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                               PROMISSORY NOTE A-1

New York, New York
$90,000,000.00                                                 February 13, 2004

         PROMISSORY NOTE A-1, dated as of February 13, 2004 (this NOTE), by 731
Office One LLC, a Delaware limited liability company (BORROWER), having an
address for notice purposes c/o Alexander's Inc., 888 Seventh Avenue, New York,
New York 10019, in favor of GERMAN AMERICAN CAPITAL CORPORATION, a Maryland
corporation (together with its successors and assigns, LENDER), having an office
at 60 Wall Street, New York, New York 10005.

         WHEREAS, Lender made a loan to Borrower in the original principal
amount of $400,000,000 (the LOAN);

         WHEREAS, Lender is the present owner and holder of that certain
Consolidated Amended and Restated Note, dated as of February [ ], 2004, made by
Borrower in favor of Lender (the EXISTING NOTE), which Existing Note evidences
an indebtedness of Borrower to Lender in the original and current outstanding
principal amount of $400,000,000 (the EXISTING DEBT);

         WHEREAS, pursuant to the Loan Agreement (as hereinafter defined),
Borrower and Lender desire to sever the Existing Note into six (6) newly issued
substitute promissory notes in an aggregate principal amount equal to the
Existing Debt;

         WHEREAS, from and after the date hereof, the Existing Note shall be
amended, restated and superseded and the Loan shall be evidenced by (i) this
Promissory Note A-1, in the principal amount of $90,000,000; (ii) that certain
Promissory Note A-2, dated as of the date hereof, made by Borrower in favor of
Lender, in the principal amount of $95,000,000 (NOTE A-2); (iii) that certain
Promissory Note A-3, dated as of the date hereof, made by Borrower in favor of
Lender, in the principal amount of $35,000,000 (NOTE A-3); (iv) that certain
Promissory Note A-4, dated as of the date hereof, made by Borrower in favor of
Lender, in the principal amount of $94,000,000 (NOTE A-4); (v) that certain
Promissory Note A-X, dated as of the date hereof, made by Borrower in favor of
Lender, in the notional principal amount of $86,000,000 (NOTE A-X); and (vi)
that certain Promissory Note B, dated as of the date hereof, made by Borrower in
favor of Lender, in the principal amount of $86,000,000 (NOTE B);

         WHEREAS, this Note, individually, evidences a portion of the Loan in
the principal amount of NINETY MILLION DOLLARS ($90,000,000); and

         WHEREAS, Lender and Borrower intend these Recitals to be a material
part of this Note.

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         NOW, THEREFORE, FOR VALUE RECEIVED, Borrower promises to pay to the
order of Lender the Principal Amount, together with interest from the date
hereof, and other fees, expenses and charges as provided in this Note.

1.       DEFINED TERMS.

         a.       Capitalized terms used but not otherwise defined herein shall
                  have the respective meanings given thereto in the Loan
                  Agreement (as defined below), unless otherwise expressly
                  provided herein. All references to sections shall be deemed to
                  be references to sections of this Note, unless otherwise
                  indicated.

         b.       The following terms shall have the meaning ascribed thereto:

         A-1 A NOTE PROPORTIONATE SHARE shall mean, with respect to any date of
         determination, a fraction, expressed as a percentage, the numerator of
         which is the Principal Amount of this Note and the denominator of which
         is the sum of the principal amounts of this Note, the A-2 Note, the A-3
         Note and the A-4 Note.

         A-1 LOAN PROPORTIONATE SHARE shall mean, with respect to any date of
         determination, a fraction, expressed as a percentage, the numerator of
         which is the Principal Amount of this Note and the denominator of which
         is the outstanding aggregate principal amount of the Loan.

         ADDITIONAL INTEREST STRIP shall mean, with respect to each Interest
         Period from and after the Anticipated Repayment Date, the excess of
         interest accrued at the Revised Interest Rate over interest accrued at
         the Stated Interest Rate (but shall not include the Post ARD Default
         Interest Strip).

         ANTICIPATED REPAYMENT DATE shall mean [March] 1, 2014.

         APPLICABLE INTEREST RATE shall mean (i) from the date hereof through
         and including the Anticipated Repayment Date, the Stated Interest Rate,
         and (ii) from the day after the Anticipated Repayment Date through and
         including the Maturity Date, the Revised Interest Rate.

