<PAGE>

                       MANAGER'S CONSENT AND SUBORDINATION
                             OF MANAGEMENT AGREEMENT

                  This MANAGER'S CONSENT AND SUBORDINATION OF MANAGEMENT
AGREEMENT, is made as of February 13, 2004 (this AGREEMENT), 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, and ALEXANDER'S MANAGEMENT LLC, a New York limited liability company
(MANAGER), having an address at 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, LENDER), having an
address at 60 Wall Street, New York, New York 10005.

                              W I T N E S S E T H:

                  WHEREAS, 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, and more
particularly described on Exhibit A attached hereto and incorporated herein (the
PROPERTY);

                  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, Manager has been retained by Borrower to act as the
manager of the Properties and will derive substantial benefit from the making of
the Loan;

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

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

<PAGE>

                  NOW, THEREFORE, in consideration of the Loan, foregoing
premises, Ten Dollars ($10.00) paid in hand, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Borrower and Manager agree as follows:

                  Section 1.        Definitions.

                           (a)      The following terms shall have the meaning
                  ascribed thereto:

                  Agreement: Shall have the meaning provided in the first
                  paragraph.

                  Borrower: Shall have the meaning provided in the first
                  paragraph.

                  Lender: Shall have the meaning provided in the first
                  paragraph.

                  Loan: Shall have the meaning provided in the Recitals.

                  Loan Agreement: Shall have the meaning provided in the
                  Recitals.

                  Management Agreement: Shall mean that certain Management
                  Agreement between Borrower and Manager dated of even date
                  herewith.

                  Manager: Shall have the meaning provided in the first
                  paragraph.

                  Note: Shall have the meaning provided in the Recitals.

                  Security Instrument: Shall have the meaning provided in the
                  Recitals.

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

                  Section  2. Assignment of Management Agreement. Borrower
hereby conditionally transfers, assigns and delivers unto Lender, and grants
Lender a security interest in, all of its right, title and interest in and to,
but none of its obligations under, the Management Agreement, said transfer and
assignment to automatically become a present, unconditional assignment, at
Lender's election by written notice to the Borrower, upon the occurrence and
during the continuance of an Event of Default. Manager hereby consents to the
assignment set forth in this paragraph. Notwithstanding the foregoing, upon
notice to Borrower and Manager transmitted after the occurrence and during the
continuance of an Event of Default, the foregoing assignment and transfer shall
automatically become a present, unconditional assignment, at Lender's option.

                  Section  3. Subordination of Management Agreement to Lien of
Security Instrument.

                                       2
<PAGE>

                           (a)      Subordination of Rights. Any and all liens,
rights and interests, whether choate or inchoate and including, without
limitation, all mechanic's and materialman's liens, owned, claimed or held, or
to be owned, claimed or held, by Manager pursuant to the Management Agreement in
and to the Properties, are and shall be, and are hereby made, in all respects
subordinate, subject and inferior to the liens and security interests created or
to be created for the benefit of Lender, its successors and assigns, and
securing the repayment and performance of the Obligations. Any indemnification
or other rights or claims of Manager against Borrower under or in connection
with the Management Agreement shall be fully subordinated to the Obligations.

                           (b)      Governed by Loan Documents. Manager agrees
that until such time as the Indebtedness has been repaid in full, the terms and
provisions of this Agreement and the other Loan Documents shall be superior to
the terms and provisions of the Management Agreement with respect to the payment
of any management fees thereunder and termination of the Management Agreement,
and to the extent that there are any inconsistencies between the Management
Agreement and this Agreement and the Loan Documents with respect to such terms
and provisions, the terms, provisions and conditions in this Agreement and the
Loan Documents shall govern in all respects. In the event of any inconsistency
between the terms of this Agreement and the terms of the Loan Agreement, the
terms of the Loan Agreement shall prevail. Without limiting the preceding
sentence, nothing in this Agreement shall modify the terms of the Loan Agreement
which (a) permit Borrower to amend, modify, cancel or terminate the Management
Agreement, (b) do not require a written management agreement and (c) permit
Borrower to replace Manager with a Qualified Manager in accordance with the
terms of the Loan Agreement.

