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                        GUARANTY OF RECOURSE OBLIGATIONS

                  This GUARANTY OF RECOURSE OBLIGATIONS, is made as of February
13, 2004 (this AGREEMENT), by ALEXANDER'S INC., a Delaware corporation
(GUARANTOR), having an address for notice purposes c/o 888 Seventh Avenue, New
York, New York 10019, to and for the benefit of GERMAN AMERICAN CAPITAL
CORPORATION, a Maryland corporation (together with its successors and assigns,
the LENDER), having an office at 60 Wall Street, New York, New York 10005.

                              W I T N E S S E T H:

                  WHEREAS, 731 Office One LLC (BORROWER) is the owner of a fee
simple interest in the real property commonly known as Office Unit 1 and Office
Unit 2 of the Beacon Court Condominium located at 731 Lexington Avenue, New
York, New York;

                  WHEREAS, on the date hereof, in accordance with the terms of a
Loan and Security Agreement, dated as of the date hereof (as the same may be
amended and supplemented from time to time, the LOAN AGREEMENT), between Lender,
as lender, and Borrower, as borrower, Lender is making a loan to Borrower in the
principal amount of $400,000,000 (the LOAN), which Loan is evidenced by that
certain Amended, Restated and Consolidated Note, dated as of the date hereof (as
the same may be amended, substituted, replaced, exchanged and supplemented from
time to time, the NOTE), made by and between Borrower and Lender and secured by
that certain Amended, Restated and Consolidated Mortgage, Security Agreement,
Financing Statement and Assignment of Leases, Rents and Security Deposits, dated
as of the date hereof (as the same may be amended and supplemented from time to
time, the SECURITY INSTRUMENT), by and between Borrower and Lender and the other
Loan Documents (as defined in the Loan Agreement);

                  WHEREAS, Guarantor is an affiliate of Borrower and will derive
substantial benefit from the Loan;

                  WHEREAS, as a condition to making the Loan, Lender has
required Guarantor to deliver this Agreement for the benefit of Lender;

                  WHEREAS, the forgoing recitals are intended to form an
integral part of this Agreement.

                  NOW, THEREFORE, in consideration of the foregoing premises,
Ten Dollars ($10.00) paid in hand, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Guarantor agrees as
follows:

                  Section 1. Definitions. Capitalized terms used herein and not
defined shall have the meaning provided in the Note or in the Loan Agreement if
no definition is provided in the Note.

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                  Section 2. Guaranty. Guarantor hereby absolutely and
unconditionally guarantees to Lender the prompt and unconditional payment of all
obligations and liabilities of Borrower for which Borrower shall be personally
liable pursuant to the following (collectively, the GUARANTEED OBLIGATIONS):

                           (a)      any Losses incurred by or on behalf of
         Lender by reason of the fraudulent acts of Borrower or any Affiliate of
         Borrower;

                           (b)      Proceeds which Borrower or any Affiliate of
         Borrower has received and intentionally misapplied (it being agreed
         that Borrower shall not be deemed to have misapplied Proceeds unless
         same are received by Borrower and not paid to Lender, in a circumstance
         in which Lender is expressly entitled to receive same from Borrower
         pursuant to the terms of the Loan Agreement or any of the Loan
         Documents to be applied toward payment of the Indebtedness, or used for
         the repair or replacement of the Property in accordance with the
         provisions of the Loan Agreement);

                           (c)      all Losses incurred by Lender and arising
         from (i) any intentional misrepresentation of Borrower or any Affiliate
         of Borrower and/or (ii) Borrower's failure, after the occurrence of a
         Casualty Event, to cause Guarantor to deliver the Completion Guaranty
         to Lender in accordance with the terms and time periods set forth in
         Section 6.2.4 of the Loan Agreement, including, without limitation, any
         Losses incurred by or on behalf of Lender as a result of Lender's
         failure to make any Proceeds available to Borrower to restore the
         Property;

                           (d)      any misappropriation of Rents or security
         deposits by Borrower or any Affiliate of Borrower;

                           (e)      any Losses incurred by or on behalf of
         Lender by reason of all or any part of the Property or the Account
         Collateral being encumbered by a Lien (other than the Loan Agreement
         and the Security Instrument) in violation of the Loan Documents;

