<PAGE>
                                                               Exhibit 10(i)C(6)


                          GUARANTY OF CARRY OBLIGATIONS

         THIS GUARANTY (this "GUARANTY") is executed as of July 3, 2002 by
ALEXANDER'S, INC., a Delaware corporation (whether one or more collectively
referred to as "GUARANTOR"), for the benefit of BAYERISCHE HYPO- UND VEREINSBANK
AG, NEW YORK BRANCH, a German banking corporation organized under the laws of
the Federal Republic of Germany, having an address at 622 Third Avenue, New
York, New York 10017 ("HVB"), acting in its capacity as agent (HVB in such
capacity, together with its successors and assigns in such capacity, "AGENT")
for the ratable benefit of HVB, acting in its individual capacity, and any other
co-lenders as may exist from time to time (collectively, with HVB, "LENDERS").

                              W I T N E S S E T H:


         WHEREAS, pursuant to that certain Building Loan Agreement, dated of
even date herewith, between Borrower, Agent and Lenders (together with all
extensions, renewals, modifications, substitutions and amendments thereof, the
"BUILDING LOAN AGREEMENT"), Agent has agreed to administer and Lenders have
agreed to make a building loan to 731 Commercial LLC and 731 Residential LLC,
each a Delaware limited liability company (collectively, "BORROWER") in the
principal amount of up to TWO HUNDRED MILLION and No/100 DOLLARS
($200,000,000.00) (the "BUILDING LOAN"), which Loan is evidenced by one or more
Consolidated, Amended and Restated Building Loan Mortgage Note(s), dated of even
date herewith, executed by Borrower and payable to the order of Lenders
according to their respective ratable shares of the Loan (collectively, together
with all extensions, renewals, modifications, substitutions and amendments
thereof, the "BUILDING LOAN NOTE");

         WHEREAS, pursuant to that certain Supplemental Loan Agreement, dated of
even date herewith, between Borrower, Agent and Lenders (together with all
extensions, renewals, modifications, substitutions and amendments thereof, the
"SUPPLEMENTAL LOAN AGREEMENT"), Agent has agreed to administer and Lenders have
agreed to make a supplemental loan to Borrower in the principal amount of up to
Two Hundred Fifteen Million Three Hundred Sixteen Thousand Eight Hundred
Eighteen and No/100 Dollars ($215,316,818) (the "SUPPLEMENTAL LOAN"), which
Supplemental Loan will be evidenced by one or more Consolidated, Amended and
Restated Supplemental Mortgage Loan Note(s), made by Borrower and payable to the
order of Lenders according to their respective ratable shares of the Loan
(collectively, together with all extensions, renewals, modifications,
substitutions and amendments thereof, the "SUPPLEMENTAL LOAN NOTE");

         WHEREAS, pursuant to that certain Project Loan Agreement, dated of even
date herewith, between Borrower, Agent and Lenders (together with all
extensions, renewals, modifications, substitutions and amendments thereof, the
"PROJECT LOAN AGREEMENT" and together with the Building Loan Agreement and
Supplemental Loan Agreement, collectively, the "LOAN AGREEMENT"), Agent has
agreed to administer and Lenders have agreed to make a project loan to Borrower
in the principal amount of up to Seventy Four Million Six Hundred Eight Three
Thousand One Hundred Eighty Two and No/100 Dollars ($74,683,182) (the "PROJECT
LOAN" and
<PAGE>
together with the Building Loan and the Supplemental Loan, collectively, the
"LOAN"), which Project Loan is evidenced by one or more Project Loan Mortgage
Note(s), made by Borrower and payable to the order of Lenders according to their
respective ratable shares of the Loan (collectively, together with all
extensions, renewals, modifications, substitutions and amendments thereof, the
"PROJECT LOAN NOTE" and together with the Building Loan Note and the
Supplemental Loan Note, collectively, the "NOTE");

         WHEREAS, Lenders are not willing to make the Loan, or otherwise extend
credit, to Borrower unless Guarantor unconditionally guarantees payment and
performance to Lenders of the Guaranteed Obligations (as herein defined); and

         WHEREAS, Guarantor is the owner of a direct or indirect interest in
Borrower, and Guarantor will directly benefit from Lenders making the Loan to
Borrower.

         NOW, THEREFORE, as an inducement to Lenders to make the Loan to
Borrower and to extend such additional credit as Lenders may from time to time
agree to extend under the Loan Documents, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:

                                   ARTICLE I

                          NATURE AND SCOPE OF GUARANTY

         1.1 GUARANTY OF OBLIGATION. Guarantor hereby irrevocably, absolutely
and unconditionally guarantees to Agent and Lenders and their respective
successors and assigns the payment and performance of the Guaranteed Obligations
as and when the same shall be due and payable, whether by lapse of time, by
acceleration of maturity or otherwise. Guarantor hereby irrevocably and
unconditionally covenants and agrees that it is liable for the Guaranteed
Obligations as a primary obligor.

         1.2 DEFINITIONS. The following terms shall have the respective
meanings set forth below. All other capitalized terms used herein and not
otherwise defined, shall have the respective meanings assigned to them in the
Building Loan Agreement.

