VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


~~21.~~20.	Income ~~(Loss)~~ Per Share/Income ~~(Loss)~~ Per Class A Unit - continued

Vornado Realty L.P.

The following table ~~provides a reconciliation of both net income (loss) attributable to Vornado Realty L.P. and~~presents the ~~number of Class A units used in the computation~~calculations of (i) basic income ~~(loss)~~ per Class A unit - which includes the weighted average number of Class A units outstanding without regard to dilutive potential Class A units and (ii) diluted income ~~(loss)~~ per Class A unit - which includes the weighted average Class A ~~units~~unit and dilutive Class A unit equivalents. ~~Dilutive unit~~Unvested share-based payment awards that contain non-forfeitable rights to dividends, whether paid or unpaid, are accounted for as participating securities. Earnings are allocated to participating securities, which include Vornado restricted stock awards, OP Units and OPPs, based on the two-class method. Other potential dilutive share equivalents ~~may include~~such as Vornado stock options, AO LTIP Units and Performance Conditioned AO LTIP Units are included in the computation of diluted income per share using the treasury stock method, while the dilutive effect of our Series A convertible preferred ~~units, Vornado stock options, restricted unit awards and Out-Performance Plan awards.~~shares is reflected in diluted EPS by application of the if-converted method.

(Amounts in thousands, except per unit amounts) For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
2018 2017 2018 2017
Numerator:
Income from continuing operations, net of income attributable to noncontrolling interests in consolidated subsidiaries $ 215,789
$ 33,154
$ 355,538
$ 206,642
Income (loss) from discontinued operations 61
(47,930 ) 381
(14,501 )
Net income (loss) attributable to Vornado Realty L.P. 215,850
(14,776 ) 355,919
192,141
Preferred unit distributions (12,582 ) (16,176 ) (38,248 ) (48,531 )
Preferred unit issuance costs —
—
(14,486 ) —
Net income (loss) attributable to Class A unitholders 203,268
(30,952 ) 303,185
143,610
Earnings allocated to unvested participating securities (997 ) (740 ) (2,259 ) (2,499 )
Numerator for basic income (loss) per Class A unit 202,271
(31,692 ) 300,926
141,111
Impact of assumed conversions:
Convertible preferred unit distributions 15
—
47
—
Numerator for diluted income (loss) per Class A unit $ 202,286
$ (31,692 ) $ 300,973
$ 141,111

Denominator:
Denominator for basic income (loss) per Class A unit – weighted average units 202,103
201,300
202,033
201,093
Effect of dilutive securities⁽¹⁾:

Vornado stock options and restricted unit awards 1,454
1,813
1,329
2,218
Convertible preferred units 37
—
38
—
Denominator for diluted income (loss) per Class A unit – weighted average units and assumed conversions 203,594
203,113
203,400
203,311

INCOME (LOSS) PER CLASS A UNIT – BASIC:
Income from continuing operations, net $ 1.00
$ 0.08
$ 1.49
$ 0.77
Loss from discontinued operations, net —
(0.24 ) —
(0.07 )
Net income (loss) per Class A unit $ 1.00
$ (0.16 ) $ 1.49
$ 0.70

INCOME (LOSS) PER CLASS A UNIT – DILUTED:
Income from continuing operations, net $ 0.99
$ 0.08
$ 1.48
$ 0.76
Loss from discontinued operations, net —
(0.24 ) —
(0.07 )
Net income (loss) per Class A unit $ 0.99
$ (0.16 ) $ 1.48
$ 0.69



(Amounts in thousands, except per unit amounts)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Numerator:
Income from continuing operations, net of income attributable to noncontrolling interests in consolidated subsidiaries	$	358,083		$	215,789		$	3,139,626		$	355,538
(Loss) income from discontinued operations	(8		)	61			(85		)	381
Net income attributable to Vornado Realty L.P.	358,075			215,850			3,139,541			355,919
Preferred unit distributions	(12,574		)	(12,582		)	(37,722		)	(38,248		)
Preferred unit issuance costs	—			—			—			(14,486		)
Net income attributable to Class A unitholders	345,501			203,268			3,101,819			303,185
Earnings allocated to unvested participating securities	(2,449		)	(997		)	(14,807		)	(2,259		)
Numerator for basic income per Class A unit	343,052			202,271			3,087,012			300,926
Impact of assumed conversions:
Convertible preferred unit distributions	14			15			43			47
Numerator for diluted income per Class A unit	$	343,066		$	202,286		$	3,087,055		$	300,973

Denominator:
Denominator for basic income per Class A unit – weighted average units	203,009			202,103			202,903			202,033
Effect of dilutive securities⁽¹⁾:
Vornado stock options, Vornado restricted stock awards, OP Units and OPPs	507			1,454			478			1,329
Convertible preferred units	34			37			35			38
Denominator for diluted income per Class A unit – weighted average units and assumed conversions	203,550			203,594			203,416			203,400

INCOME PER CLASS A UNIT – BASIC:
Income from continuing operations, net	$	1.69		$	1.00		$	15.21		$	1.49
Net income per Class A unit	$	1.69		$	1.00		$	15.21		$	1.49

INCOME PER CLASS A UNIT – DILUTED:
Income from continuing operations, net	$	1.69		$	0.99		$	15.18		$	1.48
Net income per Class A unit	$	1.69		$	0.99		$	15.18		$	1.48

____________________

(1)

The effect of dilutive securities excludes an aggregate of 905 and 105 weighted average Class A unit equivalents, for the three months ended September 30, ~~2018~~2019 and ~~2017 excludes an aggregate of 105 and 147 weighted average Class A unit equivalents,~~2018 respectively, and ~~112~~678 and ~~118~~112 weighted average Class A unit equivalents for the nine months ended September 30, ~~2018~~2019 and ~~2017,~~2018, respectively, as their effect was anti-dilutive.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


21.	Leases

As lessor

We lease space to tenants under operating leases. Most of the leases provide for the payment of fixed base rent payable monthly in advance. Office building leases generally require tenants to reimburse us for operating costs and real estate taxes above their base year costs. Certain leases provide for pass-through to tenants for their share of real estate taxes, insurance and common area maintenance. Certain leases also require additional variable rent payments based on a percentage of the tenants’ sales. None of our tenants accounted for more than 10% of total revenues for the three and nine months ended September 30, 2019 and 2018. We have elected to account for lease revenues (including base and variable rent) and the reimbursement of common area maintenance expenses as a single lease component recorded as "rental revenues" on our consolidated statements of income. As of September 30, 2019, under ASC 842, future undiscounted cash flows under non-cancelable operating leases were as follows:



(Amounts in thousands)	As of September 30, 2019
For the remainder of 2019	$	327,246
For the year ended December 31,
2020	1,263,818
2021	1,241,049
2022	1,174,436
2023	1,060,495
2024	885,891
Thereafter	4,336,649

As of December 31, 2018, under ASC 840, future undiscounted cash flows under non-cancelable operating leases were as follows:



(Amounts in thousands)	As of December 31, 2018
For the year ended December 31,
2019	$	1,547,162
2020	1,510,097
2021	1,465,024
2022	1,407,615
2023	1,269,141
Thereafter	5,832,467

The components of lease revenues for the three and nine months ended September 30, 2019 were as follows:



(Amounts in thousands)	For the Three Months Ended September 30, 2019		For the Nine Months Ended September 30, 2019
Fixed lease revenues	$	351,426	$	1,159,037
Variable lease revenues	62,917		151,844
Lease revenues	$	414,343	$	1,310,881

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

21. Leases - continued

As lessee

We have a number of ground leases which are classified as operating leases. On January 1, 2019, we recorded $526,866,000 of ROU assets and lease liabilities. Our ROU assets were reduced by $37,269,000 of accrued rent expense reclassified from “other liabilities” and $4,267,000 of acquired above-market lease liabilities, net, reclassified from “deferred revenue” and increased by $23,665,000 of acquired below-market lease assets, net, reclassified from “identified intangible assets, net of accumulated amortization” and $1,584,000 of prepaid lease payments reclassified from "other assets." As of September 30, 2019, our ROU assets and lease liabilities were $370,604,000 and $490,978,000, respectively.

The discount rate applied to measure each ROU asset and lease liability is based on our incremental borrowing rate ("IBR"). We consider the general economic environment and our credit rating and factor in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease. As we did not elect to apply hindsight, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842. Certain of our ground leases offer renewal options which we assess against relevant economic factors to determine whether we are reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods that we are reasonably certain will be exercised are included in the measurement of the corresponding lease liability and ROU asset.

The following table sets forth information related to the measurement of our lease liabilities as of September 30, 2019:



(Amounts in thousands)	As of September 30, 2019
Weighted average remaining lease term (in years)	40.89
Weighted average discount rate	4.85		%
Cash paid for operating leases	$	20,289

We recognize rent expense as a component of "operating" expenses on our consolidated statements of income. Rent expense is comprised of fixed and variable lease payments. Variable lease payments include percentage rent and rent resets based on an index or rate. The following table sets forth the details of rent expense for the three and nine months ended September 30, 2019:



(Amounts in thousands)	For the Three Months Ended September 30, 2019		For the Nine Months Ended September 30, 2019
Fixed rent expense	$	7,237	$	26,552
Variable rent expense	472		1,626
Rent expense	$	7,709	$	28,178

As of September 30, 2019, future lease payments under operating ground leases were as follows:



(Amounts in thousands)	As of September 30, 2019
For the remainder of 2019	$	6,431
For the year ended December 31,
2020	28,739
2021	29,133
2022	30,033
2023	30,448
2024	30,882
Thereafter	1,046,349
Total undiscounted cash flows	1,202,015
Present value discount	(711,037		)
Lease liabilities	$	490,978

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

21. Leases - continued

As lessee - continued

As of December 31, 2018, under ASC 840, future lease payments under operating ground leases were as follows:



(Amounts in thousands)	As of December 31, 2018
For the year ended December 31,
2019	$	46,147
2020	45,258
2021	42,600
2022	43,840
2023	44,747
Thereafter	1,612,627

Certain of our ground leases are subject to fair market rent resets based on a percentage of the appraised value of the underlying assets at specified future dates. Fair market rent resets do not give rise to remeasurement of the related right-of-use assets and lease liabilities. Fair market rent resets, which may be material, will be recognized in the periods in which they are incurred.

Farley Office and Retail Building

The future lease payments detailed previously exclude the ground and building lease at the Farley Office and Retail Building (the "Project"). We have a 95.0% ownership interest in a joint venture with the Related Companies ("Related") which was designated by Empire State Development ("ESD"), an entity of New York State, to develop the Project. The Project will include a new Moynihan Train Hall and approximately 845,000 rentable square feet of commercial space, comprised of approximately 725,000 square feet of office space and approximately 120,000 square feet of retail space. The joint venture has a 99-year triple-net lease with ESD for the commercial space at the Project. The lease has not yet commenced since construction of the Project is ongoing.

The joint venture has entered into a development agreement with ESD to build the adjacent Moynihan Train Hall, with Vornado and Related each guaranteeing the joint venture's obligations. The joint venture has entered into a design-build contract with Skanska Moynihan Train Hall Builders pursuant to which they will build the Moynihan Train Hall, thereby fulfilling all of the joint venture's obligations to ESD. The obligations of Skanska Moynihan Train Hall Builders have been bonded by Skanska USA and bear a full guaranty from Skanska AB. As a result of our involvement in the construction of the asset, we have been deemed the accounting owner of the property in accordance with ASC 842-40-55. Future undiscounted cash flows for the lease, including fixed payments in lieu of real estate taxes, as of September 30, 2019 were as follows:



(Amounts in thousands)	As of September 30, 2019
For the remainder of 2019	$	—
For the year ended December 31,
2020	10,402
2021	7,229
2022	7,444
2023	7,809
2024	8,330
Thereafter	519,048

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


22.	Commitments and Contingencies

Insurance

WeFor our properties except the Farley Office and Retail Building, we maintain general liability insurance with limits of $300,000,000 per occurrence and per property, and all risk property and rental value insurance with limits of $2.0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake. Our California properties have earthquake insurance with coverage of ~~$260,000,000~~$350,000,000 per occurrence and in the aggregate, subject to a deductible in the amount of 5% of the value of the affected property. We maintain coverage for certified terrorism acts with limits of $4.0 billion per occurrence and in the aggregate (as limited below), $760,000,000 for non-certified acts of terrorism, and $2.0 billion per occurrence and in the aggregate for terrorism involving nuclear, biological, chemical and radiological (“NBCR”) terrorism events, as defined by the Terrorism Risk Insurance Program Reauthorization Act of 2015, which expires in December 2020.