                           (f)      after the occurrence and during the
         continuance of an Event of Default, any Rents, issues, profits and/or
         income collected by Borrower or any Affiliate of Borrower (other than
         Rent sent to the Collection Account or paid directly to Lender pursuant
         to any notice of direction delivered to tenants of the Property) and
         not applied to payment of the Obligations or used to pay normal and
         verifiable Operating Expenses of the Property or otherwise applied in a
         manner permitted under the Loan Documents;

                           (g)      any Losses incurred by or on behalf of
         Lender by reason of physical damage to the Property from intentional
         waste committed by Borrower or any Affiliate of Borrower;

                           (h)      any Losses incurred by or on behalf of
         Lender by reason of the intentional failure of Borrower to comply with
         any of the provisions of Article XII of the Loan Agreement;

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                           (i)      any Losses incurred by or on behalf of
         Lender by reason of the occurrence of any of the following events:

         (1) Borrower fails to comply with the material Single Purpose Entity
         requirements of the Loan Agreement (other than solely clause (xvii) of
         the definition of "Single Purpose Entity" set forth in the Loan
         Agreement); (2) Borrower fails to comply with any of the provisions of
         Section 8.1 and/or Section 8.5 of the Loan Agreement; (3) Borrower
         files a voluntary petition under the Bankruptcy Code or any other
         Federal or state bankruptcy or insolvency law; (4) an Affiliate,
         officer, director, or representative which controls, directly or
         indirectly, Borrower files, or joins in the filing of, an involuntary
         petition against Borrower under the Bankruptcy Code or any other
         Federal or state bankruptcy or insolvency law, or solicits or causes to
         be solicited petitioning creditors for any involuntary petition against
         Borrower from any Person; (5) Borrower files an answer consenting to or
         otherwise acquiescing in or joining in any involuntary petition filed
         against it, by any other Person under the Bankruptcy Code or any other
         Federal or state bankruptcy or insolvency law, or solicits or causes to
         be solicited petitioning creditors for any involuntary petition from
         any Person; (6) any Affiliate, officer, director, or representative
         which controls Borrower consents to or acquiesces in or joins in any
         application for the appointment of a custodian, receiver, trustee, or
         examiner for Borrower or any portion of the Property; or (7) Borrower
         makes an assignment for the benefit of creditors, or admits, in writing
         or in any legal proceeding, its insolvency or inability to pay its
         debts as they become due;

                           (j)      any Losses incurred by or on behalf of
         Lender as a result of (i) the failure of any or all of Borrower, any
         its Affiliates and/or any other owner of the Upper Option Space and/or
         Lower Option Space (as each such term is defined in the Bloomberg
         Lease) (other then Lender or any Affiliate of Lender), to comply with
         the terms of Article 36 (Option Space) of the Bloomberg Lease (or,
         following a foreclosure of the lien secured by the Security Instrument
         or a deed in lieu of foreclosure, Lender's inability to comply with the
         terms of Article 36 of the Bloomberg Lease as a result of such Person's
         failure to comply with the terms of such Article) (an EXPANSION SPACE
         DEFAULT), (ii) the exercise of any rights that Bloomberg may have as a
         result of any Expansion Space Default (whether pursuant to the
         Bloomberg Lease, at law or in equity), including, without limitation,
         any rights to set off any payments required under the Bloomberg Lease
         and/or (iii) paying any amount or performing any obligation with
         respect to the Upper Option Space and/or Lower Option Space after the
         occurrence of an Expansion Space Default;

                           (k)      any Losses incurred by or on behalf of
         Lender as a result of the failure by Borrower and/or any of its
         Affiliates to comply in any respect with the terms of Section 15 of the
         Security Instrument; and/or

                           (l)      reasonable attorneys' fees and expenses
         incurred by Lender in connection with any successful suit filed on
         account of any of the foregoing clauses (a) through (k).

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                  The term "Losses" means any and all losses, damages, costs,
expenses, liabilities, claims or other obligations reasonably incurred by Lender
(including reasonable attorneys' fees and costs but excluding any punitive
damages and lost profits).

                  Notwithstanding anything to the contrary in the Loan
Agreement, the Note or any of the Loan Documents, Lender shall not be deemed to
have waived any right which Lender may have under Section 506(a), 506(b),
1111(b) or any other provisions of the Bankruptcy Code to file a claim for the
full amount of the Indebtedness or to require that all collateral shall continue
to secure all of the Indebtedness owing to Lender in accordance with the Loan
Documents.