         "CARRYING COSTS" shall mean, with respect to the period in question,
all customary or necessary costs and expenses incurred in connection with the
operation, maintenance and management of the Property, including, without
limitation, any and all accrued and unpaid interest on the Loan, Insurance
Premiums, Taxes and Other Charges, charges for utilities, repair, replacement
and all other maintenance costs and expenses, equipment lease payments,
management fees, professional fees, accounting fees, advertising expenses,
salaries, fringe and other benefits due to all employees engaged in the
operation, maintenance or management of the Property, payroll and related taxes
and any and all other Operating Expenses, but only to the extent that the
foregoing costs and expenses exceed the respective undisbursed amounts (taking
into consideration the assumptions made in the Loan Budget for the total period
of time over which such Line Items were budgeted) set forth in the related Line
Items for such


                                      -2-
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costs and expenses in the Loan Budget. Carrying Costs shall not include any
construction costs incurred in connection with the construction of the
improvements at the Property.

         "GUARANTEED OBLIGATIONS" shall mean the prompt and unconditional
payment by Borrower of the following: (i) any and all Carry Costs when due until
the earliest to occur of (A) the date when each of the conditions set forth in
Section 2.1.5(b)(vi) and (vii) of the Building Loan Agreement have been
satisfied, (B) the date that title to the Property is sold pursuant to a
foreclosure sale or that title to the Property is acquired by Agent (acting on
behalf of Lenders) or its nominee or designee pursuant to a deed-in-lieu of
foreclosure and (C) the date that is two (2) years after the date of any Tender;
(ii) all amounts that become due and payable pursuant to Section 2.2.7 of the
Loan Agreement; and (iii) any sums payable by Borrower to the Counterparty under
the Interest Rate Protection Agreement in connection with any termination
thereof.

         "OFFICER'S CERTIFICATE" shall mean a certificate delivered to Agent by
Guarantor which is signed by an authorized senior officer of Guarantor (without
recourse to said officer).

         "PERMITTED GUARANTOR DEFENSE" shall mean, with respect to the
Guarantor, the defense of payment or the defense that Lenders failed to fund the
Loan in accordance with the Loan Agreements, in either case, to the extent such
defense is available to Borrower.

         "TENDER" shall mean, with respect to the Property, that (i) Guarantor
shall have delivered to Agent (acting on behalf of Lenders) a bargain and sale
deed (without covenants against Grantor's acts), duly authorized and properly
executed and acknowledged in proper form for recording with the City Register's
Office, New York County, together with (A) any and all transfer tax returns duly
executed by Borrower, (B) tender of proper payment of any and all transfer taxes
that would be due if Agent accepts such deed, (C) a title insurance commitment
in favor of Agent committing to insure Agent or its nominee if it accepts such
deed for the amount of the Loan and (D) payment of all insurance premiums for
the issuance of a title policy pursuant to such commitment if such deed is
accepted; (ii) such deed shall convey to Agent (acting on behalf of Lenders)
good and marketable title to the Property subject only to the Permitted
Encumbrances, (iii) there shall be no Hazardous Substances (as such term is
defined in the Environmental Indemnity) at the Property other than as expressly
permitted by the Loan Documents, (iv) Guarantor shall have delivered to Agent
(acting on behalf of Lenders) a bill of sale, duly authorized and properly
executed, conveying to Agent (acting on behalf of Lenders) good and marketable
title to all personal property included within the definition of Property
including any and all Stored Materials and (v) Guarantor shall have delivered to
Agent (acting on behalf of Lenders) an assignment of contracts, licenses and
permits, duly authorized and properly executed, which outrightly assigns to
Agent (acting on behalf of Lenders) all of the contracts, licenses and permits
collaterally assigned pursuant to the Assignment of Contracts, including,
without limitation, the 421-a Negotiable Certificates and the Existing
Development Rights and Additional Development Rights.

         1.3 NATURE OF GUARANTY. (a) This Guaranty is an irrevocable,
unconditional, absolute, continuing guaranty of payment and performance and not
a guaranty of collection. This Guaranty may not be revoked by Guarantor and
shall continue to be effective with respect to any Guaranteed Obligations
arising or created after any attempted revocation by Guarantor.


                                      -3-
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The fact that at any time or from time to time the Guaranteed Obligations may be
increased or reduced shall not release or discharge the obligation of Guarantor
to Lenders with respect to the Guaranteed Obligations. This Guaranty may be
enforced by Agent on behalf of Lenders and any subsequent holder of the Note and
shall not be discharged by the assignment or negotiation of all or part of the
Note.

         1.4 GUARANTEED OBLIGATIONS NOT REDUCED BY OFFSET. The Guaranteed
Obligations and the liabilities and obligations of Guarantor to Agent and
Lenders hereunder shall not be reduced, discharged or released because or by
reason of any existing or future offset, claim or defense (other than any
Permitted Guarantor Defense) of Borrower or any other party against Agent and/or
Lenders or against payment of the Guaranteed Obligations, whether such offset,
claim or defense arises in connection with the Guaranteed Obligations (or the
transactions creating the Guaranteed Obligations) or otherwise.