Penn Plaza Insurance Company, LLC (“PPIC”), our wholly owned consolidated subsidiary, acts as a re-insurer with respect to a portion of ~~all-risk~~all risk property and rental value insurance and a portion of our earthquake insurance coverage, and as a direct insurer for coverage for acts of terrorism including NBCR acts. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third-party insurance companies and the Federal government with no exposure to PPIC. For NBCR acts, PPIC is responsible for a deductible of ~~$1,601,000~~$1,456,071 and ~~18%~~19% of the balance of a covered loss and the Federal government is responsible for the remaining portion of a covered loss. We are ultimately responsible for any loss incurred by PPIC.

For the Farley Office and Retail Building, we maintain general liability insurance with limits of $100,000,000 per occurrence, and builder’s risk insurance including coverage for existing property and development activities of $2.8 billion per occurrence and in the aggregate. We maintain coverage for certified and non-certified terrorism acts with limits of $1.0 billion per occurrence and in the aggregate.

We continue to monitor the state of the insurance market and the scope and cost of coverage for acts of terrorism. However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for deductibles and losses in excess of our insurance coverage, which could be ~~material.~~

material.

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

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


22.	Commitments and Contingencies - continued

Other Commitments and Contingencies

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

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

~~Generally, our~~Our mortgage loans are non-recourse to ~~us. However, in~~us, except for the mortgage loans secured by 640 Fifth Avenue, 7 West 34th Street and 435 Seventh Avenue, which we guaranteed and therefore are part of our tax basis. In certain cases, we have provided guarantees or master leased tenant space. These guarantees and master leases terminate either upon the satisfaction of specified circumstances or repayment of the underlying loans. As of September 30, ~~2018,~~2019, the aggregate dollar amount of these guarantees and master leases is approximately ~~$620,000,000.~~$978,000,000.

As of September 30, ~~2018, $13,337,000~~2019, $15,880,000 of letters of credit was outstanding under one of our unsecured revolving credit facilities. Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest rate coverage and maximum debt to market capitalization ratios and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB. Our unsecured revolving credit facilities ~~also~~ contain customary conditions precedent to borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal.

~~In September 2016, our 50.1%~~The joint venture ~~with Related Companies ("Related")~~in which we own a 95.0% ownership interest was designated by ~~Empire State Development ("ESD"),~~ESD, an entity of New York State, to ~~redevelop~~develop the ~~historic~~ Farley ~~Post~~ Office and Retail Building. The joint venture entered into a development agreement with ESD and a design-build contract with Skanska Moynihan Train Hall Builders. Under the development agreement with ESD, the joint venture is obligated to build the Moynihan Train Hall, with Vornado and Related each guaranteeing the joint venture’s obligations. Under the design-build agreement, Skanska Moynihan Train Hall Builders is obligated to fulfill all of the joint venture’s obligations. The obligations of Skanska Moynihan Train Hall Builders have been bonded by Skanska USA and bear a full guaranty from Skanska AB.

As of September 30, ~~2018,~~2019, we expect to fund additional capital to certain of our partially owned entities aggregating approximately ~~$19,000,000.~~$15,400,000.

As of September 30, ~~2018,~~2019, we have construction commitments aggregating approximately ~~$295,000,000.~~$746,000,000.

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


23.	Segment Information

We operate in the following reportable segments, New York and Other, which is based on how we manage our business.

Net Operating Income (“NOI”) represents total revenues less operating expenses. We consider NOI to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on NOI, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI should not be considered a substitute for net income. NOI may not be comparable to similarly titled measures employed by other companies.

Below is a ~~reconciliation~~summary of ~~net income (loss) to~~ NOI at share and NOI at share - cash basisby segment for the three and nine months ended September 30, ~~2018~~2019 and ~~2017.~~2018.

(Amounts in thousands) For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
2018 2017 2018 2017
Net income (loss) $ 219,162
$ (10,754 ) $ 324,782
$ 210,577

Deduct:
(Income) loss from partially owned entities (7,206 ) 41,801
(6,059 ) (5,578 )
Loss from real estate fund investments 190
6,308
37,973
1,649
Interest and other investment income, net (2,893 ) (7,331 ) (9,401 ) (22,567 )
Net gains on disposition of wholly owned and partially owned assets (141,269 ) —
(164,828 ) (501 )
(Income) loss from discontinued operations (61 ) 47,930
(381 ) 14,501
NOI attributable to noncontrolling interests in consolidated subsidiaries (16,943 ) (16,171 ) (51,415 ) (48,778 )

Add:
Depreciation and amortization expense 113,169
104,972
333,701
315,223
General and administrative expense 31,977
34,286
108,937
115,866
Transaction related costs and other 2,510
61
16,683
1,073
Our share of NOI from partially owned entities 60,094
66,876
193,359
199,989
Interest and debt expense 88,951
85,068
264,774
252,581
Income tax expense 1,943
1,188
4,964
3,491
NOI at share 349,624
354,234
1,053,089
1,037,526
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (8,743 ) (22,307 ) (39,172 ) (65,263 )
NOI at share - cash basis $ 340,881
$ 331,927
$ 1,013,917
$ 972,263



(Amounts in thousands)	For the Three Months Ended September 30, 2019
	Total			New York			Other
Total revenues	$	465,961		$	380,568		$	85,393
Operating expenses	226,359			188,159			38,200
NOI - consolidated	239,602			192,409			47,193
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(18,096		)	(9,574		)	(8,522		)
Add: NOI from partially owned entities	86,024			82,649			3,375
NOI at share	307,530			265,484			42,046
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other	(4,037		)	(5,560		)	1,523
NOI at share - cash basis	$	303,493		$	259,924		$	43,569



(Amounts in thousands)	For the Three Months Ended September 30, 2018
	Total			New York			Other
Total revenues	$	542,048		$	462,446		$	79,602
Operating expenses	235,575			200,949			34,626
NOI - consolidated	306,473			261,497			44,976
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(16,943		)	(11,348		)	(5,595		)
Add: NOI from partially owned entities	60,094			47,179			12,915
NOI at share	349,624			297,328			52,296
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other	(8,743		)	(9,125		)	382
NOI at share - cash basis	$	340,881		$	288,203		$	52,678



(Amounts in thousands)	For the Nine Months Ended September 30, 2019
	Total			New York			Other
Total revenues	$	1,463,732		$	1,200,234		$	263,498
Operating expenses	694,006			574,073			119,933
NOI - consolidated	769,726			626,161			143,565
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(51,915		)	(31,011		)	(20,904		)
Add: NOI from partially owned entities	236,400			211,394			25,006
NOI at share	954,211			806,544			147,667
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other	530			(3,741		)	4,271
NOI at share - cash basis	$	954,741		$	802,803		$	151,938



(Amounts in thousands)	For the Nine Months Ended September 30, 2018
	Total			New York			Other
Total revenues	$	1,620,303		$	1,369,482		$	250,821
Operating expenses	709,158			599,768			109,390
NOI - consolidated	911,145			769,714			141,431
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(51,415		)	(34,653		)	(16,762		)
Add: NOI from partially owned entities	193,359			146,730			46,629
NOI at share	1,053,089			881,791			171,298
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other	(39,172		)	(39,161		)	(11		)
NOI at share - cash basis	$	1,013,917		$	842,630		$	171,287

VORNADO REALTY TRUST AND VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)


23.	Segment Information - continued

Below is a ~~summary~~reconciliation of net income, the most directly comparable GAAP financial measure, to NOI at share and NOI at share - cash basis~~by segment~~ for the three and nine months ended September 30, ~~2018~~2019 and ~~2017.~~

2018.



(Amounts in thousands)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Net income	$	363,849		$	219,162		$	3,173,586		$	324,782
Depreciation and amortization expense	96,437			113,169			326,181			333,701
General and administrative expense	33,237			31,977			130,129			108,937
Transaction related costs, impairment losses and other	1,576			2,510			103,315			16,683
Income from partially owned entities	(25,946		)	(7,206		)	(56,139		)	(6,059		)
(Income) loss from real estate fund investments	(2,190		)	190			13,780			37,973
Interest and other investment income, net	(3,045		)	(2,893		)	(15,930		)	(9,401		)
Interest and debt expense	61,448			88,951			226,940			264,774
Net gain on transfer to Fifth Avenue and Times Square JV	—			—			(2,571,099		)	—
Net gains on disposition of wholly owned and partially owned assets	(309,657		)	(141,269		)	(641,664		)	(164,828		)
Income tax expense	23,885			1,943			80,542			4,964
Loss (income) from discontinued operations	8			(61		)	85			(381		)
NOI from partially owned entities	86,024			60,094			236,400			193,359
NOI attributable to noncontrolling interests in consolidated subsidiaries	(18,096		)	(16,943		)	(51,915		)	(51,415		)
NOI at share	307,530			349,624			954,211			1,053,089
Non cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other	(4,037		)	(8,743		)	530			(39,172		)
NOI at share - cash basis	$	303,493		$	340,881		$	954,741		$	1,013,917

(Amounts in thousands) For the Three Months Ended September 30, 2018
Total New York Other
Total revenues $ 542,048
$ 462,446
$ 79,602
Operating expenses 235,575
200,949
34,626
NOI - consolidated 306,473
261,497
44,976
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (16,943 ) (11,348 ) (5,595 )
Add: Our share of NOI from partially owned entities 60,094
47,179
12,915
NOI at share 349,624
297,328
52,296
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (8,743 ) (9,125 ) 382
NOI at share - cash basis $ 340,881
$ 288,203
$ 52,678

(Amounts in thousands) For the Three Months Ended September 30, 2017
Total New York Other
Total revenues $ 528,755
$ 453,609
$ 75,146
Operating expenses 225,226
192,430
32,796
NOI - consolidated 303,529
261,179
42,350
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (16,171 ) (11,464 ) (4,707 )
Add: Our share of NOI from partially owned entities 66,876
48,779
18,097
NOI at share 354,234
298,494
55,740
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (22,307 ) (21,092 ) (1,215 )
NOI at share - cash basis $ 331,927
$ 277,402
$ 54,525

(Amounts in thousands) For the Nine Months Ended September 30, 2018
Total New York Other
Total revenues $ 1,620,303
$ 1,369,482
$ 250,821
Operating expenses 709,158
599,768
109,390
NOI - consolidated 911,145
769,714
141,431
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (51,415 ) (34,653 ) (16,762 )
Add: Our share of NOI from partially owned entities 193,359
146,730
46,629
NOI at share 1,053,089
881,791
171,298
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (39,172 ) (39,161 ) (11 )
NOI at share - cash basis $ 1,013,917
$ 842,630
$ 171,287

(Amounts in thousands) For the Nine Months Ended September 30, 2017
Total New York Other
Total revenues $ 1,547,900
$ 1,316,710
$ 231,190
Operating expenses 661,585
561,249
100,336
NOI - consolidated 886,315
755,461
130,854
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries (48,778 ) (34,251 ) (14,527 )
Add: Our share of NOI from partially owned entities 199,989
140,627
59,362
NOI at share 1,037,526
861,837
175,689
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other (65,263 ) (57,761 ) (7,502 )
NOI at share - cash basis $ 972,263
$ 804,076
$ 168,187

~~VORNADO REALTY TRUST AND VORNADO REALTY L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~


~~24.~~	~~Subsequent Event~~

On October 26, 2018, we extended our $750,000,000 unsecured term loan from October 2020 to February 2024. The interest rate on the extended unsecured term loan was lowered from LIBOR plus 1.15% to LIBOR plus 1.00% (3.30% as of October 26, 2018).

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Trustees of Vornado Realty Trust

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of Vornado Realty Trust and subsidiaries (the "Company") as of September 30, ~~2018,~~2019, the related consolidated statements of income, ~~and~~ comprehensive income, and changes in equity for the three-month and nine-month periods ended September 30, ~~2018~~2019 and ~~2017, and of changes in equity,~~2018, and cash flows, for the nine-month periods ended September 30, ~~2018~~2019 and ~~2017,~~2018, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, ~~2017,~~2018, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the year then ended; and in our report dated February ~~12, 2018,~~11, 2019, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, ~~2017,~~2018, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

October ~~29, 2018~~28, 2019

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of Vornado Realty L.P.

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheet of Vornado Realty L.P. and subsidiaries (the "Partnership") as of September 30, ~~2018,~~2019, the related consolidated statements of income, ~~and~~ comprehensive income, and changes in equity for the three-month and nine-month periods ended September 30, ~~2018~~2019 and ~~2017, and of changes in equity,~~2018, and cash flows, for the nine-month periods ended September 30, ~~2018~~2019 and ~~2017,~~2018, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Partnership as of December 31, ~~2017,~~2018, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for the year then ended; and in our report dated February ~~12, 2018,~~11, 2019, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, ~~2017,~~2018, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

/s/ DELOITTE & TOUCHE LLP

Parsippany, New Jersey

October ~~29, 2018~~28, 2019

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

Certain statements contained in this Quarterly Report constitute forward‑looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” or other similar expressions in this Quarterly Report on Form 10‑Q. We also note the following forward-looking statements: in the case of our development and redevelopment projects, the estimated completion date, estimated project cost and cost to complete; and estimates of future capital expenditures, dividends to common and preferred shareholders and operating partnership distributions. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q or the date of any document incorporated by reference. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Management’s Discussion and Analysis of Financial Condition and Results of Operations includes a discussion of our consolidated financial statements for the three and nine months ended September 30, ~~2018.~~2019. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three and nine months ended September 30, ~~2018~~2019 are not necessarily indicative of the operating results for the full year. Certain prior year balances have been reclassified in order to conform to the current year presentation.

