<PAGE> 1
Exhibit Index on Page 28
As filed with the Securities and Exchange Commission on February 3, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 18, 1997
-------------------------------
Commission File Number: 1-11954
--------------------------------------------------------
VORNADO REALTY L.P.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3925979
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation) (I.R.S. Employer
Identification Number)
Park 80 West, Plaza II, Saddle Brook, New Jersey 07663
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(201)587-1000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Page 1
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This Form 8-K/A amends Vornado Realty L.P.'s Form 8-K's previously filed to
include certain required financial statements and pro forma financial
information.
Item 1. Not Applicable.
Item 2. Acquisition or Disposition of Assets
On December 17, 1997, Vornado Realty Trust ("Vornado") acquired 640
Fifth Avenue, an 18 story Manhattan office building located at the corner
of 51st Street, for approximately $64 million from Met Life International
Real Estate Partners Limited Partnership. The building contains
approximately 250,000 square feet. Vornado financed the purchase from its
existing cash.
This transaction was arrived at through an arms-length negotiation
and was consummated through a subsidiary of Vornado Realty L.P. (the
"Operating Partnership"), a limited partnership of which Vornado owns
92.4% and is the sole general partner.
Item 3-4. Not Applicable.
Item 5. Other Events.
On December 22, 1997, Vornado announced that the contract it
previously had executed to acquire the long-term leasehold interest in One
Penn Plaza for approximately $410 million has been executed by the seller,
and that certain rights of first refusal to the contract have been waived.
The acquisition, which was previously announced on November 18, 1997, is
expected to close within the next 60 days subject to customary closing
conditions.
One Penn Plaza is a 57 story Manhattan office building containing
approximately 2,350,000 square feet and encompasses substantially the
entire square block bounded by 33rd Street, 34th Street, Seventh Avenue
and Eighth Avenue.
On November 21, 1997, Vornado entered into an agreement to acquire
150 East 58th Street, a 39 story Manhattan office building, for
approximately $118 million. The building contains approximately 550,000
square feet. The acquisition, which is subject to customary closing
conditions, is expected to be completed in the first quarter of 1998.
Item 6. Not Applicable.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a)-(b) There are filed herewith:
(a) the historical Statements of Revenues and Certain Expenses of One
Penn Plaza, 150 East 58th Street and 640 Fifth Avenue commencing on
page 5, and
(b) the Condensed Consolidated Pro Forma Balance Sheet of Vornado Realty
L.P. as of September 30, 1997 and the Condensed Consolidated Pro
Forma Income Statement of Vornado Realty L.P. for the nine months
ended September 30, 1997 and the year ended December 31, 1996,
commencing on page 18, prepared to give Pro Forma effect to the
proposed acquisitions of One Penn Plaza and 150 East 58th Street,
the completed acquisition of 640 Fifth Avenue and the previously
reported acquisitions and investments (Mendik Company, 90 Park
Avenue, Arbor Property Trust, Americold Corporation and URS
Logistics, Inc. (collectively "Cold Storage"), The Montehiedra Town
Center, Riese, Charles E. Smith Commercial Realty L.P. and The Hotel
Pennsylvania). The Pro Forma data also includes information updated
through September 30, 1997 for certain previously reported
acquisitions which were disclosed in Form 8-K's previously filed
with the Securities and Exchange Commission in 1997.
Page
Reference
---------
One Penn Plaza
Independent Auditors' Report....................................5
Statements of Revenues and Certain Expenses for the Year Ended
December 31, 1996 (audited) and for the Nine Months Ended
September 30, 1997 and 1996 (unaudited).......................6
Notes to Statements of Revenues and Certain Expenses for the
Year Ended December 31, 1996 and for the Nine Months
Ended September 30, 1997 and 1996.............................7
150 East 58th Street
Independent Auditors' Report....................................9
Statements of Revenues and Certain Expenses for the Year Ended
December 31, 1996 (audited) and for the Nine Months Ended
September 30, 1997 and 1996 (unaudited).......................10
Notes to Statements of Revenues and Certain Expenses for the
Year Ended December 31, 1996 and for the Nine Months
Ended September 30, 1997 and 1996.............................11
640 Fifth Avenue
Independent Auditors' Report....................................13
Statements of Revenues and Certain Expenses for the Year Ended
December 31, 1996 (audited) and for the Nine Months Ended
September 30, 1997 and 1996 (unaudited).......................14
Notes to Statements of Revenues and Certain Expenses for the
Year Ended December 31, 1996 and for the Nine Months
Ended September 30, 1997 and 1996.............................15
Page 3
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Pro Forma financial information
Condensed Consolidated Pro Forma Balance Sheet at
September 30, 1997............................................18
Condensed Consolidated Pro Forma Income Statement
for the Nine Months Ended September 30, 1997..................19
Condensed Consolidated Pro Forma Income Statement
for the Year Ended December 31, 1996..........................22
Notes to Condensed Consolidated Pro Forma Financial Statements..25
(c) Exhibits.
Exhibit No. Exhibit
----------- -------
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Deloitte & Touche LLP
Item 8-9. Not Applicable.
Page 4
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INDEPENDENT AUDITORS' REPORT
To the Shareholders of
Vornado Realty L.P.:
We have audited the statement of revenues and certain expenses of One Penn
Plaza, as described in Note 1 for the year ended December 31, 1996. This
financial statement is the responsibility of One Penn Plaza's management. Our
responsibility is to express an opinion on the financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the filing of Form 8-K/A of Vornado Realty
L.P.) as described in Note 1 and is not intended to be a complete presentation
of One Penn Plaza's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the statement of revenues and certain expenses of One
Penn Plaza as described in Note 1 for the year ended December 31, 1996 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
March 17, 1997
Page 5
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ONE PENN PLAZA
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(000's Omitted)
For the Nine Months Ended For the Year
September 30 Ended
1997 1996 December 31,
(unaudited) (unaudited) 1996
----------- ----------- ----
REVENUES:
Base Rent $36,309 $35,634 $46,618
Tenant Recoveries 3,866 2,044 3,679
Other Income 5,952 4,852 7,238
------- ------- -------
Total revenues 46,127 42,530 57,535
------- ------- -------
CERTAIN EXPENSES:
Real Estate Taxes 8,966 8,842 11,761
Ground Rent 2,444 2,362 3,333
Repairs and Maintenance 3,790 1,695 2,410
Cleaning 3,322 2,987 4,079
Professional Fees 367 597 1,054
Utilities 5,782 5,173 6,808
Insurance 383 389 524
Management Fee 420 388 537
Payroll 2,302 2,248 2,939
General and Administrative 357 302 397
------- ------- -------
Total certain expenses 28,133 24,983 33,842
------- ------- -------
REVENUES IN EXCESS OF
CERTAIN EXPENSES $17,994 $17,547 $23,693
======= ======= =======
See notes to statements of revenues and certain expenses.