         1.5 PAYMENT BY GUARANTOR. If all or any part of the Guaranteed
Obligations shall not be punctually paid when due, Guarantor shall, within ten
(10) Business Days after demand by Agent and without presentment, protest,
notice of protest, notice of non-payment, notice of intention to accelerate the
maturity, notice of acceleration of the maturity or any other notice whatsoever,
pay in lawful money of the United States of America, the amount due on the
Guaranteed Obligations to Agent at Agent's address as set forth herein. Such
demand(s) may be made at any time coincident with or after the time for payment
of all or part of the Guaranteed Obligations and may be made from time to time
with respect to the same or different items of Guaranteed Obligations. Such
demand shall be deemed made, given and received in accordance with the notice
provisions hereof. If the amount due on the Guaranteed Obligations is not paid
to Agent as aforesaid within ten (10) Business Days after demand by Agent, the
same shall bear interest at the Default Rate from the date of demand until the
date the amount demanded has been paid (which interest shall be included within
the meaning of Guaranteed Obligations).

         1.6 NO DUTY TO PURSUE OTHERS. It shall not be necessary for Agent or
Lenders (and Guarantor hereby waives any rights which Guarantor may have to
require Agent or Lenders), in order to enforce the obligations of Guarantor
hereunder, first to (i) institute suit or exhaust its remedies against Borrower
or others liable on the Loan or the Guaranteed Obligations or any other person,
(ii) enforce Agent's or Lenders' rights against any collateral which shall ever
have been given to secure the Loan, (iii) enforce Agent's or Lenders' rights
against any other guarantors of the Guaranteed Obligations, (iv) join Borrower
or any others liable on the Guaranteed Obligations in any action seeking to
enforce this Guaranty, (v) exhaust any remedies available to Agent or Lenders
against any collateral which shall ever have been given to secure the Loan, or
(vi) resort to any other means of obtaining payment of the Guaranteed
Obligations. Neither Agent nor any Lender shall be required to mitigate damages
or take any other action to reduce, collect or enforce the Guaranteed
Obligations.

         1.7 WAIVERS. Guarantor agrees to the provisions of the Loan Documents
and hereby waives notice of (i) any loans or advances made by Agent or Lenders
to Borrower, (ii) acceptance of this Guaranty, (iii) any amendment or extension
of the Note, the Mortgage, the Loan Agreement or of any other Loan Documents,
(iv) the execution and delivery by Borrower, Agent and Lenders of any other loan
or credit agreement or of Borrower's execution and delivery of any promissory
notes or other documents arising under the Loan Documents or in


                                      -4-
<PAGE>
connection with the Property, (v) the occurrence of any breach by Borrower or an
Event of Default, (vi) any Lender's transfer or disposition of the Guaranteed
Obligations, or any part thereof, (vii) sale or foreclosure (or posting or
advertising for sale or foreclosure) of any collateral for the Guaranteed
Obligations, (viii) protest, proof of non-payment or default by Borrower, or
(ix) any other action at any time taken or omitted by Agent or Lenders and,
generally, all demands and notices of every kind in connection with this
Guaranty, the Loan Documents, any documents or agreements evidencing, securing
or relating to any of the Guaranteed Obligations and the obligations hereby
guaranteed.

         1.8 PAYMENT OF EXPENSES. In the event that Guarantor should breach or
fail to timely perform any provisions of this Guaranty, Guarantor shall, within
five (5) Business Days after demand by Agent, pay Agent for all reasonable
out-of-pocket costs and expenses (including reasonable court costs and
attorneys' fees) incurred by Agent in the enforcement hereof or the preservation
of Agent's and Lenders' rights hereunder. The covenant contained in this Section
shall survive the payment and performance of the Guaranteed Obligations.

         1.9 EFFECT OF BANKRUPTCY. In the event that pursuant to any insolvency,
bankruptcy, reorganization, receivership or other debtor relief law or any
judgment, order or decision thereunder, Lenders must rescind or restore any
payment or any part thereof received by Lenders in satisfaction of the
Guaranteed Obligations, as set forth herein, any prior release or discharge from
the terms of this Guaranty given to Guarantor by Lenders or Agent on Lenders'
behalf shall be without effect and this Guaranty shall remain in full force and
effect. It is the intention of Borrower and Guarantor that Guarantor's
obligations hereunder shall not be discharged except by Guarantor's performance
of such obligations and then only to the extent of such performance.

         1.10 WAIVER OF SUBROGATION, REIMBURSEMENT AND CONTRIBUTION.
Notwithstanding anything to the contrary contained in this Guaranty, Guarantor
hereby unconditionally and irrevocably waives its rights to enforce any and all
rights it may now or hereafter have under any agreement, at law or in equity
(including, without limitation, any law subrogating the Guarantor to the rights
of Agent and/or Lenders), to assert any claim against or seek contribution,
indemnification or any other form of reimbursement from Borrower or any other
party liable for payment of any or all of the Guaranteed Obligations for any
payment made by Guarantor under or in connection with this Guaranty or
otherwise, and subordinates any and all of such rights, in all cases, until the
Loan is paid in full.

         1.11 BORROWER. The term "BORROWER" as used herein shall include any new
or successor corporation, association, partnership (general or limited), limited
liability company joint venture, trust or other individual or organization
formed as a result of any merger, reorganization, sale, transfer, devise, gift
or bequest of Borrower or any interest in Borrower.