         BORROWER shall have the meaning provided in the first paragraph hereof.

         DEFAULT RATE shall mean a rate per annum equal to the lesser of (a) the
         Maximum Legal Rate and (b) five percent (5%) above the Applicable
         Interest Rate.

         DEFEASANCE LOCKOUT PERIOD shall mean the period commencing on the date
         hereof and expiring on the earlier to occur of (i) two years after the
         "startup day," within the meaning of Section 860G(a)(9) of the Internal
         Revenue Code of 1986, as amended from time to time or any successor
         statute (the "Code"), of a "real estate mortgage investment conduit,"
         ("REMIC") within the meaning of Section 860D of the Code, with respect
         to the last portion of the debt evidenced by the

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         Mortgage Notes and the Security Instrument and (ii) four (4) years from
         the date hereof.

         DEFERRED INTEREST shall mean the Additional Interest Strip and the Post
         ARD Default Interest Strip, collectively.

         EXISTING DEBT shall have the meaning provided in the Recitals to this
         Note.

         EXISTING NOTE shall have the meaning provided in the Recitals to this
         Note.

         INTEREST PERIOD shall have the meaning provided in Section 2.

         LENDER shall have the meaning provided in the first paragraph hereof.

         LIQUIDATED DAMAGES AMOUNT shall have the meaning set forth in Section
         4(e).

         LOAN shall have the meaning provided in the Recitals to this Note.

         LOAN AGREEMENT shall mean the Loan and Security Agreement, dated the
         date hereof, between Borrower and Lender.

         MATURITY DATE shall mean [March] 1, 2029, or such earlier date on which
         the final payment of principal of this Note becomes due and payable as
         provided in the Loan Agreement or this Note, whether at such stated
         maturity date, by declaration of acceleration, or otherwise.

         MATURITY DATE PAYMENT shall have the meaning set forth in Section 3(e).

         MONTHLY AMOUNTS shall have the meaning provided in Section 3(a).

         MORTGAGE NOTES shall mean, collectively, this Note, Note A-2, Note A-3,
         Note A-4, Note A-X, Note B and any amendments, restatements or
         replacements of any thereof.

         NOTE shall have the meaning provided in the first paragraph hereof.

         NOTE A-X shall have the meaning provided in the Recitals to this Note.

         NOTE A-2 shall have the meaning provided in the Recitals to this Note.

         NOTE A-3 shall have the meaning provided in the Recitals to this Note.

         NOTE A-4 shall have the meaning provided in the Recitals to this Note.

         NOTE B shall have the meaning provided in the Recitals to this Note.

         PAYMENT DATE shall be the first (1st) calendar day of each calendar
         month, whether or not such day is a Business Day, commencing on [April]
         1, 2004 and continuing to and including the Maturity Date.

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         POST ARD DEFAULT INTEREST STRIP shall mean, with respect to each
         Interest Period from and after the Anticipated Repayment Date, default
         interest accrued at a rate equal to the lesser of (x) 5.0% and (y) the
         amount by which the Maximum Legal Rate exceeds the Applicable Interest
         Rate.

         PREPAYMENT DATE shall have the meaning provided in Section 4(a)(i).

         PREPAYMENT LOCKOUT PERIOD shall mean the period commencing on the date
         hereof and expiring on [December] 1, 2013.

         PREPAYMENT NOTICE shall have the meaning provided in Section 4(a)(i).

         PRINCIPAL AMOUNT shall mean $90,000,000 or so much of the aggregate
         principal amount that is outstanding under this Note from time to time.

         REVISED INTEREST RATE shall mean, with respect to each Interest Period,
         a rate per annum equal to two percent (2%) above the Stated Interest
         Rate applicable to such Interest Period.

         STATED INTEREST RATE shall mean, (i) with respect to each Interest
         Period prior to the Anticipated Repayment Date, the rate of interest
         set forth on Exhibit A hereto for such Interest Period, as such rate
         may be modified in accordance with Section 4(f) and (ii) with respect
         to each Interest Period from and after the Anticipated Repayment Date,
         [ ]% per annum.