Overview

Vornado Realty Trust (“Vornado”) is a ~~fully integrated~~fully-integrated real estate investment trust (“REIT”) and conducts its business through, and substantially all of its interests in properties are held by, Vornado Realty L.P., a Delaware limited partnership (the “Operating Partnership”). Vornado is the sole general partner of, and owned approximately ~~93.5%~~93.1% of the common limited partnership interest in the Operating Partnership as of September 30, ~~2018.~~2019. All references to the “Company,” “we,” ~~“us,”~~“us” and “our” mean, collectively, Vornado, the Operating Partnership and those entities/subsidiaries consolidated by Vornado.

We compete with a large number of real estate property owners and developers, some of which may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, sales prices, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the global, national, regional and local economies, the financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends. See “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018 for additional information regarding these factors.

Vornado Realty Trust

Quarter Ended September 30, ~~2018~~2019 Financial Results Summary

Net income attributable to common shareholders for the quarter ended September 30, ~~2018~~2019 was ~~$190,645,000,~~$322,906,000, or ~~$1.00~~$1.69 per diluted share, compared to ~~a loss of $29,026,000,~~$190,645,000, or ~~$0.15~~$1.00 per diluted share, for the prior year’s quarter. The quarters ended September 30, ~~2018~~2019 and ~~2017~~2018 include certain items that impact the comparability of period to period net income ~~(loss)~~ attributable to common shareholders, which are listed in the table on ~~the following page.~~page 59. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased net income attributable to common shareholders for the quarter ended September 30, ~~2018~~2019 by ~~$124,485,000,~~$270,282,000, or ~~$0.65~~$1.41 per diluted share, and ~~increased net loss attributable to common shareholders by $102,024,000,~~$125,839,000, or ~~$0.53~~$0.66 per diluted share, for the quarter ended September 30, ~~2017.~~

2018.

Funds From Operations (“FFO”) attributable to common shareholders plus assumed conversions for the quarter ended September 30, ~~2018~~2019 was ~~$182,516,000,~~$279,509,000, or ~~$0.95~~$1.46 per diluted share, compared to ~~$100,178,000,~~$189,987,000, or ~~$0.52~~$0.99 per diluted share, for the prior year’s quarter. FFO attributable to common shareholders plus assumed conversions for the quarters ended September 30, ~~2018~~2019 and ~~2017~~2018 include certain items that impact the comparability of period to period FFO, which are listed in the table on page ~~54.~~60. The aggregate of these items, net of amounts attributable to noncontrolling interests, ~~decreased~~increased FFO attributable to common shareholders plus assumed conversions for the quarter ended September 30, ~~2018~~2019 by ~~$3,119,000,~~$108,543,000, or ~~$0.02~~$0.57 per diluted share, and ~~$84,948,000,~~$5,707,000, or ~~$0.45~~$0.03 per diluted share, for the quarter ended September 30, ~~2017.~~2018.

Overview - continued

Nine Months Ended September 30, ~~2018~~2019 Financial Results Summary

Net income attributable to common shareholders for the nine months ended September 30, ~~2018~~2019 was ~~$284,338,000,~~$2,904,589,000, or ~~$1.49~~$15.20 per diluted share, compared to ~~$134,698,000,~~$284,338,000, or ~~$0.71~~$1.49 per diluted share, for the nine months ended September 30, ~~2017.~~2018. The nine months ended September 30, ~~2018~~2019 and ~~2017~~2018 include certain items that impact the comparability of period to period net income attributable to common shareholders, which are listed in the table on the following page. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased net income attributable to common shareholders for the nine months ended September 30, ~~2018~~2019 by ~~$91,390,000,~~$2,784,217,000, or ~~$0.48~~$14.57 per diluted share, and ~~decreased net income attributable to common shareholders~~$95,031,000, or $0.50 per diluted share for the nine months ended September 30, ~~2017~~2018.

The increase in net income attributable to common shareholders was partially offset by ~~$52,595,000,~~(i) $8,986,000, or ~~$0.27~~$0.04 per diluted ~~share.~~

share, of our share of the non-cash write-off of straight-line rent receivables, (ii) $8,046,000, or $0.04 per diluted share, of non-cash expense for the time-based equity compensation granted in connection with the new leadership group announced in April 2019 and (iii) $11,055,000, or $0.05 per share, of non-cash expense for the accelerated vesting of previously issued OP Units and Vornado restricted stock due to the removal of the time-based vesting requirement for participants who have reached 65 years of age.

FFO attributable to common shareholders plus assumed conversions for the nine months ended September 30, ~~2018~~2019 was ~~$494,941,000,~~$691,522,000, or ~~$2.59~~$3.62 per diluted share, compared to ~~$564,431,000,~~$519,640,000, or ~~$2.95~~$2.72 per diluted share, for the nine months ended September 30, ~~2017.~~2018. FFO attributable to common shareholders plus assumed conversions for the nine months ended September 30, ~~2018~~2019 and ~~2017~~2018 include certain items that impact the comparability of period to period FFO, which are listed in the table on page ~~54.~~60. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO attributable to common shareholders plus assumed conversions for the nine months ended September 30, 2019 by $196,586,000, or $1.03 per diluted share, and decreased FFO attributable to common shareholders plus assumed conversions for the nine months ended September 30, 2018 by ~~$52,606,000,~~$23,891,000, or ~~$0.27~~$0.12 per diluted ~~share, and increased~~share.

The increase in FFO attributable to common shareholders ~~plus assumed conversions~~was partially offset by (i) $8,986,000, or $0.04 per diluted share, of our share of the non-cash write-off of straight-line rent receivables, (ii) $8,046,000, or $0.04 per diluted share, of non-cash expense for the ~~nine months ended September 30, 2017 by $38,953,000,~~time-based equity compensation granted in connection with the new leadership group announced in April 2019 and (iii) $11,055,000, or ~~$0.20~~$0.05 per ~~diluted share.~~

share, of non-cash expense for the accelerated vesting of previously issued OP Units and Vornado restricted stock due to the removal of the time-based vesting requirement for participants who have reached 65 years of age.

Overview - continued

The following table reconciles the difference between our net income ~~(loss)~~ attributable to common shareholders and our net income attributable to common shareholders, as adjusted:

(Amounts in thousands) For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
2018 2017 2018 2017
Certain (income) expense items that impact net income (loss) attributable to common shareholders:
Net gain on sale of our ownership interests in 666 Fifth Avenue Office Condominium $ (134,032 ) $ —
$ (134,032 ) $ —
Net gain on the repayment of our loan investment in 666 Fifth Avenue Office Condominium (7,308 ) —
(7,308 ) —
Decrease in fair value of marketable securities (including our share of partially owned entities) 7,966
—
26,602
—
Net gains on sale of real estate (including our share of partially owned entities) (3,350 ) (1,522 ) (28,104 ) (20,981 )
Our share of loss (income) from real estate fund investments (excluding our $4,252 share of One Park Avenue potential additional transfer taxes and reduction in carried interest for the nine months ended September 30, 2018) 748
7,794
(617 ) 11,333
Loss from discontinued operations and sold properties (primarily related to JBG SMITH Properties operating results and transaction costs through July 17, 2017 spin-off) 42
53,739
4,886
40,542
Impairment loss on investment in Pennsylvania Real Estate Investment Trust ("PREIT") —
44,465
—
44,465
Net gain resulting from Urban Edge Properties ("UE") operating partnership unit issuances —
(5,200 ) —
(21,100 )
Our share of potential additional New York City transfer taxes based on a Tax Tribunal interpretation which Vornado is appealing —
—
23,503
—
Preferred share issuance costs —
—
14,486
—
Net gain on repayment of our Suffolk Downs JV debt investments —
—
—
(11,373 )
Other 3,207
9,515
3,133
13,333
(132,727 ) 108,791
(97,451 ) 56,219
Noncontrolling interests' share of above adjustments 8,242
(6,767 ) 6,061
(3,624 )
Total of certain (income) expense items that impact net income (loss) attributable to common shareholders $ (124,485 ) $ 102,024
$ (91,390 ) $ 52,595



(Amounts in thousands)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Certain (income) expense items that impact net income attributable to common shareholders:
Net gains on sale of real estate (primarily our 25% interest in 330 Madison Avenue in 2019)	$	(178,769	)	$	(3,350	)	$	(178,769	)	$	(27,786	)
After-tax net gain on sale of 220 Central Park South ("220 CPS") condominium units	(109,035		)	—			(328,910		)	—
Mark-to-market decrease in Pennsylvania Real Estate Investment Trust ("PREIT") common shares (accounted for as a marketable security from March 12, 2019)	4,875			—			19,211			—
Our share of (income) loss from real estate fund investments	(1,455		)	748			22,207			(617		)
Net gain on sale of our ownership interests in 666 Fifth Avenue Office Condominium	—			(134,032		)	—			(134,032		)
Mark-to-market decrease (increase) in Lexington Realty Trust ("Lexington") common shares (sold on March 1, 2019)	—			7,942			(16,068		)	24,934
Previously capitalized internal leasing costs⁽¹⁾	—			(1,444		)	—			(3,883		)
Net gain on transfer to Fifth Avenue and Times Square retail JV, net of $11,945 attributable to noncontrolling interests	—			—			(2,559,154		)	—
Non-cash impairment losses and related write-offs, substantially 608 Fifth Avenue	—			—			108,592			—
Net gain from sale of Urban Edge Properties ("UE") common shares (sold on March 4, 2019)	—			—			(62,395		)	—
Prepayment penalty in connection with redemption of $400 million 5.00% senior unsecured notes due January 2022	—			—			22,540			—
Our share of disputed additional New York City transfer taxes	—			—			—			23,503
Preferred share issuance costs	—			—			—			14,486
Other	(4,811		)	(4,035		)	(857		)	2,061
	(289,195		)	(134,171		)	(2,973,603		)	(101,334		)
Noncontrolling interests' share of above adjustments	18,913			8,332			189,386			6,303
Total of certain (income) expense items that impact net income attributable to common shareholders	$	(270,282	)	$	(125,839	)	$	(2,784,217	)	$	(95,031	)


(1)	The three and nine months ended September 30, 2018 have been reduced by $1,444 and $3,883, respectively, for previously capitalized internal leasing costs to present 2018 “as adjusted” financial results on a comparable basis with the current year as a result of the January 1, 2019 adoption of a new GAAP accounting standard under which internal leasing costs can no longer be capitalized.

Overview - continued

The following table reconciles the difference between our FFO attributable to common shareholders plus assumed conversions and our FFO attributable to common shareholders plus assumed conversions, as adjusted:

(Amounts in thousands) For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
2018 2017 2018 2017
Certain expense (income) items that impact FFO attributable to common shareholders plus assumed conversions:
Decrease in fair value of marketable securities (including our share of partially owned entities) $ 7,966
$ —
$ 26,602
$ —
Net gain on the repayment of our loan investment in 666 Fifth Avenue Office Condominium (7,308 ) —
(7,308 ) —
FFO from discontinued operations and sold properties (primarily related to JBG SMITH Properties operating results and transaction costs through July 17, 2017 spin-off) (1,152 ) 38,771
(3,297 ) (68,843 )
Our share of FFO from real estate fund investments (excluding our $4,252 share of One Park Avenue potential additional transfer taxes and reduction in carried interest for the nine months ended September 30, 2018) 748
7,794
(617 ) 11,333
Impairment loss on investment in PREIT —
44,465
—
44,465
Net gain resulting from UE operating partnership unit issuances —
(5,200 ) —
(21,100 )
Our share of potential additional New York City transfer taxes based on a Tax Tribunal interpretation which Vornado is appealing —
—
23,503
—
Preferred share issuance costs —
—
14,486
—
Net gain on repayment of our Suffolk Downs JV debt investments —
—
—
(11,373 )
Other 3,071
4,701
2,751
3,986
3,325
90,531
56,120
(41,532 )
Noncontrolling interests' share of above adjustments (206 ) (5,583 ) (3,514 ) 2,579
Total of certain expense (income) items that impact FFO attributable to common shareholders plus assumed conversions, net $ 3,119
$ 84,948
$ 52,606
$ (38,953 )



(Amounts in thousands)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions:
After-tax net gain on sale of 220 CPS condominium units	$	(109,035	)	$	—		$	(328,910	)	$	—
Our share of (income) loss from real estate fund investments	(1,455		)	748			22,207			(617		)
Previously capitalized internal leasing costs⁽¹⁾	—			(1,444		)	—			(3,883		)
Non-cash impairment loss and related write-offs on 608 Fifth Avenue	—			—			77,156			—
Prepayment penalty in connection with redemption of $400 million 5.00% senior unsecured notes due January 2022	—			—			22,540			—
Our share of disputed additional New York City transfer taxes	—			—			—			23,503
Preferred share issuance costs	—			—			—			14,486
Other	(5,229		)	(5,389		)	(2,931		)	(7,854		)
	(115,719		)	(6,085		)	(209,938		)	25,635
Noncontrolling interests' share of above adjustments	7,176			378			13,352			(1,744		)
Total of certain (income) expense items that impact FFO attributable to common shareholders plus assumed conversions, net	$	(108,543	)	$	(5,707	)	$	(196,586	)	$	23,891


(1)	The three and nine months ended September 30, 2018 have been reduced by $1,444 and $3,883, respectively, for previously capitalized internal leasing costs to present 2018 “as adjusted” financial results on a comparable basis with the current year as a result of the January 1, 2019 adoption of a new GAAP accounting standard under which internal leasing costs can no longer be capitalized.