Page 6
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ONE PENN PLAZA
NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES
1. ORGANIZATION AND BASIS OF PRESENTATION
One Penn Plaza (the "Property") is a 57 story office building located on
leaseholds situated on a major portion of the block bounded by Seventh and
Eighth Avenues and 33rd and 34th Streets in New York City. The Property
has aggregate net rentable area of approximately 2,350,000 square feet
(approximately 91% leased as of September 30, 1997). The accounting
records of the Property are maintained in accordance with generally
accepted accounting principles. The statements of revenues and certain
expenses includes information related to the operations of One Penn Plaza
as recorded by the office building's previous owner.
The accompanying historical financial statement information is presented
in conformity with Rule 3-14 of the Securities and Exchange Commission.
Accordingly, the financial statements are not representative of the actual
operations for the periods presented as certain expenses, which may not be
comparable to the expenses expected to be incurred in the future
operations of the acquired property, have been excluded. Expenses excluded
consist of interest, depreciation and amortization, and other costs not
directly related to the future operations of the acquired property.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
The statements of revenues and certain expenses for the nine month periods
ended September 30, 1997 and 1996 are unaudited, however, in the opinion
of management, all adjustments (consisting solely of normal recurring
adjustments) necessary for the fair presentation of these statements of
revenues and certain expenses for the interim periods, on the basis
described above, have been included. The results for such interim periods
are not necessarily indicative of the results for an entire year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition - Rental income is recognized from leases with
scheduled rent increases on a straight-line basis over the lease term.
Escalation rents based upon payments for real estate taxes, insurance,
utilities and maintenance by tenants are estimated and accrued.
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3. RELATED PARTY TRANSACTIONS
Management fees were paid to Helmsley-Spear, Inc. ("Helmsley-Spear"). The
principal stockholder of Helmsley-Spear has an ownership interest in the
Property.
During 1996 and 1995, Metropolitan, which has an ownership interest in the
Property, executed operating leases to occupy office space in the
building. The lease terms expire to October 31, 2005 and initially
required annual rental payments of $2,283,129 through December 31, 1996.
4. LEASEHOLDS
The building is on land subject to leases with outside third parties. The
approximate fixed annual rental payments, as defined, are as follows
(000's omitted):
Year Ending
December 31, Amount
1997 $2,580
1998 2,580
1999 2,580
2000 2,580
2001 2,690
Thereafter 62,410
One lease provides for certain additional percentage rent and another
provides for reimbursement of real estate tax escalation on the land. For
the year ended December 31, 1996, the Property recognized $48,000 and
$46,000 in percentage rent and real estate tax escalation expenses,
respectively.
5. OPERATING LEASES
The Property leases office space to various tenants with lease terms
expiring in various years. The following is a schedule, by years, of the
approximate minimum future rentals required under these operating leases
as of December 31, 1996 (000's omitted):
Year Ending
December 31, Amount
1997 $ 45,812
1998 42,023
1999 38,602
2000 36,546
2001 33,386
Thereafter 166,662
******
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INDEPENDENT AUDITORS' REPORT
To the Shareholders of
Vornado Realty L.P.:
We have audited the statement of revenues and certain expenses of 150 East 58th
Street, as described in Note 1 for the year ended December 31, 1996. This
financial statement is the responsibility of Vornado Realty L.P.'s management.
Our responsibility is to express an opinion on the financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for inclusion in the filing of Form 8-K/A of Vornado Realty
L.P.) as described in Note 1 and is not intended to be a complete presentation
of 150 East 58th Street's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the statement of revenues and certain expenses of 150
East 58th Street as described in Note 1 for the year ended December 31, 1996 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
January 16, 1998
Page 9
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150 EAST 58TH STREET
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(000's Omitted)
For the Nine Months Ended For the Year
September 30, Ended
1997 1996 December 31,
(unaudited) (unaudited) 1996
----------- ----------- ----
REVENUES:
Base Rent $10,426 $9,436 $11,982
Tenant Recoveries 1,537 1,600 2,135
Other Income 410 527 765
------- ------ -------
Total revenues 12,373 11,563 14,882
------- ------ -------
CERTAIN EXPENSES:
Real Estate Taxes 2,446 2,531 3,368
Ground Rent 80 80 107
Repairs and Maintenance 448 296 401
Cleaning 917 893 1,130
Professional Fees 153 179 235
Utilities 1,079 1,210 1,546
Insurance 113 104 144
Management Fee 128 128 170
Payroll 472 436 577
Administrative 143 113 166
Miscellaneous 112 186 207
------- ------ -------
Total certain expenses 6,091 6,156 8,051
------- ------ -------
REVENUES IN EXCESS OF
CERTAIN EXPENSES $ 6,282 $5,407 $ 6,831
======= ====== =======
See notes to statements of revenues and certain expenses.
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150 EAST 58TH STREET
NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES
1. ORGANIZATION AND BASIS OF PRESENTATION
150 East 58th Street (the "Property") is a 39 story commercial office
building located on East 58th Street and Third Avenue in New York City.
The Property has aggregate net rentable area of approximately 550,000
square feet (approximately 95% leased as of September 30, 1997). The
accounting records of the Property are maintained in accordance with
generally accepted accounting principles. The statements of revenues and
certain expenses includes information related to the operations of 150
East 58th Street as recorded by the office building's previous owner.
The accompanying historical financial statement information is presented
in conformity with Rule 3-14 of the Securities and Exchange Commission.
Accordingly, the financial statements are not representative of the actual
operations for the periods presented as certain expenses, which may not be
comparable to the expenses expected to be incurred in the future
operations of the acquired property, have been excluded. Expenses excluded
consist of interest, depreciation and amortization, and other costs not
directly related to the future operations of the acquired property.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
The statements of revenues and certain expenses for the nine month periods
ended September 30, 1997 and 1996 are unaudited, however, in the opinion
of management, all adjustments (consisting solely of normal recurring
adjustments) necessary for the fair presentation of these statements of
revenues and certain expenses for the interim periods, on the basis
described above, have been included. The results for such interim periods
are not necessarily indicative of the results for an entire year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition - Rental income is recognized from leases with
scheduled rent increases on a straight-line basis over the lease term.