         TREASURY RATE shall mean, as of any Payment Date, the yield, calculated
         by linear interpolation (rounded to the nearest one-thousandth of one
         percent) of the yields of noncallable United States Treasury
         obligations with terms (one longer and one shorter) most nearly
         approximating the period from such Payment Date to the Anticipated
         Repayment Date (and converted to a monthly equivalent yield), as
         determined by Lender on the basis of Federal Reserve Statistical
         Release H.15 Selected Interest Rates under the heading U.S.
         Governmental Security/Treasury Constant Maturities or, if such
         publication is unavailable, such other recognized source of financial
         market information as shall be selected by Lender for the week prior to
         such Payment Date.

         YIELD MAINTENANCE PREMIUM shall mean an amount equal to the product of:
         (a) the positive difference (expressed as a percentage of the
         outstanding Principal Amount before any prepayment), if any, as of the
         date of determination between (i) the present value of all future
         scheduled payments of interest and principal, including the principal
         amount due on the Anticipated Repayment Date, to be made on this Note
         before the prepayment in question, discounted at an interest rate per
         annum equal to the Treasury Rate, and (ii) the outstanding Principal
         Amount immediately before such prepayment; and (b) the Principal Amount
         being prepaid.

2.       INTEREST.

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         a.       Prior to the Anticipated Repayment Date, interest shall accrue
                  on the Principal Amount at the Stated Interest Rate. In the
                  event that Borrower does not repay the Principal Amount in
                  full on or before the Anticipated Repayment Date, then, from
                  and after the Anticipated Repayment Date, interest shall
                  accrue on the Principal Amount at the Revised Interest Rate.
                  From and after the occurrence and during the continuance of
                  any Event of Default, interest shall accrue at the Default
                  Rate.

         b.       Interest on the principal sum of this Note shall be calculated
                  based on the Applicable Interest Rate on the basis of a
                  fraction, the denominator of which shall be 360 and the
                  numerator of which shall be the actual number of days in the
                  relevant Interest Period, except that interest due and payable
                  for a period less than a full month shall be calculated by
                  multiplying the actual number of days elapsed in such period
                  by a daily rate based on said 360 day year. Interest shall
                  accrue from, and including, the first (1st) day of the prior
                  month and ending on the last day of the prior month (an
                  INTEREST PERIOD); in each case without adjustment for any
                  Business Day convention; provided that the first accrual
                  period shall commence on [March] 1, 2004.

         c.       Except as expressly set forth in the Loan Agreement to the
                  contrary, interest shall accrue on all amounts advanced by
                  Lender pursuant to the Loan Documents (other than the
                  Principal Amount, which shall accrue interest in accordance
                  with clauses a. and b. above) at the Default Rate.

         d.       The provisions of this Section 2 are subject in all events to
                  the provisions of Section 2.2.4 of the Loan Agreement.

3.       PAYMENTS OF PRINCIPAL AND INTEREST.

         a.       Interest and principal under this Note shall be payable as
                  follows:

                  i.       interest accruing from the date hereof to and
                           including [February 29], 2004 shall be paid on the
                           date hereof; and

                  ii.      commencing on [April] 1, 2004 and on each and every
                           Payment Date thereafter until the Maturity Date,
                           monthly installments of interest and principal
                           payable on this Note, in arrears, in the amounts (the
                           MONTHLY AMOUNTS) set forth on Exhibit A hereto
                           (subject to adjustment as provided in Section 4(f)),
                           to be applied first, to interest accrued at the
                           Applicable Interest Rate and second, to principal.

         b.       From and after the Anticipated Repayment Date, unless the
                  Indebtedness has been repaid in full, Borrower shall continue
                  to make payments of the Monthly Amounts on each Payment Date.
                  From and after the Anticipated Repayment Date, unless the
                  Indebtedness has been repaid in full, all Excess Cash Flow
                  shall be applied to repayment of the Loan on each

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                  Payment Date and the A-1 Loan Proportionate Share thereof
                  shall be applied as a partial prepayment of the outstanding
                  Principal Amount. Deferred Interest shall be payable after all
                  principal and other amounts due hereunder have been paid in
                  full.

         c.       All payments made by Borrower hereunder or under any of the
                  Loan Documents shall be made on or before 2:00 p.m. New York
                  City time or such later time as Lender or its servicer shall
                  apply amounts on deposit in the Holding Account in accordance
                  the terms of the Loan Documents. Any payments received after
                  such time shall be credited to the next following Business
                  Day.