~~Overview - continued~~

Vornado Realty Trust and Vornado Realty L.P.

Same Store Net Operating Income (“NOI”) At Share

The percentage increase (decrease) in same store NOI at share and same store NOI at share - cash basis of our New York segment, theMART and 555 California Street are summarized below.


		Total		New York⁽¹⁾		theMART			555 California Street			Total		New York⁽¹⁾		theMART		555 California Street
Same store NOI at share % increase (decrease):	Same store NOI at share % increase (decrease):										Same store NOI at share % increase (decrease):
	Three months ended September 30, 2018 compared to September 30, 2017	0.9	%	0.6	%	(3.8	)%		17.2	%	Three months ended September 30, 2019 compared to September 30, 2018	0.9	%	0.5	%	(2.8	)%	13.9	%
	Nine months ended September 30, 2018 compared to September 30, 2017	3.3	%	3.0	%	1.6	%		14.3	%	Nine months ended September 30, 2019 compared to September 30, 2018	0.6	%	(0.2	)%	2.2	%	11.9	%
	Three months ended September 30, 2018 compared to June 30, 2018	(0.4	)%	0.6	%	(9.8	)%	⁽²⁾	(1.2	)%	Three months ended September 30, 2019 compared to June 30, 2019	(0.8	)%	1.9	%	(21.2	)%	(1.1	)%

Same store NOI at share - cash basis % increase (decrease):	Same store NOI at share - cash basis % increase (decrease):										Same store NOI at share - cash basis % increase (decrease):
	Three months ended September 30, 2018 compared to September 30, 2017	4.3	%	3.9	%	2.2	%		19.9	%	Three months ended September 30, 2019 compared to September 30, 2018	1.0	��%	0.3	%	(1.0	)%	17.7	%
	Nine months ended September 30, 2018 compared to September 30, 2017	5.9	%	5.2	%	7.6	%		19.0	%	Nine months ended September 30, 2019 compared to September 30, 2018	2.7	%	1.6	%	5.5	%	15.7	%
	Three months ended September 30, 2018 compared to June 30, 2018	0.9	%	2.0	%	(6.7	)%	⁽²⁾	(5.4	)%	Three months ended September 30, 2019 compared to June 30, 2019	(2.7	)%	(0.4	)%	(19.3	)%	(2.2	)%

____________________



		Increase
(1)	Excluding Hotel Pennsylvania, same store NOI at share % increase:
	Three months ended September 30, ~~2018~~2019 compared to September 30, ~~2017~~2018	~~1.0~~1.2	%
	Nine months ended September 30, ~~2018~~2019 compared to September 30, ~~2017~~2018	~~3.1~~0.4	%
	Three months ended September 30, ~~2018~~2019 compared to June 30, ~~2018~~2019	~~1.0~~2.4	%

	Excluding Hotel Pennsylvania, same store NOI at share - cash basis % increase:
	Three months ended September 30, ~~2018~~2019 compared to September 30, ~~2017~~2018	~~4.3~~1.0	%
	Nine months ended September 30, ~~2018~~2019 compared to September 30, ~~2017~~2018	~~5.3~~2.4	%
	Three months ended September 30, ~~2018~~2019 compared to June 30, ~~2018~~2019	~~2.5~~0.1	%

~~(2)~~ ~~Excluding tradeshows which are seasonal, same store NOI at share decreased by 4.4% and same store NOI at share - cash basis decreased by 0.3%.~~

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

Overview - continued

~~Acquisitions~~

On February 9, 2018, we acquired 537 West 26th Street, a 14,000 square foot commercial property adjacent to our 260 Eleventh Avenue office property, and 55,000 square feet of additional zoning air rights for $44,000,000.

On July 30, 2012, we entered into a lease with Host Hotels & Resorts, Inc. (NYSE: HST) (“Host”), under which we redeveloped the retail and signage components of the Marriott Times Square Hotel. We accounted for this lease as a “capital lease” and recorded a $240,000,000 capital lease asset and liability. On September 21, 2018, we acquired the retail condominium from Host for $442,000,000 (inclusive of the $240,000,000 capital lease liability). The original lease transaction provided that we would become the 100% owner through a put/call arrangement, based on a pre-negotiated formula. This transaction satisfies the put/call arrangement. Our 100% fee interest includes 45,000 square feet of retail, the 1,611 seat Marquis Theater and the largest digital sign in New York with a 330 linear foot, 25,000 square foot display.

Dispositions

220 CPS

~~On January 17, 2018, Vornado Capital Partners Real Estate Fund (the “Fund”) completed~~During the three months ended September 30, 2019, we closed on the sale of ~~the retail~~14 condominium units at ~~11 East 68th Street, a property located on Madison Avenue and 68th Street,~~220 CPS for ~~$82,000,000. From the inception of this investment through its disposition, the Fund realized a $46,259,000~~ net ~~gain.~~

~~On June 21, 2018, we completed the $45,000,000 sale of 27 Washington Square North, which resulted~~proceeds aggregating $348,759,000 resulting in a financial statement net gain of ~~$23,559,000~~$130,888,000 which is included in ~~“net~~"net gains on disposition of wholly owned and partially owned ~~assets”~~assets" on our consolidated statements of income. In connection with these sales, $21,853,000 of income tax expense was recognized on our consolidated statements of income. During the nine months ended September 30, 2019, we closed on the sale of 37 condominium units at 220 CPS for net proceeds of $1,039,493,000 resulting in a financial statement net gain of $400,500,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income. In connection with these sales, $71,590,000 of income tax expense was recognized on our consolidated statements of income. From inception to September 30, 2019, we closed on the sale of 48 units for aggregate net proceeds of $1,254,269,000. During the third quarter of 2019, we repaid the remaining $48,883,000 of the $950,000,000 220 CPS loan.

Lexington

On March 1, 2019, we sold all of our 18,468,969 common shares of Lexington, realizing net proceeds of $167,698,000. We ~~acquired~~recorded a $16,068,000 mark-to-market increase in the ~~property~~fair value of our common shares for the period from January 1, 2019 through the date of sale, which is included in ~~December 2015~~"interest and other investment income, net" on our consolidated statements of income for ~~$20,000,000.~~the nine months ended September 30, 2019.

On March 4, 2019, we converted to common shares and sold all of our 5,717,184 partnership units of UE, realizing net proceeds of $108,512,000. The sale resulted in a net gain of $62,395,000 which is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income for the nine months ended September 30, 2019.

Fifth Avenue and Times Square JV

On April 18, 2019 (the “Closing Date”), we entered into a transaction agreement (the “Transaction Agreement”) with a group of institutional investors (the “Investors”). The Transaction Agreement provides for a series of transactions (collectively, the “Transaction”) pursuant to which (i) prior to the Closing Date, we contributed our interests in properties located at 640 Fifth Avenue, 655 Fifth Avenue, 666 Fifth Avenue, ~~Office Condominium~~689 Fifth Avenue, 697-703 Fifth Avenue, 1535 Broadway and 1540 Broadway (collectively, the “Properties”) to subsidiaries of a newly formed joint venture (“Fifth Avenue and Times Square JV”) and (ii) on the Closing Date, transferred a 48.5% common interest in Fifth Avenue and Times Square JV to the Investors. The 48.5% common interest in the joint venture represents an effective 47.2% interest in the Properties (of which 45.4% was transferred from Vornado). The Properties include approximately 489,000 square feet of retail space, 327,000 square feet of office space, signage associated with 1535 and 1540 Broadway, the parking garage at 1540 Broadway and the theater at 1535 Broadway.

~~On August 3, 2018, we completed~~We retained the ~~sale~~remaining 51.5% common interest in Fifth Avenue and Times Square JV which represents an effective 51.0% interest in the Properties and an aggregate $1.828 billion of ~~our 49.5%~~preferred equity interests in certain of the properties. We also provided $500,000,000 of temporary preferred equity on 640 Fifth Avenue until May 23, 2019 when mortgage financing was completed. All of the preferred equity has an annual coupon of 4.25% for the first five years, increasing to 4.75% for the next five years and thereafter at a formulaic rate. It can be redeemed under certain conditions on a tax deferred basis.

Net cash proceeds from the Transaction were $1.179 billion, after (i) deductions for the defeasance of a $390,000,000 mortgage loan on 666 Fifth Avenue and the repayment of a $140,000,000 mortgage loan on 655 Fifth Avenue, (ii) proceeds from a $500,000,000 mortgage loan on 640 Fifth Avenue, described below, (iii) approximately $23,000,000 used to purchase noncontrolling investors' interests and (iv) approximately $53,000,000 of transaction costs (including $17,000,000 of costs related to the defeasance of the 666 Fifth Avenue ~~Office Condominium.~~mortgage loan).

We continue to manage and lease the Properties. We share control with the Investors over major decisions of the joint venture, including decisions regarding leasing, operating and capital budgets, and refinancings. Accordingly, we no longer hold a controlling financial interest in the Properties which has been transferred to the joint venture. As a result, our investment in Fifth Avenue and Times Square JV is accounted for under the equity method from the date of transfer. The Transaction valued the Properties at $5,556,000,000 resulting in a financial statement net gain of $2,571,099,000, before noncontrolling interest of $11,945,000, including the related step-up in our basis of the retained portion of the assets to fair value. The net gain is included in "net gain on transfer to Fifth Avenue and Times Square JV" on our consolidated statements of income for the nine months ended September 30, 2019. The gain for tax purposes was approximately $735,000,000.

Overview - continued

Dispositions - continued

Fifth Avenue and Times Square JV - continued

On May 23, 2019, we received $500,000,000 from the redemption of our temporary preferred equity in 640 Fifth Avenue. The temporary preferred equity was redeemed from the proceeds of a $500,000,000 mortgage financing that was completed on the property. The five year loan, which is guaranteed by us, is interest only at LIBOR plus 1.01%. The interest rate was swapped for four years to a fixed rate of 3.07%.

330 Madison Avenue

On July 11, 2019, we sold our 25% interest in 330 Madison Avenue to our joint venture partner. We received net proceeds of ~~$120,000,000 and recognized~~approximately $100,000,000 after deducting our share of the existing $500,000,000 mortgage loan resulting in a financial statement net gain of ~~$134,032,000 which~~$159,292,000. The net gain is included in "net gains on disposition of wholly owned and partially owned assets" on our consolidated statements of income for the three and nine months ended September 30, ~~2018.~~2019. The gain for tax purposes was approximately ~~$244,000,000. We continue to own all of~~$139,000,000.

3040 M Street

On September 18, 2019, we completed the ~~666 Fifth Avenue Retail Condominium encompassing the Uniqlo, Tissot and Hollister stores with 125 linear feet of frontage on Fifth Avenue between 52nd and 53rd Street.~~

~~Concurrently with the~~$49,750,000 sale of ~~our interests, the existing mortgage loan on the property was repaid and we received~~3040 M Street, a 44,000 square foot retail building in Washington, DC, which resulted in a net ~~proceeds of $55,244,000 for the participation we held in the mortgage loan. We recognized a financial statement~~ gain of ~~$7,308,000,~~$19,477,000 which is included in ~~"net~~“net gains on disposition of wholly owned and partially owned ~~assets"~~assets” on our consolidated statements of income for the three and nine months ended September 30, ~~2018.~~

2019. The gain for tax purposes was approximately $19,000,000.

Financings

On January ~~4 and 11, 2018,~~28, 2019, a joint venture, in which we redeemed all of the outstanding 6.625% Series G and Series I cumulative redeemable preferred shares/units at their redemption price of $25.00 per share/unit, or $470,000,000 in the aggregate, plus accrued and unpaid dividends/distributions through the date of redemption, and expensed $14,486,000 of previously capitalized issuance costs.

