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                                                               Exhibit 10(i)F(1)

                              AMENDED AND RESTATED
                      MANAGEMENT AND DEVELOPMENT AGREEMENT

                  THIS AMENDED AND RESTATED MANAGEMENT AND DEVELOPMENT
AGREEMENT, dated as of the 3 day of July, 2002 (the "Management Agreement"),
between ALEXANDER'S, INC., a Delaware corporation, on behalf of itself and each
of the subsidiaries listed in Exhibit B attached hereto, (collectively,
"Owner"), each having an address at c/o Vornado Realty Trust, 888 Seventh
Avenue, New York, New York 10019, and VORNADO MANAGEMENT CORP., a New Jersey
corporation, as successor-in-interest to Vornado Realty Trust, having an office
c/o Vornado Realty Trust, 888 Seventh Avenue, New York, New York 10019
("Manager").

                  WHEREAS, Owner and Manager's predecessor-in-interest entered
into that certain Management and Development Agreement dated February 6, 1995
(the "1995 Agreement").

                  WHEREAS, pursuant to an Amendment dated November 1, 1998, the
initial basic management fees of $3,000,000 were revised to include a percentage
payment with respect to the Kings Plaza Shopping Center (the "Kings Plaza Fee
Amendment");

                  WHEREAS, pursuant to an Amendment dated May 12, 1999 (the
"Rego I Severance Amendment"), the basic management fees were reduced by
$300,000 per annum to $2,700,000 per annum, and Manager entered into that
certain Rego Park I Management Agreement with Alexander's Rego Shopping Center,
Inc. dated as of May 12, 1999, providing for $300,000 per annum in fees;

                  WHEREAS, pursuant to an Amendment dated May 31, 2002 (the
"Kings Plaza Severance Amendment"), the basic management fees were reduced by
$300,000 per annum to $2,400,000 per annum and the percentage payments with
respect to the Kings Plaza Shopping Center were eliminated from the Agreement
and Manager entered into that certain Kings Plaza Management Agreement, dated as
of May 31, 2002, with Alexander's Kings Plaza, LLC and Alexander's of Kings,
LLC, providing for $300,000 per annum in fees and for the same percentage
payments with respect to the Kings Plaza Shopping Center (the 1995 Agreement, as
amended by the Kings Plaza Fee Amendment, the Rego I Severance Amendment, and
Kings Plaza Severance Amendment, and as otherwise heretofore amended, the
"Original Management Agreement");

                  WHEREAS, the responsibilities of Manager with respect to the
59th Street Property are being undertaken pursuant to the 59th Street Management
and Development Agreement dated the date hereof between 731 Residential LLC and
731 Commercial LLC, as owner, and Manager, as manager (the "59th Street
Development Agreement") and in connection therewith the Manager will be paid a
management fee of $120,000, and as a result thereof basic management fee under
the Original Management Agreement being reduced by $120,000 to $2,280,000;

                  WHEREAS, Owner and Manager desire to amend and restate the
Original Management Agreement in its entirety as of the date hereof:
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                  IN CONSIDERATION of the mutual promises and covenants herein
contained, Owner and Manager agree that effective from and after the date
hereof, the Original Management Agreement is hereby amended and restated in its
entirety as follows:

                  ARTICLE I. Appointment of Manager. A. Owner hereby appoints
Manager, on the conditions and for the tern hereinafter provided, to act for it
in the management and direction of all of its business affairs, including,
without limitation, the operation, maintenance and management of the properties
identified on Exhibit A attached hereto and made a part hereof (each such
property being hereafter referred to individually as a "Property", and all such
properties being hereafter referred to collectively as the "Properties"), which
management duties are more particularly described in Article IV, and the design,
planning, construction and development of the Properties, which development
duties are more particularly described in Article V. Manager hereby accepts said
appointment to the extent and subject to the conditions set forth below.

                  B. It is understood and agreed that in the event that one or
more of the Properties is sold or otherwise disposed of, Exhibit A shall be
deemed amended accordingly and this Agreement shall, from and after the date of
any such sale or disposition, cease to apply as to any such Property and shall
continue to apply to such remaining Properties as Owner continues to own.

                  C. Owner and Manager hereby acknowledge that affiliates of
Owner and Manager have heretofore entered into that certain Real Estate
Retention Agreement, dated as of July 20, 1992 (the "Retention Agreement"),
whereby Vornado Realty L.P., as successor in interest to Vornado, Inc. has
agreed to act as leasing agent with respect to the Properties.

                  ARTICLE II. Term. A. The term of this Agreement shall commence
on the Effective Date (as hereinafter defined) and shall continue until midnight
on the date immediately following the first anniversary of the date hereof (the
"Initial Expiration Date"), subject to paragraph C of Article III, unless this
Agreement shall be terminated and the obligations of the parties hereunder shall
sooner cease and terminate, as hereinafter provided; provided, however, that the
term of this Management Agreement shall automatically extend for consecutive
one-year periods following the Initial Expiration Date unless Manager or Board
(as hereinafter defined) provides the other with written notice, at least six
months prior to the beginning of any such additional one-year period, of its
election to terminate this Management Agreement. The amount of the Management
and Development Fee (as hereinafter defined) shall be subject to review by the
parties at the end of the initial term and at the end of each one-year term
thereafter.

                  B. The term "Board" shall mean (i) the Board of Directors of
Alexander's. Inc.; or (ii) a committee or officer designated by such Board of
Directors to act on behalf of Manager in connection with the administration of
this Agreement. The term "Independent Directors" shall mean the independent
directors of the Board of Directors of Alexander's, Inc. or their designee.


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                  ARTICLE III. Management and Development Fee.


                  A. Owner shall pay Manager, as Manager's entire compensation
for the services rendered hereunder in connection with the management of the
Properties and the management of the Owner, a management fee (the "Management
Fee") equal to Two Million Two Hundred Eighty Thousand Dollars ($2,280,000) per
annum, payable in equal monthly installments, in arrears, in the amount of
$190,000 each on the tenth day of each calendar month beginning with the first
calendar month after the Effective Date. All sums payable to Manager hereunder
shall be in addition to the amounts payable to Manager under the Retention
Agreement. In the event that this Agreement shall commence on a date other than
the first day of a calendar month, or shall terminate on a date other than the
last day of a calendar month the installment of the Management and Development
Fee (as hereinafter defined) payable for that month shall be prorated for the
actual number of days that this Agreement is effective in that calendar month.
Notwithstanding anything contained herein, in the event that the scope of the
business of Alexander's, Inc. shall expand beyond that which is contemplated on
the date hereof, Owner and Manager hereby agree that the Management Fee shall be
equitably adjusted upward to reflect the increase in services rendered. In the
event that Independent Directors and Manager are unable to agree on the amount
of the upward adjustment as provided in this paragraph, then the parties hereto
hereby agree that the dispute shall be submitted promptly by them to the
American Arbitration Association for the City of New York for determination in
accordance with its rules, and such determination shall be binding upon both
parties.

