will use commercially reasonable efforts to (x) maintain the listing and trading of its Common Stock on the NYSE, for so long as the Company qualifies for such listing under the rules and regulations of the NYSE and (y) comply in all material respects with the Company's reporting, filing, and other obligations, under the rules and regulations of the NYSE. In the event that the Common Stock is no longer eligible for listing and trading on the NYSE, the Company will use commercially reasonable efforts to secure the listing or quotation of the Common Stock on the Nasdaq National Market, the Nasdaq SmallCap Market or the American Stock Exchange (if such listing is permitted by the bylaws, rules or regulations of any of the foregoing) and to comply in all material respects with the Company's reporting, filing and other obligations under the bylaws or rules of such exchanges or the National Association of Securities Dealers, Inc., as applicable. The Company will promptly provide to the Investor copies of any notices it receives from the NYSE and any other exchange or quotation system on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges or quotation systems.

Section 5.02. REIT Certifications. The Company shall deliver to the Investor, at such time as may reasonably be requested by the Investor (but in any event no less frequently than on a quarterly basis), a certificate or certificates signed by an authorized officer of the Company to the effect that the Company has complied with the asset and income tests set forth in Section 856 of the Code, and that such officer anticipates that the Company will continue to comply with such requirements. In addition, the Company shall cooperate with the Investor, including, without limitation, by providing information and documents in its control relating to the income and assets of the Company at such times as may reasonably be requested by the Investor, even if the Investor at such time no longer holds an interest in the Company, in addressing issues raised by any taxing authority in any audit or similar proceeding that relates to or arises out of the Investors' investment in the Company. The Investor shall reimburse the Company for any increased out of pocket costs attributable to providing the certifications and information described in this paragraph to the Investor. The Company shall give the Investor at least sixty (60) days advance notice of any determination by the Company to elect to cease to be treated as a REIT for federal income tax purposes and will not cease to qualify as a REIT for any periods prior to the end of such 60-day notice period.

Section 5.03. Repurchase Notice. The Company shall agree to provide reasonable advance notice of any plan or agreement to repurchase Common Stock if such repurchase would cause the ownership interest of the Investor in the Common Stock to exceed 9.9% of the outstanding common shares.

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Section 5.04. Assignment to Subsidiary of Investor. The Company shall agree that the Investor shall be entitled to assign its Shares to a wholly-owned subsidiary of Vornado Realty L.P., including a taxable REIT subsidiary, for tax planning purposes.

Section 5.05. Limited Waiver of Ownership Limitations. The By-laws of the Company shall be amended prior to Closing, as indicated in the attached Annex C, to exempt the Investor and any wholly-owned subsidiary of Vornado Realty L.P. from the "Limit" (as defined in the By-laws), provided such exemption shall be limited to Investor's ownership of the Shares, enabling the Investor to own, at any time, up to a maximum of the greater of (i) the number of Shares issued hereunder, or (ii) 9.9% of the outstanding Common Stock. The Company covenants not to amend the By-Law provision set forth in Annex C hereto so long as the Investor or any wholly-owned subsidiary of Vornado Realty L.P. owns Shares in excess of the Limit. The Company further covenants not to take action against the Investor or otherwise that would be inconsistent with the amendment to the Company's By-Laws provided for in Annex C.

Section 5.06. Reporting. The Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports with the SEC required to be filed by the Company after the date hereof pursuant to the Exchange Act for the purpose of permitting the Investor to sell the Shares pursuant to Rule 144 under the Securities Act. If the Company is not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Investor and make publicly available in accordance with Rule 144(c) under the Securities Act such information as is necessary to permit the Investor to sell the Shares under Rule 144 under the Securities Act. The Company further covenants that it will take such further action as the Investor may reasonably request, to the extent required from time to time to enable the Investor to sell Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act.

ARTICLE VI
ACTIONS PRIOR TO CLOSING

Section 6.01. Consent. Each of the Company and the Investor will use its reasonable best efforts and shall fully cooperate with each other to make promptly all filings and applications, give all notices and obtain all Consents in connection with the transaction contemplated hereby.

Section 6.02. Publicity. The parties agree not to issue any announcement, press release, public statement or other information to the press or any third party with respect to this Agreement or the transaction contemplated hereby without obtaining the prior written approval of the other party hereto (which approval shall not be unreasonably withheld); provided, however, that nothing contained herein shall prevent either party, at any time, from furnishing any required information to any Governmental Body or from issuing any announcement, press release, public statement or other information to the press or any third party with respect to this Agreement or the transaction contemplated hereby if required by Law, although, the parties agree to consult with each other as to the content of any release so required and consider in good faith the comments of the other thereon.

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ARTICLE VII
CONDITIONS TO CLOSING

Section 7.01. Conditions to Obligations of the Investor. The obligation of the Investor to consummate the transaction contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of the following conditions:

(a) No Governmental Order or Other Proceeding or Litigation. (i) No Order of any Governmental Body shall be in effect that restrains or prohibits the purchase of the Shares and no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the Act, and no order directed at or in relation to any document incorporated by reference therein and no order preventing or suspending the use of the Prospectus has been issued by the Commission, and no suspension of the qualification of the Shares for offering or sale in any jurisdiction, or to the knowledge of the Company of the initiation or threatening of any proceedings for any such purposes, has occurred; (ii) the Registration Statement and all amendments thereto, or modifications thereof, if any, shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and (iii) the Prospectus and all amendments or supplements thereto, or modifications thereof, if any, shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading.

(b) Stock Certificates. The Company shall have delivered to the Investor (i) a certificate representing the Shares, duly registered in the name of the Investor and (ii) the Company Counsel Opinions.

(c) NYSE Listing. The Shares have been duly listed on the NYSE, subject only to notice of issuance.

(d) Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such date (except for representations and warranties that speak of a specific date, which need only be true and correct as of such date).

(e) Absence of Material Developments. Since December 31, 2004, no event or series of events shall have occurred that reasonably would be expected to have a Material Adverse Effect.

(f) Performance. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing Date.

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(g) No New Information. The Investor shall not have become aware of any information or other matter with respect to legal matters affecting the Company that is inconsistent with the financial and other information disclosed to the Investor prior to the date hereof, in a manner that constitutes or would reasonably be expected to have a Material Adverse Effect.

(h) Registration Rights Agreement. The Registration Rights Agreement shall have been executed and delivered by the Company.

(i) Opinions of Counsel. The Company shall provide to the Investor the opinions in the forms of Annex A and B hereto and, to the extent reasonably requested by Investor, such other reasonable deliveries by the Company and its counsel as are made in connection with a typical underwritten offering of common stock (other than with respect to a "comfort letter" from the Company's independent registered public accounting firm).

(j) Officers' Certificate. The Company will deliver to the Investor a certificate, dated as of and delivered on the Closing Date, of two of its executive officers to the effect that (i) the representations and warranties of the Company as set forth in this Agreement are true and correct as of the Closing Date, (ii) the Company shall have performed such of its obligations under this Agreement as are to be performed at or before the Closing Date, and
(iii) the conditions set forth in paragraphs (a) and (e) of Section 7.01 have been met.

Section 7.02. Conditions to Obligations of the Company. The obligation of the Company to consummate the transaction contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of the following conditions:

(a) No Governmental Order or Other Proceeding or Litigation. No Order of any Governmental Body shall be in effect that restrains or prohibits the sale of the Shares.

(b) Purchase Price. The Investor shall have delivered to the Company the Purchase Price.

(c) Representations and Warranties. The representations and warranties of the Investor contained herein shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such date (except for representations and warranties that speak of a specific date, which need only be true and correct as of such date).

ARTICLE VIII
SURVIVAL

Section 8.01. Survival. The representations, warranties and covenants to be performed at or prior to Closing of the parties set forth in this Agreement shall survive for a period of 12 months following the execution and delivery of this Agreement and thereafter shall be of no further force or effect, provided that the representations and warranties set forth in Sections 3.01
(Organization), 3.02 (Authorization), 3.04 (Capitalization) and 3.17 (Taxes)
shall survive indefinitely (or if indefinite survival is not permitted by Law, then for the maximum period permitted by applicable Law). Except as set forth

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herein, all of the covenants, agreements and obligations of the parties hereto shall survive the Closing indefinitely (or if indefinite survival is not permitted by Law, then for the maximum period permitted by applicable Law). Anything herein to the contrary notwithstanding, any claim for indemnification that is asserted by written notice which notice specifies in reasonable detail the facts upon which such claim is made as provided in this Section 8.01 within the survival period shall survive until resolved pursuant to a final non-appealable judicial determination or otherwise.

ARTICLE IX
INDEMNIFICATION

Section 9.01. Generally. Subject to the limitations and other provisions of this Article IX, the Company covenants and agrees to indemnify, defend and hold harmless the Investor and its directors, officers, shareholders, employees and agents (each, an "Investor Party") from and against any and all Losses resulting from, incurred in connection with or arising out of (a) any breach of any representation, warranty or covenant of the Company contained herein, or (b) the failure of the Company to perform any of the agreements, covenants or obligations contained herein (other than if any such claim was a result of a breach by the Investor under this Agreement). Subject to the limitations and other provisions of this Article IX, the Investor covenants and agrees to indemnify, defend and hold harmless the Company from and against (but only to the extent of) any and all Losses resulting from, incurred in connection with or arising out of (but only to the extent of) (a) any breach of any representation or warranty of the Investor contained herein, or (b) the failure of the Investor to perform any of the agreements, covenants or obligations of the Investor contained herein. The term "Loss" or any similar term shall mean any and all damages, reduction in value of the original investment in the Shares, deficiencies, costs, claims, fines, judgments, amounts paid in settlement, expenses of investigation, interest, penalties, taxes, assessments, out-of-pocket expenses (including reasonable attorneys' and auditors' fees and disbursements, witness fees and court costs). The party or parties being indemnified are referred to herein as the "Indemnitee" and the indemnifying party is referred to herein as the "Indemnitor."

Section 9.02. Indemnification Procedure.

(a) Any party who receives notice of a potential claim that may, in the judgment of such party, result in a Loss shall use all reasonable efforts to provide the parties hereto notice thereof, provided that failure or delay or alleged delay in providing such notice shall not adversely affect such party's right to indemnification hereunder, unless and then only to the extent that such failure or delay or alleged delay has resulted in actual prejudice to the Indemnitor, including, without limitation, by the expiration of a statute of limitations. In the event that any party shall incur or suffer any Losses in respect of which indemnification may be sought by such party hereunder, the Indemnitee shall assert a claim for indemnification by written notice (a "Notice") to the Indemnitor stating the nature and basis of such claim. In the case of Losses arising by reason of any third party claim, the Notice shall be given within thirty (30) days of the filing or other written assertion of any such claim against the Indemnitee, but the failure of the Indemnitee to give the Notice within such time period shall not relieve the Indemnitor of any liability that the Indemnitor may have to the Indemnitee, except to the extent that the Indemnitor demonstrates that the defense of such action has been materially prejudiced by the Indemnitee's failure to timely give such Notice.

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(b) In the case of third party claims for which indemnification is sought, the Indemnitor shall, if necessary, retain counsel reasonably satisfactory to the Indemnitee, and have the option (i) to conduct any proceedings or negotiations in connection therewith, (ii) to take all other steps to settle or defend any such claim (provided that the Indemnitor shall not settle any such claim without the consent of the Indemnitee which consent shall not be unreasonably withheld) and (iii) to employ counsel to contest any such claim or liability in the name of the Indemnitee or otherwise. In any event, the Indemnitee shall be entitled to participate at its own expense and by its own counsel in any proceedings relating to any third party claim. The Indemnitor shall, within 15 Business Days of receipt of the Notice, notify the Indemnitee of its intention to assume the defense of such claim. If (i) the Indemnitor shall decline to assume the defense of any such claim, (ii) the Indemnitor shall fail to notify the Indemnitee within 15 Business Days after receipt of the Notice of the Indemnitor's election to defend such claim, (iii) the Indemnitee shall have reasonably concluded that there may be defenses available to it which are different from or in addition to those available to the Indemnitor (in which case the Indemnitor shall not have the right to direct the defense of such action on behalf of the Indemnitee), or (iv) a conflict exists between the Indemnitor and the Indemnitee which the Indemnitee has reasonably concluded would prejudice the Indemnitor's defense of such action, then in each such case the Indemnitor shall not have the right to direct the defense of such action on behalf of the Indemnitee and the Indemnitee shall, at the sole expense of the Indemnitor, defend against such claim and (x) in the event of a circumstance described in clause (i) and (ii), the Indemnitee may settle such claim without the consent of the Indemnitor (and the Indemnitor may not challenge the reasonableness of any such settlement) and (y) in the event of a circumstance described in clause (iii) and (iv), the Indemnitee may not settle such claim without the consent of the Indemnitor (which consent will not be unreasonably withheld or delayed). The reasonable expenses of all proceedings, contests or lawsuits in respect of such claims shall be borne and paid by the Indemnitor if the Indemnitee is entitled to indemnification hereunder and the Indemnitor shall pay the Indemnitee, in immediately available funds, the amount of any Losses, within a reasonable time of the incurrence of such Losses. Regardless of which party shall assume the defense or negotiation of the settlement of the claim, the parties agree to cooperate fully with one another in connection therewith. In the event that any Losses incurred by the Indemnitee do not involve payment by the Indemnitee of a third party claim, then, the Indemnitor shall, within 20 days after written notice from the Indemnitee specifying the amount of Losses, pay to the Indemnitee, in immediately available funds, the amount of such Losses. Anything in this Article IX to the contrary notwithstanding, the Indemnitor shall not, without the Indemnitee's prior written consent, settle or compromise any claim or consent to entry of any judgment in respect thereof which imposes any future obligation on the Indemnitee or which does not include, as an unconditional term thereof, the giving by the claimant or plaintiff to the Indemnitee, a release from all liability in respect of such claim.

Section 9.03. Limitations on Indemnification.

Neither party shall be entitled to be indemnified hereunder unless and until the aggregate of all Losses incurred by such party shall exceed $100,000 (the "Basket"); provided, however, that the Basket shall not apply to any Losses incurred by such party with respect to any third party claim against such party for which such party is entitled to indemnity pursuant to Section 9.01.

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Notwithstanding anything to the contrary contained herein, the liability of (i) the Company under this Article IX shall be limited to an amount equal to the Purchase Price; and (ii) the Investor under this Article IX shall be limited to an amount equal to the Purchase Price.

ARTICLE X
TERMINATION

Section 10.01. Termination by Mutual Agreement. This Agreement may be terminated on or any time prior to the Closing by the mutual written consent of each of the Investor and the Company.

Section 10.02. Termination by the Company. The Company shall have the right, but not the obligation, to terminate this Agreement in the event that the Newkirk IPO is not consummated on or before March 28, 2006.

Section 10.03. Effect Of Termination. In the event of the termination of this Agreement as provided in Sections 10.01 and 10.02 hereof, all obligations and agreements of the parties set forth in this Agreement shall forthwith become void except for the obligations set forth in Article IX (Indemnification), and there shall be no liability or obligation on the part of the parties hereto except as otherwise provided in this Agreement. Notwithstanding the foregoing, the termination of this Agreement shall not relieve either party of any liability for breach of this Agreement prior to the date of termination.

ARTICLE XI
MISCELLANEOUS

Section 11.01 Notices and Addresses. Any notice, demand, request, waiver, or other communication under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service, if personally served or sent by facsimile; on the Business Day after notice is delivered to a courier or mailed by express mail, if sent by courier delivery service or express mail for next day delivery; and on the third day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered, return receipt requested, postage prepaid and addressed as follows:

If to the Company:

First Union Real Estate Equity and Mortgage Investments 7 Bulfinch Place, Suite 500
P.O. Box 9507
Boston, Massachusetts 02114
Attention: Carolyn Tiffany
Facsimile: (617) 742-4643
Telephone: (617) 570-4606

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with a copy to:

Hahn Loeser & Parks, LLP
3300 BP Tower
200 Public Square
Cleveland, Ohio 44114-2301
Attention: F. Ronald O'Keefe Facsimile: (216) 241-2824
Telephone: (216) 621-0150

If to the Investor:

Vornado Realty Trust
888 Seventh Avenue
New York, New York 10019
Attention: Clifford Broser
Facsimile: (212) 844-1073
Telephone: (212) 844-7012

with a copy to:

Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004-2498 Attention: William G. Farrar Telephone: (212) 558-4000
Facsimile: (212) 558-3588

Section 11.02 Captions. The captions in this Agreement are for convenience of reference only and shall not be given any effect in the interpretation of this Agreement.

Section 11.03 No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing. Any of the covenants or agreements contained in this Agreement may be waived only by the written consent of the Investor.

Section 11.04 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable Law, such provision(s) shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms so long as the economic or legal substance of the transactions contemplated by this Agreement are not affected in any manner materially adverse to any party.

Section 11.05 Exclusive Agreement; Amendment. This Agreement supersedes all prior agreements among the parties with respect to its subject matter, is intended (with the documents referred to herein) as a complete and exclusive statement of the terms of the agreement among the parties with respect thereto and cannot be changed or terminated except by a written instrument executed by

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the party or parties against whom enforcement thereof is sought, except that, with respect to the Investor, this Agreement may be amended by a written instrument executed by the Investor.

Section 11.06 Limitation on Assignment; Parties in Interest.

(a) No assignment of this Agreement or of any rights or obligations hereunder may be made by the Company or the Investor (by operation of Law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void except that the Investor may transfer its rights or obligations hereunder, including the Shares, to a wholly-owned subsidiary of Vornado Realty L.P. without the Company's consent as provided under Section 5.05.

(b) This Agreement shall be binding upon, and shall inure to the benefit of, and be enforceable by, the parties and their respective successors, transferees and assigns.

Section 11.07 Governing Law. This Agreement and (unless otherwise provided) all amendments hereof and waivers and consents hereunder shall be governed by the internal Laws of the State of New York, without regard to the conflicts of Law principles thereof which would specify the application of the Law of another jurisdiction.

Section 11.08 Jurisdiction. Each of the Investor and the Company (a) hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any state or federal court sitting in New York County, New York for the purposes of any suit, action or other proceeding arising out of this Agreement or the subject matter hereof brought by the Company, or the Investor and (b) hereby waives and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

Section 11.09 No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person other than any Person entitled to indemnity under Article IX.

Section 11.10 Injunctive Relief. In the event that any party threatens to take any action prohibited by this Agreement, the parties agree that there may not be an adequate remedy at law. Accordingly, in such an event, a party may seek and obtain preliminary and permanent injunctive relief (without the necessity of posting any bond or undertaking). Such remedies shall, however, be cumulative and not exclusive and shall be in addition to any other remedies which any party may have under this Agreement or otherwise.

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Section 11.11 Counterparts. This Agreement may be executed via facsimile or any other electronic means (including but not limited to PDF format) and in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute one and the same instrument.

Section 11.12 Actions Simultaneous. All actions to be taken and all documents to be executed and delivered by all parties at the Closing shall be deemed to have been taken and executed and delivered simultaneously and no actions shall be deemed to have been taken nor shall any documents be deemed to have been executed and delivered until all actions have been taken and all documents have been executed and delivered.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS

By:

Name: Peter Braverman Title: President

VORNADO INVESTMENTS L.L.C.

By: Vornado Realty L.P., its sole member

By: Vornado Realty Trust, its sole
general partner

By:

Name:


Title:

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Schedule 3.04

1. The preemptive rights granted to the holders of the Company's Series B-1 Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest, par value $1.00 per share, pursuant to an Amended and Restated Investor Rights Agreement dated as of June 20, 2005.

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Schedule 3.14

1. The registration rights granted by the Company to Kimco Realty Corporation pursuant to a Securities Purchase Agreement between the Company and Kimco dated as of February 16, 2005.

2. The registration rights granted to the holders of the Company's Series B-1 Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest, par value $1.00 per share, pursuant to an Amended and Restated Registration Rights Agreement dated as of June 20, 2005.

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Annex C

First Union Real Estate Equity and Mortgage Investments

Proposed By-Law Amendment - Article VI, Section 6

New Subparagraph (j)

(j) The limitations of this Article VI, Section 6 shall not apply to Vornado Investments L.L.C. or any wholly-owned subsidiary of Vornado Realty L.P. with respect to ownership of shares of beneficial interest acquired pursuant to that Securities Purchase Agreement dated as of November 7, 2005, so long as Vornado Investments L.L.C. together with any wholly-owned subsidiary of Vornado Realty L.P. does not own more than the greater of
(i) the number of Shares acquired under the Agreement or (ii) 9.9% of the outstanding Shares of beneficial interest.

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Execution Copy

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT, dated as of November 7, 2005 (this "Agreement"), between First Union Real Estate Equity and Mortgage Investments, an unincorporated association in the form of a business trust organized in Ohio (the "Company"), and Vornado Investments L.L.C., a Delaware limited liability company (together with its successors and permitted assigns of all or any of the Shares (as defined below), the "Shareholder").

WHEREAS, the Company has filed with the SEC the Shelf Registration Statement (as defined below) which has been declared effective by the SEC; and

WHEREAS, pursuant to the Securities Purchase Agreement by and between the Shareholder and the Company dated of even date herewith (the "Securities Purchase Agreement"), Shareholder is the purchaser of an amount of the Company's registered common shares of beneficial interest, par value $1.00 per share (the "Common Stock") that is equal to the lesser of (i) 9.9% of the outstanding shares of Common Stock as of the Closing Date, after giving effect to said issuance and sale; and (ii) 4,000,0000 shares of Common Stock (such number of shares of Common Stock, the "Shares"), in each case, at the purchase price of $4.00 per Share, upon the terms and subject to the conditions set forth in the Securities Purchase Agreement; and

WHEREAS, the Company wishes to facilitate the disposition, and the Shareholder wishes to have the ability to dispose, of such Shares.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

1. CERTAIN DEFINITIONS.

(a) Definitions. Capitalized terms not otherwise defined in this Agreement shall have the meaning set forth in the Securities Purchase Agreement. As used in this Agreement, the following terms have the meanings indicated below or in the referenced sections of this Agreement:

"Affiliate" of any Person means any other Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. The term "control" (including the terms "controlled by" and "under common control with") as 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.

"Agreement" means this Registration Rights Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to this Registration Rights Agreement as the same may be in effect at the time such reference becomes operative.


"Business Day" means any day on which commercial banks are open for business in New York, New York and on which the New York Stock Exchange or such other exchange as the Common Stock is listed is open for trading.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Other Registration Rights Agreements" means that certain Securities Purchase Agreement, dated February 16, 2005, by and between the Company and KIMCO Realty Corporation, and that certain Amended and Restated Registration Rights Agreement dated as June 20, 2005, among the Company and the holders of the Company's Series B-1 Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest, par value $1.00 per share.

"Person" means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, incorporated organization, association, corporation, institution, public benefit corporation, government (whether federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof) or any other entity.

"Prospectus" means the prospectus or prospectuses included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registerable Common Stock covered by such Registration Statement and by all other amendments and supplements to the prospectus, including any preliminary prospectus or supplement, post-effective amendments and all material incorporated by reference in such prospectus or prospectuses.

"Registerable Common Stock" means those Shares issued or issuable to the Shareholder pursuant to the Securities Purchase Agreement, including any securities issued in respect of such securities by reason of or in connection with any exchange for or replacement of such securities or any stock dividend, stock distribution, stock split, purchase in any rights offering or in connection with any combination of shares, recapitalization, merger or consolidation, or any other equity securities issued pursuant to any other pro rata distribution with respect to the Common Stock, until, in the case of any such securities, the earliest to occur of (i) the date on which its resale has been registered effectively pursuant to the Securities Act and disposed of in accordance with the Registration Statement relating to it or (ii) the date on which either it is distributed to the public pursuant to Rule 144 or is saleable without restriction pursuant to Rule 144(k) promulgated by the Commission pursuant to the Securities Act as confirmed in a written opinion of counsel to the Company addressed to the Shareholder.

"Registration Statement" means any registration statement, other than the Shelf Registration Statement, of the Company which covers any of the Registerable Common Stock pursuant to the provisions of this Agreement, including any Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference in such Registration Statement.

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"SEC" or the "Commission" means the Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended.

"Shelf Registration Statement" shall mean the registration statement of the Company on Form S-3 (No. 333-125987) and all amendments and supplements thereto, covering the registration of Company securities, including the Shares, under the Securities Act.

"Underwritten Registration" or "Underwritten Offering" means a registration in which securities of the Company are sold or to be sold to underwriters for reoffering to the public.

2. AUTOMATIC AND DEMAND REGISTRATIONS.

(a) Shelf Registration. The Shelf Registration Statement, which covers the Shares, including a Prospectus and such amendments or supplements to such Shelf Registration Statement as may have been required prior to the date of this Agreement, has been prepared by the Company under the provisions of the Act, has been filed with the SEC, and has become effective. The Company has prepared a prospectus supplement (the "Prospectus Supplement"), to the prospectus included in the Shelf Registration Statement referred to above and the documents incorporated by reference therein, setting forth the terms of the offering, sale and plan of distribution of the Shares and additional information concerning the Company and its business.

(b) Right to Request Registration. Any time after the Closing Date, the Shareholder may make a one-time request pursuant to this Section 2(b) for registration under the Securities Act of the disposition of all or part of the Shareholder's Shares in an Underwritten Offering pursuant to an effective Registration Statement ("Demand Registration"); so long as (i) Shareholder then holds the 4,000,000 Shares or, if less, 9.9% of the outstanding shares of the Company's Registerable Common Stock; and (ii) Shareholder pays all out-of-pocket costs associated with such registration statement. If requested by KIMCO Realty Corp. ("KIMCO") and approved by Shareholder, 1,000,000 shares of Common Stock held by KIMCO may be included in the Registration Statement, provided that KIMCO shall pay its proportionate share of the expenses of Shareholder pursuant to
Section 5 hereof.

(c) Restrictions on Demand Registrations. In no event shall the Company be obligated to effect more than two (2) Demand Registrations collectively pursuant to this Agreement and the Other Registration Rights Agreements in any single twelve (12) month period, with the first such period measured from the date of the first Demand Registration and ending on the same date twelve months following such Demand Registration, whether or not a Business Day; provided, however, that if (i) the Company is requested to effect a Demand Registration under this Agreement and (ii) is also requested to effect one or more Demand Registrations pursuant to the Other Registration Rights Agreements within any eighteen (18) month period during which the Company is eligible to file a registration statement on Form S-3 or on a successor form, then the Company

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shall only be obligated with respect to such latter registration statement during such period to register that percentage of the Registerable Common Stock equal to the product obtained by dividing (i) the number of shares of Registerable Common Stock held by the Shareholder and proposed to be registered hereunder by (ii) the total of the number of shares of Registerable Common Stock proposed to be registered hereunder and the number of shares of Common Stock which are registerable and are proposed to be registered under all of the Other Registration Rights Agreements. In the event that any of the Shares of the Shareholder have not been included in a Registration Statement because of the preceding sentence, then the Shareholder shall not be deemed to have utilized a Demand Registration under this Agreement. The Company may (i) postpone for up to ninety (90) days the filing or the effectiveness of a Registration Statement for a Demand Registration if, based on the good faith judgment of the Company's board of directors, such postponement or withdrawal is necessary in order to avoid premature disclosure of a matter the board has determined would be reasonably expected to result in a material adverse effect to the Company's business, financial condition, results of operations or prospects or the loss of a material opportunity to be disclosed at such time or (ii) postpone the filing of a Demand Registration in the event the Company shall be required to prepare audited financial statements as of a date other than its fiscal year end (unless the shareholders requesting such registration agree to pay the expenses of such an audit); provided, however, that in no event shall the Company withdraw a Registration Statement under clause (i) after such Registration Statement has been declared effective; and provided, further, however, that in any of the events described in clause (i) or (ii) above, the Shareholder shall be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as one of the permitted Demand Registrations. The Company shall provide written notice to the Shareholder of (x) any postponement or withdrawal of the filing or effectiveness of a Registration Statement pursuant to this Section 2(c), (y) the Company's decision to file or seek effectiveness of such Registration Statement following such withdrawal or postponement and (z) the effectiveness of such Registration Statement. The Company may defer the filing of a particular Registration Statement pursuant to this Section 2(c) only once.

(d) Selection of Underwriters. If any of the Registerable Common Stock covered by the Demand Registration granted hereunder is to be sold in an Underwritten Offering, the Shareholder shall have the right to select the managing underwriter(s) to administer the offering subject to the approval of the Company, which will not be unreasonably withheld.