Escalation rents based upon payments for real estate taxes, insurance,
utilities and maintenance by tenants are estimated and accrued.
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3. LEASEHOLDS
The building is on land subject to leases with outside third parties. The
approximate fixed annual rental payments, as defined, are as follows
(000's omitted):
Year Ending
December 31, Amount
1997 $159
1998 159
1999 159
2000 159
2001 159
Thereafter 2,696
4. OPERATING LEASES
The Property leases office space to various tenants with lease terms
expiring in various years. The following is a schedule, by years, of the
approximate minimum future rentals required under these operating leases
as of December 31, 1996 (000's omitted):
Year Ending
December 31, Amount
1997 $13,645
1998 14,407
1999 11,762
2000 9,816
2001 7,718
Thereafter 30,224
******
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INDEPENDENT AUDITORS' REPORT
To the Shareholders of
Vornado Realty L.P.:
We have audited the statement of revenues and certain expenses of 640 Fifth
Avenue, as described in Note 1 for the year ended December 31, 1996. This
financial statement is the responsibility of 640 Fifth Avenue's management. Our
responsibility is to express an opinion on the financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission (for the inclusion in the filing of Form 8-K/A of Vornado
Realty L.P.) as described in Note 1 and is not intended to be a complete
presentation of 640 Fifth Avenue's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the statement of revenues and certain expenses of 640
Fifth Avenue as described in Note 1 for the year ended December 31, 1996 in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
February 12, 1997
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640 FIFTH AVENUE
STATEMENTS OF REVENUES AND CERTAIN EXPENSES
(000's omitted)
For the Nine Months Ended For the Year
September 30, Ended
1997 1996 December 31,
(Unaudited) (Unaudited) 1996
----------- ----------- ----
REVENUES:
Base rent $3,790 $3,118 $4,170
Tenant recoveries 1,378 1,346 1,446
Other income -- 272 336
------ ------ ------
Total revenues 5,168 4,736 5,952
------ ------ ------
CERTAIN EXPENSES
Real estate taxes 1,526 1,688 2,221
Repairs and maintenance 352 60 163
Cleaning 562 689 855
Utilities 398 392 466
Insurance 37 36 48
Management fee 138 109 178
Payroll 139 105 156
Miscellaneous 114 86 115
------ ------ ------
Total certain expenses 3,266 3,165 4,202
------ ------ ------
REVENUES IN EXCESS OF
CERTAIN EXPENSES $1,902 $1,571 $1,750
====== ====== ======
See notes to statements of revenues and certain expenses.
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640 FIFTH AVENUE
NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES
1. ORGANIZATION AND BASIS OF PRESENTATION
640 Fifth Avenue is an office building located at the corner of 51st
Street of, New York, N.Y. (the "Property"). The Property was formerly
owned by Met Life International Real Estate Limited Partnership and
operated by Shorenstein Company, L.P. ("Shorenstein"). The Property has
aggregate net rentable area of approximately 248,000 square feet
(approximately 92% leased as of September 30, 1997). The accounting
records of the Property are maintained in accordance with generally
accepted accounting principles. The statements of revenues and certain
expenses includes information related to the operations of 640 Fifth
Avenue as recorded by the office building's previous owner.
The accompanying historical financial statement information is presented
in conformity with Rule 3-14 of the Securities and Exchange Commission.
Accordingly, the financial statements are not representative of the actual
operations for the periods presented as certain expenses, which may not be
comparable to the expenses expected to be incurred in the future
operations of the acquired property, have been excluded. Expenses excluded
consist of interest, depreciation and amortization, and other costs not
directly related to the future operations of the acquired property.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. The ultimate results could differ from those
estimates.
The statements of revenues and certain expenses for the nine month periods
ended September 30, 1997 and 1996 are unaudited, however, in the opinion
of management, all adjustments (consisting solely of normal recurring
adjustments) necessary for the fair presentation of these statements of
revenues and certain expenses for the interim periods, on the basis
described above, have been included. The results for such interim periods
are not necessarily indicative of the results for an entire year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition - Rental income is recognized from leases with
scheduled rent increases on a straight-line basis over the lease term.
Escalation rents based upon payments for real estate taxes, insurance,
utilities and maintenance by tenants are estimated and accrued.
Page 15
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3. OPERATING LEASES
The Property leases office space to various tenants with lease terms
expiring in various years. Approximately 26% of total rental income was
earned from one tenant in the building. The following is a schedule, by
years, of the approximate minimum future rentals required under these
operating leases as of December 31, 1996 (000's omitted):
Year Ending
December 31, Amount
1997 $4,102
1998 3,696
1999 3,521
2000 2,909
2001 2,975
Thereafter 4,980
******
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Pro Forma Financial Information:
The unaudited condensed consolidated pro forma financial information
attached presents: (A) the condensed consolidated pro forma income statements of
Vornado Realty L.P. (the "Operating Partnership") for the year ended December
31, 1996 and the nine months ended September 30, 1997, as if (i) the proposed
acquisitions of One Penn Plaza and 150 East 58th Street and the completed
acquisition of 640 Fifth Avenue (collectively "New Acquisitions"), (ii) the
previously reported acquisitions and investments (Mendik Company, 90 Park
Avenue, Arbor Property Trust, Americold and URS (collectively "Cold Storage"),
Montehiedra, Riese, Charles E. Smith Commercial Realty L.P. and the Hotel
Pennsylvania) and (iii) the sale of common shares and the use of proceeds
therefrom, had occurred on January 1, 1996 and (B) the condensed consolidated
pro forma balance sheet of Vornado Realty L.P. as of September 30, 1997, as if
the above acquisitions had occurred on September 30, 1997 or the date of
acquisition, if earlier. The Pro Forma data also includes information updated
through September 30, 1997 for certain previously reported acquisitions which
were disclosed in Form 8-K's previously filed with the Securities and Exchange
Commission in 1997.
The unaudited condensed consolidated pro forma financial information is
not necessarily indicative of what Vornado Realty L.P.'s actual results of
operations or financial position would have been had these transactions been
consummated on the dates indicated, nor does it purport to represent Vornado
Realty L.P.'s results of operations or financial position for any future period.
The results of operations for the period ended September 30, 1997 are not
necessarily indicative of the operating results for the full year.