~~On January 5, 2018, we~~have a 45.1% interest, completed a ~~$100,000,000~~$167,500,000 refinancing of ~~33-00 Northern Boulevard (Center Building),~~ 61 Ninth Avenue, a ~~471,000~~166,000 square foot office ~~building~~and retail property in ~~Long Island City, New York.~~the Meatpacking district of Manhattan which is fully leased to Aetna and Starbucks. The seven-year interest only loan ~~is at~~carries a rate of LIBOR plus ~~1.80%, which was swapped to a fixed rate~~1.35% (3.40% as of ~~4.14%.~~September 30, 2019) and matures in January 2026. We realized net proceeds of approximately ~~$37,200,000 after repayment of~~$31,000,000. The loan replaces the ~~existing 4.43% $59,800,000 mortgage~~previous $90,000,000 construction loan that bore interest at LIBOR plus 3.05% and ~~closing costs.~~was scheduled to mature in 2021.

On ~~April 19, 2018, the joint venture between the Fund and the Crowne Plaza Joint Venture~~February 4, 2019, we completed a ~~$255,000,000~~$95,700,000 refinancing of ~~the Crowne Plaza Times Square Hotel.~~435 Seventh Avenue, a 43,000 square foot Manhattan retail property. The interest-only loan iscarries a rate of LIBOR plus 1.30% (3.37% as of September 30, 2019) and matures in 2024. The recourse loan replaces the previous $95,700,000 loan that bore interest at LIBOR plus ~~3.51% (5.66% at~~2.25% and was scheduled to mature in August 2019.

On February 12, 2019, we completed a $580,000,000 refinancing of 100 West 33rd Street, a 1.1 million square foot Manhattan property comprised of 859,000 square feet of office space and the 256,000 square foot Manhattan Mall. The interest-only loan carries a rate of LIBOR plus 1.55% (3.62% as of September 30, ~~2018)~~2019) and matures in ~~May 2020~~April 2024, with ~~three~~two one-year extension options. The loan replaces the previous $580,000,000 loan that bore interest at LIBOR plus 1.65% and was scheduled to mature in July 2020.

On March 1, 2019, we called for redemption all of our $400,000,000 5.00% senior unsecured notes. The notes, which were scheduled to mature in January 2022, were redeemed on April 1, 2019 at a redemption price of 105.51% of the principal amount plus accrued interest. In connection therewith, we expensed $22,540,000 relating to debt prepayment costs which is included in "interest and debt expense" on our consolidated statements of income for the nine months ended September 30, 2019.

On March 26, 2019, we increased to $1.5 billion (from $1.25 billion) and extended to March 2024 (as fully extended) from February 2022 one of our two unsecured revolving credit facilities. The interest rate on the extended facility was lowered from LIBOR plus 1.00% to LIBOR plus 0.90%. Thefacility fee remains unchanged at 20 basis points.

On May 24, 2019, we extended our $375,000,000 mortgage loan on 888 Seventh Avenue, a 886,000 square foot Manhattan office building, from December 2020 to December 2025. The interest rate on the extended mortgage loan is LIBOR plus 1.70% (3.73%as of September 30, 2019). Pursuant to an existing swap agreement, the interest rate on the $375,000,000 mortgage loan has been swapped to 3.25% through December 2020.

On June 28, 2019, a joint venture, in which we have a 55% interest, completed a $145,700,000 refinancing of 512 West 22nd Street, a 173,000 square foot office building in the West Chelsea submarket of Manhattan, of which $106,425,000 was outstanding as of September 30, 2019. The four-year interest only loan carries a rate of LIBOR plus 2.00% (4.05% as of September 30, 2019) and matures in June 2023 with a one-year extension option. The loan replaces the previous $126,000,000 construction loan that bore interest at LIBOR plus 2.65% and was scheduled to mature in 2019.

Overview - continued

Financings - continued

On July 25, 2019, a joint venture, in which we have a 50% interest, completed a $60,000,000 refinancing of 825 Seventh Avenue, a 165,000 square foot office building on the corner of 53rd Street and Seventh Avenue, of which $28,882,000 was outstanding as of September 30, 2019. The interest-only loan carries a rate of LIBOR plus 1.65% (3.78% as of September 30, 2019) and matures in 2022 with a one-year extension option. The loan replaces the previous $20,500,000 loan that bore interest at LIBOR plus 1.40% and was scheduled to mature in September 2019.

On September 5, 2019, a consolidated joint venture, in which we have a 50% interest, completed a $75,000,000 refinancing of 606 Broadway, a 35,000 square foot office and retail building on the northeast corner of Broadway and Houston Street in Manhattan, of which $67,500,000 was outstanding as of September 30, 2019. The interest-only loan carries a rate of LIBOR plus 1.80% (3.85% as of September 30, 2019) and matures in 2024. In connection therewith, the joint venture purchased an interest rate cap that caps LIBOR at a rate of 4.00%. The ~~Crowne Plaza Times Square Hotel was previously encumbered by a $310,000,000 interest-only mortgage~~loan replaces the previous $65,000,000 construction loan. The construction loan bore interest at LIBOR plus ~~2.80%, which~~3.00% and was scheduled to mature in May 2021.

On September 27, 2019, we repaid the $575,000,000 mortgage loan on PENN2 with proceeds from our unsecured revolving credit facilities. The mortgage loan was scheduled to mature in December ~~2018.~~2021, as fully extended. PENN2 is a 1,795,000 square foot office building located on the west side of 7th Avenue between 31st and 33rd Street currently under redevelopment.

Leasing Activity

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



(Square feet in thousands)		New York
		Office			Retail			theMART			555 California Street
Three Months Ended September 30, 2019
	Total square feet leased	197			26			45			50
	Our share of square feet leased:	171			24			45			35
	Initial rent⁽¹⁾	$	80.44		$	145.54		$	48.54		$	96.54
	Weighted average lease term (years)	6.5			5.4			5.5			8.5
	Second generation relet space:
	Square feet	108			17			43			29
	GAAP basis:
	Straight-line rent⁽²⁾	$	77.33		$	135.49		$	46.46		$	108.38
	Prior straight-line rent	$	60.16		$	117.16		$	40.42		$	65.87
	Percentage increase	28.5		%	15.6		%	14.9		%	64.5		%
	Cash basis:
	Initial rent⁽¹⁾	$	78.77		$	131.49		$	47.87		$	97.41
	Prior escalated rent	$	64.22		$	123.82		$	44.88		$	69.94
	Percentage increase	22.7		%	6.2		%	6.7		%	39.3		%

	Tenant improvements and leasing commissions:
	Per square foot	$	85.35		$	44.85		$	55.67		$	84.46
	Per square foot per annum	$	13.13		$	8.31		$	10.12		$	9.94
	Percentage of initial rent	16.3		%	5.7		%	20.9		%	10.3		%

____________________

Seenotes on following page.

Overview - continued

~~Financings~~Leasing Activity - continued

On June 11, 2018, the joint venture that owns Independence Plaza, a three-building 1,327 unit residential complex in the Tribeca submarket of Manhattan completed a $675,000,000 refinancing of Independence Plaza. The seven-year interest-only loan matures in July 2025



(Square feet in thousands)		New York
		Office			Retail			theMART			555 California Street
Nine Months Ended September 30, 2019
	Total square feet leased	814			144			234			141
	Our share of square feet leased:	676			134			234			99
	Initial rent⁽¹⁾	$	78.81		$	143.61		$	49.24		$	87.56
	Weighted average lease term (years)	7.9			11.7			6.3			6.3
	Second generation relet space:
	Square feet	499			119			230			93
	GAAP basis:
	Straight-line rent⁽²⁾	$	74.22		$	149.93		$	48.22		$	92.50
	Prior straight-line rent	$	69.48		$	117.94		$	42.83		$	58.57
	Percentage increase	6.8		%	27.1		%	12.6		%	57.9		%
	Cash basis:
	Initial rent⁽¹⁾	$	75.62		$	137.36		$	49.08		$	87.29
	Prior escalated rent	$	71.28		$	126.86		$	46.18		$	66.31
	Percentage increase	6.1		%	8.3		%	6.3		%	31.6		%

	Tenant improvements and leasing commissions:
	Per square foot	$	82.88		$	51.02		$	35.42		$	57.71
	Per square foot per annum	$	10.49		$	4.36		$	5.62		$	9.16
	Percentage of initial rent	13.3		%	3.0		%	11.4		%	10.5		%

____________________


(1)	Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Most leases include free rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot but are included in the GAAP basis straight-line rent per square foot.


(2)	Represents the GAAP basis weighted average rent per square foot that is recognized over the term of the respective leases and includes the effect of free rent and periodic step-ups in rent.

Overview - continued

Square Footage (in service) and ~~has a fixed rate of 4.25%. Our share of net proceeds, after repayment of the existing 3.48% $550,000,000 mortgage and closing costs, was $55,618,000.~~

~~On August 9, 2018, we completed a $120,000,000 refinancing of 4 Union Square South, a 206,000 square foot Manhattan retail property. The interest-only loan carries a rate of LIBOR plus 1.40% (3.50%~~Occupancy as of September 30, ~~2018)~~2019



(Square feet in thousands)		Square Feet (in service)
	Number of Properties	Total Portfolio	Our Share	Occupancy %
New York:
Office	35	19,060	16,192	96.8	%
Retail (includes retail properties that are in the base of our office properties)	69	2,404	1,959	95.9	%
Residential - 1,679 units	10	1,526	793	96.8	%
Alexander's, Inc. ("Alexander's") including 312 residential units	7	2,254	730	99.5	%
Hotel Pennsylvania	1	1,400	1,400
		26,644	21,074	96.8	%
Other:
theMART	3	3,693	3,684	95.0	%
555 California Street	3	1,741	1,218	100.0	%
Other	10	2,527	1,192	92.9	%
		7,961	6,094

Total square feet as of September 30, 2019		34,605	27,168

Square Footage (in service) and ~~matures in 2025, as extended. The property was previously encumbered by a $113,000,000 mortgage at LIBOR plus 2.15%, which was scheduled to mature in 2019.~~



(Square feet in thousands)		Square Feet (in service)
	Number of properties	Total Portfolio	Our Share	Occupancy %
New York:
Office	36	19,858	16,632	97.2	%
Retail (includes retail properties that are in the base of our office properties)	71	2,648	2,419	97.3	%
Residential - 1,687 units	10	1,533	800	96.6	%
Alexander's, including 312 residential units	7	2,437	790	91.4	%
Hotel Pennsylvania	1	1,400	1,400
		27,876	22,041	97.0	%
Other:
theMART	3	3,694	3,685	94.7	%
555 California Street	3	1,743	1,220	99.4	%
Other	10	2,522	1,187	92.8	%
		7,959	6,092

Total square feet as of December 31, 2018		35,835	28,133

Critical Accounting Policies

A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, ~~2017 in Management’s Discussion and Analysis of Financial Condition and Results of Operations.~~2018. For the nine months ended September 30, ~~2018,~~2019, there were no material changes to these policies, other than the adoption of ~~the~~ Accounting Standards Codification Topic ~~606,~~ ~~Revenue from Contracts with Customers~~842, Leases, described in Note 3 - Recently Issued Accounting Literature and Note21 - Leases to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Reporton Form 10-Q.

Recently Issued Accounting Literature

Refer to Note 3 - Recently Issued Accounting Literature to the unaudited consolidated financial statements in Part I, Item I of this Quarterly Report on Form 10-Q for information regarding recent accounting pronouncements that may affect us.