                  Section 3. Guaranty of Payment. This Agreement is a guaranty
of payment and not merely a guaranty of collection and upon any failure of
Borrower to pay the Guaranteed Obligations under the Note, Lender may, at its
option, proceed directly and at once, without notice to Borrower, against
Guarantor to collect and recover the full amount of the liability to pay the
Guaranteed Obligations hereunder or any portion thereof, without proceeding
against Borrower or any other Person, or foreclosing upon, selling, or otherwise
disposing of or collecting or applying against any of the collateral that is
security for the Loan.

                  Section 4. Continuing Guaranty. This is a continuing guaranty
and the obligations of Guarantor hereunder are and shall be absolute under any
and all circumstances, including, without limitation, following a foreclosure of
the lien secured by the Security Instrument or a deed in lieu of foreclosure,
without regard to the validity, regularity or enforceability of the Note, the
Loan Agreement, the Security Instrument or any other Loan Document, a true copy
of each of said documents Guarantor hereby acknowledges having received and
reviewed.

                  Section 5. Obligations Deferred. Any indebtedness of Borrower
to Guarantor now or hereafter existing, including, without limitation, any
rights to subrogation which Guarantor may have as a result of any payment by
Guarantor under this Agreement, together with any interest thereon, shall be,
and such indebtedness is, hereby deferred, postponed and subordinated to the
prior payment in full of the Guaranteed Obligations. Until payment in full of
the principal, interest, Yield Maintenance Premium (if applicable) and the
Liquidated Damages Amount (if applicable) payable by Borrower pursuant to the
terms of the Note, including interest accruing on the Note after the
commencement of a proceeding by or against Borrower under the Bankruptcy Code
which interest the parties agree shall remain a claim that is prior and superior
to any claim of Guarantor notwithstanding any contrary practice, custom or
ruling in cases under the Bankruptcy Code generally, Guarantor agrees not to
accept any payment or satisfaction of any kind of indebtedness of Borrower to
Guarantor and hereby assigns such indebtedness to Lender, including the right to
file proof of claim and to vote thereon in connection with any such proceeding
under the Bankruptcy Code, including the right to vote on any plan of
reorganization. In no event shall "indebtedness" of the Borrower to Guarantor
include normal and customary member distributions that Guarantor is entitled to
receive pursuant to the terms of Borrower's operating agreement provided such
distributions are not evidenced by a note or similar debt document.

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                  Section 6. Expenses. Guarantor agrees that, promptly after
notice or demand, Guarantor will reimburse Lender, to the extent that such
reimbursement is not made by Borrower, for all reasonable out of pocket
expenses, including, without limitation, reasonable counsel fees and
disbursements, incurred by Lender in connection with the collection of the
Guaranteed Obligations or any portion thereof.

                  Section 7. Waivers.

                           (a)      Guarantor hereby waives notice of the
acceptance hereof, presentment, demand for payment, protest, notice of protest,
or any and all notice of non-payment, non-performance or non-observance, or
other proof, or notice or demand, except as otherwise required hereunder.

                           (b)      Guarantor agrees that the validity of this
Agreement and the obligations of Guarantor hereunder shall in no way be
terminated, affected or impaired by reason of (i) the assertion by Lender of any
rights or remedies which it may have under or with respect to any of the Note,
the Loan Agreement, the Security Instrument or any other Loan Documents against
any Person obligated thereunder; (ii) any failure to file or record any of such
instruments or to take or perfect any security intended to be provided thereby;
(iii) the release or exchange of any property or interest covered by the Loan
Agreement or the Security Instrument or any other collateral for the Loan; (iv)
Lender's failure to exercise, or delay in exercising, any such right or remedy
or any right or remedy which Lender may have hereunder or in respect to this
Agreement; (v) the commencement of a case under the Bankruptcy Code by or
against any Person obligated under the Note, Loan Agreement, the Security
Instrument or any other Loan Document; (vi) any payment made on the Guaranteed
Obligations or any other indebtedness arising under the Note, the Loan
Agreement, the Security Instrument or any other Loan Document, whether made by
Borrower or Guarantor or any other Person, which is required to be refunded
pursuant to any bankruptcy or insolvency law; it being understood that no
payment so refunded shall be considered as a payment of any portion of the
Guaranteed Obligations, nor shall it have the effect of reducing the liability
of Guarantor hereunder. It is further understood that if Borrower shall have
taken advantage of, or be subject to the protection of, any provision in the
Bankruptcy Code, the effect of which is to prevent or delay Lender from taking
any remedial action against Borrower, including the exercise of any option
Lender has to declare the Guaranteed Obligations due and payable on the
happening of any default or event by which under the terms of the Note, the Loan
Agreement the Security Instrument or any other Loan Document, the Guaranteed
Obligations shall become due and payable then Lender may, as against Guarantor,
declare the Guaranteed Obligations to be due and payable and enforce any or all
of its rights and remedies against Guarantor provided for herein.