The unaudited condensed consolidated pro forma financial information
should be read in conjunction with the Consolidated Financial Statements and
notes thereto included in Vornado Realty Trust's Annual Report on Form 10-K for
the year ended December 31, 1996, as amended, and the Operating Partnership's
Quarterly Report on Form 10-Q for the period ended September 30, 1997 and the
Statements of Revenue and Certain Expenses of One Penn Plaza, 150 East 58th
Street and 640 Fifth Avenue included herein. In management's opinion, all
adjustments necessary to reflect these transactions have been made. All unit
and per unit amounts have been restated to reflect the 2 for 1 split of the
Operating Partnership units, announced on October 7, 1997.
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Condensed Consolidated Pro Forma Balance Sheet
September 30, 1997
(unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
Historical
------------------------ Pro Forma
Previously Previously Adjustments
Operating Reported Pro Forma Reported New Total
Partnership Acquisitions Adjustments Pro Forma Acquisitions Pro Forma
----------- ------------ ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Real estate, net $ 1,054,714 $ 140,823 $ 127,334 (A) $ 1,308,570 $ 410,000 (SS) $ 1,900,570
(14,301)(A) 118,000 (TT)
64,000 (TT)
Cash and cash equivalents 117,215 24,740 (B) 141,955 (92,000)(TT) 49,955
Investment in and advances to
Cold Storage 204,000 (B) 204,000 204,000
Investment in and advances to
Alexander's, Inc. 107,446 107,446 107,446
Investment in partnerships and
joint ventures 58,177 60,000 (B) 118,177 118,177
Investment in and advances to
management companies 13,250 13,250 13,250
Officer's deferred compensation
expense 4,170 4,170 4,170
Mortgage loans receivable 84,663 84,663 84,663
Receivable arising from straight-
lining of rents 21,999 21,999 21,999
Other assets 86,272 10,626 (2,554)(C) 94,344 94,344
----------- --------- ----------- ----------- --------- -----------
$ 1,547,906 $ 151,449 $ 399,219 $ 2,098,574 $ 500,000 $ 2,598,574
=========== ========= =========== =========== ========= ===========
Liabilities:
Notes and mortgages payable $ 768,556 $ 124,879 $ (310,000)(B) $ 583,435 $ 410,000 (SS) $ 993,435
Deferred leasing fee income 10,461 10,461 10,461
Officer's deferred compensation
payable 25,000 25,000 25,000
Other liabilities 30,576 12,269 42,845 42,845
----------- --------- ----------- ----------- --------- -----------
834,593 137,148 (310,000) 661,741 410,000 1,071,741
----------- --------- ----------- ----------- --------- -----------
Partners' equity: 713,313 14,301 127,334 (A) 1,436,833 90,000 (TT) 1,526,833
(14,301)(A)
(2,554)(C)
598,740 (B)
----------- --------- ----------- ----------- --------- -----------
$ 1,547,906 $ 151,449 $ 399,219 $ 2,098,574 $ 500,000 $ 2,598,574
=========== ========= =========== =========== ========= ===========
</TABLE>
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Condensed Consolidated Pro Forma Income Statement
For the Nine Months Ended September 30, 1997
(Unaudited)
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical
--------------------------
Previously Previously Historical
Operating Reported Pro Forma Reported New Pro Forma Total
Partnership Acquisitions (1) Adjustments Pro Forma Acquisitions Adjustments Pro Forma
----------- ---------------- ------------- ---------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Property rentals $ 113,353 $ 68,596 $ 1,775 (D) $ 184,817 $ 50,525 $ 2,057 (VV) $237,399
1,093 (GG)
Expense reimbursements 25,924 19,229 45,153 6,781 51,934
Other income 2,550 3,662 (2,622) (E) 3,590 6,362 9,952
--------- --------- ------- --------- --------- ---------- --------
141,827 91,487 246 233,560 63,668 2,057 299,285
--------- --------- ------- --------- --------- ---------- --------
Expenses:
Operating 48,557 34,791 83,348 37,490 - (XX) 128,838
Depreciation and amortization 15,040 7,908 368 (F) 25,860 11,241 (UU) 37,101
1,956 (G)
588 (HH)
General and administrative 8,208 3,838 (1,607) (E) 9,285 9,285
(1,154) (H)
Amortization of officer's
deferred compensation expense 18,747 18,747 18,747
--------- --------- ------- --------- --------- ---------- --------
90,552 46,537 151 137,240 37,490 11,241 185,971
--------- --------- ------- --------- --------- ---------- --------
Operating income (loss) 51,275 44,950 95 96,320 26,178 (9,184) 113,314
(Loss) income applicable to
Preferred Stock Affiliates (6,270) (CC) 4,162 4,162
10,432 (DD)
Income applicable to
Alexander's 4,186 4,186 4,186
Equity in net income of
management companies 918 964 (E) 1,882 1,882
Equity in net income of
investees 553 362 276 (I) 3,575 3,575
2,384 (II)
Interest income on mortgage
notes receivable 7,708 (4,586) (J) 5,121 5,121
1,999 (JJ)
Interest and dividend income 9,125 899 10,024 10,024
Interest and debt expense (30,972) (15,671) 4,537 (K) (34,516) (20,756)(WW) (55,272)
(4,410) (L)
Net gain on marketable securities 911 911 911
--------- --------- ------- --------- --------- ---------- --------
Net income (loss) 43,704 30,540 17,421 91,665 26,178 (29,940) (87,903)
Preferred unit distributions (10,095) (5,137) (O) (15,233) (15,233)
Preferential allocations (4,600) (3,084) (N) (7,684) (7,684)
--------- --------- ------- --------- --------- ---------- --------
Net income (loss) applicable to
Class A units $ 29,008 $ 30,540 $ 9,200 $ 68,748 $ 26,178 $ (29,940) $ 64,986
========= ========= ======= ========= ========= ========== ========
Net income per Class A unit,
based on 53,627,027 and
72,725,331 Class A units and
Class A unit equivalents,
respectively $ 0.54 $ 0.89
========= ========
</TABLE>
Page 19
<PAGE> 20
Condensed Consolidated Pro Forma Income Statement
For the Nine Months Ended September 30, 1997
(Unaudited)
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical
--------------------------
Previously Previously Historical
Operating Reported Pro Forma Reported New Pro Forma Total
Partnership Acquisitions (1) Adjustments Pro Forma Acquisitions Adjustments Pro Forma
----------- ---------------- ------------- ---------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Other Data:
Funds from Operations (2):
Net income (loss) applicable to
Class A units $ 29,008 $ 30,540 $ 9,200 $ 68,748 $ 26,178 $ (29,940) $ 64,986
Depreciation and amortization
of real property 14,623 5,807 2,912 23,342 11,241 34,583
Straight-lining of property
rent escalations (2,317) 881 (1,775) (3,211) (2,931) (2,057) (8,199)
Leasing fees received in excess
of income recognized 1,333 1,333 1,333
Proportionate share of adjustments
to income from equity
investments to arrive at
FFO 1,142 832 28,089 30,063 30,063
Non-recurring lease cancellation
income and write-off of related
costs (11,581) (11,581) (11,581)
--------- --------- ---------- --------- --------- ---------- -----------
$ 43,789 $ 26,479 $ 38,426 $ 108,694 $ 23,247 $ (20,756) $ 111,185
========= ========= ========== ========= ========= ========== ===========
Cash flow provided by (used) in:
Operating activities $ 64,017 $ 19,522 $ 34,363 $ 117,902 $ 21,772 $ (20,756) $ 118,918
Investing activities $(670,755) $ (5,732) $ (279,630) $(956,117) $ - $ (592,000) $(1,548,117)
Financing activities $ 575,409 $ (9,235) $ 294,113 $ 860,287 $ - $ 500,000 $ 1,360,287
</TABLE>
- ----------
(1) Certain revenue and expense items have been reclassified to conform to
the Operating Partnership's presentation.