                  B. Owner shall pay Manager, as Manager's compensation for the
services rendered hereunder in connection with the development of the
Development Properties, a development fee (the "Development Fee") (the
Development Fee and the Management Fee are sometimes referred to herein,
collectively, as the "Management and Development Fee") equal to (i) five percent
(5%) of the total Development Costs (as hereinafter defined), allocated with
respect to each Development Property based on the Development Costs for that
Development Property, plus (ii) general overhead and administrative expenses
equal to one percent (1%) of the total Development Costs, allocated with respect
to each Development Property based on the Development Costs for that Development
Property.

                  As used herein, the following terms shall have the following
meanings:

                  "Development Budget" shall mean, collectively, the capital
budgets and development schedules setting forth the Development Costs to be
incurred in connection with the Development Properties, as prepared by Manager
and approved by the Board and as more particularly described in Article V
hereof.

                  "Development Costs" shall mean the costs incurred by Owner in
accordance with the Development Budget in connection with the planning, design
and construction, and development or redevelopment of the Development
Properties, including, without limitation, fees of any construction manager,
general contractor or any other third-party professionals unaffiliated with
Manager and costs set forth in the Development Budget that may be reimbursed by
tenants at the Development Properties for improvements outside the leased
premises of those tenants. Notwithstanding the foregoing, in no event shall
Development Costs include costs paid for or reimbursed by the tenants for
improvements inside the leased premises of those tenants,


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the Development Fee, costs of the land and, with respect to loans made to Owner,
interest, commitment fees and points.

                  "Development Properties" shall mean the Properties identified
in Exhibit A as the Rego Park II Property, the Rego Park III Property and the
Paramus Property.

                  "Substantial Completion" shall mean, with respect to each
Development Property, the date on which (a) all punch list items and landscaping
at that Development Property have been completed, (b) the planning, design,
construction and development of that Development Property have been completed,
as certified by the owner's architect, in accordance with the plans and
specifications therefor approved by the Board, (c) all necessary occupancy and
other permits have been obtained with respect to the work completed at that
Development Property for which Manager has any obligation hereunder and (d) if
leases are then in effect at that Development Property, the portions of the
Development Property demised under the leases have been delivered for possession
to the tenants thereunder in accordance with the terms thereof, the tenants have
otherwise taken possession of the demised premises, or, if tenants cannot take
possession due to Owner's obligation to perform tenant improvement work, tenant
improvement work has commenced thereunder.

                  C. Notwithstanding the provisions of Article II, in the event
that Substantial Completion of all of the Development Properties shall not have
occurred prior to the Initial Expiration Date, Manager shall have the option to
cause the term of this Agreement, as it applies to the development of the
Development Properties, to be extended as to any or all of the Development
Properties as to which construction has commenced or is scheduled to commence no
later than the first anniversary of the Initial Expiration Date but as to which
Substantial Completion has not occurred. Such option may be exercised by sending
notice to owner of Manager's intention to so extend, and listing the Development
Properties as to which the term of this Agreement shall be extended, not less
than thirty (30) days prior to the Initial Expiration Date, in which event the
rights and obligations of the parties hereto under this Agreement relating to
the development of the Development Properties, as provided in Article V, shall
be automatically extended with respect to the Development Properties listed in
such notice, until the date on which Substantial Completion of all of such
Development Properties shall have occurred. In the event that the term is so
extended pursuant to this paragraph, no further fee shall be due to Manager
following the Initial Expiration Date until Substantial Completion of each
respective Development Property. Upon Substantial Completion of a Development
Property, Owner shall pay to Manager the Development Fee for such Development
Property. Notwithstanding the foregoing, in no event shall the rights and
obligations of the parties hereto under this Agreement relating to the
management of owner's business be deemed to be extended beyond the Initial
Expiration Date except in accordance with Article II hereof.

                  D. In the event that (i) Owner shall dispose of any or all of
the Development Properties or (ii) shall not proceed for any reason with the
development of any or all of the Development Properties, then Manager shall use
diligent efforts to reduce or eliminate all allocable costs and expenses, both
direct or indirect, that would otherwise be incurred by Manager in the
performance of its obligations hereunder. In all cases, however, Manager shall
be compensated for services rendered and reimbursed for costs and expenses
incurred to such date including, without limitation, salaries and other
compensation for employees of Manager.


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Manager shall also be compensated for costs and expenses of employees and other
such items that will continue to be incurred to the extent such costs and
expenses are not avoidable or cannot be mitigated by Manager using its diligent
efforts.

                  E. Manager shall receive no commissions, fees or other
compensation (other than the Management and Development Fee) in connection with
any leasing or sale of all or any part of any of the Properties or the procuring
of any financing or refinancing with respect thereto; provided, however, that
nothing contained herein shall in any way restrict the commissions, fees and
other compensation otherwise payable to Manager or any affiliate of Manager by
owner or its affiliates pursuant to the Retention Agreement.

                  F. In the event that Manager desires to provide services not
required to be performed hereunder ("Additional Services") for the benefit of a
tenant of any Property, Manager shall notify Owner in advance of its intention
to provide Additional Services to a tenant or tenants where those services are
substantial in nature. The Independent Directors shall have the right to
prohibit manager from undertaking such services, if, in its judgment, the
performance by Manager of the Additional Services would adversely affect the
professional relationship and duties of Manager created by this Agreement.

                  ARTICLE IV. Management Services. A. Manager agrees to operate
and manage the day-to-day business of Owner and to perform all of the executive
functions of Owner other than those performed by the Board, the Independent
Directors, and any officers of owner (including, without limitation, the Chief
Executive Officer of owner) designated by the Board, including, without
limitation, the operation and management of the Properties and to perform, or
cause to be performed by outside contractors and under Manager's supervision,
the following functions on behalf of Owner in an efficient and diligent manner
using the same standard of care, including bidding and selection processes,
segregation of funds, internal controls and internal auditing, used by Vornado
Realty Trust in connection-with its business and in connection with properties
owned and managed by Vornado Realty Trust:

                           1. Preparing, or causing to be prepared at Owner's
                  expense, and filing all income, franchise and other tax
                  returns required to be filed by Owner.

                           2. Keeping true and complete books of account in
                  which shall be entered fully and accurately each transaction
                  of Owner's business. The books shall be kept in accordance
                  with the accrual method of accounting, and shall reflect all
                  transactions of Owner's business.

                           3. Preparing an annual report within ninety (90) days
                  after the end of each fiscal year of Owner, including an
                  annual balance sheet, profit and loss statement and a
                  statement of changes in financial position.

                           4. Preparing a quarterly financial report of Owner,
                  within forty-five (45) days after the end of each fiscal
                  quarter of Owner.

                           5. Preparing or causing to be prepared at Owner's
                  expense, any reports or filings required by the New York Stock
                  Exchange or the Securities and Exchange Commission.


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                           6. Except as otherwise provided hereunder, procuring,
                  at Owner's expense and at the direction of the Board or the
                  Owner's insurance brokers or insurance advisors, any insurance
                  required or desirable in connection with Owner's business or
                  the employees required to operate Owner's business and errors
                  and omissions insurance for Manager, under which Owner shall
                  be the sole beneficiary. Manager shall not settle any claim
                  for a settlement amount in excess of $100,000 without the
                  approval of the Board.