~~Overview - continued~~

~~Leasing Activity~~

(Square feet in thousands) New York
Office Retail theMART 555 California Street
Three Months Ended September 30, 2018
Total square feet leased 312
104
28
160
Our share of square feet leased: 308
99
28
112

Initial rent⁽¹⁾
$ 67.35
$ 135.05
$ 57.92
$ 91.16
Weighted average lease term (years) 9.5
5.7
7.4
12.1
Second generation relet space:
Square feet 203
95
23
33
GAAP basis:

Straight-line rent⁽²⁾
$ 68.30
$ 153.36
$ 60.71
$ 108.36
Prior straight-line rent $ 53.99
$ 255.72
$ 53.06
$ 83.08
Percentage increase (decrease) 26.5 % (40.0 )%
⁽³⁾
14.4 % 30.4 %
Cash basis:

Initial rent⁽¹⁾
$ 68.00
$ 130.39
$ 58.53
$ 97.84
Prior escalated rent $ 60.80
$ 95.69
$ 57.45
$ 88.66
Percentage increase 11.8 % 36.3 % 1.9 % 10.4 %

Tenant improvements and leasing commissions:
Per square foot $ 90.48
$ 18.48
$ 21.55
$ 101.81
Per square foot per annum $ 9.52
$ 3.24
$ 2.91
$ 8.41
Percentage of initial rent 14.1 % 2.4 % 5.0 % 9.2 %

~~____________________~~

~~See notes on the following page~~

~~Overview - continued~~

~~Leasing Activity - continued~~

(Square feet in thousands) New York
Office Retail theMART 555 California Street
Nine Months Ended September 30, 2018
Total square feet leased 1,348
229
197
249
Our share of square feet leased: 1,212
219
197
174

Initial rent⁽¹⁾
$ 81.11
$ 168.10
$ 51.78
$ 89.28
Weighted average lease term (years) 10.3
5.3
5.9
10.3
Second generation relet space:
Square feet 990
209
186
62
GAAP basis:

Straight-line rent⁽²⁾
$ 86.62
$ 178.46
$ 52.32
$ 104.06
Prior straight-line rent $ 60.21
$ 233.31
$ 41.88
$ 77.46
Percentage increase (decrease) 43.9 % (23.5 )% 24.9 % 34.3 %
Cash basis:

Initial rent⁽¹⁾
$ 83.54
$ 163.02
$ 51.69
$ 97.28
Prior escalated rent $ 63.94
$ 164.76
$ 44.65
$ 85.77
Percentage increase (decrease) 30.7 % (1.1 )% 15.8 % 13.4 %

Tenant improvements and leasing commissions:
Per square foot $ 97.49
$ 52.48
$ 19.61
$ 94.98
Per square foot per annum $ 9.47
$ 9.90
$ 3.32
$ 9.22
Percentage of initial rent 11.7 % 5.9 % 6.4 % 10.3 %

~~___________________~~


~~(1)~~	Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Most leases include free rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot but are included in the GAAP basis straight-line rent per square foot.


~~(2)~~	~~Represents the GAAP basis weighted average rent per square foot that is recognized over the term of the respective leases, and includes the effect of free rent and periodic step-ups in rent.~~


~~(3)~~	~~The decrease results from an accounting adjustment at acquisition of the property in 2015 under which we marked the rent up to market.~~

~~Overview - continued~~

~~Square Footage (in service) and Occupancy as of September 30, 2018~~

(Square feet in thousands) Square Feet (in service)

Number of
Properties

Total
Portfolio

Our
Share
Occupancy %
New York:
Office 36
20,175
16,898
97.3 %
Retail (includes retail properties that are in the base of our office properties) 71
2,671
2,423
96.6 %
Residential - 1,687 units 10
1,533
800
96.7 %
Alexander's, including 312 residential units 7
2,437
790
99.3 %
Hotel Pennsylvania 1
1,400
1,400

28,216
22,311
97.3 %
Other:
theMART 3
3,694
3,685
95.5 %
555 California Street 3
1,741
1,219
99.4 %
Other 10
2,522
1,187
93.5 %
7,957
6,091

Total square feet as of September 30, 2018 36,173
28,402

~~Square Footage (in service) and Occupancy as of December 31, 2017~~

(Square feet in thousands) Square Feet (in service)

Number of
properties

Total
Portfolio

Our
Share
Occupancy %
New York:
Office 36
20,256
16,982
97.1 %
Retail (includes retail properties that are in the base of our office properties) 71
2,720
2,471
96.9 %
Residential - 1,671 units 10
1,533
800
97.3 %
Alexander's, including 312 residential units 7
2,437
790
99.3 %
Hotel Pennsylvania 1
1,400
1,400

28,346
22,443
97.2 %
Other:
theMART 3
3,689
3,680
98.6 %
555 California Street 3
1,741
1,219
94.2 %
Other 11
2,525
1,188
93.6 %
7,955
6,087

Total square feet as of December 31, 2017 36,301
28,530

Net Operating Income At Share by Segment for the Three Months Ended September 30, ~~2018~~2019 and ~~2017~~2018

NOI represents total revenues less operating expenses. We consider NOI to be the primary non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on NOI, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. NOI should not be considered a substitute for net income. NOI may not be comparable to similarly titled measures employed by other companies.

Below is a summary of NOI at share and NOI at share - cash basisby segment for the three months ended September 30, ~~2018~~2019 and ~~2017.~~

2018.


(Amounts in thousands)	For the Three Months Ended September 30, 2018									For the Three Months Ended September 30, 2019
	Total			New York			Other			Total			New York ⁽¹⁾			Other
Total revenues	$	542,048		$	462,446		$	79,602		$	465,961		$	380,568		$	85,393
Operating expenses	235,575			200,949			34,626			226,359			188,159			38,200
NOI - consolidated	306,473			261,497			44,976			239,602			192,409			47,193
Deduct: NOI attributable to noncontrolling interests in consolidated subsidiaries	(16,943		)	(11,348		)	(5,595		)	(18,096		)	(9,574		)	(8,522		)
Add: Our share of NOI from partially owned entities	60,094			47,179			12,915
Add: NOI from partially owned entities										86,024			82,649			3,375
NOI at share	349,624			297,328			52,296			307,530			265,484			42,046
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net and other	(8,743		)	(9,125		)	382
Non-cash adjustments for straight-line rents, amortization of acquired below-market leases, net, and other										(4,037		)	(5,560		)	1,523
NOI at share - cash basis	$	340,881		$	288,203		$	52,678		$	303,493		$	259,924		$	43,569



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



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

Vornado Realty L.P.	Delaware	13-3925979
	(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)



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



Vornado Realty Trust:
	☑	Large Accelerated Filer	☐	Accelerated Filer
	☐	Non-Accelerated Filer	☐	Smaller Reporting Company
			☐	Emerging Growth Company



Vornado Realty L.P.:
	☐	Large Accelerated Filer	☐	Accelerated Filer
	☑	Non-Accelerated Filer	☐	Smaller Reporting Company
			☐	Emerging Growth Company



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



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



(212)	894-7000
(Registrants’ telephone number, including area code)



Registrant	Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Vornado Realty Trust	Common Shares of beneficial interest, $.04 par value per share	VNO	New York Stock Exchange
	Cumulative Redeemable Preferred Shares of beneficial interest, liquidation preference $25.00 per share
Vornado Realty Trust	5.70% Series K	VNO/PK	New York Stock Exchange
Vornado Realty Trust	5.40% Series L	VNO/PL	New York Stock Exchange
Vornado Realty Trust	5.25% Series M	VNO/PM	New York Stock Exchange


•	Note 12. Redeemable Noncontrolling Interests/Redeemable Partnership Units



PART I.		Financial Information:	Page Number

	Item 1.	Financial Statements of Vornado Realty Trust:

		Consolidated Balance Sheets (Unaudited) as of September 30, ~~2018~~2019 and December 31, ~~2017~~2018	56

		Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended September 30, ~~2018~~2019 and ~~2017~~2018	67

		Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, ~~2018~~2019 and ~~2017~~2018	78

		Consolidated Statements of Changes in Equity (Unaudited) for the Three and Nine Months Ended September 30, ~~2018~~2019 and ~~2017~~2018	89

		Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, ~~2018~~2019 and ~~2017~~2018	1013

		Financial Statements of Vornado Realty L.P.:

		Consolidated Balance Sheets (Unaudited) as of September 30, ~~2018~~2019 and December 31, ~~2017~~2018	1215

		Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended September 30, ~~2018~~2019 and ~~2017~~2018	1316

		Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, ~~2018~~2019 and ~~2017~~2018	1417

		Consolidated Statements of Changes in Equity (Unaudited) for the Three and Nine Months Ended September 30, ~~2018~~2019 and ~~2017~~2018	1518

		Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, ~~2018~~2019 and ~~2017~~2018	1722

		Vornado Realty Trust and Vornado Realty L.P.:

		Notes to Consolidated Financial Statements (Unaudited)	1924

		Reports of Independent Registered Public Accounting Firm	4954

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	5156

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	9296

	Item 4.	Controls and Procedures	9397

PART II.		Other Information:

	Item 1.	Legal Proceedings	9498

	Item 1A.	Risk Factors	9498

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9498

	Item 3.	Defaults Upon Senior Securities	9498

	Item 4.	Mine Safety Disclosures	9498

	Item 5.	Other Information	9498

	Item 6.	Exhibits	9498

EXHIBIT INDEX			9599

SIGNATURES			96100


(Amounts in thousands, except unit, share, and per share amounts)	September 30, 2018			December 31, 2017			September 30, 2019			December 31, 2018
ASSETS
Real estate, at cost:
Land	$	3,306,264		$	3,143,648		$	2,602,039		$	3,306,280
Buildings and improvements	10,083,313			9,898,605			7,888,950			10,110,992
Development costs and construction in progress	1,579,628			1,615,101			1,805,846			2,266,491
Moynihan Train Hall development expenditures							791,703			445,693
Leasehold improvements and equipment	106,945			98,941			121,164			108,427
Total	15,076,150			14,756,295			13,209,702			16,237,883
Less accumulated depreciation and amortization	(3,109,361		)	(2,885,283		)	(2,945,107		)	(3,180,175		)
Real estate, net	11,966,789			11,871,012			10,264,595			13,057,708
Right-of-use assets							370,604			—
Cash and cash equivalents	772,524			1,817,655			1,132,491			570,916
Restricted cash	147,286			97,157			113,065			145,989
Marketable securities	157,951			182,752			35,751			152,198
Tenant and other receivables, net of allowance for doubtful accounts of $3,935 and $5,526	69,796			58,700
Tenant and other receivables							99,499			73,322
Investments in partially owned entities	909,440			1,056,829			4,023,820			858,113
Real estate fund investments	369,767			354,804			306,596			318,758
220 Central Park South condominium units ready for sale	307,552			—			288,135			99,627
Receivable arising from the straight-lining of rents, net of allowance of $1,705 and $954	937,294			926,711
Deferred leasing costs, net of accumulated amortization of $202,480 and $191,827	443,350			403,492
Identified intangible assets, net of accumulated amortization of $167,861 and $150,837	139,994			159,260
Assets related to discontinued operations	74			1,357
Receivable arising from the straight-lining of rents							743,646			935,131
Deferred leasing costs, net of accumulated amortization of $191,299 and $207,529							360,608			400,313
Identified intangible assets, net of accumulated amortization of $99,623 and $172,114							30,773			136,781
Other assets	456,203			468,205			446,516			431,938
	$	16,678,020		$	17,397,934		$	18,216,099		$	17,180,794
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgages payable, net	$	8,119,075		$	8,137,139		$	5,640,895		$	8,167,798
Senior unsecured notes, net	843,710			843,614			445,668			844,002
Unsecured term loan, net	749,874			748,734			745,585			744,821
Unsecured revolving credit facilities	80,000			—			655,000			80,000
Lease liabilities							490,978			—
Moynihan Train Hall obligation							791,703			445,693
Accounts payable and accrued expenses	415,531			415,794			453,331			430,976
Deferred revenue	176,211			227,069			62,583			167,730
Deferred compensation plan	102,281			109,177			99,677			96,523
Liabilities related to discontinued operations	205			3,620
Preferred shares redeemed on January 4 and 11, 2018	—			455,514
Other liabilities	229,042			464,635			266,090			311,806
Total liabilities	10,715,929			11,405,296			9,651,510			11,289,349
Commitments and contingencies
Redeemable noncontrolling interests:
Class A units - 12,591,157 and 12,528,899 units outstanding	919,154			979,509
Series D cumulative redeemable preferred units - 177,101 units outstanding	5,428			5,428
Class A units - 13,346,927 and 12,544,477 units outstanding							849,798			778,134
Series D cumulative redeemable preferred units - 141,401 and 177,101 units outstanding							4,535			5,428
Total redeemable noncontrolling interests	924,582			984,937			854,333			783,562
Vornado's shareholders' equity:
Preferred shares of beneficial interest: no par value per share; authorized 110,000,000 shares; issued and outstanding 36,798,580 and 36,799,573 shares	891,294			891,988
Common shares of beneficial interest: $0.04 par value per share; authorized 250,000,000 shares; issued and outstanding 190,285,799 and 189,983,858 shares	7,589			7,577
Shareholders' equity:
Preferred shares of beneficial interest: no par value per share; authorized 110,000,000 shares; issued and outstanding 36,797,280 and 36,798,580 shares							891,256			891,294
Common shares of beneficial interest: $0.04 par value per share; authorized 250,000,000 shares; issued and outstanding 190,850,321 and 190,535,499 shares							7,613			7,600
Additional capital	7,580,463			7,492,658			7,872,597			7,725,857
Earnings less than distributions	(4,135,602		)	(4,183,253		)	(1,649,035		)	(4,167,184		)
Accumulated other comprehensive income	34,173			128,682
Total Vornado shareholders' equity	4,377,917			4,337,652
Accumulated other comprehensive (loss) income							(47,359		)	7,664
Total shareholders' equity							7,075,072			4,465,231
Noncontrolling interests in consolidated subsidiaries	659,592			670,049			635,184			642,652
Total equity	5,037,509			5,007,701			7,710,256			5,107,883
	$	16,678,020		$	17,397,934		$	18,216,099		$	17,180,794