(2) Funds from operations does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and
is not necessarily indicative of cash available to fund cash needs which
is disclosed in the Consolidated Statements of Cash Flows for the
applicable periods. There are no material legal or functional restrictions
on the use of funds from operations. Funds from operations should not be
considered as an alternative to net income as an indicator of the
Operating Partnership's operating performance or as an alternative to
cash flows as a measure of liquidity. Management considers funds from
operations a supplemental measure of Operating performance and along with
cash flow from operating activities, financing activities, and investing
activities, it provides investors with an indication of the ability of the
Operating Partnership to incur and service debt, to make capital
expenditures and to fund other cash needs. Funds from operations may not
be comparable to similarly titled measures employed by other REITs since a
number of REITs, including the Operating Partnership's method of
calculating funds from operations is different from that used by NAREIT.
Funds from operations, as defined by NAREIT, represents net income
applicable to common shares before depreciation and amortization,
extraordinary items and gains or losses on sales of real estate. Funds
from operations as disclosed above has been modified to adjust for the
effect of straight-lining of property rentals for rent escalations and
leasing fee income.
Page 20
<PAGE> 21
Condensed Combining Income Statement
For the Nine Months Ended September 30, 1997
(Unaudited)
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical
--------------------------------------------------
One Penn 150 East 640 Fifth
Plaza 58th Street Avenue Combined
--------- ----------- --------- --------
<S> <C> <C> <C> <C>
Revenues:
Property rentals $ 36,309 $ 10,426 $ 3,790 $ 50,525
Expense reimbursements 3,866 1,537 1,378 6,781
Other income 5,952 410 -- 6,362
-------- -------- ------- --------
46,127 12,373 5,168 63,668
-------- -------- ------- --------
Expenses:
Operating 28,133 6,091 3,266 37,490
-------- -------- ------- --------
28,133 6,091 3,266 37,490
-------- -------- ------- --------
Net income applicable to
Class A units $ 17,994 $ 6,282 $ 1,902 $ 26,178
======== ======== ======= ========
Other Data:
Funds from Operations (2):
Net income (loss) applicable to
Class A units $ 17,994 $ 6,282 $ 1,902 $ 26,178
Depreciation and amortization
of real property - - - -
Straight-lining of property rent
escalations (2,855) 82 (158) (2,931)
-------- -------- ------- --------
$ 15,139 $ 6,364 $ 1,744 $ 23,247
======== ======== ======= ========
Cash flow provided by:
Operating activities $ 14,462 $ 6,089 $ 1,221 $ 21,772
Investing activities $ - $ - $ - $ -
Financing activities $ - $ - $ - $ -
</TABLE>
- ----------
(2) Funds from operations does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and
is not necessarily indicative of cash available to fund cash needs which
is disclosed in the Consolidated Statements of Cash Flows for the
applicable periods. There are no material legal or functional restrictions
on the use of funds from operations. Funds from operations should not be
considered as an alternative to net income as an indicator of the
Operating Partnership's operating performance or as an alternative to cash
flows as a measure of liquidity. Management considers funds from
operations a supplemental measure of Operating performance and along with
cash flow from operating activities, financing activities, and investing
activities, it provides investors with an indication of the ability of the
Operating Partnership to incur and service debt, to make capital
expenditures and to fund other cash needs. Funds from operations may not
be comparable to similarly titled measures employed by other REITs since a
number of REITs, including the Operating Partnership's, method of
calculating funds from operations is different from that used by NAREIT.
Funds from operations, as defined by NAREIT, represents net income
applicable to common shares before depreciation and amortization,
extraordinary items and gains or losses on sales of real estate. Funds
from operations as disclosed above has been modified to adjust for the
effect of straight-lining of property rentals for rent escalations and
leasing fee income.