         d.       All amounts advanced by Lender pursuant to the Loan Documents,
                  other than the Principal Amount, or other charges provided in
                  the Loan Documents, shall be due and payable as provided in
                  the Loan Documents. In the event any such advance or charge is
                  not so repaid by Borrower, Lender may, at its option, first
                  apply any payments received under this Note to repay such
                  advances, together with any interest thereon, or other charges
                  as provided in the Loan Documents, and the balance, if any,
                  shall be applied in payment of any installment of interest or
                  principal then due and payable.

         e.       The entire Principal Amount of this Note, all unpaid accrued
                  interest, all interest that would accrue on the Principal
                  Amount through the end of the Interest Period during which the
                  Maturity Date occurs and all other fees and sums then payable
                  hereunder or under the Loan Documents (collectively, the
                  MATURITY DATE PAYMENT), shall be due and payable in full on
                  the Maturity Date.

         f.       Amounts due on this Note shall be payable, without any
                  counterclaim, setoff or deduction whatsoever, at the office of
                  Lender or its agent or designee at the address set forth on
                  the first page of this Note or at such other place as Lender
                  or its agent or designee may from time to time designate in
                  writing.

         g.       All amounts due under this Note, including, without
                  limitation, interest and the Principal Amount, shall be due
                  and payable in lawful money of the United States.

         h.       To the extent that Borrower makes a payment or Lender receives
                  any payment or proceeds for Borrower's benefit, which are
                  subsequently invalidated, declared to be fraudulent or
                  preferential, set aside or required to be repaid to a trustee,
                  debtor in possession, receiver, custodian or any other party
                  under any bankruptcy law, common law or equitable cause, then,
                  to such extent, the obligations of Borrower hereunder intended
                  to be satisfied shall be revived and continue as if such
                  payment or proceeds had not been received by Lender.

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4.       PREPAYMENTS. Except as permitted in Sections 4(a), 4(b), 4(c) and 4(d)
         hereof, the outstanding Principal Amount may not be prepaid in whole or
         in part. Any Principal Amount prepaid pursuant to this Section 4 may
         not be reborrowed hereunder.

         a.       VOLUNTARY PREPAYMENTS. Borrower shall not have the right to
                  prepay, in whole or in part, the Principal Amount due
                  hereunder prior to the Anticipated Repayment Date (other than
                  with respect to the application of Proceeds pursuant to
                  Section 6.2 of the Loan Agreement); provided, however,
                  Borrower shall be entitled to make a prepayment of all of the
                  Principal Amount on any Business Day occurring after the
                  expiration of the Prepayment Lockout Period, without any
                  premium or penalty upon satisfaction of the following
                  conditions:

                  i.       Borrower shall provide prior irrevocable written
                           notice (the PREPAYMENT NOTICE) to Lender specifying
                           the proposed Business Day on which the prepayment is
                           to be made, which Business Day shall be no earlier
                           than thirty (30) days after the date of such
                           Prepayment Notice and no later than ninety (90) days
                           after the date of such Prepayment Notice (the date of
                           such prepayment pursuant to this Section 4(a) and
                           Section 4(b) below being the PREPAYMENT DATE); and

                  ii.      Borrower shall comply with the provisions set forth
                           in Section 4(c) and Section 4(d) of this Note.

                  iii.     Borrower agrees that all Excess Cash Flow shall be
                           applied in accordance with the terms of the Loan
                           Agreement, including, without limitation, Article III
                           and Section 16.5 of the Loan Agreement and the
                           provisions of .

         b.       DEFEASANCE. From and after expiration of the Defeasance
                  Lockout Period and prior to the Anticipated Repayment Date,
                  Borrower shall have the right to defease the Loan pursuant to
                  the provisions of Article IX of the Loan Agreement. In no
                  event shall a prepayment of this Note in accordance with
                  Sections 4(a) or 4(c) trigger or result in any defeasance
                  liability under this Note or the other Loan Documents.

         c.       MANDATORY PREPAYMENTS.

                  i.       On the next occurring Payment Date following the date
                           on which Borrower actually receives any Proceeds, if
                           Lender is not obligated pursuant to the terms of the
                           Loan Agreement to make such Proceeds available to
                           Borrower for the restoration of the Property,
                           Borrower shall use such Proceeds to prepay the
                           outstanding principal balance of the Note as set
                           forth in Section 6.2.3 of the Loan Agreement; and