                  Section 4.        Obligations and Rights of Lender.

                           (a)      Lender Not Obligated Under Management
Agreement. Manager agrees that, except as provided in this Section, nothing in
this Agreement shall impose upon Lender, and Lender shall not have, any
obligation for payment or performance in favor of Manager with respect to the
Management Agreement or the Property. In the event that Lender notifies Manager
in writing after the occurrence and during the continuance of an Event of
Default that Lender has elected to assert Borrower's rights under the Management
Agreement, Lender shall pay Manager the sums due Manager under the terms of the
Management Agreement for the period commencing on the effective date of Lender's
notice to Manager and ending on the expiration date or earlier termination of
the Management Agreement.

                           (b)      Continued Performance by Manager. Upon the
occurrence and during the continuance of an Event of Default, Manager shall, at
the request of Lender, continue performance, on behalf of Lender, of all of
Manager's obligations under the terms of the Management Agreement with respect
to the Property, provided that Lender gives Manager the notice provided for in
this Section and Lender or Borrower performs or causes to be performed the
obligations of Borrower to Manager under the

                                       3
<PAGE>

Management Agreement accruing or arising from and after, and with respect to the
period commencing upon, the effective date of such notice.

                           (c)      Right to Terminate. Notwithstanding anything
contained in the Management Agreement to the contrary, Lender, or Borrower at
Lender's direction, shall have the right to terminate the Management Agreement
(i) upon, or at any time after the occurrence and during the continuance of a
monetary Event of Default, (ii) with respect to any Manager that is not an
Affiliate of Borrower, upon, or at any time after the occurrence and during the
continuance of a material default (as determined by Lender in its sole and
absolute discretion) under the terms of the Management Agreement, (iii) upon, or
at any time after, a forty-nine percent (49%) or more change in control of the
ownership of Manager, unless Manager is a publicly traded company or a direct or
indirect wholly owned subsidiary of such publicly traded company (to the extent
such change in control in excess of forty-nine percent (49%) or more results in
a change in control of forty-nine percent (49%) or more in the publicly traded
company), (iv) at any time following the Manager becoming insolvent, or (v) at
any time following any act of gross negligence, fraud, misapplication of funds,
violation of the standard of care, or any other violation of its duties pursuant
to the Management Agreement beyond applicable notice and grace periods, if any,
thereunder, by giving Manager thirty (30) days prior written notice of such
termination, in which event Manager shall resign as manager of the Property
effective upon the end of such thirty (30) day period.

                           (d)      No Joint Venture. Lender has no obligation
to Manager with respect to the Loan and Manager shall not be a third party
beneficiary with respect to any of Lender's obligations to Borrower set forth in
the Loan Documents. The relationship of Lender to Borrower is one of a creditor
to a debtor, and Lender is not a joint venturer or partner of Borrower or
Manager.

                  Section 5.        Manager's Representations. Manager warrants
and represents to Lender that the following are true, complete and correct:

                                    (i)     Manager has agreed to act as
         property manager of the Property pursuant to the Management Agreement.

                                    (ii)    A true, correct and complete copy of
         the Management Agreement is attached as Exhibit B.

                                    (iii)   The Management Agreement is in full
         force and effect and has not been amended, modified or supplemented.

                                    (iv)    The entire agreement between Manager
         and Borrower for the management of the Property is evidenced by the
         Management Agreement.

                                    (v)     The Management Agreement constitutes
         the legal, valid and binding agreement of Manager, enforceable against
         Manager in accordance with its terms.

                                       4
<PAGE>

                                    (vi)    Manager is qualified and has full
         power and authority to perform all of its obligations under the
         Management Agreement and this Agreement.

