899689--2/23/2010--VORNADO_REALTY

related topics

{loan, real, estate}

{provision, law, control}

{stock, price, share}

{investment, property, distribution}

{regulation, change, law}

{condition, economic, financial}

{debt, indebtedness, cash}

{acquisition, growth, future}

{tax, income, asset}

{competitive, industry, competition}

{cost, regulation, environmental}

{operation, natural, condition}

{personnel, key, retain}

{loss, insurance, financial}

Capital markets and economic conditions can materially affect our financial condition and results of operations and the value of our debt and equity securities. Real estate is a competitive business. We depend on leasing space to tenants on economically favorable terms and collecting rent from tenants who may not be able to pay. Bankruptcy or insolvency of tenants may decrease our revenues and available cash. We may incur costs to comply with environmental laws. Inflation or deflation may adversely affect our financial condition and results of operations. Some of our potential losses may not be covered by insurance. Because we operate a hotel, we face the risks associated with the hospitality industry. Because of the ownership structure of the Hotel Pennsylvania, we face potential adverse effects from changes to the applicable tax laws. Compliance or failure to comply with the Americans with Disabilities Act or other safety regulations and requirements could result in substantial costs. Our Investments Are Concentrated in the New York CITY METROPOLITAN AREA and Washington, DC / NORTHERN VIRGINIA Areas. Circumstances Affecting These Areas Generally Could Adversely Affect Our Business. A significant portion of our properties are in the New York City / New Jersey metropolitan areas and Washington, DC / Northern Virginia areas are affected by the economic cycles and risks inherent to those areas. Terrorist attacks, such as those of September 11, 2001 in New York City and the Washington, DC area, may adversely affect the value of our properties and our ability to generate cash flow. We May Acquire or Sell Additional Assets or Entities or Develop Additional Properties. Our Failure or Inability to Consummate These Transactions or Manage the Results of These Transactions Could Adversely Affect Our Operations and Financial Results. We have grown rapidly since 1998 through acquisitions. We may not be able to maintain this rapid growth and our failure to do so could adversely affect our stock price. We may acquire or develop properties or acquire other real estate related companies and this may create risks. From time to time we have made, and in the future we may seek to make, one or more material acquisitions. The announcement of such a material acquisition may result in a rapid and significant decline in the price of our common shares. It may be difficult to buy and sell real estate quickly. We may not be permitted to dispose of certain properties or pay down the debt associated with those properties when we might otherwise desire to do so without incurring additional costs. On January 1, 2002, we completed the acquisition of the 66% interest in Charles E. Smith Commercial Realty L.P. that we did not previously own. The terms of the merger restrict our ability to sell or otherwise dispose of, or to finance or refinance, the properties formerly owned by Charles E. Smith Commercial Realty L.P., which could result in our inability to sell these properties at an opportune time and increase costs to us. From time to time we make investments in companies over which we do not have sole control. Some of these companies operate in industries that differ from our current operations, with different risks than investing in real estate. We are subject to risks that affect the general retail environment. We depend upon our anchor tenants to attract shoppers. Our investment in Toys subjects us to risks that are different from our other lines of business and may result in increased seasonality and volatility in our reported earnings. Our decision to dispose of real estate assets would change the holding period assumption in our valuation analyses, which could result in material impairment losses and adversely affect our financial results. We invest in subordinated or mezzanine debt of certain entities that have significant real estate assets. These investments involve greater risk of loss than investments in senior mortgage loans. We invest in marketable equity securities of companies that have significant real estate assets. The value of these investments may decline as a result of operating performance or economic or market conditions. We May Not Be Able to Obtain Capital to Make Investments. Vornado Realty Trust depends on dividends and distributions from its direct and indirect subsidiaries. The creditors and preferred security holders of these subsidiaries are entitled to amounts payable to them by the subsidiaries before the subsidiaries may pay any dividends or distributions to Vornado Realty Trust. We have outstanding debt, and it and its cost may increase and refinancing may not be available on acceptable terms. Covenants in our debt instruments could adversely affect our financial condition and our acquisitions and development activities. Vornado Realty Trust may fail to qualify or remain qualified as a REIT and may be required to pay income taxes at corporate rates. We face possible adverse changes in tax laws, which may result in an increase in our tax liability. Loss of our key personnel could harm our operations and adversely affect the value of our common shares. Vornado Realty Trust s charter documents and applicable law may hinder any attempt to acquire us. Our Amended and Restated Declaration of Trust sets limits on the ownership of our shares. We have a classified Board of Trustees and that may reduce the likelihood of certain takeover transactions. We may issue additional shares in a manner that could adversely affect the likelihood of certain takeover transactions. The Maryland General Corporation Law contains provisions that may reduce the likelihood of certain takeover transactions. We may change our policies without obtaining the approval of our shareholders. Steven Roth and Interstate Properties may exercise substantial influence over us. They and some of our other trustees and officers have interests or positions in other entities that may compete with us. There may be conflicts of interest between Alexander s and us. The Number of Shares of Vornado Realty Trust and the Market for Those Shares Give Rise to Various Risks. The trading price of our common shares has recently been volatile and may fluctuate. Vornado Realty Trust has many shares available for future sale, which could hurt the market price of its shares. Increased market interest rates may hurt the value of Vornado Realty Trust s common and preferred shares.

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899689--2/23/2010--VORNADO_REALTY_TRUST