(e) Effective Period of Demand Registration. After the Demand Registration filed pursuant to this Agreement has become effective, the Company shall use its best efforts to keep such Demand Registration effective until such time as the Registerable Common Stock registered thereon has been disposed of pursuant thereto. If the Company shall withdraw the Demand Registration pursuant to subsection (c) of this Section 2 before all of the Shareholders Registerable Common Shares covered by the withdrawn Demand Registration are sold, the Shareholder shall be entitled to a replacement Demand Registration at the

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Company's sole expense (subject to the provisions of this Article 2). After the replacement Demand Registration has become effective, the Company shall use its best efforts to keep such Registration effective until such time as the Registerable Common Stock registered thereon has been disposed of pursuant thereto. Such replacement Demand Registration otherwise shall be subject to all of the provisions of this Agreement.

3. OTHER REGISTRATIONS.

(a) If the Company has previously filed a Registration Statement with respect to shares of Registerable Common Stock pursuant to Section 2 (other than
Section 2(a)), and if such previous registration has not been withdrawn or abandoned, the Company shall not be obligated to cause to become effective any other registration of such same shares of Registerable Common Stock or any of its securities under the Securities Act, whether on its own behalf or at the request of any holder or holders of such securities.

(b) Except as specifically provided herein or in the Other Registration Rights Agreements, the Company shall not grant to other holders of its securities the right to include any of their securities of the Company in a Demand Registration.

4. REGISTRATION PROCEDURES.

Whenever the Shareholder requests that any of its Registerable Common Stock be registered pursuant to this Agreement, the Company shall use its best efforts to effect the registration and the sale of such Registerable Common Stock in accordance with the intended methods of disposition thereof as provided by the Shareholder, and pursuant thereto the Company shall as expeditiously as possible:

(a) prepare and file with the SEC a Registration Statement with respect to such Registerable Common Stock, which shall be on Form S-3 (or a successor form) providing for "short-form" registration if the Company is eligible at such time to use such form, and use its best efforts to cause such Registration Statement to become effective as soon as practicable thereafter; and before filing a Registration Statement or Prospectus or any amendments or supplements thereto, furnish to the Shareholder and the underwriter or underwriters, if any, copies of all such documents proposed to be filed, including documents incorporated by reference in the Prospectus and, if requested by the Shareholder, the exhibits incorporated by reference, and the Shareholder shall have the opportunity to object to any information pertaining to the Shareholder that is contained therein and the Company will make the corrections reasonably requested by the Shareholder with respect to such information prior to filing any Registration Statement or amendment thereto or any Prospectus or any supplement thereto;

The Company, at least 10 days prior to filing a Registration Statement or at least five days prior to filing a Prospectus or any amendment or supplement to such Registration Statement or Prospectus, including a document incorporated by reference therein, will furnish to (i) the Shareholder, (ii) counsel to the Shareholder and (iii) each underwriter, if any, named in the Registration Statement or an amendment or supplement thereto of the Shares covered by such Registration Statement, copies of such Registration Statement and each amendment

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or supplement as proposed to be filed, together with exhibits thereto, which documents will be subject to reasonable review and approval (which approval may not be unreasonably withheld) by each of the foregoing within five days after delivery (except that such review and approval of any Prospectus or any amendment or supplement to such Registration Statement or Prospectus must be within three days), and thereafter, furnish to the Shareholder, Shareholder's counsel and underwriters, if any, such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus) and such other documents or information as the Shareholder, Shareholder's counsel or any underwriter of the Shareholder's Shares may reasonably request in order to facilitate the disposition of the Shares; provided, however, that notwithstanding the foregoing, if the Company intends to file any Prospectus, Prospectus supplement or Prospectus sticker which does not make any material changes in the documents already filed (including, without limitation, any prospectus under Rule 430A or 424(b)), then Shareholder's counsel will be afforded such opportunity to review such documents prior to filing consistent with the time constraints involved in filing such document, but in any event no less than one day.

(b) The Company will promptly notify the Shareholder of any stop order with respect to the Registration Statement issued or threatened by the Commission and take all commercially reasonable actions required to prevent the entry of threatened stop order or to remove it as soon as reasonably possible if entered.

(c) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for such period as is necessary to complete the distribution of the securities covered by such Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement;

(d) furnish to each seller of Registerable Common Stock such number of copies of such Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary Prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registerable Common Stock owned by such seller;

(e) use its commercially reasonable efforts to become and remain eligible to file registration statements on Form S-3 or any successor thereto then available, and if applicable to utilize "well known seasoned issuer status", and to register or qualify such Registerable Common Stock under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in

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such jurisdictions of the Registerable Common Stock owned by such seller (provided, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph (d), (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction);

(f) notify each seller of such Registerable Common Stock, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and prepare promptly a supplement or amendment to such Prospectus so that such Prospectus, as then amended or supplemented, shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

(g) in the case of an Underwritten Offering, enter into such customary agreements (including underwriting and related lockup agreements in customary form) and take all such other actions as the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registerable Common Stock (including, without limitation, effecting a stock split or a combination of shares and making members of senior management of the Company available to participate in, and cause them to cooperate with the underwriters in connection with, "road-show" and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registerable Common Stock)) and cause to be delivered to the underwriters and the sellers, if any, opinions of counsel to the Company in customary form, as well as closing certificates and other customary documents covering such matters as are customarily covered by opinions for and certificates in an underwritten public offering as the underwriters may request and addressed to the underwriters and the sellers; provided, however, notwithstanding anything else contained in this Agreement, that under this Agreement and the Other Registration Rights Agreements the Company shall not be obligated to effect an aggregate of more than three Underwritten Offerings or participate in more than two "road shows" (which, for the purposes of this sentence shall not include presentations that involve only telephonic or internet-based marketing and do not require any travel by the Company's management) in any twenty-four (24) month period, and not more than one Underwritten Offering every six (6) months. Except as expressly provided herein, only the Shareholder and its affiliates holding Registerable Common Stock shall be entitled to participate in any Underwritten Offering pursuant to this Agreement with respect to Registerable Common Stock;

(h) make available, for inspection by the Shareholder, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by the Shareholder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by any Shareholder, underwriter, attorney, accountant or agent in connection with such Registration Statement;

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(i) to use its best efforts to cause all such Registerable Common Stock to be listed on each securities exchange on which securities of the same class issued by the Company are then listed or, if no such similar securities are then listed, on Nasdaq or a national securities exchange selected by the Company;

(j) provide a transfer agent and registrar for all such Registerable Common Stock not later than the effective date of such Registration Statement;

(k) if requested, cause to be delivered, immediately prior to the effectiveness of the Registration Statement (and, in the case of an Underwritten Offering, at the time of delivery of any Registerable Common Stock sold pursuant thereto), letters from the Company's independent certified public accountants addressed to the Shareholder (unless the Shareholder does not provide to such accountants the appropriate representation letter required by rules governing the accounting profession) and each underwriter, if any, stating that such accountants are independent public accountants within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC thereunder, and otherwise in customary form and covering such financial and accounting matters as are customarily covered by letters of the independent certified public accountants delivered in connection with primary or secondary underwritten public offerings, as the case may be;

(l) make generally available to its shareholders a consolidated earnings statement (which need not be audited) for the 12 months beginning after the effective date of a Registration Statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earning statement under Section 11(a) of the Securities Act;

(m) promptly notify the Shareholder and the underwriter or underwriters, if any:

(i) when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective;

(ii) of any SEC comments applicable to the Registration Statement or Prospectus or written request from the SEC for any amendments or supplements to the Registration Statement or Prospectus;

(iii) of the notification to the Company by the SEC of its initiation of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement;

(iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registerable Common Stock for sale under the applicable securities or blue sky laws of any jurisdiction;

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(v) of the existence of, any fact or the happening of any event that makes any statement of material fact made in any registration statement filed pursuant to this Agreement or related prospectus untrue in any material respect, or that requires the making of any changes in such registration statement so that, in the case of the registration statement, it will not 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 not misleading and that, in the case of the prospectus, including documents incorporated by reference therein, such prospectus will not 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 under which they were made, not misleading; and

(vi) of the determination by the Company that a post-effective amendment to a registration statement filed pursuant to this Agreement will be filed with the SEC and is due.

The Company shall file, and shall use its commercially reasonable efforts to timely file, all reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and take such further action as the Shareholder may reasonably request, all to the extent required to enable the Shareholder to be eligible to sell Registerable Common Stock pursuant to Rule 144 (or any similar rule then in effect).

In connection with any registration pursuant to which any of a Shareholder's Registerable Common Stock is to be sold, the Company may require that the Shareholder furnish to the Company any other information regarding the Shareholder and the distribution of such securities as the Company may from time to time reasonably request in writing.

The Company shall as promptly as practicable take such actions as are necessary to respond to or eliminate, as the case may be, any of the events referred to in clause (m)(ii), (iii), (iv) or (v), so that the prospectus, as then amended or supplemented, as the case may be, shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, provided, however, that notwithstanding the foregoing, the Shareholder agrees that by having its stock treated as Registerable Common Stock hereunder, upon notice of the happening of any event described in m(v) above (a "Suspension Notice"), the Shareholder will forthwith discontinue disposition of Registerable Common Stock until the Shareholder is advised in writing by the Company that the use of the Prospectus may be resumed and is furnished with a supplemented or amended Prospectus as contemplated by Section 4(f) hereof, and, if so directed by the Company, the Shareholders will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in the Shareholder's possession, of the Prospectus covering such Registerable Common Stock current at the time of receipt of such notice; provided, however, that

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such postponement of sales of Registerable Common Stock shall not exceed ninety
(90) days in the aggregate in any one year; provided, further, however, that not later than the last day of such ninety (90) day period or such shorter period as may apply, the Company shall have provided to the Shareholders a supplemented or amended Prospectus as contemplated by Section 4(f) hereof. If the Company shall give any notice to suspend the disposition of Registerable Common Stock pursuant to a Prospectus, the Company shall extend the period of time during which the Company is required to maintain the Registration Statement effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date the Shareholder either is advised by the Company that the use of the Prospectus may be resumed or receives the copies of the supplemented or amended Prospectus contemplated by
Section 4(f). In any event, the Company shall not be entitled to deliver more than one (1) Suspension Notice in any one year.

5. REGISTRATION EXPENSES.

All expenses incident to the Company's performance of or compliance with this Agreement, including, without limitation, all registration and filing fees, underwriting discounts and commissions, NASD fees, fees and expenses of compliance with securities or blue sky laws, listing application fees, printing expenses, transfer agent's and registrar's fees, cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto, and fees and disbursements of one counsel for the Company, one independent certified public accountant and other Persons retained by the Company (all such expenses being herein called "Registration Expenses"), shall be borne by the Shareholder; provided, however, that the Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), and the expense of any annual audit or quarterly review, and the expense of any liability insurance.

6. INDEMNIFICATION.

(a) The Company shall indemnify, to the fullest extent permitted by law, each Shareholder, its officers, directors, trustees, partners, and Affiliates and each Person who controls such Shareholder (within the meaning of the Securities Act) against all losses, claims, damages, expenses and liabilities, joint or several, actions or proceedings, to which each such indemnified party may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, expenses (including reasonable costs of investigation) or liabilities (or actions or proceedings in respect thereof) arise out of or based upon any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or any violation or alleged violation by the Company of the Securities Act, the Exchange Act or applicable "blue sky" laws and the Company will reimburse each such Shareholder and each such director, trustee, officer, partner, agent, employee or affiliate, underwriter and controlling person for any legal or other expenses reasonably incurred by them (as such legal or other expenses are incurred and for which reasonably sufficient documentation is provided) in

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connection with investigating or defending any such loss, claim, damage, expense, liability, action or proceeding, except insofar as the same are made in reliance and in conformity with information relating to the Shareholder furnished in writing to the Company by the Shareholder expressly for use therein or caused by Shareholder's failure to deliver to the Shareholder's immediate purchaser a copy of a final prospectus or any amendments or supplements thereto (if the same was required by applicable law to be so delivered) after the Company has furnished the Shareholder with a sufficient number of copies of the same and the claim would not have arisen if the final prospectus, amendment or supplement had been delivered to the claimant. In connection with an Underwritten Offering, the Company shall indemnify such underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Shareholder.

(b) In connection with any Registration Statement in which the Shareholder is participating, the Shareholder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests expressly for use in connection with any such Registration Statement or Prospectus and, shall indemnify, to the fullest extent permitted by law, the Company, its officers, directors, Affiliates, and each Person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, expenses and liabilities joint or several, actions or proceedings, to which each such indemnified party may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) arise out of or based upon any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Shareholder will reimburse the Company and each director, trustee, officer, partner, agent, employee or affiliate, underwriter and controlling person for any legal or other expenses reasonably incurred by them (as such legal or other expenses are incurred and for which reasonably sufficient documentation is provided) in connection with investigating or defending any such loss, claim, damage, expense, liability action or proceeding, but only to the extent that the same are made in reliance and in conformity with information relating to the Shareholder furnished in writing to the Company by the Shareholder expressly for use therein. Notwithstanding anything in this Section 6(b), the aggregate amount which may be recovered from the Shareholder pursuant to the indemnification provided for in this Section 6(b) shall be limited to the total proceeds received by such Shareholder from the sale of such Shareholder's Registerable Common Stock (net of underwriting discounts and commissions). In no event shall the Shareholder be jointly liable with any other holder of securities involved in the sale of the Company's securities.

(c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. The failure to give prompt notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that the indemnifying party is actually and materially prejudiced by such failure. The indemnifying party will not, without the prior written consent of

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the indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not such indemnified party or any Person who controls such indemnified party is a party to such claim, action, suit or proceeding), if such settlement, compromise or consent (i) does not include an unconditional release of such indemnified party from all liability and no finding of liability arising out of such claim, action, suit or proceeding or (ii) requires anything from the indemnified party other than the payment of money damages which the indemnifying party has agreed to pay in full. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party which are in addition to or may conflict with those available to another indemnified party with respect to such claim.

(d) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of securities.

(e) If the indemnification provided for in or pursuant to this Section 6 is due in accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which result in such losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified Person 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 the indemnifying party or by the indemnified party, and by such party's relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In no event shall the liability of any selling Shareholder under this Section 6(e) be greater in amount than the amount of net proceeds received by such Shareholder upon such sale or the amount for which such indemnifying party would have been obligated to pay by way of indemnification if the indemnification provided for under Section 6(b) hereof had been available under the circumstances less any amounts recovered from the Shareholder under Section 6(b).

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(f) In the event that advances are not made pursuant to this Section 6 or payment has not otherwise been timely made, each indemnified party shall be entitled to seek a final adjudication in an appropriate court of competent jurisdiction of the entitlement of the indemnified party to indemnification or advances hereunder.

The Company and the Shareholder agree that they shall be precluded from asserting that the procedures and presumptions of this Section 6 are not valid, binding and enforceable. The Company and the Shareholder further agree to stipulate in any such court that the Company and the Shareholder are bound by all the provisions of this Section 6 and are precluded from making any assertion to the contrary.

To the extent deemed appropriate by the court, interest shall be paid by the indemnifying party to the indemnified party at a reasonable interest rate for amounts which the indemnifying party has not timely paid as the result of its indemnification and contribution obligations hereunder.

In the event that any indemnified party is a party to or intervenes in any proceeding to which the validity or enforceability of this Section 6 is at issue or seeks an adjudication to enforce the rights of any indemnified party under, or to recover damages for breach of, this Section 6, the indemnified party, if the indemnified party prevails in whole in such action, shall be entitled to recover from the indemnifying party and shall be indemnified by the indemnifying party against, any expenses incurred by the indemnified party. If it is determined that the indemnified party is entitled to indemnification for part (but not all) of the indemnification so requested, expenses incurred in seeking enforcement of such partial indemnification shall be reasonably prorated among the claims, issues or matters for which the indemnified party is entitled to indemnification and for such claims, issues or matters for which the indemnified party is not so entitled.

The indemnity agreements contained in this Section 6 shall be in addition to any other rights (to indemnification, contribution or otherwise) which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made or omitted by or on behalf of any indemnified party and shall survive the transfers and sale of any Registerable Common Stock by the Shareholder.

7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.

No Person may participate in any registration hereunder that is underwritten unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

8. RULE 144.

The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and it will take such further action as the Shareholder may reasonably request to make available adequate current public information with respect to the Company meeting the current public

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information requirements of Rule 144(c) under the Securities Act (to the extent such information is available), to the extent required to enable the Shareholder to sell Registerable Common Stock without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of the Shareholder, the Company will deliver to the Shareholder a written statement as to whether it has complied with such information and requirements.

9. MISCELLANEOUS.

(a) Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given,

If to the Company:

First Union Real Estate Equity and Mortgage Investments 7 Bulfinch Place, Suite 500
P.O. Box 9507
Boston, Massachusetts 02114
Attn: Carolyn Tiffany
Fax: (617) 742-4643
Tel: (617) 570- 4606

with a copy to:

Hahn Loeser + Parks, LLP
3300 BP tower
200 Public Square
Cleveland, Ohio 44114-2301
Attn: F. Ronald O'Keefe
Fax: (216) 241-2824
Tel: (216) 621-0150

If to the Shareholder:

Vornado Realty Trust
Address: 888 Seventh Avenue
New York, NY 10019
Facsimile No.: (212) 894-7035 Attn: Cliff Broser
Fax: (212) 894-1073
Tel: (212) 894-7012

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With a copy to:

Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Attn: William G. Farrar
Fax: (212) 558-1600
Tel: (212) 558-4940

or such other address or facsimile number as such party (or transferee) may hereafter specify for the purpose by notice to the other parties. Each such notice, request or other communication shall be effective (a) if given by facsimile, when such facsimile is transmitted to the facsimile number specified in this Section and the appropriate facsimile confirmation is received or (b) if given by any other means, when delivered at the address specified in this Section.

(b) No Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

(c) Expenses. Except as otherwise provided for herein or otherwise agreed to in writing by the parties, all costs and expenses incurred in connection with the preparation of this Agreement shall be paid by the Company.

(d) Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party, except that the Shareholder may assign its rights hereunder to any Affiliate and such Affiliate shall be entitled to the benefits of this Agreement as if it had been a signatory hereto.

(e) Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York, without regard to principles of conflicts of law.

(f) Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in any federal or state court located in the County and State of New York, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 9(a) shall be deemed effective service of process on such party.

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(g) Waiver of Jury Trial.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(h) Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

(i) Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the transactions contemplated herein. Except as provided herein, no provision of this Agreement or any other agreement contemplated hereby is intended to confer on any Person other than the parties hereto any rights or remedies.

(j) Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

(k) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, 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 in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

(l) Amendments. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the prior written consent of the parties hereto.

(m) Aggregation of Stock. All Common Stock held by or acquired by any Affiliated Persons will be aggregated together for the purpose of determining the availability of any rights under this Agreement.

(n) Equitable Relief. The parties hereto agree that legal remedies may be inadequate to enforce the provisions of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement.

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(o) No Inconsistent Agreements. The Company will not enter into any agreement that is inconsistent with the rights granted to the Shareholder in this Agreement or that otherwise conflicts with the provisions hereof. The rights granted to the Shareholder hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's other issued and outstanding securities under any such agreements.

(p) No Adverse Action Affecting the Registerable Common Stock. The Company shall take no action with respect to the Registerable Common Stock with an intent to adversely affect or that does adversely affect the ability of any of the Shareholder to include such Registerable Common Stock in a registration undertaken pursuant to this Agreement or their offer and sale. Notwithstanding the foregoing, the provisions of this Section 9(p) shall not apply to the Other Registration Rights Agreements.

IN WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by each of the parties hereto as of the date first written above.

Vornado Investments LLC.

By:

Name:
Title:

First Union Real Estate Equity and Mortgage Investments

By:
Name: Peter Braverman
Title: President

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SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT, dated as of November 7, 2005 (this "Agreement"), is by and between Newkirk Realty Trust, Inc., a Maryland corporation (the "Company") and First Union Real Estate Equity and Mortgage Investments, an Ohio business trust (the "Investor").

RECITALS:

WHEREAS, the Company has filed a registration statement on Form S-11 (as the same may be amended from time to time, the "Registration Statement") with the Securities and Exchange Commission (the "Commission") pursuant to which the Company is making an initial public offering of its common stock, par value $0.01 per share (the "Common Stock");

WHEREAS, the Company and the Investor are executing and delivering this Agreement in reliance upon the exemptions from registration provided by Regulation D ("Regulation D") promulgated by the Commission under the Securities Act of 1933, as amended (the "Securities Act"), and/or Section 4(2) of the Securities Act; and

WHEREAS, the Investor wishes to purchase, and the Company wishes to issue and sell, shares of Common Stock having a value of $50,000,000, based on a purchase price per share equal to the initial public offering price of the Common Stock sold to the public pursuant to the Registration Statement, upon the terms and conditions of this Agreement;

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and undertakings hereunder and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, intending to be legally bound, the parties hereto do hereby agree as follows:

ARTICLE I
DEFINITIONS

Section 1.01. Definitions. As used in this Agreement, the following terms have the meanings set forth below.

"Acquisition Agreement" shall mean that certain Acquisition Agreement, dated of even date herewith, between the Company and the Investor with respect to the assignment by the Investor to the Company of certain of Investor's rights under the Exclusivity Services Agreement, dated as of December 31, 2003, between the Investor and Michael Ashner.

"Affiliate" shall mean (a) with respect to an individual, any member of such individual's family residing in the same household; (b) with respect to an entity: (i) any executive officer, director, partner or Person that owns ten percent (10%) or more of the outstanding beneficial interest of or in such entity, or (ii) any brother, sister, brother-in-law, sister-in-law, lineal descendant or ancestor of any executive officer, director, partner or Person that owns ten percent (10%) or more of the outstanding beneficial interest of or in such entity; and (c) with respect to a Person, any Person which directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person or entity; provided, however, that for purposes of the definition of "Affiliate," no Investor shall be deemed an "Affiliate" of the Company.


"Agreement" shall have the meaning set forth in the preamble.

"Basket" shall have the meaning set forth in Section 9.03.

"Business Day" shall mean any day other than (i) a Saturday, (ii) a Sunday or (iii) any other day on which banks in the City of New York are authorized or required to close.

"By-Laws" shall mean, when used with respect to a specified Person, the by-laws of a Person, as the same may be amended from time to time.

"Capital Stock" shall mean, with respect to any Person, any and all shares, shares of beneficial interest, interests, participations, rights in or other equivalents (however designated and whether voting or non-voting) of such Person's capital stock or any form of membership, ownership or participation interests, as applicable, including partnership interests, whether now outstanding or hereafter issued and any and all securities, debt instruments, rights, warrants or options exercisable or exchangeable for or convertible into such capital stock.

"Closing" shall have the meaning set forth in Section 2.02(a).

"Closing Date" shall have the meaning set forth in Section 2.02(a).

"Commission Filings" shall have the meaning set forth in Section 3.08.

"Common Stock" shall mean the common shares, $0.01 par value per share, of the Company.

"Company" shall have the meaning set forth in the preamble.

"Company Subsidiaries" and "Company Subsidiary" shall mean all of the subsidiaries of the Company as set forth on Exhibit 21 of the Registration Statement.

"Consents" shall mean all governmental and third party consents, approvals, authorizations, qualifications and waivers necessary to be received by a Person for the consummation of the transaction contemplated by the Agreement.

"Contract" shall mean any legally binding contract, agreement, mortgage, deed of trust, bond, loan, indenture, lease, license, note, option, warrant, right, instrument, commitment or other similar document, arrangement or agreement, whether written or oral.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

"GAAP" shall mean generally accepted accounting principles applied on a consistent basis as used in the United States of America.

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"Governmental Body" shall mean any government or governmental or quasi-governmental authority including, without limitation, any federal, state, territorial, county, municipal or other governmental or quasi-governmental agency, board, branch, bureau, commission, court, arbitral body (public or private), department or other instrumentality or political unit or subdivision, whether located in the United States or abroad, the National Association of Securities Dealers, Inc., the New York Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market or the American Stock Exchange.

"Indemnitee" shall have the meaning set forth in Section 9.01.

"Indemnitor" shall have the meaning set forth in Section 9.01.

"Investor" shall have the meaning set forth in the preamble.

"Law" shall mean any treaty, statute, ordinance, code, rule, regulation, Order or other legal requirement enacted, adopted, promulgated, applied or followed by any Governmental Body.

"Legal Proceeding" shall mean any judicial, administrative or arbitral actions, suits, proceedings (public or private) or governmental proceedings.

"Legend" shall mean the Legend set forth in Section 4.02(e).

"Lien" shall mean any mortgage, pledge, lien (statutory or otherwise), security interest, hypothecation, conditional sale agreement, encumbrance or similar restriction or agreement.

"Lock-up Agreement" shall mean an agreement in substantially the form of Annex C hereto pursuant to which the Investor agrees that its right to sell the Common Stock to be acquired by it hereunder and pursuant to the Assignment Agreement shall be subject to restriction.

"Loss" shall have the meaning set forth in Section 9.01.

"Material Adverse Effect" shall mean any event, condition or contingency that has had, or is reasonably likely to have, a material adverse effect on (i) the assets, business, condition (financial or otherwise), results of operations, stockholders' equity, properties or prospects of the Company, the Operating Partnership, Newkirk REIT Advisor LLC, a Delaware limited liability company (the "Manager") and the Company Subsidiaries, taken as a whole; (ii) the long-term debt or capital stock of the Company, the Operating Partnership, the Manager or any Company Subsidiary; or (iii) the offering contemplated by the Registration Statement or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement or the Prospectus.

"Notice" shall have the meaning set forth in Section 9.02(a).

"NYSE" shall mean the New York Stock Exchange.

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"Offering" shall mean the offering and sale of the Shares contemplated by the Registration Statement and Prospectus.

"Operating Partnership" shall mean The Newkirk Master Limited Partnership, a Delaware limited partnership.

"Order" shall mean any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award.

"Ownership Waiver" shall have the meaning set forth in Section 5.03.

"Person" shall mean any individual, corporation, partnership, firm, limited liability company, joint venture, trust, association, unincorporated organization, group, joint-stock company, Governmental Body or other entity.

"Prospectus" shall mean the prospectus, in the form in which it is to be filed with the SEC pursuant to Rule 424(b), or, if the prospectus is not to be filed with the SEC pursuant to Rule 424(b), the prospectus in the form included as part of the Registration Statement at the time the Registration Statement becomes effective.

"Purchase Price" shall have the meaning set forth in Section 2.01.

"Qualified Institutional Buyer" shall mean a Person that is a "qualified institutional buyer" within the definition contained in Rule 144A under the Securities Act.

"Registration Rights Agreement" shall mean that certain Registration Rights Agreement, dated of even date herewith, between the Company and the Investor.

"Registration Statement" shall have the meaning set forth in the Recitals.

"SEC" shall mean the U.S. Securities and Exchange Commission.

"Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

"Shares" shall mean the shares of Common Stock purchased by the Investor pursuant to the terms hereof.

"Subsidiary" shall mean, as to any Person, any other Person more than 50% of the shares of the voting stock, voting interests, membership interests or partnership interests of which are owned or controlled, or the ability to select or elect more than 50% of the directors or similar managers is held, directly or indirectly, by such first Person or one or more of its Subsidiaries or by such first Person and one or more of its Subsidiaries.

Section 1.02. Rules of Construction. Unless the context otherwise requires:

(a) an accounting term defined by GAAP that is not otherwise defined herein has the meaning assigned to it in accordance with GAAP;

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(b) "or" is not exclusive;

(c) words in the singular include the plural, and words in the plural include the singular;

(d) the words "include" and "including" shall be deemed to mean "include, without limitation," and "including, without limitation";

(e) "herein," "hereof," "hereto," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular article, section, paragraph or clause where such terms may appear;

(f) references to sections mean references to such section in this Agreement, unless stated otherwise; and

(g) the use of any gender shall be applicable to all genders.

ARTICLE II
ISSUANCE, SALE AND PURCHASE OF THE SHARES.

Section 2.01. Sale and Purchase of the Shares. Upon the terms and subject to the conditions of this Agreement, the Company will sell to the Investor, and the Investor will purchase from the Company, shares of its Common Stock having a value of $50,000,000, based on a purchase price per share equal to the initial public offering price of the Common Stock sold to the public pursuant to the Registration Statement for a purchase price of $50,000,000 (the "Purchase Price").

Section 2.02. Closing.

(a) Subject to the satisfaction or waiver of the conditions set forth in this Agreement, the closing of the transaction contemplated by Section
2.01 (the "Closing") shall take place simultaneously with the closing of the Company's initial public offering, or at such other time as may be mutually agreed upon by the Investor and the Company (the "Closing Date"). The Closing shall occur on the Closing Date at the offices of Katten Muchin Rosenman, 575 Madison Avenue, New York, New York.

(b) At the Closing: (i) the Company will deliver to the Investor (x) a certificate for the Shares registered in the name of the Investor and (y) legal opinions of counsel to the Company addressed to the Investor, satisfactory to counsel to the Investor (the "Company Counsel Opinions"); (ii) the Investor, in full payment for the Shares, will deliver to the Company the Purchase Price in immediately available funds, by wire transfer to such account as the Company shall specify, and (iii) each party shall take or cause to happen such other actions, and shall execute and deliver such other instruments or documents, as shall be required under Article VII.