                                      -5-
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                                   ARTICLE II

                      EVENTS AND CIRCUMSTANCES NOT REDUCING
                     OR DISCHARGING GUARANTOR'S OBLIGATIONS

         Guarantor hereby consents and agrees to each of the following and
agrees that Guarantor's obligations under this Guaranty shall not be released,
diminished, impaired, reduced or adversely affected by any of the following and
waives any common law, equitable, statutory or other rights (including without
limitation rights to notice) which Guarantor might otherwise have as a result of
or in connection with any of the following:

         2.1 MODIFICATIONS. Any renewal, extension, increase, modification,
alteration or rearrangement of all or any part of the Guaranteed Obligations,
the Note, the Mortgage, the Loan Agreement, the other Loan Documents or any
other document, instrument, contract or understanding between Borrower and Agent
and/or Lenders or any other parties pertaining to the Guaranteed Obligations or
any failure of Agent or Lenders to notify Guarantor of any such action.

         2.2 ADJUSTMENT. Any adjustment, indulgence, forbearance or compromise
that might be granted or given by Lenders or Agent on its behalf to Borrower or
any Guarantor.

         2.3 CONDITION OF BORROWER OR GUARANTOR. The insolvency, bankruptcy,
arrangement, adjustment, composition, liquidation, disability, dissolution or
lack of power of Borrower, Guarantor or any other party at any time liable for
the payment of all or part of the Guaranteed Obligations; or any dissolution of
Borrower or Guarantor or any sale, lease or transfer of any or all of the assets
of Borrower or Guarantor or any changes in the shareholders, partners or members
of Borrower or Guarantor; or any reorganization of Borrower or Guarantor.

         2.4 INVALIDITY OF GUARANTEED OBLIGATIONS. The invalidity, illegality or
unenforceability of all or any part of the Guaranteed Obligations or any
document or agreement executed in connection with the Guaranteed Obligations for
any reason whatsoever, including without limitation the fact that (i) the
Guaranteed Obligations or any part thereof exceeds the amount permitted by law,
(ii) the act of creating the Guaranteed Obligations or any part thereof is ultra
vires, (iii) the officers or representatives executing the Note, the Mortgage,
the Loan Agreement or the other Loan Documents or otherwise creating the
Guaranteed Obligations acted in excess of their authority, (iv) the Guaranteed
Obligations violate applicable usury laws, (v) the Borrower has valid defenses
(other than any Permitted Guarantor Defense), claims or offsets (whether at law,
in equity or by agreement) which render the Guaranteed Obligations wholly or
partially uncollectible from Borrower, (vi) the creation, performance or
repayment of the Guaranteed Obligations (or the execution, delivery and
performance of any document or instrument representing part of the Guaranteed
Obligations or executed in connection with the Guaranteed Obligations or given
to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible
or unenforceable, or (vii) the Note, the Mortgage, the Loan Agreement or any of
the other Loan Documents have been forged or otherwise are irregular or not
genuine or authentic, it being agreed that Guarantor shall remain liable hereon
regardless of whether Borrower or any other person be found not liable on the
Guaranteed Obligations or any part thereof for any reason (other than any
Permitted Guarantor Defense).



                                      -6-
<PAGE>
         2.5 RELEASE OF OBLIGORS. Any full or partial release of the liability
of Borrower on the Guaranteed Obligations or any part thereof, or of any
co-guarantors, or any other Person now or hereafter liable, whether directly or
indirectly, jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Guaranteed Obligations, or any part
thereof, it being recognized, acknowledged and agreed by Guarantor that
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other party, and Guarantor has not been induced to
enter into this Guaranty on the basis of a contemplation, belief, understanding
or agreement that other parties will be liable to pay or perform the Guaranteed
Obligations, or that Lenders will look to other parties to pay or perform the
Guaranteed Obligations.

         2.6 OTHER COLLATERAL. The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Guaranteed Obligations.

         2.7 RELEASE OF COLLATERAL. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including, without
limitation, negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, property or security at any time existing in connection with, or
assuring or securing payment of, all or any part of the Guaranteed Obligations.

         2.8 CARE AND DILIGENCE. The failure of Agent and/or Lenders or any
other party to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any part
of any collateral, property or security, including but not limited to any
neglect, delay, omission, failure or refusal of Agent and/or Lenders (i) to take
or prosecute any action for the collection of any of the Guaranteed Obligations
or (ii) to foreclose, or initiate any action to foreclose, or, once commenced,
prosecute to completion any action to foreclose upon any security therefor, or
(iii) to take or prosecute any action in connection with any instrument or
agreement evidencing or securing all or any part of the Guaranteed Obligations.

         2.9 UNENFORCEABILITY. The fact that any collateral, security, security
interest or lien contemplated or intended to be given, created or granted as
security for the repayment of the Guaranteed Obligations, or any part thereof,
shall not be properly perfected or created, or shall prove to be unenforceable
or subordinate to any other security interest or lien, it being recognized and
agreed by Guarantor that Guarantor is not entering into this Guaranty in
reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectibility or value of any of the collateral for the
Guaranteed Obligations.

         2.10 OFFSET. The fact that the Note, the Guaranteed Obligations and the
liabilities and obligations of the Guarantor to Lenders hereunder shall not be
reduced, discharged or released because of or by reason of any existing or
future right of offset, claim or defense (other than any Permitted Guarantor
Defense) of Borrower against Agent and/or Lenders, or any other party, or
against payment of the Guaranteed Obligations, whether such right of offset,
claim or defense (other than any Permitted Guarantor Defense) arises in
connection with the Guaranteed Obligations (or the transactions creating the
Guaranteed Obligations) or otherwise.