                           7. Providing all general bookkeeping and accounting
                  services required by the provisions of this Agreement at the
                  expense of Manager. Any independent certified public
                  accountant engaged by Manager shall be subject to the approval
                  of the Board and all fees and expenses payable to such
                  accountant shall be at owner's expense. Manager shall maintain
                  separate books and records in connection with its management
                  of the Properties and Owner, which books and records shall be
                  kept in accordance with generally accepted accounting
                  principles. Owner shall have the right to examine or audit the
                  books and records at reasonable times and Manager will
                  cooperate with owner in connection with any such audit.

                           8. Investing funds not otherwise required to pay the
                  costs of day-to-day maintenance and operation of the
                  Properties or in the operation of owner's business pursuant to
                  guidelines set by the Board.

                           9. Repairing, making replacements and maintaining the
                  Properties and all common areas at the Properties and
                  purchasing all materials and supplies that Manager deems
                  necessary to repair and operate and maintain the Properties,
                  in order that each Property shall remain in good, sound and
                  clean condition, and making such improvements, construction,
                  changes and additions to the Properties (including capital
                  improvements), as Manager deems advisable, provided that
                  Manager shall receive approval of the Board prior to
                  undertaking any improvements, construction, changes or
                  additions to the Properties. Owner shall pay all fees, costs
                  and expenses incurred by Manager in connection with the
                  retention of outside contractors and suppliers for the
                  performance of all repairs, replacements and maintenance of
                  the Properties. In the event that Owner decides to remodel or
                  extensively refurbish any Property, or any part thereof,
                  Manager shall be entitled to receive additional compensation
                  for services required to be rendered by it for services such
                  as supervision of construction and allocation of overhead
                  expense (i) to the extent that tenants at that Property
                  reimburse Owner for such costs and (ii) if such costs are not
                  reimbursable by the tenants and such remodeling or
                  refurbishment shall be on a significant scale and shall
                  require significant work by the Manager, the amount of such
                  additional compensation payable to Manager shall be equal to
                  Manager's costs in connection with such work, plus twenty
                  percent (20%) of Manager's costs.

                           10. Negotiating and executing contracts for the
                  furnishing to the Properties of all services and utilities,
                  including electricity, gas, water, steam, telephone, cleaning,
                  security, vermin extermination, elevator, escalator and boiler


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                  maintenance and any other utilities or services, including
                  repairs and maintenance of the buildings, other improvements
                  and common areas at the Properties, or such of them as Manager
                  deems advisable to assure that the Properties shall be caused
                  to be and remain in a good, sound and clean condition and
                  properly operating. All fees, costs and expenses under the
                  contracts shall be paid by Owner.

                           11. Subject to the terms of any loan or credit
                  agreement entered into by Owner with a lender and affecting
                  any of the Properties, demanding, receiving and collecting all
                  rents, income and other revenues, which Manager shall deposit
                  in a bank account or accounts of Owner maintained by Manager
                  (with any interest thereon for the account of Owner) for the
                  deposit of monies in regard to the Properties; disbursing,
                  deducting and paying from such rents, income and revenues,
                  such amounts required to be disbursed or paid in connection
                  with the repair, maintenance and operation of the Properties
                  and in the carrying out of Manager's duties. In the event that
                  Manager shall determine that funds in the accounts are
                  insufficient to make necessary disbursements or payments,
                  Manager shall notify Owner promptly of the amount of such
                  insufficiency. Promptly after (i) Owner receives such notice,
                  or (ii) Owner independently determines that such funds are
                  insufficient, owner shall determine and notify Manager as to
                  the order of priority in which disbursements and payments
                  shall be made. Disbursements or payments shall include, but
                  not be limited to, the following items:

                                    a. all assessments and charges of every kind
                           imposed by any governmental authority having
                           jurisdiction (including real estate taxes,
                           assessments, sewer rents and/or water charges) and
                           interest and penalties thereon; provided, however,
                           that the interest or penalty payments shall be
                           reimbursed by Manager to Owner if imposed by reason
                           of delay in payment caused by Manager's gross
                           negligence, willful misconduct, bad faith or material
                           misapplication of funds (to the extent such material
                           misapplication of funds is not covered by insurance)
                           (collectively "Malfeasance");

                                    b. debt service on any loans secured by any
                           of the Properties;

                                    c. license fees, permit fees, insurance
                           appraisal fees, fines, penalties, legal fees,
                           accounting fees incurred in the auditing of tenants'
                           books and records to establish and collect overage or
                           percentage rents, and all similar fees reasonably
                           incurred in connection with the ownership, management
                           or operation of the Properties, provided, however,
                           that any fines or penalties shall be reimbursed to
                           Owner by Manager if imposed by reason of delay in
                           payment caused by Manager's Malfeasance;

                                    d. premiums on all policies of insurance;

                                    e. salaries, wages and other related
                           expenses, bonuses and fringe benefits for on-site
                           personnel, service contracts, utilities, repairs,


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                           replacements, on-site administration expenses and
                           Manager's compensation;

                                    f. the Management and Development Fee and
                           any other sums payable hereunder to Manager;

                                    g. contributions to merchants associations,
                           if and as required by any outstanding agreements; and
                           advertisement and public relations costs for
                           promotional activities; and

                                    h. any and all other expenses or costs that
                           are customarily disbursed by managing agents of
                           properties comparable to the Properties or that are
                           required in order for Manager to perform its duties.

                  In no event shall Manager be required to pay any bills or
                  charges from its own funds, except as otherwise specifically
                  provided herein.

                           12. Engaging, at the expense of Owner, any outside
                  collection agency Manager deems appropriate for the collection
                  of rent or other revenues or instituting, in Manager's name
                  (but only if Manager so elects) or in the name of Owner, but
                  in any event at the expense of Owner, any and all legal
                  actions or proceedings to collect rent or other income from
                  the Properties or to oust or dispossess tenants or other
                  persons therefrom, or canceling or terminating any lease or
                  the breach thereof or default thereunder by the tenant, and
                  holding all security deposits posted by tenants and occupants
                  and applying the same against defaults by the tenant or
                  occupant. Manager shall hold all security deposits in a
                  separate account if required by law or if requested by Owner.
                  Manager shall not terminate any lease or evict the tenant
                  thereunder without the prior approval of the Board.

                           13. Rendering such statements at such times and in
                  such formats as Owner shall reasonably request and as shall be
                  customary for properties comparable to the Properties,
                  including, without limitation, monthly cash flows, quarterly
                  reports and operating statements and annual budgets as
                  provided below.

                           14. Maintaining, at Manager's expense, insurance with
                  reasonable deductibles, if any, for any and all claims or
                  causes of action arising from bodily injury, disease or death
                  of any of Manager's employees, agents, or representatives and
                  for any and all claims or causes of action arising from
                  Manager's negligence, infidelity or wrongful acts in
                  connection with the performance of this Agreement, as well as
                  employer's liability and worker's compensation for Manager's
                  employees and fidelity bonds for employees of Manager that
                  handle funds and proceeds from the Properties, in each case,
                  at customary levels of coverage.