Section 2.03. Use of Proceeds. The Company shall use the proceeds from the sale of the Shares for the purposes set forth in the Registration Statement.

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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investor as follows:

Section 3.01. Organization and Good Standing. Each of the Company, the Operating Partnership and the Subsidiaries has been duly organized and validly exists as a corporation, partnership, limited partnership or limited liability company in good standing under the laws of its jurisdiction of organization. Each of the Company, the Operating Partnership and the Company Subsidiaries has all requisite power and authority to carry on its business as it is currently being conducted and as described in the Prospectus, and to own, lease and operate its respective properties. Each of the Company, the Operating Partnership and the Company Subsidiaries is duly qualified to do business and is in good standing as a foreign corporation, partnership, limited partnership or limited liability company in each jurisdiction in which the character or location of its properties (owned, leased or licensed) or the nature or conduct of its business makes such qualification necessary, except for those failures to be so qualified or in good standing which (individually and in the aggregate) could not reasonably be expected to have a Material Adverse Effect. The Company has heretofore delivered or made available to the Investor complete and correct copies of the Articles of Incorporation of the Company, as amended to date (the "Articles of Incorporation").

Section 3.02. Authority; Binding Effect. The Company has the full right, power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated by this Agreement, the Registration Statement and the Prospectus. This Agreement and the transactions contemplated by this Agreement, the Registration Statement and the Prospectus have been duly and validly authorized by the Company. This Agreement has been duly and validly executed and delivered by the Company. This Agreement constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except as such enforceability may be subject to the effects of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting creditors' rights generally and subject to the effects of general equitable principles

Section 3.03. Organization and Good Standing of Company Subsidiaries. The Company Subsidiaries constitute all of the Subsidiaries of the Company and the Operating Partnership. Each of the Company, the Operating Partnership and the Company Subsidiaries has all necessary consents, approvals, authorizations, orders, registrations, qualifications, licenses, filings and permits of, with and from all judicial, regulatory and other legal or governmental agencies and bodies and all third parties, foreign and domestic (collectively, the "Consents"), to own, lease and operate its properties and conduct its business as it is now being conducted and as disclosed in the Registration Statement and the Prospectus except where the failure to obtain such consents would not have a Material Adverse Effect, and each such Consent is valid and in full force and effect, and none of the Company, the Operating Partnership nor any Company Subsidiary has received notice of any investigation or proceedings which results in or, if decided adversely to the Company, the Operating Partnership or any Company Subsidiary, could reasonably be expected to result in, the revocation of, or imposition of a materially burdensome restriction on, any Consent. Each of the Company, the Operating Partnership and the Company Subsidiaries is in compliance with all applicable laws, rules, regulations, ordinances, directives, judgments, decrees and orders, foreign and domestic, except where failure to be in compliance could not reasonably be expected to have a Material Adverse Effect. No Consent contains a materially burdensome restriction not adequately disclosed in the Registration Statement and the Prospectus.

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Section 3.04. Capitalization. The capitalization table set forth in the Registration Statement and Prospectus accurately sets forth as of the date indicated therein, (i) the authorized capitalization of the Company, the number of shares of each class issued and outstanding and the number of shares reserved for issuance in connection with the Company's stock option plans, and (ii) all options, warrants, convertible securities, rights to subscribe to, calls, contracts, undertakings, arrangements and commitments to issue which may result in the issuance of stock of the Company. All of the issued and outstanding shares of the Company's Capital Stock have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any preemptive rights. No securities of the Company are entitled to preemptive or similar rights, and no person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transaction contemplated by this Agreement. All of the issued partnership interests, shares of capital stock of or other ownership interests in the Operating Partnership and in each Company Subsidiary have been duly and validly authorized and issued and are fully paid and non-assessable and (except as otherwise set forth in the Prospectus) at the Closing will be owned directly or indirectly by the Company (in the case of the Operating Partnership) or by the Operating Partnership or a Company Subsidiary, free and clear of any Lien, charge, mortgage, pledge, security interest, claim, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever.

Section 3.05. No Violations; Consents. Neither the execution, delivery or performance by the Company of this Agreement nor the consummation of the transaction contemplated hereby, will (a) conflict with, or result in the breach of, any provision of the organizational documents of the Company, the Operating Partnership or any Company Subsidiary, (b) conflict with, violate, result in the breach or termination of, or constitute a default or give rise to any right of termination, amendment, cancellation or acceleration or right to increase the obligations or otherwise modify the terms thereof under any Contract or Order to which the Company, the Operating Partnership or any Company Subsidiary is a party or by which the Company or any Company Subsidiary or any of the properties or assets of the Company, the Operating Partnership or any Company Subsidiary is bound, (c) constitute a violation of any Law applicable to the Company, the Operating Partnership or any Company Subsidiary; or (d) result in the creation of any Lien upon the properties or assets of the Company, the Operating Partnership or any Company Subsidiary. Except for the approval of the NYSE referred to in Section 6.01(c) and the declaration by the SEC of the effectiveness of the Registration Statement, no Consent is required on the part of the Company, the Operating Partnership or the Company Subsidiaries in connection with the execution and delivery of this Agreement and the consummation of the transaction contemplated hereby, including the issuance, sale and deliver of the Shares to be issued, sold and delivered hereunder.

Section 3.06. Listing. The Company has applied to have its shares of Common Stock listed on the NYSE.

Section 3.07. Financial Statements. The pro forma financial statements, financial statement schedules and pro forma data set forth in the Registration Statement and Prospectus accurately reflect the books and records of the Company and the Operating Partnership and present fairly, in all material respects, the

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financial position of the Company and the Operating Partnership and the Company Subsidiaries and the results of their operations and their cash flows for the period and date covered thereby, in conformity with GAAP, except for changes resulting from year-end adjustments (none of which will be material in amount). The assumptions used in preparing the pro forma and financial information included in the Registration Statement and the Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein.

Section 3.08. Commission Filings. The Operating Partnership has filed all reports, registration statements, proxy statements and other materials, together with any amendments required to be made with respect thereto, that were required to be filed with the SEC under the Securities Act or the Exchange Act from and after January 1, 2002 (all such reports and statements are collectively referred to herein as the "Commission Filings"). As of their respective dates, the Commission Filings, including the financial statements contained therein, complied in all material respects with all of the statutes and published rules and regulations enforced or promulgated by the regulatory authority with which the Commission Filings were filed, and, except to the extent the information in any Commission Filing has been revised or superseded by a later filed Commission Filing, did not and do not as of the date hereof contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Operating Partnership included in the Commission Filings comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.

Section 3.09. Absence of Certain Developments. Except as specifically disclosed in the Commission Filings, since December 31, 2004 and as of the date hereof no event or series of events has occurred which could reasonably have a Material Adverse Effect.

Section 3.10. Litigation. There are no Legal Proceedings pending or, to the knowledge of the Company, threatened, that question the validity of this Agreement or the transaction contemplated hereby or any action taken or to be taken by the Company, the Operating Partnership or any Company Subsidiary in connection with the consummation of the transaction contemplated hereby. There are no material Legal Proceedings pending or, to the knowledge of the Company, threatened, against or involving the Company, the Operating Partnership or any Company Subsidiary or any of their respective properties or assets, at Law or in equity which in the aggregate could reasonably have a Material Adverse Effect. There is no outstanding or, to the knowledge of the Company, threatened, Order of any Governmental Body against the Company, the Operating Partnership or any Company Subsidiary or any of their respective properties or assets, which Order could reasonably have a Material Adverse Effect.

Section 3.11. Compliance with Laws. The Company, the Operating Partnership and the Company Subsidiaries are in compliance in all material respects with all Laws and Orders promulgated by any Governmental Body applicable to the Company, the Operating Partnership and the Company Subsidiaries or to the conduct of the business or operations of the Company, the Operating Partnership and the Company Subsidiaries or the use of their properties (including any leased properties) and assets, except where failure to comply would not have a Material Adverse Effect. Since July 1, 2005 neither the Company, the Operating Partnership nor

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any Company Subsidiary has received any written notice of violation or alleged material violation of any such Law or Order by any Governmental Body in any material respect that has not been resolved. Since July 1, 2005 neither the Company, the Operating Partnership nor any Company Subsidiary has received written notice that it is the subject of an investigation by any Governmental Body which has not been resolved or which could reasonably have a Material Adverse Effect.

Section 3.12. Financial Advisors. Except as set forth on Schedule 3.12, no agent, broker, investment banker, finder, financial advisor or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from the Company, directly or indirectly, in connection with the transaction contemplated hereby.

Section 3.13. Registration Statement. At the time of the effectiveness of the Registration Statement, the Registration Statement and Prospectus and any amendments thereof and supplements thereto will comply in all material respects with the applicable provisions of the Securities Act and the rules and regulations promulgated thereunder ("Rules and Regulations"), and will not contain an untrue statement of a material fact and will not omit to state any material fact required to be stated therein or necessary in order to make the statements therein (i) in the case of the Registration Statement, not misleading and (ii) in the case of the Prospectus or any related preliminary prospectus in light of the circumstances under which they were made, not misleading. The statistical, industry-related and market-related data included in the Registration Statement and the Prospectus are based on or derived from sources which the Company reasonably and in good faith believes are reliable and accurate, and such data agree with the sources from which they are derived.

Section 3.14. No Default. The Company is not in default in the payment or performance of any of its Contracts, except where such default would not have a Material Adverse Effect.

Section 3.15. Other Registration Rights. Except as provided in the Registration Statement, the Company has not entered into any agreement to register its debt or equity securities under the Securities Act.

Section 3.16. Disclosure Controls. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company, including its subsidiaries, is timely made known to the certifying officers by others within those entities, particularly during the period in which the Company's Form 10-K or 10-Q, as the case may be, is being prepared. The Operating Partnership's certifying officers have evaluated the effectiveness of the Operating Partnership's controls and procedures as of June 30, 2005 (such date, the "Evaluation Date"). The Operating Partnership presented in its Form 10-Q for the quarter ended June 30, 2005 the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Operating Partnership's internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the knowledge of the Company, in any factors that could significantly affect the Company's or the Operating Partnership's internal controls.

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Section 3.17 Taxes. Since January 1, 2002, the Operating Partnership and each Company Subsidiary has timely filed or caused to be filed any and all material tax returns required to be filed by it under applicable federal, state, local and foreign Law, except where the failure to failure to do so could not reasonably be expected to have a Material Adverse Effect. The reserves for taxes contained in the financial statements of the Operating Partnership or carried on the books and records of the Operating Partnership are in the aggregate adequate to cover all tax liabilities and deferred taxes of the Operating Partnership and the Company Subsidiaries as of the date of this Agreement, except to the extent that any inadequacy could not in the aggregate reasonably have a Material Adverse Effect. Commencing with its initial taxable year beginning on the business day prior to the Closing Date and ending December 31, 2005, the Company will be organized in conformity with the requirements for qualification as a real estate investment trust (a "REIT") pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"); the Company's proposed method of operation as described in the Registration Statement and in the Prospectus will enable it to meet the requirements for qualification and taxation as a REIT under the Code; and all statements in the Registration Statement and the Prospectus regarding the Company's qualification and taxation as a REIT are true, complete and correct in all material respects.

Section 3.18 Non-Integration. None of the Company, the Operating Partnership nor any of their respective affiliates has, prior to the date hereof, made any offer or sale of any securities which could be "integrated" for purposes of the Securities Act and the Rules and Regulations with the offer and sale of the Shares pursuant to the Registration Statement. Except as disclosed in the Registration Statement and the Prospectus, none of the Company, the Operating Partnership nor any of their respective affiliates has sold or issued any Common Stock or other security of the Company, the Operating Partnership or any Subsidiary or any security convertible into, or exercisable or exchangeable for, Common Stock or any other such security during the six-month period preceding the date of the Prospectus, including but not limited to any sales pursuant to Rule 144A or Regulation D or S under the Securities Act or the Rules and Regulations.

Section 3.19 Affiliations. No relationship, direct or indirect, exists between or among any of the Company, the Operating Partnership, the Manager or any of their respective affiliates, on the one hand, and any director, officer, stockholder, tenant or supplier of the Company, the Operating Partnership, the Manager or any of their respective affiliates, on the other hand, which is required by the Securities Act or the Rules and Regulations to be described in the Registration Statement or the Prospectus which is not so described and described as required. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company or the Operating Partnership to or for the benefit of any of the officers or directors of the Company or the Operating Partnership or any of their respective family members, except as disclosed in the Registration Statement and the Prospectus.

Section 3.20 Investment Company. Neither the Company nor the Operating Partnership is and, at all times up to and including consummation of the transactions contemplated by this Agreement, the Registration Statement and the Prospectus, and after giving effect to application of the net proceeds of the Offering, will not be, subject to registration as an "investment company" under the Investment Company Act of 1940, as amended, and is not and will not be an entity "controlled" by an "investment company" within the meaning of such act.

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

Section 4.01. Investor Representations. The Investor represents and warrants to the Company as follows:

(a) Authorization. The Investor is a trust organized and validly existing under the Laws of the State of Ohio. The Investor has the full power and authority to enter into this Agreement and to consummate the transaction contemplated hereby. The execution and delivery of this Agreement and the consummation by the Investor of the transaction contemplated hereby have been duly authorized by all necessary action on the part of the Investor. This Agreement has been duly executed and delivered by the Investor and constitutes the legal, valid and binding obligations of the Investor, enforceable in accordance with its respective terms, except as such enforceability may be subject to the effects of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting creditors' rights generally and subject to the effects of general equitable principles.

(b) Investment Representations. The Investor is a Qualified Institutional Buyer and is acquiring the Shares for the Investor's own account, for investment, and not with a view to, or for sale in connection with, the distribution thereof or of any interest therein. The Investor understands that the Shares have not been registered under the Securities Act by reason of its issuance in a transaction exempt from the registration requirements of the Securities Act pursuant to the exemption provided in Section 4(2) and/or Regulation D promulgated under the Securities Act, and that the Shares may not be sold or otherwise disposed of unless registered under the Securities Act or exempted from such registration.

(c) Investor's Acknowledgment. The Investor has had the opportunity, directly or through its representatives, to ask questions of and receive answers from Persons acting on behalf of the Company concerning the transactions contemplated by this Agreement.

(d) Financial Advisors. No agent, broker, investment banker, finder, financial advisor or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from the Investor, directly or indirectly, in connection with the transaction contemplated by this Agreement.

(e) Legend.

(i) The certificate evidencing the Shares will bear a legend (the "Legend") substantially similar to the following:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AS PROVIDED FOR IN THAT CERTAIN LOCK-UP AGREEMENT, DATED NOVEMBER 7, 2005, BETWEEN NEWKIRK REALTY TRUST, INC. AND FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE PURPOSE OF NEWKIRK REALTY TRUST, INC.'S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. SUCH RESTRICTIONS ARE SET FORTH IN NEWKIRK REALTY TRUST, INC.'S ARTICLES OF ORGANIZATION, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO THE HOLDER OF THE SHARES REPRESENTED BY THIS CERTIFICATE ON REQUEST AND WITHOUT CHARGE."

(ii) The first paragraph of the legend endorsed on the certificate pursuant to Section 4.01 (e) hereof shall be removed and the Company shall issue a certificate without such portion of the legend to the holder thereof at such time as the securities evidenced thereby cease to be restricted securities upon the earliest to occur of (i) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) the securities shall have been sold to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, and (iii) the expiration of the restrictions on transfers under the Lock-up Agreement provided that such securities may then be sold by the holder without restriction or registration under Rule 144(k) under the Securities Act (or any successor provision).

(f) Ownership and Transfer Limitations. The Investor has received a copy of the Articles of Incorporation of the Company, and understands, and will be in compliance with, the restrictions on transfer and ownership of the Company's Capital Stock included therein at the Closing and at all times thereafter.

ARTICLE V
COVENANTS OF THE COMPANY

The Company covenants and agrees as follows:

Section 5.01. Maintain Listing. The Company will use commercially reasonable efforts to (x) maintain the listing and trading of its Common Stock on the NYSE, for so long as the Company qualifies for such listing under the rules and regulations of the NYSE and (y) comply in all material respects with the Company's reporting, filing, and other obligations, under the rules and regulations of the NYSE. In the event that the Common Stock is no longer

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eligible for listing and trading on the NYSE, the Company will use commercially reasonable efforts to secure the listing or quotation of the Common Stock on the Nasdaq National Market, the Nasdaq SmallCap Market or the American Stock Exchange (if such listing is permitted by the bylaws, rules or regulations of any of the foregoing) and to comply in all material respects with the Company's reporting, filing and other obligations under the bylaws or rules of such exchanges or the National Association of Securities Dealers, Inc., as applicable. The Company will promptly provide to the Investor copies of any notices it receives from the NYSE and any other exchange or quotation system on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges or quotation systems.

Section 5.02. Secure Listing. Following the execution of this Agreement, the Company shall promptly file with the NYSE an application to list the Shares on the NYSE.

Section 5.03 Exemption from Ownership Limitation. The Company will grant the Investor an exemption (the "Ownership Waiver") from the ownership limitation contained in the Company's Articles of Incorporation to permit ownership by it of Common Stock to the extent that such ownership does not exceed the greater of
(i) 17.5% of the outstanding Common Stock on a fully diluted basis, and (ii) the percentage of Common Stock owned by Investor immediately following the consummation of the transactions hereunder, assuming in either case the redemption of all interests in the Operating Partnership that are redeemable in exchange for shares of Common Stock, whether or not such interests are then redeemable.

Section 5.04 REIT Certifications. The Company shall deliver to the Investor, at such time as may reasonably be requested by the Investor (but in any event no less frequently than on a quarterly basis), a certificate or certificates signed by an authorized officer of the Company to the effect that the Company has complied with and is then in compliance with the asset and income tests set forth in Section 856 of the Code, and that such officer anticipates that the Company will continue to comply with such requirements. In addition, the Company shall cooperate with the Investor, including, without limitation, by providing information and documents in its control relating to the income and assets of the Company at such times as may reasonably be requested by the Investor, even if the Investor at such time no longer holds an interest in the Company, in addressing issues raised by any taxing authority in any audit or similar proceeding that relates to or arises out of the Investor's investment in the Company. The Investor shall reimburse the Company for any increased out of pocket costs attributable to providing the certifications and information described in this paragraph to the Investor. The Company shall give the Investor at least sixty (60) days advance notice of any determination by the Company to elect to cease to be treated as a REIT for federal income tax purposes and will not cease to qualify as a REIT for any period prior to the end of such 60-day notice period.

ARTICLE VI
ACTIONS PRIOR TO CLOSING

Section 6.01. Consent. Each of the Company and the Investor will use its reasonable best efforts and shall fully cooperate with each other to make promptly all registrations, filings and applications, give all notices and obtain all Consents in connection with the transaction contemplated hereby.

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Section 6.02. Publicity. The parties agree not to issue any announcement, press release, public statement or other information to the press or any third party with respect to this Agreement or the transaction contemplated hereby without obtaining the prior written approval of the other party hereto (which approval shall not be unreasonably withheld); provided, however, that nothing contained herein shall prevent either party, at any time, from furnishing any required information to any Governmental Body or from issuing any announcement, press release, public statement or other information to the press or any third party with respect to this Agreement or the transaction contemplated hereby if required by Law, although, the parties agree to consult with each other as to the content of any release so required and consider in good faith the comments of the other thereon.

ARTICLE VII
CONDITIONS TO CLOSING

Section 7.01. Conditions to Obligations of the Investor. The obligation of the Investor to consummate the transaction contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of the following conditions:

(a) No Governmental Order or Other Proceeding or Litigation. No Order of any Governmental Body shall be in effect that restrains or prohibits the issuance of the Shares.

(b) Stock Certificates. The Company shall have delivered to the Investor (i) a certificate representing the Shares, duly registered in the name of the Investor, which Shares shall have been duly and validly authorized and issued and, assuming delivery of the Purchase Price, fully paid and non-assessable, and (ii) the Company Counsel Opinions, which opinions shall include opinions acceptable to Investor with respect to the Operating Partnership and the Joinder Agreement as well as to the Company as herein provided.

(c) Shares. The Shares shall be issued in compliance with all applicable state, federal and foreign securities laws and will not have been issued in violation of or subject to any preemptive or similar right that does or will entitle any person to acquire any equity security from the Company, the Operating Partnership or any Subsidiary upon issuance or sale of the Shares and the Common Stock and the Shares shall conform to the descriptions thereof contained in the Registration Statement and the Prospectus.

(d) NYSE Listing. The Shares have been duly listed on the NYSE, pending notice of issuance and the Company shall not be in violation of the listing requirements of the NYSE in any material respect nor shall the Company have received any written notice from the NYSE that the Common Stock is to be delisted by the NYSE.

(e) Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such date (except for representations and warranties that speak of a specific date, which need only be true and correct as of such date).

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(f) Absence of Material Developments. Since June 30, 2005, no event or series of events shall have occurred that reasonably would be expected to have a Material Adverse Effect.

(g) Performance. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing Date.

(h) No New Information. The Investor shall not have become aware of any information or other matter with respect to legal matters affecting the Company that is inconsistent with the financial and other information disclosed to the Investor prior to the date hereof including the disclosures in the Registration Statement as filed with the SEC on the date hereof, in a manner that constitutes or would reasonably be expected to have a Material Adverse Effect.

(i) Effectiveness of Registration Statement. The Registration Statement shall have been declared effective by the Commission and the Offering shall have been consummated and the Registration Statement and all amendments thereto, or modifications thereof, if any, shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and all amendments or supplements thereto, or modifications thereof, if any, shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading.

(j) Officer's Certificate. The Investor shall have received a certificate of an officer of the Company, dated the Closing Date, certifying on behalf of the Company as to the fulfillment of the conditions specified in this
Section 7.01.

(k) Acquisition Agreement. The transactions contemplated by the Acquisition Agreement shall have been consummated or shall be consummated simultaneously with the Closing.

(l) Registration Rights Agreement. The Registration Rights Agreement shall have been executed and delivered by the Company.

(m) Ownership Waiver. The Ownership Waiver shall have been granted by the Company.

(n) Advisory Agreement. The Company and the Operating Partnership shall have retained NKT Advisors LLC as its advisor pursuant to an agreement on the terms and conditions described in the Registration Statement and such agreement shall have been duly and validly authorized, executed and delivered by the Company and the Operating Partnership and shall constitute the legal, valid and binding obligation of the Company and the Operating Partnership, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

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(o) Joinder by the Operating Partnership. The Operating Partnership shall have executed and delivered an Agreement of Joinder, in form and substance satisfactory to the Investor, for the purpose of joining in and becoming a party to this Agreement, jointly and severally with the Company, with the effect of amending this Agreement by adding the Operating Partnership as a party, and the Operating Partnership shall therein make with the Company, jointly and severally, all representations, warranties, covenants and agreements made herein by the Company, and shall make the representations and warranties set forth in
Section 3.02 hereof with respect to the authority of the Operating Partnership to enter into this Agreement and the binding effect of this Agreement on the Operating Partnership, among others.

(o) No Stop Order or Suspension. No stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the Act, and no order directed at or in relation to any document incorporated by reference therein and no order preventing or suspending the use of the Prospectus has been issued by the Commission, and no suspension of the qualification of the Shares for offering or sale in any jurisdiction, or to the knowledge of the Company of the initiation or threatening of any proceedings for any such purposes, has occurred.

Section 7.02. Conditions to Obligations of the Company. The obligation of the Company to consummate the transaction contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of the following conditions:

(a) No Governmental Order or Other Proceeding or Litigation. No Order of any Governmental Body shall be in effect that restrains or prohibits the issuance of the Shares.

(b) Purchase Price. The Investor shall have delivered to the Company the Purchase Price.

(c) Effectiveness of Registration Statement. The Registration Statement shall have been declared effective by the Commission and the IPO shall have been consummated.

(d) Acquisition Agreement. The transactions contemplated by the Acquisition Agreement shall have been consummated or shall be consummated simultaneously with the Closing.

(e) Lock-up Agreement. The Lock-up Agreement shall have been executed and delivered by the Investor.

ARTICLE VIII
SURVIVAL

Section 8.01. Survival. The representations and warranties and covenants to be performed at or prior to Closing of the parties set forth in this Agreement shall survive for a period of 12 months following the execution and delivery of this Agreement and thereafter shall be of no further force or effect, provided that the representations and warranties set forth in (i) Sections 3.01 (Organization), 3.02 (Authorization), and 3.04 (Capitalization) shall survive indefinitely (or if indefinite survival is not permitted by Law, then for the maximum period permitted by applicable Law) and (ii) 3.17 (Taxes) shall survive for the applicable statute of limitations. Except as set forth

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herein, all of the covenants, agreements and obligations of the parties hereto shall survive the Closing indefinitely (or if indefinite survival is not permitted by Law, then for the maximum period permitted by applicable Law). Anything herein to the contrary notwithstanding, any claim for indemnification that is asserted by written notice which notice specifies in reasonable detail the facts upon which such claim is made within the survival period as provided in this Section 8.01 shall survive until resolved pursuant to a final non-appealable judicial determination or otherwise.

ARTICLE IX
INDEMNIFICATION

Section 9.01. Generally. Subject to the limitations and other provisions of this Article IX, the Company covenants and agrees to indemnify, defend and hold harmless the Investor and its directors, officers, shareholders, employees and agents (each, an "Investor Party") from and against any and all Losses resulting from, incurred in connection with or arising out of (a) any breach of any representation, warranty, agreement or covenant of the Company contained herein, or (b) the failure of the Company to perform any of the agreements, covenants or obligations of the Company contained herein (other than if any such claim was a result of a breach by the Investor under this Agreement). Subject to the limitations and other provisions of this Article IX, the Investor covenants and agrees to indemnify, defend and hold harmless the Company from and against (but only to the extent of) any and all Losses resulting from, incurred in connection with or arising out of (but only to the extent of) (a) any breach of any representation, warranty, covenant or agreement of the Investor contained herein, or (b) the failure of the Investor to perform any of the agreements, covenants or obligations of the Investor contained herein. The term "Loss" or any similar term shall mean any and all damages, reduction in value of the original investment in the Shares, deficiencies, costs, claims, fines, judgments, amounts paid in settlement, expenses of investigation, interest, penalties, assessments, out-of-pocket expenses (including reasonable attorneys' and auditors' fees and disbursements, witness fees and court costs). The party or parties being indemnified are referred to herein as the "Indemnitee" and the indemnifying party is referred to herein as the "Indemnitor."

Section 9.02. Indemnification Procedure.

(a) Any party who receives notice of a potential claim that may, in the judgment of such party, result in a Loss shall use all reasonable efforts to provide the parties hereto notice thereof, provided that failure or delay or alleged delay in providing such notice shall not adversely affect such party's right to indemnification hereunder, unless and then only to the extent that such failure or delay or alleged delay has resulted in actual prejudice to the Indemnitor, including, without limitation, by the expiration of a statute of limitations. In the event that any party shall incur or suffer any Losses in respect of which indemnification may be sought by such party hereunder, the Indemnitee shall assert a claim for indemnification by written notice (a "Notice") to the Indemnitor stating the nature and basis of such claim. In the case of Losses arising by reason of any third party claim, the Notice shall be given within thirty (30) days of the filing or other written assertion of any such claim against the Indemnitee, but the failure of the Indemnitee to give the Notice within such time period shall not relieve the Indemnitor of any liability that the Indemnitor may have to the Indemnitee, except to the extent that the Indemnitor demonstrates that the defense of such action has been materially prejudiced by the Indemnitee's failure to timely give such Notice.