                                      -7-
<PAGE>
         2.11 MERGER. The reorganization, merger or consolidation of Borrower
into or with any other Person.

         2.12 PREFERENCE. Any payment by Borrower to Agent and/or Lenders is
held to constitute a preference under bankruptcy laws or for any reason Lenders
are required to refund such payment or pay such amount to Borrower or someone
else.

         2.13 OTHER ACTIONS TAKEN OR OMITTED. Any other action taken or omitted
to be taken with respect to the Loan Documents, the Guaranteed Obligations, or
the security and collateral therefor, whether or not such action or omission
prejudices Guarantor or increases the likelihood that Guarantor will be required
to pay the Guaranteed Obligations pursuant to the terms hereof, it is the
unambiguous and unequivocal intention of Guarantor that Guarantor shall be
obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever (other than
actions that constitute Permitted Guarantor Defenses), whether contemplated or
uncontemplated, and whether or not otherwise or particularly described herein,
which obligation shall be deemed satisfied only upon the full and final payment
and satisfaction of the Guaranteed Obligations.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         To induce Agent to enter into the Loan Documents and Lenders to enter
into the Loan Agreement and extend credit to Borrower, Guarantor represents and
warrants to Agent and Lenders as follows:

         3.1 BENEFIT. Guarantor is an Affiliate of Borrower, is the owner of an
indirect interest in Borrower, and has received, or will receive, direct or
indirect benefit from the making of this Guaranty with respect to the Guaranteed
Obligations.

         3.2 FAMILIARITY AND RELIANCE. Guarantor is familiar with, and has
independently reviewed books and records regarding, the financial condition of
the Borrower and is familiar with the value of any and all collateral intended
to be created as security for the payment of the Note or Guaranteed Obligations;
however, Guarantor is not relying on such financial condition or the collateral
as an inducement to enter into this Guaranty.

         3.3 NO REPRESENTATION BY LENDERS. Neither Agent nor Lenders nor any
other party has made any representation, warranty or statement to Guarantor in
order to induce the Guarantor to execute this Guaranty.

         3.4 GUARANTOR'S FINANCIAL CONDITION. As of the date hereof, and after
giving effect to this Guaranty and the contingent obligation evidenced hereby,
Guarantor is and will be solvent and has and will have assets which, fairly
valued, exceed its obligations, liabilities (including contingent liabilities)
and debts, and has and will have property and assets sufficient to satisfy and
repay its obligations and liabilities.



                                      -8-
<PAGE>
         3.5 LEGALITY. The execution, delivery and performance by Guarantor of
this Guaranty and the consummation of the transactions contemplated hereunder do
not and will not contravene or conflict with any law, statute or regulation
whatsoever to which Guarantor is subject or constitute a default in any material
respect (or an event which with notice or lapse of time or both would constitute
a default in any material respect) under, or result in the breach in any
material respect of, any indenture, mortgage, charge, lien, or any material
contract, agreement or other instrument to which Guarantor is a party or which
may be applicable to Guarantor. This Guaranty is a legal and binding obligation
of Guarantor and is enforceable in accordance with its terms, except as limited
by bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors' rights.

         3.6 CONSENTS. No consent, approval, authorization or order of any court
or Governmental Authority or other Person is required for the execution,
delivery and performance by Guarantor of, or compliance by Guarantor with, this
Guaranty or the consummation of the transactions contemplated hereby, other than
those which have been obtained by Guarantor.

         3.7 LITIGATION. There is no action, suit, proceeding or investigation
pending or, to Guarantor's knowledge, threatened against Guarantor in any court
or by or before any other Governmental Authority, or labor controversy affecting
Guarantor or any of its properties, businesses, assets or revenues, which would
reasonably be expected to (i) materially and adversely affect the ability of
Guarantor to carry out the transactions contemplated by this Agreement, (ii)
materially and adversely affect the value of its property, (iii) impair the use
and operation of its property or (iv) impair Guarantor's ability to pay its
obligations in a timely manner.

         3.8 NO PLAN ASSETS. As of the date hereof and throughout the term of
the Loan (a) Guarantor is not and will not be an "employee benefit plan," as
defined in Section 3(3) of ERISA, subject to Title I of ERISA, (b) none of the
assets of Guarantor constitutes or will constitute "plan assets" of one or more
such plans within the meaning of 29 C.F.R. Section 2510.3 101, (c) Guarantor is
not and will not be a "governmental plan" within the meaning of Section 3(32) of
ERISA and (d) transactions by or with Guarantor are not and will not be subject
to state statutes regulating investment of, and fiduciary obligations with
respect to, governmental plans.

         3.9 FINANCIAL AND OTHER INFORMATION. All financial data that have been
delivered to Agent and/or Lenders in respect of Guarantor (i) are true, complete
and correct in all material respects as of the date of the statements containing
such data, (ii) accurately represent the financial condition of Guarantor as of
the date of such reports, and (iii) have been prepared in accordance with GAAP
throughout the periods covered, except as disclosed therein. Guarantor does not
have any contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments that are known to Guarantor and reasonably likely to have a
materially adverse effect on Guarantor, except as referred to or reflected in
said financial statements. Since the date of the financial statements, there has
been no material adverse change in the financial condition, operations or
business of Guarantor from that set forth in said financial statements. All
documents furnished to Agent and/or Lenders by or on behalf of Guarantor, as
part of or in support of the Loan application or pursuant to this Guaranty or
any of the other Loan Documents, are true, correct,


                                      -9-
<PAGE>
complete in all material respects and accurately represent the matters to which
they pertain as of the dates made and there have been no materially adverse
changes with respect to such matters since the respective dates thereof.