                           15. Causing, at Owner's expense, all such acts and
                  things to be done in or about the Properties as shall be
                  necessary to comply with all statutes, ordinances, laws,
                  rules, regulations, orders and determinations, ordinary or


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                  extraordinary, foreseen or unforeseen of every kind or nature
                  affecting or issued in connection with the Properties by any
                  governmental authority having jurisdiction thereof, as well as
                  with all such orders and requirements of the Board of Fire
                  Underwriters, Fire Insurance Exchange, or any other body that
                  may hereafter exercise similar functions (collectively,
                  "Applicable Laws"). In the event that Manager's good faith
                  estimate of the cost of complying with any Applicable Laws
                  shall exceed $100,000 in connection with any one Property or
                  in the aggregate, Manager shall not take any action to comply
                  with Applicable Laws without first obtaining the consent of
                  the Board. Notwithstanding the foregoing, however, Owner shall
                  have no obligation to pay for the expenses incurred in
                  connection with compliance with Applicable Laws to the extent
                  such costs are incurred due to Manager's Malfeasance or
                  material breach of this Agreement. Manager shall have the
                  right to contest such Applicable Laws, and pending the final
                  determination of the contest, Manager may withhold compliance,
                  provided that Manager shall receive the Board's prior consent
                  to so withhold compliance. Manager agrees to contest any
                  Applicable Law the Board shall request Manager to contest.

                           16. Filing applications, in manager's name (but only
                  if Manager so elects) or in the name of Owner, but in any
                  event at Owner's expense, for the reduction of real estate tax
                  assessments and/or water charges and sewer rents, and/or for
                  the cancellation or reduction of any other taxes, assessments,
                  duties, imposts or other obligations of any nature imposed by
                  law; and instituting any and all legal actions or proceedings
                  in connection therewith; filing, settling, trying or appealing
                  of all such applications and/or proceedings, upon such terms
                  and conditions as Manager deems appropriate, provided,
                  however, that Manager shall receive the consent of the Board
                  prior to the institution or settling of any legal action or
                  proceeding.

                           17. Taking, at Owner's expense and with the prior
                  consent of the Board, any appropriate steps to protest and/or
                  litigate to final decision in any appropriate court or forum
                  any violation, order, rule or regulation affecting any
                  Property.

                           18. Engaging, at Owner's expense, counsel, approved
                  by the Board, and paying counsel fees and court costs and
                  disbursements in connection with any proceedings involving any
                  Property.

                           19. Assisting Owner in obtaining financing for the
                  Properties and causing Owner to comply, or complying on behalf
                  of Owner, at Owner's expense, with all terms, conditions and
                  obligations of any lease, mortgage, credit agreement,
                  reimbursement agreement, development agreement, construction
                  agreement, or any other agreement that shall relate to any
                  matters in connection with the rental, operation or management
                  of each Property, unless prevented or delayed by strikes,
                  riot, civil commotion, war, inability to obtain materials
                  because of governmental restrictions or acts of God or public
                  enemy, or any other cause beyond Manager's control.


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                           20. Performing administrative services required in
                  connection with managing the Properties, including, without
                  limitation, the following:

                                    a. administration of tenants' insurance and
                           enforcement of continuing coverage in accordance with
                           the terms of the leases.

                                    b. confirmation of lease commencement dates
                           and termination dates.

                                    c. liaison with the tenants as Owner's
                           representative.

                                    d. supervision of tenant litigation in
                           conjunction with owner's legal counsel.

                                    e. obtaining sales volume reports from
                           tenants and calculating and collecting percentage
                           rents as a result of those reports.

                                    f. providing necessary information to Owner
                           for tax reporting, in a format reasonably approved by
                           Owner and upon Owner's request, initiating together
                           with Owner's counsel, property tax appeals.

                                    g. providing quarterly financial statements,
                           in a format reasonably approved by Owner, reflecting
                           in reasonable detail the operating income and expense
                           of the Properties.

                                    h. alerting owner if tenant sales volume
                           reports appear inaccurate and recommend audits.

                                    i. reporting and making recommendations
                           regarding unusual tenant problems requiring Owner's
                           approval.

                                    j. obtaining contractors to maintain,
                           operate and provide security for the Properties.

                                    k. coordinating with Vornado Realty Trust
                           and all other consultants retained by owner in
                           connection with the Properties.

                           21. Preventing the use of the Properties for any
                  purpose that would void any insurance policy covering any of
                  the Properties or that would render any loss thereunder
                  uncollectible, or that would be in violation of any
                  governmental restriction, any tenant lease or any reciprocal
                  easement agreement.

                           22. Providing all other services customarily provided
                  by Vornado Realty Trust in connection with properties owned
                  and managed by Vornado Realty Trust.

                  B. Owner shall be responsible for, and shall indemnify Manager
against, all costs incurred in connection with the operation of owner's
business, except to the extent such


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costs are incurred in connection with Manager's Malfeasance or material breach
of this Agreement, and all past, present and future liabilities of owner,
including, without limitation:

                           1. all outside professional fees, including
                  attorneys, accountants and architects;

                           2. all filing, registration and other fees payable to
                  the New York Stock Exchange, the Securities and Exchange
                  Commission and state securities agencies;

                           3. taxes;

                           4. insurance (other than workers' compensation
                  insurance for Manager's employees and as otherwise provided
                  herein), including retiree health liability insurance and
                  directors' and officers' liability insurance;

                           5. fees and expenses applicable to the Board of
                  Directors of Owner;

                           6. costs that are at the discretion of Owner, for
                  services not included in this Agreement, including, without
                  limitation, rent and other expenses for Owner's offices,
                  salaries and other related expenses of employees performing
                  services for Owner (other than employees of Manager); and

                           7. all costs and expenses incurred by Manager in
                  connection with the transition to Manager of the management
                  activities contemplated by this Agreement.

                  ARTICLE V. Development. Manager agrees to design and plan the
development of the Development Properties and to manage the construction and
development of the Development Properties and to perform, or cause to be
performed by outside contractors, the following functions on behalf of Owner in
an efficient and diligent manner using the same standard of care, including
bidding and selection processes, used by Vornado Realty Trust in connection with
properties owned and managed by Vornado Realty Trust, and on a Property by
Property basis:

                           1. Obtaining or assisting owner in obtaining, on
                  behalf of Owner and at Owner's expense, all required building
                  permits and other governmental approvals and consents, along
                  with any zoning variances or other zoning approval, necessary
                  to initiate the development of any Development Property.

                           2. Retaining, at Owner's expense, all architects,
                  engineers, contractors, construction managers and consultants
                  (collectively "Consultants") necessary or desirable in
                  completing the design and planning of the development of any
                  Development Property and negotiating, on behalf of Owner, any
                  contracts with Consultants.

                           3. Monitoring and coordinating the activities of the
                  Consultants retained for the planning and design of the
                  Development Properties.


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                           4. Assisting and cooperating with Owner in all
                  aspects of arranging or acquiring any construction or other
                  financing required for the Development Properties, including,
                  without limitation, meeting with and furnishing information to
                  prospective lenders.