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(b) In the case of third party claims for which indemnification is sought, the Indemnitor shall, if necessary, retain counsel reasonably satisfactory to the Indemnitee, and have the option (i) to conduct any proceedings or negotiations in connection therewith, (ii) to take all other steps to settle or defend any such claim (provided that the Indemnitor shall not settle any such claim without the consent of the Indemnitee which consent shall not be unreasonably withheld) and (iii) to employ counsel to contest any such claim or liability in the name of the Indemnitee or otherwise. In any event, the Indemnitee shall be entitled to participate at its own expense and by its own counsel in any proceedings relating to any third party claim. The Indemnitor shall, within 15 Business Days of receipt of the Notice, notify the Indemnitee of its intention to assume the defense of such claim. If (i) the Indemnitor shall decline to assume the defense of any such claim, (ii) the Indemnitor shall fail to notify the Indemnitee within 15 Business Days after receipt of the Notice of the Indemnitor's election to defend such claim, (iii) the Indemnitee shall have reasonably concluded that there may be defenses available to it which are different from or in addition to those available to the Indemnitor (in which case the Indemnitor shall not have the right to direct the defense of such action on behalf of the Indemnitee), or (iv) a conflict exists between the Indemnitor and the Indemnitee which the Indemnitee has reasonably concluded would prejudice the Indemnitor's defense of such action, then in each such case the Indemnitor shall not have the right to direct the defense of such action on behalf of the Indemnitee and the Indemnitee shall, at the sole expense of the Indemnitor, defend against such claim and (x) in the event of a circumstance described in clause (i) and (ii), the Indemnitee may settle such claim without the consent of the Indemnitor (and the Indemnitor may not challenge the reasonableness of any such settlement) and (y) in the event of a circumstance described in clause (iii) and (iv), the Indemnitee may not settle such claim without the consent of the Indemnitor (which consent will not be unreasonably withheld or delayed). The reasonable expenses of all proceedings, contests or lawsuits in respect of such claims shall be borne and paid by the Indemnitor if the Indemnitee is entitled to indemnification hereunder and the Indemnitor shall pay the Indemnitee, in immediately available funds, the amount of any Losses, within a reasonable time of the incurrence of such Losses. Regardless of which party shall assume the defense or negotiation of the settlement of the claim, the parties agree to cooperate fully with one another in connection therewith. In the event that any Losses incurred by the Indemnitee do not involve payment by the Indemnitee of a third party claim, then, the Indemnitor shall, within 20 days after written notice from the Indemnitee specifying the amount of Losses, pay to the Indemnitee, in immediately available funds, the amount of such Losses. Anything in this Article IX to the contrary notwithstanding, the Indemnitor shall not, without the Indemnitee's prior written consent, settle or compromise any claim or consent to entry of any judgment in respect thereof which imposes any future obligation on the Indemnitee or which does not include, as an unconditional term thereof, the giving by the claimant or plaintiff to the Indemnitee, a release from all liability in respect of such claim.

Section 9.03. Limitations on Indemnification.

Neither party shall be entitled to be indemnified hereunder unless and until the aggregate of all Losses incurred by such party shall exceed $50,000 (the "Basket"); provided, however, that the Basket shall not apply to any Losses incurred by such party with respect to any third party claim against such party for which such party is entitled to indemnity pursuant to Section 9.01.

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Notwithstanding anything to the contrary contained herein, the liability of (i) the Company under this Article IX shall be limited to an amount equal to the Purchase Price; and (ii) the Investor under this Article IX shall be limited to an amount equal to the Purchase Price.

ARTICLE X
TERMINATION

Section 10.01. Termination. This Agreement may be terminated on or any time prior to the Closing by the mutual written consent of each of the Investor and the Company.

Section 10.02. Offering of Common Stock. In the event that the Registration Statement has not been declared effective and the Offering contemplated thereby has not been consummated on or before March 31, 2006, the Investor shall have the right, but not the obligation, to terminate this Agreement.

Section 10.03 Effect Of Termination. In the event of the termination of this Agreement as provided in Section 10.01, all obligations and agreements of the parties set forth in this Agreement shall forthwith become void except for the obligations set forth in: (i) Section 6.02 (Publicity) and (ii) Article IX (Indemnification), and there shall be no liability or obligation on the part of the parties hereto except as otherwise provided in this Agreement. Notwithstanding the foregoing, the termination of this Agreement shall not relieve either party of any liability for breach of this Agreement prior to the date of termination.

ARTICLE XII
MISCELLANEOUS

Section 11.01 Notices and Addresses. Any notice, demand, request, waiver, or other communication under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service, if personally served or sent by facsimile; on the Business Day after notice is delivered to a courier or mailed by express mail, if sent by courier delivery service or express mail for next day delivery; and on the third day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered, return receipt requested, postage prepaid and addressed as follows:

If to the Company:

Newkirk Realty Trust, Inc.

Two Jericho Plaza
Wing A, Suite 111
Jericho, New York 11753
Attention: Peter Braverman
Facsimile: (516) 433-2777
Telephone: (516) 822-0022

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If to the Investor:

First Union Real Estate Equity and Mortgage Investments 7 Bulfinch Place, Suite 500
P.O. Box 9507
Boston, Massachusetts 02114 Attention: Carolyn Tiffany
Facsimile: (617) 742-4643
Telephone: (617) 570-4606

Section 11.02 Captions. The captions in this Agreement are for convenience of reference only and shall not be given any effect in the interpretation of this Agreement.

Section 11.03 No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing. Any of the covenants or agreements contained in this Agreement may be waived only by the written consent of the Investor.

Section 11.04 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable Law, such provision(s) shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms so long as the economic or legal substance of the transactions contemplated by this Agreement are not affected in any manner materially adverse to any party.

Section 11.05 Exclusive Agreement; Amendment. This Agreement supersedes all prior agreements among the parties with respect to its subject matter, is intended (with the documents referred to herein) as a complete and exclusive statement of the terms of the agreement among the parties with respect thereto and cannot be changed or terminated except by a written instrument executed by the party or parties against whom enforcement thereof is sought, except that, with respect to the Investor, this Agreement may be amended by a written instrument executed by the Investor.

Section 11.06 Limitation on Assignment; Parties in Interest.

(a) No assignment of this Agreement or of any rights or obligations hereunder may be made by the Company without the prior written consent of the Investor and any attempted assignment without the required consent shall be void. No assignment of this Agreement or of any rights or obligations hereunder may be made by the Investor (by operation of Law or otherwise) except as permitted by the Lock-up Agreement.

(b) This Agreement shall be binding upon, and shall inure to the benefit of, and be enforceable by, the parties and their respective successors, transferees and assigns.

Section 11.07 Governing Law. This Agreement and (unless otherwise provided) all amendments hereof and waivers and consents hereunder shall be governed by the internal Laws of the State of New York, without regard to the conflicts of Law principles thereof which would specify the application of the Law of another jurisdiction.

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Section 11.08 Jurisdiction. Each of the Investor and the Company (a) hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any state or federal court sitting in New York County, New York for the purposes of any suit, action or other proceeding arising out of this Agreement or the subject matter hereof brought by the Company, or the Investor and (b) hereby waives and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

Section 11.09 No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person other than (i) any Person entitled to indemnity under Article IX and (ii) with respect to the representations and warranties set forth in Articles III and IV, any placement agent identified on Schedule 3.12 hereof.

Section 11.10 Injunctive Relief. In the event that any party threatens to take any action prohibited by this Agreement, the parties agree that there may not be an adequate remedy at law. Accordingly, in such an event, a party may seek and obtain preliminary and permanent injunctive relief (without the necessity of posting any bond or undertaking). Such remedies shall, however, be cumulative and not exclusive and shall be in addition to any other remedies which any party may have under this Agreement or otherwise.

Section 11.11 Counterparts. This Agreement may be executed via facsimile and in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute one and the same instrument.

Section 11.12 Actions Simultaneous. All actions to be taken and all documents to be executed and delivered by all parties at the Closing shall be deemed to have been taken and executed and delivered simultaneously and no actions shall be deemed to have been taken nor shall any documents be deemed to have been executed and delivered until all actions have been taken and all documents have been executed and delivered.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

NEWKIRK REALTY TRUST, INC.

By:

Peter Braverman President

FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS

By:

Name:


Title:

[signature page to securities purchase agreement]

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ACQUISITION AGREEMENT

THIS ACQUISITION AGREEMENT, dated as of November 7, 2005 (this "Agreement"), is by and between Newkirk Realty Trust, Inc., a Maryland corporation (the "Newkirk"), and First Union Real Estate Equity and Mortgage Investments, an Ohio business trust ("First Union").

RECITALS:

WHEREAS, pursuant to that certain Exclusivity Services Agreement (the "Exclusivity Agreement"), dated as of December 31, 2003, between First Union and Michael L. Ashner ("Ashner"), Ashner is required to offer to First Union any Business Opportunity (as defined in the Exclusivity Agreement) offered to him during the period that he is serving as either an executive officer First Union or as a member of the Board of Trustees of First Union;

WHEREAS, Ashner is a director and executive officer of Newkirk;

WHEREAS, Newkirk is simultaneously herewith making an initial public offering of its shares of common stock, par value $.01 (the "Common Stock") pursuant to a registration statement on Form S-11 filed by Newkirk (the "Registration Statement") with the Securities and Exchange Commission and, in connection therewith, desires to acquire from First Union certain rights presently held by First Union pursuant to the Exclusivity Agreement in exchange for shares of Common Stock;

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and undertakings hereunder and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, intending to be legally bound, the parties hereto do hereby agree as follows:

ARTICLE I
DEFINITIONS

Section 1.01. Definitions. As used in this Agreement, the following terms have the meanings set forth below.

"Advisor" shall mean NKT Advisors LLC, a Delaware limited liability company.

"Advisory Agreement" shall mean that certain Advisory Agreement dated November 7, 2005, between Newkirk, the Operating Partnership and the Advisor.

"Affiliate" shall mean (a) with respect to an individual, any member of such individual's family residing in the same household; (b) with respect to an entity: (i) any executive officer, director, partner or Person that owns ten percent (10%) or more of the outstanding beneficial interest of or in such entity, or (ii) any brother, sister, brother-in-law, sister-in-law, lineal descendant or ancestor of any executive officer, director, partner or Person that owns ten percent (10%) or more of the outstanding beneficial interest of or in such entity; and (c) with respect to a Person, any Person which directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Person or entity; provided, however, that for purposes of the definition of "Affiliate," First Union shall not be deemed an "Affiliate" of Newkirk.


"Agreement" shall have the meaning set forth in the preamble.

"Basket" shall have the meaning set forth in Section 11.03.

"Business Day" shall mean any day other than (i) a Saturday, (ii) a Sunday or (iii) any other day on which banks in the City of New York are authorized or required to close.

"By-Laws" shall mean, when used with respect to a specified Person, the by-laws of a Person, as the same may be amended from time to time.

"Capital Stock" shall mean, with respect to any Person, any and all shares, shares of beneficial interest, interests, participations, rights in or other equivalents (however designated and whether voting or non-voting) of such Person's capital stock or any form of membership, ownership or participation interests, as applicable, including partnership interests, whether now outstanding or hereafter issued and any and all securities, debt instruments, rights, warrants or options exercisable or exchangeable for or convertible into such capital stock.

"Closing" shall have the meaning set forth in Section 2.03(a).

"Closing Date" shall have the meaning set forth in Section 2.03(a).

"Commission Filings" shall have the meaning set forth in Section 3.08.

"Common Stock" shall have the meaning set forth in the Recitals.

"Company Subsidiaries" and "Company Subsidiary" shall mean all of the subsidiaries of the Company as set forth on Exhibit 21 of the Registration Statement.

"Consents" shall mean all governmental and third party consents, approvals, authorizations, qualifications and waivers necessary to be received by a Person for the consummation of the transaction contemplated by the Agreement.

"Contract" shall mean any legally binding contract, agreement, mortgage, deed of trust, bond, loan, indenture, lease, license, note, option, warrant, right, instrument, commitment or other similar document, arrangement or agreement, whether written or oral.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

"Forfeiture Event" shall mean (i) the termination of the Advisory Agreement by Newkirk for Cause (as defined in the Advisory Agreement), (ii) Michael L. Ashner's resignation as the Chief Executive Officer and director of Newkirk and the Advisor, or (iii) the death or disability of Michael L. Ashner unless the other members of the Advisor's senior management at such time remain in such positions.

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"GAAP" shall mean generally accepted accounting principles applied on a consistent basis as used in the United States of America.

"Governmental Body" shall mean any government or governmental or quasi-governmental authority including, without limitation, any federal, state, territorial, county, municipal or other governmental or quasi-governmental agency, board, branch, bureau, commission, court, arbitral body (public or private), department or other instrumentality or political unit or subdivision, whether located in the United States or abroad, the National Association of Securities Dealers, Inc., the New York Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market or the American Stock Exchange.

"Indemnitee" shall have the meaning set forth in Section 10.01.

"Indemnitor" shall have the meaning set forth in Section 10.01.

"Law" shall mean any treaty, statute, ordinance, code, rule, regulation, Order or other legal requirement enacted, adopted, promulgated, applied or followed by any Governmental Body.

"Legal Proceeding" shall mean any judicial, administrative or arbitral actions, suits, proceedings (public or private) or governmental proceedings.

"Legend" shall mean the Legend set forth in Section 4.02(e).

"Lien" shall mean any mortgage, pledge, lien (statutory or otherwise), security interest, hypothecation, conditional sale agreement, encumbrance or similar restriction or agreement.

"Lock-up Agreement" shall have the meaning ascribed thereto in the Securities Purchase Agreement.

"Loss" shall have the meaning set forth in Section 10.01.

"Material Adverse Effect" shall mean any event, condition or contingency that has had, or is reasonably likely to have, a material adverse effect on (i) the assets, business, condition (financial or otherwise), results of operations, stockholders' equity, properties or prospects of Newkirk, the Operating Partnership, Newkirk REIT Advisor LLC, a Delaware limited liability company (the "Manager") and the Company Subsidiaries, taken as a whole; (ii) the long-term debt or capital stock of Newkirk, the Operating Partnership, the Manager or any Company Subsidiary; or (iii) the offering contemplated by the Registration Statement or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement or the Prospectus.

"Net Lease Assets" shall mean (i) a property that is either (a) triple net leased or (b) where a tenant leases at least 85% of the rentable square footage of the property and, in addition to base rent, the tenant is required to pay some or all of the operating expenses for the property, and, in both (a) and (b) the lease has a remaining term, exclusive of all unexercised renewal terms, of more than 18 months, (ii) management agreements and master leases with terms of greater than three years where a manager or master lessee bears all operating expenses of the property and pays the owner a fixed return, (iii) securities of

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companies including, without limitation, corporations, partnerships and limited liability companies, whether or not publicly traded, that are primarily invested in assets that meet the requirements of clauses (i) and (ii), and (iv) all retenanting and redevelopment associated with such properties, agreements and leases, and all activities incidental thereto.

"Notice" shall have the meaning set forth in Section 10.02(a).

"NYSE" shall mean the New York Stock Exchange.

"Offering" shall mean the offering and sale of the Shares contemplated by the Registration Statement and Prospectus.

"Operating Partnership" shall mean The Newkirk Master Limited Partnership, a Delaware limited partnership.

"Order" shall mean any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award.

"Person" shall mean any individual, corporation, partnership, firm, limited liability company, joint venture, trust, association, unincorporated organization, group, joint-stock company, Governmental Body or other entity.

"Prospectus" shall mean the prospectus, in the form in which it is to be filed with the SEC pursuant to Rule 424(b), or, if the prospectus is not to be filed with the SEC pursuant to Rule 424(b), the prospectus in the form included as part of the Registration Statement at the time the Registration Statement becomes effective.

"Purchase Price" shall have the meaning set forth in Section 2.02.

"Qualified Institutional Buyer" shall mean a Person that is a "qualified institutional buyer" within the definition contained in Rule 144A under the Securities Act.

"Registration Rights Agreement" shall mean that certain Registration Rights Agreement, dated of even date herewith, between Newkirk and First Union.

"Registration Statement" shall have the meaning set forth on the Recitals.

"Reversion Event" shall mean (i) the termination or non-renewal of the Advisory Agreement or (ii) Michael L. Ashner's resignation as the Chief Executive Officer and director of Newkirk and the Advisor.

"SEC" shall mean the U.S. Securities and Exchange Commission.

"Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

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"Securities Purchase Agreement" shall mean that certain Securities Purchase Agreement, dated of even date herewith, among Newkirk and First Union.

"Shares" shall mean the shares of Common Stock issued to First Union pursuant to the terms hereof.

"Subsidiary" shall mean, as to any Person, any other Person more than 50% of the shares of the voting stock, voting interests, membership interests or partnership interests of which are owned or controlled, or the ability to select or elect more than 50% of the directors or similar managers is held, directly or indirectly, by such first Person or one or more of its Subsidiaries or by such first Person and one or more of its Subsidiaries.

"Vesting Event" shall mean (i) the termination of the Advisory Agreement by the Advisor following a breach by Newkirk of the Advisory Agreement that remains uncured by Newkirk, (ii) the non-renewal of the Advisory Agreement, or
(iii) termination of the Advisory Agreement by Newkirk other than for Cause (as defined in the Advisory Agreement).

Section 1.02. Rules of Construction. Unless the context otherwise requires:

(a) an accounting term defined by GAAP that is not otherwise defined herein has the meaning assigned to it in accordance with GAAP;

(b) "or" is not exclusive;

(c) words in the singular include the plural, and words in the plural include the singular;

(d) the words "include" and "including" shall be deemed to mean "include, without limitation," and "including, without limitation";

(e) "herein," "hereof," "hereto," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular article, section, paragraph or clause where such terms may appear;

(f) references to sections mean references to such section in this Agreement, unless stated otherwise; and

(g) the use of any gender shall be applicable to all genders.

ARTICLE II
ASSIGNMENT OF RIGHTS; ISSUANCE OF SHARES

Section 2.01. Assignment of Rights. Upon the terms and subject to the conditions of this Agreement, First Union shall sell, assign, convey and transfer to Newkirk all of First Union's right, title and interest under the Exclusivity Agreement solely with respect to Net Lease Assets (the "Exclusivity Assignment"), free and clear of any lien or other encumbrance.

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Section 2.02. Purchase Price. In consideration of the assignment provided for in Section 2.01 hereof, Newkirk shall issue to First Union shares of Common Stock having a value of $20,000,000 (the "Purchase Price"), based on a purchase price per share equal to the initial public offering price of the Common Stock sold to the public pursuant to the Registration Statement.

Section 2.03. Closing.

(a) Subject to the satisfaction or waiver of the conditions set forth in this Agreement, the closing of the transaction contemplated by Sections 2.01 and 2.02 (the "Closing") shall take place simultaneously with the closing of Newkirk's initial public offering, or at such other time as may be mutually agreed upon by First Union and Newkirk (the "Closing Date"). The Closing shall occur on the Closing Date at the offices of Katten Muchin Rosenman, 575 Madison Avenue, New York, New York.

(b) At the Closing: (i) Newkirk will deliver to First Union (x) a certificate for the Shares registered in the name of First Union and (y) legal opinions of counsel to Newkirk addressed to First Union, satisfactory to counsel to First Union (the "Newkirk Counsel Opinions"); (ii) First Union, in full payment for the Shares, will execute and deliver to Newkirk an assignment in form and substance reasonably satisfactory to Newkirk to evidence the Exclusivity Assignment ; and (iii) each party shall take or cause to happen such other actions, and shall execute and deliver such other instruments or documents, as shall be required under Article VIII.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NEWKIRK

Newkirk represents and warrants to First Union as follows:

Section 3.01. Organization and Good Standing. Each of Newkirk, the Operating Partnership and the Subsidiaries has been duly organized and validly exists as a corporation, partnership, limited partnership or limited liability company in good standing under the laws of its jurisdiction of organization. Each of Newkirk, the Operating Partnership and Newkirk Subsidiaries has all requisite power and authority to carry on its business as it is currently being conducted and as described in the Prospectus, and to own, lease and operate its respective properties. Each of Newkirk, the Operating Partnership and the Company Subsidiaries is duly qualified to do business and is in good standing as a foreign corporation, partnership, limited partnership or limited liability company in each jurisdiction in which the character or location of its properties (owned, leased or licensed) or the nature or conduct of its business makes such qualification necessary, except for those failures to be so qualified or in good standing which (individually and in the aggregate) could not reasonably be expected to have a Material Adverse Effect. Newkirk has heretofore delivered or made available to First Union complete and correct copies of the Articles of Incorporation of Newkirk, as amended to date (the "Articles of Incorporation").

Section 3.02. Authority; Binding Effect. Newkirk has the full right, power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated by this Agreement, the Registration Statement and the Prospectus. This Agreement and the transactions

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contemplated by this Agreement, the Registration Statement and the Prospectus have been duly and validly authorized by Newkirk. This Agreement has been duly and validly executed and delivered by Newkirk. This Agreement constitutes the legal, valid and binding obligation of Newkirk, enforceable in accordance with its terms, except as such enforceability may be subject to the effects of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting creditors' rights generally and subject to the effects of general equitable principles

Section 3.03. Organization and Good Standing of Company Subsidiaries. Newkirk Subsidiaries constitute all of the Subsidiaries of Newkirk and the Operating Partnership. Each of Newkirk, the Operating Partnership and the Company Subsidiaries has all necessary consents, approvals, authorizations, orders, registrations, qualifications, licenses, filings and permits of, with and from all judicial, regulatory and other legal or governmental agencies and bodies and all third parties, foreign and domestic (collectively, the "Consents"), to own, lease and operate its properties and conduct its business as it is now being conducted and as disclosed in the Registration Statement and the Prospectus except where the failure to obtain such consents would not have a Material Adverse Effect, and each such Consent is valid and in full force and effect, and none of Newkirk, the Operating Partnership nor any Company Subsidiary has received notice of any investigation or proceedings which results in or, if decided adversely to Newkirk, the Operating Partnership or any Company Subsidiary, could reasonably be expected to result in, the revocation of, or imposition of a materially burdensome restriction on, any Consent. Each of Newkirk, the Operating Partnership and the Company Subsidiaries is in compliance with all applicable laws, rules, regulations, ordinances, directives, judgments, decrees and orders, foreign and domestic, except where failure to be in compliance could not reasonably be expected to have a Material Adverse Effect. No Consent contains a materially burdensome restriction not adequately disclosed in the Registration Statement and the Prospectus.

Section 3.04. Capitalization. The capitalization table set forth in the Registration Statement and Prospectus accurately sets forth as of the date indicated therein, (i) the authorized capitalization of Newkirk, the number of shares of each class issued and outstanding and the number of shares reserved for issuance in connection with Newkirk's stock option plans, and (ii) all options, warrants, convertible securities, rights to subscribe to, calls, contracts, undertakings, arrangements and commitments to issue which may result in the issuance of stock of Newkirk. All of the issued and outstanding shares of Newkirk's Capital Stock have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any preemptive rights. No securities of Newkirk are entitled to preemptive or similar rights, and no person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transaction contemplated by this Agreement. All of the issued partnership interests, shares of capital stock of or other ownership interests in the Operating Partnership and in each Company Subsidiary have been duly and validly authorized and issued and are fully paid and non-assessable and (except as otherwise set forth in the Prospectus) at the Closing will be owned directly or indirectly by Newkirk (in the case of the Operating Partnership) or by the Operating Partnership or a Company Subsidiary, free and clear of any Lien, charge, mortgage, pledge, security interest, claim, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any kind whatsoever.

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Section 3.05. No Violations; Consents. Neither the execution, delivery or performance by Newkirk of this Agreement nor the consummation of the transaction contemplated hereby, will (a) conflict with, or result in the breach of, any provision of the organizational documents of Newkirk, the Operating Partnership or any Company Subsidiary, (b) conflict with, violate, result in the breach or termination of, or constitute a default or give rise to any right of termination, amendment, cancellation or acceleration or right to increase the obligations or otherwise modify the terms thereof under any Contract or Order to which Newkirk, the Operating Partnership or any Company Subsidiary is a party or by which Newkirk or any Company Subsidiary or any of the properties or assets of Newkirk, the Operating Partnership or any Company Subsidiary is bound, (c) constitute a violation of any Law applicable to Newkirk, the Operating Partnership or any Company Subsidiary; or (d) result in the creation of any Lien upon the properties or assets of Newkirk, the Operating Partnership or any Company Subsidiary. Except for the approval of the NYSE referred to in Section 6.01(c) and the declaration by the SEC of the effectiveness of the Registration Statement, no Consent is required on the part of Newkirk, the Operating Partnership or the Company Subsidiaries in connection with the execution and delivery of this Agreement and the consummation of the transaction contemplated hereby, including the issuance, sale and deliver of the Shares to be issued, sold and delivered hereunder.

Section 3.06. Listing. Newkirk has applied to have its shares of Common Stock listed on the NYSE.

Section 3.07. Financial Statements. The pro forma financial statements, financial statement schedules and pro forma data set forth in the Registration Statement and Prospectus accurately reflect the books and records of Newkirk and the Operating Partnership and present fairly, in all material respects, the financial position of Newkirk and the Operating Partnership and the Company Subsidiaries and the results of their operations and their cash flows for the period and date covered thereby, in conformity with GAAP, except for changes resulting from year-end adjustments (none of which will be material in amount). The assumptions used in preparing the pro forma and financial information included in the Registration Statement and the Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein.

Section 3.08. Commission Filings. The Operating Partnership has filed all reports, registration statements, proxy statements and other materials, together with any amendments required to be made with respect thereto, that were required to be filed with the SEC under the Securities Act or the Exchange Act from and after January 1, 2002 (all such reports and statements are collectively referred to herein as the "Commission Filings"). As of their respective dates, the Commission Filings, including the financial statements contained therein, complied in all material respects with all of the statutes and published rules and regulations enforced or promulgated by the regulatory authority with which the Commission Filings were filed, and, except to the extent the information in any Commission Filing has been revised or superseded by a later filed Commission Filing, did not and do not as of the date hereof contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Operating Partnership included in the Commission Filings comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.

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Section 3.09. Absence of Certain Developments. Except as specifically disclosed in the Commission Filings, since December 31, 2004 and as of the date hereof no event or series of events has occurred which could reasonably have a Material Adverse Effect.

Section 3.10. Litigation. There are no Legal Proceedings pending or, to the knowledge of Newkirk, threatened, that question the validity of this Agreement or the transaction contemplated hereby or any action taken or to be taken by Newkirk, the Operating Partnership or any Company Subsidiary in connection with the consummation of the transaction contemplated hereby. There are no material Legal Proceedings pending or, to the knowledge of Newkirk, threatened, against or involving Newkirk, the Operating Partnership or any Company Subsidiary or any of their respective properties or assets, at Law or in equity which in the aggregate could reasonably have a Material Adverse Effect. There is no outstanding or, to the knowledge of Newkirk, threatened, Order of any Governmental Body against Newkirk, the Operating Partnership or any Company Subsidiary or any of their respective properties or assets, which Order could reasonably have a Material Adverse Effect.

Section 3.11. Compliance with Laws. Newkirk, the Operating Partnership and the Company Subsidiaries are in compliance in all material respects with all Laws and Orders promulgated by any Governmental Body applicable to Newkirk, the Operating Partnership and the Company Subsidiaries or to the conduct of the business or operations of Newkirk, the Operating Partnership and the Company Subsidiaries or the use of their properties (including any leased properties) and assets, except where failure to comply would not have a Material Adverse Effect. Since July 1, 2005 neither Newkirk, the Operating Partnership nor any Company Subsidiary has received any written notice of violation or alleged material violation of any such Law or Order by any Governmental Body in any material respect that has not been resolved. Since July 1, 2005 neither Newkirk, the Operating Partnership nor any Company Subsidiary has received written notice that it is the subject of an investigation by any Governmental Body which has not been resolved or which could reasonably have a Material Adverse Effect.

Section 3.12. Financial Advisors. No agent, broker, investment banker, finder, financial advisor or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from Newkirk, directly or indirectly, in connection with the transaction contemplated hereby.

Section 3.13. Registration Statement. At the time of the effectiveness of the Registration Statement, the Registration Statement and Prospectus and any amendments thereof and supplements thereto will comply in all material respects with the applicable provisions of the Securities Act and the rules and regulations promulgated thereunder ("Rules and Regulations"), and will not contain an untrue statement of a material fact and will not omit to state any material fact required to be stated therein or necessary in order to make the statements therein (i) in the case of the Registration Statement, not misleading and (ii) in the case of the Prospectus or any related preliminary prospectus in light of the circumstances under which they were made, not misleading. The statistical, industry-related and market-related data included in the Registration Statement and the Prospectus are based on or derived from sources which Newkirk reasonably and in good faith believes are reliable and accurate, and such data agree with the sources from which they are derived.

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Section 3.14. No Default. Newkirk is not in default in the payment or performance of any of its Contracts, except where such default would not have a Material Adverse Effect.

Section 3.15. Other Registration Rights. Except as provided in the Registration Statement, Newkirk has not entered into any agreement to register its debt or equity securities under the Securities Act.

Section 3.16. Disclosure Controls. Newkirk has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Newkirk and designed such disclosure controls and procedures to ensure that material information relating to Newkirk, including its subsidiaries, is timely made known to the certifying officers by others within those entities, particularly during the period in which Newkirk's Form 10-K or 10-Q, as the case may be, is being prepared. The Operating Partnership's certifying officers have evaluated the effectiveness of the Operating Partnership's controls and procedures as of June 30, 2005 (such date, the "Evaluation Date"). The Operating Partnership presented in its Form 10-Q for the quarter ended June 30, 2005 the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Operating Partnership's internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the knowledge of Newkirk, in any factors that could significantly affect Newkirk's or the Operating Partnership's internal controls.