                                    (vii)   Neither Manager nor, to Manager's
         best knowledge, Borrower is in default in the performance of any of
         their respective obligations under the Management Agreement and there
         is no condition which, with the giving of notice and/or the passing of
         time, would constitute a default under the Management Agreement.

                                    (viii)  Except for sums not currently due
         and payable that have been incurred in the ordinary course of business
         of the operation of the Property, no amounts are due to Manager under
         the Management Agreement on the date hereof.

                                    (ix)    Manager has not assigned, pledged or
         otherwise transferred or subcontracted its rights and/or obligations
         under the Management Agreement.

                                    (x)     Manager has all permits, licenses
         and other governmental authorizations necessary for it to perform its
         obligations under the Management Agreement.

                                    (xi)    Manager has received and reviewed a
         copy of the Loan Agreement.

                  Section 6.        Manager's Agreements.

                           (a)      Notice of Default. Manager shall give Lender
prompt written notice of any other default beyond applicable grace and cure
periods by Borrower under the Management Agreement.

                           (b)      No Termination of Management Agreement.
Manager shall not terminate the Management Agreement without first obtaining
Lender's prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed. Notwithstanding the foregoing, Manager shall
have the right to terminate the Management Agreement for default by Borrower
beyond applicable grace and cure periods with respect to non-payment of the
management fee due thereunder by giving Lender ten (10) days' prior written
notice of such termination. In the event Lender shall cure such non-payment
default in the aforesaid ten (10) day period, then any such termination notice
shall be deemed to void and of no further force or effect.

                           (c)      No Claim Against Lender. Manager shall not
look to, or make any claim against, Lender for payment of any accrued but unpaid
fees, including, without limitation, any termination fees, relating to the
Property or the Management Agreement pursuant to this Agreement or otherwise.

                                       5
<PAGE>

                           (d)      No Amendments. Manager shall not terminate
or materially amend or modify the Management Agreement without the prior written
consent of Lender, not to be unreasonably withheld, delayed or conditioned. In
the event Manager fails to secure such approval, the Management Agreement shall,
for the purposes of Manager's obligations to Lender pursuant to this Agreement,
including Manager's aforesaid obligation to continue performance thereunder for
Lender's benefit pursuant to the terms of this Agreement, be deemed not to have
been modified by such amendment.

                           (e)      Delivery of Rent Roll and Service Contracts.
Without duplication of any items actually delivered by Borrower, when such
delivery is required, pursuant to Article XI of the Loan Agreement, within ten
(10) business days of a request from Lender, such request not to be made more
than once per calendar month, Manager shall furnish to Lender a current rent
roll of all tenants of the Property, including a list of which tenants are in
default under their respective Leases, and a schedule of all other entities with
whom Manager has entered into contracts or other agreements relating to the
Property, together with copies of all such Leases, contracts or agreements.
Without duplication of any items actually delivered by Borrower, when such
delivery is required, pursuant to Article XI of the Loan Agreement, Manager
shall furnish Lender with copies of all reports, budgets and other information
that Borrower is entitled to receive under the Management Agreement. Upon
reasonable advance notice from Lender and during normal business hours, Manager
shall cooperate with Lender's representative in any inspection of the Property,
subject in all instances to the rights of Tenants and provided that neither
Lender nor any such Persons shall unreasonably interfere with the operation of
business on the Property.

                  Section 7.        Assignment of Rents and Leases. Manager
acknowledges that, in connection with the Loan, Borrower has pledged and
assigned to Lender pursuant to the Loan Documents, among other things, all of
Borrower's right, title and interest in and to all of the Leases now or
hereafter affecting the Property, including, without limitation, any of
Borrower's rights in and to any Security Deposits thereunder. To the extent
permitted under applicable law, Manager shall deliver to Lender for application
in accordance with the terms and conditions of the Loan Documents, all proceeds
relating to the Property from time to time being held by Manager and all Rents,
Security Deposits and other proceeds received from and after the date hereof
from any and all Tenants or other parties occupying or using any portion of the
Property.