                           5. Preparing and filing, or causing the preparation
                  and filing at the expense of Owner of, all returns (other than
                  income, franchise and other similar returns), statements,
                  declarations and filings that may from time to time be
                  required of Owner in connection with the planning, design and
                  development of any Development Property by any municipal,
                  state, federal or other governmental or statutory authority
                  having jurisdiction over the development of any Development
                  Property.

                           6. Preparing an initial budget as soon as
                  practicable, but in any event prior to the commencement of any
                  construction at any of the Development Properties (including,
                  without limitation, an estimate of the timing of the
                  incurrence of expenditures contained in the budget) for such
                  Development Property and make any revisions or adjustments
                  necessary to acquire approval of the Board for such budget,
                  the approved budget for any of the Properties being herein
                  called the "Development Budget". Manager shall recommend any
                  revision to the Development Budget that Manager from time to
                  time may deem appropriate, or as the Board may reasonably
                  request, in each case to be approved by the Board, provided,
                  however, that Manager's obligation to seek Board approval of
                  change orders shall be limited to change orders exceeding, in
                  the aggregate, ten percent (10%) of the applicable line item
                  in the initial Development Budget. The approval by the Board
                  of the Development Budget and any revisions thereto shall also
                  constitute authorization by the Board of the expenditures and
                  commitments provided for therein and, subject to the other
                  provisions of this Agreement, Manager then shall be entitled
                  to act for owner in incurring the expenditures and making
                  commitments to the extent provided for in the approved initial
                  or revised Development Budget, as applicable.

                           7. Recommending, for the Board's approval, such
                  Consultants as may be necessary or desirable for the
                  development of any Development Property and negotiating on
                  behalf of Owner any contracts and agreements as are necessary
                  or desirable in connection with the development of any
                  Development Property with such Consultants approved by the
                  Board and supervising the performance by such Consultants
                  thereunder, including, without limitation, the supervision and
                  processing of change requests and change orders.

                           8. Monitoring and coordinating the activities of the
                  Consultants and, where appropriate, assisting Owner in
                  performing Owner's obligations under the contracts with
                  Consultants.

                           9. Supervising the collection and review of all
                  documentation required to be submitted to any construction
                  lender or other lender in connection with the


                                      -12-
<PAGE>
                  development of any Development Property and supervising all
                  disbursements made pursuant to any financing.

                           10. Supervising the ordering and installation of
                  equipment or other supplies necessary for the development of
                  any Development Property;

                           11. Preparing (i) quarterly progress reports
                  regarding the development of the Development Properties,
                  detailing any deviations from the Development Budget and
                  providing explanations for such deviations, (ii) all reports
                  required under loan agreements affecting Owner and (iii)
                  promptly after the completion of the development of any
                  Development Property, preparing a report of actual Development
                  Costs incurred in connection with the development of that
                  Development Property, separately identifying as estimated
                  items those, if any, that cannot be finally determined at the
                  time of the final report.

                           12. Providing regular and continuing accounting
                  services, on the basis of standard accounting practices for
                  similar projects consistently applied, of all costs and
                  expenses incurred by Owner in connection with the development
                  of the Development Properties, and the receipt and use of
                  borrowed funds or funds otherwise made available.

                           13. Attending meetings as reasonably required or
                  requested by the Board.

                           14. Assisting Owner in obtaining and maintaining in
                  full force and effect at all times during the term of
                  construction at any of the Properties all-risk builder's risk
                  insurance (including coverage against collapse and fire)
                  written on a progress basis and including commercial public
                  liability insurance with incidental contract coverage, with
                  such insurers, in such amounts and under such policies as may
                  be reasonably satisfactory to the Board and the expense of
                  maintaining such insurance shall be an expense of, chargeable
                  to, or paid by owner.

                           15. Generally performing such other acts and things
                  as may be reasonably required for coordinating, monitoring,
                  administering and supervising the full and complete planning,
                  design construction and development of the Development
                  Properties.

                  ARTICLE VI. Annual Budget. A. On or before the beginning of
each fiscal year of Alexander's Inc., Manager shall prepare and submit to Owner
a proposed budget (hereinafter referred to as the "Proposed Budget") of the
estimated operating and capital expenses of the Properties for the next fiscal
year or such other operating period as may be agreed to by the parties.

                  B. The Board shall have the right to approve or disapprove the
Proposed Budget. The final budget for the fiscal year is referred to as the
"Approved Budget" in this Agreement. The Approved Budget shall be subject to
quarterly comparisons and revisions, which revisions the Manager and the Board
mutually shall agree to be appropriate, all such


                                      -13-
<PAGE>
revisions as approved by the Board shall be considered part of the "Approved
Budget". Manager shall make expenditures without the specific approval of the
Board if

                           1. The expenditure (or group of related expenditures)
                  has been generally identified in an Approved Budget line item
                  and exceeds the amount shown in respect thereof in such budget
                  line item by no more than ten percent (10%).

                           2. The expenditure (or group of expenditures) has not
                  been generally identified in the Approved Budget but does not
                  exceed $100,000.

                           3. The expenditure (or group of related expenditures)
                  exceeds $100,000 and was either not anticipated or exceeded
                  the Approved Budget by more than ten percent, but is not
                  discretionary.

                           4. The expenditure is required by a condition or
                  situation that in Manager's professional judgment constitutes
                  an emergency. In any case where an emergency situation exists
                  that is of serious financial or physical consequence, Manager
                  may act in the best interest of Owner but Manager shall
                  attempt to notify Owner prior to making the expenditure, but
                  in any event, Manager shall report verbally the making of the
                  expenditure to owner no later than 24 hours after the
                  occurrence of the emergency.

                  ARTICLE VII. Chief Executive Officer. Manager shall cause
Steven Roth, Chairman of the Board and Chief Executive Officer of Manager, to
serve as Chief Executive Officer of Alexander's, Inc., Michael Fascitelli to
serve as President of Alexander's, Inc. and Joseph Macnow to serve as Executive
Vice President of Alexander's Inc., each at no additional compensation, and to
provide all services normally associated with such position, to the extent not
inconsistent with his position with Manager. Owner recognizes that Steven Roth,
Michael Fascitelli and Joseph Macnow each has or may have other business
interests, activities and investments, including, without limitation, interests
in connection with his interest in Manager and Manager's affiliates, some of
which may be in conflict or competition with the business of owner and that he
is entitled to carry on such other business, activities, and interests and shall
have no duty or obligations to offer to Owner any interest in such business
interests, activities and interests, including, without limitation, any
potential property acquisition, whether or not competitive with the business
interests of Owner. Manager agrees to cause Steven Roth, Michael Fascitelli and
Joseph Macnow each to excuse himself from any activities of Owner that are
related to the enforcement of this Agreement.

                  ARTICLE VIII. Owner to Execute Documents; Reserved Rights.
Owner covenants and agrees that wherever in this Agreement it is provided that
Manager may take any action in the name of or on Owner's behalf, Owner will
promptly execute any documents that may be required by Manager for the purposes
of carrying out any of Manager's functions as same are set forth.