Section 3.17 Taxes. Since January 1, 2002, the Operating Partnership and each Company Subsidiary has timely filed or caused to be filed any and all material tax returns required to be filed by it under applicable federal, state, local and foreign Law, except where the failure to failure to do so could not reasonably be expected to have a Material Adverse Effect. The reserves for taxes contained in the financial statements of the Operating Partnership or carried on the books and records of the Operating Partnership are in the aggregate adequate to cover all tax liabilities and deferred taxes of the Operating Partnership and the Company Subsidiaries as of the date of this Agreement, except to the extent that any inadequacy could not in the aggregate reasonably have a Material Adverse Effect. Commencing with its initial taxable year beginning on the business day prior to the Closing Date and ending December 31, 2005, Newkirk will be organized in conformity with the requirements for qualification as a real estate investment trust (a "REIT") pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"); Newkirk's proposed method of operation as described in the Registration Statement and in the Prospectus will enable it to meet the requirements for qualification and taxation as a REIT under the Code; and all statements in the Registration Statement and the Prospectus regarding Newkirk's qualification and taxation as a REIT are true, complete and correct in all material respects.

Section 3.18 Non-Integration. None of Newkirk, the Operating Partnership nor any of their respective affiliates has, prior to the date hereof, made any offer or sale of any securities which could be "integrated" for purposes of the Securities Act and the Rules and Regulations with the offer and sale of the Shares pursuant to the Registration Statement. Except as disclosed in the Registration Statement and the Prospectus, none of Newkirk, the Operating Partnership nor any of their respective affiliates has sold or issued any Common Stock or other security of Newkirk, the Operating Partnership or any Subsidiary or any security convertible into, or exercisable or exchangeable for, Common Stock or any other such security during the six-month period preceding the date of the Prospectus, including but not limited to any sales pursuant to Rule 144A or Regulation D or S under the Securities Act or the Rules and Regulations.

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Section 3.19 Affiliations. No relationship, direct or indirect, exists between or among any of Newkirk, the Operating Partnership, the Manager or any of their respective affiliates, on the one hand, and any director, officer, stockholder, tenant or supplier of Newkirk, the Operating Partnership, the Manager or any of their respective affiliates, on the other hand, which is required by the Securities Act or the Rules and Regulations to be described in the Registration Statement or the Prospectus which is not so described and described as required. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by Newkirk or the Operating Partnership to or for the benefit of any of the officers or directors of Newkirk or the Operating Partnership or any of their respective family members, except as disclosed in the Registration Statement and the Prospectus.

Section 3.20 Investment Company. Neither Newkirk nor the Operating Partnership is and, at all times up to and including consummation of the transactions contemplated by this Agreement, the Registration Statement and the Prospectus, and after giving effect to application of the net proceeds of the Offering, will not be, subject to registration as an "investment company" under the Investment Company Act of 1940, as amended, and is not and will not be an entity "controlled" by an "investment company" within the meaning of such act.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FIRST UNION

First Union represents and warrants to Newkirk as follows:

Section 4.01. Authorization. First Union is a trust organized and validly existing under the Laws of the State of Ohio. First Union has the full power and authority to enter into this Agreement and to consummate the transaction contemplated hereby. The execution and delivery of this Agreement and the consummation by First Union of the transaction contemplated hereby have been duly authorized by all necessary action on the part of First Union. This Agreement has been duly executed and delivered by First Union and constitutes the legal, valid and binding obligations of First Union, enforceable in accordance with its respective terms, except as such enforceability may be subject to the effects of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting creditors' rights generally and subject to the effects of general equitable principles.

Section 4.02. No Violations; Consents. Neither the execution, delivery or performance by First Union of this Agreement nor the consummation of the transaction contemplated hereby, will (a) conflict with, or result in the breach of, any provision of the organizational documents of First Union, (b) conflict with, violate, result in the breach or termination of, or constitute a default or give rise to any right of termination, amendment, cancellation or acceleration or right to increase the obligations or otherwise modify the terms thereof under any Contract or Order to which First Union is a party or by which First Union or any of the properties or assets of First Union is bound, (c) constitute a violation of any Law applicable to First Union; or (d) result in the creation of any Lien upon the properties or assets of First Union. No Consent of any third party or governmental entity is required or necessary in connection with the execution and delivery of this Agreement and the consummation of the transaction contemplated hereby by First Union.

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Section 4.03. Litigation. There are no Legal Proceedings pending or, to the knowledge of First Union, threatened, that question the validity of this Agreement or the transaction contemplated hereby or any action taken or to be taken by First Union in connection with the consummation of the transaction contemplated hereby. There are no Legal Proceedings pending or, to the knowledge of First Union, threatened, against or involving First Union or any of its respective properties or assets, at Law or in equity. There is no outstanding or, to the knowledge of First Union, threatened, Order of any Governmental Body against First Union or any of its properties or assets, which Order could reasonably have a Material Adverse Effect.

Section 4.04. Compliance with Laws. First Union is in compliance in all respects with all Laws and Orders promulgated by any Governmental Body applicable to First Union or to the conduct of the business or operations of First Union or the use of their properties (including any leased properties) and assets, except where failure to comply would not have a Material Adverse Effect. First Union has not received any written notice of violation or alleged material violation of any such Law or Order by any Governmental Body in any material respect that has not been resolved. First Union has not received written notice that it is the subject of an investigation by any Governmental Body which has not been resolved or which could reasonably have a Material Adverse Effect.

Section 4.05. Investment Representations. First Union is a Qualified Institutional Buyer and is acquiring the Shares for First Union's own account, for investment, and not with a view to, or for sale in connection with, the distribution thereof or of any interest therein. First Union understands that the Shares have not been registered under the Securities Act by reason of its issuance in a transaction exempt from the registration requirements of the Securities Act pursuant to the exemption provided in Section 4(2) and/or Regulation D promulgated under the Securities Act, and that the Shares may not be sold or otherwise disposed of unless registered under the Securities Act or exempted from such registration.

Section 4.06. First Union's Acknowledgment. First Union has had the opportunity, directly or through its representatives, to ask questions of and receive answers from Persons acting on behalf of Newkirk concerning the Shares.

Section 4.07. Financial Advisors. No agent, broker, investment banker, finder, financial advisor or other Person is or will be entitled to any broker's or finder's fee or any other commission or similar fee from First Union, directly or indirectly, in connection with the transaction contemplated by this Agreement.

Section 4.08. Legend.

(i) The certificate evidencing the Shares will bear a legend (the "Legend") substantially similar to the following:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

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THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AS PROVIDED FOR IN THAT CERTAIN LOCK-UP AGREEMENT, DATED NOVEMBER 7, 2005, BETWEEN NEWKIRK REALTY TRUST, INC. AND FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE PURPOSE OF NEWKIRK REALTY TRUST, INC.'S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. SUCH RESTRICTIONS ARE SET FORTH IN NEWKIRK REALTY TRUST, INC.'S ARTICLES OF ORGANIZATION, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO THE HOLDER OF THE SHARES REPRESENTED BY THIS CERTIFICATE ON REQUEST AND WITHOUT CHARGE."

(ii) The first paragraph of the legend endorsed on the certificate pursuant to Section 4.08(e) hereof shall be removed and Newkirk shall issue a certificate without such portion of the legend to the holder thereof at such time as the securities evidenced thereby cease to be restricted securities upon the earliest to occur of (i) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) the securities shall have been sold to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, and (iii) the expiration of the restrictions on transfers under the Lock-up Agreement provided that such securities may then be sold by the holder without restriction or registration under Rule 144(k) under the Securities Act (or any successor provision).

Section 4.09. Ownership and Transfer Limitations. First Union has received a copy of the Articles of Incorporation of Newkirk, and understands, and will be in compliance with, the restrictions on transfer and ownership of Newkirk's Capital Stock included therein at the Closing and at all times thereafter.

Section 4.10. Interests in Newkirk. Except for Shares being issued to First Union pursuant to that certain Stock Purchase Agreement of even date herewith, at or simultaneously with the Closing, First Union does not own, directly or indirectly, any Capital Stock of Newkirk.

Section 4.11. Exclusivity Agreement. First Union had the full power and authority to enter into the Exclusivity Agreement and to consummate the transaction contemplated thereby. The execution and delivery of the Exclusivity Agreement and the consummation by First Union of the transaction contemplated

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thereby was duly authorized by all necessary action on the part of First Union. The Exclusivity Agreement was duly executed and delivered by First Union and constitutes the legal, valid and binding obligation of First Union, enforceable in accordance with its terms, except as such enforceability may be subject to the effects of any applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar Laws affecting creditors' rights generally and subject to the effects of general equitable principles. The rights granted to First Union pursuant to the Exclusivity Agreement were granted free and clear of any lien or other encumbrance.

ARTICLE V
RIGHTS AND RESTRICTIONS ON SHARES; TERMINATION OF ASSIGNMENT

Section 5.01. Vesting. The Shares shall be deemed fully vested and not subject to forfeiture as contemplated by Section 5.02 as follows: 50% of the Shares shall be fully vested upon issuance and the balance shall vest ratably over 36 months on each monthly anniversary of the date of Closing commencing on the first monthly anniversary of Closing; provided, however, all of the Shares shall immediately vest upon a Vesting Event.

Section 5.02. Forfeiture of Shares. At such time, if at all, that a Forfeiture Event shall occur, the Shares not then vested shall be deemed forfeited and First Union shall have no further interest in such Shares. Upon the termination of the Exclusivity Assignment, Newkirk shall deliver written notice thereof to First Union and First Union shall promptly deliver to Newkirk for cancellation the certificate or certificates evidencing the Shares and Newkirk shall deliver to First Union a replacement certificate evidencing the total amount of Shares then vested.

Section 5.03. Voting Rights. Notwithstanding whether the Shares have vested, unless forfeited pursuant to Section 5.02 all Shares shall be entitled to be voted without restriction at any meeting or written consent of shareholders of Newkirk.

Section 5.04. Dividends. Notwithstanding whether the Shares have vested, unless forfeited pursuant to Section 5.02 all Shares shall be entitled to be paid a dividend at such time or times, if any, as dividends are paid on the Common Stock.

Section 5.05. Termination of Exclusivity Assignment. Upon the occurrence of a Reversion Event, the Exclusivity Assignment shall immediately terminate without any further action on the part of either party and all rights assigned to Newkirk pursuant to this Agreement and any assignment delivered in connection therewith shall revert to First Union.

ARTICLE VI
COVENANTS OF NEWKIRK

Newkirk covenants and agrees as follows:

Section 6.01. Maintain Listing. Newkirk will use commercially reasonable efforts to (x) maintain the listing and trading of its Common Stock on the NYSE, for so long as Newkirk qualifies for such listing under the rules and regulations of the NYSE and (y) comply in all material respects with Newkirk's reporting, filing, and other obligations, under the rules and regulations of the NYSE. In the event that the Common Stock is no longer eligible for listing and

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trading on the NYSE, Newkirk will use commercially reasonable efforts to secure the listing or quotation of the Common Stock on the Nasdaq National Market, the Nasdaq SmallCap Market or the American Stock Exchange (if such listing is permitted by the bylaws, rules or regulations of any of the foregoing) and to comply in all material respects with Newkirk's reporting, filing and other obligations under the bylaws or rules of such exchanges or the National Association of Securities Dealers, Inc., as applicable. Newkirk will promptly provide to First Union copies of any notices it receives from the NYSE and any other exchange or quotation system on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges or quotation systems.

Section 6.02. Secure Listing. Following the execution of this Agreement, Newkirk shall promptly file with the NYSE an application to list the Shares on the NYSE.

ARTICLE VII
ACTIONS PRIOR TO CLOSING

Section 7.01. Consent. Each of Newkirk and First Union will use its reasonable best efforts and shall fully cooperate with each other to make promptly all registrations, filings and applications, give all notices and obtain all Consents in connection with the transaction contemplated hereby.

Section 7.02. Publicity. The parties agree not to issue any announcement, press release, public statement or other information to the press or any third party with respect to this Agreement or the transaction contemplated hereby without obtaining the prior written approval of the other party hereto (which approval shall not be unreasonably withheld); provided, however, that nothing contained herein shall prevent either party, at any time, from furnishing any required information to any Governmental Body or from issuing any announcement, press release, public statement or other information to the press or any third party with respect to this Agreement or the transaction contemplated hereby if required by Law, although, the parties agree to consult with each other as to the content of any release so required and consider in good faith the comments of the other thereon.

ARTICLE VIII
CONDITIONS TO CLOSING

Section 8.01. Conditions to Obligations of First Union. The obligation of First Union to consummate the transaction contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of the following conditions:

(a) No Governmental Order or Other Proceeding or Litigation. No Order of any Governmental Body shall be in effect that restrains or prohibits the issuance of the Shares.

(b) Stock Certificates. Newkirk shall have delivered to First Union
(i) a certificate representing the Shares, duly registered in the name of First Union and (ii) Newkirk Counsel Opinions.

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(c) NYSE Listing. The Shares have been duly listed on the NYSE, pending notice of issuance.

(d) Representations and Warranties. The representations and warranties of Newkirk contained herein shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such date (except for representations and warranties that speak of a specific date, which need only be true and correct as of such date).

(e) Absence of Material Developments. Since June 30, 2005, no event or series of events shall have occurred that reasonably would be expected to have a Material Adverse Effect.

(f) Performance. Newkirk shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing Date.

(g) No New Information. First Union shall not have become aware of any information or other matter with respect to legal matters affecting Newkirk that is inconsistent with the financial and other information disclosed to First Union prior to the date hereof including the disclosures in the Registration Statement as filed with the SEC on the date hereof, in a manner that constitutes or would reasonably be expected to have a Material Adverse Effect.

(h) Effectiveness of Registration Statement. The Registration Statement shall have been declared effective by the Commission and the Offering shall have been consummated and the Registration Statement and all amendments thereto, or modifications thereof, if any, shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and all amendments or supplements thereto, or modifications thereof, if any, shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading.

(i) Officer's Certificate. The Investor shall have received a certificate of an officer of the Company, dated the Closing Date, certifying on behalf of the Company as to the fulfillment of the conditions specified in this
Section 8.01.

(j) Consummation of Securities Purchase Agreement. The transaction contemplated by the Securities Purchase Agreement shall be consummated simultaneously with the Closing.

(k) Registration Rights Agreement. The Registration Rights Agreement shall have been executed and delivered by Newkirk.

Section 8.02. Conditions to Obligations of Newkirk. The obligation of Newkirk to consummate the transaction contemplated hereby shall be subject to the fulfillment on or prior to the Closing Date of the following conditions:

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(a) No Governmental Order or Other Proceeding or Litigation. No Order of any Governmental Body shall be in effect that restrains or prohibits the issuance of the Shares.

(b) Assignment. First Union shall have delivered to Newkirk an assignment in form and substance reasonably acceptable to Newkirk to assign to Newkirk all of First Union's right, title and interest under the Exclusivity Agreement to Net Lease Assets.

(c) Effectiveness of Registration Statement. The Registration Statement shall have been declared effective by the Commission.

(d) Consummation of Securities Purchase Agreement. The transaction contemplated by the Securities Purchase Agreement shall be consummated simultaneously with the Closing.

ARTICLE IX
SURVIVAL

Section 9.01. Survival. The representations and warranties and covenants to be performed at or prior to Closing of the parties set forth in this Agreement shall survive for a period of 12 months following the execution and delivery of this Agreement and thereafter shall be of no further force or effect, provided that the representations and warranties set forth in (i) Sections 3.01 (Organization), 3.02 (Authorization), and 3.04 (Capitalization) shall survive indefinitely (or if indefinite survival is not permitted by Law, then for the maximum period permitted by applicable Law) and (ii) 3.17 (Taxes) shall survive for the applicable statute of limitations. Except as set forth herein, all of the covenants, agreements and obligations of the parties hereto shall survive the Closing indefinitely (or if indefinite survival is not permitted by Law, then for the maximum period permitted by applicable Law). Anything herein to the contrary notwithstanding, any claim for indemnification that is asserted by written notice which notice specifies in reasonable detail the facts upon which such claim is made within the survival period as provided in this Section 9.01 shall survive until resolved pursuant to a final non-appealable judicial determination or otherwise.

ARTICLE X
INDEMNIFICATION

Section 10.01. Generally. Subject to the limitations and other provisions of this Article X, Newkirk covenants and agrees to indemnify, defend and hold harmless First Union and its directors, officers, shareholders, employees and agents (each, an "First Union Party") from and against any and all Losses resulting from, incurred in connection with or arising out of (a) any breach of any representation, warranty or covenant of Newkirk contained herein, or (b) the failure of Newkirk to perform any of the agreements, covenants or obligations contained herein (other than if any such claim was a result of a breach by First Union under this Agreement). Subject to the limitations and other provisions of this Article X, First Union covenants and agrees to indemnify, defend and hold harmless Newkirk from and against (but only to the extent of) any and all Losses resulting from, incurred in connection with or arising out of (but only to the extent of) (a) any breach of any representation, warranty, covenant or agreement of First Union contained herein, or (b) the failure of First Union to perform any of the agreements, covenants or obligations of First Union contained herein. The term "Loss" or any similar term shall mean any and all damages, reduction in

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value of the original investment in the Shares, deficiencies, costs, claims, fines, judgments, amounts paid in settlement, expenses of investigation, interest, penalties, assessments, out-of-pocket expenses (including reasonable attorneys' and auditors' fees and disbursements, witness fees and court costs). The party or parties being indemnified are referred to herein as the "Indemnitee" and the indemnifying party is referred to herein as the "Indemnitor."

Section 10.02. Indemnification Procedure.

(a) Any party who receives notice of a potential claim that may, in the judgment of such party, result in a Loss shall use all reasonable efforts to provide the parties hereto notice thereof, provided that failure or delay or alleged delay in providing such notice shall not adversely affect such party's right to indemnification hereunder, unless and then only to the extent that such failure or delay or alleged delay has resulted in actual prejudice to the Indemnitor, including, without limitation, by the expiration of a statute of limitations. In the event that any party shall incur or suffer any Losses in respect of which indemnification may be sought by such party hereunder, the Indemnitee shall assert a claim for indemnification by written notice (a "Notice") to the Indemnitor stating the nature and basis of such claim. In the case of Losses arising by reason of any third party claim, the Notice shall be given within thirty (30) days of the filing or other written assertion of any such claim against the Indemnitee, but the failure of the Indemnitee to give the Notice within such time period shall not relieve the Indemnitor of any liability that the Indemnitor may have to the Indemnitee, except to the extent that the Indemnitor demonstrates that the defense of such action has been materially prejudiced by the Indemnitee's failure to timely give such Notice.

(b) In the case of third party claims for which indemnification is sought, the Indemnitor shall, if necessary, retain counsel reasonably satisfactory to the Indemnitee, and have the option (i) to conduct any proceedings or negotiations in connection therewith, (ii) to take all other steps to settle or defend any such claim (provided that the Indemnitor shall not settle any such claim without the consent of the Indemnitee which consent shall not be unreasonably withheld) and (iii) to employ counsel to contest any such claim or liability in the name of the Indemnitee or otherwise. In any event, the Indemnitee shall be entitled to participate at its own expense and by its own counsel in any proceedings relating to any third party claim. The Indemnitor shall, within 15 Business Days of receipt of the Notice, notify the Indemnitee of its intention to assume the defense of such claim. If (i) the Indemnitor shall decline to assume the defense of any such claim, (ii) the Indemnitor shall fail to notify the Indemnitee within 15 Business Days after receipt of the Notice of the Indemnitor's election to defend such claim, (iii) the Indemnitee shall have reasonably concluded that there may be defenses available to it which are different from or in addition to those available to the Indemnitor (in which case the Indemnitor shall not have the right to direct the defense of such action on behalf of the Indemnitee), or (iv) a conflict exists between the Indemnitor and the Indemnitee which the Indemnitee has reasonably concluded would prejudice the Indemnitor's defense of such action, then in each such case the Indemnitor shall not have the right to direct the defense of such action on behalf of the Indemnitee and the Indemnitee shall, at the sole expense of the Indemnitor, defend against such claim and (x) in the event of a circumstance described in clause (i) and (ii), the Indemnitee may settle such claim without the consent of the Indemnitor (and the Indemnitor may not challenge the

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reasonableness of any such settlement) and (y) in the event of a circumstance described in clause (iii) and (iv), the Indemnitee may not settle such claim without the consent of the Indemnitor (which consent will not be unreasonably withheld or delayed). The reasonable expenses of all proceedings, contests or lawsuits in respect of such claims shall be borne and paid by the Indemnitor if the Indemnitee is entitled to indemnification hereunder and the Indemnitor shall pay the Indemnitee, in immediately available funds, the amount of any Losses, within a reasonable time of the incurrence of such Losses. Regardless of which party shall assume the defense or negotiation of the settlement of the claim, the parties agree to cooperate fully with one another in connection therewith. In the event that any Losses incurred by the Indemnitee do not involve payment by the Indemnitee of a third party claim, then, the Indemnitor shall, within 20 days after written notice from the Indemnitee specifying the amount of Losses, pay to the Indemnitee, in immediately available funds, the amount of such Losses. Anything in this Article X to the contrary notwithstanding, the Indemnitor shall not, without the Indemnitee's prior written consent, settle or compromise any claim or consent to entry of any judgment in respect thereof which imposes any future obligation on the Indemnitee or which does not include, as an unconditional term thereof, the giving by the claimant or plaintiff to the Indemnitee, a release from all liability in respect of such claim.

Section 10.03. Limitations on Indemnification.

Neither party shall be entitled to be indemnified hereunder unless and until the aggregate of all Losses incurred by such party shall exceed $50,000 (the "Basket"); provided, however, that the Basket shall not apply to any Losses incurred by such party with respect to any third party claim against such party for which such party is entitled to indemnity pursuant to Section 10.01. Notwithstanding anything to the contrary contained herein, the liability of (i) Newkirk under this Article X shall be limited to an amount equal to the Purchase Price; and (ii) First Union under this Article X shall be limited to an amount equal to the Purchase Price.

ARTICLE XI
TERMINATION

Section 11.01. Termination. This Agreement may be terminated on or any time prior to the Closing by the mutual written consent of each of First Union and Newkirk.

Section 11.02. Effect Of Termination. In the event of the termination of this Agreement as provided in Section 11.01, all obligations and agreements of the parties set forth in this Agreement shall forthwith become void except for the obligations set forth in: (i) Section 7.02 (Publicity) and (ii) Article X (Indemnification), and there shall be no liability or obligation on the part of the parties hereto except as otherwise provided in this Agreement. Notwithstanding the foregoing, the termination of this Agreement under Section 11.01 shall not relieve either party of any liability for breach of this Agreement prior to the date of termination.

ARTICLE XII
MISCELLANEOUS

Section 12.01 Notices and Addresses. Any notice, demand, request, waiver, or other communication under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service, if personally served or sent by facsimile; on the Business Day after notice is delivered to a courier or mailed by express mail, if sent by courier delivery service or express mail for next day delivery; and on the third day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered, return receipt requested, postage prepaid and addressed as follows:

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If to Newkirk:

Newkirk Realty Trust, Inc.

Two Jericho Plaza
Wing A, Suite 111
Jericho, New York 11753
Attention: Peter Braverman
Facsimile: (516) 433-2777
Telephone: (516) 822-0022

If to First Union:

First Union Real Estate Equity and Mortgage Investments 7 Bulfinch Place, Suite 500, P.O. Box 9507,
Boston, Massachusetts 02114 Attention: Carolyn Tiffany
Facsimile: (617) 742-4643
Telephone: (617) 570-4606

Section 12.02 Captions. The captions in this Agreement are for convenience of reference only and shall not be given any effect in the interpretation of this Agreement.

Section 12.03 No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing. Any of the covenants or agreements contained in this Agreement may be waived only by the written consent of First Union.

Section 12.04 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable Law, such provision(s) shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms so long as the economic or legal substance of the transactions contemplated by this Agreement are not affected in any manner materially adverse to any party.

Section 12.05 Exclusive Agreement; Amendment. This Agreement supersedes all prior agreements among the parties with respect to its subject matter, is intended (with the documents referred to herein) as a complete and exclusive statement of the terms of the agreement among the parties with respect thereto and cannot be changed or terminated except by a written instrument executed by the party or parties against whom enforcement thereof is sought, except that, with respect to First Union, this Agreement may be amended by a written instrument executed by First Union.

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Section 12.06 Limitation on Assignment; Parties in Interest.

(a) No assignment of this Agreement or of any rights or obligations hereunder may be made by Newkirk without the prior written consent of First Union and any attempted assignment without the required consent shall be void. No assignment of this Agreement or of any rights or obligations hereunder may be made by First Union (by operation of Law or otherwise) except as permitted by the Lock-up Agreement.

(b) This Agreement shall be binding upon, and shall inure to the benefit of, and be enforceable by, the parties and their respective successors, transferees and assigns.

Section 12.07 Governing Law. This Agreement and (unless otherwise provided) all amendments hereof and waivers and consents hereunder shall be governed by the internal Laws of the State of New York, without regard to the conflicts of Law principles thereof which would specify the application of the Law of another jurisdiction.

Section 12.08 Jurisdiction. Each of First Union and Newkirk (a) hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any state or federal court sitting in New York County, New York for the purposes of any suit, action or other proceeding arising out of this Agreement or the subject matter hereof brought by Newkirk, or First Union and (b) hereby waives and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

Section 12.09 No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person other than any Person entitled to indemnity under Article X.

Section 12.10 Injunctive Relief. In the event that any party threatens to take any action prohibited by this Agreement, the parties agree that there may not be an adequate remedy at law. Accordingly, in such an event, a party may seek and obtain preliminary and permanent injunctive relief (without the necessity of posting any bond or undertaking). Such remedies shall, however, be cumulative and not exclusive and shall be in addition to any other remedies which any party may have under this Agreement or otherwise.

Section 12.11 Counterparts. This Agreement may be executed via facsimile and in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute one and the same instrument.

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Section 12.12 Actions Simultaneous. All actions to be taken and all documents to be executed and delivered by all parties at the Closing shall be deemed to have been taken and executed and delivered simultaneously and no actions shall be deemed to have been taken nor shall any documents be deemed to have been executed and delivered until all actions have been taken and all documents have been executed and delivered.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

NEWKIRK REALTY TRUST, INC.

By:

Peter Braverman President

FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS

By:

Name:
Title:

THE UNDERSIGNED, BY HIS EXECUTION OF THIS AGREEMENT, ACKNOWLEDGES AND AGREES TO BE BOUND THE TERMS OF THIS AGREEMENT.


Michael L. Ashner

[signature page to acquisition agreement]

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REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of November 7, 2005, (this "Agreement") between Newkirk Realty Trust, Inc., a Maryland corporation (the "Company"), and First Union Real Estate Equity and Mortgage Investments, an unincorporated association in the form of a business trust organized in Ohio (together with its successors and permitted assigns, the "Shareholder").

WHEREAS, the Company has filed a registration statement on Form S-11 (as the same may be amended from time to time, the "Form S-11") with the Securities and Exchange Commission (the "Commission") pursuant to which the Company is making an initial public offering on its common stock, par value $0.01 per share (the "Common Stock");

WHEREAS, pursuant to the Securities Purchase Agreement by and between the Shareholder and the Company dated of even date herewith (the "Securities Purchase Agreement"), Shareholder is the purchaser of an amount of the Company's Common Stock having a value of $50,000,000, based on the purchase price per share equal to the initial public offering price of the Common Stock sold to the public pursuant to the Registration Statement (such shares of Common Stock, the "SPA Shares"), upon the terms and conditions of the Securities Purchase Agreement; and

WHEREAS, in consideration for the partial assignment of Shareholder's right, title and interest under the Exclusivity Agreement pursuant to Section 2.01 of the Acquisition Agreement by and between Shareholder and the Company dated of even date herewith (the "Acquisition Agreement"), the Company has issued shares of Common Stock, subject to certain restrictions on resale, forfeiture and vesting, as set forth in the Acquisition Agreement, having the value of $20,000,000 based on the purchase price per share equal to the initial public offering price of the Common Stock sold to the public pursuant to the Registration Statement (such number of shares of Common Stock, the "Acquisition Shares"); and

WHEREAS, the SPA Shares and the Acquisition Shares shall be herein collectively referred to as the "Shares"; and

WHEREAS, the Company wishes to facilitate the disposition, and the Shareholder wishes to have the ability to dispose, of such Shares.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

1. CERTAIN DEFINITIONS.


(a) Definitions. Capitalized terms not otherwise defined in this Agreement shall have the meaning set forth in the Securities Purchase Agreement and the Acquisition Agreement. As used in this Agreement, the following terms have the meaning indicated below or in the referenced sections of this Agreement:

"Advisor" means NKT Advisors LLC, a Delaware limited liability company.

"Advisory Agreement" shall mean that certain Advisory Agreement dated November 7, 2005 between the Company, the Operating Partnership and the Advisor.