                           (c)      This Agreement shall remain and continue in
full force and effect as to any modification, extension or renewal of the Note,
the Loan Agreement, the Security Instrument or any other Loan Document and
Lender shall not be under a duty to protect, secure or insure any security or
lien provided by the Loan Agreement or the Security Instrument or other such
collateral, and that other indulgences or forbearance

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may be granted under any or all of such documents, all of which may be made,
done or suffered without notice to, or further consent of, Guarantor.

                           (d)      Guarantor hereby waives the pleading of any
statute of limitations as a defense to the obligation hereunder.

                  Section 8. Miscellaneous.

                           (a)      Marshalling. GUARANTOR WAIVES ANY RIGHT OR
CLAIM OF RIGHT TO CAUSE A MARSHALLING OF BORROWER'S ASSETS OR TO CAUSE LENDER TO
PROCEED AGAINST ANY OF THE SECURITY FOR THE LOAN BEFORE PROCEEDING UNDER THIS
AGREEMENT AGAINST BORROWER OR TO PROCEED AGAINST GUARANTOR IN ANY PARTICULAR
ORDER. GUARANTOR AGREES THAT ANY PAYMENTS REQUIRED TO BE MADE HEREUNDER SHALL
BECOME DUE AND PAYABLE TEN (10) DAYS AFTER DEMAND. EXCEPT AS PERMITTED PURSUANT
TO SECTION 5 HEREOF, GUARANTOR EXPRESSLY WAIVES AND RELINQUISHES ALL RIGHTS AND
REMEDIES (INCLUDING ANY RIGHTS OF SUBROGATION) ACCORDED BY APPLICABLE LAW TO
GUARANTOR.

                           (b)      Joint and Several Obligation. If Guarantor
consists of more than one Person or entity, each shall be jointly and severally
liable to perform the obligations of Guarantor hereunder. Any one of Borrower or
one or more parties constituting Guarantor or any other party liable upon or in
respect of this Agreement or the Loan may be released without affecting the
liability of any party not so released.

                           (c)      Further Assurances. Guarantor shall execute
and acknowledge (or cause to be executed and acknowledged) and deliver to Lender
all documents, and take all actions, reasonably required by Lender from time to
time to confirm the rights created or now or hereafter intended to be created
under this Agreement, to protect and further the validity, priority and
enforceability of this Agreement or otherwise carry out the purposes of this
Agreement and the transactions contemplated thereunder.

                           (d)      Notices. All notices, consents, approvals
and requests required or permitted hereunder shall be given in writing and shall
be effective for all purposes if hand delivered or sent by (a) certified or
registered United States mail, postage prepaid, return receipt requested or (b)
expedited prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery, or (c) by telecopier (with answer
back acknowledged), addressed as follows (or at such other address and Person as
shall be designated from time to time by any party hereto, as the case may be,
in a written notice to the other parties hereto in the manner provided for in
this Section and given at least twenty (20) days prior to the effective date of
such change of address).

If to Guarantor:                    Alexander's Inc.
                                    888 Seventh Avenue

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                                    New York, New York 10019
                                    Attention: Wendy Silverstein
                                    Facsimile: (212) 894-7073
                                    Confirmation No.: (212) 894-7000

with a copy to:                     Proskauer Rose LLP
                                    1585 Broadway
                                    New York, New York 10036-8299
                                    Attention: Ronald D. Sernau, Esq.
                                    Facsimile: (212) 969 2900
                                    Confirmation No.: (212) 969-3000

If to Lender:                       German American Capital Corporation
                                    60 Wall Street
                                    New York, New York  10005
                                    Attention: Eric Schwartz and General Counsel
                                    Facsimile: (212) 250-7210
                                    Confirmation No.: (212) 250-2500

with a copy
to the Servicer:                    GMAC Commercial Mortgage Corporation
                                    200 Witmer Road
                                    Horsham, Pennsylvania 19044
                                    Attention: Managing Director, Global
                                    Facsimile: (215).328.3478
                                    Confirmation No.: 215.328.1030

and copy to:                        Skadden, Arps, Slate, Meagher & Flom LLP
                                    Four Times Square
                                    New York, NY 10036
                                    Attention: Harvey R. Uris, Esq.
                                    Facsimile: (212) 735-2000
                                    Confirmation No.: (212) 735-3000