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                  ii.      Borrower shall comply with the provisions set forth
                           in Section 4(d) and Section 4(e) of this Note
                           (provided, however, that the Liquidated Damages
                           Amount and the Yield Maintenance Premium shall not
                           apply to prepayments made from the receipt of
                           Proceeds).

         d.       PAYMENTS IN CONNECTION WITH A PREPAYMENT.

                  i.       On the date on which a prepayment, voluntary,
                           involuntary or mandatory, is made under this Note or
                           as required under the Loan Agreement, Borrower shall,
                           unless such prepayment is made on a Payment Date, pay
                           to Lender all unpaid interest on the Principal Amount
                           prepaid through the end of the Interest Period during
                           which such prepayment is made.

                  ii.      On the Business Day on which a prepayment is made,
                           Borrower shall pay to Lender all other sums (not
                           including scheduled interest and principal payments)
                           then due and payable under the Note, the Loan
                           Agreement, the Security Instrument, and the other
                           Loan Documents;

                  iii.     Borrower shall pay all reasonable costs and expenses
                           of Lender incurred in connection with the prepayment
                           (including without limitation, any reasonable costs
                           and expenses associated with a release or assignment
                           of the Lien of the related Security Instrument as set
                           forth in Section 2.3.3 of the Loan Agreement as well
                           as reasonable attorneys' fees and expenses); and

                  iv.      In the event of a prepayment made after an
                           acceleration of the Loan, Borrower shall also pay to
                           Lender the Yield Maintenance Premium to the extent
                           such prepayment is made prior to expiration of the
                           Prepayment Lockout Period.

         e.       LIQUIDATED DAMAGES AMOUNT. IF NOTWITHSTANDING THE PROHIBITIONS
                  OF THIS SECTION 4, THE LOAN IS VOLUNTARILY OR INVOLUNTARILY
                  REPAID DURING THE PREPAYMENT LOCKOUT PERIOD (EXCLUDING
                  PREPAYMENTS MADE (I) IN ACCORDANCE WITH SECTION 4(C) OF THIS
                  NOTE AND (II) FROM A DEFEASANCE OF THE LOAN IN ACCORDANCE WITH
                  THE TERMS OF THE LOAN DOCUMENTS AFTER EXPIRATION OF THE
                  DEFEASANCE LOCKOUT PERIOD), INCLUDING, BUT NOT LIMITED TO, AS
                  A RESULT OF AN ACCELERATED MATURITY DATE, THEN BORROWER SHALL
                  PAY TO LENDER, AS LIQUIDATED DAMAGES FOR SUCH DEFAULT AND NOT
                  AS A PENALTY, AND IN ADDITION TO ANY AND ALL OTHER SUMS AND
                  FEES PAYABLE UNDER THIS NOTE AND THE OTHER LOAN DOCUMENTS, AN
                  AMOUNT EQUAL TO THE GREATER OF (A) FIVE PERCENT (5%) OF THE
                  PRINCIPAL

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                  AMOUNT BEING REPAID HEREUNDER AND (B) THE YIELD MAINTENANCE
                  PREMIUM (THE LIQUIDATED DAMAGES AMOUNT). NOTWITHSTANDING THE
                  FOREGOING, THE LIQUIDATED DAMAGES AMOUNT SHALL NOT BE APPLIED
                  TOWARD ANY PREPAYMENTS FROM PROCEEDS.

         f.       MODIFICATION OF MONTHLY AMOUNTS.

                  i.       In the event that any partial prepayment of principal
                           occurs before the Anticipated Repayment Date (other
                           than in connection with an acceleration of the Loan),
                           the Payment Dates shall remain the same and Lender
                           shall recalculate the amount of subsequent Monthly
                           Amounts (including the Stated Interest Rate
                           applicable thereto) to reflect the reduction of the
                           Principal Amount, based on the following:

                           (A) the amount of principal payable with respect to
                           each Interest Period shall be adjusted to reflect the
                           same proportionate amortization for each remaining
                           Interest Period as in effect prior to such
                           modification, assuming a twenty-five year
                           amortization schedule, taking into account the
                           reduction in the Principal Amount; and