                  ARTICLE IX. Assignment; Cancellation. A. Neither Owner nor
Manager shall assign this Agreement or any of its rights hereunder without the
consent of the other party;


                                      -14-
<PAGE>
provided, however, (i) qualification by Alexander's, Inc. as a REIT (as defined
herein) shall not be deemed to constitute an assignment and (ii) that manager
shall have the right to assign its rights and delegate its duties under this
Agreement to any Specified Vornado Affiliate without the consent of Owner
provided that, (a) in connection with any such assignment, Vornado Realty Trust
provides to Owner a guarantee, in form and substance reasonably satisfactory to
Owner, of the duties and obligations of the Specified Vornado Affiliate under
this Agreement and agrees, to the extent necessary, to make available to the
Specified Vornado Affiliate the resources of Vornado Realty Trust for the
purposes of carrying out such duties and obligations, (b) notwithstanding any
such assignment to a Specified Vornado Affiliate, the indemnification of Owner
by Manager set forth in Article XII hereof shall remain the obligation of
Vornado Realty Trust and (c) references to the standard of care, customarily
provided services and reporting standards applicable to Manager in performing
its duties under this Management Agreement shall be the same standard of care
and reporting standards applicable to Vornado Realty Trust in connection with
properties owned by Vornado Realty Trust; and further provided that Owner shall
have a right to collaterally assign its rights under this Agreement to one or
more lenders providing financing with respect to a Property. For purposes of
this Article IX, "Specified Vornado Affiliate" shall mean (i) any wholly-owned
subsidiary of Vornado Realty Trust or (ii) any entity at least 95% of the
preferred stock of which is owned by Vornado Realty Trust.

                  B. In the event that there is a change of control of Vornado
Realty Trust or Manager after the date of this Agreement, the Independent
Directors shall have the right to terminate this Agreement if the Independent
Directors shall determine that such change of control is reasonably likely to
have a material adverse effect on the ability of Manager to perform its
obligations under this Agreement. For purposes of this Article IX, "change of
control" shall mean that the aggregate interest of Interstate Properties and its
partners in Vornado Realty Trust shall be less than twenty percent of the
ownership interests therein.

                  C. This Agreement shall be non-cancelable, except as permitted
by the terms of this Agreement.

                  ARTICLE X. Breach; Termination. A. If either party shall
commit a material breach of this Agreement, the other party shall serve written
notice upon the allegedly breaching party, and the notice shall set forth the
details of such alleged breach. Owner covenants and agrees that Manager shall
not be deemed to have committed a material breach of this Agreement unless
Manager wilfully violates any provision hereof, is grossly negligent in the
observance or performance of any of its obligations hereunder, acts in bad faith
in connection with its duties under this Agreement, or materially misapplies any
funds received from the Properties (to the extent not covered by insurance).

                  B. Owner shall, within thirty (30) days after its receipt of
said notice, cure such breach unless it disputes the claim as set forth in
Paragraph D of this Article X. If Owner does not cure within such ten-day
period, Manager shall have the right, but not the obligation, to cease providing
services hereunder until the breach shall be cured. In the event that Manager
shall cease providing services hereunder pursuant to this Paragraph, Owner shall
have the right to terminate this Agreement and replace Manager in which event
Manager promptly shall deliver to Owner all books and records with respect to
the Properties and Owner that are in Manager's possession and otherwise comply
with paragraph H below, and upon its receipt of any


                                      -15-
<PAGE>
outstanding payments due to it, shall cooperate with the successor Manager to
effect a smooth transition in the management, operation and development of the
Properties and the management and operation of owner.

                  C. Manager shall, within thirty (30) days, after its receipt
of a notice under Paragraph A of this Article X, cure such breach unless it
disputes the claim as set forth in Paragraph D of this Article X; or if said
breach cannot be cured within said thirty (30) day period, Manager shall within
said time period commence and thereafter diligently and continuously proceed
with all necessary acts to cure such breach, subject to the terms of any loan
documents and other material agreements affecting the Properties. If Manager
shall fail within said time period to cure the said breach, Owner shall have the
right, by sending a second written notice to Manager, to terminate this
Agreement effective immediately or as of a particular date which shall be
specified in said second notice.

                  D. If the party who receives the notice of breach shall,
within five (5) days after receipt of such notice, send the notifying party a
written notice disputing the claim of material breach and demanding arbitration
thereof, then the parties hereto hereby agree that the dispute shall be
submitted promptly by them to the American Arbitration Association for the City
of New York for determination in accordance with its rules, and such
determination shall be binding upon both parties. During the pendency of said
arbitration, Manager shall continue to perform all of its obligations as Manager
under this Agreement. If it is determined that the party did commit a breach,
then the breach shall be cured within ten (10) days after service of a copy of
the award or determination on the breaching party; and if not so cured, this
Agreement shall be terminated.

                  E. If, at any time during the term of this Agreement there
shall be filed against either of the parties hereto in any court, pursuant to
any statute either of the United States or any state, a petition in bankruptcy
or insolvency or for reorganization of or for the appointment of a receiver or
trustee of all or a portion of the property of either party, and such petition
is not discharged within thirty (30) days after the filing thereof, or if either
party makes an assignment for the benefit of creditors, or petitions for or
enters into an arrangement, or permits this Agreement to be taken under any writ
of execution or attachment, then in any of such events, the other party hereto
shall have the right to terminate this Agreement by giving written notice, by
certified mail, effective as of a particular date specified in said notice.

                  F. Manager and Owner shall each have the further right to
terminate this Agreement or any portion or provision thereof or activity
thereunder on not less than thirty (30) days' prior written notice to the other
party if Manager or Owner shall determine in good faith that this Agreement
shall or may deprive Manager or Alexander's, Inc. of any benefits appurtenant to
that Party's future qualification as a REIT under all applicable laws, including
without limitation, the Internal Revenue Code of 1986, as amended from time to
time (the "Code") or continued benefits if that party is a REIT.

                  G. Upon any termination, partial termination with respect to
one or more Properties or as set forth in paragraph C of Article III or
expiration of this Agreement, all of the obligations of either party to the
other shall terminate immediately except (i) Manager shall comply with the
applicable provisions of Subsection H below, (ii) Owner shall pay to Manager


                                      -16-
<PAGE>
all Management and Development Fees and expenses earned and/or due hereunder to
the date of termination or expiration and (iii) as otherwise expressly stated
herein. Upon any termination of any portion, provision or activity of or under
this Agreement, the provisions of the preceding sentence shall apply in respect
of the terminated portion, provision or activity. Owner shall pay Manager any
amount owed to Manager under this Agreement within 30 days after any termination
of this Agreement.