All notices, elections, requests and demands required or permitted under this
Agreement shall be in the English language. All notices, elections, requests and
demands under this Agreement shall be effective and deemed received upon the
earliest of (i) the actual receipt of the same by personal delivery or
otherwise, (ii) one (1) Business Day after being deposited with a nationally
recognized overnight courier service as required above, (iii) upon delivery or
rejection of delivery after being deposited in the United States mail as
required above, or (iv) on the day sent if sent by facsimile with confirmation
on or before 5:00 p.m. New York time on any Business Day or on the next Business
Day if so delivered after 5:00 p.m. New York time or on any day other than a
Business Day. Rejection or other refusal to accept or the inability to deliver
because of changed address of

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which no notice was given as herein required shall be deemed to be receipt of
the notice, election, request, or demand sent.

                           (e)      Entire Agreement. This Agreement constitutes
the entire and final agreement between Guarantor and Lender with respect to the
subject matter hereof and may only be changed, amended, modified or waived by an
instrument in writing signed by Guarantor and Lender.

                           (f)      No Waiver. No waiver of any term or
condition of this Agreement, whether by delay, omission or otherwise, shall be
effective unless in writing and signed by the party sought to be charged, and
then such waiver shall be effective only in the specific instance and for the
purpose for which given. No delay on Lender's part in exercising any right,
power or privilege under this Agreement or any other Loan Document shall operate
as a waiver of any privilege, power or right hereunder.

                           (g)      Successors and Assigns. This Agreement shall
be binding upon Guarantor and its successors and assigns of this Agreement and
shall inure to the benefit of Lender and its successors and permitted assigns of
the Loan Documents. Guarantor, without the prior written consent of Lender in
each instance, may assign, transfer or set over to another, in whole or in part,
all or any part of its benefits, rights, duties and obligations hereunder,
including, but not limited to, performance of and compliance with conditions
hereof, provided that such assignment shall not release Guarantor of its
obligations hereunder.

                           (h)      Captions. All paragraph, section, exhibit
and schedule headings and captions herein are used for reference only and in no
way limit or describe the scope or intent of, or in any way affect, this
Agreement.

                           (i)      Counterparts. This Agreement may be executed
in counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one binding Agreement.

                           (j)      Severability. The provisions of this
Agreement are severable, and if any one clause or provision hereof shall be held
invalid or unenforceable in whole or in part, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof,
and not any other clause or provision of this Agreement.

                           (k)      GOVERNING LAW. THIS NOTE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT
TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WITHOUT REGARD TO
CHOICE OF LAW RULES. BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING
MADE UPON BORROWER IN THE MANNER AND AT THE

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ADDRESS SPECIFIED FOR NOTICES IN THE LOAN AGREEMENT. BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

                           (l)      JURY TRIAL WAIVER. GUARANTOR AND LENDER AND
ALL PERSONS CLAIMING BY, THROUGH OR UNDER THEM, HEREBY EXPRESSLY, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF GUARANTOR OR
LENDER WITH RESPECT TO THIS AGREEMENT (AS NOW OR HEREAFTER MODIFIED) OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND GUARANTOR
AND LENDER HEREBY AGREE AND CONSENT THAT AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY. EACH OF GUARANTOR AND LENDER
ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING OF
THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE
MAKING OF THE LOAN. THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.

                           (m)      Counterclaims and Other Actions. Guarantor
hereby expressly and unconditionally waives, in connection with any suit, action
or proceeding brought by Lender in connection with this Agreement, any and every
right it may have to (i) interpose any counterclaim therein (other than a
counterclaim which can only be asserted in the suit, action or proceeding
brought by Lender on this Agreement and cannot be maintained in a separate
action) and (ii) have any such suit, action or proceeding consolidated with any
other or separate suit, action or proceeding.

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]

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                  IN WITNESS WHEREOF, Guarantor has executed this Guaranty of
Recourse Obligations as of the date first set forth above.

                                        GUARANTOR:

                                        ALEXANDER'S INC., a Delaware corporation

                                        By: /s/    Brian Kurtz
                                            ------------------------------------
                                            Name:  Brian Kurtz
                                            Title: Assistant Secretary

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