                           (B) the Stated Interest Rate for each Interest Period
                           shall be re-calculated based on the A-1 Proportionate
                           Share of an amount equal to (x) the interest that
                           would be payable on a loan in the aggregate notional
                           principal amount of the Loan, assuming an interest
                           rate of [      ]% per annum, less (y) the interest
                           that would actually be payable on the outstanding
                           principal amount of Note B, assuming an interest rate
                           thereon of [     ]% (in each case, after giving
                           effect to all scheduled payments and prepayments of
                           principal with respect to this Note, Note A-2, Note
                           A-3, Note A-4 and Note B).

                  ii.      In the event that any partial prepayment of principal
                           occurs after the Anticipated Repayment Date (other
                           than in connection with an acceleration of the Loan)
                           or Excess Cash Flow is applied to the prepayment of
                           principal after the Anticipated Repayment Date, the
                           Payment Dates shall remain the same, Lender shall
                           recalculate the amount of subsequent Monthly Amounts
                           and the Stated Interest Rate to reflect the reduction
                           of the Principal Amount (as described in clause (i)
                           above) and Lender shall take into account the
                           reduction of the Monthly Amounts when applying
                           payments against interest and principal. Deferred
                           Interest accrued pursuant to Section 3(b) of this
                           Note shall not result in any increase in the Monthly
                           Amounts.

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5.       MISCELLANEOUS.

         a.       WAIVER. Borrower and all endorsers, sureties and guarantors
                  hereby jointly and severally waive all applicable exemption
                  rights, valuation and appraisement, presentment for payment,
                  demand, notice of demand, notice of nonpayment or dishonor,
                  protest and notice of protest of this Note, and, except as
                  otherwise expressly provided in the Loan Documents, all other
                  notices in connection with the delivery, acceptance,
                  performance, default or enforcement of the payment of this
                  Note. Borrower consents to any and all extensions of time,
                  renewals, waivers or modifications that may be granted by
                  Lender with respect to the payment or other provisions of this
                  Note and to the release of the collateral securing this Note
                  or any part thereof, with or without substitution, and agrees
                  that additional makers may become parties hereto without
                  notice to them or affecting their liability under this Note.

         b.       NON-RECOURSE. Recourse with respect to any claims arising
                  under or in connection with this Note shall be limited to the
                  extent provided in Article XVIII of the Loan Agreement and the
                  terms, covenants and conditions of Article XVIII of the Loan
                  Agreement are hereby incorporated by reference as if fully set
                  forth in this Note.

         c.       NOTE SECURED. This Note and all obligations of Borrower
                  hereunder are secured by the Loan Agreement, the Security
                  Instrument and the other Loan Documents.

         d.       NOTICES. Any notice, election, request or demand which by any
                  provision of this Note is required or permitted to be given or
                  served hereunder shall be given or served in the manner
                  required for the delivery of notices pursuant to the Loan
                  Agreement.

         e.       ENTIRE AGREEMENT. This Note, together with the other Loan
                  Documents, constitutes the entire and final agreement between
                  Borrower and Lender with respect to the subject matter hereof
                  and thereof and may only be changed, amended, modified or
                  waived by an instrument in writing signed by Borrower and
                  Lender.

         f.       NO WAIVER. No waiver of any term or condition of this Note,
                  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
                  notice to, or demand on, Borrower shall entitle Borrower to
                  any other or future notice or demand in the same, similar or
                  other circumstances.

         g.       SUCCESSORS AND ASSIGNS. This Note shall be binding upon and
                  inure to the benefit of Borrower and Lender and their
                  respective successors and permitted assigns. Upon any
                  endorsement, assignment, or other transfer of

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<PAGE>

                  this Note by Lender or by operation of law, the term "Lender"
                  as used herein, shall mean such endorsee, assignee, or other
                  transferee or successor to Lender then becoming the holder of
                  this Note. The term "Borrower" as used herein shall include
                  the respective successors and assigns, legal and personal
                  representatives, executors, administrators, devisees, legatees
                  and heirs of Borrower, if any.

         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 Note.

         i.       COUNTERPARTS. This Note may be executed in counterparts, each
                  of which shall be an original and all of which, when taken
                  together, shall constitute one binding Note.

         j.       SEVERABILITY. The provisions of this Note 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
                  Note.

