EXHIBIT 8.1
[LETTERHEAD OF SHEARMAN & STERLING LLP]
November 21, 2003
Alexander's, Inc.
210 Route 4 East
Paramus, NJ 07652
Alexander's REIT Election
-------------------------
Dear Sirs:
In connection with the registration of common stock, par value $1.00 per
share, preferred stock, par value $1.00 per share, depository shares
representing preferred stock, debt securities and debt warrants of Alexander's,
Inc. ("Alexander's"), on November 21, 2003 on the Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Registration"), you have
requested our opinion with regard to the election by Alexander's to be treated
for Federal income tax purposes as a real estate investment trust (a "REIT"),
within the meaning of section 856(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). We understand that Alexander's has elected to be treated
as a REIT initially for its taxable year ended December 31, 1995, and intends to
continue to be so treated for subsequent taxable years.
In rendering this opinion, we have relied as to certain factual matters
upon the statements and representations contained in the certificate provided to
us by Alexander's (the "Alexander's Certificate") dated November 21, 2003. We
have assumed that the statements made in the Alexander's Certificate are true
and correct and that the Alexander's Certificate has been executed by
appropriate and authorized officers of Alexander's.
In rendering this opinion, with your permission we also have made the
following assumptions, which are based on factual representations made by
Alexander's and certified to us:
(a) Alexander's has made a valid election to be taxed as a REIT for its
taxable year ended December 31, 1995, which election has not been, and
will not be, revoked or terminated.
(b) Since January 1, 1995, the outstanding shares of Alexander's have been
held by at least 100 or more persons, and such shares will continue to
be held by 100 or more persons.
(c) Not more than 50 percent in value of the outstanding shares of
Alexander's have been or will be owned directly or indirectly,
actually or constructively (within the meaning of section 542(a)(2) of
the Code, as modified by section 856(h) of the Code), by five or fewer
individuals (or entities treated as individuals for purposes of
section 856(h)
of the Code) during the second half of every taxable year following
the taxable year ended December 31, 1995.
(d) Alexander's and its subsidiaries (the "Company") will not receive
or accrue (and since January 1, 1995, has not received or accrued) any
amount that would constitute "rents from real property" (within the
meaning of section 856(d)(1) of the Code without regard to section
856(d)(2)(B) of the Code) from (i) any corporation in which it owns
(or since July 1, 1994, has owned) (a) 10 percent or more of the total
combined voting power of all shares of stock entitled to vote, (b) 10
percent or more of the total number of shares of all classes of stock
of such corporation or (c) 10 percent or more of the total value of
shares of all classes of stock, or (ii) any unincorporated entity in
which it owns (or since July 1, 1994, has owned) an interest of 10
percent or more in the assets or net profits of such person. For
purposes of this assumption, ownership is determined in accordance
with section 856(d)(5) of the Code.
(e) Alexander's has requested and maintained, and will continue to request
and maintain, records concerning ownership of its outstanding shares
in accordance with section 857(f)(1) of the Code and Treasury
Regulations promulgated thereunder and predecessor requirements.
(f) Alexander's has made and will make distributions to its stockholders
sufficient to meet the distribution requirements of section 857(a)(1)
of the Code for the taxable year for which the REIT election was made
and every subsequent taxable year.
(g) For its taxable year ended December 31, 1995, Alexander's had a
deficit in earnings and profits (as defined in the Code) in excess of
its accumulated earnings and profits (if any) as of the close of its
taxable year ended December 31, 1994.
Based on the foregoing and in reliance thereon and subject thereto and on
an analysis of the Code, Treasury Regulations thereunder, judicial authority and
current administrative rulings and such other laws and facts as we have deemed
relevant and necessary, we are of the opinion that commencing with its taxable
year ended December 31, 1995, Alexander's has been organized and operated in
conformity with the requirements for qualification and taxation as a REIT under
the Code, and its proposed method of operation will enable it to continue to
meet the requirements for qualification and taxation as a REIT under the Code.
Qualification of Alexander's as a REIT will depend upon the satisfaction by
the Company through actual operating results, distribution levels, diversity of
stock ownership and otherwise, of the applicable asset composition, source of
income, shareholder diversification, distribution, recordkeeping and other
requirements of the Code necessary for a corporation to qualify as a REIT. No
assurance can be given that the actual results of the Company's operations for
any one taxable year will satisfy all such requirements. We do not undertake to
monitor whether the Company actually has satisfied or actually will satisfy the
various
qualification tests, and we express no opinion whether the Company actually has
satisfied or actually will satisfy these various qualification tests.
This opinion is based on current Federal income tax law, and we do not
undertake to advise you as to future changes in Federal income tax law that may
affect this opinion unless we are specifically engaged to do so. This opinion
relates solely to Federal income tax law, and we do not undertake to render any
opinion as to the taxation of the Company under any state or local corporate
franchise or income tax law.
We hereby consent to the filing with the Securities and Exchange Commission
of this letter as an exhibit to the Registration Statement and the reference to
us in the Registration Statement under the caption "Certain Federal Income Tax
Considerations". In giving such consent, we do not thereby admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended.
Very truly yours,
/s/ Shearman & Sterling LLP
RJB:JLK
DJL