Page 21
<PAGE> 22
Condensed Consolidated Pro Forma Income Statement
For the Year Ended December 31, 1996
(Unaudited)
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical
--------------------------
Previously Previously Historical
Operating Reported Pro Forma Reported New Pro Forma Total
Partnership Acquisitions (1) Adjustments Pro Forma Acquisitions Adjustments Pro Forma
----------- ---------------- ------------- ---------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Property rentals $ 87,424 $ 145,335 $ 7,071 (P) $ 241,972 $ 62,770 $ 2,866 (ZZ) $307,608
(44) (Q)
2,186 (MM)
Expense reimbursements 26,644 37,651 64,295 7,260 71,555
Other income 2,819 6,124 (5,378) (Q) 3,565 8,339 11,904
--------- ---------- -------- ---------- --------- ---------- --------
116,887 189,110 3,835 309,832 78,369 2,866 391,067
--------- ---------- -------- ---------- --------- ---------- --------
Expenses:
Operating 36,412 82,523 (39) (Q) 119,012 46,095 - (BBB) 165,107
116 (R)
Depreciation and amortization 11,589 18,515 (144) (Q) 45,089 14,987 (YY) 60,076
9,981 (S)
3,276 (T)
1,872 (NN)
General and administrative 5,167 8,956 (3,788) (Q) 8,162 8,162
(2,173) (U)
Amortization of officer's deferred
compensation expense 2,083 2,083 2,083
--------- ---------- -------- ---------- --------- ---------- --------
55,251 109,994 9,101 174,346 46,095 14,987 235,428
--------- ---------- -------- ---------- --------- ---------- --------
Operating income (loss) 61,636 79,116 (5,266) 135,486 32,274 (12,121) 155,639
(Loss) income applicable to
Preferred Stock Affiliates (8,357) (EE) 5,552 5,552
13,909 (FF)
Income applicable to Alexander's 7,956 7,956 7,956
Equity in net income of
management companies 1,855 1,471 (Q) 3,326 3,326
Equity in net income of investees 1,663 1,755 (V) 5,609 5,609
2,191 (OO)
Interest income on mortgage
notes receivable 2,579 3,998 (PP) 6,577 6,577
Interest and dividend income 3,151 2,536 (20) (Q) 5,667 5,667
Interest and debt expense (16,726) (34,692) 9,016 (W) (43,862) (71,537)
(12,775) (X) (27,675)(AAA)
1,237 (Y)
(10,072) (QQ)
20,150 (RR)
Net gain on marketable securities 913 913 913
--------- ---------- -------- ---------- --------- ---------- --------
Net income (loss) 61,364 48,623 17,237 127,224 32,274 (39,796) 119,702
Preferred unit distributions (19,800) (AA) (19,800) (19,800)
Preferential allocations (10,372) (2) (10,372) (10,372)
--------- ---------- -------- ---------- --------- ---------- --------
Net income (loss) applicable to
Class A units $ 61,364 $ 48,623 $(12,935) $ 97,052 $ 32,274 $ (39,796) $ 89,530
========= ========== ======== ========== ========= ========== ========
Net income per Class A unit
based on 49,206,884 and
68,305,188 Class A units
and Class A unit equivalents,
respectively $ 1.25 $ 1.31
========= ========
</TABLE>
Page 22
<PAGE> 23
Condensed Consolidated Pro Forma Income Statement
For the Year Ended December 31, 1996
(Unaudited)
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical
--------------------------
Previously Previously Historical
Operating Reported Pro Forma Reported New Pro Forma Total
Partnership Acquisitions (1) Adjustments Pro Forma Acquisitions Adjustments Pro Forma
----------- ---------------- ------------- ---------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Other Data:
Funds from Operations (2):
Net income (loss) applicable to
Class A units $ 61,364 $ 48,623 $ (12,935) $ 97,052 $ 32,274 $ (39,796) $ 89,530
Depreciation and amortization
of real property 10,583 18,515 14,985 44,083 14,987 59,070
Straight-lining of property
rent escalations (2,676) (2,676) (7,071) (12,423) (1,672) (2,866) (16,961)
Leasing fees received in excess
of income recognized 1,805 1,805 1,805
Proportionate share of adjustments
to income from equity
investments to arrive at FFO (1,760) 2,747 35,445 36,432 36,432
-------- ---------- ---------- ---------- --------- ---------- ------------
$ 69,316 $ 67,209 $ 30,424 $ 166,949 $ 30,602 $ (27,675) $ 169,876
======== ========== ========== ========== ========= ========== ============
Cash flow provided by (used) in:
Operating activities $ 70,703 $ 59,012 $ 61,185 $ 190,900 $ 28,723 $ (27,675) $ 191,948
Investing activities $ 14,912 $ (8,930) $ (951,148) $ (945,166) $ - $ (592,000) $ (1,537,166)
Financing activities $(15,046) $ (20,031) $ 869,165 $ 834,088 $ - $ 500,000 $ 1,334,088
</TABLE>
- -----------
(1) Certain revenue and expense items have been reclassified to conform to
the Operating Partnership's presentation.
(2) Funds from operations does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and
is not necessarily indicative of cash available to fund cash needs which
is disclosed in the Consolidated Statements of Cash Flows for the
applicable periods. There are no material legal or functional restrictions
on the use of funds from operations. Funds from operations should not be
considered as an alternative to net income as an indicator of the
Operating Partnership's operating performance or as an alternative to cash
flows as a measure of liquidity. Management considers funds from
operations a supplemental measure of Operating performance and along with
cash flow from operating activities, financing activities, and investing
activities, it provides investors with an indication of the ability of the
Operating Partnership to incur and service debt, to make capital
expenditures and to fund other cash needs. Funds from operations may not
be comparable to similarly titled measures employed by other REITs since a
number of REITs, including the Operating Partnership's, method of
calculating funds from operations is different from that used by NAREIT.
Funds from operations, as defined by NAREIT, represents net income
applicable to common shares before depreciation and amortization,
extraordinary items and gains or losses on sales of real estate. Funds
from operations as disclosed above has been modified to adjust for the
effect of straight-lining of property rentals for rent escalations and
leasing fee income.
Page 23
<PAGE> 24
Condensed Combining Income Statement
For the Year Ended December 31, 1996
(Unaudited)
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical
--------------------------------------------------
One Penn 150 East 640 Fifth
Plaza 58th Street Avenue Combined
--------- ----------- --------- --------
<S> <C> <C> <C> <C>
Revenues:
Property rentals $ 46,618 $ 11,982 $ 4,170 $ 62,770
Expense reimbursements 3,679 2,135 1,446 7,260
Other income 7,238 765 336 8,339
--------- --------- -------- ---------
57,535 14,882 5,952 78,369
--------- --------- -------- ---------
Expenses:
Operating 33,842 8,051 4,202 46,095
--------- --------- -------- ---------
33,842 8,051 4,202 46,095
--------- --------- -------- ---------
Net income applicable to
Class A units $ 23,693 $ 6,831 $ 1,750 $ 32,274
========= ========= ======== =========
Other Data:
Funds from Operations (2):
Net income (loss) applicable to
Class A units $ 23,693 $ 6,831 $ 1,750 $ 32,274
Depreciation and amortization
of real property - - - -
Straight-lining of property rent
escalations (1,417) (44) (211) (1,672)
--------- --------- -------- ---------
$ 22,276 $ 6,787 $ 1,539 $ 30,602
========= ========= ======== =========
Cash flow provided by:
Operating activities $ 20,905 $ 6,283 $ 1,535 $ 28,723
Investing activities $ - $ - $ - $ -
Financing activities $ - $ - $ - $ -
</TABLE>
- ----------
(2) Funds from operations does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and
is not necessarily indicative of cash available to fund cash needs which
is disclosed in the Consolidated Statements of Cash Flows for the
applicable periods. There are no material legal or functional restrictions
on the use of funds from operations. Funds from operations should not be
considered as an alternative to net income as an indicator of the
Operating Partnership's operating performance or as an alternative to cash
flows as a measure of liquidity. Management considers funds from
operations a supplemental measure of Operating performance and along with
cash flow from operating activities, financing activities, and investing
activities, it provides investors with an indication of the ability of the
Operating Partnership to incur and service debt, to make capital
expenditures and to fund other cash needs. Funds from operations may not
be comparable to similarly titled measures employed by other REITs since a
number of REITs, including the Operating Partnership's, method of
calculating funds from operations is different from that used by NAREIT.