         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 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. BORROWER, LENDER AND ALL PERSONS CLAIMING
                  BY, THROUGH OR UNDER BORROWER OR LENDER, 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 NOTE, INCLUDING, WITHOUT LIMITATION,
                  ANY PRESENT OR FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY
                  CONNECTED WITH OR RELATED

                                       11
<PAGE>

                  OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
                  THEM WITH RESPECT TO THIS NOTE (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 BORROWER 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 BORROWER
                  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. Borrower hereby expressly and
                  unconditionally waives, in connection with any suit, action or
                  proceeding brought by Lender on this Note, any and every right
                  it may have to (i) interpose any counterclaim therein (other
                  than a mandatory or compulsory counterclaim which can only be
                  asserted in the suit, action or proceeding brought by Lender
                  on this Note 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 LEFT BLANK]

                                       12
<PAGE>

         IN WITNESS WHEREOF, Borrower has caused this Note to be executed and
delivered as of the day and year first above written.

                                    BORROWER:

                                    731 OFFICE ONE LLC, a Delaware limited
                                    liability company

                                    By: 731 OFFICE ONE HOLDING LLC, a Delaware
                                    limited liability company, its sole member

                                        By: ALEXANDER'S INC., a Delaware
                                        corporation, its sole member

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

<PAGE>

                                    EXHIBIT A
                               PROMISSORY NOTE A-1
                                 MONTHLY AMOUNTS

<TABLE>
<CAPTION>
                                       SCHEDULED PRINCIPAL
INTEREST PERIOD  STATED INTEREST RATE      AMORTIZATION     INTEREST PAYMENT
---------------  --------------------  -------------------  ----------------
<S>              <C>                   <C>                  <C>
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>
                                       SCHEDULED PRINCIPAL
INTEREST PERIOD  STATED INTEREST RATE      AMORTIZATION     INTEREST PAYMENT
---------------  --------------------  -------------------  ----------------
<S>              <C>                   <C>                  <C>
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>

                                        3
<PAGE>

<TABLE>
<CAPTION>
                                       SCHEDULED PRINCIPAL
INTEREST PERIOD  STATED INTEREST RATE      AMORTIZATION     INTEREST PAYMENT
---------------  --------------------  -------------------  ----------------
<S>              <C>                   <C>                  <C>
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>

                                       4
<PAGE>

<TABLE>
<CAPTION>
                                       SCHEDULED PRINCIPAL
INTEREST PERIOD  STATED INTEREST RATE      AMORTIZATION     INTEREST PAYMENT
---------------  --------------------  -------------------  ----------------
<S>              <C>                   <C>                  <C>
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>

                                        5
<PAGE>

<TABLE>
<CAPTION>
                                       SCHEDULED PRINCIPAL
INTEREST PERIOD  STATED INTEREST RATE      AMORTIZATION     INTEREST PAYMENT
---------------  --------------------  -------------------  ----------------
<S>              <C>                   <C>                  <C>
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>

                                        6
<PAGE>

<TABLE>
<CAPTION>
                                       SCHEDULED PRINCIPAL
INTEREST PERIOD  STATED INTEREST RATE      AMORTIZATION     INTEREST PAYMENT
---------------  --------------------  -------------------  ----------------
<S>              <C>                   <C>                  <C>
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>

                                        7

<PAGE>

<TABLE>
<CAPTION>
                                       SCHEDULED PRINCIPAL
INTEREST PERIOD  STATED INTEREST RATE      AMORTIZATION     INTEREST PAYMENT
---------------  --------------------  -------------------  ----------------
<S>              <C>                   <C>                  <C>
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>

                                       8
<PAGE>

<TABLE>
<CAPTION>
                                       SCHEDULED PRINCIPAL
INTEREST PERIOD  STATED INTEREST RATE      AMORTIZATION     INTEREST PAYMENT
---------------  --------------------  -------------------  ----------------
<S>              <C>                   <C>                  <C>
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>

                                        9
<PAGE>

<TABLE>
<CAPTION>
                                       SCHEDULED PRINCIPAL
INTEREST PERIOD  STATED INTEREST RATE      AMORTIZATION     INTEREST PAYMENT
---------------  --------------------  -------------------  ----------------
<S>              <C>                   <C>                  <C>
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
</TABLE>

                                       10