                  H. Upon the expiration or earlier termination or partial
termination of this Agreement with respect to any or all of the Properties,
Manager shall:

                           1. Deliver to Owner, or such other person or persons
                  designated by owner, all books and records of any Property as
                  to which this Agreement has been terminated and all funds in
                  its possession belonging to Owner or received by Manager
                  pursuant to this Agreement with respect to such Properties,
                  together with all leases and all other contracts related to
                  such Properties; provided, however, that Manager shall have
                  the right to keep a copy of all such records; and

                           2. Assign, transfer or convey to Owner, or such other
                  person or persons designated by Owner, all service contracts
                  and personal property of Owner relating to or used in the
                  operation or maintenance of any Property as to which this
                  Agreement has been terminated. Upon the expiration or
                  termination, in whole or in part, of this Agreement, Manager
                  shall render a full account to Owner and shall deliver to
                  Owner a statement outlining in detail all management fees due
                  to Manager hereunder with respect to such terminated Property,
                  shall cause the net amount of any funds held by manager in
                  connection with any such Property to be delivered to owner and
                  shall cooperate with Owner in the transition by Owner to a
                  replacement property manager, if applicable.

         Owner shall compensate Manager for all costs and expenses incurred by
         Manager in good faith in connection with the transition of the
         management of Owner and the management of the Properties from Manager
         to any new manager.

                  ARTICLE XI. No Joint Venture. It is the intent of this
Agreement to constitute Manager as an independent contractor and as agent of
Owner under any contract entered into by Manager on behalf of Owner in
accordance with the terms of this Agreement, and this Agreement shall be so
construed and Manager agrees at all times to act in conformity therewith.
Nothing herein contained shall be deemed to have created, or be construed as
having created any joint venture or partnership relationship between Owner and
Manager. At all times during the performance of its duties and obligations
arising hereunder, Manager shall be acting as an independent contractor.

                  ARTICLE XII. Indemnity. A. Owner shall, to the fullest extent
permitted by applicable law, indemnify, defend and hold harmless Manager, its
officers, directors, trustees, partners, agents, employees and representatives
against any losses, claims, damages or liabilities to which such person may
become subject in connection with any matter arising out of or in connection
with this Agreement or owner's business or affairs, except for any loss, claim,
damage or liability caused by Manager's Malfeasance. If Manager becomes involved
in any

                                      -17-
<PAGE>
capacity in any action, proceeding or investigation in connection with any
matter arising out of or in connection with this Agreement or owner's business
or affairs, owner shall reimburse Manager for Manager's legal and other expenses
(including the cost of any investigation and preparation) as they are incurred
in connection therewith; provided, however, that Manager shall promptly repay to
Owner the amount of any such reimbursed expenses paid to it to the extent that
it shall ultimately be determined that Manager, its officers, directors,
trustees or agents were not entitled to be indemnified by Owner in connection
with such action, proceeding or investigation.

                  B. Vornado Realty Trust shall indemnify, defend and hold
harmless Owner and each of their respective officers, directors, trustees,
partners, representatives, employees and agents from and against any and all
claims, losses, damages or liabilities, to which such person may become subject
and arising out of Manager's Malfeasance or the Malfeasance of any of its
employees, representatives or agents in performing its or their duties under
this Agreement, except to the extent caused by the Malfeasance of owner or any
of their respective officers, directors, trustees, shareholders, partners,
representatives, employees or agents. If Owner becomes involved in any capacity
in any action, proceeding or investigation in connection with any matter arising
out of or in connection with this indemnity, Manager shall reimburse Owner for
Owner's legal and other expenses (including the cost of any investigation and
preparation) as they are incurred in connection therewith; provided, however,
that Owner shall promptly repay to Manager the amount of any such reimbursed
expenses paid to it to the extent that it shall ultimately be determined that
owner, its officers, directors, trustees or agents were not entitled to be
indemnified by Manager in connection with such action, proceeding or
investigation. Notwithstanding anything contained herein, Manager's liability
hereunder shall be limited (except to the extent covered by insurance) to the
aggregate amount of the Management and Development Fee received by Manager as of
the date such liability is determined.

                  C. The terms of this Article XII shall survive the expiration
or termination of this Agreement.

                  ARTICLE XIII. Notices. Any and all notices, consents or
directives by either party intended for the other shall be in writing sent by
hand delivery or reputable overnight courier service to the respective addresses
first herein set forth in this Agreement, with copies sent to Vornado Realty
Trust, 210 Route 4 East, Paramus, New Jersey 07652, Attention: Chief Financial
Officer, and Vornado Realty Trust, 888 Seventh Avenue, New York, New York 10019,
Attention: President, unless either party shall have designated different
addresses, by serving written notices of change of addresses on the other party
by registered or certified mail, return receipt requested.

                  ARTICLE XIV. Miscellaneous. A. This Agreement cannot be
changed or modified, varied or altered except by an agreement, in writing,
executed by each of the parties hereto. This Agreement constitutes all of the
understandings and agreements of whatsoever kind or nature existing between the
parties in connection with the relationship created herein.

                  B. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.


                                      -18-
<PAGE>
                  C. Neither Owner nor Manager shall make (and each hereby
waives) any claim against the other party's directors personally or against the
other party's trustees, beneficiaries or shareholders personally. Manager shall
(and is hereby authorized to) insert in all leases, documents and agreements
executed by it on behalf of Owner, a provision that Manager's directors,
trustees, beneficiaries or shareholders shall not be personally liable
thereunder.

                  D. Owner shall have the right to collaterally assign this
Agreement to a lender providing financing to Owner and Manager agrees to execute
and deliver a recognition agreement, in a commercially reasonable form,
providing that (a) such lender may assume Owner's interest in this Agreement
without obligation for payment of any fees accrued and payable to Manager for a
time prior to such assumption or with respect to performance of any obligation
relating to a time prior to such assumption, (b) Manager will perform the
services set forth herein for so long as such lender continues to perform the
obligations of Owner hereunder and (c) any termination hereof by the lender
other than in accordance with the terms of this Agreement (as opposed to in
accordance with the recognition agreement) shall not relieve Owner of its
obligations hereunder. In no event shall an assumption by the lender under such
a recognition agreement release Owner from its obligation hereunder with respect
to accrued fees or otherwise.

                  E. Any approval or consent required by or requested of any of
Owner, the Board, or the Independent Directors pursuant to the terms of this
Agreement may be withheld in the sole and absolute discretion of owner, the
Board or the Independent Directors, as applicable, unless otherwise expressly
provided.

                  F. Manager and Owner hereby expressly acknowledge and agree
that any third party engaged in accordance with the terms of this Agreement to
perform any of the services contemplated hereunder shall be at owner's expense.

                  G. Owner and Manager acknowledge that nothing contained in
this agreement shall restrict or otherwise affect the rights of Vornado Realty
Trust or any affiliate thereto in connection with any loan facility provided by
Vornado Realty Trust or such affiliate to Alexander's, Inc. and/or its
subsidiary.

                  H. Anything contained in this Agreement to the contrary
notwithstanding, Manager's agreement to undertake the obligations set forth in
this Agreement shall not constitute or be deemed to constitute an express or
implied warranty concerning the general affairs, financial position,
stockholders' equity, financial results of operations or prospects of Owner.

                  ARTICLE XV. Declaration of Trust.