(Amounts in thousands, except per share amounts)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018			2017			2019			2018			2019			2018
REVENUES:
Property rentals	$	437,560		$	432,062		$	1,322,265		$	1,275,597
Tenant expense reimbursements	66,387			63,401			185,009			174,091
Rental revenues													$	427,638		$	503,947		$	1,348,814		$	1,507,274
Fee and other income	38,101			33,292			113,029			98,212			38,323			38,101			114,918			113,029
Total revenues	542,048			528,755			1,620,303			1,547,900			465,961			542,048			1,463,732			1,620,303
EXPENSES:
Operating	235,575			225,226			709,158			661,585			(226,359		)	(235,575		)	(694,006		)	(709,158		)
Depreciation and amortization	113,169			104,972			333,701			315,223			(96,437		)	(113,169		)	(326,181		)	(333,701		)
General and administrative	31,977			34,286			108,937			115,866			(33,237		)	(31,977		)	(130,129		)	(108,937		)
Expense from deferred compensation plan liability	1,861			1,975			3,534			5,233			(974		)	(1,861		)	(7,722		)	(3,534		)
Transaction related costs and other	2,510			61			16,683			1,073
Transaction related costs, impairment losses and other													(1,576		)	(2,510		)	(103,315		)	(16,683		)
Total expenses	385,092			366,520			1,172,013			1,098,980			(358,583		)	(385,092		)	(1,261,353		)	(1,172,013		)
Operating income	156,956			162,235			448,290			448,920
Income (loss) from partially owned entities	7,206			(41,801		)	6,059			5,578
Loss from real estate fund investments	(190		)	(6,308		)	(37,973		)	(1,649		)

Income from partially owned entities													25,946			7,206			56,139			6,059
Income (loss) from real estate fund investments													2,190			(190		)	(13,780		)	(37,973		)
Interest and other investment income, net	2,893			7,331			9,401			22,567			3,045			2,893			15,930			9,401
Income from deferred compensation plan assets	1,861			1,975			3,534			5,233			974			1,861			7,722			3,534
Interest and debt expense	(88,951		)	(85,068		)	(264,774		)	(252,581		)	(61,448		)	(88,951		)	(226,940		)	(264,774		)
Net gain on transfer to Fifth Avenue and Times Square JV													—			—			2,571,099			—
Net gains on disposition of wholly owned and partially owned assets	141,269			—			164,828			501			309,657			141,269			641,664			164,828
Income before income taxes	221,044			38,364			329,365			228,569			387,742			221,044			3,254,213			329,365
Income tax expense	(1,943		)	(1,188		)	(4,964		)	(3,491		)	(23,885		)	(1,943		)	(80,542		)	(4,964		)
Income from continuing operations	219,101			37,176			324,401			225,078			363,857			219,101			3,173,671			324,401
Income (loss) from discontinued operations	61			(47,930		)	381			(14,501		)
Net income (loss)	219,162			(10,754		)	324,782			210,577
(Loss) income from discontinued operations													(8		)	61			(85		)	381
Net income													363,849			219,162			3,173,586			324,782
Less net (income) loss attributable to noncontrolling interests in:
Consolidated subsidiaries	(3,312		)	(4,022		)	31,137			(18,436		)	(5,774		)	(3,312		)	(34,045		)	31,137
Operating Partnership	(12,671		)	1,878			(18,992		)	(9,057		)	(22,637		)	(12,671		)	(197,354		)	(18,992		)
Net income (loss) attributable to Vornado	203,179			(12,898		)	336,927			183,084
Net income attributable to Vornado													335,438			203,179			2,942,187			336,927
Preferred share dividends	(12,534		)	(16,128		)	(38,103		)	(48,386		)	(12,532		)	(12,534		)	(37,598		)	(38,103		)
Preferred share issuance costs	—			—			(14,486		)	—			—			—			—			(14,486		)
NET INCOME (LOSS) attributable to common shareholders	$	190,645		$	(29,026	)	$	284,338		$	134,698
NET INCOME attributable to common shareholders													$	322,906		$	190,645		$	2,904,589		$	284,338

INCOME (LOSS) PER COMMON SHARE – BASIC:
Income from continuing operations, net	$	1.00		$	0.09		$	1.50		$	0.78
Loss from discontinued operations, net	—			(0.24		)	—			(0.07		)
Net income (loss) per common share	$	1.00		$	(0.15	)	$	1.50		$	0.71
INCOME PER COMMON SHARE – BASIC:
Net income per common share													$	1.69		$	1.00		$	15.22		$	1.50
Weighted average shares outstanding	190,245			189,593			190,176			189,401			190,814			190,245			190,762			190,176

INCOME (LOSS) PER COMMON SHARE – DILUTED:
Income from continuing operations, net	$	1.00		$	0.09		$	1.49		$	0.78
Loss from discontinued operations, net	—			(0.24		)	—			(0.07		)
Net income (loss) per common share	$	1.00		$	(0.15	)	$	1.49		$	0.71
INCOME PER COMMON SHARE – DILUTED:
Net income per common share													$	1.69		$	1.00		$	15.20		$	1.49
Weighted average shares outstanding	191,327			190,847			191,292			191,257			191,024			191,327			191,027			191,292

DIVIDENDS PER COMMON SHARE	$	0.63		$	0.60		$	1.89		$	2.02


(Amounts in thousands)	Preferred Shares					Common Shares			Additional Capital			Earnings Less Than Distributions				Accumulated Other Comprehensive Income				Non-controlling Interests in Consolidated Subsidiaries			Total Equity				Preferred Shares					Common Shares			Additional Capital		Earnings Less Than Distributions			Accumulated Other Comprehensive Loss			Non-controlling Interests in Consolidated Subsidiaries			Total Equity
	Shares		Amount			Shares	Amount					Earnings Less Than Distributions				Accumulated Other Comprehensive Income			Shares				Total Equity			Amount			Shares		Amount				Additional Capital		Earnings Less Than Distributions			Accumulated Other Comprehensive Loss			Non-controlling Interests in Consolidated Subsidiaries			Total Equity
Balance, December 31, 2017	36,800		$	891,988		189,984	$	7,577	Additional Capital		$	7,492,658			$	(4,183,253	)		$	Non-controlling Interests in Consolidated Subsidiaries	128,682		$	670,049			$	5,007,701
Cumulative effect of accounting change (see Note 3)	—		—			—	—		—			122,893				(108,374		)		—			14,519
For the Three Months Ended September 30, 2019:
Balance, June 30, 2019																											36,797		$	891,256		190,813	$	7,611	$	7,845,748	$	(1,845,995	)	$	(38,066	)	$	635,590		$	7,496,144
Net income attributable to Vornado	—		—			—	—		—			336,927				—				—			336,927				—		—			—	—		—		335,438			—			—			335,438
Net loss attributable to noncontrolling interests in consolidated subsidiaries	—		—			—	—		—			—				—				(31,137		)	(31,137		)
Dividends on common shares	—		—			—	—		—			(359,456		)		—				—			(359,456		)
Dividends on preferred shares	—		—			—	—		—			(38,103		)		—				—			(38,103		)
Preferred share issuance costs	—		(663		)	—	—		—			(14,486		)		—				—			(15,149		)
Net income attributable to noncontrolling interests in consolidated subsidiaries																											—		—			—	—		—		—			—			5,774			5,774
Dividends on common shares ($0.66 per share)																											—		—			—	—		—		(125,947		)	—			—			(125,947		)
Dividends on preferred shares (see Note 13 for dividends per share amounts)																											—		—			—	—		—		(12,532		)	—			—			(12,532		)
Common shares issued:
Upon redemption of Class A units, at redemption value	—		—			201	8		14,081			—				—				—			14,089				—		—			31	1		1,998		—			—			—			1,999
Under employees' share option plan	—		—			77	3		4,223			—				—				—			4,226
Under dividend reinvestment plan	—		—			15	1		1,035			—				—				—			1,036				—		—			6	1		356		—			—			—			357
Contributions:
Real estate fund investments	—		—			—	—		—			—				—				46,942			46,942
Other	—		—			—	—		—			—				—				14,577			14,577				—		—			—	—		—		—			—			908			908
Distributions:
Real estate fund investments	—		—			—	—		—			—				—				(12,665		)	(12,665		)		—		—			—	—		—		—			—			(6		)	(6		)
Other	—		—			—	—		—			—				—				(28,173		)	(28,173		)		—		—			—	—		—		—			—			(7,086		)	(7,086		)
Conversion of Series A preferred shares to common shares	(1	)	(31		)	2	—		31			—				—				—			—
Deferred compensation shares and options	—		—			7	—		871			(121		)		—				—			750				—		—			—	—		266		—			—			—			266
Pro rata share of other comprehensive income of nonconsolidated subsidiaries	—		—			—	—		—			—				989				—			989
Increase in value of interest rate swaps	—		—			—	—		—			—				13,789				—			13,789
Unearned 2015 Out-Performance Plan awards acceleration	—		—			—	—		9,046			—				—				—			9,046
Other comprehensive income of nonconsolidated subsidiaries																											—		—			—	—		—		—			11			—			11
Reduction in value of interest rate swaps																											—		—			—	—		—		—			(9,953		)	—			(9,953		)
Adjustments to carry redeemable Class A units at redemption value	—		—			—	—		57,970			—				—				—			57,970				—		—			—	—		24,228		—			—			—			24,228
Redeemable noncontrolling interests' share of above adjustments	—		—			—	—		—			—				(913		)		—			(913		)		—		—			—	—		—		—			650			—			650
Other	—		—			—	—		548			(3		)		—				(1		)	544				—		—			—	—		1		1			(1		)	4			5
Balance, September 30, 2018	36,799		$	891,294		190,286	$	7,589	$	7,580,463		$	(4,135,602	)		$	34,173			$	659,592		$	5,037,509
Balance, September 30, 2019																											36,797		$	891,256		190,850	$	7,613	$	7,872,597	$	(1,649,035	)	$	(47,359	)	$	635,184		$	7,710,256


(Amounts in thousands, except unit amounts)	September 30, 2018			December 31, 2017			September 30, 2019			December 31, 2018
ASSETS
Real estate, at cost:
Land	$	3,306,264		$	3,143,648		$	2,602,039		$	3,306,280
Buildings and improvements	10,083,313			9,898,605			7,888,950			10,110,992
Development costs and construction in progress	1,579,628			1,615,101			1,805,846			2,266,491
Moynihan Train Hall development expenditures							791,703			445,693
Leasehold improvements and equipment	106,945			98,941			121,164			108,427
Total	15,076,150			14,756,295			13,209,702			16,237,883
Less accumulated depreciation and amortization	(3,109,361		)	(2,885,283		)	(2,945,107		)	(3,180,175		)
Real estate, net	11,966,789			11,871,012			10,264,595			13,057,708
Right-of-use assets							370,604			—
Cash and cash equivalents	772,524			1,817,655			1,132,491			570,916
Restricted cash	147,286			97,157			113,065			145,989
Marketable securities	157,951			182,752			35,751			152,198
Tenant and other receivables, net of allowance for doubtful accounts of $3,935 and $5,526	69,796			58,700
Tenant and other receivables							99,499			73,322
Investments in partially owned entities	909,440			1,056,829			4,023,820			858,113
Real estate fund investments	369,767			354,804			306,596			318,758
220 Central Park South condominium units ready for sale	307,552			—			288,135			99,627
Receivable arising from the straight-lining of rents, net of allowance of $1,705 and $954	937,294			926,711
Deferred leasing costs, net of accumulated amortization of $202,480 and $191,827	443,350			403,492
Identified intangible assets, net of accumulated amortization of $167,861 and $150,837	139,994			159,260
Assets related to discontinued operations	74			1,357
Receivable arising from the straight-lining of rents							743,646			935,131
Deferred leasing costs, net of accumulated amortization of $191,299 and $207,529							360,608			400,313
Identified intangible assets, net of accumulated amortization of $99,623 and $172,114							30,773			136,781
Other assets	456,203			468,205			446,516			431,938
	$	16,678,020		$	17,397,934		$	18,216,099		$	17,180,794
LIABILITIES, REDEEMABLE PARTNERSHIP UNITS AND EQUITY
Mortgages payable, net	$	8,119,075		$	8,137,139		$	5,640,895		$	8,167,798
Senior unsecured notes, net	843,710			843,614			445,668			844,002
Unsecured term loan, net	749,874			748,734			745,585			744,821
Unsecured revolving credit facilities	80,000			—			655,000			80,000
Lease liabilities							490,978			—
Moynihan Train Hall obligation							791,703			445,693
Accounts payable and accrued expenses	415,531			415,794			453,331			430,976
Deferred revenue	176,211			227,069			62,583			167,730
Deferred compensation plan	102,281			109,177			99,677			96,523
Liabilities related to discontinued operations	205			3,620
Preferred units redeemed on January 4 and 11, 2018	—			455,514
Other liabilities	229,042			464,635			266,090			311,806
Total liabilities	10,715,929			11,405,296			9,651,510			11,289,349
Commitments and contingencies
Redeemable partnership units:
Class A units - 12,591,157 and 12,528,899 units outstanding	919,154			979,509
Series D cumulative redeemable preferred units - 177,101 units outstanding	5,428			5,428
Class A units - 13,346,927 and 12,544,477 units outstanding							849,798			778,134
Series D cumulative redeemable preferred units - 141,401 and 177,101 units outstanding							4,535			5,428
Total redeemable partnership units	924,582			984,937			854,333			783,562
Equity:
Partners' equity:
Partners' capital	8,479,346			8,392,223			8,771,466			8,624,751
Earnings less than distributions	(4,135,602		)	(4,183,253		)	(1,649,035		)	(4,167,184		)
Accumulated other comprehensive income	34,173			128,682
Total Vornado Realty L.P. equity	4,377,917			4,337,652
Accumulated other comprehensive (loss) income							(47,359		)	7,664
Total partners' equity							7,075,072			4,465,231
Noncontrolling interests in consolidated subsidiaries	659,592			670,049			635,184			642,652
Total equity	5,037,509			5,007,701			7,710,256			5,107,883
	$	16,678,020		$	17,397,934		$	18,216,099		$	17,180,794