                  Section 8.        Borrower Consent. Borrower has joined herein
to evidence its consent to all the covenants, acknowledgments and agreements of
Manager contained in this Agreement.

                  Section 9.        Miscellaneous.

                           (a)      Assignment. Lender shall have the right to
transfer, sell and assign its interest in this Agreement to any Person.

                           (b)      Further Assurances. Borrower and Manager
shall execute and acknowledge (or cause to be executed and acknowledged) and
deliver to Lender all

                                       6
<PAGE>

documents, and take all actions, reasonably required by Lender from time to time
to confirm the rights created or 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.

                           (c)      Notices. Any notice, election, request,
demand, report or statement which by any provision of this Agreement is required
or permitted to be given or served hereunder shall be in writing and shall be
given or served (i) by certified mail return receipt requested, postage prepaid
or (ii) in the manner required by the Loan Agreement provided that any such
notice shall be given to the Manager at the address set forth herein in the
recitals.

                           (d)      Entire Agreement. This Agreement constitutes
the entire and final agreement between Borrower, Manager 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 Borrower, Manager and Lender.

                           (e)      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.

                           (f)      Successors and Assigns. This Agreement shall
be binding upon Borrower and Manager and their respective successors and assigns
and shall inure to the benefit of Lender and its successors and permitted
assigns. If Borrower consists of more than one person, the obligations and
liabilities of each such person hereunder and under the other Loan Documents
shall be joint and several.

                           (g)      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.

                           (h)      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.

                           (i)      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.

                           (j)      Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CHOICE OF LAW RULES. EACH OF BORROWER AND MANAGER AGREES THAT
ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS

                                       7
<PAGE>

OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON BORROWER OR MANAGER IN THE MANNER AND AT THE ADDRESS
SPECIFIED FOR NOTICES IN THIS AGREEMENT. EACH OF BORROWER AND MANAGER 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.

                           (k)      JURY TRIAL WAIVER. EACH OF LENDER, BORROWER
AND MANAGER AND ALL PERSONS CLAIMING BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES 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
BORROWER, MANAGER 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
EACH OF LENDER, BORROWER AND MANAGER HEREBY AGREES AND CONSENTS 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 LENDER, BORROWER AND MANAGER ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL
COUNSEL REGARDING THE MEANING OF THIS WAIVER AND EACH OF BORROWER AND MANAGER
ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THE
LOAN. THIS WAIVER SHALL SURVIVE THE REPAYMENT OF THE LOAN.

                           (l)      Counterclaims and Other Actions. Each of
Borrower and Manager hereby expressly and unconditionally waives, in connection
with any suit, action or proceeding brought by Lender on 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.

                           (m)      Termination of Agreement. Except as set
forth in Section 9(k), this Agreement shall terminate upon full repayment of the
Loan and all Indebtedness.

                                       8
<PAGE>

                           (n)      Non-Recourse. Recourse with respect to any
claims arising under or in connection with this Agreement 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 Agreement.

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]

                                       9
<PAGE>

                  IN WITNESS WHEREOF, Borrower and Manager have duly executed
this Manager's Consent and Subordination of Management Agreement as of the date
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

                                    MANAGER:

                                    ALEXANDER'S MANAGEMENT LLC, a New York
                                    limited liability company

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

                                    LENDER:

                                    GERMAN AMERICAN CAPITAL CORPORATION, a
                                    Maryland corporation

                                    By: /s/ Christopher Tognola
                                        ----------------------------------------
                                        Name:  Christopher Tognola
                                        Title: Vice President

                                    By: /s/ Thomas R. Traynor
                                        ----------------------------------------
                                        Name:  Thomas R. Traynor
                                        Title: Authorized Signatory

<PAGE>

                                    EXHIBIT A

                                 (Office Unit 1)