         3.10 TAX FILINGS. Guarantor has filed (or has obtained effective
extensions for filing) any federal, state and local tax returns required to be
filed and has paid or made adequate provision for the payment of all federal,
state and local taxes, charges and assessments payable by Guarantor.

         3.11 SURVIVAL. All representations and warranties made by Guarantor
herein shall survive the execution hereof.

                                   ARTICLE IV

                                    COVENANTS

         4.1 FINANCIAL REPORTING. (a) Guarantor shall keep and maintain or will
cause to be kept and maintained proper and accurate books and records, in
accordance with GAAP, reflecting the financial affairs of Guarantor. Agent shall
have the right during the continuance of an Event of Default from time to time
during normal business hours upon reasonable notice to Guarantor to examine such
books and records at the office of Guarantor or other Person maintaining such
books and records and to make such copies or extracts thereof as Agent shall
desire.

                  (b) Guarantor shall furnish Agent annually, within ninety days
following the end of each Fiscal Year, a complete copy of Guarantor's annual
financial statements audited by a nationally recognized accounting firm (other
than Arthur Andersen) and prepared in accordance with GAAP, including, without
limitation, statements of (i) balance sheet, (ii) income and expense and (iii)
cash flow for such Borrower, together with a copy of Guarantor's Form 10K.

                  (c) Guarantor shall furnish Agent quarterly, within forty five
days following the end of each quarter (other than the fourth quarter),
unaudited, quarterly financial statements for Guarantor, including, without
limitation, quarterly and year to date statements of (i) balance sheet, (ii)
income and expense and cash flow for Guarantor, with a balance sheet for
Guarantor prepared in accordance with GAAP, together with a copy of Guarantor's
Form 10Q.

                  (d) Guarantors' financial statements delivered pursuant to
Section 4.1(b) and (c) shall be accompanied by an Officer's Certificate stating
that (A) to the best knowledge of the Person executing such Officer's
Certificate, such financial statements present fairly, in all respects, the
financial condition and the results of operations of Guarantor and (B) setting
forth Guarantor's calculation of its Net Worth.

         4.2 FINANCIAL COVENANTS. At all times during the term of the Loan,
Guarantor shall maintain a market equity capitalization of not less than
Thirty-Five Million and No/100 ($35,000,000.00) Dollars as of the last day of
each fiscal quarter during the term of the Loan.



                                      -10-
<PAGE>
         4.3 INTENTIONALLY OMITTED.

         4.4 INTENTIONALLY OMITTED.

         4.5 PRINCIPAL PLACE OF BUSINESS. Guarantor shall not change its chief
executive office or chief place of business, which as of the date hereof is 888
Seventh Avenue, New York, New York 10019, without first giving Agent prompt
prior notice.

         4.6 ERISA. (a) As used herein, "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended.

                  (b) Guarantor shall deliver to Agent such certifications or
other evidence from time to time throughout the term of the Loan, as requested
by Agent, that (A) Guarantor is not and will not be an "employee benefit plan"
as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a
"governmental plan" within the meaning of Section 3(32) of ERISA; (B) Guarantor
is not subject to state statutes regulating investments and fiduciary
obligations with respect to governmental plans; and (C) one or more of the
following circumstances is true:

         (i) Equity interests in Guarantor are publicly offered securities,
     within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);

         (ii) Less than twenty-five percent (25%) of each outstanding class of
     equity interests in Guarantor are held by "benefit plan investors" within
     the meaning of 29 C.F.R. Section 2510.3-101(f)(2); or

         (iii) Guarantor qualifies as an "operating company" or a "real estate
     operating company" within the meaning of 29 C.F.R. Section 2510.3-101(c) or
     (e).

         4.7 ASSIGNMENT AND PARTICIPATIONS. Guarantor agrees to execute, within
ten (10) days after request therefor is made by Agent, any documents and/or
estoppel certificates reasonably requested by Agent in connection with any
participation or assignment made by any Lender pursuant to Section 10.24 of the
Building Loan Agreement, without charge; provided that such documents and/or
estoppel certificates do not expand the liability or obligations of Guarantor or
reduce such assignee's or participant's obligations.

                                   ARTICLE V

                      SUBORDINATION OF CERTAIN INDEBTEDNESS

         5.1 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the term
"GUARANTOR CLAIMS" shall mean all debts and liabilities of Borrower to
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligations of Borrower thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of the person or persons
in whose favor such debts or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in


                                      -11-
<PAGE>
which they have been or may hereafter be acquired by Guarantor. The Guarantor
Claims shall include without limitation all rights and claims of Guarantor
against Borrower (arising as a result of subrogation or otherwise) as a result
of Guarantor's payment of all or a portion of the Guaranteed Obligations. After
the occurrence of an Event of Default or during a Cash Trap Period (except as
otherwise expressly permitted pursuant to Section 4.2.12 of the Building Loan
Agreement), Guarantor shall not receive or collect, directly or indirectly, from
Borrower any amount upon the Guarantor Claims until (i) the Loan has been paid
in full or such Event of Default has been cured or waived in writing by Agent on
behalf of Lenders and (ii) such Cash Trap Period no longer continues.