                  A. Manager shall use every reasonable means to assure that all
persons having dealings with Alexander's through Manager shall be informed that
no trustee, shareholder, officer or agent of Alexander's, or any subsidiary of
Alexander's established for purposes of electing tax treatment as a REIT, shall
be held to any personal liability, nor shall resort be had to their private
property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of Owner, but the trust estate only shall be liable.
Manager


                                      -19-
<PAGE>
recognizes and agrees that every agreement or other written instrument entered
into by Manager on behalf of Owner shall contain a provision stating the above
limitation.

                  B. Manager represents, warrants and agrees that neither it nor
any affiliated or related person or entity (including any person or entity
owning any interest in Manager) is now, or shall become during the term of this
Agreement, a borrower of any funds advanced by Alexander's and Manager shall
advise Alexander's promptly, in writing, should such representation and warranty
become untrue. Manager shall, from time to time, furnish such information as may
reasonably be requested by Owner in order to facilitate Alexander's
qualification as a REIT under the Code.

                  ARTICLE XVI. Continued Qualification as a REIT. A. Manager
shall make reasonable efforts not to enter into any agreement (including,
without being limited to, any agreement for the furnishing of non-customary
services), without the consent of Alexander's, with any tenant or other occupant
of any Property; that would result in (A) the disqualification of Alexander's as
a REIT entitled to the benefits of Section 856 et seq., of the Code, (B) the
imposition of any penalty or similar tax on Alexander's (including, without
being limited to, the tax imposed on the failure to meet certain income
requirements under Section 857(b)(5) of the Code and the tax imposed on income
from prohibited transactions under Section 857(b)(6) of the Code) or (C) any
part of the rental or other consideration paid thereunder by such tenant or
occupant to Alexander's, or to Manager on behalf of Alexander's, being held not
to constitute either "rents from real property" or "interest on obligations
secured by mortgages on real property or on interests in real property" or
"interest on obligations secured by mortgages on real property or on interest in
real property" or other income described in Sections 856(c)(2) and (c)(3) of
the Code.

                  B. Alexander's shall make reasonable efforts to assure, by
prior review of agreements to be entered into by Manager, that no such agreement
contains provisions that would result in the disqualification of Alexander's as
a REIT entitled to the benefits of Section 856 et seq. of the Code, receipt by
the owner of non-qualifying income, or imposition of a penalty or similar tax
(including, without being limited to, the tax imposed on the failure to meet
certain income requirements under Section 857(b)(5) of the Code and tax imposed
on income from prohibited transactions under Section 857(b)(6) of the Code), and
specifically agrees that Manager shall be entitled to rely upon the advice of
Alexander's designated counsel as to any such matter; provided, however, that,
without regard to whether such review has been performed or advice rendered, if
any document or other written undertaking entered into or made by or on behalf
of Owner or any constituent entity of Owner shall, in the reasonable opinion of
counsel to Alexander's, contain any provision that would result in a significant
risk of the disqualification of Alexander's as a REIT, receipt by Alexander's of
non-qualifying income, imposition on Alexander's of any penalty or similar tax
(including, without being limited to, the tax imposed on the failure to meet
certain requirements under Section 857(b)(5) of the Code and the tax imposed on
income from prohibited transactions under Section 857(b)(6) of the Code), all as
provided for in said Section 856 et sea., then:

                           (i) such provision shall promptly be amended or
                  modified, to the reasonable satisfaction of counsel to
                  Alexander's so as to remove the risk of such result, such
                  amendment or modification to be retroactive to the date of
                  such


                                      -20-
<PAGE>
                  document or other undertaking, or to a date approved by
                  counsel to Alexander's; or

                           (ii) if a satisfactory amendment or modification
                  cannot be agreed upon as set forth in clause (i) above; any
                  such document or other undertaking shall be terminated by
                  Alexander's, such termination to be retroactive to the date of
                  such document or other undertaking, or to a date approved by
                  counsel to Alexander's, and effective as to all terms and
                  provisions of such document or other undertaking, except such
                  provisions thereof as call for the making of any distribution
                  or the payment of any compensation to any third party, for the
                  purposes of which provisions, the termination date shall be
                  deemed to be without retroactive effect.

                  C. Manager agrees that it shall cooperate with Owner in
accomplishing a satisfactory amendment or modification of any such document or
other undertaking, or the termination thereof, and shall, on request, execute
and deliver any and all agreements and other documents reasonably required to
effect such amendment or modification, or such termination. Manager shall submit
any agreement proposed to be entered into by or on behalf of Owner to Owner's
designated counsel for review a reasonable period of time prior to the proposed
execution of such agreement.

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



                                      -21-
<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have hereunto executed
this Agreement as of the 3 day of July, 2002.

                                        OWNER:     ALEXANDER'S INC.


                                                   By: /s/ Brian Kurtz
                                                       -------------------------
                                                       Brian Kurtz

                                                       Assistant Secretary

                                        MANAGER:   VORNADO MANAGEMENT
                                                     CORP.


                                                   By: /s/ Joseph Macnow
                                                       -------------------------
                                                       Joseph Macnow

                                                       Executive Vice President

                  The undersigned joins in the execution of this Agreement
solely for the purpose of indicating its agreement to the provisions of Article
XII.B, hereof:

VORNADO REALTY TRUST


By: /s/ Joseph Macnow
    -----------------------------
    Joseph Macnow
    Executive Vice President
<PAGE>
                                    EXHIBIT A


1.       "FLUSHING PROPERTY"
          -----------------
         ADDRESS:          136-20 through 136-30 Roosevelt Avenue,
                           a/k/a 40-17-19 Main Street
                           Queens, New York
           TAX MAP DESIGNATION:
                  BLOCK:  5019               LOT:  5
                  CITY:  New York            COUNTY:   Bronx   STATE:  New York

2.       "THIRD AVENUE PROPERTY"
          ---------------------
         ADDRESS:          2948-54 Third Avenue
                           633 Bergen Avenue;
                           2964 Third Avenue; and
                           2970 Third Avenue
                           Bronx, New York
           TAX MAP DESIGNATION:
                  SECTION: 9
                  BLOCK:   2362              LOTS:  44, 72, 71, 52, 53
                  CITY:  New York            COUNTY:   Bronx   STATE:  New York

3.       "REGO PARK II PROPERTY"
           TAX MAP DESIGNATION:
                  BLOCK:   2080              LOTS:     101
                  CITY:  New York            COUNTY:   Queens  STATE:  New York

4.       "REGO PARK III PROPERTY"
           TAX MAP DESIGNATION:
                  BLOCK:   2077               LOTS:    90 and 98
                  CITY:  New York             COUNTY:  Queens  STATE:  New York

                                       AND

                  BLOCK:   2076               LOTS:    50 and 63
                  CITY:  New York             COUNTY:  Queens  STATE:  New York

5.       "PARAMUS PROPERTY"
           TAX MAP DESIGNATION:
                  BLOCKS:  1202               LOTS:    1
<PAGE>
                                    EXHIBIT B

                              List of Subsidiaries


Alexander's of Flushing, Inc.

Alexander's of Rego Park II, Inc.

Alexander's of Rego Park III, Inc.

Alexander's of Third Avenue, Inc.