"Affiliate" of any Person means any other Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. The term "control" (including the terms "controlled by" and "under common control with") as 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.

"Agreement" means this Registration Rights Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to this Registration Rights Agreement as the same may be in effect at the time such reference becomes operative.

"Business Day" means any day on which commercial banks are open for business in New York, New York and on which the New York Stock Exchange or such other exchange as the Common Stock is listed is open for trading.

"Common Stock" means common stock, par value $0.01 per share, of the Company.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Exclusivity Agreement" means that certain Exclusivity Agreement dated as of December 31, 2003 between First Union Real Estate Equity and Mortgage Investments and Michael L. Ashner.

"Forfeiture Event" shall mean (i) the termination of the Advisory Agreement by the Company for Cause (as defined in the Advisory Agreement), (ii) Michael L. Ashner's resignation as the Chief Executive Officer and director of the Company and the Advisor, or (iii) the death or disability of Michael L. Ashner unless the other members of the Advisor's senior management at such time remain in such positions.

"Form S-11" means the initial public offering of the Company's shares of Common Stock filed with the Commission on Form S-11.

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"Holder" means any shareholder holding securities entitled to registration by the Company hereunder or under one or more Other Registration Rights Agreements, and shall include, where the context requires, the Shareholder.

"Lock-Up Agreement" means that certain Lock-Up Agreement between the Company and the Shareholder dated of even date herewith expiring or terminating on the earlier to occur of (i) three years from the date thereof, or (ii) the occurrence of a Vesting Event; provided however, in no event shall such expiration or termination occur less than one (1) year from the Closing Date.

"Operating Partnership" means The Newkirk Master Limited Partnership, a Delaware limited partnership, and any successor thereto.

"Other Registration Rights Agreements" means that certain Registration Rights Agreement, of even date herewith, by and between the Company and Apollo Real Estate Investment Fund III, L.P. ("Apollo") and that certain Registration Rights Agreement, of even date herewith, and by and between the Company and Vornado Realty L.P.

"Partnership Units" means the partnership units of the Operating Partnership.

"Person" means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, incorporated organization, association, corporation, institution, public benefit corporation, government (whether federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof) or any other entity.

"Prospectus" means the prospectus or prospectuses included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registerable Common Stock covered by such Registration Statement and by all other amendments and supplements to the prospectus, including any preliminary prospectus or supplement, post-effective amendments and all material incorporated by reference in such prospectus or prospectuses.

"Registerable Common Stock" means the SPA Shares and those Acquisition Shares deemed to have vested under the Acquisition Agreement and described herein in Section 2(i) and not otherwise forfeited as described in Section 2(j), including any securities issued in respect of such securities by reason of or in connection with any conversion of Partnership Units or the exchange for or replacement of such securities or any stock dividend, stock distribution, stock split, purchase in any rights offering or in connection with any combination of shares, recapitalization, merger or consolidation, or any other equity securities issued pursuant to any other pro rata distribution with respect to the Shares.

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"Registration Statement" means any registration statement of the Company, other than the Form S-11, which covers any of the Registerable Common Stock pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference in such Registration Statement.

"Rule 415" means Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar Rule or regulation hereafter adopted by the Commission as a replacement thereto having substantially the same effect as such rule.

"SEC" or the "Commission" means the Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended.

"Shelf Registration Statement" shall have the meaning set forth in Section 4 hereof.

"Underwritten Registration or Underwritten Offering" means a registration in which securities of the Company are sold to underwriters for reoffering to the public.

"Vesting Event" shall mean (i) the termination of the Advisory Agreement by the Advisor following a breach by the Company of the Advisory Agreement that remains uncured by the Company, (ii) the non-renewal of the Advisory Agreement, or (iii) termination of the Advisory Agreement by the Company other than for Cause (as defined in the Advisory Agreement).

2. AUTOMATIC AND DEMAND REGISTRATIONS.

(a) Form S-11. The Form S-11 which covers the Common Stock of the Company, including a prospectus and such amendments or supplements to such Form S-11 as may have been required prior to the date of this Agreement, has been prepared by the Company under the provisions of the Act and has been filed with and declared effective by the SEC. If such Form S-11 ceases to be effective for any reason at any time prior to the delivery of all Common Stock registered thereunder, then the Company shall use its commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof. The Company shall be responsible for all Registration Expenses in connection with any registration pursuant to this Section 2(a). The Company shall promptly supplement and amend such Form S-11 and the prospectus included therein if required by the rules, regulations or instructions applicable to such form used for such registration statement or by the Securities Act. The Form S-11 referenced in this Section 2(a) shall not eliminate or affect any right to registration provided hereunder.

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(b) Right to Request Registration. Any time after the Closing Date subsequent to the expiration or termination of the limitations of the Lock-Up Agreement, the Shareholder may request pursuant to this Section 2(b), registration under the Securities Act of the resale of all or part of the Shareholder's Registerable Common Stock ("Demand Registration"); provided, that if the Company is eligible to use a Shelf Registration Statement (as defined in
Section 4 hereof), the Shareholder shall be required to request that the Company register its Registerable Common Stock on a Shelf Registration Statement rather than requesting Demand Registrations and shall not be entitled to request any Demand Registrations while such Shelf Registration is effective and available for registration of the Registerable Common Stock.

(c) Number of Demand Registrations. Subject to the provisions of Section
2(b), the Shareholder shall be entitled to request an aggregate of two (2) Demand Registrations during any twelve (12)-month period; provided, however, that Shareholder shall not be entitled to request that less than 25% of the Registerable Common Stock be included in any Demand Registration requested under this Agreement.

(d) Restrictions on Demand Registrations. The Company shall not be obligated to effect any Demand Registration within six months after the effective date of a previous Demand Registration, a previous Shelf Registration (as hereinafter defined) or a previous registration under which the Shareholder had piggyback rights pursuant to Section 3 hereof wherein the Shareholder was permitted to register, and sold, at least 25% of the shares of Registerable Common Stock requested to be included therein. In no event shall the Company be obligated to effect more than two (2) Demand Registrations collectively pursuant to this Agreement and the Other Registration Rights Agreements in any single twelve (12) month period, with the first such period measured from the date of the first Demand Registration and ending on the same date twelve months following such Demand Registration, whether or not a Business Day; provided, however, that if (i) the Company is requested to effect a Demand Registration under this Agreement which is not otherwise designated by the shareholder to be a "shelf" registration statement and (ii) is also requested to effect one or more Demand Registrations (as such term is defined in each of the Other Registration Rights Agreements) pursuant to the Other Registration Rights Agreements within any eighteen (18) month period, during which the Company is eligible to file a Registration Statement on Form S-3 or on a successor form, then the Company shall only be obligated with respect to such latter registration statement during such period to register that percentage of the Registerable Common Stock equal to the product obtained by dividing (i) the total number of shares of Registerable Common Stock held by the Shareholder by
(ii) the total number of shares of Registerable Common Stock covered under this Agreement and all of the Other Registration Rights Agreements. In the event that any of the Shares of the Shareholder have not been included in a Registration Statement because of the preceding sentence, then the Shareholder shall not be deemed to have utilized a Demand Registration under this Agreement. The Company may (i) postpone for up to ninety (90) days the filing or the effectiveness of a Registration Statement for a Demand Registration if, based on the good faith judgment of the Company's board of directors, such postponement or withdrawal is necessary in order to avoid premature disclosure of a matter the board has determined would be reasonably expected to result in a material adverse effect

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to the Company's business, financial condition, results of operations or prospects or the loss of a material opportunity to be disclosed at such time or
(ii) postpone the filing of a Demand Registration in the event the Company shall be required to prepare audited financial statements as of a date other than its fiscal year end (unless the shareholders requesting such registration agree to pay the expenses of such an audit); provided, however, that in no event shall the Company withdraw a Registration Statement under clause (i) after such Registration Statement has been declared effective; and provided, further, however, that in any of the events described in clause (i) or (ii) above, the Shareholder shall be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as one of the permitted Demand Registrations. The Company shall provide written notice to the Shareholder of (x) any postponement or withdrawal of the filing or effectiveness of a Registration Statement pursuant to this Section 2(d), (y) the Company's decision to file or seek effectiveness of such Registration Statement following such withdrawal or postponement and (z) the effectiveness of such Registration Statement. The Company may defer the filing of a particular Registration Statement pursuant to this Section 2(d) only once.

(e) Selection of Underwriters. If any of the Registerable Common Stock covered by a Demand Registration or a Shelf Registration pursuant to Section 4 hereof is to be sold in an underwritten offering, the Shareholder, if it is the Holder who instructed the Demand Registration or Shelf Registration, or in the case of a transaction representing a "shelf takedown", the Holder initiating such transaction, shall have the right to select the managing underwriter(s) to administer the offering subject to the approval of the Company, which will not be unreasonably withheld; provided, however, that the Company shall have the right to select the managing underwriter, subject to the approval of the Holder, which shall not be unreasonably withheld, in the event of any underwritten offering pursuant to a Demand Registration or "shelf takedown" where the Company is bearing the expenses of such Demand Registration or "shelf takedown".

(f) Effective Period of Demand Registrations. After any Demand Registration filed pursuant to this Agreement has become effective, the Company shall use its best efforts to keep such Demand Registration effective until such time as the Registerable Common Stock registered thereon has been disposed of pursuant thereto. If the Company shall withdraw any Demand Registration pursuant to subsection (e) of this Section 2 before any of the Shareholders Registerable Common Shares covered by the withdrawn Demand Registration are unsold (a "Withdrawn Demand Registration"), the Shareholder shall be entitled to a replacement Demand Registration that (subject to the provisions of this Article
2) the Company shall use its best efforts to keep effective until such time as the Registerable Common Stock registered thereon has been disposed of pursuant thereto. Such additional Demand Registration otherwise shall be subject to all of the provisions of this Agreement.

(g) Other Company Stock. In no event shall the Company agree to register Common Stock or any other securities for issuance by the Company or for resale by any Persons other than the Shareholder in any registration statement filed pursuant to Section 2(b), without the express written consent of the Shareholder, which consent shall be entirely discretionary.

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(h) Conversion to Form S-3. In the event that at any time a Demand Registration Statement is in effect and the Company is eligible to register on Form S-3 or any successor thereto then available, the Company shall as promptly as reasonably practicable convert such registration statement to Form S-3 or such successor form.

(i) Acquisition Shares. Except as provided in Section 2(j) below, all Acquisition Shares shall become Registerable Common Stock automatically and without notice or any action by the Shareholder upon their vesting pursuant to the provisions of the Acquisition Agreement; provided that all of the Acquisition Shares shall immediately vest upon a Vesting Event automatically and without notice or any action by the Shareholder.

(j) Forfeiture Event under Acquisition Agreement. In the event that a Forfeiture Event shall occur, the Acquisition Shares not then vested shall be deemed forfeited and shall not be eligible to be Registerable Common Stock hereunder.

3. PIGGYBACK REGISTRATIONS.

(a) Right to Piggyback. At any time after the Closing Date, whenever the Company proposes to register any of its common equity securities under the Securities Act (other than the Form S-11, or a registration statement on Form S-8 or on Form S-4 or any similar successor forms thereto), whether for its own account or for the account of one or more stockholders of the Company, and the registration form to be used may be used for any registration of Registerable Common Stock (a "Piggyback Registration"), the Company shall give prompt written notice (in any event within 10 business days after its receipt of notice of any exercise of other demand registration rights) to the Shareholder of its intention to effect such a registration and, subject to Sections 3(b) and 3(c), shall include in such registration all Registerable Common Stock of the Shareholder with respect to which the Company has received written requests for inclusion therein within 20 days after the receipt of the Company's notice. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its sole discretion.

(b) Priority on Primary Registrations. If a Piggyback Registration is an underwritten primary registration on behalf of the Company, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number that can be sold in such offering and/or that the number of shares of Registerable Common Stock proposed to be included in any such registration would adversely affect the price per share of the Company's equity securities to be sold in such offering, the underwriting shall be allocated among the Company and the Shareholder pro rata on the basis of the Common Stock and Registerable Common Stock offered for such registration by the Company and the Shareholder, respectively, electing to participate in such registration.

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(c) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of a holder of the Company's securities other than Registerable Common Stock ("Non-Holder Securities"), and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number that can be sold in such offering and/or that the number of shares of Registerable Common Stock proposed to be included in any such registration would adversely affect the price per share of the Company's equity securities to be sold in such offering, the underwriting shall be allocated among the holders of Non-Holder Securities and the Shareholder pro rata on the basis of the Non-Holder Securities and Registerable Common Stock offered for such registration by the holder of Non-Holder Securities and the Shareholder, respectively, electing to participate in such registration.

(d) Selection of Underwriters. If any Piggyback Registration is an underwritten primary offering, the Company shall have the right to select the managing underwriter or underwriters to administer any such offering.

(e) Other Registrations. If the Company has previously filed a Registration Statement with respect to shares of Registerable Common Stock pursuant to Sections 2 (other than Section 2(a)) or 4 hereof or pursuant to this
Section 3, and if such previous registration has not been withdrawn or abandoned, the Company shall not be obligated to cause to become effective any other registration of such same shares of Registerable Common Stock or any of its securities under the Securities Act, whether on its own behalf or at the request of any holder or holders of such securities.

4. SHELF REGISTRATIONS.

(a) After the Closing Date, at the Shareholder's election (such election to be made if the Shareholder may not elect to exercise any Demand Registrations, subject to Section 4(b) below), if at any time that the Company is eligible to use Form S-3 or any successor thereto then available to the Company providing for the resale pursuant to Rule 415 from time to time by the Shareholder of any and all Registerable Common Stock held by the Shareholder (a "Shelf Registration Statement") the Shareholder requests that the Company file a Shelf Registration Statement for a public offering of all or any portion of the Registerable Common Stock held by the Shareholder, then the Company shall use its best efforts to register under the Securities Act pursuant to a Shelf Registration Statement, for public sale in accordance with the method of disposition specified in such notice, the number of shares of Registerable Common Stock specified in such notice. Whenever the Company is required by this
Section 4 to use its best efforts to effect the registration of Registerable Common Stock, each of the procedures and requirements of Section 2 (including but not limited to the requirement that the Company notify all Holders from whom notice has not been received and provide them with the opportunity to participate in the offering) shall apply to such registration. The Company shall use its commercially reasonable efforts to keep the Shelf Registration Statement effective until the earliest to occur of the date on which all of the Registerable Common Stock ceases to be Registerable Common Stock.

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(b) If at any time the Company is not eligible to use a Shelf Registration Statement, the Shareholder may during such time exercise Demand Registration Rights, regardless of any previous exercise of their rights under Section 4(a).

(c) A filing pursuant to this Section 4 shall not relieve the Company of any obligation to effect registration of Registerable Common Stock pursuant to
Section 2 or Section 3 hereof, except as provided therein.

5. REGISTRATION PROCEDURES.

Whenever the Shareholder requests that any of its Registerable Common Stock be registered pursuant to this Agreement, the Company shall use its best efforts to effect the registration and the sale of such Registerable Common Stock in accordance with the intended methods of disposition thereof as provided by the Shareholder, and pursuant thereto the Company shall as expeditiously as possible:

(a) prepare and file with the SEC a Registration Statement with respect to such Registerable Common Stock, which shall be on Form S-3 (or a successor form) providing for "short-form" registration if the Company is eligible at such time to use such form, and use its best efforts to cause such Registration Statement to become effective as soon as practicable thereafter; and before filing a Registration Statement or Prospectus or any amendments or supplements thereto, furnish to the Shareholder and the underwriter or underwriters, if any, copies of all such documents proposed to be filed, including documents incorporated by reference in the Prospectus and, if requested by the Shareholder, the exhibits incorporated by reference, and the Shareholder shall have the opportunity to object to any information pertaining to the Shareholder that is contained therein and the Company will make the corrections reasonably requested by the Shareholder with respect to such information prior to filing any Registration Statement or amendment thereto or any Prospectus or any supplement thereto.

The Company, at least 10 business days prior to filing a Registration Statement or at least five days prior to filing a prospectus or any amendment or supplement to such Registration Statement or prospectus, including a document incorporated by reference therein, will furnish to (i) the Shareholder, (ii) counsel to the Shareholder and (iii) each underwriter, if any, named in the Registration Statement or an amendment or supplement thereto of the Shares covered by such Registration Statement, copies of such Registration Statement and each amendment or supplement as proposed to be filed, together with exhibits thereto, which documents will be subject to reasonable review and approval (which approval may not be unreasonably withheld) by each of the foregoing within five days after delivery (except that such review and approval of any prospectus or any amendment or supplement to such Registration Statement or prospectus must be within three days), and thereafter, furnish to the Shareholder, Shareholder's counsel and underwriters, if any, such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto and documents incorporated by reference

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therein), the prospectus included in such Registration Statement (including each preliminary prospectus) and such other documents or information as the Shareholder, Shareholder's counsel or any underwriter of the Shareholder's Shares may reasonably request in order to facilitate the disposition of the Shares; provided, however, that notwithstanding the foregoing, if the Company intends to file any prospectus, prospectus supplement or prospectus sticker which does not make any material changes in the documents already filed (including, without limitation, any prospectus under Rule 430A or 424(b)), then Shareholder's counsel will be afforded such opportunity to review such documents prior to filing consistent with the time constraints involved in filing such document, but in any event no less than one business day;

(b) prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for such period as is necessary to complete the distribution of the securities covered by such Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement;

(c) furnish to each seller of Registerable Common Stock such number of copies of such Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary Prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registerable Common Stock owned by such seller;

(d) use its commercially reasonable efforts to become and remain eligible to file registration statements on Form S-3 or any successor thereto then available, and if applicable to utilize "well known seasoned issuer status", and to register or qualify such Registerable Common Stock under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registerable Common Stock owned by such seller (provided, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph (d), (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction);

(e) notify each seller of such Registerable Common Stock, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and prepare promptly a supplement or amendment to such Prospectus so that such Prospectus, as then amended and supplemented, shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

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(f) in the case of an underwritten offering, enter into such customary agreements together with the Operating Partnership (including underwriting agreements in customary form) and take all such other actions as the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registerable Common Stock (including, without limitation, effecting a stock split or a combination of shares and making members of senior management of the Company available to participate in, and cause them to cooperate with the underwriters in connection with, "road-show" and other customary marketing activities (including one-on-one meetings with prospective purchasers of the Registerable Common Stock)) and cause to be delivered to the underwriters and the sellers, if any, opinions of counsel to the Company and the Operating Partnership in customary form, as well as closing certificates and other customary documents covering such matters as are customarily covered by opinions for and certificates in an underwritten public offering as the underwriters may request and addressed to the underwriters and the sellers; provided, however, that notwithstanding anything else contained in this Agreement, the Company shall not be obligated to effect an aggregate of more than three underwritten offerings or participate in more than two "road shows" (which, for the purposes of this sentence shall not include presentations that involve only telephonic or internet-based marketing and do not require any travel by the Company's management) in any twenty-four (24) month period, and not more than one underwritten offering every six (6) months under this Agreement or under the Other Registration Rights Agreements; and provided further, however, that if an underwritten public offering (including a public sale to a registered broker-dealer) is effected at the request of Apollo or Vornado Realty L.P. under the Other Registration Rights Agreements, the Shareholder shall have the right to participate in such offering, and Apollo and Vornado Realty L.P. shall have the right to participate in any underwritten public offering effected at the request of the Shareholder under this Agreement; and if the managing underwriters or broker-dealers of any such underwritten offering advise the Shareholder, Apollo and Vornado Realty L.P. in writing that in their opinion the number of shares of Registerable Common Stock proposed to be included in any such offering exceeds the number of securities that can be sold in such offering and/or that the number of shares of Registerable Common Stock proposed to be included in any such offering would materially adversely affect the price per share of the Company's equity securities to be sold in such offering, Apollo, Vornado Realty L.P. and the Shareholder shall include in such offering only the number of shares of Registerable Common Stock that, in the opinion of such managing underwriters (or registered broker-dealer), can be sold. If the number of shares that can be sold exceeds the number of shares of Registerable Common Stock proposed to be sold, such excess shall be allocated pro rata among theHolders of Common Stock desiring to participate in such offering based on the amount of such Common Stock initially requested to be registered by such Holders or as such Holders may otherwise agree.

Only Apollo, the Shareholder and Vornado Realty L.P., and their affiliates holding Registerable Common Stock shall be entitled to participate in any public underwritten offerings pursuant to this Agreement with respect to Registerable Common Stock (which for purposes of this paragraph (f) includes Registerable Common Stock as defined in the Other Registration Rights Agreements).

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If any of Apollo, the Shareholder or Vornado Realty L.P. determines not to participate in an Underwritten Offering with respect to which it is entitled hereunder to participate in hereunder or under the Other Registration Rights Agreements, then the non-participating party shall agree to such lockup period with respect to its Common Stock as the managing underwriters or broker dealer deems reasonably necessary for purposes of effecting the public offering.

(g) make available, for inspection by any seller of Registerable Common Stock, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such Registration Statement;

(h) to use its best efforts to cause all such Registerable Common Stock to be listed on each securities exchange on which securities of the same class issued by the Company are then listed or, if no such similar securities are then listed, on Nasdaq or a national securities exchange selected by the Company;

(i) provide a transfer agent and registrar for all such Registerable Common Stock not later than the effective date of such Registration Statement;

(j) if requested, cause to be delivered, immediately prior to the effectiveness of the Registration Statement (and, in the case of an underwritten offering, at the time of delivery of any Registerable Common Stock sold pursuant thereto), letters from the Company's independent certified public accountants addressed to the Shareholder and each underwriter, if any, stating that such accountants are independent public accountants within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC thereunder, and otherwise in customary form and covering such financial and accounting matters as are customarily covered by letters of the independent certified public accountants delivered in connection with primary or secondary underwritten public offerings, as the case may be;

(k) make generally available to its stockholders a consolidated earnings statement (which need not be audited) for the 12 months beginning after the effective date of a Registration Statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earning statement under Section 11(a) of the Securities Act;

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(l) promptly notify the Shareholder and the underwriter or underwriters, if any:

(i) when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective;

(ii) of any SEC comments applicable to the Registration Statement or Prospectus or written request from the SEC for any amendments or supplements to the Registration Statement or Prospectus;

(iii) of the notification to the Company by the SEC of its initiation of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement;

(iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registerable Common Stock for sale under the applicable securities or blue sky laws of any jurisdiction;

(v) of the existence of, any fact or the happening of any event that makes any statement of material fact made in any registration statement filed pursuant to this Agreement or related prospectus untrue in any material respect, or that requires the making of any changes in such registration statement so that, in the case of the registration statement, it will not 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 not misleading and that, in the case of the prospectus, including documents incorporated by reference therein, such prospectus will not 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 under which they were made, not misleading; and

(vi) of the determination by the Company that a post-effective amendment to a registration statement filed pursuant to this Agreement will be filed with the SEC and is due.

(m) promptly take such actions as necessary to respond, cure or eliminate, as the case may be, any of the events referred to in clause (l)(ii), (iii), (iv) or (v) so that the prospectus, as then amended or supplemented, as the case may be, shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

The Company shall file, and shall use its commercially reasonable efforts to timely file, all reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and take such further action as the Shareholder may reasonably request, all to the extent required to enable the Shareholder to be eligible to sell Registerable Common Stock pursuant to Rule 144 (or any similar rule then in effect).

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In connection with any registration pursuant to which any of a Shareholder's Registerable Common Stock is to be sold, the Company may require that the Shareholder furnish to the Company any other information regarding the Shareholder and the distribution of such securities as the Company may from time to time reasonably request in writing.

The Shareholder agrees that by having its stock treated as Registerable Common Stock hereunder that, upon notice of the happening of any event described in l(v) above (a "Suspension Notice"), the Shareholder will forthwith discontinue disposition of Registerable Common Stock until the Shareholder is advised in writing by the Company that the use of the Prospectus may be resumed and is furnished with a supplemented or amended Prospectus as contemplated by
Section 5(e) hereof, and, if so directed by the Company, the Shareholder will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in the Shareholder's possession, of the Prospectus covering such Registerable Common Stock current at the time of receipt of such notice; provided, however, that such postponement of sales of Registerable Common Stock shall not exceed ninety (90) days in the aggregate in any one year; provided, further, however, that not later than the last day of such ninety (90) day period or such shorter period as may apply, the Company shall have provided to the Shareholder a supplemented or amended Prospectus as contemplated by
Section 5(e) hereof. If the Company shall give any notice to suspend the disposition of Registerable Common Stock pursuant to a Prospectus, the Company shall extend the period of time during which the Company is required to maintain the Registration Statement effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date the Shareholder either is advised by the Company that the use of the Prospectus may be resumed or receives the copies of the supplemented or amended Prospectus contemplated by Section 5(e). In any event, the Company shall not be entitled to deliver more than one (1) Suspension Notice in any one year.

6. REGISTRATION EXPENSES.

(a) All expenses incident to the Company's performance of or compliance with this Agreement, including, without limitation, all registration and filing fees, underwriting discounts and commissions, NASD fees, fees and expenses of compliance with securities or blue sky laws, listing application fees, printing expenses, transfer agent's and registrar's fees, cost of distributing Prospectuses in preliminary and final form as well as any supplements thereto, and fees and disbursements of counsel for the Company and all independent certified public accountants and other Persons retained by the Company (all such expenses being herein called "Registration Expenses"), shall be borne by the Shareholder; provided, however, that the Company shall bear the expenses, exclusive of underwriting discounts and commissions, incident to the Form S-11,

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one (1) Registration Statement filed pursuant to Section 4(a), including up to three (3) "shelf takedowns" or offerings pursuant to Rule 430A under the Securities Act, if applicable, and up to three (3) Demand Registrations pursuant to Section 2(b), but in no event shall the Company be obligated to bear the expense of more than three (3) offerings (exclusive of the expenses incident to the Form S-11 and one (1) Registration Statement filed pursuant to Section 4(a)) pursuant to this Section 6(a) (or four (4) offerings if the Shareholder is unable, through its commercially reasonable efforts, to dispose of all its Registerable Common Stock after such three (3) offerings). The Company shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), and the expense of any annual audit or quarterly review, and the expense of any liability insurance.

7. INDEMNIFICATION.

(a) The Company and the Operating Partnership shall indemnify, to the fullest extent permitted by law, the Shareholder, its officers, directors, trustees, partners, and Affiliates and each Person who controls such Shareholder (within the meaning of the Securities Act) against all losses, claims, damages, expenses and liabilities, joint or several, actions or proceedings, to which each such indemnified party may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, expenses (including reasonable costs of investigation) or liabilities (or actions or proceedings in respect thereof) arise out of or based upon any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or any violation or alleged violation by the Company of the Securities Act, the Exchange Act or applicable "blue sky" laws and the Company and the Operating Partnership will reimburse the Shareholder and its directors, trustees, officers, partners, agents, employees or affiliates, underwriters and controlling persons for any legal or other expenses (as such legal or other expenses are incurred) reasonably incurred by them in connection with investigating, preparing or defending any such loss, claim, damage, expense, liability, action or proceeding, except insofar as the same are made in reliance and in conformity with information relating to the Shareholder furnished in writing to the Company by the Shareholder expressly for use therein or caused by the Shareholder's failure to deliver to the Shareholder's immediate purchaser a copy of the final Prospectus or any amendments or supplements thereto (if the same was required by applicable law to be so delivered) after the Company has furnished the Shareholder with a sufficient number of copies of the same and the claim would not have arisen if the final Prospectus, amendment or supplement had been delivered to the claimant. In connection with an underwritten offering, the Company shall indemnify such underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Shareholder.

(b) In connection with any Registration Statement in which the Shareholder is participating, the Shareholder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests expressly for use in connection with any such Registration Statement or Prospectus and, shall indemnify, to the fullest extent permitted by law, the Company, its officers,

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directors, Affiliates, and each Person who controls the Company (within the meaning of the Securities Act) against all losses, claims, damages, expenses and liabilities joint or several, actions or proceedings, to which each such indemnified party may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, expenses or liabilities (or actions or proceedings in respect thereof) arise out of or based upon any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Shareholder will reimburse each of the Company and the Operating Partnership and each such director, trustee, officer, partner, agent, employee or affiliate, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, expense, liability action or proceeding, but only to the extent that the same are made in reliance and in conformity with information relating to the Shareholder furnished in writing to the Company by the Shareholder expressly for use therein. Notwithstanding anything in this Section 7(b), the aggregate amount which may be recovered from the Shareholder pursuant to the indemnification provided for in this Section 7(b) shall be limited to the total proceeds received by the Shareholder from the sale of such Shareholder's Registerable Common Stock (net of underwriting discounts and commissions). In no event shall the Shareholder be jointly liable with any other holder of securities involved in the sale of the Company's securities.