	~~Vornado Realty Trust~~ ~~Vornado Realty L.P.~~


1.	Organization


2.	Basis of Presentation


(Amounts in thousands)	Preferred Units					Class A Units Owned by Vornado			Earnings Less Than Distributions				Accumulated Other Comprehensive Income				Non- controlling Interests in Consolidated Subsidiaries			Total Equity				Preferred Units					Class A Units Owned by Vornado			Earnings Less Than Distributions			Accumulated Other Comprehensive Loss			Non- controlling Interests in Consolidated Subsidiaries			Total Equity
	Units		Amount			Units	Amount						Accumulated Other Comprehensive Income			Units				Total Equity			Amount			Units		Amount				Earnings Less Than Distributions			Accumulated Other Comprehensive Loss			Non- controlling Interests in Consolidated Subsidiaries			Total Equity
Balance, December 31, 2017	36,800		$	891,988		189,984	$	7,500,235	Earnings Less Than Distributions			$	(4,183,253	)		$	Non- controlling Interests in Consolidated Subsidiaries	128,682		$	670,049			$	5,007,701
Cumulative effect of accounting change (see Note 3)	—		—			—	—		122,893				(108,374		)		—			14,519
For the Three Months Ended September 30, 2019:
Balance, June 30, 2019																								36,797		$	891,256		190,813	$	7,853,359	$	(1,845,995	)	$	(38,066	)	$	635,590		$	7,496,144
Net income attributable to Vornado Realty L.P.	—		—			—	—		355,919				—				—			355,919				—		—			—	—		358,075			—			—			358,075
Net income attributable to redeemable partnership units	—		—			—	—		(18,992		)		—				—			(18,992		)		—		—			—	—		(22,637		)	—			—			(22,637		)
Net loss attributable to noncontrolling interests in consolidated subsidiaries	—		—			—	—		—				—				(31,137		)	(31,137		)
Distributions to Vornado	—		—			—	—		(359,456		)		—				—			(359,456		)
Distributions to preferred unitholders	—		—			—	—		(38,103		)		—				—			(38,103		)
Preferred unit issuance costs	—		(663		)	—	—		(14,486		)		—				—			(15,149		)
Class A Units issued to Vornado:
Net income attributable to noncontrolling interests in consolidated subsidiaries																								—		—			—	—		—			—			5,774			5,774
Distributions to Vornado ($0.66 per unit)																								—		—			—	—		(125,947		)	—			—			(125,947		)
Distributions to preferred unitholders (see Note 13 for distributions per unit amounts)																								—		—			—	—		(12,532		)	—			—			(12,532		)
Class A units issued to Vornado:
Upon redemption of redeemable Class A units, at redemption value	—		—			201	14,089		—				—				—			14,089				—		—			31	1,999		—			—			—			1,999
Under Vornado's employees' share option plan	—		—			77	4,226		—				—				—			4,226
Under Vornado's dividend reinvestment plan	—		—			15	1,036		—				—				—			1,036				—		—			6	357		—			—			—			357
Contributions:
Real estate fund investments	—		—			—	—		—				—				46,942			46,942
Other	—		—			—	—		—				—				14,577			14,577				—		—			—	—		—			—			908			908
Distributions:
Real estate fund investments	—		—			—	—		—				—				(12,665		)	(12,665		)		—		—			—	—		—			—			(6		)	(6		)
Other	—		—			—	—		—				—				(28,173		)	(28,173		)		—		—			—	—		—			—			(7,086		)	(7,086		)
Conversion of Series A preferred units to Class A units	(1	)	(31		)	2	31		—				—				—			—				—		—			—	—		—			—			—			—
Deferred compensation units and options	—		—			7	871		(121		)		—				—			750				—		—			—	266		—			—			—			266
Pro rata share of other comprehensive income of nonconsolidated subsidiaries	—		—			—	—		—				989				—			989
Increase in value of interest rate swaps	—		—			—	—		—				13,789				—			13,789
Unearned 2015 Out-Performance Plan awards acceleration	—		—			—	9,046		—				—				—			9,046
Other comprehensive income of nonconsolidated subsidiaries																								—		—			—	—		—			11			—			11
Reduction in value of interest rate swaps																								—		—			—	—		—			(9,953		)	—			(9,953		)
Adjustments to carry redeemable Class A units at redemption value	—		—			—	57,970		—				—				—			57,970				—		—			—	24,228		—			—			—			24,228
Redeemable partnership units' share of above adjustments	—		—			—	—		—				(913		)		—			(913		)		—		—			—	—		—			650			—			650
Deconsolidation of partially owned entity																								—		—			—	—		—			—			—			—
Other	—		—			—	548		(3		)		—				(1		)	544				—		—			—	1		1			(1		)	4			5
Balance, September 30, 2018	36,799		$	891,294		190,286	$	7,588,052	$	(4,135,602	)		$	34,173			$	659,592		$	5,037,509
Balance, September 30, 2019																								36,797		$	891,256		190,850	$	7,880,210	$	(1,649,035	)	$	(47,359	)	$	635,184		$	7,710,256


◦	Lease termination income is recognized immediately if a tenant vacates or is recognized on a straight-line basis over the shortened remaining lease term in accordance with ASC 842.


◦	Hotel revenue arising from the operation of Hotel Pennsylvania consists of room revenue, food and beverage revenue, and banquet revenue. Room revenue is recognized when the rooms are made available for the guest, in accordance with ASC 842.


◦	Trade shows revenue arising from the operation of trade shows is primarily booth rentals. This revenue is recognized upon the occurrence of the trade shows when the trade show booths are made available for use by the exhibitors, in accordance with ASC 842.


◦	Tenant services revenue arises from sub-metered electric, elevator, trash removal and other services provided to tenants at their request. This revenue is recognized as the services are transferred in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606").


~~(1)~~	~~Represents the elimination of intercompany fees from the New York segment upon consolidation.~~



(Amounts in thousands)	Fair Value at				(Decrease) Increase
	September 30, 2018		December 31, 2017		in Fair Value ⁽¹⁾
Equity securities:
Lexington Realty Trust	$	153,292	$	178,226	$	(24,934	)
Other	4,659		4,526		133
	$	157,951	$	182,752	$	(24,801	)


8.(1)	Included in “interest and other investment income, net” on our consolidated statements of income (see Note 18 - Interest and Other Investment Income, Net).


(Amounts in thousands)	(Amounts in thousands)	Percentage Ownership at September 30, 2018		Balance as of							Percentage Ownership at September 30, 2019		Balance as of
			September 30, 2018				December 31, 2017				Percentage Ownership at September 30, 2019	September 30, 2019				December 31, 2018
Investments:	Investments:	Percentage Ownership at September 30, 2018
Fifth Avenue and Times Square JV (see page 30 for details)											51.5%		$	3,308,363			$	—
Partially owned office buildings/land⁽¹⁾											Various		467,787				499,005
Alexander’s											32.4%		101,228				107,983
PREIT⁽²⁾											N/A		—				59,491
UE⁽³⁾											N/A		—				45,344
Other investments⁽⁴⁾											Various		146,442				146,290
	Partially owned office buildings/land⁽¹⁾	Various		$	502,826			$	504,393				$	4,023,820			$	858,113
	Alexander’s	32.4%		111,842				126,400
Investments in partially owned entities included in other liabilities⁽⁵⁾:
330 Madison Avenue⁽⁶⁾											N/A		$	—			$	(58,117	)
7 West 34th Street											53.0%		(52,222		)		(51,579		)
85 Tenth Avenue											49.9%		(5,814		)		—
	PREIT	7.9%		61,514				66,572					$	(58,036	)		$	(109,696	)
	UE	4.5%		45,398				46,152
	Other investments⁽²⁾	Various		187,860				313,312
				$	909,440			$	1,056,829

	330 Madison Avenue⁽³⁾	25.0%		$	(57,935	)		$	(53,999	)
	7 West 34th Street ⁽⁴⁾	53.0%		(49,647		)		(47,369		)
				$	(107,582	)		$	(101,368	)


(1)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 512 West 22nd Street, ~~85 Tenth Avenue,~~ 61 Ninth Avenue and others.


(2)	On March 12, 2019, we converted all of our PREIT operating partnership units into common shares and began accounting for our investment as a marketable security in accordance with ASC 321 (see Note 6 - Marketable Securities).


(4)	Includes interests in Independence Plaza, Fashion Centre Mall/Washington Tower, Rosslyn Plaza, 50-70 West 93rd Street ~~Moynihan Office Building~~ and others.


~~(3)~~(5)	Our negative basis ~~resulted~~results from ~~a refinancing distribution and is included~~distributions in ~~“other liabilities” on~~excess of our ~~consolidated balance sheets.~~investment.


~~(4)~~(6)	~~Our negative basis resulted from a deferred gain from the sale of a 47.0% ownership interest in the property~~Sold on ~~May 27, 2016 and is included in “other liabilities” on our consolidated balance sheets.~~July 11, 2019 (see page 31 for details).


(Amounts in thousands)	(Amounts in thousands)	Percentage Ownership at September 30, 2018		For the Three Months Ended September 30,								For the Nine Months Ended September 30,							Percentage Ownership at September 30, 2019		For the Three Months Ended September 30,							For the Nine Months Ended September 30,
			2018				2017				2018				2017					2019				2018			2019				2018
Our share of net income (loss):	Our share of net income (loss):
Fifth Avenue and Times Square JV (see page 30 for details):
Equity in net income																			51.5%		$	9,891			$	—		$	21,108			$	—
Return on preferred equity, net of our share of the expense																					9,545				—			18,131				—
																					19,436				—			39,239				—
Alexander's (see page 31 for details):
Equity in net income⁽¹⁾																			32.4%		5,393				4,278			14,707				7,215
Management, leasing and development fees																					1,299				1,149			3,478				3,378
	Alexander's (see page 26 for details):																				6,692				5,427			18,185				10,593
	Equity in net income⁽¹⁾	32.4%		$	4,278			$	6,510			$	7,215			$	20,092
Partially owned office buildings⁽²⁾																			Various		(186		)		735			(1,531		)		(1,546		)

Other investments⁽³⁾																			Various		4				1,044			246				(2,988		)
	Management, leasing and development fees			1,149				1,335				3,378				4,351
				5,427				7,845				10,593				24,443					$	25,946			$	7,206		$	56,139			$	6,059

	UE (see page 26 for details):
	Equity in net income⁽²⁾	4.5%		2,696				5,908				3,017				25,793
	Management, leasing and development fees			67				100				217				518
				2,763				6,008				3,234				26,311

	Partially owned office buildings⁽³⁾	Various		735				(967		)		(1,546		)		79

	PREIT (see page 26 for details)⁽⁴⁾	7.9%		(616		)		(49,748		)		(2,113		)		(53,480		)

	Other investments⁽⁵⁾	Various		(1,103		)		(4,939		)		(4,109		)		8,225

				$	7,206			$	(41,801	)		$	6,059			$	5,578


(2)	~~The three and nine months ended September 30, 2017 include $5,200 and $21,100, respectively, of net gain resulting from UE operating partnership unit issuances.~~


~~(4)~~	~~The three and nine months ended September 30, 2017 include a $44,465 non-cash impairment loss.~~



(Amounts in thousands)
2020	$	16,643
2021	11,934
2022	8,792
2023	6,261
2024	2,518



(Amounts in thousands)
2019	$	25,115
2020	24,047
2021	19,313
2022	16,173
2023	13,496



(Amounts in thousands)
2020	$	6,300
2021	4,763
2022	3,050
2023	2,964
2024	2,351