The Condominium Unit (the "Unit") in the premises known as Beacon Court
Condominium and by the street number by the street number 151 East 58th Street,
Borough of Manhattan, City, County and State of New York, said Unit being
designated and described as "Office Unit 1" in the declaration (the
"Declaration") establishing a plan for condominium ownership of said premises
under Article 9-B of the Real Property Law of the State of New York (the
"Condominium Act"), dated December 4, 2003, and recorded in the New York County
office of the Register of The City of New York (the "City Register's Office") on
February 3, 2004, in CRFN No. 2004000064392, and also designated as Tax Lot 1002
in Block 1313 of Section 5 of the Borough of Manhattan on the Tax Map of the
Real Property Assessment Department of the City of New York and on the Floor
Plans of said building, certified by Peter Claman, Registered Architect, on
January 29, 2004, and filed in the Real Property Assessment Department of the
City of New York on January 30, 2004 as Condominium Plan No. 1350 also filed in
the City Register's Office on February 3, 2004 in CRFN No. 2004000064393. All
capitalized terms herein which are not separately defined herein will have the
meanings given to those terms in the Declaration or in the by-laws of Beacon
Court Condominium. (Said by-laws, as the same may be amended from time to time,
are hereinafter referred to as the "By-Laws.")

         TOGETHER with an undivided 49.0559% percentage interest in the General
Common Elements (as such term is defined in the Declaration);

         TOGETHER with the appurtenances and all the estate and rights in and to
the Unit;

         TOGETHER with, and subject to, the rights, obligations, easements,
restrictions and other provisions set forth in the Declaration and the By-Laws,
all of which constitute covenants running with the Land and will bind any person
having at any time any interest or estate in (any of) the Unit, as though
recited and stipulated at length herein;

The premises within which the Unit is located is more particularly described as:

ALL that certain plot, piece or parcel of land, situate, lying and being in the
borough of Manhattan, County, City and State of New York, bounded and described
as follows:

BEGINNING at the corner formed by the intersection of the southerly side of East
59th Street and the westerly side of Third Avenue;

RUNNING THENCE southerly, along the westerly side of Third Avenue, 200'-10" to
the northerly side of East 58th Street;

THENCE westerly, along the northerly side of East 58th Street 420' to the
easterly side of Lexington Avenue;

THENCE northerly along the easterly side of Lexington Avenue, 200'-10" to the
southerly side of East 59th Street;

THENCE easterly, along the southerly side of East 59th Street, 420' to the point
or place of BEGINNING.

TOGETHER with the benefits and SUBJECT to the burdens of the easements set forth
in the deed made by Seven Thirty One Limited Partnership to 59th Street
Corporation dated as of 8/1/2001 and recorded 8/8/2001 in Reel 3339 Page 1100.

<PAGE>

                                 (Office Unit 2)

The Condominium Unit (the "Unit") in the premises known as Beacon Court
Condominium and by the street number by the street number 151 East 58th Street,
Borough of Manhattan, City, County and State of New York, said Unit being
designated and described as "Office Unit 2" in the declaration (the
"Declaration") establishing a plan for condominium ownership of said premises
under Article 9-B of the Real Property Law of the State of New York (the
"Condominium Act"), dated December 4, 2003, and recorded in the New York County
office of the Register of The City of New York (the "City Register's Office") on
February 3, 2004, in CRFN No. 2004000064392, and also designated as Tax Lot 1003
in Block 1313 of Section 5 of the Borough of Manhattan on the Tax Map of the
Real Property Assessment Department of the City of New York and on the Floor
Plans of said building, certified by Peter Claman, Registered Architect, on
January 29, 2004, and filed in the Real Property Assessment Department of the
City of New York on January 30, 2004 as Condominium Plan No. 1350 also filed in
the City Register's Office on February 3, 2004 in CRFN No. 2004000064393. All
capitalized terms herein which are not separately defined herein will have the
meanings given to those terms in the Declaration or in the by-laws of Beacon
Court Condominium. (Said by-laws, as the same may be amended from time to time,
are hereinafter referred to as the "By-Laws.")