(c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. The failure to give prompt notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that the indemnifying party is actually and materially prejudiced by such failure. The indemnifying party will not, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not such indemnified party or any Person who controls such indemnified party is a party to such claim, action, suit or proceeding), if such settlement, compromise or consent (i) does not include an unconditional release of such indemnified party from all liability and no finding of liability arising out of such claim, action, suit or proceeding or (ii) requires anything from the indemnified party other than the payment of money damages which the indemnifying party has agreed to pay in full. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party which are in addition to or may conflict with those available to another indemnified party with respect to such claim.

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(d) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of securities.

(e) If the indemnification provided for in or pursuant to this Section 7 is due in accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which result in such losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified Person 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 the indemnifying party or by the indemnified party, and by such party's relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In no event shall the liability of the selling Shareholder under this Section 7(e) be greater in amount than the amount of net proceeds received by such Shareholder upon such sale or the amount for which such indemnifying party would have been obligated to pay by way of indemnification if the indemnification provided for under Section 7(b) hereof had been available under the circumstances less any amounts recovered from the Shareholder under Section 7(b).

(f) In the event that advances are not made pursuant to this Section 7 or payment has not otherwise been timely made, each indemnified party shall be entitled to seek a final adjudication in an appropriate court of competent jurisdiction of the entitlement of the indemnified party to indemnification or advances hereunder.

The Company, the Operating Partnership and the Shareholder agree that they shall be precluded from asserting that the procedures and presumptions of this
Section 7 are not valid, binding and enforceable. The Company, the Operating Partnership and the Shareholder further agree to stipulate in any such court that the Company, the Operating Partnership, and the Shareholder are bound by all the provisions of this Section 7 and are precluded from making any assertion to the contrary.

To the extent deemed appropriate by the court, interest shall be paid by the indemnifying party to the indemnified party at a reasonable interest rate for amounts which the indemnifying party has not timely paid as the result of its indemnification and contribution obligations hereunder.

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In the event that any indemnified party is a party to or intervenes in any proceeding to which the validity or enforceability of this Section 7 is at issue or seeks an adjudication to enforce the rights of any indemnified party under, or to recover damages for breach of, this Section 7, the indemnified party, if the indemnified party prevails in whole in such action, shall be entitled to recover from the indemnifying party and shall be indemnified by the indemnifying party against, any expenses incurred by the indemnified party. If it is determined that the indemnified party is entitled to indemnification for part (but not all) of the indemnification so requested, expenses incurred in seeking enforcement of such partial indemnification shall be reasonably prorated among the claims, issues or matters for which the indemnified party is entitled to indemnification and for such claims, issues or matters for which the indemnified party is not so entitled.

The indemnity agreements contained in this Section 7 shall be in addition to any other rights (to indemnification, contribution or otherwise) which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made or omitted by or on behalf of any indemnified party and shall survive the transfer and sale of any Registerable Common Stock by the Shareholder.

8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.

No Person may participate in any registration hereunder that is underwritten unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

9. RULE 144.

The Company covenants that it will file, and use its commercially reasonable efforts to timely file, the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and it will take such further action as the Shareholder may reasonably request to make available adequate current public information with respect to the Company meeting the current public information requirements of Rule 144(c) under the Securities Act (to the extent such information is available), to the extent required to enable the Shareholder, subject to the expiration of the restrictions on transfer under the Lock-Up Agreement, to sell the Registerable Common Stock without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of the Shareholder, the Company will deliver to the Shareholder a written statement as to whether it has complied with such information and requirements.

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10. MISCELLANEOUS.

(a) Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given,

If to the Company:

Newkirk Realty Trust, Inc.

Two Jericho Plaza
Wing A, Suite 11
Jericho, New York 11753
Attn: Peter Braverman
Fax: (516) 433-2777
Tel: (516) 822-0022

If to the Shareholder:

First Union Real Estate Equity and Mortgage Investments 7 Bulfinch Place, Suite 500
P.O Box 9507
Boston, Massachusetts 02114
Attn: Carolyn Tiffany
Fax: (617) 742-4643
Tel: (617) 570- 4606

or such other address or facsimile number as such party (or transferee) may hereafter specify for the purpose by notice to the other parties. Each such notice, request or other communication shall be effective (a) if given by facsimile, when such facsimile is transmitted to the facsimile number specified in this Section and the appropriate facsimile confirmation is received or (b) if given by any other means, when delivered at the address specified in this Section.

(b) No Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

(c) Expenses. Except as otherwise provided for herein or otherwise agreed to in writing by the parties, all costs and expenses incurred in connection with the preparation of this Agreement shall be paid by the Company.

(d) Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that neither party may assign its rights or obligations under this Agreement without the prior written consent of

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the other party, except that the Shareholder may assign its rights hereunder to any Affiliate and such Affiliate shall be entitled to the benefits of this Agreement as if it had been a signatory hereto.

(e) Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York, without regard to principles of conflicts of law.

(f) Jurisdiction. Any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby may be brought in any federal or state court located in the County and State of New York, and each of the parties hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 10(a) shall be deemed effective service of process on such party.

(g) Waiver of Jury Trial.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(h) Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

(i) Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the transactions contemplated herein. Except as provided herein, no provision of this Agreement or any other agreement contemplated hereby is intended to confer on any Person other than the parties hereto any rights or remedies.

(j) Captions. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

(k) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and

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effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, 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 in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

(l) Amendments. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the prior written consent of the parties hereto.

(m) Aggregation of Stock. All Registerable Common Stock held by or acquired by any Affiliated Persons will be aggregated together for the purpose of determining the availability of any rights under this Agreement.

(n) Equitable Relief. The parties hereto agree that legal remedies may be inadequate to enforce the provisions of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement.

(o) No Inconsistent Agreements. None of the Company or the Operating Partnership has entered and neither of them will enter into any agreement that is inconsistent with the rights granted to the Shareholder in this Agreement or that otherwise conflicts with the provisions hereof. The rights granted to the Shareholder hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company or the Operating Partnership's other issued and outstanding securities under any such agreements. From and after the date of this Agreement, neither the Company nor the Operating Partnership will enter into any agreement with any holder or prospective holder of any securities of the Company or the Operating Partnership which would grant such holder or prospective holder more favorable rights than those granted to the Shareholder hereunder or substantially similar or equivalent rights to those granted to the Shareholder.

(p) No Adverse Action Affecting the Registerable Common Stock. Neither the Company nor the Operating Partnership shall take any action with respect to the Registerable Common Stock with an intent to adversely affect or that does adversely affect the ability of the Shareholder to include such Registerable Common Stock in a registration undertaken pursuant to this Agreement or their offer and sale. Notwithstanding the foregoing, the provisions of this Section 10(p) shall not apply to the Other Registration Rights Agreements.

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IN WITNESS WHEREOF, this Registration Rights Agreement has been duly executed by each of the parties hereto as of the date first written above.

NEWKIRK REALTY TRUST, INC.

By:

Name:


Title:

FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS

By:

Name:


Title:

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AMENDED AND RESTATED

ADVISORY AGREEMENT

BETWEEN

FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS

AND

FUR ADVISORS LLC

Dated as of November 7, 2005


AMENDED AND RESTATED ADVISORY AGREEMENT

THIS AGREEMENT, made as of November 7, 2005, between FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, an Ohio business trust corporation (the "Trust") and FUR ADVISORS LLC (the "Advisor").

WHEREAS, pursuant to that certain Advisory , dated December 31, 2003, between the Trust and the Advisor, as amended by that certain Amendment No. 1 to Advisory Agreement, dated as of January 8, 2004, as further amended by that certain Amendment No. 2 to Advisory Agreement, dated as of January 1, 2005 (as amended, the "Original Agreement") the Advisor has been retained to provide, among other things, certain asset management, investor relations and accounting services to the Trust;

WHEREAS, simultaneously herewith NKT Advisors LLC ("NKT"), an affiliate of the Advisor is entering into that certain Advisory Agreement among NKT, Newkirk Realty Trust, Inc. and The Newkirk Master Limited Partnership (the "Newkirk Advisory Agreement");

WHEREAS, in connection with the Newkirk Advisory Agreement and the other agreements being entered into between the Trust and Newkirk simultaneously herewith, the Trust and the Advisor desire to amend and restate the Original Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, it is agreed as follows:

ARTICLE I

RETENTION OF ADVISOR

Subject to the terms and conditions hereinafter set forth, the Trust hereby retains the Advisor to undertake the duties and responsibilities hereinafter set forth. By its execution and delivery of this Agreement, the Advisor represents and warrants that (i) it is duly organized, validly existing, in good standing under the laws of the state of Delaware and has all requisite power and authority to enter into and perform its obligations under this Agreement and (ii) the person signing this Agreement for the Advisor is duly authorized to execute this Agreement on the Advisor's behalf.

ARTICLE II

RESPONSIBILITIES OF ADVISOR

2.1 General Responsibility. Subject to the supervision of the Board, the Advisor shall:

(i) serve as the Trust's investment and financial advisor and recommend changes in the Trust's investment policies, when appropriate;


(ii) investigate and evaluate investment opportunities and recommend them to the Board;

(iii) administer the day-to-day operations of the Trust;

(iv) investigate, select and conduct relations and enter into appropriate contracts on behalf of the Trust with other individuals, corporations and entities in furtherance of the investment activities of the Trust;

(v) acquire and dispose of investments and funds of the Trust, handle, prosecute and settle any claims of the Trust and handle, defend and settle claims against the Trust;

(vi) invest and reinvest any money of the Trust;

(vii) negotiate, as appropriate, on behalf of the Trust with investment banking firms, banks and other institutions or investors for public or private sales of securities of the Trust or for other financing on behalf of the Trust;

(viii) conduct relations on behalf of the Trust with the Trust's beneficiaries and with securities exchanges and dealers making markets in the Trust's securities;

(ix) establish one or more bank accounts in the name of the Trust and deposit into and disburse from such accounts any moneys on behalf of the Trust, provided that no funds in any such account shall be commingled with funds of the Advisor, and the Advisor shall as requested by the Board render appropriate accountings of such deposits and payments to the Board;

(x) administer such day-to-day bookkeeping and accounting functions as are required for the proper management of the assets of the Trust and prepare or cause to be prepared such reports (other than the preparation and filing of tax returns) as may be required by any governmental authority in connection with the ordinary conduct of the Trust's business, including without limitation, periodic reports, returns or statements required under the Securities Exchange Act of 1934, as amended, the Internal Revenue Code of 1986, as amended (the "Code"), the securities and tax statutes of any jurisdiction in which the Trust is obligated to file reports or the rules and regulations promulgated under any of the foregoing;

(xi) from time to time, enter into Property Management Agreements and Construction Management Agreements (each as defined below), upon terms set forth in Article 4.2 of this Agreement, in consultation with the Board;

(xii) from time to time, or at any time requested by the Board, make reports to the Board of its performance of the foregoing services; and

(xiii) cause the Trust to obtain insurance covering such risks, with such insurers and on such terms as the Trust may reasonably determine.

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2.2 Authority. The Advisor shall have full discretion and authority pursuant to this Agreement to perform the duties and services specified in
Section 2.1 hereof in such manner as the Advisor reasonably considers appropriate subject to the terms and restrictions contained in the Trust's Trust Agreement, as amended from time to time. In furtherance of the foregoing, the Trust hereby designates and appoints the Advisor or its designee as the agent and attorney-in-fact of the Trust, with full power and authority and without further approval of the Trust, for purposes of accomplishing on its behalf any of the foregoing matters or any matters which are properly the subject matter of this Agreement. The Advisor may execute, in the name and on behalf of the Trust and its affiliates all such documents and take all such other actions which the Advisor reasonably considers necessary or advisable to carry out its duties hereunder.

ARTICLE III

INDEMNIFICATION

3.1 Indemnity. (a) The Trust shall indemnify and hold harmless the Advisor, and its members, officers, affiliates, agents and employees, from and against any and all liability, claims, demands, expenses and fees, fines, suits, losses and causes of action of any and every kind or nature arising from or in any way connected with the performance by the Advisor of its obligations under this Agreement, other than any liability, claim, demand, expense, fee, suit, loss or cause of action arising from or in any way connected with (i) any acts of the Advisor, or its members, officers, affiliates, agents or employees, outside the scope of the authority of the Advisor under this Agreement unless such person acted in good faith and reasonably believed that his conduct was within the scope of authority of the Advisor under this Agreement, or (ii) the gross negligence, willful misconduct or material breach of this Agreement or the violation of applicable laws by the Advisor, its members, officers, affiliates, agents or employees. In addition, Advisor shall be named as an additional insured on all policies of insurance maintained by the Trust including, without limitation, the Commercial General Liability, Comprehensive Automobile Liability, Umbrella and Excess Liability Insurance policy. Certificates of Insurance evidencing compliance with the provisions of the immediately preceding sentence shall be furnished to the Advisor on request.

(b) The Advisor shall indemnify and hold harmless the Trust and its Trustees, officers, affiliates, agents and employees, from and against any and all liability, claims, demands, expenses and fees, fines, suits, losses and causes of action of any and every kind or nature arising from third party actions and connected with the performance by the Advisor of its obligations under this Agreement to the extent caused by (i) any acts of the Advisor, or its members, officers, affiliates, agents or employees, outside the scope of the authority of the Advisor under this Agreement unless such person acted in good faith and reasonably believed that his conduct was within the scope of authority of the Advisor under this Agreement, or (ii) the gross negligence, willful misconduct or material breach of this Agreement or the violation of applicable laws by the Advisor, its members, officers, affiliates, agents or employees.

3.2 Additional Costs; Survival. The obligation to indemnify set forth in Section 3.1 above shall include the payment of reasonable attorneys' fees and investigation costs, as well as other reasonable costs and expenses incurred by the indemnified party in connection with any such claim. At the option of, and upon receipt of notice from, the indemnified party, the indemnifying party shall promptly and diligently defend any such claim, demand, action or proceeding. The provisions of Sections 3.1 and 3.2 hereof shall survive the expiration or earlier termination of this Agreement.

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ARTICLE IV

COMPENSATION

The Advisor agrees to accept from the Trust, the compensation set forth in this Article IV as full and complete consideration for all services to be rendered by the Advisor pursuant to this Agreement. Except as hereinafter provided, neither the Advisor nor any of its affiliates shall be entitled to receive any other fees or compensation relating to the Trust or its properties, including but not limited to leasing commissions, acquisition fees, disposition fees or loan fees.

4.1 Annual Asset Management Fee. (a) The Advisor shall be entitled to receive an asset management fee, which shall be payable quarterly basis, equal to the amount by which (i) the lesser of the Asset Based Fee and the Equity Based Fee, exceeds (ii) 80% of all amounts paid to NKT pursuant to the Newkirk Advisory Agreement as an Incentive Management Fee (as defined in the Newkirk Advisory Agreement). If the amount determined for a calendar quarter pursuant to clause (ii) of the foregoing sentence exceeds the amount determined for such calendar quarter pursuant to clause (i) of the foregoing sentence, such excess amount shall be paid by the Advisor to FUR within 30 days of such determination. For purposes of this Section 4.1, the following terms have the following meanings:

"Asset Based Fee" - means an amount equal to: 1.00% of the Gross Asset Value up to $100 million, .75% of the Gross Asset Value between $100 million and $250 million, .625% of the Gross Asset Value between $250 million and $500 million and .50% of the Gross Asset Value in excess of $500 million; provided, however, with respect to the properties acquired from Finova Capital Corporation, the fee amount with respect to such assets shall be equal to .25% of Gross Asset Value of such properties that is subject to leverage.

"Equity Based Fee" - means an amount equal to (i) 1.5% of the Issuance Price of the issued and outstanding Equity Securities of the Trust plus (ii) .25% of any equity contribution by a third party to a joint venture managed by the Trust, in each case pro rated to the extent that an equity security was not issued for the entire quarterly period.

"Equity Securities" - means common shares, convertible preferred shares, convertible debt and perpetual preferred shares which do not require dividend payments.

"Gross Asset Value" - means, as of a particular date, the gross asset value of all assets owned, directly or indirectly, by the Trust on that date, as determined, in the case of assets whose values are not readily ascertainable, by the most recent appraisal of such assets by an independent appraiser of national reputation selected by the Trust. The Gross Asset Value shall be calculated as of the last day of the period in respect of which the annual asset management fee is payable.

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"Issuance Price" - means, with respect to future issuances, the issuance price of the Equity Security after deducting any underwriting discounts and commissions and other expenses and costs relating to the issuance, and with respect to the Trust's existing Equity Securities, as follows:

Common Shares - 26,058,913 Common Shares (the "$2.30 Common Shares") are to be based on an issuance price of $2.30, the FUR Investors LLC tender price, and 5,000,000 Common Shares (the "$2.60 Common Shares") are to be based on an issuance price of $2.60, the price paid by FUR Investors LLC.

Series A Cumulative Convertible Redeemable Preferred Shares - $25 per share.

The Issuance Price will be modified accordingly in the event of stock splits and, in the event of a Common Share repurchase, the shares repurchased will be allocated proportionally among the $2.30 Common Shares, the $2.60 Common Shares and all future issuances of Common Shares.

(b) The Advisor shall provide the Trust with such information as it shall reasonably request from time to time to evidence the calculation of the Incentive Management Fee NKT pursuant to the Newkirk Advisory Agreement.

4.2 Property and Construction Management Fees. (a) The Trust may, from time to time, enter into separate property management agreements (the "Property Management Agreements") with third parties, the Advisor or an affiliate of the Advisor for each Trust property, pursuant to which the Advisor or its affiliate shall be entitled to receive fees for property management services at a rate for each property that does not exceed a commercially reasonable rate for performing such services for comparable properties in the same geographic location taking into account that the Advisor will not be performing leasing services or receiving leasing commissions. The proposed rates shall be submitted for approval by a majority of the independent trustees on the Board. Such Property Management Agreements may be terminated in the same manner as proscribed in Section 6.2 of this Agreement and shall contain commercially reasonable and customary terms for such arrangements.

(b) The Trust may, from time to time, enter into construction management agreements (the "Construction Management Agreements") with third parties, the Advisor or an affiliate of the Advisor with respect to Trust properties, pursuant to which the Advisor or its affiliate shall be entitled to receive fees for construction management services at a rate that does not exceed a commercially reasonable rate for performing such services for comparable properties in the same geographic location. The proposed rates shall be submitted for approval by a majority of the independent trustees on the Board. Such Construction Management Agreements may be terminated in the same manner as proscribed in Section 6.2 of this Agreement and shall contain commercially reasonable and customary terms for such arrangements.

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4.3 [intentionally omitted]

4.4 Incentive Fee. (a) As additional compensation for its services hereunder, the Advisor shall be paid a fee (the "Incentive Fee"), at the times and pursuant to the procedures set forth below, equal to twenty percent (20%) of Excess Share Distributions.

(b) Definitions as used herein:

(i) "Excess Share Distributions" means the aggregate of all Distributions after the date hereof in respect of all common shares of beneficial interest of the Trust which exceed the Hurdle as of the date of calculation. The "Hurdle" means (x) $71,300,000, increased by the net issuance price of all common shares of beneficial interests issued after the date hereof (including the conversion price of any securities actually converted into Common Shares) and decreased by the redemption price of all common shares of beneficial interest redeemed after the date hereof, plus
(y) a return on the amount set forth in (x) above, as adjusted, equal to 7% per annum compounded annually taking into account the timing of any such adjustments; provided, however, the amount set forth in (x) above shall be subject to increase, BUT NOT REDUCTION, as of the date that the Trust receives amounts awarded to it as a result of the entry of a final non-appealable order in the case entitled Paterno et al. v. State of California, by the amount so received by the Trust reduced by (i) all costs and expenses, including but not limited to attorneys' fees and expenses, paid by the Trust subsequent to November 26, 2003 in connection with the action, (ii) the amount of any subrogation claim due to the Trust's insurance carrier in connection with the action and (iii) $2,000,000.

(ii) "Distributions" means all distributions made after the date hereof in respect of common shares of beneficial interest of the Trust, including distributions of cash, debt obligations and the fair market value of other property and the fair market value of any consideration received in exchange for common shares of beneficial interest by reason of a merger or consolidation with a third party entity or other similar transaction. In the event of a merger, consolidation or other similar business combination transaction, the Advisor will receive a credit toward the Distribution amount equal to the fair market value of the consideration received by holders of common shares of beneficial interest of the Trust received in exchange for their common shares of beneficial interest of the Trust, including, but not limited to, the fair market value ascribed in the transaction to stock, preferred stock, debt instruments, cash, warrants, options, etc., received by the holders of common shares of beneficial interest of the Trust. Except as otherwise provided herein, "fair market value" shall be determined by the Board in good faith; provided, however, that if the Advisor disagrees in good faith with such determination, then the Advisor shall be entitled to seek arbitration in accordance with Section 7.4 herein with respect to this issue.

(c) Time of Payment. The Incentive Fee shall be paid to the Advisor from time to time, as, when and if Excess Share Distributions are made to shareholders of the Trust. The Incentive Fee shall be deemed earned on the first date that Excess Share Distributions are made and shall not be subject to any claw-back, refund or offset for any reason, including as a result of an increase in the amount of the Hurdle from time to time. The amount of each payment of the Incentive Fee shall equal the entire Incentive Fee computed pursuant to Section 4.4(a), less the amount thereof which has theretofore been paid to the Advisor.

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4.5 Joint Investment Fees. In the event that the Trust and the Advisor or an affiliate of the Advisor make a joint investment as permitted by the Stock Purchase Agreement, then the Advisor agrees to share with the Trust, in proportion to their respective investments, the amount of any fee or promoted interest payable to the Advisor or its affiliate by a third party in connection with entering into or structuring the transaction.

4.6 Other Services. Other than as specifically provided in this Agreement, or as approved in writing by a majority of independent Trustees of the Board, the Advisor shall not be compensated by the Trust for services rendered to the Trust. The Advisor shall disclose to the Board the terms of any sub-contracting arrangement entered into by the Advisor with third parties with respect to the services to be provided by the Advisor hereunder.

ARTICLE V

TRUST EXPENSES

5.1 Expenses Paid by Advisor. Without regard to the amount of compensation received hereunder by the Advisor, the Advisor shall bear the following expenses of the Trust:

(a) All direct and indirect remuneration and all other employment expenses of employees of the Advisor, including but not limited to, salaries, wages, payroll taxes and the costs of employee benefit plans, and fees, if any, paid to members of the Board who are employed by the Advisor;

(b) rent, telephone, utilities, office furniture, equipment and machinery and other office expenses of the Advisor and the Trust; and

(c) administrative expenses relating to performance by the Advisor of its duties hereunder other than payments to third parties as provided in
Section 5.2.

5.2 Expenses paid by the Trust. The following expenses relating to the operation and management of the Trust shall be paid by the Trust:

(a) Underwriting, brokerage, listing, reporting, registration and other fees, and printing, engraving and other expenses and taxes incurred in connection with the issuance, distribution, transfer, trading, registration and securities exchange or quotation system listing of the Trust's securities;

(b) Fees and expenses paid to members of the Board who are not affiliated with the Advisor, independent advisors, consultants and other agents employed by or on behalf of the Trust;

(c) The cost of borrowed money;

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(d) Third party expenses directly connected with the acquisition, disposition, ownership and operation of real estate interests or other property (including the costs of foreclosure, insurance premiums, legal services, brokerage and sales commissions, taxes and assessments on real property and all other taxes, utilities, maintenance, repair and improvement of property and expenses for which reimbursement or payment by the Trust is provided for under the Property Management Agreements);

(e) Third party expenses connected with payments of dividends or interest or distributions in cash or any other form made to beneficiaries of the Trust;

(f) All third party expenses connected with communications to the beneficiaries of the Trust including with the proxy solicitation materials and reports to holders of the Trust's beneficial interests;

(g) Transfer agent's, registrar's and indenture trustee's fees and charges;

(h) Legal, investment banking, and external accounting, auditing and tax return preparation fees and expenses;

(i) Directors and officers liability insurance costs;

(j) All expenses in connection with the beneficiaries' meetings;

(k) All expenses relating to membership of the Trust in any trade or similar association.

ARTICLE VI

TERM OF AGREEMENT; TERMINATION

6.1 Term. This Agreement shall become effective on the date hereof and shall continue in force for a period expiring June 30, 2006 and thereafter shall be automatically renewed for successive one-year periods unless terminated in accordance with the provisions of this Agreement.

6.2 Right of Termination. (a) Notwithstanding anything to the contrary contained in this Agreement, (i) the Trust may terminate this Agreement with or without cause upon sixty (60) days' prior written notice to the Advisor and (ii) the Advisor may terminate this Agreement with or without cause upon one hundred and twenty (120) days' prior written notice to the Trust. In addition, this Agreement may be terminated by the Trust at any time for "cause", defined as (i) the Advisor's continuous and intentional failure to perform its duties under this Agreement after written notice from the Trust to the Advisor of such non-performance; (ii) intentional misconduct by the Advisor which is materially injurious to the Trust, monetarily or otherwise; or (iii) the material breach by the Advisor of any of the material terms or conditions of this Agreement.

(b) The Advisor shall have the continuing right, but not the obligation, to immediately terminate this Agreement from and after the date that the Exclusivity Agreement (as defined in the Stock Purchase Agreement) or the Covenant Agreement (as defined in the Stock Purchase Agreement) is, without the prior written consent of FUR, terminated by the Company or voided, in each case in whole or material part.

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6.3 Termination Fee. (a) Upon termination of this Agreement in accordance with Section 6.1 or 6.2 above, the Trust will be obligated to pay the Advisor a termination fee equal to 20% of the difference between (x) the Deemed Excess Share Distributions less (y) the amount of Incentive Fees which have theretofore been paid to the Advisor in accordance with Section 4.4(a) hereto.

(b) Definitions as used herein:

(i) "Deemed Excess Share Distributions" means the difference between (A) the aggregate of all Distributions in respect of all common shares of beneficial interest plus the Net Asset Amount (as defined below) and (B) the Hurdle, as of the date of termination..

(ii) "Net Asset Amount" means the difference between (x) the gross assets of the Trust as of the date of termination less (y) the total liabilities of the Trust as of the date of termination (including any amounts necessary to satisfy obligations due to holders of preferred shares of the Trust as liabilities), as determined by an appraisal to be conducted by a nationally recognized appraisal firm mutually agreed upon by the Trust and the Advisor. If the Trust and the Advisor are unable to agree upon an appraisal firm, then each of the Trust and the Advisor is to choose an independent appraisal firm to conduct an appraisal. In such event, (i) if the appraisals prepared by the two appraisers so selected are the same or differ by an amount that does not exceed 20% of the higher of the two appraisals, the Net Asset Amount is to be deemed to be the average of the appraisals, as prepared by each party's chosen appraiser, and (ii) if these two appraisals differ by more than 20% of such higher amount, the two appraisers together are to select a third appraisal firm to conduct an appraisal. If the two appraisers are unable to agree on the identity of such third appraiser, either of the Advisor and the Trust may request that the American Arbitration Association ("AAA") select the third appraiser. The Net Asset Amount then is to be the amount determined by such third appraiser, but in no event less then the lower of the two initial appraisals or more than the higher of such two initial appraisals. Each party shall pay the costs of the appraisals chosen by it, and each party shall pay one half of the costs of the third appraiser. Any appraisal hereunder shall be performed no later than 45 days following selection of the appraiser or appraisers.

(c) In the event that this Agreement shall have been terminated by the Trust for cause, the Trust shall have the right to offset any direct damages to the Trust caused by the actions giving rise to such termination for cause against the fee otherwise payable under this Section 6.3.

6.4 Continued Responsibility. Notwithstanding termination of this Agreement as provided above, the Advisor agrees to use its best efforts in the performance of its duties under this Agreement until the effective date of the termination of this Agreement.

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6.5 Responsibilities upon Termination. Upon termination of this Agreement, the Advisor shall forthwith deliver the following to the Trust, as applicable, on the effective date of termination:

(a) A final accounting reflecting the balance of funds held on behalf of the Trust as of the date of termination; and

(b) All files, records, documents and other property of any kind relating to the Trust, including, but not limited to, computer records, contracts, leases, warranties, bank statements, rent rolls, employment records, plans and specifications, inventories, correspondence, tenant records, receipts, paid and unpaid bills or invoices, maintenance records.

(c) Agreements to terminate all property management, construction management and other agreements with affiliates of the Advisor and third parties retained on a subcontracting basis by the Advisor, in each case, with respect to the services to be provided by the Advisor hereunder.