         5.2 CLAIMS IN BANKRUPTCY. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor's relief, or other insolvency proceedings
involving Guarantor as debtor, Agent shall have the right to prove its claim in
any such proceeding so as to establish its rights hereunder and receive directly
from the receiver, trustee or other court custodian dividends and payments which
would otherwise be payable upon Guarantor Claims. Guarantor hereby assigns such
dividends and payments to Agent for the benefit of Lenders. Should Agent
receive, for application against the Guaranteed Obligations, any such dividend
or payment which is otherwise payable to Guarantor and which, as between
Borrower and Guarantor, shall constitute a credit against the Guarantor Claims,
then, upon payment to Agent in full of the Guaranteed Obligations, Guarantor
shall become subrogated to the rights of Lenders to the extent that such
payments to Agent on the Guarantor Claims have contributed toward the
liquidation of the Guaranteed Obligations, and such subrogation shall be with
respect to that proportion of the Guaranteed Obligations which would have been
unpaid if Agent had not received dividends or payments upon the Guarantor
Claims.

         5.3 PAYMENTS HELD IN TRUST. In the event that, notwithstanding anything
to the contrary in this Guaranty, during the continuance of an Event of Default
or a Cash Trap Period. Guarantor should receive any funds, payment, claim or
distribution from Borrower which is prohibited by this Guaranty or the Loan
Agreement, Guarantor agrees to hold in trust for Agent an amount equal to the
amount of all funds, payments, claims or distributions so received, and agrees
that it shall have absolutely no dominion over the amount of such funds,
payments, claims or distributions so received except to pay them promptly to
Agent, and Guarantor covenants promptly to pay the same to Agent.

         5.4 LIENS SUBORDINATE. Guarantor agrees that any liens, security
interests, judgment liens, charges or other encumbrances upon Borrower's assets
securing payment of the Guarantor Claims shall be and remain inferior and
subordinate to any liens, security interests, judgment liens, charges or other
encumbrances upon Borrower's assets securing payment of the Guaranteed
Obligations, regardless of whether such encumbrances in favor of Guarantor or
Agent or Lenders presently exist or are hereafter created or attach. Until
Lenders have been paid in full, without the prior written consent of Agent,
Guarantor shall not (i) exercise or enforce any creditor's right it may have
against Borrower, or (ii) foreclose, repossess, sequester or otherwise take
steps or institute any action or proceedings (judicial or otherwise, including
without limitation the commencement of, or joinder in, any liquidation,
bankruptcy, rearrangement, debtor's relief or insolvency proceeding) to enforce
any liens, mortgage, deeds of trust, security interests, collateral rights,
judgments or other encumbrances on assets of Borrower held by Guarantor.



                                      -12-
<PAGE>
                                   ARTICLE VI

                                  MISCELLANEOUS

         6.1 WAIVER. No failure to exercise, and no delay in exercising, on the
part of Agent and/or Lenders, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right. The rights of Agent
and Lenders hereunder shall be in addition to all other rights provided by law.
No modification or waiver of any provision of this Guaranty, nor consent to
departure therefrom, shall be effective unless in writing and no such consent or
waiver shall extend beyond the particular case and purpose involved. No notice
or demand given in any case shall constitute a waiver of the right to take other
action in the same, similar or other instances without such notice or demand.

         6.2 NOTICES. All notices, demands, requests, consents, approvals or
other communications (any of the foregoing, a "NOTICE") required, permitted, or
desired to be given hereunder shall be in writing sent by telefax (with answer
back acknowledged) or by registered or certified mail, postage prepaid, return
receipt requested, or delivered by hand or reputable overnight courier addressed
to the party to be so notified at its address hereinafter set forth, or to such
other address as such party may hereafter specify in accordance with the
provisions of this Section 10.6. Any Notice shall be deemed to have been
received: (a) three (3) days after the date such Notice is mailed, (b) on the
date of sending by telefax if sent during business hours on a Business Day
(otherwise on the next Business Day), (c) on the date of delivery by hand if
delivered during business hours on a Business Day (otherwise on the next
Business Day), and (d) on the next Business Day if sent by an overnight
commercial courier, in each case addressed to the parties as follows:

               If to Agent:         HVB Real Estate
                                    622 Third Avenue
                                    New York, New York  10017
                                    Attention:  Mr. Robert Dowling
                                    Facsimile No. (212) 672-5527

               with a copy to:      Cadwalader, Wickersham & Taft
                                    100 Maiden Lane
                                    New York, New York  10038
                                    Attention:  John M. Zizzo, Esq.
                                    Facsimile No. (212) 504-6666

               If to Lenders:       at their respective addresses set
                                    forth in the Loan Agreement



                                      -13-
<PAGE>
               If to Guarantor:     Alexander's, Inc.
                                    888 Seventh Avenue
                                    New York, New York  10019
                                    Attention:  Chief Executive Officer
                                    Facsimile No.:

               With a copy to:      Proskauer Rose LLP
                                    1585 Broadway
                                    New York, New York  10036
                                    Attention:  Lawrence J. Lipson, Esq.
                                    Facsimile No.:  (212) 969-2900

         6.3 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Guaranty shall be
governed by and construed in accordance with the laws of the State of New York
and the applicable laws of the United States of America. Any legal suit, action
or proceeding against Agent and/or Lenders or Guarantor arising out of or
relating to this Guaranty may at Agent's and/or Lenders' option be instituted in
any Federal or State court in the City of New York, County of New York, pursuant
to Section 5-1402 of the New York General Obligations Law and Guarantor waives
any objections which it may now or hereafter have based on venue and/or forum
non conveniens of any such suit, action or proceeding, and Guarantor hereby
irrevocably submits to the jurisdiction of any such court in any suit, action or
proceeding. Guarantor does hereby designate and appoint:

                      Proskauer Rose LLP
                      1585 Broadway
                      New York, New York  10036
                      Attention:  Lawrence J. Lipson, Esq.

as its authorized agent to accept and acknowledge on its behalf service of any
and all process which may be served in any such suit, action or proceeding in
any Federal or State court in New York, New York, and agrees that service of
process upon said agent at said address and written notice of said service
mailed or delivered to Guarantor in the manner provided herein shall be deemed
in every respect effective service of process upon Guarantor in any such suit,
action or proceeding in the State of New York.

         6.4 INVALID PROVISIONS. If any provision of this Guaranty is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Guaranty, such provision shall be fully severable and this
Guaranty shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Guaranty, and the
remaining provisions of this Guaranty shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Guaranty, unless such continued effectiveness of this
Guaranty, as modified, would be contrary to the basic understandings and
intentions of the parties as expressed herein.

         6.5 AMENDMENTS. This Guaranty may be amended only by an instrument in
writing executed by the party or an authorized representative of the party
against whom such amendment is sought to be enforced.



                                      -14-
<PAGE>
         6.6 PARTIES BOUND; ASSIGNMENT; JOINT AND SEVERAL. This Guaranty shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors, assigns and legal representatives; provided, however,
that Guarantor may not, without the prior written consent of Lenders, assign any
of its rights, powers, duties or obligations hereunder. If Guarantor consists of
more than one person or party, the obligations and liabilities of each such
person or party shall be joint and several.

         6.7 HEADINGS. Section headings are for convenience of reference only
and shall in no way affect the interpretation of this Guaranty.

         6.8 RECITALS. The recital and introductory paragraphs hereof are a part
hereof, form a basis for this Guaranty and shall be considered prima facie
evidence of the facts and documents referred to therein.

         6.9 COUNTERPARTS. To facilitate execution, this Guaranty may be
executed in as many counterparts as may be convenient or required. It shall not
be necessary that the signature of, or on behalf of, each party, or that the
signature of all persons required to bind any party, appear on each counterpart.
All counterparts shall collectively constitute a single instrument. It shall not
be necessary in making proof of this Guaranty to produce or account for more
than a single counterpart containing the respective signatures of, or on behalf
of, each of the parties hereto. Any signature page to any counterpart may be
detached from such counterpart without impairing the legal effect of the
signatures thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature pages.

         6.10 RIGHTS AND REMEDIES. If Guarantor becomes liable for any
Indebtedness owing by Borrower to Lenders, by endorsement or otherwise, other
than under this Guaranty, such liability shall not be in any manner impaired or
affected hereby and the rights of Agent and Lenders hereunder shall be
cumulative of any and all other rights that Agent and/or Lenders may ever have
against Guarantor. The exercise by Agent of any right or remedy hereunder or
under any other instrument, or at law or in equity, shall not preclude the
concurrent or subsequent exercise of any other right or remedy.

         6.11 ENTIRETY. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF
GUARANTOR, AGENT AND LENDERS WITH RESPECT TO GUARANTOR'S GUARANTY OF THE
GUARANTEED OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTOR, AGENT AND LENDERS
AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE
OF DEALING BETWEEN GUARANTOR, AGENT AND LENDERS, NO COURSE OF PERFORMANCE, NO
TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY
AGREEMENT. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR, AGENT AND LENDERS.



                                      -15-
<PAGE>
         6.12 WAIVER OF RIGHT TO TRIAL BY JURY. GUARANTOR HEREBY AGREES NOT TO
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE NOTE, THE MORTGAGE, THE LOAN
AGREEMENT, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER
ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
GIVEN KNOWINGLY AND VOLUNTARILY BY GUARANTOR, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. AGENT IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR.

         6.13 INTENTIONALLY OMITTED.

         6.14 REINSTATEMENT IN CERTAIN CIRCUMSTANCES. If at any time any payment
of any amount payable by the Borrower under the Loan Documents is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, the Guarantor's obligations
hereunder with respect to such payment shall be reinstated as though such
payment has been due but not made at such time.

                         [NO FURTHER TEXT ON THIS PAGE]



                                      -16-
<PAGE>
               EXECUTED as of the day and year first above written.

                                          GUARANTOR:

                                          ALEXANDER'S, INC.,
                                          a Delaware corporation

                                          By: /s/ Joseph Macnow
                                              ---------------------------------
                                              Name: Joseph Macnow
                                              Title: Executive Vice President-
                                                     Finance and Administration