TOGETHER with an undivided 14.0095% percentage interest in the General Common
Elements (as such term is defined in the Declaration);

TOGETHER with the appurtenances and all the estate and rights in and to the
Unit;

TOGETHER with, and subject to, the rights, obligations, easements, restrictions
and other provisions set forth in the Declaration and the By-Laws, all of which
constitute covenants running with the Land and will bind any person having at
any time any interest or estate in (any of) the Unit, as though recited and
stipulated at length herein;

The premises within which the Unit is located is more particularly described as:

ALL that certain plot, piece or parcel of land, situate, lying and being in the
borough of Manhattan, County, City and State of New York, bounded and described
as follows:

BEGINNING at the corner formed by the intersection of the southerly side of East
59th Street and the westerly side of Third Avenue;

RUNNING THENCE southerly, along the westerly side of Third Avenue, 200'-10" to
the northerly side of East 58th Street;

THENCE westerly, along the northerly side of East 58th Street 420' to the
easterly side of Lexington Avenue;

THENCE northerly along the easterly side of Lexington Avenue, 200'-10" to the
southerly side of East 59th Street;

THENCE easterly, along the southerly side of East 59th Street, 420' to the point
or place of BEGINNING.

TOGETHER with the benefits and SUBJECT to the burdens of the easements set forth
in the deed made by Seven Thirty One Limited Partnership to 59th Street
Corporation dated as of 8/1/2001 and recorded 8/8/2001 in Reel 3339 Page 1100.

<PAGE>

                                    EXHIBIT B

                          COPY OF MANAGEMENT AGREEMENT

                                 (see attached)
<PAGE>

                               PROMISSORY NOTE A-X

New York, New York
$86,000,000 (initial and maximum notional amount)              February 13, 2004

         PROMISSORY NOTE A-X, 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 13, 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-X, in the notional principal amount of $86,000,000; (ii) that
certain Promissory Note A-1, dated as of the date hereof, made by Borrower in
favor of Lender, in the principal amount of $90,000,000 (NOTE A-1); (iii) 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); (iv) 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); (v) 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); 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); and

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

         NOW, THEREFORE, FOR VALUE RECEIVED, Borrower promises to pay to the
order of Lender the interest and other fees, expenses and charges provided in
this Note.

<PAGE>

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:

         ANTICIPATED REPAYMENT DATE shall mean March 1, 2014.

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

         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.

         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 Note B becomes due and payable as
         provided in the Loan Agreement or Note B, 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).

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

         NOTE A-1 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.

                                       2
<PAGE>

         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, 2014 and continuing to and including the Maturity Date.

         NOTIONAL AMOUNT shall mean $86,000,000 or so much of the aggregate
         principal amount that is outstanding under Note B from time to time.

         STATED INTEREST RATE shall mean the rate of 00.11875% per annum.

2.       INTEREST.

         a.       From and after the Anticipated Repayment Date, interest shall
                  accrue on the Notional Amount at the Stated Interest Rate.

         b.       Interest on the Notional Amount shall be calculated based on
                  the Stated 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 the
                  Anticipated Repayment Date.

         c.       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.

         a.       Commencing on April 1, 2014 and on each and every Payment Date
                  thereafter until the Maturity Date, Borrower shall pay to
                  Lender interest accruing hereunder for the entire Interest
                  Period immediately preceding the month in which said Payment
                  Date occurs. There shall be no required payments of principal
                  under this Note.

         b.       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.

         c.       All amounts advanced by Lender pursuant to the Loan Documents,
                  other than the principal amount of the Loan, 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

                                       3
<PAGE>

                  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.

         d.       All unpaid accrued interest, all interest that would accrue on
                  the Notional 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.

         e.       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.

         f.       All amounts due under this Note shall be due and payable in
                  lawful money of the United States.

         g.       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.

4.       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.

                                       4
<PAGE>

         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 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

                                       5
<PAGE>

                  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 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

                                       6
<PAGE>

                  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]

                                       7
<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