Funds from operations, as defined by NAREIT, represents net income
applicable to common shares before depreciation and amortization,
extraordinary items and gains or losses on sales of real estate. Funds
from operations as disclosed above has been modified to adjust for the
effect of straight-lining of property rentals for rent escalations and
leasing fee income.
Page 24
<PAGE> 25
Notes to Condensed Consolidated Pro Forma Financial Statements
(Amounts in thousands, except per share amounts)
New Acquisitions (One Penn Plaza, 150 East 58th Street and 640 Fifth Avenue):
On November 21, 1997, Vornado entered into an agreement to acquire 150
East 58th Street, a 39 story Manhattan office building, for approximately $118
million. The building contains approximately 550,000 square feet. The
acquisition, which is subject to customary closing conditions, is expected to be
completed in the first quarter of 1998.
On December 17, 1997, Vornado acquired 640 Fifth Avenue, an 18 Story
Manhattan office building located at the corner of 51st Street, for
approximately $ 64 million from Met Life International Real Estate Partners
Limited Partnership. The building contains approximately 250,000 square feet.
Vornado financed the purchase from its existing cash.
On December 22, 1997, Vornado announced that the contract it previously
had executed to acquire the long-term leasehold interest in One Penn Plaza for
approximately $410 million has been executed by the seller, and that certain
rights of first refusal to the contract have been waived. The acquisition, which
was previously announced on November 18, 1997, is expected to close within the
next sixty days subject to customary closing conditions. One Penn Plaza is a 57
story Manhattan office building containing approximately 2,350,000 square feet
and encompasses substantially the entire square block bounded by 33rd Street,
34th Street, Seventh Avenue and Eighth Avenue.
Pro Forma September 30, 1997 Balance Sheet:
(SS) To reflect the acquisition of One Penn Plaza with borrowings from the
Operating Partnership's revolving credit facility.
(TT) To reflect the use of $90 million of proceeds from the issuance of 2.1
million common shares by Vornado (exercise of over-allotment option by
underwriters in November, 1997), net of expenses, and $92 million of
existing cash for (i) the acquisition of 640 Fifth Avenue ($64 million)
and (ii) 150 East 58th Street ($118 million).
Pro Forma September 30, 1997 Income Statement:
(UU) Adjustment to depreciation expense for the nine month period ended
September 30, 1997 for the new acquisitions based upon their respective
purchase price
(VV) To adjust rentals for the nine month period ended September 30, 1997
arising from the straight-lining of tenant leases that contain escalations
over the lease term.
(WW) To accrue interest at 6.75%, the current rate in effect, on borrowings
under the Operating Partnership's revolving credit facility to finance
the One Penn Plaza acquisition.
(XX) The above pro formas reflect fees for property management services paid to
third parties. These properties will be managed internally subsequent to
their acquisitions, by the Mendik division. Management assumes significant
cost savings can be anticipated, however, amounts can not presently be
determined.
Pro Forma December 31, 1996 Income Statement:
(YY) Adjustment to depreciation expense for the year ended December 31, 1996
for the new acquisitions based upon their respective purchase price.
(ZZ) To adjust rentals for the year ended December 31, 1996 arising from the
straight-lining of tenant leases that contain escalations over the lease
term.
(AAA) To accrue interest at 6.75%, the current rate in effect, on borrowings
under the Operating Partnership's revolving credit facility to finance the
One Penn Plaza acquisition.
(BBB) The above pro formas reflect fees for property management services paid to
third parties. These properties will be managed internally subsequent to
their acquisitions, by the Mendik division. Management assumes significant
cost savings can be anticipated, however, amounts can not presently be
determined.
Previously Reported Acquisitions (Mendik Companies, 90 Park Avenue, Arbor
Property Trust, Americold, URS, Montehiedra, Riese, Charles E. Smith
Commercial Realty, L.P. And The Hotel Pennsylvania)
Pro forma effect has been given to the above listed acquisitions in
previously filed Form 8-K's during 1997 and is included in this document in a
combined manner as "Previously Reported Acquisitions" for the historical
information.
Pro Forma September 30, 1997 Balance Sheet:
(A) Assumed issuance of 2,998,304 common shares by Vornado, with a fair value
of $127,334 (based on an average price of $42.469 per share), in exchange
for all of the common shares of Arbor.
(B) To reflect the use of $598,740 of proceeds, net of $35,754 of offering
costs, from the issuance of 14,100 common shares by Vornado for (i)
$204,000 loan in connection with Cold Storage acquisition, (ii) $60,000
Charles E. Smith Realty Limited Partnership, and (iii) $310,000 reduction
in debt. The remaining balance of $24,740 is reflected in cash and cash
equivalents.
(C) Write-off of deferred assets of Arbor as reflected in the values allocated
to the real estate and the debt in accordance with APB No. 16.
Page 25
<PAGE> 26
Pro Forma September 30, 1997 Income Statement:
(D) To adjust rentals for the period from January 1, 1997 to April 14, 1997
arising from the straight-lining of property rentals for rent escalations
based on the remaining terms of the applicable Mendik leases.
(E) To reflect adjustments required to record the Operating Partnership's
investment in the Mendik management company for the period from January 1,
1997 to April 14, 1997 under the equity method of accounting.
(F) Increase in depreciation for the period from January 1, 1997 to April 14,
1997 due to allocation of the Mendik purchase price.
(G) Adjustment to depreciation based on allocation of the Arbor purchase price
and the reclassification of the 90 Park Avenue investment to real estate.
(H) Reflects the elimination of Arbor management expenses in connection with
the acquisition.
(I) Increase in equity in investees for the period from January 1, 1997 to
April 14, 1997 due to net decrease in interest expense on refinanced
Mendik debt.
(J) Elimination of interest income earned on mortgage loan receivable from 90
Park Avenue for the period prior to Operating Partnership's acquisition of
title to the land.