ARTICLE VII

MISCELLANEOUS PROVISIONS

7.1 Notice. Any notice required or permitted under this Agreement shall be in writing and shall be given by being delivered to the following addresses or fax numbers of the parties hereto:

To the Trust:   First Union Real Estate Equity and Mortgage
                Investments
                7 Bulfinch Place
                Suite 500, P.O. Box 9507
                Boston, Massachusetts 02114
                Telephone No.: (617) 570-4600
                Telecopier No.: (617) 742-4643
                Attention: Carolyn Tiffany

To the Advisor: FUR Advisors LLC
                Two Jericho Plaza
                Wing A, Suite 111
                Jericho, New York  11753
                Telephone No.: (516) 822-0022
                Telecopier No.: (516) 433-2777
                Attention: Michael L. Ashner

or to such other address or fax number as may be specified from time to time by such party in writing.

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7.2 Entire Agreement; Amendment. This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof. This Agreement shall not be amended or modified in any respect unless agreed to in writing by the Trust and the Advisor.

7.3 Governing Law. This Agreement shall be construed, interpreted and applied in accordance with, and shall be governed by, the laws of the State of New York without reference to principles of conflicts of law.

7.4 Arbitration. Any dispute or controversy between the Advisor or any of its employees and the Trust or any of its affiliates arising in connection with this Agreement, any amendment thereof, or the breach thereof shall be determined and settled by arbitration in New York, New York, by a panel of three arbitrators in accordance with the rules of the American Arbitration Association. Any award rendered therein shall be final and binding upon the Trust, its affiliates and the Advisor and their respective legal representatives and judgment may be entered in any court having jurisdiction thereof. The expenses of such arbitration shall be paid by the party against whom the award shall be entered, unless otherwise directed by the arbitrators.

7.5 Assignment. This Agreement may not be assigned by any party hereto without the prior written consent of the other parties hereto; provided, however, that the Advisor shall be permitted to assign this Agreement or any of its rights hereunder, and delegate any and all of its responsibilities and obligations hereunder, to any of its affiliates without the consent of the other parties hereto.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS

By:

Peter Braverman President

FUR ADVISORS LLC

By: FUR Holdings LLC
Member

By: WEM-FUR Investors LLC
Managing Member

By:

Michael L. Ashner Managing Member

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AMENDMENT NO. 1 TO
EXCLUSIVITY SERVICES AGREEMENT

AMENDMENT NO. 1 TO EXCLUSIVITY SERVICES AGREEMENT, dated as of October 27, 2005 (this "Amendment"), between FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, an Ohio business trust (the "Company") and MICHAEL L. ASHNER ("Ashner"), an individual.

RECITALS

WHEREAS, pursuant to that certain Exclusivity Services Agreement, dated December 31, 2003, between the Company and Ashner (the "Exclusivity Agreement"), Ashner agreed to offer to the Company all Business Opportunities offered to Ashner during the term of the Agreement;

WHEREAS, the parties desire to amend the Agreement to make clear that "offered to" includes "generated by";

NOW THEREFORE, in consideration of the foregoing and mutual provisions and agreements contained herein, the parties hereto agree as follows:

1. Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed thereto in the Exclusivity Agreement.

2. The Exclusivity Agreement is hereby amended by deleting Section 1.1 thereof in its entirety and inserting the following in lieu thereof:

Section 1.1 Business Opportunities. Ashner hereby covenants and agrees that any Business Opportunity offered to him or generated by him during the period of time that he is serving either as an executive officer of the Company or as a member of the Board shall be offered to the Company. "Business Opportunity" shall mean an investment in real property or assets related thereto other than a Permitted Investment (as defined in Section 1.2). Neither Ashner nor his affiliates shall be permitted to invest in a Business Opportunity that has been offered to the Company.

3. Miscellaneous. (a) Except as modified hereby, the Exclusivity Agreement shall remain in full force and effect and the provisions thereof are hereby ratified and confirmed.

(b) All references in the Exclusivity Agreement to "this Agreement", "hereunder", "hereto" or similar references, and all references in all other documents to the Exclusivity Agreement shall hereinafter be deemed references to the Exclusivity Agreement as amended hereby.


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS

By:

Peter Braverman President


Michael L. Ashner

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Lock-Up Agreement - First Union

November 7, 2005

Bear, Stearns & Co. Inc.
Credit Suisse First Boston LLC
As Representatives of the several
Underwriters referred to below
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Attention: Equity Capital Markets

Newkirk Realty Trust, Inc. Lock-Up Agreement

Ladies and Gentlemen:

This letter agreement (this "Agreement") relates to the proposed initial public offering (the "Offering") by Newkirk Realty Trust, Inc., a Maryland corporation (the "Company"), of its common stock, $.01 par value (the "Stock").

In order to induce you and the other underwriters for which you act as representatives (the "Underwriters") to underwrite the Offering, the undersigned hereby agrees that, except as otherwise provided herein without the prior written consent of Bear, Stearns & Co. Inc. ("Bear Stearns"), during the Lock-Up Period (as hereinafter defined), the undersigned (a) will not, directly or indirectly, offer, sell, agree to offer or sell, solicit offers to purchase, grant any call option or purchase any put option with respect to, pledge, borrow or otherwise dispose of any Relevant Security (as defined below), and (b) will not establish or increase any "put equivalent position" or liquidate or decrease any "call equivalent position" with respect to any Relevant Security (in each case within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder), or otherwise enter into any swap, derivative or other transaction or arrangement that transfers to another, in whole or in part, any economic consequence of ownership of a Relevant Security, whether or not such transaction is to be settled by delivery of Relevant Securities, other securities, cash or other consideration.

As used herein "Relevant Security" means the Stock, any other equity security of the Company or any of its subsidiaries and any security convertible into, or exercisable or exchangeable for, any Stock or other such equity security held by the undersigned immediately following the Offering including, without limitation, units of limited partnership interest in The Newkirk Master Limited Partnership, a Delaware limited partnership (the "Partnership"). As used herein, the term "Lock-Up Period" means the period from the date hereof until the earlier of (i) the third anniversary of the effective date of the Offering and (ii) the date of termination or expiration of the Advisory Agreement among the Company, the Partnership and NKT Advisors LLC.


Notwithstanding the foregoing:

(i) if (x) during the last 17 days of the Lock-Up Period the Company issues an earnings release or material news or a material event relating to the Company occurs; or (y) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the Lock-Up Period; the restrictions imposed in this Letter Agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event; provided, however, that this sentence shall not apply if the research published or distributed on the Company is compliant with Rule 139 of the Securities Act then in effect and the Company's securities are actively traded as defined in Rule 101(c)(1) of Regulation M of the Exchange Act;

(ii) the undersigned shall be permitted to pledge Relevant Securities in connection with a loan obtained by the undersigned so long as the principal amount of such loan is no greater than 35% of the value of all Relevant Securities held by the undersigned. For purposes hereof, the value of the Relevant Securities shall be calculated assuming the value of each Relevant Security is the Offering price of the Stock, adjusted for stock splits; and

(iii) the undersigned shall be permitted to transfer or otherwise assign Relevant Securities to an affiliate of the undersigned provided that such affiliate agrees to be bound by the terms of this Agreement.

The undersigned hereby authorizes the Company during the Lock-Up Period to cause any transfer agent for the Relevant Securities to decline to transfer, and to note stop transfer restrictions on the stock register and other records relating to, Relevant Securities for which the undersigned is the record holder and, in the case of Relevant Securities for which the undersigned is the beneficial but not the record holder, agrees during the Lock-Up Period to cause the record holder to cause the relevant transfer agent to decline to transfer, and to note stop transfer restrictions on the stock register and other records relating to, such Relevant Securities. The undersigned hereby further agrees that, except as contemplated in the final prospectus for the Offering, without the prior written consent of Bear Stearns, during the Lock-up Period the undersigned (x) will not file or participate in the filing with the Securities and Exchange Commission of any registration statement, or circulate or participate in the circulation of any preliminary or final prospectus or other disclosure document with respect to any proposed offering or sale of a Relevant Security and (y) will not exercise any rights the undersigned may have to require registration with the Securities and Exchange Commission of any proposed offering or sale of a Relevant Security.

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The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Agreement and that this Agreement constitutes the legal, valid and binding obligation of the undersigned, enforceable in accordance with its terms. Upon request, the undersigned will execute any additional documents necessary in connection with enforcement hereof. Any obligations of the undersigned shall be binding upon the successors and assigns of the undersigned from the date first above written.

The Agreement may be terminated by (i) Bear, Stearns & Co. Inc. on behalf of the several Underwriters at any time, in whole or in part, (ii) the undersigned upon the earlier of (A) January 15, 2006 if the underwriting agreement in respect of the Offering has not been executed by the parties thereto prior to such date, or (B) the abandonment of the Offering and the termination of the underwriting agreement (other than the provisions thereof that survive termination) in respect of the Offering in accordance with its terms.

This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Delivery of a signed copy of this letter by facsimile transmission shall be effective as delivery of the original hereof.

Very truly yours,

FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS

By

Peter Braverman President

[signature page to First Union Lock-up agreement]

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OWNERSHIP LIMIT WAIVER AGREEMENT (FIRST UNION)

THIS OWNERSHIP LIMIT WAIVER AGREEMENT (this "Agreement"), dated as of November 7, 2005, is between Newkirk Realty Trust, Inc., a Maryland corporation (the "Company"), and First Union Real Estate Equity and Mortgage Investments ("First Union"), an unincorporated association in the form of an Ohio business trust (together with any entity at least 99% of the voting stock of which is owned by First Union, "Buyer"). Capitalized terms used, but not otherwise defined, in this Agreement shall have the meanings given to them in the hereinafter-mentioned Articles.

R E C I T A L S

A. Article VII of the Company's Articles of Incorporation, as amended (the "Articles") contains a restriction prohibiting any Person other than an Excepted Holder from acquiring any shares of Capital Stock of the Company if, as a result of such Transfer, such Person shall Beneficially Own or Constructively Own more than a specified percentage (currently set at 9.8%) of the value of the total outstanding Capital Stock of the Company (the "Aggregate Stock Ownership Limit") or more than a specified percentage (currently set at 9.8%) of the value or number of shares (whichever is more restrictive) of the total outstanding Common Stock of the Company (the "Common Stock Ownership Limit").

B. Pursuant to Section 7.2.7(a) of the Articles, the Company's Board of Directors has adopted resolutions approving Buyer's exemption from the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit on the terms and conditions hereinafter set forth.

A G R E E M E N T

1. WAIVER OF STOCK OWNERSHIP LIMITS

1.1. The Company, effective as of the date of this Agreement, exempts Buyer from the Aggregate Stock Ownership Limit and the Common Stock Ownership Limit but only (A) with respect to its ownership of up to 17.5% of the Common Stock, as determined and subject to reduction in the manner provided in Section 1.2 below, and (B) upon and subject to Buyer's compliance with Section 2.2 below and its continued compliance with the covenants referred to therein. This exemption shall not apply to any other shares of Capital Stock of the Company Beneficially Owned by Buyer.

1.2. The percentage of Common Stock held by Buyer for purposes of applying the percentage limitation set forth in Section 1.1 above (such percentage limitation being hereinafter called the "Excepted Holder Limit") shall be determined in accordance with the provisions of Paragraph 5e of that certain letter agreement, dated August 5, 2005, among the Company, Buyer and certain other Persons with respect to the transactions related to the Company's initial public offering of Common Stock (said provisions being deemed to be incorporated in and made a part of this Agreement). After any Transfer by Buyer, the Excepted Holder Limit for Buyer shall be reduced by the percentage of the outstanding shares of Capital Stock so Transferred, provided that the Excepted Holder Limit shall not be reduced to a percentage or amount that is less than the Common Stock Ownership Limit.


2. LIMITATIONS AND OTHER MATTERS

2.1. The exemption set forth in Section 1.1 above (the "Ownership Limit Waiver") shall not be effective if and to the extent that, as a result of Buyer's ownership of Capital Stock permitted by reason of the Ownership Limit Waiver, Buyer would be considered to have Beneficial Ownership or Constructive Ownership of Capital Stock that would result in (A) the Company owning (actually or Constructively, applying the provisions of Section 856(d)(5) of the Code) an interest described in Section 856(d)(2)(B) in a "First Union Related Tenant" (as defined in Section 2.5 herein), or (B) Beneficial Ownership by any "individual" (within the meaning of Section 542(a)(2) of the Code) who Beneficially Owns or will Beneficially Own any of the shares of Common Stock covered by the Ownership Limit Waiver, of more than 9.8% (by number of shares or value, whichever is more restrictive) of the total outstanding shares of Common Stock of the Company (whether or not such ownership causes the Company to be "closely held" under the REIT rules). In addition, if the Ownership Limit Waiver is not effective as a result of the operation of any clause(s) of the preceding sentence, the Capital Stock that otherwise would be "Excess Stock" (as defined in Section 2.4 herein) shall be automatically transferred to a Trust in accordance with Sections 7.2.1(b) and 7.3 of the Articles.

2.2. For the Ownership Limit Waiver to be effective, Buyer must execute a counterpart signature page to this Agreement and complete and make the representations and covenants set forth in the Certificate of Representations and Covenants, the form of which is attached hereto as Exhibit A (the "Certificate"), and must deliver such Certificate to the Company prior to its acquisition of Capital Stock. Except as otherwise determined by the Board of Directors, the Ownership Limit Waiver shall cease to be effective upon any breach of the representations or covenants set forth herein or in the Certificate. In addition, if the Ownership Limit Waiver is not effective as a result of the operation of the preceding sentence, the Capital Stock that would otherwise be "Excess Stock" (as defined in Section 2.4 herein) shall be automatically transferred to a Trust in accordance with Sections 7.2.1(b) and 7.3 of the Articles.

2.3. Buyer shall deliver to the Company, at such times as may reasonably be requested by the Company (it being acknowledged that Buyer may reasonably make such request on at least a calendar quarterly basis), a certificate signed by an authorized officer of Buyer to the effect that Buyer has complied and expects to continue to comply with its representations and covenants set forth in this Agreement and the Certificate. If so requested by the Company, Buyer will cooperate with the Company in investigating any direct or indirect relationship that Buyer and any Person whose ownership of Capital Stock would be attributed to Buyer under Section 318(a) of the Code (as modified by Section 856(d)(5) of the Code), may have with the Company's tenants or "independent contractors" (within the meaning of Section 856(d)(3) of the Code) for purposes of determining compliance with the provisions of this Ownership Limit Waiver. However, the Company's remedies under this Agreement with respect to Buyer's representations and covenants set forth in this Agreement and the Certificate shall become effective only if and from and after such time as Buyer requires the exemptions afforded to Buyer under this Agreement.

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2.4. For purposes of this Agreement, "Excess Stock" means the number of shares of Capital Stock the Beneficial or Constructive Ownership of which otherwise would cause such Person to violate any provision of Section 7.2.1(a) of the Articles.

2.5. For purposes of this Agreement, "First Union Related Tenant" means any entity (x) in which First Union owns (actually or Constructively, applying the provisions of Section 856(d)(5) of the Code), in the case of a corporation, shares equal to or greater than the "Threshold Percentage" (as defined in
Section 2.6 herein) of either the total combined voting power of all classes of stock of such entity entitled to vote or the total value of shares of all classes of stock of such entity or, in the case of an entity that is not a corporation, an interest equal to or greater than the Threshold Percentage in the assets or net profits of such entity (such actual or Constructive ownership equal to or greater than the Threshold Percentage being hereinafter called a "Related Interest"), (y) from which the Company is or will be deriving rental income (other than a taxable REIT subsidiary, if the requirements of Section 856(d)(8) of the Code are satisfied) and (z) included in the tenant list attached hereto (or added to such list pursuant to the next sentence), unless the Board of Directors has determined that the Company derives (and is expected to continue to derive) an amount of gross rental income that is sufficiently small so as not to adversely affect the Company's ability to qualify as a REIT. The Company may add an entity to such list from time to time by written notice to First Union, provided, however, that if such notice is delivered at a time when First Union owns a Related Interest in such entity that would result in the Company's owning (actually or Constructively) an interest in such entity described in Section 856(d)(2)(B) of the Code, then, subject to the following proviso, such entity shall not be added to the list; provided, further, that if such notice is given at a time when either First Union's interest in such entity has a fair market value of less than $1,000,000 or First Union is engaged in active discussions regarding a potential acquisition of a Related Interest in such entity that would result in the Company's owning (actually or Constructively) an interest in such entity described in Section 856(d)(2)(B) of the Code, then the parties shall jointly determine in good faith, based on the parties' relative economic interests and REIT qualification interests with respect to such entity, whether such entity shall be added to the list. Buyer shall advise the Company of the percentage ownership that its Related Interest represents in each First Union Related Tenant not later than five days following the date of the Company's request for such information.

2.6 For purposes of Section 2.5 above, the "Threshold Percentage" as of any date of determination shall mean the percentage determined by dividing nine (9%) percent by the absolute number of holders of Capital Stock of the Company (as of the date of determination) who or which have been granted an exemption from the Aggregate Stock Ownership Limit and/or the Common Stock Ownership Limit.

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3. MISCELLANEOUS

3.1. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by and construed in accordance with the domestic laws of the State of Maryland, without giving effect to any choice of law or conflict of law provision (whether of the State of Maryland or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Maryland.

3.2. This Agreement may be signed by the parties in separate counterparts, each of which when so signed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument.

3.3 All references to any Code provision shall be deemed to include any successor provisions of the Code and any regulatory, judicial or administrative amendment or interpretation of such statutory provisions.

Each of the parties has caused this Ownership Limit Waiver Agreement to be signed by its duly authorized officers as of the date set forth in the introductory paragraph hereof.

THE COMPANY                                   BUYER

Newkirk Realty Trust, Inc.                    First Union Real Estate Equity and
                                              Mortgage Investments


By:                                           By:
    ------------------------------                ------------------------------
    Peter Braverman                               Peter Braverman
    President                                     President

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EXHIBIT A

CERTIFICATE OF REPRESENTATIONS AND COVENANTS
FOR
OWNERSHIP LIMIT WAIVER

The undersigned desires that the Ownership Limit Waiver Agreement dated as of November 7, 2005, between the undersigned and the Company (the "Ownership Limit Waiver Agreement"), be applicable to the Common Stock owned or to be acquired by the undersigned to the extent provided in the Ownership Limit Waiver Agreement. Capitalized terms used and not defined herein shall have the meanings set forth in the Ownership Limit Waiver Agreement.

In connection therewith, the undersigned, on behalf of Buyer under the Ownership Limit Waiver Agreement, makes the following representations effective as of the date of execution hereof:

(a) For U.S. federal income tax purposes, Buyer is a United States person within the meaning of Section 7701(a)(30) of the Code.

(b) Buyer is acquiring Common Stock for its own account.

(c) Except as disclosed to the Company in writing, Buyer does not own (actually or Constructively, applying the provisions of Section 856(d)(5) of the Code) a Related Interest in any of the entities included in the tenant list attached hereto, as the same may be supplemented from time to time in accordance with the Ownership Limit Waiver Agreement.

(d) Buyer will not take any affirmative action in the future that could reasonably be expected to cause the Company to be treated as deriving "impermissible tenant service income" (within the meaning of Section 856(d)(7) of the Code), provided that any person that the Company actually treats as an "independent contractor" for purposes of Section 856 of the Code is identified in a written notice from the Company to the undersigned.

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(e) Buyer further represents and warrants to the Company that:

(i) as of the date of execution and delivery hereof, it Beneficially Owns 4,375,000 shares of Common Stock; and

(ii) no "individual" (as defined in Section 542(a)(2) of the Code) who Beneficially Owns or will Beneficially Own any of the shares of Common Stock Beneficially Owned by it, shall Beneficially Own shares of Common Stock in an amount greater than 9.8% (by number of shares or value, whichever is more restrictive) of the total outstanding shares of Common Stock.

(f) The undersigned covenants to notify the Company promptly after the undersigned obtains knowledge that any of the foregoing representations (including any disclosures provided in connection with its representation in (c) above) is or may no longer continue to be accurate.

Dated: November 7, 2005                       First Union Real Estate Equity and
                                              Mortgage Investments

                                              By:
                                                 -------------------------------
                                                 Peter Braverman
                                                 President

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JOINDER AGREEMENT

THIS JOINDER AGREEMENT, dated November 7, 2005, among NEWKIRK REALTY TRUST, INC., a Maryland corporation (the "Company"), FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, an Ohio business trust ("First Union"), and THE NEWKIRK MASTER LIMITED PARTNERSHIP, a Delaware limited partnership (the "Partnership").

R E C I T A L S:

WHEREAS, the Company and First Union are party to that certain Securities Purchase Agreement dated November 7, 2005 (the "Securities Purchase Agreement") pursuant to which First Union is acquiring 3,125,000 shares of common stock in the Company;

WHEREAS, the Company is acquiring a general partner interest in the Partnership;

WHEREAS, it is a condition to the consummation of the transactions contemplated by the Securities Purchase Agreement that the Partnership join in and become a party to the Securities Purchase Agreement;

NOW, THEREFORE, in consideration of the premises, warranties and mutual covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1. Capitalized Terms. Capitalized Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Securities Purchase Agreement.

2. Joinder. The Partnership hereby joins in and becomes party to the Securities Purchase Agreement solely for purposes of the representations and warranties set forth in ARTICLE III of the Securities Purchase Agreement and the indemnification obligations of the Company set forth in ARTICLE IX of the Securities Purchase Agreement.

3. Representations and Warranties. The Partnership hereby represents and warrants to First Union as of the date hereof as follows:

(a) All of the representations and warranties set forth ARTICLE III of the Securities Purchase Agreement that relate to the Partnership are true and correct in all material respects;

(b) This Agreement has been duly authorized, executed and delivered and constitutes the legal, valid and binding obligation of the Partnership, enforceable against the Partnership in accordance with its terms except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency and similar laws affecting rights of creditors generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).


4. Governing Law. This Assignment shall be governed by and construed under the laws of the State of New York, without respect to principles governing conflict of laws.

5. Successors and Assigns. This Assignment shall inure to the benefit of, and be binding upon, the heirs, executors, administrators, successors and assigns of the parties hereto.

6. Counterparts. This Assignment may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute but one document.

IN WITNESS WHEREOF, this Amendment has been executed as of the date and year first above written.

NEWKIRK REALTY TRUST, INC.

By:

Peter Braverman President

FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS

By:

Michael L. Ashner Chief Executive Officer

THE NEWKIRK MASTER LIMITED PARTNERSHIP

By: Newkirk Realty Trust, Inc.
General Partner

By:

Peter Braverman President

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UNDERTAKING

This Undertaking is made and delivered this 7th day of November, 2005 by FUR HOLDINGS LLC, a Delaware limited liability company ("Holdings") and FUR Advisors LLC ("Advisors"). Concurrently with the delivery of this Undertaking, First Union Real Estate Equity and Mortgage Investments, an Ohio trust ("First Union") and Advisors are entering into that certain Amended and Restated Advisory Agreement (the "Advisory Agreement") pursuant to which First Union is retaining Advisors to provide advisory services to First Union. It is acknowledged and agreed by Holdings and Advisors that this Undertaking is made as an inducement to First Union to enter into the Advisory Agreement. Each capitalized term used herein and not otherwise defined shall have the meaning ascribed thereto in the Advisory Agreement.

WHEREAS, Holdings is the sole member of Advisors and holds an 80% membership interest in NKT Advisors LLC ("NKT"), which has agreed to provide advisory services pursuant to the Newkirk Advisory Agreement;

WHEREAS, Holdings and Advisors acknowledge that it is an inducement and a condition to First Union entering into the Advisory Agreement that Holdings deliver this Undertaking;

WHEREAS, Holdings and Advisors are deriving material benefit from First Union entering into the Advisory Agreement and are delivering this Undertaking to induce First Union to enter into the Advisory Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Holdings and Advisors hereby jointly and severally agree as follows.

1. Undertakings

a. At all times from and after a termination (if any) of the Advisory Agreement and during such period as the Newkirk Advisory Agreement is then in effect, Holdings shall pay or cause to be paid to First Union within five days of receipt thereof by Holdings (i) an amount equal to 80% of all payments made to NKT pursuant to the Newkirk Advisory Agreement on account of the Incentive Management Fee (as defined in the Newkirk Advisory Agreement) (herein, the "80% Fee"); and (ii) any amount or amounts payable and unpaid by Advisors to First Union with respect to the 80% Fee prior to the termination of the Advisory Agreement;

b. At all times from and after a termination (if any) of the Newkirk Advisory Agreement, Holdings shall pay or cause to be paid to First Union within five days of receipt thereof by Holdings any amount or amounts payable and unpaid by NKT to Advisors with respect to the 80% Fee; and


c. Holdings and Advisors shall direct NKT, and by delivery of a copy of this Undertaking hereby direct NKT, in satisfaction of the obligations of Holdings pursuant paragraph 1 hereof, to pay directly to First Union from amounts otherwise distributable to Holdings by NKT the amounts contemplated by Paragraphs 1(a) and 1 (b) hereof.

2. Holdings and Advisors represent, warrant and covenant to First Union that:

a. Holdings and Advisors have the power to execute and deliver this Undertaking and to incur and perform their obligations hereunder;

b. Holdings and Advisors have duly taken all necessary action to authorize the execution, delivery and performance of this Undertaking and to incur and perform its obligations hereunder;

c. No consent, approval, authorization or other action by, and no notice to or of, or declaration or filing with, any governmental or other public body, or any other person or entity, is required for the due authorization, execution, delivery and performance by Holdings or Advisors of this Undertaking or the consummation of the transactions contemplated hereby;

d. The execution, delivery and performance by Holdings and Advisors of this Undertaking does not and will not, with the passage of time or the giving of notice or both, violate or otherwise conflict with any term or provision of any material agreement, instrument, judgment, decree, order or any statute, rule or governmental regulation applicable to Holdings or result in the creation of any lien upon any of its properties or assets pursuant thereto; and

e. This Undertaking has been duly authorized, executed and delivered by Holdings and Advisors and constitutes the legal, valid and binding obligation of Holdings and Advisors, and is enforceable against Holdings and Advisors in accordance with its terms, except as enforcement thereof may be subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally, and general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law).

2

IN WITNESS WHEREOF, Holdings and Advisors have duly executed or caused this Undertaking to be duly executed as of the date first above set forth.

FUR HOLDINGS LLC

By: WEM-FUR Investors LLC
Managing Member

By

Michael L. Ashner Managing Member

FUR ADVISORS LLC

By: FUR Holdings LLC
Member

By: WEM-FUR Investors LLC
Managing Member

By

Michael L. Ashner Managing Member

[signature page to FUR Holdings undertaking}

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FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS

AT THE COMPANY
Carolyn Tiffany
Chief Operating Officer
(617) 570-4614

FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
ANNOUNCES IT SALE OF 3,522,566 COMMON SHARES TO VORNADO REALTY
TRUST

FOR IMMEDIATE RELEASE - Boston, Massachusetts- November 7, 2005-First Union Real Estate Equity and Mortgage Investments (NYSE:FUR) announced today that it consummated the sale of its common shares of beneficial interest to a subsidiary of Vornado Realty Trust which was agreed to on August 5, 2005. Pursuant to a Securities Purchase Agreement dated as of November 7, 2005, Vornado acquired 3,522,566 shares, representing 9.9% of the outstanding common shares of beneficial interest in First Union, at the previously agreed upon per share price of $4.00 ($14,090,264 in the aggregate). The shares were sold pursuant to First Union's currently effective Registration Statement on Form S-3.


First Union Real Estate Equity and Mortgage Investments is a NYSE-listed real estate investment trust (REIT) headquartered in Boston, Massachusetts.


FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS

AT THE COMPANY
Carolyn Tiffany
Chief Operating Officer
(617) 570-4614

FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
ANNOUNCES ACQUISITION OF 4,375,000 SHARES OF COMMON STOCK IN
NEWKIRK REALTY TRUST, INC.

FOR IMMEDIATE RELEASE - Boston, Massachusetts- November 7, 2005-First Union Real Estate Equity and Mortgage Investments (NYSE:FUR) announced today that it has consummated the acquisition of 3,125,000 shares of common stock in Newkirk Realty Trust, Inc. (NYSE:NKT) for a purchase price of $50 million. In addition, First Union also acquired an additional 1,250,000 shares of common stock in Newkirk in exchange for the assignment by First Union to Newkirk of certain exclusivity rights held by First Union with respect to the services of Michael L. Ashner, First Union's Chief Executive Officer, on half of which are subject to forfeiture over next three year period with such amount subject to forfeiture decreasing pro rata on a monthly basis. Also as part of the transaction, First Union will be entitled to receive 80% of all payments made by Newkirk to its advisor on account of the incentive fee payable to its advisor, if any. Based on the $1.60 anticipated dividend to be paid by Newkirk as set forth in Newkirk's Prospectus, the annual cash-on-cash yield on this investment is expected to be 14%.


Certain statements contained in this press release that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. Further information about these matters and the risks generally with respect to First Union can be found in First Union's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

First Union Real Estate Equity and Mortgage Investments is a NYSE-listed real estate investment trust (REIT) headquartered in Boston, Massachusetts.