(K) Reflects decrease in interest expense and loan cost amortization for the
period from January 1, 1997 to April 14, 1997 resulting from the reduction
and refinancing of Mendik debt.
(L) Reflects interest expense of $4,410 for the period from January 1, 1997 to
May 6, 1997 on the 90 Park Avenue investment of $185,000, based on an
average interest rate of approximately 7.0%.
(M) Reflects elimination of amortization of deferred financing costs of $884
for the nine months ended September 30, 1997 on existing Arbor debt.
(N) To reflect preferential distributions for the period from January 1, 1997
to April 14, 1997 relating to the Mendik Transaction.
(O) To reflect preferred stock dividends at a rate of 6.50% plus offering
costs for the period from January 1, 1997 to April 14, 1997 on the
proportionate number of Series A Preferred Shares used to fund the Mendik
acquisition.
(CC) To reflect Operating Partnership's share of net loss per the Cold Storage
Condensed Consolidated Pro Forma Income Statement for the Nine Months
Ended September 30, 1997.
(DD) To reflect Operating Partnership's share of the management fee income
received from Cold Storage.
(GG) To reflect rent from new leases entered into with the Riese organization
in connection with the acquisition.
(HH) Adjustment to depreciation expense for the period from January 1, 1997 to
date of Riese and Montehiedra acquisitions based on the allocation of the
purchase price.
(II) To reflect equity in income from investment in Charles E. Smith Commercial
Realty Limited Partnership and the Hotel Pennsylvania.
(JJ) Adjustment to interest income for the period from January 1, 1997 to the
date of the Riese acquisition on mortgage note receivable $41,000 at a
rate of 9.75%.
(KK) Adjustment to interest expense for the period from January 1, 1997 to date
of Riese and Montehiedra acquisitions based on the amount of the
investments.
(LL) To reflect reduction of interest expense based on reduction of debt from
the use of proceeds from Vornado's common stock offering.
Pro Forma December 31, 1996 Income Statement:
(P) To adjust rentals arising from the straight-lining of property rentals for
rent escalations based on the remaining terms of the applicable Mendik
leases.
(Q) To reflect adjustments required to record the Operating Partnership's
investment in the Mendik management company under the equity method of
accounting.
(R) Increase in Mendik operating expenses due to contract changes.
(S) Increase in depreciation due to preliminary allocation of the Mendik
purchase price.
(T) Adjustment to depreciation based on allocation of the Arbor purchase price
and the reclassification of the 90 Park Avenue investment to real estate.
(U) Reflects the elimination of Arbor management expenses in connection with
the acquisition.
(V) Increase in equity in investees, due to net decrease in interest expense
on refinanced Mendik debt.
(W) Reflects decrease in interest expense and loan cost amortization resulting
from the reduction and refinancing of the Mendik debt.
(X) Reflects interest expense on the 90 Park Avenue investment of $185,000,
based on an average interest rate of approximately 7.0%.
(Y) Reflects elimination of amortization of deferred financing costs on
existing Arbor debt.
(Z) To reflect preferential distributions relating to the Mendik Transaction.
(AA) To reflect preferred stock dividends at a rate of 6.50% plus amortization
of the underwriting discount on the proportionate number of Series A
Preferred Shares used to fund the Mendik acquisition.
(EE) To reflect Operating Partnership's share of net loss per the Cold Storage
Condensed Consolidated Pro Forma Income Statement for the Year Ended
December 31, 1996.
(FF) To reflect Operating Partnership's share of the management fee income
received from Cold Storage.
(MM) To reflect rent from new leases entered into with the Riese organization
in connection with the acquisition.
(NN) Adjustment to depreciation expense for the Riese and Montehiedra
acquisitions based on the allocation of purchase price.
(OO) To reflect equity in income from investment in Charles E. Smith Commercial
Realty Limited Partnership and the Hotel Pennsylvania.
(PP) Adjustment to interest income on the mortgage note receivable with the
Riese organization of $41,000 at a rate of 9.75%.
(QQ) Adjustment to interest expense for the Riese and Montehiedra acquisitions
based on the amount of the investments.
(RR) To reflect reduction of interest expense based on reduction of debt from
the use of proceeds from common stock offering.
Page 26
<PAGE> 27
VORNADO REALTY L.P.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VORNADO REALTY L.P.
--------------------------
(Registrant)
Date: February 3, 1998 /s/ Irwin Goldberg
--------------------------
IRWIN GOLDBERG
Vice President,
Chief Financial Officer
Page 27
<PAGE> 28
INDEX TO EXHIBITS
Page
Exhibit No: Exhibit Reference
- ----------- ------- ---------
23.1 Consent of Deloitte & Touche LLP................................29
23.2 Consent of Deloitte & Touche LLP................................30
23.3 Consent of Deloitte & Touche LLP................................31
Page 28
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 2 to Registration
Statement No. 333-40787 and Amendment No. 4 to Registration Statement No.
333-29013 of Vornado Realty Trust and Vornado Realty L.P. both on Form S-3, of
our report dated March 17, 1997 on the statement of revenues and certain
expenses of One Penn Plaza for the year ended December 31, 1996, which report
appears in the Form 8-K/A of Vornado Realty Trust and Vornado Realty L.P. dated
November 18, 1997.
DELOITTE & TOUCHE LLP
New York, New York
January 28, 1998
Page 29
<PAGE> 1
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 2 to Registration
Statement No. 333-40787 and Amendment No. 4 to Registration Statement No.
333-29013 of Vornado Realty Trust and Vornado Realty L.P. both on Form S-3, of
our report dated January 16, 1998 on the statement of revenues and certain
expenses of 150 East 58th Street for the year ended December 31, 1996, which
report appears in the Form 8-K/A of Vornado Realty Trust and Vornado Realty L.P.
dated November 18, 1997.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
January 28, 1998
Page 30
<PAGE> 1
Exhibit 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 2 to Registration
Statement No. 333-40787 and Amendment No. 4 to Registration Statement No.
333-29013 of Vornado Realty Trust and Vornado Realty L.P. both on Form S-3, of
our report dated February 12, 1997 on the statement of revenues and certain
expenses of 640 Fifth Avenue for the year ended December 31, 1996, which report
appears in the Form 8-K/A of Vornado Realty Trust and Vornado Realty L.P. dated
November 18, 1997.
DELOITTE & TOUCHE LLP
New York, New York
January 28, 1998
Page 31
